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June Stats

Well the June Stats are in but you can’t see them. I tried for the first time to upload the graphs myself and totally screwed it up. Tim Ellis at Seattle Bubble set up this site for me and I have learned most of the functions but cutting and pasting new graphs into the html files exceeded my abilities.

Bottom line on the Stats is there was another uptick this month. East Bellevue is still stuck in the $220 per sq. ft. price range but the Eastside and King County are see the per sq. ft. price start to move up. More on this later after The Tim puts this thing back together for me.

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Legislative Update

Washington State recently did two important changes to its Foreclosure procedures. The first is that tenants now get 60 days to vacate a residential rental property once it has been foreclosed. The requirement before was 20 days. In addition there has been a requirement by the lender that during the foreclosure process that it must make every reasonable effort to reach the borrower before a notice of default can be reached.  This will probably add another 30 days to the foreclosure process. It also puts a lot of subtle pressure on a lender to modify the loan.  To supplement these efforts  Washington State Bar is will now be doing pro-bono work through its “Foreclosure Legal Aid” project to assist home owners in dealing with their lenders. However the bottom line is if you are in over your head look for the best way out. In my opinion doing a modification that adds to the length of the loan or worse yet increases the principle balance is not a viable solution for anyone.

The folks at Rain City Guide have a great post on all of this. Here is the link: http://www.raincityguide.com/2009/06/19/longer-waiting-period-to-evict-tenants-after-foreclosure-in-wa-state-effective-july-26-2009-and-free-legal-aid-for-wa-homeowners-facing-foreclosure/ .

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Weekly Score Card 7-6-09

Well things appear to continue to stabilize in East Bellevue. The number of listings was 290 which is right in between the low last week of 287 and the week previous at 295. Generally when you see an increase in sales volumes listings follow but that has not been the case. If you start seeing some firming in prices or a little uptick that will probably kick loose some potential sellers. On the surface the bank inventory appears to be going down. This week there was only 4 bank owned homes on the market an increase of one home that was a result of a failed pending sale. In the sold homes this week, of which there 14,  there was no bank owned homes and only one short sale. This is a really low number. Keep in mind this number only reflects those homes which the agent checks the bank owned box on the MLS listing. Some agents don’t do this, I know of at least four other homes which are bank owned but the box on the listing is not checked and not all foreclosures are listed in the MLS but in general having numbers these low is pretty unique in any market area.

The sales this week came in at 14 refelecting the spring bounce that happened in April in May as those pendings now close. There was one waterfront in those sales at $1,600,000 that brought all of the numbers up but even deleting that sale from the rest of the stats the average sale price was at $570,243 but more importantly we saw the first meaningful uptick in the per sq. ft. sales price which came in at $235 per sq. ft. again this is with the waterfront home removed. If the waterfront home was left in it would have been $251. This is the first significant movement we have seen since March where the average per sq. ft. sales price bottomed at about $220 per sq. ft. and stayed stuck at that number until this week. In addition the pending sales came in at $238 per sq ft. but there were only three pending sales. This is the second week we have seen the pending sales volume decline. The average sale price for a pending sale was $622,200 but with only r homes this doesn’t mean much.

It appears that much of the bank owned and some of the short sale inventory is getting cleared out and the lower volumes of those homes coming through as sold and pending are starting to show in the numbers. However as the sale numbers appear to move up in both average price and price per sq. ft. the volumes appear to be dropping.  In general you always have your spring burst and then the summer doldrums but my gut feel is that if prices rise anymore the buyers will start sitting on the fence and let inventories build and drive those prices back down. Especially if interest rates head up. Also speaking of interest rates they were down somewhat this week to under 5.5% but not a whole lot.  Let’s see what happens in the next 3 to 4 weeks.

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Bank Owned Inventory

The amount of bank owned homes in MLS area 530 seems to be declining. The MLS only list three bank owned homes. Now that number is low because not all agents check the box but going to the public records for 98008 there only shows 5 bank owned homes if which only two are listed. This is a big drop in January when the market look to be falling off of a cliff there were over 20 bank owned homes in 98008. Also you will notice in the weekly reports that the number of homes in the sold and pending sales that are either short sales or bank owned keeps declining. It is the distressed property that drives down values and to have 1% of the inventory be bank owned is probably one of the lowest numbers in the country.

