In the “workshop post” I wrote this morning, I indicated that I have almost always started the homebuying process with my clients by looking at was has SOLD vs. what is currently for sale. Sold, Pending and STI properties will better reflect the best that the market has to offer in your price range, as someone liked them, and bought them. So better to set your sights and parameters based on these properties, before you look at the properties for sale. I had a request to do the Green Lake/Wallingford area in a similar “workshop post”, so here goes.
A buyer client tells me that they want to live “in Green Lake“. I ask why because wanting “the lifestyle of being able to live where they can walk around the Lake” is a LOT different than wanting to “live in Green Lake”. Seattle Agents and publications define Green Lake much more narrowly than consumers who just want to be within walking distance to the Lake.
So I go to the mls, which I now have open in a separate window, and I DO NOT search for “Green Lake” by Community. Instead, I do a radius search, and I put the center point of the circle smack in the middle of the Lake. I draw the circle at 1.45 miles from the center of the lake. First, because no one is walking IN the Lake, so part of that distance is the Lake itself. Secondly, because walking around the lake is 2.7 miles or so. If you are going to walk around the Lake once or twice, I figure you can walk a mile to get TO it, and should consider your options within that distance. Third because I used to live exactly 1.45 miles from the center of the Lake, and it was a comfortable walk over to the Lake, even in high heels. So I know, from personal experience, that this is a reasonable parameter and opens up the options, especially if a client’s price range is teetering on maybe not being able to afford to live “near” the Lake.
Obviously you are not going to pay as much for a house 1 mile from the Lake, as you will for one across the street from the Lake. But some people are very surprised by how much house they can get, if they just go a little further away, and so should consider all property within a mile of the Lake, all the way around the Lake. Someday I’ll have to tell the story of when I showed a house that was used as a brothel. It was a riot and an experience I will never forget. Talk about “never let them see you sweat”. But I’ll skip that area in this workshop post. Suffice it to say, that while it IS close to the Lake, you may not want to be the first house in from Aurora on certain streets. 🙂
The median price range for this area is $447,000, but includes some houses priced as high as $1.7 million. So let’s say that this client is single and can afford up to $450,000. The first thing I see is that 265 properties have sold in the last six months for $450,000 or less, and that does not include the STI and Pending sales. So the first question is answered. YES, you can afford to live within walking distance to Green Lake. Let’s see what he can get for something that is at least 900 sf and built since 1990. I expect to find condos and townhomes, but since he is single, he may want something newer, rather than an older house that needs a lot of work, so let’s look there first.
WOW! 68 newer townhomes and 12 condos have sold and he really likes the idea of owning a newer townhome, which in Seattle are not condos. Since there are so many, and he likes the two story townhomes vs. the one floor condos, we can up the square footage to at least 1,200 square feet. He really likes this style
Which is only 6 blocks from the Lake up at the top end by Duke’s. I call that “the Top”. It was over 1,400 square feet, had 3 bedrooms and 2.25 baths, a garage, and was well within his price range as it sold for $390,000
Now he is VERY upset that he never saw that one as he had been looking on the Internet for a home before he met me, and this one just closed. He wants to know how and why he missed this one. I look in the mls and note that it wasn’t “mapped”. Not mappable for some reason OR maybe the agent didn’t want to show it on a map, as the map feature makes it look a lot closer to a busy road than it actually is. So if the buyer was looking at property via a site that required “mapping” to be intact…this one would may have been overlooked if he was only using that “cool” feature.. Most sites offer various means of searching for property, the same way that I can use several “search types” when using the mls. Don’t use ONLY one, if you are seriously looking for property and not just browsing around the Internet. Use several sites and a few different search methods. Not just “the fun” one.
He asks what a .25 bath is. I explained that there was no .25 bath in this townhome. “2.25 baths” equals 1 full bath (with tub), one 3/4 bath with a shower (and no tub) and one “powder room” with toilet and sink on the main living area.
He asks if he can rent out the other two bedrooms. I point out the layout and what he will “lose” if he rents out the two rooms to people he doesn’t know REALLY well. First, he will pretty much lose his “yard”, because the sliding glass doors to the yard are from the lower floor bedroom. Kind of awkward to go through someone’s bedroom to get to your yard, and possibly even more awkward to sit in your yard, staring into someone else’s bedroom. I also point out that in this townhome, the 3/4 bath is down with the lower level bedroom. So if he is OK with only using his yard with the lower tenant’s permission, yes he can have a friend live there and contribute some money each month for groceries and utilities. (Not legally “rentable” as a separate living unit.)
