Sales of waterfront homes on Mercer Island were some of the first to come back after the doldrums of 2008 and 2009.  Following an anemic year of just 11 waterfront home sales in 2009, the sales totals have nearly tripled in the past two years.

While 2011’s sales of 30 Mercer island waterfront homes was a 6.25% drop compared to the 32 sales in 2010, to say this was a disappointment would be incorrect.  2010 was a banner year for Mercer Island, considering the current economic and real estate landscape.  Waterfront sales here were at standout levels compared to the greater market.  The fact that waterfront home sales in 2011 continued to keep pace with the blockbuster 2010 sales is another testament to the staying power of waterfront homes values in Mercer Island.

Of the 30 waterfront homes sold in Mercer Island last year, 25 were priced over $1 million and 18 were multi-million dollar homes.  The NWMLS labels homes in the center of Mercer Island on man-made lakes as “waterfront”, and these homes are the lowest-priced sales in the $800k-$900k range.  Most homes that are actually on Lake Washington waterfront are priced significantly over $ 1 million.

Mercer Island Waterfront Homes Sold, 2011

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Sales of waterfront homes in Issaquah were up more than one fifth in 2011, signalling a strengthening of the market for Issaquah waterfront homes.

A total of 28 homes were sold on waterfront property in Issaquah in the past year, five more than in 2010.  Also significantly up were the number of high-end, luxury waterfront homes.

Ten million-dollar-plus homes were sold in 2011, including four multi-million dollar waterfront homes.  This was more than double the four million-dollar homes sold in 2010.

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Waterfront home sales in King County and most of the Eastside have been rising steadily for the past couple of years.  Kirkland’s waterfront real estate sales, in particular, have gotten a big boost.

After 38 Kirkland waterfront homes were sold in 2010, that number jumped to 48 during 2011.  The increase of 26% was one of the biggest in the greater Seattle region.  Not only did the total number of sales increase, but the highest-end home sales were also up significantly.

Many cities saw a drop in their million-dollar and multi-million-dollar home sales recently due to the lack of luxury home buyers.  Kirkland’s sales of waterfront homes over $1 million in 2011 almost doubled, from 12 sales to 20 sales.  Multi-million dollar waterfront home sales rose from 5 closings in 2010 to 7 in 2011.  The market for waterfront homes in the city of Kirkland seems to be heating up even more quickly than the rest of the strengthening luxury real estate market in King County.

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Sales of waterfront homes in Seattle were up 2.91 percent in 2011, according to statistics from the Northwest Multiple Listing Service.  While waterfront sales have been steadily increasing for the past couple of years, the continued resurgence of this market is another strong driver of confidence for real estate investors in the Seattle area.

2011 statistics showed 672 sales of Seattle waterfront homes during the full year of 2011.   This is in comparison to 653 waterfront homes sold in the city in 2010.  Sales of houseboats and waterfront houses of every size and category continued to surprise real estate investors throughout 2011, even as the economy as a whole maintained its flat course.

Some analysts point to a loosening of jumbo and super-jumbo mortgage lending as helping the higher-end real estate market recover in recent months.  Luxury home financing has certainly played a part, but even the large number of all-cash transactions on the waterfront have increased, leading many to believe that investors have “called the bottom” and are finding that real estate is one of the safest bets for their money in the current economic environment.

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Following up yesterday’s bargain $500k Seattle waterfront home, we move over to the Eastside for the least-expensive sale on Lake Washington’s waterfront.

The bargain of 2011 on the Eastside was in Holmes Point, on the North end of Kirkland.  The Eastside’s “inexpensive” waterfront is usually quite a bit more expensive than the same category in Seattle, but this home actually broke through to Seattle-level prices.  At $725,000, this West-facing house on the Holmes Point shoreline was actually a short sale (A short sale occurs when an seller owes more than the home is worth–the bank must agree to sell for less, and someone is taking a loss).  The home was snapped up after just 11 days on the market.  The whole process took about 45 days to close, which is particularly surprising, as the majority of short sales are anything but short–they can takes months on end in some cases (I’ve personally closed a short sale that took two years for the bank to acquiesce).  In terms of general pricing, most lots on the Eastside’s waterfront would sell for more than this, with or without a house.

This property has multiple spots for residential improvements, while the value was clearly in the land.  A house and additional dwelling unit are located on the top of the property, while an unfinished cabana is down by the lakeside.  Covering nearly half an acre, the sloped lot has a fair amount of space to rebuild/expand.  At 50 feet of waterfront with a private dock, this is fairly standard Lake Washington frontage.  Holmes Point and Kenmore in the North are usually the least-expensive waterfront homes on the Eastside’s Lake Washington waterfront, along with Kennydale/Renton in the South.  This sale certainly set the bar lower for potential waterfront home buyers on the Eastside.

Kirkland/Holmes Point Waterfront Home, Sold For $725,000

11523 Holmes Point Dr NE, Kirkland WA 98034
4 beds, 2 baths, 2460 sq ft, .422 acres

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Waterfront homes on Lake Washingtonare, in most cases, valued at more than $1 million and often multiple times that.  It’s uncommon that we see a home sell for less, but there have been more discounted sales in the past year since prices have decreased significantly.  Current market notwithstanding, the most recent lakefront bargain was a real surprise to most Lake Washington observers.

