This update on the Green Lake real estate market comes to us via Daniela Dombrowski & Kris Murphy of The Murphy & Dombrowski Real Estate Group.
In zip codes 98103, 98105 and 98115 inventory for single family homes has dropped to some of the lowest levels we have seen over the last four years. There are fewer homes on the market than last spring when the tax credit was in effect but they are selling at the same rate. Buyer demand is starting to outpace available homes on the market. This makes for very favorable selling conditions in those areas.
Months of inventory based on pended sales in zip codes 98103, 98105 and 98115:
For sale, sold, and pended, January 2010 - March 2011
Inventory levels, March 2007 - March 2011
In analyzing the sales trends specifically within the neighborhood boundaries defined by My Green Lake, we see that since the beginning of the year 36 sales have closed, 29 properties are under contract and 33 homes are active on the market, as of April 19, 2011.
Click to enlarge
You can see a list of active, pending, and sold properties in Green Lake since Jan. 1, 2011 by clicking the graphic to the left.
What does this mean?
One measure we apply in assessing the condition of the housing market is to look at the number of homes on the market and then divide that number by the number of pending or sold homes. When applying this formula, we get to 1.13 months of inventory based on pended (under contract) sales and to .91 months of inventory based on closed sales. We have not seen low numbers like this since the height of the market in 2007. Two months or less of inventory is defined as a seller’s market. Between 2-5 months is seen as a balanced market, and once we get to over 5-6 months of inventory as we experienced the majority of time over the last few years (with the exception of the tax credit periods) it is a buyer’s market.
Due to the low number of available homes on the market and strong buyer demand at the moment, multiple offers are back and in some cases prices are driven up. Out of the 36 closed sales, seven received and accepted an offer within less than a week; four out of these or 11% of total sales went for over asking price (1%, 2%, 15% and 17% above asking price respectively).
When looking at the properties that are currently pending, 12 out of 29 or 41% sold in less than a week. Official sales prices for these homes are not available, yet. However, from our own experience in representing sellers and buyers over the last few weeks, we can report that many of these resulted in multiple offers and in some cases sales prices will exceed the list price – significantly so in some cases.
An April 6, 2011 Northwest Multiple Listing Service press release confirms this apparent trend in some other areas as well. The press release quotes Mike Grady, president and COO of Coldwell Banker Bain. “Most real estate professionals will be happy to move past the year-over-year comparisons that have been made the first few months of 2011,” he says, “as they reflect the boost given home sales by last year’s Homebuyer Tax Credit. Home sales are now standing on their own — without the benefit of incentives — and the market is actually behaving quite typically.”
“In fact,” Grady added, “some urban core neighborhoods, such as Greenlake, Queen Anne and West Bellevue, are seeing very strong demand, and a waning supply of desirable homes for sale.” Many buyers looking in these neighborhoods are beginning to express frustration over the lack of available homes, according to Grady. “As a result, Realtors are beginning to report multiple offers, with contracts settling over the list price on the best homes.”
While this certainly isn’t the norm in most areas served by the NWMLS, Grady said it is encouraging that in some areas homes are selling briskly, and distressed and bank-owned properties are still in the minority.
In the Northwest MLS map areas comprising the Eastside, prices were off about 2 percent ($435,000 versus 444,000), while in the Seattle area, the year-over-year drop was only about 1 percent ($357,500 versus $361,500).
“We saw a lot of qualified buyers making offers in March,” Northwest MLS director OB Jacobi, president of Windermere Real Estate Company, is quoted as saying. “They’re out of the tire-kicking mode and ready to buy now. Inventory is low in general, and there is a particular shortage of move-in ready homes,” he stated, noting properties that are selling look like model homes. “Sellers realize if they remove any buyer objections ahead of time, their house will sell, and sell quickly.”
Grady senses some neighborhoods appear to be close to recovery, according to the press release, which cites remarks made to Grady by a broker who likened the market to a space capsule re-entering the atmosphere: “While it might appear to be burning out of control, the heat is actually beneficial, providing the friction necessary to slow the descent and allow a safe landing. Perhaps our broader market appears to be smoldering now, but some neighborhoods also appear to be close to recovery. With ‘Spaceship Seattle’ currently offering fewer than two single family homes for sale for every buyer currently under contract, it could be an interesting summer around the real estate launch pad.”
National news reports are more optimistic about the housing as well. An April 18, 2011 MSN Money article cites a recent Freddie Mac report that “paints a hopeful picture of the housing market just in time for the spring selling season,” and a MainStreet post from April 14, 2011 cites a study that shows that prices for “non-distressed” properties may be stabilizing.