Main drawback is the top floor had no “master bedroom” as there is one bathroom in the middle of the hallway between the two bedrooms. So if he “rented” the other bedroom upstairs, he would have to share his bathroom with that other person.
He wants to know how I know where the bathrooms are and where the yard access is, etc without having ever been in the property? One because almost all Seattle townhomes are built with two bedrooms on the top (3rd) level and one down at the garage level. Second, because the position of the bedrooms and bathrooms is noted in the mls, but not on the public sites.
There was a much bigger townhome on the Wallingford side, but the front door was “below grade” and it sold for $35,000 more
After looking at and discussing all of the options, he decided he’d rather have something like this free standing newer single family home for $450,000 with attached garage and 1,600 square feet in Greenwood.
He was surprised that both of these were built in 1990. He said they seemed newer. I explained that was because they upgraded the colors in the house and updated the appliances to stainles steel when they remodeled the kitchen.
The client was happy with his options. He didn’t think he could get something newer in his price range, within walking distance to Green Lake and shops. He didn’t rule out attached townhomes, but we figured out he preferred a free standing townhome, at the higher price.
Hi Ardell –
Great post! I really like the way you detailed it as a step-by-step process. Do you do this on the phone with the buyer, or is he sitting next to you at the computer?
Morning Ardell: excellent as usual….giving clients options, transperancy, knowledge is KEY!
Hi Vicki,
In this particular scenario, I would probably do this quickly at the computer with the client, but move to actual for sale property to drive home the “layout” issues.
While there may or not be something for sale that I would recommend, given location considerations, I would still go through those that I am not recommending to give the client the visual of the layout.
This way he knows what we are looking for when it arrives in the right location, so he can make a quick decision and hopefully better steer clear of multiple bid situations. Better to offer quickly, than to wait until there are two other offers. Also sometimes 1st offer in gets the property, if all offers are fairly equivalent.
By walking through at least 3-5 properties that log in the client’s brain the interior they are looking for, we can move more quickly with a fast peek at the inside, when the property comes on market in the ideal location. Or, I can just get hold of the people involved in the next one being built that is not yet for sale, and try to tie it up at a “pre-construction” discounted price.
To accomplish this, I can show properties in Ballard, even if the client wants one at Green Lake, as the layout and finishes will be about the same.
One thing to note is that unlike new construction large homes, buying pre-construction townhomes in Seattle often does not afford you the advantage of interior options. The land is so expensive, that the builder usually buys interior finishes in huge bulk quantities and has factored in “the economies of scale” into his profit margin. So if the builder has just bought a huge supply of wide plank Brazilian Cherry hardwood floors…wide-plank Brazilian Cherry it is, and the buyer doesn’t have the opition of switching to narrow plank light oak.
The builder might have some options, but generally not. Pre-construction does not equal unlimited or even many or sometimes ANY choices with regard to interior finishes.
Hi Ardell, Do you see an upturn in the market in Spring now? Or are sales slowing and properties depreciating like the bubble folks are claiming?I am interested in statistics around the east side (redmond, bellevue, kirkland).
Fantastic post. Captured my attention because I have not tried this approach with buyers before. Held my attention because your walk through addressed many key issues that come up! Thanks for the great info.
Sandy,
Single family or condo?? Price range?? Give me that and I’ll give you reatime answers with real examples to back up my opinion. I can’t do every price range and style. Age of house is important, as in if you wouldn’t buy a house built in the 50s, let me know that.
Give the questions some meat and I’ll bite it for you.
Hi Ardell, I was referring to your posts some months back regarding pending sales, closed sales etc in east side. I believe your stats were resistricted to single family and below 500K$ correct? I remember you were projecting another good year for real estate here. I am requesting you to post the same for the month of march now and am wondering if the trends you forecasted are continuing.
Sandy,
Thanks for the clarification. I didn’t do the Stats for end of March, because March went into April. Real Estate doesn’t always “calculate” on a strict monthly basis in value trends, in fact almost never does. I will post them after April closings and then average March and April. This often happens where Spring Break and vacations interrupt the flow of sales for a one to two week period.
“single family under $500,000″ doesn’t really ” compute any more than “condo under $200,000”. The market has jumped past that point, except for single family in Kingsgate, which I don’t use in my stats on an evenly weighted basis with Finn Hill side of Kirkland.
