What's Happening With Home Sales & Prices in Washington?

The media says sales in Washington are still up where the rest of the nation has seen a decrease as high as 13% in some areas.  Pending sales numbers are still high.  But as an agent I have to wonder where they get their information?

Well, I believe, the answer to our increase is according to recent numbers the market with the greatest absorption rate is the $750k-1.5mil range.  With homes closing in those markets it looks like we have a strong market.  But what about all the homes in the $250k-$450k range?  Why are the sitting?  The answer is simple, with the absence of or extreme difficulty in obtaining 100% financing, even the best qualified buyer lacks the 5% minimum needed to buy an affordable home.  So....those homes are sitting.  Those buyers can't buy.  The person buying in the $750k+ market have money needed to buy.

In the past week, I've had a couple of agents comment on this strange market we are in.  Yesterday I got a call from a seasoned (22yrs) agent who asked me how I got my listing to sell.  He has a listing in the same neighborhood and it's not moving.  He added that his seller had put $90k into remodeling the home with top of the line this and that.  I explained that my sellers weren't in a huge hurry to sell so we decided to test the waters.  The area that their home is in has quite a range of pricing so we started high.  After 59 days and a $34k drop in price we are now pending.  The reality is and what I told the agent, it is all about who's buying.  I also told him you never want to be the best house on the street and if the neighborhood doesn't support the upgrades and finishes his client put into the house, it won't sell for the price he's asking.  Buyers are very educated these days and they know what they want and what neighborhoods can support.  And, he may have the most beautiful home, but in the wrong neighborhood it's not going to move.  He continued to pick my brain for about 20 min, which I was flattered by because I've only had my license 2.5 years.  It was nice to know that an old timer felt what I had to say was worth listening to.

My personal opinion is that in the past two years western Washington saw a dramatic increase in prices.  On average homeowners easily saw a $100k appreciation in those two years.  But with prices going up so quickly, that knocked a HUGE number of buyers out of the game.  Then you throw in the sub-prime lender troubles and now even A lenders struggling and even more buyers are knocked out.  In the past 6-9 months prices have started coming down.  Are sellers losing money?  Of course they would say they are, after-all their neighbor sold for $50k more shouldn't they at least make what they did?  The reality is that prices rose too fast for the economy to keep up for the average home buyer.  Yes homes in the higher price range are still moving.  Those buyers are able to buy.  But for the sellers trying to sell in the mid price point range it's a tough road and you just have to ride it out.  Patience is the key.  But also sellers have to accept that what their neighbor sold for a year ago probably won't be happening for them and that's a tough pill to swallow.

I believe we will see another 6-12 months of declining prices before things stabilize.  Then we will return to a more moderate increase in home values.  Hopefully in that time lenders will be able to recover and we can help the hard working middle class buyer achieve the dream of home ownership.

Sandy Noll
Realtor, eAgent
Keller Williams Realty
425-890-0878
sandranoll@kw.com
http://www.letsachieveyourgoals.com/
Woodinville, Kirkland, Bothell