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Housing prices dip again

Lisa Hasselman and Chris Hedgpeth found a quiet spot on Vashon. - Leslie Brown/Staff Photo
Lisa Hasselman and Chris Hedgpeth found a quiet spot on Vashon.
— image credit: Leslie Brown/Staff Photo

Lisa Hasselman and Chris Hedgpeth used to wake up to the noise of rowdy sports enthusiasts vacating Safeco Field after a Mariners’ game. Now, they hear owls at night and songbirds in the morning.

After six months of searching last year, the couple found their piece of paradise on Vashon — a custom-built home perched above a madrone-studded ravine on the Island’s north-end and a far-cry from their downtown Seattle condo.

“The first morning, we woke up to the chorus of birds,” Hedgpeth, a carpenter, recalled. “We were used to hearing a different chorus.”

Hasselman, a lawyer, smiled. “We feel very lucky.”

In the world of real estate, 2010 was another buyer’s market, with prices on Vashon falling for the third year in a row. It’s been tricky and sometimes painful for sellers, especially those who bought a few years ago when the market reached its peak and then found themselves having to sell at a loss.

But it’s been great for buyers. And to Emma Amiad, a buyer’s agent who helped Hasselman and Hedgpeth find their new home, the depressed prices have had a silver lining: A cooler market has enabled those who were getting priced out of Vashon a chance to move to the Island.

“We’re finally getting some young people here,” she said.

Prices, Amiad and other agents noted, are now at 2004 levels — resulting in a rich inventory of homes between $300,000 and $500,000.

“I wish I had some money,” Amiad added wryly. “I’d buy something.”

According to statistics gathered by Dick Bianchi, who co-owns the Windermere office on Vashon, prices peaked in 2007, when the median price for a single-family home was $535,000. Since then, prices have fallen more than 30 percent — with a median sales price on Vashon last year of $371,000, just a tad higher than the median price of $365,000 in 2004.

The biggest drop was in 2009, when the median price fell 24 percent over that of 2008. Last year, there was another steep decline; house prices fell on average another 9 percent.

Leslie Ferriel and Jean Bosch, agents at the John L. Scott office on Vashon, analyzed the numbers by segment in a report they regularly issue on real estate trends on Vashon. Inland homes on more than three acres sold for an average price of $458,999 in 2010, 22 percent lower than the year before. Waterfront homes, meanwhile, fetched an average price of $630,000 last year, a 4.5 percent decline over 2009.

What’s more, prices on Vashon appear to have fallen more than house prices in the rest of King County. According to a report issued last week by the Northwest Multiple Listing Service (NMLS), the median price for a single-family home in King County was $375,000 last year, a 1.3 percent decline from 2009 and the smallest drop in three years.

Across the state, in the 21 counties the listing service tracks, prices fell on average 4.7 percent, the NMLS reported.

But agents say it’s unwise to put too much stock in Vashon’s statistics, where the pool of houses bought and sold is small and a few significant sales can skew the numbers.

“It’s a function of what sold,” Ferriel said.

Denise Katz, a Windermere agent, agreed. A few million-dollar waterfront homes can have a big impact on Vashon’s statistics. What’s more, she said, Vashon’s market was particularly hot a couple of years ago, climbing at a faster pace than the rest of the region.

“Vashon’s market is calming itself down,” she said.

Buyers — some of whom have dreamed of moving to Vashon — say it’s been a joy to go house-shopping on the Island, where the inventory has been strong despite the depressed prices.

Liz Sheldon, an engineer, moved here with her husband, a yoga instructor, in August after a two-week search for a home. “It was amazingly easy,” she said.

She and her husband, who were renting a house near Children’s Hospital in Seattle, wanted some acreage. She fell in love with the second house her agent, Leslie Ferriel, showed her, a well-built, two-bedroom home with big windows overlooking an expanse of woods near Bethel Church.

She and her husband continued to search, looking at 15 homes altogether, before settling on that second house they saw. “Nothing else really compared to it,” she said.

Still, it was an easy process. “Everything went smoothly,” she said.

But agents say the market has been tough for some sellers, especially those who found themselves facing what’s called a “short sale,” when the selling price is less than the seller’s existing mortgage on the house.

“It’s a difficult time to be a seller. There’s a lot of pain out there,” said Ferriel, who’s had to remind her clients than it’s not their fault that they’ve found themselves in such a position. “I tell my clients, ‘You shouldn’t feel responsible for the meltdown of the nation’s economy,’” she said.

Agents say they’ve had several short sales and foreclosures over the past year — transactions that can be very difficult and time-consuming in today’s real estate market, where commercial lenders are wary and the rules are increasingly complex. In one instance, Amiad said, the process around a short sale was taking so much time and proving so difficult that the couple walked away from what had seemed to them a dream home.

“The finally said, ‘We can’t do this anymore,’” she said.

But Vashon’s real estate agents say they’re optimistic about what lies ahead for the Island.

The uncertain situation around the state’s financially ailing ferry system is a cloud over Vashon’s real estate market, some agents noted. At the same time, they said, they see a market that seems to be warming up again, after a few years of what Ferriel called “a lot of pent-up demand.”

In the last year or two, a lot of people looked at houses but decided not to buy, wondering if the market and interest rates might drop a little more. Now, agents said, those looking for a new home seem ready to sign a purchase-and-sale agreement — especially since record-low interest rates are starting to climb again.

January tends to be a slow month, but Katz said she and her fellow agents are already seeing a lot of activity.

“We’ve got incredible houses at incredible prices,” Katz said. “We’re busy again.”

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