The Dow’s holding its own so far today. “Hanging in the eights”; as I like to say. I don’t see the day coming yet when my week doesn’t start without checking the Dow when I wake up on Monday morning.

Last night I looked at the homes that sold in Redmond in August for the means of financing.  Where once I saw two loans as in 80/20 and 100% financing, I now see two loans as in conforming and jumbo.  One loan at exactly $417,000 and another for the difference.  I saw a couple of FHA loans in the mix and a couple of cash sales, but by and large the purchases had significant downpayments.  $20,000,000 worth of purchases had $13,000,000 worth of debt.  So 35% down overall.

Looking at who got a good buy and who didn’t, the new bogey appears to be 1.09 times assessed value, by and large.  The fabulous buys went for under assessed value, mostly in the high end near a million dollars.  The assessed values I am using are still the ones that 2008 taxes are based on, so be careful there.  The new ones for 2009 taxes should not produce this multiple.  Up to 1.17 times assessed value is pretty safe, depending on condition of the property, with 1.09 times assessed value being fairly doable and the better sold scenario.

Some of the best buys were those that listed low and sold quickly.  Some of the worst buys were listed high, and while the buyer got the property substantially less than asking price, the net result was still too high.  Remember to double check the multiple of assessed value against the main floor footprint calculation keep apples to apples as to style of home.

I’m not seeing any short sale closings in the mix.  Most are still stuck in pending.  The “decent” buys were popular homes dropping from 1.22 and 1.17 times assessed value to about 1.13 times assessed value.  Those were newer two story homes built in the mid 90s.

The waiting game is playing out where new construction is competing with resale by the same builder in the same community.  It will be very interesting to see what the builders are going to do about that as we head into Winter.  Look for some screaming “offers” from builders…BUT check that against the prices of same model resale before being lured by builder offerings.

Still hard to find a good house at a good price in this market, the best values still going quickly.  For those who see something that “looks good” out the gate, but need a method to quickly evaluate if it is a good buy, asking price divided by assessed value is still a good rule of thumb.  The closer it is to assessed value, the less time you will have to think about it.

Losers in this market are those who take too long to “think about it” and don’t have a good valuation tool.  Some of the worst buys were people who bought houses at substantially less than asking price, but still over market value.  Don’t fool yourself into thinking you “saved $50,000” just because you paid under asking price.

Mostly these are some tips for people who are buying in today’s market.  But sellers can take note as well.  After you come up with your list price, divide it by the assessed value used for 2008 NOT 2009 assessments, and see where that leaves you.  If you have a view  property, the multiples will be higher.  Buy if you don’t, and the calculation comes up at 1.5 times assessed value…think again.

Some stats on sold in September homes without basements:

Redmond – median price per square foot $233 in 08 vs. $284 in 07 prices down 18% volume up 25% from 43 to 54.  Median price down from just under $700,000 to just under $600,000 plus more home for the money as to total square footage.

Bellevue – MPPSF $332 in 08 vs. $318 in 07 prices up 5% volume unchanged at 37/38. Median price up from $685,000 to $739,750. (lots of very pricey homes in that mix vs. Redmond and Kirkland)

Kirkland – MPPSF $268 in 08 vs. $286 in 07 prices down 6% volume down 25% from 32 to 24.  Median price up from $526,500 to $570,000.

King County – MPPSF $193 in 08 vs. $223 in 07 prices down 13% volume down 10% from 788 to 704.  Median price down from $449,975 to $382,884

Asking Prices of unsold homes on market today:

Redmond $260 asking vs. $233 sold; 6.5 months of supply.

Bellevue $311 asking vs. $332 sold; 8 months of supply.

Kirkland $284 asking vs. $268 sold; over 12 months of supply.

King County $210 asking vs. $193 sold; just over 8 month supply.

When you consider prices and volume, you see that the deep dip in price sold in Redmond (down 18%) is giving them an increased volume of sales, up by 25%, and a shorter timeframe on existing inventory at 6.5 months in Redmond vs. 12 months plus in Kirkland.

Volume up 25% in Redmond proves that when buyer’s perceive real value, they buy. Buyers with money for downpayments do exist, but they are very, very value conscious. Bellevue stats are a bit screwy, but Kirkland and King County as a whole show that when prices are down slightly the volume is down a lot.  When prices are down moderately, the volume is up somewhat.

So buyers appear to be “happy” at 18% down in price, OK with 13% down in price and not so happy about only 6% down in price.  Remember, I removed basement square footage to evaluate pure living square footage, and never buy without looking at 2008 assessed value.

Stats not compiled, verified or posted by NWMLS (Required disclosure)