Seattle Surpasses Bellevue

FOR THE FIRST TIME in years, buying a home in Seattle may cost you more than buying a similar one in Bellevue - and several other cities across the nation.

Since 1988, when Coldwell Banker first began including Bellevue in its national home-price survey, the same thing has happened every year:

When the giant real-estate sales firm researched what it would cost to buy a 2,200 square-foot, four-bedroom house with a family room and two-car garage, Bellevue's price tag was always higher - in 1991 some $50,000 higher - than Seattle's.

Now comes Coldwell Banker's 1996 Home Price Comparison Index of nearly 300 markets across North America, and surprise, Seattle's typical "subject home" is $247,350. Bellevue's is only $224,250.

Why the switch in affordability?

There's no hard evidence, but William Riss, president of the Seattle-area Coldwell Banker Bain Associates, has some theories. (The Bain name was added locally when Coldwell Banker offices here merged with William Bain Real Estate.)

"I believe maybe because house prices have narrowed (over the past couple of years between the two cities), that lifestyle choices are driving where people want to live instead of affordablility issues," Riss says. "Because of the cultural and sports centers in Seattle, and the traffic commuting problems from the Eastside, maybe people are taking another look at Seattle.

"And it may be the population is deciding that Seattle's

quality of life is actually improving," he adds, mentioning the drop in reported crime, plus the possible effects of getting a new Seattle police chief - Norm Stamper - and new superintendent of Seattle Schools, John Stanford.

Riss stresses, however, that Seattle's sudden surpassing of Bellevue in home prices may be a statistical fluke because "when you select an individual house as a sample without doing a cross section, your information potentially could be flawed."

Still, he points to two telling indicators that indicate that Seattle's new price supremacy is quite possibly no fluke:

-- Over the past couple of years the price difference between the two cities has been narrowing;

-- Seattle homes sell for closer to their listing price than Eastside homes. Why? Perhaps because Seattle's number of single-family homes is static while demand is clearly growing, and because Seattle buyers are more neighborhood conscious than those on the Eastside.

"If someone wants to live on Federal Avenue (on Capitol Hill) they'll watch that market, or if they want to live in View Ridge, that's what they want," Riss observes. "But you can recreate neighborhood areas in a lot of places on the Eastside. You can live in Kirkland, Redmond or Issaquah and pretty much have the same lifestyle."

As a result, he speculates that Seattle buyers might well be willing to offer full price more often than Eastside buyers.

On a national level, Seattle clearly is becoming more expensive relative to other cities - but Bellevue is not.

In 1991, when Coldwell Banker first began tracking what it would cost to purchase a typical four-bedroom, middle-management transfer home in various cities, Seattle's subject home sold for $172,333 and had an index of 87. (The higher the index number, the more expensive the market.)

By comparison, Bellevue's 1991 subject home had a $222,125 price tag and an index of 112.

Since then Seattle has taken off like one of its proverbial jets.

Seattle in 1992: $174,750; index 88.

Seattle in 1993: $189,680; index 95.

Seattle in 1994: $192,688; index 98.

Seattle in 1995: $216,290; index 110.

And finally this year, Seattle's subject house carries a $247,350 price tag and has an index of 125.

Bellevue's subject house, on the other hand, has appreciated $6,450 - from $217,800 and an index of 110 in 1992, to this year's $224,250 and an index of 113.

Those numbers, Riss points out, "really dispel the myth that property values have gone down in the last few years. On the moderate-priced homes - those under $250,000 - there has been steady appreciation." (The market that's dropped is $400,000-$700,000, he says.)

While Seattle's prices clearly have climbed relative to the rest of the country, two things need to be kept in perspective.

First, prices in many areas of the Northeast and Southern California have gone down, thus making Seattle more expensive relative to those major markets.

For example, comparison homes in two Orange County, Calif., cities, Mission Viejo and Newport Beach, have had price drops in excess of $40,000 in the past four years. And where Mission Viejo had an index of 141 in 1992, its index now is 119.

What also needs to be kept in perspective is that while Seattle is more expensive relative to other cities, it's still nowhere near the top of the heap. That honor is held by Beverly Hills, Calif., whose subject house would set a buyer back $745,666 this year (a relative bargain; in 1992 it would have been $1,184,167).

In fact this year, Seattle, albeit more expensive than any city in Oregon, Idaho, most of the Midwest and South, still is 49th down the list of pricey places to live.

Of the 29 California cities tracked, Seattle is still cheaper than 19 of them, and it's also a bargain compared to the tony suburbs of major Northeastern cities - places like Darien, Westport and Greenwich, Conn. outside New York City, or Northern Virginia and Howard County, Md., outside Washington, D.C., and Baltimore.

It's also almost $40,000 cheaper in U.S. dollars than Vancouver, ranked as most expensive city in Canada for several years now.

Bellevue, placing 61st on the list, is even more reasonable in comparison to other parts of the country. With an index of 113, its roughly on a par with San Diego and Santa Fe.

Still, local prices draw gasps "all the time" from folks thinking of moving here, says Veronica Dinkins, Coldwell Banker Bain's relocation director.

"I had a call from a gentleman in Dallas just last week; he was hoping to get a three- or four-bedroom home here for $100,000 because you can get that in Dallas," Dinkins recalls. "So I had to gracefully educate him."

Dinkins says many callers are hoping to move from Florida, where "you can get a great house for $85,000," or California.

Northern Californians mostly are coming here as job transfers; for those from the San Francisco area, Seattle prices are still a bargain.

Southern Californians' motive for moving is "they want a quality of life change," Dinkins says. And while many Southern California prices are more on a par with ours, they can still be shocking.

"We leased a home in Ramona (San Diego County) that was 2,800 square feet on half an acre with a community swimming pool; it sold for $235,000," recalls Chris Corley, whose job transferred her and her family here recently.

"We thought we'd be able to get a home similar to that here for similar money."

But after hunting Bellevue and Issaquah, I wasn't able to get as nice a house as we had in San Diego," Corley says. `"t was just shocking."

Says Riss: "Buyers really get sticker shock when they come in and see Seattle's and Bellevue's prices. So we take them out to other areas. You can go to Tacoma, Renton, North Bend, parts of Issaquah, Woodinville, Bothell, and suddenly homes become a lot more affordable."

At least on the Coldwell Banker comparison index, prices in Tacoma have hardly changed at all. Five years ago, the subject home rang in at $149,150; index 75. This year it's $153,726, index of 77. It was much the same in Vancouver, Clark County, which five years ago was at $145,350 with an index of 73. This year it's barely up, to $148,500; index 75.

Spokane, however, has shown a significant price increase. Five years ago the capital of the Inland Empire was $146,302; index 74. This year: $181,375; index 91.

According to the Coldwell Banker price survey, the average price of the subject home is $241,517 in the Northeast, $226,493 in the West, $168,167 in the Midwest and $153,188 in the Southeast.