Moving to Seattle from the East Coast

Everyone who is buying a home comes to the marketplace with some preconceptions as to how things will proceed. If someone is selling a house in the area and buying a different house in the same area, there are not as many surprises that cause a lot of confusion. If someone is moving here from California, the process of buying a home is not different and the home styles are often so completely different that the expectation of what they will find is not carved in stone.

When someone is moving here from the East Coast, especially the Northeast, there are a few differences best known before you head out to buy a house.

1) THE HOUSES ARE DIFFERENT

facade

The main difference in the home style is what is called “Craftsman” style. If you are building a house, they often will ask “Traditional or Craftsman?” when asking for the main styling of all of the millwork in the house. While “Traditional” will resemble an East Coast Colonial style a little bit…”traditional” does not mean “colonial”. The floor plan may or may not be different, but the facade will definitely be different.

The four homes in the photo are basically new homes by the same builder with the two on the left being on the East Coast and the two on the right being in The Seattle Area.

Some of the main differences:

1) Wood or wood facsimile products vs Brick A lot of people moving here from other States and other Countries like the more solid look of brick. But know that one of the reasons this area avoided brick for the most part is due to earthquake activity. Wood has some flexibility. Brick and mortar joints do not. There are plenty of old brick tudors still standing that have been through earthquakes. But I have seen many where there are patches over time from the brick cracking in a step pattern. I had some pictures in my phone of a house over in Montlake with this issue recently. If you do buy a brick house, examine it carefully, not just for cracks but for sections where the mortar is wider and often in a step pattern. Do use a structural engineer in addition to or as the home inspector as well. The new homes the brick is just a “facade” and not part of the construction. Still, brick doesn’t move well, even to a small degree.

That said, many of the homes today are built with a wood-like cement product as the siding. More expensive and custom homes still use wood. But most tract homes use the wood-facsimile product that may not have more movement than brick. You just don’t have to deal with the mortar issues.

2) Shutters Most of the time you will feel like the shutters are missing. Often, especially when buying older homes of the exact same style you can find on the East Coast, people will remark that they need to add shutters. Colonial homes had shutters going back centuries of the type shown on the homes in the photos on the left. Once in awhile you will find a form of shutters here that are more of a tudor style shutter. Same with the uneven pitched roof on the bottom photo on the right. There is a tudor influence. But no shutters has been more common for a very long time and because the homes were built that way it may not be easy to add them.

3) Closing and Closing Day

ALMOST NEVER DO YOU MOVE ON THE DAY OF CLOSING ON THE WEST COAST. NOR DO YOU TAKE OFF ANY TIME FROM WORK ON CLOSING DAY.

This has always been the most significant difference in the process, and one that often confuses people who are buying homes.

DO NOT MAKE ANY ARRANGEMENTS FOR MOVERS OR ANY OTHER SERVICES FOR CLOSING DAY!

This is vastly different from the East Coast where closings happen all day and several times in a day, usually every hour or so.

Whether or not you are moving here from the East Coast, it does seem a bit odd for the seller to be signing over his house to a buyer before it is paid for. It also seems a bit odd to sign all of your closing paperwork as the buyer and even bring your funds to closing, and not get the keys to the house. Even more odd that the day of closing is not the day you can tell your movers to bring your belongings to your new house.

The difference is that on the West Coast (and several other States) “closing” means the County has actually recorded the Deed to the property in the buyers name. On the East Coast that is not the case and the Deed is often recorded “in due course” and sometimes a month or so after closing. HUGE difference. On the East Coast they do a table funding and the buyer and seller are often in the same room with the agents and the closing agent. They buyer brings their money, the lender sent the money early in the day, the seller gets a check and hands over the keys to the buyer. All that within one hour. So if the signing is at 10 you can usually have the movers start moving things in around noon. If your closing is at 1 you can usually have the movers ready to move things in by 3 ish.

NOT so on the West Coast. On the West Coast the seller sometimes signs the new Deed over to the buyer a couple of weeks before closing. The buyer most often signs a few days before closing. Closing Day is too late to do much of anything. If it all wasn’t done before Closing Day, or at least most of it, less likely it will close by end of day. Closing is a phone call saying “we have recording numbers”. That means the new Deed has been recorded in the buyer’s name and that usually happens between 4 and 5 p.m. (not always; but often)

BUT! KEYS ARE NOT DUE UNTIL BY 9 P.M.

