Author Archives: ARDELL

About ARDELL

ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 34+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

7,200 sf lot West of Market Kirkland

Posted on by
8

Awhile back, Dustin wrote a post about Pocket Listings, and we had a discussion about what “pocket listings” are, and why agents advertising them is generally against mls rules.

A pocket listing is someone who tells you they want to sell a property, but for some reason they either are not ready to, don’t want to, or can’t enter the property in the mls. 

I think this one may fall into the category of “can’t”, though I’m not totally sure.  I was recently contacted by someone who owns a 14,000 +sf lot with a house on it, West of Market in Kirkland which is zoned for 7,200 sf lots. It is a view lot, and the 7,200 sf vacant portion of the lot is on the view side (view of Lake Washington)  I believe it is unobstructable as to houses but not trees, across from Waverly Park.  Taking another walk over there today to study it further.

Back to the mls and “pocket listings”.  Clearly to put a property in the mls, you have to have an asking price.  Given current market conditions, do the builders want a 7,200 sf lot with a view West of Market in Kirkland?  There are lots of houses for sale over that way.  Might someone want to build their own custom house and get the lot cheaper by doing the short plat?

Since the lot is not two separate lots today, should the seller go to the time and expense of separating it into two lots and increase the cost of the lot accordingly?  Or in this day of the cheaper the better for a buyer, should they let the buyer of the lot participate in the short plat to save some money?

Given there is no current legal entity “7,200 sf lot” until after it is short-platted into two lots, can you even put the property in the mls, given it doesn’t exist as that legal description?

There is a note in the mls rules that you can list a property if it can not be put in the mls by reason of other mls rules, but you can’t use a NWMLS contract form to do so.  This one seems to fall into that category.

So to Dustin, since you asked, I guess there may be a “true” pocket listing…even here in the Seattle Area.  Maybe not.  Perhaps someone will shed some light on this in the comments.

Reminder Rain City Guide MeetUp Tonight

Posted on by
11

Where: Crossroads Food Court (behind 1/2 Price Books)

When: 6:30 P.M.

Crossroads is at 156th Ave. NE and NE 8th Street in Bellevue

We likely will be at the street entrance end of the Food Court, where there are all tables and no food booths.  We will have RCG signs on the tables in the area.

I put (behind 1/2 Price Books) as it is easier to see that from the parking lot, then to describe the exterior entrance to the Food Court area to the left of 1/2 Price Books.

If you are in the Food Court and looking for us, just call my cell 206-910-1000.

If anyone has been to a MeetUp and has any advice for us, that would be great.  I know Redfin and Seattle Bubble have had them and they just hang out together and people find them.  I expect we will talk about just about anything loan, real estate and anything else related.  Blogging.  Whatever.  I expect if anyone NOT RCG has a topic, their topic gets preference.  If no one suggests a topic, I’m sure even if it is just Rhonda, Jillayne, Robbie, Craig and me plus a few agents, we’l have plenty to talk about 🙂

Hope you can make it!

Sunday Night Stats

Posted on by
122

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

Rain City Guide Eastside MeetUp

Posted on by
56

We’re planning a Rain City Guide “Meet Up” at Crossroads in Bellevue on February 4th at 6:30 p.m. 

I know Rhonda, Jillayne and I will be there.  Possibly Robbie and/or Galen, and others from RCG.

Pretty informal, as most “MeetUps” are.  No pre-planned “agenda” unless someone wants to submit a few topics they would like covered.

I picked Crossroads vs. “a pub”, as I don’t like to encourage drinking and driving.  It will be in the food court area, so people coming from work can grab a bite to eat. 

Hope you can make it, and we will post a reminder the day before or day of “the event”.  Anyone from RCG who is planning to attend should send me an email.  It would be nice if readers could RSVP in the comments here, so I could “reserve” tables as needed, but RSVP is not required.

We’ve never done one of these before (or I haven’t) so if anyone has any suggestions based on their previous experience at “MeetUps”, advices would be much appreciated.

2009 $8,000 "1st time" buyer credit

Posted on by
26

IMPORTANT UPDATE!  Bill signed on 2/17/2009.

Original post below:

Back in October, I wrote this post about the repayment feature of the 2008 $7,500 1st time buyer “credit”, including this link to more information as to who qualifies, and the terms of the “credit”.

