Friday, July 29, 2011
Second Quarter Real Estate Report 2011
Are we on a roll? Pendings skyrocket
As the second quarter got underway, things looked pretty dismal for the local real estate market. In fact, during the entire month of April there was only one house sold in Madison Park (Broadmoor and Washington Park included). While two condos also changed hands, the combined monthly volume of three total sales was the most depressed level of activity since the two-sales-per-month suffered by the market in the first quarter of 2009.
Fortunately for sellers, the pace picked up dramatically during what passed for spring here in the Park, with a more-robust monthly total of ten sales recorded in both May and June. Moreover, at the end of the quarter a stunningly large number of houses and condos were pending sale: 24. As we noted in our last real estate posting, we have been averaging 11 pendings per month over the past year, with 63% of these pending sales ultimately closing. Of the 19 houses and five condos currently pending, therefore, we should expect 15 or so to appear as sales in future months.
Even so, this year may still not shape up to be as strong as last year in terms of total volume. Through the end of June there have been 41 sales, compared with 57 sales at the same point last year, a 28% decline. But the number of listings is also much lower this year, just 81 properties on the market now versus 102 in June 2010. That’s a 21% smaller universe of available homes.
Here’s where the market stood at the end of the second quarter in terms of inventory:
Median List Price: $1,550,000
Median Sq. Ft.: 3,490
Median Price per Sq. Ft.: $444
Average Days on Market: 116
Percentage with Price Reductions: 42%
New Listings: 12
Pending Sales: 19
Median List Price: $550,000
Median Sq. Ft.: 1,025
Median Price per Sq. Ft.: $537
Average Days on Market: 147
Percentage with Price Reductions: 47%
New Listings: 4
Pending Sales: 5
In June of last year the average number of days on market for sold properties was significantly lower than the current situation: 126 days for houses last year versus 172 days this year and 166 days for condos last year versus 598 days this year. A significant outlier skews that last number, however. One condo sold during the second quarter had been on the market for 1,572 days, the sellers finally agreeing to take a 32% discount from their original listing price of $1,700,000.
Here is how the sales played out in the market during the second quarter:
Median Sale Price: $1,160,000
Average Sq. Ft.: 3,501
Average Price per Sq. Ft.: $416
Average Days on Market: 172
Average Discount from List Price: 12.4%
Median Sale Price: $735,000
Average Sq. Ft.: 1,766
Average Price per Sq. Ft.: $418
Average Days on Market: 598
Average Discount from List Price: 11.2%
It is interesting to compare the median price of houses sold during the quarter with the current median list price for houses in our market, $1,160,000 versus $1,550,000, a difference of 25%.
The most expensive house sold in the quarter was a 5,780 sq. ft. residence in Broadmoor, which went for $3,367,500, a ten percent discount from the initial asking price. The least expensive house sold was a 1914 cabin in Washington Park, one of the original houses built in the area. With only 1,000 sq. ft., it went for $410,000, 9% above the asking price. It will ultimately be slated for redevelopment.
Is spec-house building finally done?
And speaking of redevelopment, it seems that we overstated the case a few months ago when we reported that there were no uncompleted speculative houses under development in Madison Park. We missed the one on 39th Avenue E. pictured above. The house was under construction at the time of we reported that speculative building in the neighborhood was a thing of the past. It became obvious that we were wrong on that point when this house was completed and immediately listed for sale. It sold quickly, perhaps giving hope to any speculator who's still waiting with a property ready to develop.
On the other hand, there are currently at least three spec houses for sale in the neighborhood, two of which have been awaiting buyers for several years. One of these is this 5,800 sq. ft. Washington Park mansion, built in 2008 and recently re-listed at $3,495,000:
At this point it may really be true that there is no speculative housing under development in Madison Park, but we will only know for sure when several existing construction projects are completed (we're watching one major development on 39th Avenue E. very closely). There's still a fair amount of residential construction underway in the neighborhood, a subject we will explore in detail in our next monthly Real Estate Report.
[Thanks to Wendy Skerritt of Windermere Real Estate for her help in compiling the sales data. Listing data courtesy of Redfin, using information from the Northwest Multiple Listing Service. Lower photo of house at 819 33rd Avenue E. courtesy of Windermere Real Estate via Redfin.]