Once in awhile the seller is not completely moved out by the time that phone call comes in. Technically they have until 9 p.m. to be vacated and hand over the keys. I have only seen it go all the way to 9 p.m. a couple of times in a dozen years. But neither is it practical to want the keys to the house as soon as you get the phone call that it is closed.

The Seller gives the keys to their agent. Their agent gives the keys to the buyer’s agent. The buyer gets the keys from their agent. Most always the Agent for the Buyer can’t get the keys until after it closes. There are a dozen different ways we arrange this depending on the agents and parties, but do know that having cleaners or movers standing outside the door at 5:30 p.m. can end very badly.

Things are changing a bit because of the new rules that lenders must follow as of October 3rd. We are seeing more table funded loans and more buyers signing the morning of closing. We can’t move to a system where all buyers sign the morning of closing. It just wouldn’t work for the Title Companies.

As a buyer you don’t get much notice as to when you will be signing. More and more people are paying an extra cost for a mobile signer so they can sign after business hours or very early in the morning before work.

Just know that Closing Day on the West Coast is very, very different and once your loan documents get to escrow, there will be a signing appointment scheduled with very little advance notice. It’s a bit chaotic, but, it’s just how it is done here.

If you have moved here from the East Coast and have some other observations as to the differences, do note them in the comments along with where you moved here from.

Seller Will Review Offers on Monday…

cc4d542f-3346-4b02-930c-2b5b443d80edA seller setting a time in the future when they will review all offers at the same time has become common enough to warrant a blog post explaining the general pros and cons and procedure for this type of listing instruction. I just did a spot check of new listings in Kirkland 98033 and a full 2/3rds have this instruction, including both single family homes and condos. If you look only at the single family homes, the percentage is even higher. There is very little written on this topic that can be googled, so I will try to explain the ins and outs of this process best I can. Everyone does it a little differently, so this is by no means a full explanation or an absolute description that pertains to all listings with this instruction. But it should serve well as a guide to those who have not run into this yet, such as first time buyers just starting to look at homes to purchase.

First it should be noted that the SELLER, and not the Agent, must direct this instruction. Usually as a result of a conversation with the seller regarding whether or not they “have to” respond to the first offer quickly. In fact while I noted 2/3rds of the listings have the direct wording “…will look at-review offers on…” At least half of those who didn’t show that restriction, throw in vague language insinuating that the seller will not be responding quickly because they are out of town for a few days. A roundabout way of saying “…will look at offers on…” loosely.

Let’s lay out the mechanics of how this works before discussing the pros and cons from both the Seller and Buyer side of things. To that end I will describe how I do it.

Usually I list a property on Wednesday night after midnight, which is actually Thursday morning. I do this because the public sites don’t always pull the photos in the same data pull as the listing information, causing the listing to appear in mobile instant alerts with no photos. By listing a property in the middle of the night, the photos have time to catch up with the listing by the time people wake up and view the new listing on their phones or laptops. So I do this whether there is a “…will look at offers on…” instruction or not. Most often the “…will look at offers…” day and time will be Monday in the evening with a deadline for receipt of offers in the afternoon. This gives the agent for the seller time to print out and review the offers, call agents if needed for explanations or changes, and often summarize the offers in advance of meeting with the seller to review them.

It really is as simple as that without going into the particulars of how, when and why to apply this instruction or not. So we’ll move quickly into what this means for Buyer and Sellers with some of the pros and cons.

BUYERS:

When you first see a listing come on market that you want to see, you usually contact your agent. These days the first thing the agent looks for is this instruction, because it almost never shows in the public remarks and only in the Agent Only remarks. I don’t have a good “why” for that except that the public remarks has a limit as to number of characters, and most if not all of that is used to advertise the property with no room left to go into other topics. The agent only remarks area is even more limited, but there is usually room to very briefly describe this agent instruction.

The main reason the Agent for the Buyer first looks for this instruction noting how FIRM…or not…the instruction is, is to determine how quickly the agent needs to meet the buyer at the property.

If you see a property come on market on Wednesday or Thursday and they are not looking at offers until Monday, you still want to see it as early as possible to have time to consider the property before writing an offer. But if this instruction appears, you might not have to jump up from work with no notice or leave the children standing in front of school waiting for you to pick them up or interfere with the baby’s normal nap time. ALSO not all agents can jump up “right now” to run over to the property the minute it hits the market.

