With prices rapidly escalating in Seattle and the Eastside, some would-be homeowners are finding new answers, and extending the definition of what qualifies as a Seattle suburb.
The list of cities some might call suburbs of Seattle now stretches to places like North Bend, Poulsbo and Cle Elum. More homebuyers are willing to trade longer commutes to buy a house they can afford or for more space and features.
Some would-be buyers are looking at such alternatives as a lack of available homes on the market drives up prices in the hot housing markets of Seattle and the Eastside.
The median price of a home in King County soared by 12.5 percent to $540,000 in April, from $480,000 a year earlier.
In Seattle, the median price for a single-family home climbed by 15.3?percent to $637,250 in April, up from $552,500 last year. The most expensive local submarket is in Bellevue, west of Interstate 405, where the median home price hit $1.8 million in April, up from $1.66?million a year ago, according to data released Thursday by the Northwest Multiple Listing Service.
Areas more distant from these urban centers saw smaller increases. For Snohomish County, the median price for a single-family home rose by 4.2 percent to $375,000. In Pierce, the median home price went up 8 percent to $269,925. The Kitsap median home price crept up by 5.1 percent to $269,950.
Meanwhile, the number of homes on the market for the four-county region plunged by 20 percent from a year ago.
“Inventory is exceptionally constrained right now,” said Michael Doyle, managing director for Windermere. That is good news for sellers, but likely means more headaches for buyers who have to compete for the few homes that are on the market.
With supply going down, prices go up — a dynamic that leads to a downward spiral of dwindling inventory, said Svenja Gudell, chief economist at Zillow, a Seattle-based real-estate information company.
Homeowners don’t put their homes on the market for fear they won’t be able to buy a new home, and that only gets worse as prices climb higher.
“It’s this lack of inventory (both new construction and resale) that’s causing prices to escalate so quickly,” Mike Grady, president and chief operating officer of Coldwell Banker Bain, said in a statement.
The region has seen a surge of apartment development in dozens of new buildings, some of which could encourage conversions to condo, he said.
Condo prices have been shooting up. In King County, the median condo price rose 18.9 percent to $323,500 in April year-over-year. Kitsap County saw condo prices balloon by 61.7?percent to $289,500 in April from $179,000 the prior year.
At the same time, other economic factors put even more pressure on housing: a strong job market attracting new residents, and rents rising so much that some renters would rather pay a mortgage.
The low-inventory issue, which has been going on for months, doesn’t appear likely to dissipate anytime soon, Gudell said, so homebuyers should brace themselves for prices to keep going up and competition to grow more intense during the summer selling season.
“Buyers are severely limited in the negotiating process and are paying prices for properties they wouldn’t have a few years ago,” Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, said in a statement.
Multiple bids and bidding far above the asking price are the norm in hot submarkets, leaving some prospective buyers demoralized. That is prompting some buyers to consider moving to another part of the region.
“You see Seattle fatigue, where you have buyers who have been outbid many times or have seen homes go well above asking prices,” said Stacie Gall, a Redfin agent based in Bainbridge Island.
Buyers in Kitsap County face far less competition, with only the most desirable homes drawing five or more bids, she said.
Gall recently sold a 2,800-square-foot, three-bedroom home on Bainbridge Island for $560,000 to a family relocating from Southern California. The father works in Seattle and decided that a 35-minute ferry ride was an improvement over the lengthy highway commutes he was used to.
Bainbridge is becoming more popular with people who work in Seattle, so she’s seeing demand seep into such cities as Poulsbo and Kingston, which has ferry service to Edmonds.
“A lot of people are being willing to move out of their comfort zone and are finding that Seattle and the Eastside are becoming too expensive,” said Shane Raff, a real-estate agent with John L. Scott. “People are just getting priced out of the market and there’s nowhere for them to go.”
Raff, whose job is based in Redmond, and his wife, who works for T-Mobile in Bellevue, recently decided to move from North Bend to Cle Elum. They estimate their drive to work to be around an hour and 15 minutes.
“My wife and I have always wanted more land and more space,” Raff said. The couple, who have two young children, purchased a one-acre lot in Meadow Ridge, a new subdivision being built by developer Trailside.
For $500,000 to $600,000, homebuyers in Cle Elum can buy a sizable home with high-end finishes that would cost $100,000 to $150,000 more in an area closer to Seattle, Raff said. Besides more “bang for your buck,” Cle Elum offers a natural setting, access to outdoor recreation and a small-town feel, he said.
The Raffs are willing to brave the commute even in winter conditions that can shut down Snoqualmie Pass.
“It is a risk you run,” Raff said. “But that’s the risk we’re willing to take on.”