As much as I wish real estate could always be "win-win" for everybody, the market doesn't seem to allow for it most of the time. Five years ago I often felt so BAD for my buyers. They would tour a home the day it came on the market, do a pre-inspection, offer to increase their offer to beat others, write flowery cover letters pleading with the seller to sell to them, only to find out in the end there were 12 other offers, and somebody with more resources blew them out of the water.
My, how the tables have turned. Now it's the downtrodden sellers who often can't wrap their brains around the possibility that the same exact house they lived in five years ago has lost a third of its value, even though nothing about the house itself has changed.
And so with that in mind. . . I regret to inform you sellers, and am delighted to tell you potential buyers, that the numbers in West Seattle YTD (year to date) for 2011 show a substantial slide in home values for us West Seattle-ites. In fact, I had to don my readers and take out a ruler to make sure I was reading the new MLS statistics correctly. While the median home price in King County YTD 2011 has taken about an 8.2% drop ($379K down to $348K), in West Seattle it's even uglier: The median sale price in our area YTD 2010 was $350K, and that number for 2011 is $300K, or, a drop of over Fourteen Percent, OUCH!
Is there any good news for sellers here? Well, maybe. Among the many tools in our box for analyzing the market, is the absorption rate. The purpose of an absorption report is to predict how long it will take a listing to sell that is priced at market value (the key phrase there being "at market value," and obviously there are many other factors such as property condition & location even within a neighborhood). The absorption rate basically tells you how much of the housing inventory is being "absorbed," or sold, into the marketplace. Around six months is considered a "balanced" market- much over that, you have a buyer's market, and much below that, a seller's market.
I calculated the absorption rate for January through August of 2010 for West Seattle (MLS area 140), and it's 6.82 - indicative of a fairly balanced market tilted slightly in the buyer's favor. For the same period, same area for 2011, that number is 4.72. This coincides with what I'm seeing out in the field: when a nice home comes on the market which is well - presented (clean, staged, well-maintained) and realistically priced, it sells, and usually very quickly. I do think the 4.72 number is somewhat skewed by the fact that a lot of would-be sellers simply aren't willing or able to sell right now, but I'm also encouraged to see that things are selling at all.
If you're of the "things could always be worse" school of thought, indeed they could: this Inman News article published yesterday should make you thankful you didn't buy a house in Merced, CA five years ago, just in case you weren't already. At least West Seattle is a wonderful place to live, no matter what your home is worth!
Comments(0)