Yesterday on Twitter I noticed Ryan Hukill’s post referencing Kenneth Harney’s article suggesting that:

“… Congress might be on the verge of transforming it into a true tax credit — one that never has to be paid back…” for purchases made on or after 1/1/2009.

I personally don’t see how changing the repayment terms for people who bought houses last year can be part of a “stimulus” package.   Posting this so that people who are eligible for the credit are aware that there may be a change in the repayment feature. (update: Apparently Obama agreed with me, as there does not appear to be a change in the repayment feature for homes bought from 4/9/08 through 12/31/08 and the 2008 $7,500 Loan/Credit.)

Ruin Sity Gaide

Posted on by
88

I love this comment posted by David Losh over on Seattle Bubble.  I decided to give it it’s own post before it faded away into oblivion. 🙂

“If you do come to the internet for information about a home purchase or sale you are in the wrong place. This site (Seattle Bubble)  has excellent financial crisis dialog, but is very short on Real Estate information. It does provide much more information than a Ruin Sity Gaide, but still this is just entertainment.  The internet Real Estate sales business model is a very long way off if it will ever be viable. radfun hired the expodia.com sales person to push the Real Estate sales agenda on line. Sellers with problems flock to the online Real Estate sites along with the week end warrior home shoppers. It’s a mish mash of confusion that radfun happily collects fees for. In time it will be obvious this was just a continuation of a problem rather than a solution. Be very careful of what you think you will learn about Real Estate online. These are sales people looking to collect your money for doing nothing, that’s the business model.”

"Over-priced" Houses That Don't Sell

Posted on by
22

As I wander through the various message boards, I often read about people’s frustration regarding “over-priced houses that can’t possibly sell”.  To a buyer who likes the house, and is waiting for the price to be within reason, this can be very frustrating.

What they fail to understand is that every house that is for sale, is not necessarily going to be sold by the current owner. 

1) Divorce – Often in a divorce, one of the spouses is offered an option to buy out the other spouse.  In a market like this one, sometimes the agreed upon price must be tested.  Say the spouse who is leaving wants the buyout price to be $600,000. Let’s say they bought it for $400,000 and put $100,000 worth of improvements into it.   They put it on market for $$599,000 and keep reducing the price to $519,000.  Then it goes off market (this is a real case) and it never comes back on market.

Meanwhile, a buyer has been watching it, who wanted to buy it for $485,000.  He’s been watching it for 7 months.  He feels “used” and frustrated that it went off market before it hit an asking price of $499,950 .

Once the value was proven to be $400,000 plus $100,000 at best, the two spouses agree on the “buyout” amount, and one of them gets to stay in it.  It was only ON MARKET to prove to one of the spouses that the price of $600,000 was unrealistic.

2) Passive Aggressive – saying YES and meaning NO.  Husband and wife have a fight and the wife calls an agent to list the house, planning to get a divorce when the house sells.  Husband signs the listing paperwork at a price at which he knows it won’t sell.  He appears to be cooperating with the sale, and blames the market for the wife’s failed plans 🙂  They make up at some point, take the house off the market, and live “happily” ever after…until the next fight.

3) “Mom, you HAVE TO move” – Well meaning children tell Mom she’s too old to live in that big house all by herself.  She’s tired of hearing it, and agrees to put the house up for sale.  High price and awkward showing instructions.  “Can only be shown with listing agent present’ or “Can only be shown on weekdays from 10 a.m. to 4 p.m. and not on weekends”.

Sometimes these homes are on market from April through October, every year, year after year, with the price increasing every year.  Kids wonder why Mom’s house won’t sell, but they stop bugging her about her need to sell it.

4) Short Sale – Bank approves a sale price of $450,000.  House sits on market at $450,000.  No offers.  Owner can’t lower it below what bank has indicated they will take.  Bank won’t reduce the amount they will take, because they have an appraisal at $450,000.  House sits on market until someone buys it at foreclosure.  Some owners keep reducing it every couple of weeks, but mls says they can’t offer it at a “fake” price not ratified by the Bank…big Catch 22.

So when you look at the inventory of homes for sale, understand that they will not all be reduced to a price at which they will sell.  Often you will not get the real story about the seller’s motivation.

