Seattle's Real-Estate Market Going Through Roof

Talk about a seller's market:

A single-family home with a view on Queen Anne Hill gets seven offers within 48 hours of being put on the market.

A Green Lake house is sold on the spot when a couple walks into an open house on the first day the home is offered.

A real-estate agent entertains 12 offers for a small Ravenna home that sells for more than $200,000 - beating its listed price by over $30,000.

Local agents say the real-estate market has been crazy all year in some Seattle neighborhoods, a frenzy fueled by low interest rates, high job growth and a finite supply of housing.

But some agents also say the market has been particularly chaotic since Labor Day, perhaps fueled by a return from summer vacations or the late-summer resolution of capital-gains legislation.

"In the last five weeks, there really has been an acceleration in the number of sales and multiple-offer situations," said Stephen Hicks, a Windermere real-estate agent focusing on Queen Anne Hill.

Hicks said a single-family home on Queen Anne's 11th Avenue West recently drew seven offers in 48 hours, and may sell for as much as $60,000 more than its $239,000 listing price.

Another Queen Anne home, a fixer with virtually no yard and needing vast improvements to its kitchen and bathroom, is expected to sell quickly at or near its $285,000 price tag, Hicks said.

"It was listed yesterday, and it'll sell tomorrow," he said.

"It's definitely neighborhoodspecific. It's not acrosstheboard in Seattle by any means," said Cecil McCann, designated broker in Quorum Real Estate's Laurelhurst office.

Stories abound of buyers leapfrogging each other to land a sale - having inspections performed ahead of time, offering amounts above the purchase price, even allowing the previous owners to reduced rents to give them time to find their own new home.

While those measures can be the push buyers need to set themselves apart, they also can be risky maneuvers that might backfire.

"I am continually amazed at the amount over the purchase price that people are willing to pay for a piece of property," said McCann.

A few weeks ago, one of her clients agreed to pay $1,700 over any other offer for a home "There was no cap on it whatsoever. That's what I call risky business," she said.

Although housing prices in King County dropped last month, demand remains markedly stronger than last year, particularly in Seattle. Prices for Seattle-area homes are predicted to rise 6.7 percent in the next twelve months, according to one recent study.

"There's no doubt, it's a seller's market," says Barbara Cahill, a realtor in Windermere Real Estate's Madison Park office and a 19-year veteran of the housing market.

Prospective buyers, she said, are jockeying for an edge, including arming themselves with cashier's checks made out to escrow for ernest money, many times in excess of 5 percent of the listing price, and incorporating into purchase offers an "acceleration clause" stipulating that they will meet or beat any other offer by paying a certain amount over the highest other offer received.

On the escrow issue, Cahill said a recent client presented a cashier's check for $100,000 on a $425,000 offer - nearly one-quarter of the sales price.

Prospective buyers also are agreeing up front to allowing the seller to name the closing date, and flexible possession, allowing sellers to stay past the formal closing date by renting the property for a time.

"People are also coming in with personal letters, photos and family profiles," to try to sway sellers, Cahill said.

About three weeks ago, she said, a real-estate agent in her office had 12 offers for a small Ravenna-area starter house that listed at $170,000 and sold for more than $200,000.

Prospective buyers seeking inspection reports on a property even before the seller considers offers is becoming more the rule than an exception, many realtors say.

"Buyers are opting to either not do one, or pay to have an inspection done before their offer is presented," said Lyle Bjork, part-owner of Russell Jones Real Estate on Capitol Hill. "It may mean risking $3,000 to $4,000 because you may not get the house after that. It takes a higher level of commitment to do that."

With interest rates low and the region's economy showing no signs of slowing down, most experts say the housing market will stay hot for at least the next couple of years.

Traditionally, the housing market has followed Boeing's fortunes; when the company expands its work force, prices explode. When the aerospace market hits heavy turbulence, the housing market spirals.

But today's economy gets its strength from not only Boeing, but Microsoft, Starbucks and a host of other big employers. The result: Housing prices won't slow down anytime soon, and the old adage of buying low and selling high doesn't apply. People want homes. Now.

Ken Corbley, an agent for MacPherson's Inc. Better Homes and Gardens, said his own Green Lake home sold within hours of going on the market three weeks ago - and at a price three times greater than what he bought it for.

Corbley said the couple that bought it came to an open house with their real-estate agent. They toured the house, then stepped outside to talk things over.

"They came back and said, `We'll have an offer for you in two hours,' " Corbley said. "It was over."

Seattle Times business reporter Alex Fryer contributed to this report.

Jake Batsell's phone message number is 206-464-2595. His e-mail address is: jaba-new@seatimes.com