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King County’s housing market hit two milestones in December: The median single-family home price set a new high, $508,000, topping the $481,000 peak reached in July 2007 before prices began their long slide.

And the number of active listings of houses and condominiums — just 2,196 — hit the lowest monthly level since at least 1993, according to data from the Northwest Multiple Listing Service.

For sellers, it’s a dream. For buyers, it’s a nightmare. And for sellers who want to buy their next home, it’s complicated.

The desperation for listings is so great that it’s encouraging some to go off the beaten path to get deals.

Affordability under pressure

Region at a crossroads as home-buying power shrinks

For example, Faira, a new Kirkland technology firm started by former eBay and Microsoft veterans, is free for sellers and charges buyers only a 0.5 percent fee. Its chief executive even penned a sincere offer to Zillow CEO Spencer Rascoff to help sell his Madison Park home.

Mike Chaffee, a John L. Scott broker in Issaquah, uses the personal touch. At homes not on the market, he drops off a handwritten solicitation with a photo of his buyer and $5 Starbucks gift card. The kicker: The whole transaction costs the seller half the typical 6 percent commission.

Such off-market home sales represent a shadow inventory: Chaffee says one-third of the roughly 60 homes he helped sell last year were not listed on the MLS. He guesses that about 10 percent of homes sold by other agents are off-market deals.

“I just sold a 1,600-square-foot house in Kirkland on a 6,000-square-foot lot built in 1940, for $940,000,” Chaffee said. “A little cottage house! It says to me there’s no inventory in really desirable areas. Some people are just fed up of waiting so long, they’re OK with paying a little bit more.”

Or a lot more. Last year’s bidding wars resulted in homes in popular neighborhoods selling for premiums that shocked even brokers. There was a three-bedroom home in north Ballard that sold for $640 a square foot. A Montlake house listed for $880,000 sold for $1.6 million.

November’s $11.2 million sale of a Hunts Point waterfront mansion appeared to be the highest price among homes sold in King County last year. According to media reports, the buyer was a senior Microsoft executive who helped lead its cloud platform.

Surrounding counties also saw robust gains: The median price in Snohomish County was $358,000, up 8 percent; in Pierce County, $252,500, up 11 percent; and in Kitsap, $269,950, up 15 percent.

Location, location

Across the region, however, there continue to be large discrepancies in home prices and market dynamics.

On the Eastside, the most expensive submarket in King County, the median price of single-family homes sold in December was $675,000, up a relatively small 6 percent over the year.

In Seattle, the median price rose 20 percent over the year to $600,000. North King County saw its median price jump 25 percent over the year to $480,000.

Seattle is The Fourth Best Real Estate Market In The Country For 2016

Seattle's supercharged market for everything from skyscrapers to single-family houses is expected to keep booming next year, even with higher interest rates.

  Metro Seattle ranks fourth nationally as the hottest market to watch for 2016, according to the influential Emerging Trends in Real Estate survey by theUrban Land Institute.

  This marks a rise from No. 8 in last year’s report. Emerging Trends has proved to be a good barometer of Seattle’s real-estate prospects.

  “The Seattle market has become so popular with domestic and global investors that in interviews it is not unusual for it to be added to the list of top six markets,” the report states. Among our strengths is a diverse industry base and growth in so-called TAMI sectors (technology, advertising, media and information).

  “One interviewee noted that Seattle is one of those markets where the growth has been strong enough, long enough, that the only potential risk is being able to sustain its current pace,” according to the report.

  The outlook for every real-estate sector in Seattle except hotels is strong. Hotels come off “good,” but not as robust as other sectors. Population growth and constraints on supply make Seattle inviting for single-family house construction.

  Seattle also benefits from its appeal to millennials, as well as being an “18-hour city,” vibrant live-work-play urban areas that are attracting more people and investment, doing better economically, than sprawly places lacking an energetic center.

  Nationally, real estate is expected to continue growing, even with interest rates going up. Foreign investment remains strong. The report’s top three are Dallas-Fort Worth, Austin and Charlotte. Seattle is followed by Atlanta, Denver, Nashville, San Francisco, Portland and Los Angeles to round out the top 10 best markets.

For the full article click here   http://www.seattletimes.com/business/economy/a-hot-2016-for-seattle-real-estate-jon-talton/