I can tell you that “in the Zone” decent single family is riding the $575,000 to $625,000 fence. Properties that should be selling for $575,000 are selling for $600,000. So yes, I am seeing my predictions taking place.
Will know better by end of April, and even more when “The IT House in the Zone” gets bid out…or not.
I can’t tell you where that is at the moment, as it is “in play” and I have one of the buyers. But I can tell you that there were so many buyers there yesterday that the agents never got to lock the door behind them, as another agent showing it arrived, and it was a steady stream of buyers with agents all day.
So the answer is yes, I am seeing the trends going in the direction I forecasted.
BUT I am seeing buyers looking for MORE VALUE for their money at the same time. So its going a little differently. One in Three are getting bid out to way over where they should be selling, and two are being passed by. If the passed by ones sell in April…I will be able to calculate the average increase. House one up 35%, house two up 25% and house three up 15% is likely where it will fall, the average being where I predicted.
Hope that helps you for now. I have more closing this week than I have ever had in one week, so that is another sign that things are moving as I predicted. One is in Seattle, one is in Issaquah and the other is no Bothell and none are in “the Zone”. On two we “took a pass” on “in the Zone” because the value wasn’t there for us. But there are still enough “Zonies” who are pushing on those prices.
I’m seeing a slight weakness in Redmond. Still trying to figure out where that is coming from. Redmond is a tough one to call as it is always a “mixed bag” were portions of it act like “the Zone” and portions do not. It has to do with traffic flow and roads that are a b.tch to get to work on. So housing that requires you to use those roads suffers and housing that gets you to Microsoft faster and with less congestion, do better.
Plus, the seven in my “sights” were asking INSANE amounts of annual appreciation, like 50%!! Hopefully nobody bought those. They were Condo/Townhome in the $300,000 to $400,000 range. Be careful of affordable housing, as being able to afford it has become a price pusher, and pushing price way outside of reality, in some cases.
As an aside, Kirkland Condos is starting to have some of the same signs as Downtown Seattle Condos. People who “bought at preconstruction pricing” new and conversion, dumping resales of them into the market. Could be a problem. Watching it.
Hi Ardell, Thank you very much. This is a good roundup. I am looking forward to your posting on April-March sales round up and trends.
I hear you ENTIRELY regarding traffic. The only reason I wouldnt consider bothell is because of the traffic. I refuse to spend 40 + mins one way coming from Bothell to the east side for work. Frankly, the traffic is so bad I prefer a house in the east side even if I have to make compromises including yard space. Traffic stress is an absolute NO for me.
Hi Sandy,
The Bothell buyer works at Boeing-Everett. I don’t do Bothell for Microsoft Employees BUT if you truly are in the $500,000 or so range…wouldn’t North Juanita/Finn Hill and going across Willows Road do it??
What is your actual price range? If it is $500,000 max, I’d go for townhome and then be real picky about current value and future value.
There are some nice things with a little yard for $350,000 to $375,000. If you are single, why stretch up for trash to reach single family at it’s lowest possible point, which has appreciated beyond reason? Go the other way…lower price…get nice townhome with yard.
That’s a generalization, because I don’t know you. But don’t overlook the option. Broaden your options and look at both, before you make an investment. You can always say no after you see it, but don’t rule it out based on “theory”.
Hi Ardell, The other reason why I am waiting to read your post on area prices based on closed sales in March-April is because I am almost getting freaked out reading more and more about the “bubble” in this market. I personally havent seen house prices “fall” yet. Have you? I still see well maintained well priced homes selling.
Sandy,
I’m looking really hard too, but I’m seeing weakness where I expected weakness. I saw one short sale in the one place I wouldn’t let my buyer’s touch with a ten foot pole since it was built. They screwed up “the permeable surface”, can’t imagine how they got the develpment approved like that in the first place, and the townhomes were leaking from under the units up.
So I’ve seen one of those not being able to sell for what they guy paid for it, but is that a “market problem” or simply “stupid is as stupid does” shouldn’t have bought that in the first place.
My problem Sandy, is this. I post stats when I feel they are relevant. But reality is, when I see 112 for sale in the price range…I see MAYBE 2 worth buying. The people who buy the other 110…I don’t worry about them. There are a group of agents who see the same 2 I see, and then there are the remaining agents who see and sell the other 110.
