Photo Courtesy of Evan Parker, Digital Homeshow

Good news! Northeast Seattle condo sales are up again for the second quarter in a row! The increase from a year ago is 65%, forty (40) sales this winter vs. fourteen (14) for the same time period a year ago. Sales this quarter compared to last were similar, 40 this winter vs. 42 in the fall.

The median price from a year ago is down 14%. However, I think that number is misleading. Prices are down for three reasons:
1) Short Sales
2) Foreclosures
3) Some value drop

Short sales impact values because they sell for less than market rate. These transactions are complicated. The Seller’s lender is a party to the transaction and the time frame for a property to get lender approval is often 60-75 days.

Winter quarter 2011 there were no short sales in northeast Seattle. This past quarter there were five (5). One of these was in the Sand Point/U Village corridor.

Foreclosures also bring down values; as again Buyers will not pay market rate. Last winter there was 1 bank owned property sold in northeast Seattle and none in the Sand Point/U Village corridor. This year there were 10, two in the corridor.

Expect this trend to continue throughout 2012. This report notes 7 properties with a pending status. Seventy one per cent (71%) of these are short or bank owned.

Short Sales and foreclosures have their greatest impact on the complexes where the sales occur. (Some complexes in the Sand Point corridor reflect prices at 2001-2002 levels). However, they also impact the greater market because they hold down values.

Appraisers aren’t to use short sales or bank owned properties as comparables when appraising a property for purchase. Yet, if short sales or bank owned units are a significant portion of the comps they have to choose from the appraiser has no choice. The result, he or she will be cautious when assigning value.

The buying public has proven to be even more cautious. Buyers buy with emotion. Currently, they are terrified of overpaying. And as long as Buyers feel we are in a declining market they would rather lose a property to another Buyer than overpay.

Pricing your property at market is the best antidote for this fear. Well priced properties sell quickly. When Buyers see properties receive offers within a few weeks of listing they begin to have confidence in the market. This confidence is contagious and improves market conditions across the board.

Post a comment or call me directly at 206.915.1076 if you have a question about today’s post.

All the best,

Mary

A recent sale in North Seattle. Photo courtesy of Evan Parker, Digital Homeshow

The March Real Estate update shows that Seattle’s market currently has three tiers.

First tier homes are those that are being sold short (the Seller owes more to the bank than what they can sell the  property for) or are bank owned. These homes are selling for 14-17% less than market rate.

Properties with deferred maintenance and priced close to market make up 2^nd tier properties. These  homes usually sell for less than the most preferred  but get more than homes sold short.

Third tier homes are the most desirable. These are well priced; well maintained and often have been updated. Starting in December we began to see these home sell quickly (offers within 3-7 days) and often with multiple offers.

A few properties would receive offers for more than list but most would receive offers at list or below. Buyers would sweeten their offer NOT with cash but with better terms (for e.g., a quick close date or Seller rent back with no fee charged). This trend has continued as we move into the spring market!

NWMLS data released this week show that prices in King County have dipped some but that the median price for an in city, Seattle home was actually up 3% from February, 2011. This means that most 2^nd and 3^rd  tier homes are selling somewhere between 2004 and 2006 prices.

Expect lower prices to continue as the back log of bank owned properties aka “the shadow inventory”  is released into the market. This will  happen because the sheer volume of bank owned properties will hold prices down.

John Gardner, a local economist estimates the shadow inventory in the Puget Sound region to be equal to the Northwest Multiple’s entire inventory.

The good news for Sellers is that low interest rates are pushing more Buyers into the market place. Recent statistics released by NAR (National Association of Realtors) show that nationally pending sales in January were up over 8% from a year ago.

Locally, the NWMLS  reports pending sales in February were up 27% from February, 2011. The moral of the story, homes priced correctly are selling!

Lower prices combined with lower interest rates means Buyers can buy a home today for the same price as a home which sold six to eight years ago. Yet their monthly costs will be less!! And the amount of money Buyers will save over the life of the loan is considerable.

Consider this example.

