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

Sales of new homes in the U.S. rose 1.3 percent this past month, marking a positive sign for the greater real estate market.  According to the U.S. Commercer Department, this is the biggest gain in the past six months.  New construction is a needed component to the real estate recovery, as inventories nationwide have dipped significantly in the past year.

New home sales were up significantly in the West, with a 14.9 percent increase intotal sales for October.  With a 6-month supply of homes available nationwide, and much less in parts of the Seattle market, home builders are encouraged by the recent statistics.

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

Bank-owned homes, REOs, or Foreclosures:  whichever term you use, there is a stigma associated with these homes that gives a consumer the impression of a less-than-attractive piece of property.  While there are plenty of ransacked foreclosures for sale, there are also plenty of high-end luxury homes that end up being bank-owned sales.

In our area, there were six recent Seattle bank-owned homes that closed for over $1 million.  While one might expect these to be mostly waterfront homes, half of them were actually just high-quality, luxury homes that for one reason or another went back to the bank.  Buyers of luxury property are clearly seeing past the distressed property designation and realizing that there is a real market for high-end foreclosures.

Seattle’s Million Dollar Foreclosure Sales (Homes sold within the past 6 months):

Arroyo
10859 Arroyo Beach Place, Seattle WA 98126 – $1,075,000

From the listing: “Modern waterfront retreat with 50′ feet on Puget Sound and three stories of stunning views! Soaring ceilings and walls of windows highlight the unobstructed views from this custom built 4,014 square foot home. Huge outdoor living space with 3 decks that are perfect for entertaining. Master bedroom with luxurious master bath and soaking tub. Located on a quiet dead-end street, the boat lift and 3 car garage complete this modern masterpiece!”

Mt Baker
3423 Cascadia Ave S, Seattle WA 98144 – $1,125,000

From the listing: “Enjoy great views of Lake Washington and I-90 bridge from porch and upper deck. Huge windows in most room allowing for a light filled home. Kitchen is designed for you, the cook, the baker, with food prep island, two sinks. Loads of built in Queen Anne style cabinetry. Great yard in back . Bring your creative ideas to make this marvelous home your personal statement.”

Seward Park
5009 S Oregon St, Seattle WA 98118 – $1,150,000

From the listing: “White oak floors accentuate the full-scale freedom of furniture capacity, people flow, stunning bursting view perspectives. A handsome posture of sterling distinction…portrayed by a highly respected craftsman. Enter from garage into elevator lobby or thru secured gated entry. Striking kitchen ~ generously proportioned (12 ft granite island, maple and ebony cabinets, glass tile). Master ste. extends to personal deck; deluxe bath; 2 walk-in closets. Coffered ceils. Home office (guest quarters?).”

Magnolia
3036 23rd Ave W, Seattle WA 98199 – $1,160,000

From the listing: “Magnificent showcase of style & elegance! The views of Puget Sound, Mt Rainier & Interbay will please. One-of-a kind custom home offers an open floor plan on the main level-perfect for entertaining. Full suite of Viking appliances + expansive use of granite travertine throughout. This thoughtful yet sizeable home is ideal for multi-generational living w/top level guest wing + lower level nanny quarters. The mid-level offers 3-beds,lounge,wet bar & more. Each & every room is detailed beautifully!”

Rainier Beach
9954 Rainier Ave S, Seattle WA 98118 – $1,250,000

From the listing: “Highend Luxury – Private lane seclusion on large waterfront lot. Chef’s kitchen, SS appliances, gas range, granite, 2 ovens, Grand master w/dbl entry hallway, fp, jetted soaking tub. Entertaining room w/kitchen & fp. Wired for the finest in technology, surround sound speakers throughout & exterior security cameras.”

Seward Park
5370 S Kenyon St, Seattle WA 98118 – $1,655,000

From the listing: “An extraordinary property: well over half an acre of spectacular manicured grounds leading to 100 feet of waterfront with deep-water dock. Original 1949 home taken down to the studs and completely reimagined over the last two years as a lush contemporary. Granite & stainless kitchen, open living & dining areas, multi-chambered master suite, family room, solarium & more. All new systems including double furnaces & heat pumps. Secure gated courtyard, & garage for up to four cars. Remarkable value!”

Currently, there are over 250 Seattle bank-owned homes for sale, including two for over $1 million. 

Tomorrow:  Million-dollar foreclosures on the Eastside.

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

FHA mortgages’ high cost loan limits have been restored.  FHA loans in high-cost areas had previously been allowed at up to 125% percent of the median home price for individual counties, with the maximum loan being $729,950.  In September, those limits were temporarily reduced as Congress failed to renew the temporarily-increased limits.  Maximum loans were reduced to $625,500 and 115% of the median as a result, affecting a large number of markets in larger cities with higher costs of living.

Congress’s passage of the new bill, along with the President’s signature, assures a consistent lending market for the near future, a key to strengthening a real estate recovery.  While conventional loan limits are still at $625,500, there is a good chance that they too could be increased, matching the FHA limits.  The National Association of Realtors has been pushing consistently for the enactments of these measures to reassure home buyers in some of the country’s largest markets that financing will still be available in their areas.

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