2009 was an up-and-down year for Seattle’s real estate market in general.  Half of the year was slumping prices and slow sales, followed by surging demand of first time buyers and a flurry of sales to close out the year.  The lowest-priced sale of the year was a $48,000 houseboat on Lake Union–the ultimate in cheap waterfront living.  On the other end of the scale, we topped out just over $15 million for a Lake Washington home in Mercer Island’s East Seattle neighborhood. 

Waterfront home sellers in the greater Seattle real estate market felt the pain of a recession which has put a drag on luxury market purchases in general.  While things were looking up by the end of 2009, the overall waterfront market is still recovering from the hits it has taken since mid-2007.  This has created some very attractive opportunities for home buyers.

Median sale prices of waterfront homes in King County dropped 4% from $716,000 in 2007 to $690,000 in 2008.  2009 saw a much larger 20% drop with the median sale price being $550,000.  While those numbers certainly show an increase in affordability, take them with a grain of salt.  Waterfront homes did not lose 20% of their value in 2009, there were just very few high-end sales last year, pushing the median lower.  The total sales numbers have been skewed much further toward lower-end homes in the past two years as consumers have tightened their belts–even luxury home buyers.

In the meantime, the marketing time required to sell a waterfront home has increased markedly.  With fewer buyers in the market, marketing time went up from a median of 38 days in 2007 to 66 days in 2008 and 70 days in 2009.  Sellers had to try quite a bit harder to entice buyers to make a large purchase, and many home buyers actually downsized to save costs.

One theory that persists in the high-end real estate market is that these home owners don’t “have to sell”.  More than the average home owner, they have more discretionary funds, more ability to carry mortgages on multiple homes, or the financial confidence to sit on their current property until they get the price they want.

While there is certainly truth to that theory in some situations, we’re also seeing some cracks in the foundation.  Waterfront home owners can certainly ride out the slow market, but there is always a limit.  There were some very significant price drops this year on $15 million and $20 million properties that didn’t budge much at all during 2008.  These home owners are still investors, and they understand when it’s time to cut their losses and make a sale happen.

For home sellers in 2010, the good news is that things continue to stabilize in the overall market.  On a monthly basis, total home sales are on the rebound.  Prices seem to have found a bottom for now.  When the base of the market improves, the luxury market gets a delayed bounce.  That’s a bounce that can’t come too soon for some waterfront home owners who have waited patiently to sell these past two years.  For waterfront home buyers–the deal is there for the taking. 

Sam DeBord and Brian Wiegand
SeattleHome.com – Washington State Realty – (206) 658-3225
Real Estate Brokers, Realtors, Green Certified Pros

Statistics not compiled or published by the Northwest Multiple Listing Service.

This entry was posted on Tuesday, February 9th, 2010 at 6:14 am and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.