So the primary benefit to buyers and their buyer’s agent is it gives them a bit of time to schedule a convenient and mutually agreeable showing time.

That does not mean you wait until a Sunday Open House if the property comes on Market on Thursday and they are looking at offers on Monday. In fact most of the time I do not do an Open House during that 4 to 5 day period which encourages the buyer and their agent to view the property privately, which is usually better for the buyer. The more time you have after seeing the property to investigate further, collect your thoughts, make a good and firm decision before writing an offer…the better. The time frame is short enough from list to review date. Use that time wisely.

The second and possibly only other benefit to the buyer is it gives them some time to fully consider both the property and their offer before needing to submit that offer.

Some people are very quick decision makers and others are not. From what I have seen, buyers who have competed in multiple offers without success respond much more quickly than those for whom this is their first offer. This is not a “how to win in multiple offers” post, and in fact my next post may be “how to LOSE in multiple offers”.

This is just a basic outline of a common practice that most all buyers need to be aware of if they are looking for homes in some of the most popular neighborhoods in the Seattle Area.

Cons to the buyer of course are that they have to wait until Monday for an answer from the Seller and they are more likely to have to deal with multiple offers than if they could write an offer within an hour of the home coming on market and put a response time of same day. However this “con” from the buyer side will be addressed more as a “pro” from the seller side.

SELLERS:

Whether it is a strong or a weak market, over the 25 years I have been helping sellers sell their homes and buyers buy them, most every seller likes the property to get past the weekend before responding to offers. Given the best buyers often work for a living, unless they are cash buyers, the seller would like the people who are working for a living to have a chance to see their home before the seller responds to offers. They like their home to be listed before the weekend and they like to look at offers after the weekend. This is nothing new. In fact I just saw a house that used a wishy-washy “…will look at offers on…” stated as “Seller would like to wait until after the Open House on Sunday to respond to any offers.” I’m not a big fan of wishy washy as it leads to confusion. Some buyers will read that as a hard and fast indicator that they have plenty of time, only to be very upset to find that the house was sold earlier and the Open House was cancelled.

It is very important for the Agent for the Seller to have a very LONG and detailed “What IF?” conversation with the seller, to pin this down very clearly as to the sellers’ wishes. If the seller is a couple, you need to have this conversation with BOTH sellers.

This is not to say that the Agent should guide the seller to a “…will look at offers…” instruction. But it is important for the agent to know the sellers intentions by asking questions such as:

“If you receive an offer on the first day the property is on market and the buyer wants a same day response, are you prepared to accommodate that offer as written?”

The answers to that question are many and varied and almost no one answers a clear YES. That surprises some buyers and even some agents that the seller wouldn’t be very happy to have a good offer on the first day and take it on the first day. But in my experience the answer is usually another question as in “Do I HAVE to?” Once the seller has indicated a reluctance to accept an offer, the Agent for the Seller needs to go through a whole series of what ifs to come to a full understanding of the Seller’s intentions as to how they plan to react to offers.

Historically the “reasonable” time frame for responding to offers has been 2 days, not counting the day the offer is submitted.

In the above noted scenario of listing by very early Thursday morning, the anticipated response date and time would be Saturday by 9 p.m. here in the Seattle Area where a day ends at 9 p.m., unless stated otherwise. HOWEVER the buyer is the one who types in the response date and time in the offer and what was previously reasonable and customary is not what all or even most buyers will do in a hot market.

Since control of that response date in the offer is on the buyer side…it is important for the seller to give an instruction if they do not intend to comply with whatever a buyer may write. It is not good for anyone to start off on the wrong foot by the seller being angry at the time given or the buyer being angry that the seller chose not to respond by the time given.

Most sellers whether they have an Open House or not would prefer the home be shown all weekend when most people are available to see it, than respond on Saturday night. So Sunday night would often be the earliest date the seller expects to respond and Monday night is not a stretch and gives those buyers who weren’t available until Sunday, or even very early Monday if they were out of town for the weekend, a chance to see the property.