Buyer Smith buys a home in 2005 Sales for $235,000

Buyer Jones can buy that same home today for $235,000

Both Buyers get 30 year, fixed rate conventional mortgages.

Buyer Smith’s interest rate was 6.27%; his principal & interest are $1499.99

Buyer Jones’ interest  rate is 3.875%; his principal & interest are $1105.06

Buyer Jones saves $344.93 per month and $124,174.80 over the life of the loan. If you are thinking of buying now is defenitely the time to do it!

Post a comment or call me directly at  206.915.1076 if you have a question about today’s post.

All the best,

Mary

**Interest rate information courtesy  of Eileen Burke, Cobalt Mortgage. You can contact Eileen at www. Eileenburke.com or via email Eileen.burke@cobaltmortgage.com

Photo courtesy Evan Parker, Digital Homeshow

We’re starting to see some good news in the condo market in Northeast Seattle. Volume is up 52% as compared to last year when only 21 properties were under contract. However, prices are continuing to slide and are down 9% from a year ago.

 Last year’s median price for sales September-November was $210,000. This year the number has dropped to $184,000. Much of this drop can be attributed to: 

The pool of Buyers has shrunk. Many first time Buyers (typically a young professional in their thirties) and Baby Boomers (who are downsizing) are choosing to rent VS buy.

These potential Buyers report that they’re choosing renting over owning because they’re fearful that if they purchase a property it will decline in value and not recover.

Short sales and foreclousres are having a big impact on our market. This fall nearly 45% of all listings in north east Seattle were listed as either short sales or bank owned.

Sellers are affected by these listings because they sell for less than a typical property. Buyers are able to use this sales data to negotiate. If we were in a more neutral market – one where the number of Buyers and Sellers was more equal Buyers couldn’t use this tactic.

 Unfortunately, our market has had and I believe will continue to have far more condos available than there are Buyers. Consequently, Buyers are more able to control price.

Successfully selling a Condo in today’s market is all about price! Properties that Buyer’s perceive as being over priced are sitting on the market and many simply aren’t selling. Even units that are in excellent condition will sit if they are not priced at market.

That said it’s an excellent time for Buyers and particularly investors to consider purchasing a condominium because not only prices are low but current interet rates are now as low as 3.91%.

If you have a question feel free to call me at 206.915.1076 or post a comment

Mary

You’ve found the perfect property, it’s in a great neighborhood but it’s a fixer. Is there a loan you can get that would allow you to buy a property like this?

An FHA construction loan aka an FHA 203k may be the answer. This type of loan allows the Buyer to borrow funds based on the value of the property once it’s been rehabbed or updated.

Essentially this type of loan gives the Buyer both the funds to make the purchase and the money needed to update the property.

For more information on FHA 203K loan, contact Justin Arnold at Sterling Savings Bank, 1730 Minor Ave. in Seattle.  Justin can be reached directly at 206.287.5780, via email at justin.arnold@sterlingsavings.com His web site .

Mary

First impressions count. And in today’s real estate market it’s especially important that the outside of your home looks as attractive and welcoming as possible. Here’s a list of simple things you can do to improve curb appeal and draw a Buyer inside your front door.

Mow the lawn and keep it maintained while your house is on the market. Nothing scares Buyers away as quickly as an unkempt yard. 

Check the front walk for trip hazards. You don’t want anyone falling and injuring themselves.

Clean the windows inside and out. Clean windows make everything look fresh.  It’s amazing how many Sellers skimp on one of the most cost effective things you can do to have your home look welcoming.

Dress the flower beds with a layer of compost mulch. This gives the impression your home is well tended and a fresh layer of mulch will help keep weeds under control.

Clean the gutters inside and out. Dirty gutters can make the outside of a home look grungy.

Paint the front door. A freshly painted door invites the Buyer in and leaves an impression that your home is clean and well maintained.

Like I said, a pretty simple list; nothing on it costs a lot to do. Yet these things set the stage so that when a Buyer pulls up to your home they feel that your property has been maintained and worth considering as their new home.

Post a comment or call me directly@ 206.915.1076 if you have a question about today’s post

All the Best,
Mary