Of all these neighborhoods, the furthest south locales are where the better (read lower) prices are at. The closer to downtown Seattle you get, you'll tend to see prices going up, unless the street or individual house hasn't had good upkeep. Architects have been focusing on the renovated areas of Madison and the Central District because they still feel it's "where the best sales prices are" for them, but that's not always true for the buyers. We've been trying for years to get more architects to look at the light rail areas along MLK and Beacon Hill. One of our builder clients is about to release a listing on a new construction spec home in the next week or so that will have easy access to light rail and I-5, along with having some nice views out to Mt. Rainier and the Cascades.
Back up in central district, not everyone is savvy to the cuteness that is the Madrona neighborhood just east of MLK, right before you hit the pricier areas of the Lake Washington view homes which are down below the steep hill dropoff. The Central District has a widely varying demographic giving it an eclectic vibe. Many neighborhood areas actually fit into the CD (area 390) - Jackson, First Hill, Judkins, Madison Valley.
This is reflected in the breakdown of the MLS market areas that encompass these areas. Examples:
Mt. Baker/Rainier (area 380) had an average sales price in May 2009 of $404,060 and average YTD of $409,048, down 10% from last year.
Beacon Hill (area 385) average sales price for May was $345,767 and YTD of 337,958 down only 4% from last year.
Central Seattle/Madison Park (area 390) had an average sales price of $714,221 and a YTD average of $723,942. That's down 25% from last year's average of $968,625 proving again that it's the higher priced homes are getting hit hardest in our local economy and primarily by the reduced ability for buyers to get funding for loans in these higher price ranges.
Has anyone else noticed that the Zillow estimates have started showing spikes in values in the close in metro areas but they continue to show drops in the outlying areas? I find this interesting since within the past couple of months the Seattle metro area has been classified a "declining market" by the financial/banking sector.
We've had more than one lender tell us that appraisals continue to be an issue and the Seattle market has now been hit with it, not just areas like Kent, Maple Valley, Renton, Tacoma, etc. Five (5%) percent of all deals that are being written right now are failing and mostly due to either contingent sales not closing, or appraisals/financing issues. While it can all be confusing because of the array of places that we get data you have to take a broader view overall.
Let's take a quick look at what's been happening lately:
1. Zillow estimates show fluctuations in Seattle metro area spiking values in the past month.
2. Zillow estimates show continued downward trends in outlying areas of King/Snohomish County.
3. Pierce County continues to have some of the highest foreclosure rates, particularly in Tacoma.
4. Expected timeline of short sale and foreclosures to impact local market values is 5 years.
5. Per the NWMLS data, summer sales of homes have picked up in many areas.
6. Half of those NWMLS areas are still lower in terms of overall turnover of sales.
We have to keep in mind that up till about mid-2007 we had record sales levels due to the fact that loans were easy to come by, so it's not unusual that we'd be in lower sales numbers once the financing market slowed lending ability. Add to that the currently unemployment rates that have even well-employed folks in a holding pattern, it's not surprising. People tend to lock down and take cover when fear takes over.
May 2009 results from title company reviews of data showed all but 2 market areas (Juanita/Woodinville & the Ballard/Greenlake/Greenwood both at 1%) of the NWMLS had fewer closings than the year prior and 2008 was pretty bad for most. Every single market place had a lower average sale price than the year earlier, however, as an average price year to date review shows us 3 areas were up slightly (Skyway - 2%, Vashon - 11%, Lake Forest Park/Kenmore - 4%). Pending units for June are at their highest for the year at 8393 but the current average ($264,500) and median ($325,276) prices haven't moved much since January ($260,000 & $318,411 respectively). Highest volume of sales continues to be in the $200k-$350k ranges.
Even with the increase in activity 992 agents have dropped out of the business in the NWMLS areas since January. But, with the increase in summer business the tide of people failing out has slowed from 200-300 per month to around fewer than 100 each the past 2 months.
A quick review of some of REALTOR.com's latest stories provides us with the finding that Mukilteo, in Snohomish County, is in their Top 10 list of places to live. One of my band mates lives in Mukilteo in a gorgeous home overlooking Puget Sound and the islands, I'm pretty sure his house doesn't fit the magazine's definition of "affordable" but it sure is nice.
I was happy to see that an area of our state was listed as we've dropped off the top 10 in many other magazine ratings over the past few years because of the rising prices of real estate. Guess the past 2 years of price drops has brought us back on the radar a bit as still being relatively affordable compared to other coastal areas still.
I've got a client of mine that we're in the process of looking for a new place for her to move into. The beauty of the move for her will be recapturing a lot of her time since she's been commuting a long way for 16 years. A couple of years ago she was entirely priced out of Bellevue but today that has changed as prices have declined. We've been looking in the $400k or under price range and we've actually found quite a few that fit her basic requirements.
This is a relief for people locally but also for those that are relocating to our area. Many of my relocation clients that come from Microsoft have been frustrated often in the past 5 years because of how expensive the neighboring areas of Bellevue and Redmond have been for them. More often than not, we've had to look at farther out cities for them to get what is affordable for their families.
Many families choose this area because of the well regarded school district that often gets national accolades for educational performance. If you thought that you were priced out of Bellevue before, it's worth taking another look.
The northern end of Seattle is a mixed bag of activity. There are 2 main areas designated in the local MLS called 705 and 710. Area 705 encompasses neighborhoods such as Ballard, Greenlake, Greenwood, and more. Basically, anything west of I-5, north of the Ballard locks/ship canal, all the way up to Seattle's border at 145th Street. This is the largest market area of Seattle in terms of number of homes and land coverage.
Which means you'll get a mixed bag of activity. The Ballard and Phinney Ridge areas continue to have some of the lowest on market times for homes in the more affordable price ranges (up to about $500k), with averages around 68 days. That's about half the time when comparing that to further north areas close to the Shoreline border, such as Haller Lake and Bitter Lake. The overall area in May 2009 was up 1% in sales volume over May 2008. Prices, however, were down 14% year to date comparing year over year. Average sale price is down to $419,341 compared to 2008's $541,963.
Going east of I-5 from University area to 145th is area 710. Also a large area, but half the volume of area 705, including neighborhoods such as Meadowbrook, Victory Heights, Lake City, Laurelhurst, View Ridge, Ravenna, Maple Leaf, Northgate and more. Results of sales in these are a bit different because you've got a dense commercial area in the U-district that isn't really covered much in MLS sales. Several commercial units are for sale right now based on emails we receive from other commercial agents touting their listings.
For residential sales the volume is close to last year, down only 5%. Average sale price has dropped from $686,204 (2008) to $503,551 (2009). Most of that likely has to do with the higher price point areas having many fewer sales and/or longer lead times overall for selling thus dragging down the average.
The good news? These are still some of the most popular neighborhoods of Seattle, particularly for many of our transplants coming from other parts of the country. Quality of life of these very walkable neighborhoods draws many to their amenities along with the ease of access to downtown Seattle. When the market starts turning around after this stabilizing period, these will be the neighborhoods that will continue to thrive.
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Team Reba is a network of professionals specialized in all aspects of residential and commercial real estate transactions in the Greater Seattle Area. We know real estate, and we know numbers.
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