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Market Statistics Category

The 5 Most Expensive Homes Sold in 2011

Who said that the real estate market in the greater Seattle area is slow?  In King County alone, there were 734 homes that sold for over $1 million!  Of those, 135 homes were over $2 million, and 45 were priced over $3 million.  Here are the top 5 most expensive homes sold in King County last year.

#5 – 9740 SE 35th Place, Mercer Island WA  – $6,750,000

#5

#4 – 9627 Lake Washington Blvd. NE, Bellevue WA  – $7,030,000

#4

#3 – 3248 78th Place NE, Medina WA  – $7,250,000

#3

#2 – 6301 NE Windermere Rd., Seattle WA  – $7,999,999

#2

#1 – Undisclosed Address in Seattle, WA  – $9,000,000

#1

Would you like to see your home on this list?  If so, just give me a call and we’ll get it sold right away!

Cottage Lake Statistics

ChartI often get calls from clients asking about the current value of their homes, given the state of the current housing market.  This usually leads to an in-home visit and catching up on the good times (what? You didn’t have a good time with your real estate agent while searching for a home?).  Eventually, the conversation turns back to real estate and I’m forced to talk about work. Read the rest of this entry »

Sellers Still Not Budging

stubbornI was sitting at my local Italian restaurant last night and speaking with an acquaintance whom had just signed a listing agreement on his home (not with me unfortunately). The first question out of his mouth was “So how’s the market?”.  After some back and forth lightweight banter, we began to analyze the whole housing crisis (as people so often do while sitting at the bar). I asked how much his home was listed for, and his response was that he hadn’t yet decided on a price.  Read the rest of this entry »

Is It Time To Buy Again?

Sometimes I’m a bit slow on the draw.  Today is no exception.  Here is an article that was published in late March that I just came across.  It’s a long one, so get your coffee cup ready…

In a nutshell, it’s an interview with Mike Castleman, CEO of Metrostudy, a company that tracks real-time data on the country’s inventory of new homes.  You can read the article HERE.

I try to bring a balanced view of the housing market by providing a variety of articles, each with unique and different perspectives.  As always, feedback is welcome…

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2010 Distressed Property Statistics for Seattle

ChartsI’m a numbers kind of guy. I like looking at statistics and charts to help keep things in perspective. Here are the 4th quarter graphs for Bank Owned and Short Sale properties for the various counties surrounding and including King County, WA.

4th Quarter 2010 Distressed Properties by County

Foreclosure sales account for 26% of sales in 2010

Realtytrac, the leading online marketplace for foreclosure properties just released statistics for the fourth quarter, 2010.

Foreclosures are down

Sounds promising until you read deeper into the report. Foreclosures accounted for 26% of the overall market nationwide, down from a record high of 29% in 2009.  It’s great to see the decrease, but that is still a staggering percentage of the overall market!

Overall home prices get dragged down also…

When bank owned properties were just a small portion of the market (less than 10%), their sales prices were viewed as an aberration. One bank sale didn’t really affect the values of other homes in the neighborhood. But, when the percentage of REOs increased, it started to negatively affect the values of other homes (see my previous post: What is lurking in the shadows). In the report by Realtytrac, Washington foreclosures sold for an average of 30% less than their Fair Market counterparts.

Lower Prices = More Investors

As the sales price ratio of REO : FMV sales increases, so does the investor activity. That’s when the smart money begins to show up. To put it into perspective, if you could buy something for 70 cents on the dollar, wouldn’t you be interested too? Read the rest of this entry »

To Rent or to Buy, that is the question…

A recent press release put out by Trulia, a real estate site, detailed where it was more beneficial to buy a home rather than renting. I found the results to be very interesting, and while I do question the accuracy and/or the methodology of the report, it does get me (and I’m sure many other readers as well) thinking about it, given the current economy.

I decided to replicate their analysis, but scale down the area to my specific city of Woodinville. I know that the smaller the sample size, the greater the margin of error (I remember a little from my college days and statistics courses). But, what I’m going for here, is a broad overview to see if the data from Trulia could be used to measure the affordability index in Woodinville. Here are my findings, based on their methodology:

There are 6 homes (condos) for sale in Woodinville, with a median price of $88,200. These condos are 2 bedroom, 1 bath units. The median rent for a similar apartment unit is $1,022/mo (which I think is a bit high, but that’s what I got off the Trulia site.