A bank-owned home on the Southwest shoreline of the lake was recently sold for $499,900.  This South Seattle home, listed in the Lakeridge neighborhood (just between Rainier Beach and Bryn Mawr), is the lowest-priced traditional waterfront Lake Washington home that we’ve seen in a long, long time.  There are certainly some tear-down homes and lots that sell inexpensively on the lake, but even those are usually price well above this home’s final sale price.  Bank-owned homes on the lake are fairly scarce, and most haven’t lasted long on the market.

If you thought that this might be a ransacked, gutted old house, you’d be wrong.  It’s certainly small for a waterfront home, but at 1500 sq ft and 3 beds/2 baths, it is comfortably large enough for its price.  Mostly remodeled, the home has a clean, modern kitchen, shiny hardwood floors, and quality materials throughout.  There is moorage for jetskis and a boat at the private dock, and alley access/garage parking.

These kinds of deals don’t come by often.  The vast majority of the waterfront market will never touch this price range.  Once in a while, though, a sale like this breaks through a “low price barrier” and gives a glimmer of hope for the wishful waterfront buyer who thought they might not ever be able to afford living on the lake.

Lake Washington Waterfront Home – Sold 11/21/2011

10664 Rainier Ave S, Seattle WA 98178
3 beds, 2 baths, 1480 sq ft, built in 1941 – $499,900

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

Foreclosure data for King County and the U.S. are showing significant changes in foreclosure statistics for the past month.  While the number of auctions for previously-defaulting properties was up significantly, the number of new defaults and bank repossessions dropped.  Less homeowners are falling behind on their payments and receiving default notices from their lenders.  Add this to the fact that non-distressed home prices in the U.S. have stabilized, and there are some strong signs for a real estate recovery.

The takeaway from the full range of new data is this:  A large number of homes defaulted and were put into the foreclosure process earlier this year.  The bulk of those homes will be coming to the market as bank-owned homes and foreclosure auctions in the near-term.  At the same time, fewer homeowners are defaulting, and having their homes repossessed by the banks.

These are good signs for the market.  The current number of foreclosures being held by banks needs to be cleared out, and that is happening in a significant way with the new increase in auction numbers.  Buyers, especially in the greater Seattle market, are actually seeing very low inventory numbers and these new homes on the market will allow for a wider variety of properties available.  The overall trend is less new potential foreclosures in the long run.

Significant statistics via Seattle Times:

• U.S. repossessions hit their lowest level since March 2008 last month, down 17% from one year ago.
• King county repossessions were down 16% compared to last year.
• Total bank repossessions are projected at 810,000 homes this year, down from more than 1 million last year.
• Properties receiving foreclosure-related notices were down 3% in November and down 14% compared to last year.

There are some very positive signs in the real estate market for buyers and sellers these days.  Foreclosures will continue to affect the market for some time, but the direction of the market continues to point toward recovery.

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service

With stories about real estate trends in the U.S. headed in every direction, it’s difficult to get a good feel for where we are in terms of a recovery.  Headlines about sinking distressed home prices certainly receive attention but, in their simplicity, they fail to capture the overall market and its complex mix of properties.  For the average home buyer or seller, the condition of the real estate in their specific market is what they truly need to know–not just in locale, but also in property type.

The most significant statistics in real estate sales right now are those of non-distressed home sales.  Prices of traditional resale homes (those that make up the majority of the market and are likely what an average American homeowner intends to purchase) have stabilized over the past year.  We’ve seen minor fluctuations in prices throughout the year, but the general fact across the U.S. is that if you’re buying or selling a traditional home, we are already in a flat market with increasing sales numbers.

Barclays Capital analyst Stephen Kim supports the idea of a recovery in the non-distressed market.  “In the absence of a government home buyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

Home prices have stabilized in the market you’re intending to buy or sell.

If you’re  a traditional home buyer or seller, this is already true.  We’ve seen the effect in Greater Seattle, with King County numbers showing a wide divergence between foreclosures and short sales, and the majority of sales with are non-distressed.  Most of the recent headlines have pointed to the 11% year-over-year loss in median values, but this is skewed inordinately by the 18% price drop in bank-owned homes.  Non-distressed Seattle homes, on the other hand, have decreased only 2.5%, and that number has bounced around near zero for quite some time now.

Even more striking, there were droves of new sales in November, netting huge increases over 2010’s sales.  King County recorded 41% more sales of houses this November than in the same month last year, according to the Washington Center for Real Estate Research at WSU.  Condo sales were even stronger, with a 70% increase over the previous year. Total inventories of homes for sale are down significantly year-over-year, meaning that homes that are on the market today are much more likely to sell than they were one year ago.

Shrinking inventory, increasing sales, and stability of prices in the non-distressed market point to a recovery in this sector

This isn’t to say that we shouldn’t be aware of the distressed property issues.  They will certainly be an important component in the market and will take a few years to flush out of the system.  However, the leading edge of real estate price recovery will come from traditional home sales.  Investors will continue to scoop up cheap distressed properties and rehab them at a lower cost.  Average home buyers, on the other hand, have decided that prices for traditional homes are favorable, and combined with the affordability of homes with the current low interest rates, they’re buying in at reasonable prices.

As an average home buyer or seller, this specific sector of the market should be your focus.  As we always say in real estate, “Location, Location, Location”.  Don’t be distracted by flashy headlines that have little effect on your current situation.  If your location is in the traditional, non-distressed home market, we’ve hit that flat market that you’ve been waiting for. 

Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service