2009 is the Brightest Year

Posted on by
14

Last night was “Chinese New Year” and unlike 2008, which was “a blind” year, 2009 is “a bright year”.  Now before you get all excited about this Year of the Ox, let me explain what “bright” means.

Remember the movie “Wait Until Dark”? The fear and damage caused to the blind woman, when simply being touched with a scarf, by her “torturer” in her darkness?  It wasn’t WHAT he was doing…it was that she couldn’t see it coming…couldn’t see who and what it was.  That was 2008.

In the ancient culture  of Chinese New Year, the  “eyes” of the year are on February 4th. The dates that encompass each year are determined by the cycles of the moon. Some years, like 2008 have NO February 4th, and so are blind years.  Others have only foresight, with February 4th in the beginning, but not at  the end.  Some years have only hindsight, with February 4th at the end of the year, but not at the beginning.

2009, which started last night at the first new moon of 2009, has two February 4ths, giving us “the brightest” of years, with both foresight AND hindsight.   The year begins on 1/26 and ends on 2/13 this year, so 2/4 comes around twice. Bright doesn’t mean GOOD, it means if you don’t see it coming…and if you look back at the end of the year and “wish you had” done things differently…then you were choosing to bury your head in the sand, and you refused to see the handwriting on the wall.

  1. Thinking about flipping a house?  Think again.
  2. Thinking low priced home sales all around you, are not going to affect your property’s value? Think again.
  3. Think the real estate market is going to come back to the point where all people with a real estate license can make a decent living?  Think again.
  4. Think Obama is going to turn this market around by the 2nd Quarter? Think again.
  5. Think throwing good money after bad is going to save the economy? Think again.

If you bought a property in July of 2007…bite the bullet – or stay in it.  Wishing the market is going to get back there soon, is not going to make it happen.

In a “bright” year, you know what to expect and you base your actions accordingly.

  1. Try to get a loan mod, ONLY if you can afford the resultant new payments.
  2. If you see no hope of your income getting back up to anywhere near where it was when you bought the house; let it go to foreclosure, wave goodbye, and reduce your expenses.
  3. If you are a move up buyer, understand the house you buy is also down in price, and reduce the sale price on the one you are selling accordingly.
  4. If you are afraid of losing your job, stop buying toys you don’t need to have, and put 3-6 months of expenses in the bank, just in case.
  5. Recognize that Obama as President means we have the Leadership to help us do what WE need to do…not an Il Salvatore with a magic wand.

It’s a bright year…use it wisely.

What do you do with a Zillow Zestimate?

Posted on by
28

In the post below, I have shown comparisons of Sold price vs. Zillow Zestimate and Cyberhomes valution of the most recent recorded sales.  Why do we need to know this, and how do we use this information?

1) Short Sale vs. Zestimate – Was buying a short sale worth the extra hassle?

SS#1 – the Zestimate is identical to the 2008 assessed value. The Cyberhomes value is also almost exactly what the owner paid for it in March of 2006.  So neither was needed, as most buyers would look at assessed value and what the owner paid for it. This short sale is good for an “end user”, but not for an investor.  The discount of 5% under the Zillow Zestimeate and 10% under the Cyberhomes value equals the hassle, no more and no less for this buyer.  But there was a buyer before this buyer who waited around for 60 days for the bank to not approve the original offer price.  The first buyer flushed out what the bank would take.  The second buyer had the advantage of the first buyer’s hassle factor.

SS#2 – This is a good one.  The assessed value, Zillow Zestimate and the Cyberhomes values are all about the same.  This is down where current prices are about equal to 2008 assessed values in Auburn and Federal Way.  So this sold for 20% under fair market value and 30% under what the current owner paid for it. Hard to see the hassle factor, as it looks like they didn’t put this one as pending until they had bank approval, which was 10 days or so before it closed. This one is a stereotypical good Short Sale from the buyer’s standpoint and the Zestimate and Cyberhomes valuations and assessed value all confirm the discount.

Now that you know what a good and bad short sale looks like relative to a Zestimate, et al, you can see that SS#3 = not so good, SS#4 = Zillow’s way over on this one.  Assessed is $717,000 Cyberhomes is $794,000, the owner paid $803,000 for it in 2006, so not likely the Zestimate of $937,000 is correct. Compared to the Zestimate it looks like a screaming deal…but in reality it’s about the same as SS#1…OK for an end user but not for an investor.

