In some areas, like Bellevue, the best deals are pulling up the median price per square foot of the area, even though the individual home is selling at a bargain price. That is because supply and demand is causing the highest priced homes to be in more trouble, so many of the highest sales are distressed property sales.

In other areas like Lower North Seattle, there are so few bank owned properties, that they tend to sell at or over market value, particularly when there are multiple offers. That area also has the lowest supply and highest demand in King County.

So it is still and clearly a Supply and Demand driven market.

Im looking for a SFR, $500K range (98004,98005, bridle trails) that were built in the 50-60s but remodeled.
The odds seem to be against me at this point but we’ll see what happens

For instance if you are looking at price of $500,000 or less and age of home as 2005 or newer…single famiy not a townhome…the odds are less than older home or a $1.8 million home.

Strategic Defaults a Growing Problem

Thanks for your reply.

“Stability of an entire area will depend on the % of people who bought prior to 2005. So if you are looking at an area where most of the housing was built since 2005, the long term outlook for pricing will be more down. The financial health of the area will depend on the % of people who bought and or refinanced during the loose lending years. -> VERY GOOD POINT.

I also agree with you that Banks are leading people to believe that their inventory of distressed properties offer deep discount but from my experience, that has NOT been the case.

Most of the times, I found that regular MLS listings seem to be more attractive than REO/Foreclosures.

As a potential buyer on the eastside, this is bad news for me but I still want to stick to my guideline which is “I will only buy a house if it’s priced at 2003 level” Whether or not that will become a reality remains to be seen =P

Any comments will be appreciated!!!

Of particular note is a 2.25 bath townhome sold for $275,000 back in June that had a full remodel. Not sure how they reconfigured the baths to fit in a 3/4 bath on this unit which is generally known to have 1.5 baths. In one place in the photos it shows the 1.5 bath floorplan and then says “has to be remodeled to create 2 baths” from the one on the bedroom level. Seems it should say “has been” vs. “has to be”, since it is listed as a 2.25 bath. Can’t shed any light on that, but worth noting.

The highest price ever paid was in January of this year for a one floor unit that was remodeled that sold for $335,000. Not many places have highest price ever paid as a 2009 sale vs a 2007 sale. Of the 5 that sold for $300,000 or more, 3 were in 07, 1 in 08 and 1 in 09, again defying “peak” as being in 07 as to price.

In the $274,500 to $299,999 category there are 9 sold of which 5 were in 07, 3 in 08 and 1 in 09. Again showing the ability to achieve peak level pricing is there, moreso than in most any area or complex at this time.

Moving to sorting by recording date from most recent in descending order, there were 17 properties sold YTD in 2009 plus 7 pending. 9 of the 17 closed YTD had less than 2 bedrooms. There appear to be 17 townhomes for sale and the one that says “lowest price” seems to be the highest price With almost two years worth of inventory on market, the competition is pushing on prices, so 2010 will likely be more of a down year than 2009 in this particular complex. Still, those with “real” remodels are beating the odds and peak pricing levels.

For the most part, pricing is running at 1.06 times 2009 assessed value and up, so let your assessed value (2009 not 2010 AV) guide you somewhat, coupled with interior improvements. Email me direct if you want more than that regarding 60-01. From what I’m seeing, prices are postioned to fall there over the next 6 months. With two high and two low sales there in the upper valued units, I think people running into appraisal issues, even if they can find a buyer at a high price, will be the problem with closings from here through Spring of 2010.

SC,

There were two layers nationally to the downswing. Seattle did not “lag” the Country. Seattle simply did not participate to the same degree in the upswing from 1998, and consequently on the first layer of the downswing.

Nationally, prices started their upswing in 1998 through 2005, a 7 year climb, with only the latter portion attributed to loose lending standards. Seattle’s upswing didn’t pick up steam until much later, and largely due to the loose lending standards. Most of the Country started down in 2005 before the mortgage meltdown, while Seattle was just picking up it’s largest phase of the upswing.

Beginning in July ALL markets subject to financing issues suffered somewhat equally, so markets already into the first layer of down had a double whammy result, while Seattle did not. That is why you see much of the Country back to 2003 pricing (having started down in 2005) but Seattle down to 2005 pricing by most accounts.

You mention Eastside, so I caution that the areas with more homes in the jumbo loan arena will continue to suffer for a long period of time. It is important to track not only volume of current inventory…but the price range of that inventory. Those areas with inventory that is top heavy as to price, will experience a future cram down as the market tries to absorb those homes without enough buyers able to afford the price tags.

Buyers dealing in the conforming loan price tier have less to fear regarding future pricing, than those dealing in prices near or past a million dollars where supply and demand will be out of sync for years to come. In the conforming loan price tier, buyers purchasing in areas with considerable new housing from 2005 to present will also experience above average price declines.

As you note: “Many of us bought houses from 2005 – 2008 but lot more people bought houses from 1990 ~ 2005.” Stability of an entire area will depend on the % of people who bought prior to 2005. So if you are looking at an area where most of the housing was built since 2005, the long term outlook for pricing will be more down. The financial health of the area will depend on the % of people who bought and or refinanced during the loose lending years.

So no…”quality of mortgages” is not the reason…degree of upswing from 1998 to 2003 is the reason.