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