Home sales strong, prices up 6.3 percent in King County

Low interest rates helped spur home sales last year as new buyers entered the market and second- and third-time buyers traded up to bigger, more expensive homes.

"The lower cost of money allowed more first-time home buyers to enter the market than ever before," said Gary O'Leyar, designated owner and broker at Prudential Signature Properties in Seattle. "That started a chain reaction of people selling their entry-level homes and moving up into second and third homes."

For the market to remain strong this year, interest rates have to stay low, real-estate agents said. Home sales could fall if higher rates push first-time buyers back out of the market.

In the Puget Sound area more home sales closed in 2002 than in 2001, according to numbers released by the Northwest Multiple Listing Service, a Kirkland-based real-estate group that tracks home sales in the region.

In the 13 Western Washington counties tracked by the listing service, 60,047 homes sold last year, compared with 57,308 in 2001, a 4.8 percent increase. King County sales rose from 22,536 to 23,614. Only Snohomish County had fewer closed sales, with 10,259 homes sold in 2002, compared with 10,692 in 2001.

"Last year only remained strong because of low interest rates," said Jill Jacobi Wood, co-owner and president of Windermere Real Estate. "I think 2001 would have stayed strong, too, had 9-11 not happened. The economy was riding high in 2001, interest rates were low and then the terrorist attacks happened."

Prices rose across King, Snohomish, Pierce and Kitsap counties compared with the year before, with King County up 6.3 percent to $278,500 and Snohomish up 4.7 percent to $219,950. In the four-county area, 38 percent of single family homes sold for under $200,000. In the other nine counties, more than 73 percent of sales sold for under 200,000.

Fewer homes went on the market in King, Pierce and Snohomish counties last year, compared with 2001. New listings went down 3.7 percent in King, 4.5 percent in Snohomish and 3 percent in Pierce. Only Kitsap had more listings, with a 1.7 percent increase.

"When I go around and talk to my realtors, they say they're running out of single-home lots," said J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate. "We're seeing fewer lots and fewer condominiums coming onto the market."

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com.