Using their calculations ((median price / (median rent*12)) = 7.19

So, going by their calculations in their report, it would be better to BUY in Woodinville, than to rent.

There are many flaws in my research data to be sure, but remember that this is a “Broad Overview”. Interested? Drop me a line…

What is lurking in the shadows?

Many people have heard the term “Shadow Inventory” in connection with real estate. But, what exactly does the term mean?  In a nutshell, shadow inventory

“is the inventory of homes that are either owned by the bank (foreclosed upon but not yet listed for sale), or where the current owner is in jeopardy of losing his/her home to the bank in the near future”.

CNN recently released a report on this problem and in it described the long term effects it could have on our nation’s housing recovery.  You might be asking yourself how

homes that aren’t even on the market could have an effect on the market? There are two ways that this inventory can affect the market.

  1. Perception – This is when potential buyers read in the news about how bad the real estate market is, and decide to delay their purchase until they see more positive results.  I call these people the Lemmings. They blindly follow the crowds, listen and believe whatever they read and/or see on the news. Until this shadow inventory actually comes into the market, it is all speculation.
  2. Reality – When these homes are actually listed for sale and compete against other homes in the marketplace. The effect of this extra inventory causes downward pressure on the asking and eventual sales prices of other nearby homes. It is simply the law of supply and demand but with a twist…

According to some statistics provided to me at a recent seminar I attended, Short Sales (those sales where the sellers’ home will not sell for an amount high enough to cover the liens on the property) will generally net 70-88% of fair market value. REOs (bank owned property where the home has been taken back by the bank) generally net 40-60% of fair market value.

Here’s the problem if you actually think about it:

Fair market value is generally defined as the price at which a seller is willing to sell for, and a buyer is willing to pay in an arm’s length transaction. However, housing sales are not done in a vacuum. There are many factors that contribute to a property’s value, including but not limited to: location, condition, amenities, and much more. So let’s create a scenario which is pretty common right now…

A condo complex of 100 units with a historical average value of $250,000 (the price that many of the current owners paid for their homes just a few years ago) has one unit (fair market value) for sale at $250,000. What is the value of that unit? $250,000? Maybe a little less given the decline in the market?
Now let’s say that that unit sells for $200,000 and is recorded as a closed sale at that price. Another unit comes on the market for $225,000. Is that unit over-priced?
Then another unit (short sale) comes on the market at $150,000. Then another short sale at $140,000. Then another short sale at $130,000. Finally when all is said and done, you have 19 units for sale in the complex (out of 100 units = 19% of the total # of units, but 100% of the total units currently for sale) that are either short sales or REO, and with an aggregate average price of $150,000. What is the value of a unit in this complex now? This scenario is real, and happening in a condo complex in Lynnwood, WA. All of these short sale and REO properties have brought down the values of ALL units in the complex!

The end result of this glut of REO and Short Sale properties, is that those homeowners who weren’t “Short” before, may now become “short” as a result of the declining values in the complex brought about by the other short and REO properties, thus setting a new value benchmark, and exacerbating the problem further…

Current MLS statistics show that there are 2846 condos for sale in King County. Of those 2846 units, 623 are short sales, and 402 are REO properties. An astounding 36% of the total units for sale (1025 units) are NOT Fair Market Value properties. Imagine what is happening to the prices!

And those buyers? The savvy ones are jumping in and picking up one or more units to hold long term. The Lemmings stand on the sidelines because they fear that prices will continue to fall and their purchase will lose even more value. Just like the stock market, these buyers wait until the market has bottomed out and is on the rise before they jump in…

Is the recession over?

Here is another article from the Wall Street Journal that has charted Housing Starts since 1972. According to this article, each time new housing starts have dropped below the one million mark, that signaled an end to the housing slump. The article makes some good points, but as always, we never know about making history until after its been made…

What are your thoughts about the housing market?

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Weekly Sales Ratios (4/5 – 5/21)

Here are the most recent statistics for homes in the Woodinville area. The dates covered are from April 5th thru May 21st. This is a rolling statistic (meaning that the data will overlap with other charts in my Blog). Check it out here

As always, if you live in a different area and would like statistics for your city, drop me a line!

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