Real Estate has ALWAYS been that way. Some of the 110 end up in “the radar” and some sell at the wrong price by some agent who, I don’t know, let’s call it “doesn’t know any better”.
So to expect “the market” overall to be good or bad really makes no sense to me. 1% of the properties are worth buying in any market and 99% of them either need to get there…or not.
Does that make any sense to you? So it is my job to find “the one” and not rely on general market conditions to verify or improve value. I need to find the one “of value” in the first place.
But given all the scary talk, I do try to figure out what the heck they are talking about and test if it’s true from time to time.
What’s been hard in determining where the market is headed is a bunch, and many, sellers pricing too high. Insanely high. Making it look like the price reductions are a sign that the market is heading south, when they just were getting back to reality.
Wow, I could not agree with you more. Excellent points! I agree with you so much when you say just some % is worth buying. The worst part is the not worth buying houses are not over priced, but more like insanely high that reductions or downturn is inevitable there.
Sandy,
I just went through this for months over in Seattle in the $350,000 to $420,000 range. Problem was that the insanely overpriced houses were selling at insame prices AND the ones priced right were bidding UP to insane prices.
My clients were like, OMG!! Who paid THAT for THAT POS?!?! But truth is, they did and do, and that hurts the rest of us trying to do something that has a basis in reality.
But both of my clients managed to find their “the one” properties. Completely different buyer profiles and type of house, but both got really good places for them at the right prices for them. One at just under $370,000 (that was the really tough one) and one for $450,000.
One of my problems is I won’t take two clients at once who want the same type of housing in the same area for the same price. Cuts down on my “doable” volume. I don’t know how an agent can have three buyers who all want the same thing in the same place? Do they ring a dinner bell and say “come and get it” and have them compete with each other? Doesn’t seem right to me, but I’ve seen lots doing that over the last 17 years.
I can tell u one reason why these 30 + old yr old homes with out dated layouts, no decent upgrades in the “zone” sell. Traffic 🙂 Try commuting at this hour, and traffic is just crazy stressful.
Another reason is this: the MLS has inventory today of homes that are just terrible. The layout of the house is so unappealing that no matter what you upgrade thats not going to fix it.
Then comes the very interesting question: I saw this 30+ yr old house in bridle trails area with large lower level area (family at 4 steps lower though than main house) with some upgrades – minimal though. Nice large lot of 9000sqft abouts. That was listed in mid 500’s for a sqft area under 2000. Next I see newer homes built by a very popular mid range builder built in 2003 with smaller yard 3500 to 4200 sqft with internal sqft area of 2200-ish, nice layout etc for early 600’s and I dont get it. What on earth would some one pay mid 500’s for!!!! But beileve me both sold. The latter flew off in a week, and the former took 3 months 😉 I am wondering if there is this whole generation of folks out there who says heck I work so hard each week dont even talk to me about mowing the lawn 😉 Perhaps yard space isnt as important to some zonies?
For me, area on both levels is very important. I value decent size bedrooms, windows with west and south facing for light, closet space as much as I value living and dining area. Ofcourse family and kitchen areas are super important. The odds of my using my living area is less compared to bedrooms or bonus rooms (media room sort) upstairs. See my point? In old homes I find the lower level to be large, and upper level to be dingy at best!
A group of friends checked out some new construction homes which practically have a backyard or rather patio opening to 520, tri level chalet style homes build by a really good builder with good finishing. Pricing for 2200 to 2600 sqft homes is in early 600’s upwards. And they are apparently selling. I can think of 2 reasons: lousy traffic, and the lack of “good” homes in inventory.
“I am wondering if there is this whole generation of folks out there who says heck I work so hard each week dont even talk to me about mowing the lawn Perhaps yard space isnt as important to some zonies?”
You hit that nail on the HEAD! Absolutely! People do not want to spend the little time we have sunny here in Seattle, doing yard maintenance. The best houses are bigger lots, but low maintenance, backs to greenbelt. Anything with low maintnenance and PRIVACY.
No one likes to live in a “fishbowl” feeling like everyone is staring at them. That’s why I’m not crazy about a lot of the houses in Lakemont. Nice interiors, but as they get older you just feel like the world is going to wave at you when you wake up in the morning. And who wants to shut all the blinds when the sun finally comes out to have privacy here in Seattle?
I had a celebration drink at a signing. I think I’m being a little loose with my fingers. I better “step away from the keyboard” 🙂