Recent Stories in Real Estate

In Q3 of 2010, CoreLogic had Washington underwater mortgages at somewhere between 15 and 29 percent of homes (scroll down this blistering ZeroHedge post to see the map). With an unemployment rate holding steady around 9 percent for the past...year, and the 99ers dropping off unemployment eligibility, that combination leads to the following statistics:

Realty Trac foreclosure heat map

In King County, Realty Trac currently shows some 1,400 homes for sale, with over 6,300 bank-owned properties. They say there were 438 King County foreclosures in December alone. This Bellingham Herald story breaks out Washington counties with the highest 2010 foreclosure rates; the percentages are frightening.

"The Washington Bankers Association says 33,000 homes went into foreclosure in Washington in 2010, and it's going to be just as bad this year," reports KING5. The legislature is considering a Foreclosure Fairness Act, to demand mediation between banks and homeowners. But if the economy doesn't improve, widespread mediation may simply prolong the foreclosure crisis. 

All of these distressed properties act to further depress property values. This First Hill studio caught my eye, 500 square feet in a building that opened in 2002, going for $121,000: "[I]magine an open floor plan, granite tiled entry, slab granite counters, stainless steel backsplash, breakfast bar, & in unit w/d. Modern secure bldg w/workout, media, bus. center, & parking."... (more)

Zillow recently created a "10 Best Places to Invest" list--with an emphasis on "invest," not "live"--but Business Insider chose to play up the thirteen worst real estate investment areas: Spokane is eighth-worst, Seattle fifth-worst, and Portland fourth. Key factors were price-to-income ratio, home value declines, and the percentage of foreclosure sales.

In Seattle's case, the price-to-income ratio is 117 percent above the norm, home values are down 11.6 percent year-over-year, and foreclosures are 17 percent of all resales. (Seattle Bubble has foreclosure shopping tips for you.) Not grim enough? Trulia just announced "Seattle is second worst city to buy versus rent," reports Seattlepi.com: "Specifically, the median cost to buy a two-bedroom apartment, condominium or townhouse in Seattle is 24 times the median annual rental cost for a similar home."

But people are buying, sometimes in large quantities. Take a look at Estately's "10 Most Expensive Homes Sold in King County" last year. #1 is a Hunts Point behemoth, with 8,300 square feet, that sold for almost $11.3 million. Redin has its previous sale price, in 2001, as $5.75 million, so as an investment, that didn't seem to pan out too badly. (#2 sold for $9.1 million, after previously fetching $15 million in 2006, so caveat millionaire.)

Meanwhile, December 2010 showed a surprising surge in King County closed sales. How much of a surge, and what drove it, is up for debate, but one thing is clear--more closed sales than expected isn't bad news. Yet Seattle was more or less unaffected by the bump. Redfin shows Seattle sales at plus--or-minus two percent from November (depending on month-to-month or weekday-to-weekday comparison). And, year over year, Seattle sales were down 14.5 percent. ... (more)

"much can be said" courtesy of our Flickr pool's +Russ

How is the Seattle real estate market like an ice cream cone? It's frozen and it either is currently "clearly a double-dipper" or will be. (Once again, Portland gets there first.)

Hell may have frozen over as well as Seattle; the Seattle Bubble says this could be a good time to buy a home. Granted, they're talking about prepared buyers taking advantage of that below-market deal they've found. Anecdotally, this is echoed by Redfin's report on the Seattle area market, which notes that a few first-time home buyers are making their move. 

Otherwise, of the Seattle area homes pulled off the market in November, a full 60 percent were delisted by owners who plan to wait out the winter. Only 40 percent were sales. Of the city of Seattle 1,700-house November inventory (down 14 percent from October), 344 sold, while the time it took to close on a sale continued to lengthen thanks to difficulties finalizing financing.

Seattle condo sales remain way back in the deep freeze section, down a full 50 percent year over year. 137 sold, but 200 were delisted, to wait for spring. The Bubble warned that the home buying credit program was simply pulling demand from the future, and that once it ended, we'd see the frozen wasteland currently before us. But it is also true that many first-time buyers went the condo route, and now sit underwater, unable even to think of taking a short sale's loss; the average condo sale price per square foot is down just 1.2 percent from last November.

Meanwhile, bottom-callers have these home-price declines to stare at. (Here's the Bubble's latest Case-Schiller graphs.) It's not just Seattle, of course--Seattlepi.com reports that Seattle and ten other metro areas are seeing a "triple-dip," and analysts predict anywhere from another six to fifteen percent slide over 2011. (Nor is the problem limited to residential real estate--the Wall Street Journal reports that Beacon Capital Parters, owners of the Columbia Tower Center, are selling their best-performing asset to raise capital to meet debt obligations.)... (more)

Connoisseurs will note that this studio condo's location, at the corner of East Union and Belmont, actually leaves it perching on the north shoulder of First Hill. But since the bustling Pike/Pine corridor is just down the street, I don't think people will sniff at you if you call it Capitol Hill.

This 377-sq.-ft. studio in the Belboy Condos is admittedly cozy, but it does come with 10 feet tall ceilings. In addition to a the benefits of a renovation of this 110-year-old building--intercom systems, updated electrical, kitchens, and bathrooms--you can enjoy a large full bath, a fireplace, and leaded glass windows.

All for just over $100,000, if you can imagine that. (If you can imagine bank ownership, more to the point.) HOA dues are $208, and property taxes are $996. There's an open house this Sunday, October 24, from 1 to 4 p.m.

"Short Sales, Foreclosures, and Bankruptcy Sales: Oh My!" is the subtitle of a section of Redfin's monthly real estate report, and that's partly a warning for bargain hunters:

Non-refundable costs needed up front, the stress of buying home as-is, and a process that seem interminable are all common issues encountered when buying distressed inventory. Sometimes the pain is worth the gain, it just depends on your constitution.... (more)

"Buyers know that now is the time to get the big home with a view at a price that is hundreds of thousands less than just a couple of years ago, and at an incredibly low interest rate," says West Seattle Redfin agent Dan Mullins. He wasn't talking about condo auctions specifically, but he captures the appeal succinctly.

For real estate market watchers, the auction is also a useful barometer. Over the weekend, 32 condos in the luxury condominium tower Olive 8 hit the auction block, and the results support those dismal few prognosticators who suspected, back in the boom days, that the market was overvalued by some 30 percent.

Keep in mind, while perusing the Olive 8 sales, that this is what a luxury downtown condo goes for. Wendy Leung at Seattle Condo Review gives you a great by-the-numbers breakdown (with more granularity than you'll find in the Seattle Times Olive 8 auction story):

The homes were sold for an average of 66% of the previous listing price, which is very close to the average of the last few auctions (Queen Anne High School, Lumen, Brix, Gallery, and 5th and Madison) since 2009 at 67%.

Leung goes on to separate out high and low bids by condo size, and to work out their price per square foot. While the average discount from list price was 34 percent, a larger two-bedroom went for only 54 percent of list. The units being sold ranged between the 18th and 26th floors in the 39-story tower--the more expensive units above, over 100 unsold, have "price tags from $500,000 to $6.9 million," says the Seattle Times, who also make room for a cheery broker's quote:... (more)