Lucie Turcotte knew her move from Minneapolis would come with higher home prices, but she was surprised that Seattle houses were selling days after going on the market and for more than the asking price. "Here you really have a lot more time to look," Turcotte said Tuesday by telephone from Minneapolis. "It's just a whole different real estate world."
New data released Tuesday show that Seattle-area house prices continue to defy a sinking national market, with the best year-over-year and month-to-month figures in February among 20 major metropolitan areas. Experts disagree, however, on whether the national housing storm will eventually batter the region.
The latest figures, from Standard & Poor's S&P/Case-Shiller Home Price Indices, show that Seattle-area house prices were up 10.6 percent in February from the same month in 2006 and 0.5 percent from January. Both were the largest increases among the indices' 20 cities -- most of which posted declines year-to-year and month-to-month.
The 20-city index in February was down 0.5 percent from January and 1 percent from February 2006. Also Tuesday, the National Association of Realtors reported that sales of existing homes nationally fell by 8.4 percent in March -- the sharpest drop since January 1989 and three times what had been expected.
In Seattle, sales of all homes were up 1.9 percent in March from a year earlier.
The monthly increase in Seattle in the S&P index was the best since September, but the yearly rise was the lowest since October 2004. The index, which does not list actual prices, counts the Seattle area as King, Pierce and Snohomish counties.
"Seattle and Portland for the last few months have been the star outperformers," said David Blitzer, chairman of Standard & Poor's Index Committee. "I've puzzled about it."
Blitzer said strong employment, which Seattle has, tends to drive housing costs. He also said Seattle could be slower to catch the national cold because the bursting of the tech bubble at the beginning of the decade delayed the start of the run-up in house prices.
Prices for S&P's 20-city index went up 12 percent in 2002, compared with just 4.1 percent in Seattle. The index shows that Seattle's price increases started to peak in early 2006, by which time increases in the composite indices were already declining.
"That would suggest you're just a little bit behind the other cities," Blitzer said. "The declines seem much too pervasive to argue any city's going to escape unscathed."
But declines in Seattle should not be as dramatic as those in such hard-hit cities as Detroit, he added.
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, agreed with Blitzer, to a point.
"I certainly agree with the assessment that we got started later," he said. "I think that means that we are not as overheated as some of the other markets were."
It's too early to tell if prices will go down, but any decline would probably not amount to much, Crellin said. "I'm convinced we're going to have a softer landing than most other markets around the country."
Crellin pointed to the area's strong economy and its lower percentage of riskier loans than in many other areas. Statistics from the national Mortgage Bankers Association and RealtyTrac, an Irvine, Calif., company, show that the percentage of subprime loans in Washington -- those for borrowers with weak credit -- delinquent mortgages and foreclosures are lower in than those for the country as a whole.
Crellin also noted that, while inventory has increased in recent months, compared with the same months last year, it is not high by historic standards.
All this may mean that those hoping for a bargain may not have much luck, at least not any time soon.
Turcotte's Realtor, Mary Schile of RE/MAX Mutual Realty, said she is still seeing multiple offers bidding up prices on good homes in good neighborhoods.
"I sold a house last Tuesday, and we got three offers on it," she said. "There were still some buyers willing to go close to $75,000 over" the asking price.
Carole Alexander, a Realtor with Windermere Real Estate, said her buyers are still running into multiple offers.
"Prices are up, unfortunately," she said. "I wish they wouldn't go up anymore, but they are."
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 weight them for such factors as remodeling, neglect and the time between sales.
The 0.2 percent drop in January in the 20-city index was the first year-to-year decline in that index, which gives data back to January 2000. February's 1.5 percent year-to-year decline in S&P's separate 10-city index was the largest drop since October 1993.
"We haven't seen any real signs that the thing is bottoming out at this point," Blitzer said. "I think it's got a ways to go."
The 10-city index declined, year-to-year, for all but three of the 44 months from August 1990 through March 1994.
Analysts attributed the drop nationwide in existing home sales in part to bad weather. But they also cautioned that tougher approval standards by lenders in response to the increase in mortgage delinquencies, particularly in the subprime market, would further depress sales and help delay a housing rebound.
March's sales pace was the slowest in nearly three years. If that pace continues, it would take7.3 months to exhaust the existing inventory of homes for sale.
"The number of homeowners trying to unload their properties is still so ridiculously high that pressures on prices will likely continue," said Joel Naroff, chief economist at Naroff Economic Advisors. "How much lower the housing market can go is unclear, but it is not likely that we have seen the bottom."
David Lereah, chief economist for the Realtors, predicted that this year's sales nationwide would end down about 3 percent for existing homes and 15 percent for new homes. He said the median home price would fall 1 percent to 3 percent, which would be the first price decline for an entire year on the Realtors' four decades of records. Lereah said he didn't expect a full recovery in housing until 2008.
This story includes information from The Associated Press. P-I reporter Aubrey Cohen can be reached at 206-448-8362 or firstname.lastname@example.org.