While it appears the pressure downward may be easing some by the reduction of the “distrssed” inventory and the great fundamentals of the East bellevue location, there appears to be nothing to drive values up. There is still increasing unemployment and there is still a lot of liquidity issues to work through the banking system and it will be interesting to see if the buyers elect to participate in the market if they cannot purchase distrssed inventory but overall the East Bellevue market area is probably one of the better stories in the real estate market place.

If anyone would like a list of the bank owned properties please let me know. I haver the public records list for 9005, 98007 and 98008. It includes all of the inventory just not the listed inventory in the MLS.

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Weekly Score Card 6-29-09

Another week with some interesting activity. The overall number of listings was down this week to 287 from 295. This is the first downward trend in a few weeks. I thought as sales would continue more sellers would come to the market but maybe the sellers have figured out that while sales are good there is not much  movement upward on pricing. The number of sales really jumped to 17 from 5 sales last week and 9 the week before. Also in this batch there appeared to be no bank owned or short sales. The per sq. ft. sold price however seems stuck at that $220 number. This week it was $224 per sq. ft. There was one bank owned home that really drug the numbers down last week to $185 so that was kind of an anomaly with only four sales. The number that is moving up for the third week in a row is the average sales price at $549,643. It appears the lesser expensive inventory is getting cleaned out. 

This week there were only five pending sales and again the per sq. ft. average was up for three weeks in a row for pendings versus sold, this is a counter trend to other markets still fighting through bank owned homes and short sales. Also in this group of pendings there appeared to be no banked owned or short sales. A first. The average pending per sq. ft. price was $238 vs $241 last week and the average sale price was. The average list price sold was $503,000 down from both weeks in a row.

On the surface it appears that some of the bank owned and short sales may be working themselves through the system. If the economy doesn’t get worse this maybe a continuing trend. It appears there is some mild movemement up on price on the lower end but it also appears the buyers are starting to dig there heels in. I suspect we will see sales volumes declining from seasonal levels. Also you may see buyers sit on the sidelines if they can’t get the deals they want. Interesting to see how this plays out.

Tags: 6-29-09, active, avg. per sq. ft. price, lending, short sales, sold, weekly results
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East vs West Bellevue

Some interesting things are happening and you can see it in the new construction pricing. The relative differential in values between East Bellevue and West Bellevue have been narrowing. A good way to see the market differential for different neighborhoods is to look at their new construction. Since the value of the neighborhood and location is a big factor. Using resales in tear-down areas can be deceptive because many homes are sold for land value not land and house value.

Some interesting numbers come up. Five years ago in May of 2004 the average per sq. ft. sales price for a new home in West Bellevue was about $300 per sq. ft. in East Bellevue it was $200 per sq. ft. Now here is a shocker in May of 2009 the average per sq. ft. sales price was $258 in West Bellevue, in March of 2008 that number was $427 per sq. ft. In East Bellevue in May of 2009 the average price per sq. ft. was $254 and in March of 2009 it was $262.

Now once financing and the economy returns I think you will see this differential widen again between East and West Bellevue when the extreme upper end market comes back to life; but there is a shift going on that I am seeing at the street level. When I first started 30+ years ago Bellevue was a commuter cityand living next to the two bridges, particularly 520 had a big premium because it cut the commute time. The Doctor and Lawyer crowd chose West Bellevue as the place of choice. It always had a certain appeal because of the waterfront and large lots but what drove the values in West Bellevue like all real estate was location. Also East Bellevue was seen as “tract” development and the commute to everything was longer. You could have a spread in relative values of a 100% or more between new constuction product.

A couple of generations make a difference. Now Bellevue is the fastest growing job base north of San Francisco and the main crowd purchasing is the “tech” buyer. There is no real location advantage living in West Bellevue. Overlake and Group Health is where the Doctors go and the lawyers are moving to Bellevue. Yes there is the aesthetics of the neighborhood and the presitege factor but the basic location difference which drove the differentials in values is changing.

In addition odd things have happened such as Interlake and Sammamish High School are rated higher than Bellevue High. In addition the City of Bellevue will be sinking huge resoources into East Bellevue and East Bellevue has a neighborhood park system within walking distance of almost any home in Bellevue.

The tear down cycle will start in the next go around in East Bellevue. Most of the available infill was done in the last cycle  in East Bellevue. The character of East Bellevue is going to change with the most notable improvements being transportation and redevelopment of post war strip centers such as is being done in the Lakehills Shopping center now.

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