You might ask why not longer, and the answer to that is buyers are often frustrated with waiting 4 days and so extending that to a week or 10 days is really pushing it and usually causes more harm than good. That is a conversation the Agent for the Seller and the Seller discuss in the “what ifs” discussion. Every Seller will have a different opinion and there are no hard and fast rules and every Agent for the Seller will have a different counsel on that subject. For the most part, since I can’t speak for every Agent in the Country, I am basing most of this on how I do it and on conversations I have had with actual sellers. But the options can be many and varied.

The obvious Elephant in the Room from the buyer side is “Aren’t you just trying to start a bidding war?” Or from the seller side “Do I HAVE TO take a full price offer?”

This is where the issue gets very controversial and it is not uncommon to get some very angry calls within the first hour the home is on market.

1) NO the purpose is NOT to instigate a bidding war. The purpose is to give the seller a reasonable time to market his/her property before having to accept an offer. By any definition and anyone’s perspective, 72 hours seems reasonable. So Thursday to list, Friday-Saturday and Sunday to view and prepare offers, and Monday to submit and respond, seems more than reasonable. Except to the person who wants to be “The Early Bird Who Catches the Worm”, and I don’t blame them. But that, in many if not most cases, does not give the Seller ample time to market his/her home.

For some sellers “ample time” could be much longer or possibly shorter. But the bottom line is the seller gets to decide what is and is not “ample time”.

2) Pretty much yes…you do “have to” as to the seller’s question of whether or not they have to accept a full price offer. At least this is the conversation BEFORE the home is listed for sale. Mainly because the Agent for the Seller needs to confirm that the seller is willing to take the price at which they list the home.

It’s OK to hope for multiple offers and a price higher than the list price. BUT it is NOT ok to list the home for less than you are willing to take.

To some extent the rules and practices of this particular topic have changed somewhat since Craig wrote a post with his concerns Titled “Offers to be Considered on a Future Date” Is this Really Fair to Buyers?” in that sellers have to attach the instruction before the home is listed and must note whether or not they intend to reserve the right to NOT wait until that date to respond. Still, reading his post via that link in conjunction with this one is advised.

I wish I had 10 or more links to others expounding on this topic, but the only other has been here on Rain City Guide that I can find. If you see any others on “…will look at offers on…” vs simply multiple offer situations which I will cover in my next post, please do put those links in the comments. Thank you.

HACKED BY SudoX — HACK A NICE DAY.

Sunday Night Stats – Prices Improving?

We all know that prices can’t go up in large leaps the same way that they can drop significantly in a short time.  It takes a lot longer to go up than down, due to appraisal issues.

It will take many weeks to build up enough data post Obama $8,000 Stimulus Credit to form any conclusions. But you have to start somewhere 🙂  Stats prior to the credit are somewhat irrelevant at the moment except to later see if in hindsight pre-credit was “bottom”.  We won’t know that until next 4th Quarter and January of 2010.  Until then, we’ll track week to week until we build up enough data to do larger market segments.

I am using MPPSF Pending Inspection King County SFH, as these are the most recent “went under contract” homes. The green columns are properties that went under contract pending inspection Monday March 2nd through Sunday the 8th.  The  purple columns went under contract pending inspection Monday the 9th through Sunday the 15th.

I broke the stats down into under $500,000 (2 columns on the left) and $500,000 to $1M (2 columns on the right). The lower priced segment is doing better, but both show slight improvements.  These are asking prices, so all this is telling us at the moment is that buyers seem to be making offers on houses that are not priced quite as low on a median price per square foot basis, as they were pre-homebuyer credit. We won’t know if actual prices close higher until we get at least 45 to 60 days in front of the credit passing.

Data is not compiled or posted by NWMLS (required disclosure)

King County Home Prices inching Upward?

King County Home Prices inching Upward?

 

Sunday Night Stats

As of tonight, prices are showing at down 5% in January vs. the 4th quarter median price per square foot in the graph below.  That would take prices back to the 2nd quarter of 2005 at $185 MPPSF (vs $195 4th quarter median).  That would also be 20% under peak price of $230. ($230 minus 20% – $184)

I expect the median for the 1st quarter to be higher than that, and the median for the second quarter to be higher than the first.  Not by a lot.  But clearly there are more people out to buy property in the last week to ten days, than we have seen for the 6 to 8 weeks prior.

