Bank-Owned Condo Bargain of the Week: $135,000

"Foreclosures continue to surge around Seattle," reports the Seattle Bubble, with King County's 1,413 notices of trustee sale in July representing an increase of 13 percent compared to July 2009.

Thus this 410-sq.-ft. studio condo on East Thomas Street, just off Belmont on Capitol Hill, which the bank will let you have for $135,000. It's eligible for HomePath financing, so you can buy with just three percent down (about $4,000).

View the listing on Windermere or Redfin. It's a 1917 brick-exterior building, with natural gas and a heat pump. HOA is $252 per month, but property taxes are $1,617. 

The price is down from an original $144,900 and it's been on the market for about a month and a half.

Redfin's July real estate summary compares buyers to vultures ("Vultures! Vultures everywhere!" Sorry. It's a tic.) who won't act until sellers pull the listing in despair, or someone else tries to snap it up. Sales volume is down, and inventory even ticked up slightly, as Seattle home sales dropped over 15 percent from June. Their spreadsheet shows 2,129 houses for sale in Seattle, and 1,373 condos. The median sale price for condos was $342 per square foot; for houses, $330.

Bottom line, says Glenn: "So far in August, we have seen record numbers of Redfin customers touring properties in Seattle, but buyers are very picky, and in no rush. Prices are going to stay down for the rest of the year, and probably longer."