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The economic turmoil that gripped the nation in October took its toll on the Seattle-area real-estate market.

Sales and new listings in King County both dropped significantly last month, according to statistics released Thursday by the Northwest Multiple Listing Service.

What’s more, the median selling price of houses dipped below $400,000 for the first time in more than 2-½ years.

“October was such a chaotic month,” said Karen Lavallee, manager of Windermere Real Estate’s West Seattle office. “People who were seriously thinking about buying a home stepped back and took a breath.”

Pending sales — offers that have been accepted but haven’t closed — were down 22 percent from the same month a year ago and 46 percent from October 2006, when the market was white-hot.

The number of closed sales last month was off 20 percent from a year ago. The number of new listings added to the broker-owned service’s database was the fewest since December, traditionally a low month.

Fear kept many potential sellers and buyers on the sidelines, said Kim Horn of the Horn Real Estate Group in Snoqualmie. With few exceptions, only those who absolutely must make a move now are in the market, she said.

“I’m working with eight sellers right now,” Horn said, “None of them are selling because they want to.”

Lavallee agreed. In West Seattle, she said, most sellers and buyers now are motivated not by pleasure but by pain: divorce, death, job loss.

The median price of King County single-family homes sold in October was $392,000, down nearly 12 percent from October 2007, the listing service said. It was the largest percentage drop, year-over-year, since the market turned south two summers ago.

Prices in King County haven’t dipped below $400,000 since February 2006, the month the Seahawks played in the Super Bowl.

Houses sold in North King County — Shoreline, Lake Forest Park and Kenmore — experienced the biggest year-over-year price decline, 17 percent.

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