Given Friday was the end of the month, I don’t want to post the January stats yet, as some sales will be recorded by the agents during the coming week.  That could affect the median pricing somewhat, but as of now, January prices are down, and fairly significantly.

Good for buyers…not so good for sellers.

For now, stick a big red dot on the chart below at $185 MPPSF.  That’s where we are as of tonight for MPPSF, King County, Residential vs. Condo.

No stats in any of my posts are compiled or published by NWMLS. All are hand calculated by ARDELL (required disclosure)

mppsf

Click here for previous Sunday Night Stat posts

Seattle Real Estate Recovery in 2009?

I’m busy making James’ Biscotti , but I just got a Tweet from Matt Goyer over at Redfin about a Cover Story in the Seattle PI.  I glanced at it and everyone and their mother is putting in their $.02 about the Seattle Real Estate Market in 2009.

You can read it HERE

I didn’t see much of a concensus.  The usual suspects saying it’s going to be good vs. the usual contra-suspects saying it’s going to be bad.  I’ll look at it more closely when the bis-cotti is twice baked (biscotti means twice-baked; not biscuit).  In the meantime, if anyone sees a strong case for believing in one person more than another, let me know.

James, your recipe calls for “a lb. of flour” and I have a half used 5 lb. bag.  I guess I’ll have to Google how many cups = 1lb. of flour 🙂

We’re back to work…but’s it’s still Holiday Time too!   Plus, we can’t really do any meaningful year end or 4th Quarter stats until a week or so into the New Year.

So far, December is neck and neck with November as to median prices (per square foot), and 12% down for the year.

Seattle Real Estate – 2008

Ardell  s Crystal BallLet’s take out the Crystal Ball and a mountain of stats and make some predictions for 2008.

Here are my predictions for residential (not condo) sales in 2008:

16,500 will sell by year end.

3,583 sold in the first quarter (fact not prediction)

4,455 will sell in the second quarter

4,950 will sell in the third quarter

3,927 will sell in the last quarter

Sales of residential property peaked as to volume in the 1st quarter of 2006. We have been in a “volume down – prices up” cycle from the 1st quarter of 2006 through most of the 3rd quarter of 2007.

A little history regarding volume:

2001 – 22,425, 2002 – 23,921, 2003 – 28,804, 2004 – 31,091, 2005 – 32,821, 2006 – 27,816, 2007 – 23,375, 2008 prediction 16,500.

Volume started dropping in the 1st quarter of 2006, but the condo market picked up that drop to some extent until the 3rd quarter of 2007. So prices continued up as volume declined.

A little history regarding prices:

2001 – $252,000 to $269,000, 2002 – $269,000 to $277,000, 2003 – $277,000 to $300,000, 2004 – $300,000 to $328,000, 2005 – 328,000 to $389,000, 2006 – $389,000 to $439,000

last quarter of 2006 – $439,000
first quarter of 2007 – $445,000
second quarter of 2007 – $470,000
third quarter of 2007 – $469,000
fourth quarter of 2007 – $439,000
first quarter of 2008 – $435,000 (same as 3rd quarter of 2006)

Prices continued up through the 2nd quarter of 2007, continued up in the first part of the 3rd quarter and headed down in the tail end of the 3rd quarter ending at pretty flat.

My price predictions are:

$429,000 for the 2nd quarter of 2008
$400,000 for the 4th quarter of 2008

You guess the 3rd quarter.

So volume peaked in the first quarter of 2006 and prices peaked during the third quarter of 2007.

Will be interesting to see where actual compares to my predictions as we head into the 2nd quarter of 2008. If the darned sun doesn’t come out and stay out, 2nd quarter may fall short.

I think if we hit around 16,500 by year end, we will have bottomed out as to volume, but not price. I think prices will be down 15% from July of 2007 to end of December 2008. Volume will level out and prices will continue to fall.

I predict that agents will think I’ve been too tough on these market predictions and the general public will think I’ve been too soft and 5% will say I caused it all to happen 🙂

“Statistics not compiled or published by NWMLS.

How to evaluate "the comps" and price per square foot

tri levelWith more and more home buyers and sellers participating in the home buying & selling process to a greater degree than ever before, we can’t write enough posts that provide the basic infomation and skills that help them evaluate home prices. The other day I talked about the popularity and pricing of homes in differering age segments.