For those who wanted to know Original Asking Price, I don’t know how it helps you to know that was $1.4 million on a property whose value is clearly just under $800,000?  Maybe I’m missing something, but asking price is never part of my valuation for  a buyer client.

Bottom line, looking at the Zestimate AND the Cyberhomes value AND what the owner paid for it and when AND the 2008 assessed value (not 2009) and the improvements or lack thereof, tells you a lot more than “the comps” these days.  Looking at comps is dangerous, as if you go back even 4-6 months, you are looking at prices that are higher than today’s current market value.  That may change into the second quarter…but the full area trend is MUCH more important right now than what the neighbors’ homes sold for back in June or July.

Zestimate vs. Sold Price

Posted on by
150

“Tsuru” over in Seattle Bubble comments, asked me for a comparison of Zillow Zestimates vs. Closed Sale Prices in the current market.  To be sure the Zestimate isn’t picking up the recent sale, I’m using the latest 50 or so sales recorded in the mls for King County in the last few days.  42 are single family homes and 8 are condos. I’m only showing the data for the single family homes, but thought you’d like to know the breakdown of the sales for the last few days.

I think I saw David G. at Zillow and someone from Cyberhomes going at it recently, so let’s throw Cyberhomes in the mix too.  As usual, I am posting this as the results come in…so I have no idea how it is going to turn out.  Let the best “man” win 🙂

Also of particular interest are the number of sales that are Short Sales and Bank Owned or other “stressed” sales, many, and very few of those indicated so in the Public view vs. Agent fields.

Sold Price Zestimate                Cyberhomes

$262,000 SS*                 $275,000                  $292,552

$365,000                         $301,500                   $398,192

$287,000 BO*                $311,900                   no result

$530,000 CO*                $743,000                  $695,991

$140,000 BO*                $186,957                    $196,698

$210,000  SS*                 $269,500                   $274,417

$282,500                           $320.000                  $281,461

$285,000                          $276,000                   $276,134

$347,500                           $334,000                  $347,910

$480,000                          $422,500                   $483,891

$550,000 ES*                  $705,500                 $688,842

$565,000 NC                      none                              none

$652,500                              ” N/A”                       $661,320

$190,000 BO                     “no result”                 $234,017

$269,950 SS*                    $285,400                  $282,102

$279,900                           $413,000                  $272,349

$517,000 BO                     $682,500                “$0-Foreclosure”

$450,000                           $454,500                 $518,982

$176,000 BO                     $312,500                 “0-Foreclosure”

$267,999 NC                           n/a                                     n/a

$740,000 SS*                   $937,000                $794,218

$325,000 CG                     $547,000               $567,171

$420,000                           $410,000                $402,384

$451,050 CR                     $637,000                $559,188

$850,000 NC                         n/a                               n/a

$835,000                           $802,500                $811,305

$915,000                            $831,500                $875,266

$850,000 NC                          n/a                              n/a

$370,000                           $367,000               $428,766

$636,500                            $702,000              $676,200

$650,000 SS *                   $707,500              $662,000

$360,000                            $347,500              $376,152

$475,000 BO*                   $584,157               $585,199

$292,500 NC                            n/a                              n/a

$305,000 NC                           n/a                              n/a

$309,950 NC                            n/a                              n/a

$373,000                            $342,000             $352,252

$386,000 NC                               n/a                         n/a

$389,950 NC                               n/a                          n/a

$400,000                            $391,000             $392,337

$577,000   TR                   $467,500             $405,413

$416,000                            $468,500              $484,506

*disclosed in Agent Remarks or owner field, but NOT in public remarks

SS = Short Sale. CO  = Corporate Owned, CR  = Corporate Relocation, BO  = Bank Owned, ES  = Estate Sale, NC = New Construction, CG  = Completely Gutted, TR = Totally Remodeled

Geographically, most of the short sales, all except one, are South.  The first sales are in Federal Way, Auburn, then Burien, Kent, South Seattle, over Mercer Island, Eastside, Bothell, North Seattle on the Green Lake/Greenwood side, then North Seattle up through Shoreline. That is how the mls code numbers run from 100 through 715.