November Real Estate Report

Madison Park goes posh

At mid-December there were exactly two houses for sale in Madison Park listed at under $1 million. And with the median price of condos having risen to $600,000, affordable is definitely not a good characterization of the current real estate scene here in the Park.

It isn’t that there aren’t still a lot of Madison Park houses that are worth less than $1 million. It’s just that the market has absorbed almost all homes that had been for sale in that price range. Meanwhile, many of the higher-priced residences are still awaiting buyers. “Maybe we’re just out of the relatively inexpensive houses,” says Dave Hale, Managing Broker for Windermere Real Estate in Madison Park. “I think our office’s average listing price is now somewhere in the $2 million range.”

What we had in the early part of 2008 was a market with very little movement. Now what we apparently have is a market where houses at the lower end are being snapped up fairly quickly, but the upper market has yet to fully recover. The average number of days on the market for under $1 million houses during the last three months was 79, while the average for the over $1 million houses was 145, based on listing information from the Northwest Multiple Listing Service (MLS).

Nevertheless, sales were surprisingly brisk last month in the upper market. Of seven houses sold during November in Madison Park (Broadmoor and Washington Park included), five changed hands at over $1 million. Here are the statistics (which include two houses not listed by MLS but recorded as sold by the King County Assessor’s Office):

Houses

Average Sales Price: $1,433,000
Median Sales Price: $1,295,000
Average Sq. Ft.: 2,952
Average Cost per Sq. Ft: $485
Average Days on Market for Listed Homes: 267
Average Discount from Original List Price: 16%

(Note that the discount average is skewed by the famous example, which I discussed in an earlier posting, of the Washington Park home which sold for a 52% discount from its initial asking price. Without that outlier, the average discount accepted by house sellers in November was just 7%.)

[Pictured above is the least expensive house on the market as of December 15, a three-bedroom 1927 stucco home located at 2324 41st Avenue E. Priced at $649,000, it is a listing of Michael Roland of Skyline Properties.]

There were also three condo sales in Madison Park during November:

Condos

Average Sales Price: $593,667
Median Sales Price: $585,000
Average Sq. Ft.: 1,410
Average Cost per Sq. Ft.: $440
Average Days on Market: 223
Average Discount from Original list Price: 6.5%

With ten total residential real estate sales during the month, November continued the trend of increasing market activity that began earlier in the fall. December, though mid-month, also showed surprising strength, with six sales recorded in the first two weeks. In addition, there were nine houses listed as pending sale or contingent. There were, however, only three new house listings and one new condo listing during the holiday season.

The impact of all these sales and the relative lack of new listings means that we enter 2010 with a pretty low level of inventory. Currently, there are only 70 active listings in Madison Park, which is a 10% decline from the October level and a 40% decline from the 116 listings that agents were working with at the beginning of the summer. We end the year with a seven-month absorption rate (10 sales to 70 listings).

So it’s both a rather limited market and an expensive one:

As Windermere’s Dave Hale notes, however, this is all just part of a long-term trend. “For the average person, it’s getting very tough to find a home here,” he says. So-called ‘starter’ homes which once may have cost $800,000 in the Park have declined to something like $650,000, he notes, but there aren’t very many of them available. And with declining inventory and renewed buyer interest, we may even be returning to price appreciation in 2010. “It’s been a tough year,” Hale admits, “but we start fresh in January. So we’ll just have to see what the New Year brings.”

Thanks to Wendy Skerritt of Windermere Realty for her help in providing some of the market data utilized in this report. Additional listing information was obtained from Redfin.