Today I’m going to talk about “the comps” and median price per square foot of homes of differing styles. For this purpose I’m going to use Bellevue, Kirkland and Redmond vs. Seattle or all of King County. We will be looking at the differences in price per square foot for ramblers, split-entry homes and ramblers with basements, tri-levels and two story homes both with and without basements. I’m using all sales from 1/01/07 to date, to insure enough volume of sales in each category, to have a relevant median price per square foot. I eliminated lots in excess of 13,000 sf so the “extra” land doesn’t skew the data.

The photo above is a tri-level. When you’ve been in the business for many years, you can pretty much know the floor plan of a house without ever needing to go inside. When a house looks like one story from one side and two story from the other, viewing it from left to right while standing only in front of it, that is a tri-level. You will enter on the main level which has the living room, dining room and kitchen. After you are inside the main floor (and not when you immediately enter the front door) you will go up 4 or 5 steps to the bedrooms or down 4 or five steps to the family room that exits to the yard, usually via sliding glass doors. The garage entrance is on the other side of the family room and no portion of the tri-level is underground. That is your basic tri-level and you can tell that without having to go inside.

bi levelThe home pictured to the left is a split-entry home. For those reading this from outside of the Seattle Area, you may call a “split-entry” a 2-level, a bi-level, a raised rambler or a raised rancher. All are referencing the same style of home called different things in different areas. Basically it is a rambler with a basement, most often but not always a daylight basement. The underground side of the basement is raised high enough for there to be windows.

The front steps take you up to the front door that looks like it is centered in the middle of the structure. Once you walk in the front door you have to go immediately up or down from the foyer to access any of the rooms. It is a rambler with a basement that is not fully underground at any point. A rambler with a daylight basement is basically the same home, but the street side of the basement is fully underground, so you enter at street level onto the main floor.

Now let’s do some stats on the differing home styles. PPSF = Price Per Square Foot.

Rambler/One Story Home – median price $491,500 – median sf 1,470 – median PPSF $334 DOM 26

Rambler w. basement – median price $699,000 – median sf 2,760 – median PPSF – $253 DOM 30

Some people think that the smaller square footage is creating the higher price per square foot. What is really happening is that the main level is valuing at $334 per square foot (same as the rambler) and the basement level is valuing at $172.50 per square foot. For instance the 2,760 sf divided by two, equals 1,380 on the main level times $334 equals $460,920 for the main floor “rambler portion”. The difference, $699,000 minus $460,920 = $238,080 for the basement divided by 1,380 sf equals $172.50 PPSF for the basement. That averages $253 PPSF for the whole house as to finished square foot and does not include the garage or unfinished/not heated basement area. It’s a bit simplified, but hopefully you get the gist of that. Same is true for the split entry.

Split-entry home – median price $510,000 – median sf 2,150 – median PPSF $237 DOM 30

Again, the main level of 1,075 sf of the split-entry is valuing the same as the rambler at $334 or $359,050. $510,000 minus $359,950 = $150,050 divided by 1,075 basement sf = $139.58 for the basement sf and that averages to $237 PPSF for the whole house. In reality above ground square footage values higher than underground square footage, so if the basement is all underground on either the rambler or split entry, the basement square footage would value for less than a “daylight” basement and the fully above ground portion would value for more than the partially above ground portion. So don’t pay the same for a fully underground basement as you would a daylight basement.

Two Story Home – median price $750,000 – median sf 2,760 – median PPSF $271 – DOM 39

Two Story Home w/basement – median price $1,097,000 – median sf 3,920, median PPSF $280 – DOM 59

The two story home with a basement does not get “diluted” in value by the basement because it is basically the top choice of available homes, there are fewer of them and almost half of them have a lake view. The builders will put the most house, 2 story plus a basement, on the priciest lots with views. So there are a lot of factors that create what looks like full value for the basement on these 2 story homes, when in reality it is an external “plus feature” doing that. Only 4.7% of splits and 1 story ramblers have a lake view, 11.4% of 2 story homes without a basement have a lake view and 42.8% of 2 story homes with a basement have a lake view. 31.8% of the big ramblers with basements have a lake view, so adjust for that as well.

The longer days on market has more to do with higher total price of home, than home style.

