Wednesday, September 26, 2007

Seattle home values hottest in U.S.


Seattle-area home appreciation has been the hottest in the nation for 11 months in a row, despite steadily slowing for the past year and a half, according to data released Tuesday.

July's price for a typical home in King, Pierce and Snohomish counties was up 6.9 percent from July 2006 and 0.2 percent from June 2007, according to the S&P/Case-Shiller Home Price Indices, which do not give actual prices.

The August median home price was $439,000 in Seattle and $415,000 in King County, according to the Northwest Multiple Listing Service. Both medians figured in condominiums and single-family homes.

While July's annual increase was the smallest for the Seattle area in nearly four years, it was still the largest in July among the 20 metropolitan areas the indices track, just five of which posted an increase.

The story is a bit different for month-to-month appreciation, with nine other areas posting increases and all but one of those exceeding Seattle's percentage change. The 20-city composite index declined 0.4 percent from June and 3.9 percent from July 2006.

"The decline in home prices clearly continued into the summer months," Robert Shiller, chief economist at MacroMarkets LLC, said in a news release accompanying the report.

Detroit was simultaneously worst among the 20 cities for annual price change, with a 9.7 percent decline from July 2006 to July 2007, and first for monthly change, with a 1.3 percent jump from June to July.

Tampa, Fla., had the second-highest annual decline, at 8.8 percent, while Charlotte, N.C., was second to Seattle for increases, at 6 percent. Miami posted the biggest monthly decline, with prices down 1.7 percent, followed by Tampa and New York, which were both down 1 percent.

The drop in the 20-city index was the largest ever for that measure, which goes back to 2000, while the 4.5 percent decline in S&P's 10-city index was the largest for it since July 1991.

S&P Index Committee Chairman David Blitzer said prices might level off nationally by the end of the year.

"Maybe the first stage is steep declines, and we're just about done with those," he said. "The second stage is not much gain, not much loss. The rest of the economy has to catch up to home prices."

Shiller, an economist at Yale University, told lawmakers in a statement last week that the loss of a boom mentality among consumers posed a "significant risk" of a recession within the next year.

Unlike monthly sales statistics, the Standard & Poor's indices try to track the price of typical houses in a market by applying a formula to repeat sales of homes.

They screen sales for distortions, such as foreclosures or sales between family members, and weigh them for such factors as remodeling, neglect and the time between sales.

The Seattle area saw 33 months of double-digit annual appreciation, peaking at 18.5 percent in November and December 2005.

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