King County Home Prices hit a new low in January of 2011. There’s definitely something a little odd going on, as median home prices do not usually fall by $32,000 in one month. But then November and December of 2010 should not likely have gone up as much as they did, unless the market is positioned to start ramping upward, which no one really expects to happen.

The only conclusion is the market is teetering on WTH to we do NOW! …or lot’s of people read my Oh NO! People are starting to overpay for houses again post.

No more tax credits, market should have gone down. But 2010 ended higher than it began. Totally unexpected and irrational.

Take a look for yourself. The blue $ is the King County Median Home Price in Thousands. The red blocks mark the bottom of the decline from PEAK Pricing in July of 2007 to March of 2009 and the second red block is where we are now at the end of January 2011. The first number in each 3 number sequence is number of homes closed. The middle number is the halfway point (median) as to units sold. Some are not exactly half as more than the perfect number sold at the same price to stop at exactly half sold for more and half sold for less.

Example: Jan 2011 824-413-$350 means 824 homes sold and 413 of them sold for $350,000+.

A NEW low!

The quarterly median graphs on the right above show you that in a flat market a year ends about where it started as to 1st and 4th quarter and the 2nd and 3rd quarters are usually higher. That is what they call “Spring Bump” and what a “normal” relatively flat year looks like.

Now let’s look at where King County Home Prices are BACK TO with this NEW LOW.

NOT at 2004 pricing YET…but very close. A small $5,000 drop from here will put us at December 2004 level.

At the moment, as you can see in the above graph, we are at February 2005 pricing.

We had been running at or above April 2005 pricing for quite some time. For years…many years,and consistently for the last two years. So this new low is quite a “newsworthy” event.

I think we will “Spring” back up to $375,000ish pretty quickly…but for now, we have a new low. What will cause the rise up? Some people with really nice houses who are not upside down getting on market and listing their homes. There are more buyers today than there are nice homes, priced well, to buy. But I expect that to change, and for prices to get back up to the $375,000 level fairly quickly. If not in February, than by April at the latest.

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(Required Disclosure: Stats in this post and in the charts in this post are not compiled or published by The Northwest Multiple Listing Service.)