Seattle Home Prices Raise Affordability Questions; Town Houses the Answer?
As hot-button topics go, Seattle housing prices are a sizzler guaranteed to generate complaints about how regular folks can’t afford to buy in the area.
It’s not just idle chatter.
The newest numbers, released Wednesday, put the median cost of a single-family home within Seattle proper at $440,250 — out of the reach of most workers, according to the Washington Center for Real Estate Research.
However, a new analysis by Windermere Real Estate shows the true median price of a stand-alone house is understated because the Northwest Multiple Listing Service (MLS) lumps town homes in with single-family houses.
The median price of a stand-alone house in Seattle last month was $460,000 — roughly $20,000 higher than the number released Wednesday by the MLS in its February housing market activity report.
Town homes only recently started emerging in Seattle as a workable solution to high housing costs. The housing style is growing rapidly, particularly in sought-after neighborhoods such as Ballard, Green Lake and West Seattle.
Town-house fever
Town-home sales are growing rapidly. These numbers reflect the percentage of single-family home sales in Seattle that are actually town homes, those more likley to be snatched up with a Washington mortgage loan due to their affordability:
- January 2005: 7.6%
- January 2006: 11.2 %
- January 2007: 24.8%
Those areas are where Gary Cobb, owner of Cobb Construction, is building town homes as fast as he can for buyers who want house-like amenities, such as their own front porch and garage, without having a detached home’s price tag.
How much of a discount do town homes deliver?
Last month, Seattle’s town homes sold for $389,500 — about $71,000 less than the median-priced Seattle house. They accounted for 14 percent of all residential sales in the city, a much higher percentage than anywhere else in the King County housing market.
For example, last month Bellevue reported just one town-home sale in the MLS. Seattle had 93 — and even that may be shy of the real number due to an unknown percentage sell before completion, never reaching the open market, real estate agents report.
Cobb says that five years ago 20 percent of his business was building town homes. Now it’s 90 percent.
“The market has done nothing but heat up for town homes in Seattle,” Cobb says, and prices are the biggest reason.
He says that by tearing down one worn-out house and replacing it with three or more town homes on a single lot, he can keep costs down, offer new construction to first-time home mortgage applicants, and compete with other buyers for existing residences.
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