Friday, May 29, 2009

Is the worst over for Madison Park real estate?

Madison Park was one of the very few neighborhoods in the Seattle area to experience an increase in home values during the last quarter, at least according to a new survey issued by Zillow. Madison Park had an actual 4% increase in median house value, says Zillow, compared to the last quarter of last year. The next highest neighborhood on Zillow’s list was Vashon Island, where house values were up 1.7% for the quarter. Of the 137 neighborhoods surveyed by Zillow in the Seattle/Bellevue/Tacoma region, only 13 experienced an increase in house values. These include North Beacon Hill, Lower Queen Anne, and Meydenbaur (Bellevue). For the 98112 zip code area as a whole, there was a quarterly decline of 2.1%, according to Zillow.

The median value of a Madison Park home now stands at $885,000, down only .2% from one year ago. This compares with a median value of $379,013 for Seattle as a whole, where overall values declined 2.2% during the quarter and by 14.6% during the past year. The bottom line is that Zillow, at least, believes that Madison Park is doing quite well relative to the rest of region and the country as a whole. Madison Park‘s median home value of $885,000 represents 7.6% average annual appreciation for the past decade. Not bad.

For comparative purposes, it is interesting to note that only three Seattle-area neighborhoods in the Zillow analysis show a higher median home value (the point where half the homes are worth more and half are worth less) than our community: Medina ($1,431,018), Clyde Hill ($1,287,403) and Market/Downtown Kirkland ($939,417).

Kathryn Lister, a realtor at Coldwell Banker Bain, says it may be too early to say for sure whether the market has really turned in Madison Park. What she’s seeing is reluctance by some buyers to make a move right now. “On the upper end of the market,” she told me, “we’re dealing with savvy people,” the kind who are willing to wait to see if the interest rate and requirements for jumbo loans are eased by the banks in coming months. While prices may be at a good point, she said, there’s still the issue of how to finance. She believes that the differential between a conventional mortgage and a jumbo mortgage loan rate (5.0% versus 6.5% as of today) is too big, and the down-payment requirements for a jumbo (in the 25-30% range) also make this kind of loan problematic for many people. So there’s perhaps a wait-and-see attitude on the part of some buyers.

On the other hand, Madison Park is a special community “with a great neighborhood feeling,” she notes, and this just may be a big differentiator for houses in the Park, relative to other Seattle neighborhoods.

We will be providing an in-depth look at real estate sales and trends in Madison Park on a regular basis beginning next week, including statistical reports and analysis by area realtors. Stay tuned.

Zillow’s US real estate market surveys are available here:

[Photo of 1427 39th Avenue E., listed at $1,675,000, courtesy of Kathryn and Wendy Lister, Coldwell Banker Bain-Bellevue.]

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