It appears that Madison Park’s very low level of real estate inventory is having a collateral benefit for at least some homesellers. 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 homesellers 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 percent 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 percent vs. 12.5 percent last year — certainly a trend in the right direction.
On the uptick
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 million
Average square footage: 3,495
Average price per square foot: $387
Average days on market: 67
Average discount from initial list price: 8.9%
Median sale price: $272,000
Average square footage: 922
Average price per square foot: $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 percent nationally, with 15-year rates at the 2.88-percent level. Assuming one can qualify, financing is super-affordable.
Closer to home, the University of Washington’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 percent, permits were up 22.9 percent and median resale prices were up 4 percent year-over-year for the state.
The Case-Schiller home-price index for Seattle, meanwhile, shows a one-year, 3.1-percent uptick in Seattle home values, the Northwest Multiple Listing Service (MLS) reports sales up 14.6 percent 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-percent increase in its labor force during the 12 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.
Here’s how this all played out in Madison Park during the third quarter. Of the 25 home sales, 10 were for $1 million or more — the most expensive house (a 4,300-square-foot Washington Park mansion at 602 36th Ave. E.) having sold for $3.2 million.
The least expensive home was a 1,300-square-foot 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 East, north of East Madison Street. The first of the two spec houses sold quickly, but the second one languished on the market until this August.
That house received the biggest discount at sale from its original list price (28 percent), with the second-place honor for the quarter going to a 5,260 square-foot home initially listed for $2.495 million but sold for $1.85 million, a 26-percent discount.
There were five houses and nine condos that sold for less than $1 million during the quarter. The condos ranged in value from $210,000 to $785,000. One of these sold for 100 percent of its list price after a full 412 days on the market — apparently, it pays to stick to your price sometimes.
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 million
Median square footage: 4,010
Median price per square foot: $423
Average days on market: 148
Percentage with price reductions: 37%
New listings: 5
Pending sales: 10
Median list price: $465,000
Median square footage: 1,106
Median price per square foot: $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 million is 36-percent less than the $1.695 million median list price for houses in the neighborhood.
And this is after 37 percent 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 high-end 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 less than $1 million (16 percent), while six of 16 houses sold last quarter (38 percent) were sold at that level.
Just to further belabor the point, the six less-than-$1 million houses currently available have been on the market an average of 74 days, while the 32 more-than-$1 million houses average 149 days.
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.
BRYAN TAGAS writes the Madison Park blog (www.madisonparkblogger.com), from which this column was excerpted.
Windermere Real Estate’s Laura Halliday compiled the sales data.
Listing data is courtesy of Redfin, using information from the Northwest Multiple Listing Service.
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