From “Active” to “Sold” in Three Months
It appears that Madison Park’s very low level of real estate inventory is having a collateral benefit for at least some home sellers. Those who price their houses in line with the market can now realistically hope for multiple bids, a “sale for list” price or even higher, and a quick “turn.” During the third quarter no fewer than six home sellers were paid their original list price or higher at sale. The average time on market for these particular “sold” properties was just five days. In previous quarters there were few if any homes sold at 100% of original list price, so the last few months seem to demonstrate that the local market is entering a new phase.
And there are other good reasons for potential sellers to be optimistic. For example, the average time on market for Madison Park houses sold during the quarter was only 67 days, down dramatically from the 136-day average of the same period last year. Meanwhile, the average discount from the original list price for these properties was just 8.9%, versus 12.5% last year—certainly a trend the right direction.
Here’s a quick overview of what happened in Madison Park (Washington Park and Broadmoor included) during the past quarter:
Median Sale Price: $1,086,000
Average Sq. Ft.: 3,495
Average Price per Sq. Ft.: $387
Average Days on Market: 67
Average Discount from Initial List Price: 8.9%
Median Sale Price: $272,000
Average Sq. Ft.: 922
Average Price per Sq. Ft.: $360
Average Days on Market: 93
Average Discount from Initial List Price: 7.3%
The total of 25 sales is not spectacular, given that there were 34 sales in the third quarter last year, but that number is robust when compared to the situation just two years ago when only 14 houses changed hands in the same period. At that down point for the market there were 77 houses for sale, whereas today the number of house listings stands at only 38.
On a macro level there is much to be enthusiastic about, and all of it impacts our hyper-local market here in Madison Park. First of all, rates remain stunningly low. Bankrate.com reports that 30-year fixed-rate mortgages are now averaging 3.5% nationally, with 15-year rates at the 2.88% level. Assuming one can qualify, financing is super-affordable. Closer to home, the UW’s Runstad Center for Real Estate Studies reports that in the second quarter (the most recent for which statistics are available) resales in Washington were up 10.4%, permits were up 22.9% and median resale prices were up 4% year-over-year for the state.
The Case-Schiller home-price index for Seattle, meanwhile, shows a one-year 3.1% uptick in Seattle home values, the Northwest Multiple Listing Service (MLS) reports sales up 14.6% in Western Washington for the first nine months of the year, and pending sales of homes in the Puget Sound region are up over the previous year. According to Tim Ellis of SeattleBubble.com, approximately two thirds of homes in the Seattle market are attracting multiple offers. Finally (and most importantly), Seattle has experienced a 3% increase in its labor force during the twelve months ending August 2012, according to Washington State Employment Security—and continued rising employment in the area is expected to keep the real estate market on a positive trajectory.
|615 36th Avenue E. - Sold for $2.850,000 in September|
Here’s how this all played out in Madison Park during the third quarter. Of the 25 home sales, ten were for $1 million or more, the most expensive house (a 4,300 sq. ft. Washington Park mansion located at 602 36th Avenue E.) having sold for $3,200,000. The least expensive home was a 1,300 sq. ft. spec house completed in early 2011 and originally listed at $750,000, which ultimately sold for $543,000. We previously profiled this house and its companion house, which were both built on what had once been a single lot on 42nd Avenue E., north of Madison. The first of the two spec houses sold quickly, but the second one languished on the market, off and on, until this August.
That house received the biggest discount at sale from its original list price (28%), with the second-place honor for the quarter going to a 5,260 sq. ft. home initially listed for $2,495,000 but sold for $1,850,000, a 26% discount.
There were five houses and nine condos that sold for under $1 million during the quarter. The condos ranged in value from $210,000 to $785,000. One of these sold for 100% of its list price after a full 412 days on the market. Sometimes it pays to stick to your price, apparently.
|This cottage at 1865 41st Avenue E. is listed at $710,000|
As usual there is a significant disconnect between the Madison Park homes that are being sold and those that are listed for sale at any given point.
Here’s a snapshot of the market as it stands at the end of October:
Median List Price: $1,695,000
Median Sq. Ft.: 4,010
Median Price per Sq. Ft.: $423
Average Days on Market: 148
Percentage with Price Reductions: 37%
New Listings: 5
Pending Sales: 10
Median List Price: $465,000
Median Sq. Ft.: 1,106
Median Price per Sq. Ft.: $420
Average Days on Market: 176
Percentage with Price Reductions: 71%
New Listings: 0
Pending Sales: 5
The houses currently for sale, in particular, are much larger and more expensive than those that were sold last quarter. The median sale price of $1,086,000 is 36% less than the $1,695,000 median list price for houses in the neighborhood. And this is after 37% of those listed houses have already suffered a price reduction. This does not mean, however, that the for-sale houses are out of line with current market conditions. It’s partially the effect of having a lot of expensive houses available and the likelihood that the less-expensive listings will move to sale more quickly. Only six of 38 houses listed for sale are priced at under $1 million (16%), while six of 16 houses sold last quarter (38%) were sold at that level. Just to further belabor the point, the six under-$1 million houses currently available have been on the market an average of 74 days, while the 32 over-$1 million houses average 149 days.
|The view from the spec house at 344 McGilvra Blvd. E., listed at $5,995,000|
In a future report we will take a look at how the price per square foot of Madison Park dwellings has moved with fluctuations in the market. For now we will end by simply stating that things have certainly been worse.
[Thanks to Laura Halliday 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. All photos courtesy of the listing agents, via Redfin, except for upper photo, showing 1878 McGilvra Blvd. E., listed at $739,500.]