The tri-level pictured at the top is only valued at $268 per square foot, even though all of the living square footage is above ground. There are fewer of them, but that does not make them more desirable and a higher PPSF, because when you chop up 2,000 sf into three levels, no level seems large enough. When you put the family room on the main floor next to the kitchen it values higher on the main level, than when you put it down on the basement level. If you can see into the family room on the lower level from the kitchen, it values higher than if you can’t.

It’s really common sense when you think about it that way. With more and more people using price per square foot as an indicator of value, I hope this post gives you a little more info to help you to refine your DIY valuation process.

Have a great day!

Older sells faster and for more

It may surprise you to know that older and even oldest sells faster, and for more money on a price per square foot basis. In the last six months the median days on market for homes sold in King County was 50 days and the median price per square foot was $219. But you may be surprised that older sells faster and for more money per square foot.

Built prior to 1930 sold with median days on market of 33 and a price per square foot of $251

Built from 1931 to 1950 sold with median days on market of 40 days and a price per square foot of $244

Built from 1951 to 1969 sold with median days on market of 49 days and a price per square foot of $228

Built from 1970 to 1989 sold with median days on market of 56 and a price per square foot of $212

Built from 1990 to 2005 sold with median days on market of 63 and a price per square foot of 210

Built from 2006 to present sold with median days on market of 52 days and a price per square foot of $207

Surprised? Don’t be. It’s the old “Location, Location, Location!”

Every time someone built a house, going back to Seattle’s First Hill, by and large they chose the very best location to build on. Chances are if you were to go out right now and find the absolute best place to build a house, there will already be one built there.

Often people will assume newer is better and new is best. Not so. Most often the place where a builder can put up more than one house and as many as 50, the location is inferior…and consequently available.

If you ever doubted the mantra “Location, Location, Location!” then look at the proof. Older sells faster and for more money on a price per square foot basis because people choose location over house…almost always, and rightly so. And most often best location equals oldest house.

Seattle Real Estate – Sunday Night Stats

real estate market is flatlining

Before I get to tonight’s stats, let’s talk a little bit about some myths out there. Many are saying that the volume of sales is down by 30% this year because the low end can’t finance, as if only the lowest of price ranges is reacting to the mortgage markets. Not so. In fact the results are pretty startling across the board in that they are virtually identical in every price range!

Number of sales is down 30% equally in every price segment.

In Jan & Feb of 2007 when there were 4,226 properties sold, 46% of them were priced between $200,000 and $400,000

In Jan & Feb of 2008 the number of sales dropped from 4,226 to 2,919, but still 46% of them were priced between $200,000 and $400,000.

Virtually the same for all price segments. $400,000 to $600,000 represents 28.5% of sales in both years. To see all price segments and compare the percentages to 2005 and 2006 and to see all of the underlying data too boring to post on RCG 🙂 go here.

Up to this point more people were buying at higher prices each year. This “flatlining” of percentage of purchases in each price category is another way of saying that prices are flat.

When will we know that prices are down? When more people can and do buy more houses at lower prices and those percentages start increasing on the low side and decreasing on the high side, you will know that prices have been affected by more than just a little. Conversely if these percentages stay the same or start moving up again, then volume is down and prices are not affected. Personally I don’t see how volume can continue to reduce by 30% YOY without that affecting prices more than it has to date.

I will be waiting a week or so before reporting for the full first quarter in a like comparison. It takes a good week or even two weeks for agents to post their March month end sales. But as soon as we’re pretty sure all of the sales are posted, the all telling 1st Quarter 2008 numbers will be very interesting. Generally the 1st quarter accounts for 20% to 22% of the year’s sales. So we should be able to make some assumptions about how we expect the year to play out once we have all of the 1st quarter data.

OK…on to Sunday Night Stats and our regular programming.

King County Residential Sales

Active/For Sale -10,064 – UP 285 – median price $528,000- up $3,000

In Escrow – 2,664 – DOWN 48 – median price $447,725 – UP $3,725

Closed YTD – 3,273- UP 390 – median price $435,000 – DOWN $2,500

King Conty Condo Sales

Active/For Sale – 3,518 – UP 83 – median price $324,950 – no change

In Escrow – 863 – DOWN 39 – median price $299,900 – DOWN $50 (asking prices)

Closed YTD – 1,097 – UP 139 – median price $285,000 – no change

“Statistics not compiled or published by NWMLS.