December Real Estate Report

Steady as she goes

The year ended on a pretty positive note for the real estate market here in the Park. Sales were steady, inventory was down, and there’s good reason to hope that even if things are not improving quickly, at least they don’t seem to be getting worse.

In line with the activity level that began in the early fall, there were eight houses sold in Madison Park during December, as well as two condos. Not bad for the holiday season. Among the sales was the spectacular $12.8 million waterfront mansion in the Reed Estate (shown below) that I profiled during the summer (“A glimpse beyond the gates”). After over a year on the market, the house changed hands at $10.6 million, a discount of 17% from the list price. A local real estate blog reports this as the second-highest -priced home sold in Seattle in 2009, based on data from the Northwest Multiple Listing Service (MLS).

Confirming the rarefied atmosphere of the market here in the Park, there was only one house sold in December at under $1 million; and the New Year begins with only four such houses listed for sale. December also saw the sale of two homes built by speculative builders (i.e. spec houses). But this still leaves, by my count, nine other spec houses on the market as of mid-January, with another two nearing completion. These represent 14% of the total homes listed for sale here—28% of the houses on the market outside of Broadmoor, which does not allow speculative building.

There is one spec home currently listed as a short sale by the MLS. A short sale is a situation where the sales price is (or, in the case of a listed-but-unsold house, is expected to be) less than the amount owing on the underlying mortgage. The particular spec house that has now become a short sale is located at 628 32nd Avenue E. (shown below). It was built in 2008, is listed at $1.65 million, and has been on the market for over 600 days.

As I noted in an earlier posting, it’s a tough market for spec builders—and there’s a limit to how long most can afford to wait before unloading their houses. Usually a short sale occurs when the property is turned over to the bank that financed the project. I am aware of only one other short sale in Madison Park during the past year, a Broadmoor home that is currently listed as pending sale. A short sale is always a sacrifice for both the owner (who gives up all equity) and the mortgage holder (who receives less than the amount financed).

Inventory shrinks

We begin the New Year with an inventory of only 64 homes listed for sale, including 18 residential condominiums. The for-sale properties are certainly not scattered uniformly about the Park, however, especially the houses:

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So, while Broadmoor represents less than 20% of the total housing units in Madison Park, listed houses in that enclave constitute 50% of the Park’s for-sale inventory. This was the general pattern throughout 2009, but it has accelerated as the cheaper housing inventory outside of Broadmoor was gradually sold but not replaced with new listings during the year. There have been only three new house listings in our market during the last 30 days, and two of these were in Broadmoor (one was in Washington Park). And there were only two new condo listings during the period.

Here’s how the Madison Park market (Washington Park and Broadmoor included) looks in January, as reported by Redfin:

Houses

Listings: 46
Median List Price: $ 1,995,000
Median Sq. Ft.: 4800
Median Price per Sq. Ft.: $415.63
Percentage with Price Reduction: 39%
Average Days on Market: 154

Condos

Listings: 18
Median List Price: $550,000
Median Sq. Ft.: 1,125
Median Price per Sq. Ft.: $488.89
Percentage with Price Reduction: 44%
Average Days on Market: 218

There’s a significant difference between the houses that sold in December and those that remain on the market, both in terms of price:

and in terms of size:

Houses sold in December were on average 35% smaller and 23% less expensive than those still on the market in January. There are currently four houses listed as pending, and these houses have a median list of price of about $1 million and median square footage of about 3,000.

The most expensive house currently on the market is the $10,995,000 Normandy-style home shown in the photo at the top of this posting. Built in 1931 and extensively reconstructed in 2005, it sits on a half acre of prime Broadmoor real estate and boasts four bedrooms and seven and a quarter baths (listing by Betsy Terry of Ewing & Clark). The least expensive listed house, at $599,950, is a 2,400 sq. ft. 1925 Spanish stucco located on the south side of E. Madison Street, but with a view of Lake Washington.

As an aside, I see that at least two houses are “for sale by owner” in Madison Park, listed on Zillow at $2.2 million and $1.5 million respectively. It’s unusual for homeowners in the upper market to try this gambit, so I’ll be watching to see their success (or otherwise) in marketing their homes without an agent involved. It’s not the kind of thing real estate professionals advise, of course (the doing it, I mean, not the watching it).

Up next month: an overview of how the Madison Park real estate market fared in 2009 compared to previous years.

[Thanks to Wendy Skerritt of Windermere Real Estate/Capitol Hill for her help in providing market data used in this report. Upper and bottom photos courtesy of Redfin.]