While the rest of the U.S. may be limping through a dogged housing market, the Emerald City continues to attract buyers for residential real estate. Distressed real estate sales are dragging down the median average price, which is helping boost sales in the area. September numbers were down from the previous month due to the slowing sales season, but were up 26.2% from a year ago. Seattle has not been completely spared from housing-market woes, however, as the report from DataQuick shows the sales spike is still 27.4% below the average for the month. The majority of sales were made in the sub-$200,000 category thanks to low mortgage rates and attractive pricing, with much activity in the market for distressed homes. For more on this continue reading the following article from TheStreet.
Seattle-area home sales shot up from a year earlier for the third consecutive month in September amid especially robust sub-$200,000 sales.
The median sale price dropped year over year for the 14th consecutive month, to the lowest level in seven years, as distressed property sales accounted for nearly half of the resale market, a real estate information service reported.
A total of 3,747 new and resale houses and condos closed escrow during September in the Seattle-Tacoma-Bellevue metro area encompassing King, Snohomish and Pierce counties. September’s total sales fell 11.8 percent from August but jumped 26.2 percent from September 2010, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
A drop in sales between August and September is normal for the season, partly because many families try to close escrow and move before school starts in late summer. On average, sales have fallen 10.6 percent between August and September since 1994, when DataQuick’s complete Seattle-area statistics begin.
September sales were the highest for that month in two years but were still 27.4 percent below average for a September, and they were the fourth-lowest sales for a September since 1994, behind 2010, 2008, and 1996.
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However, total sales have been dragged down by an extraordinarily weak new-home market. Sales of newly built houses and condos rose 3.1 percent from a year earlier in September but were still the second-lowest on record for that month. The Seattle-area resale market has fared much better, posting a 30.7 percent gain in house and condo sales in September compared with a year earlier. Resales in September were the highest in four years, though they were 23.4 percent below average for a September.
The number of homes that sold for less than $200,000 in September rocketed 71% from a year earlier, which is at least partly the result of improved affordability this year thanks to price declines and ultra-low mortgage rates. Sales between $200,000 and $600,000 rose 6.8% in September compared with a year earlier, while sales in the $600,000 to $900,000 range increased 27.1%. ($600,000-to-$900,000 sales represented 8.2% of all September transactions, while sub-$200,000 deals accounted for 32.5% of the market and $200,000-to-$600,000 sales accounted for 56.8%).
In the Seattle area’s multi-million-dollar luxury market, 17 homes sold in September for $2 million or more, down from 22 multi-million-dollar sales in August and 18 in September 2010. During the first nine months of this year, 140 Seattle-area homes sold for more than $2 million, a tad less than the 143 that sold during the same nine-month period last year. The figures are based on public records, where either a price or loan amount is available.
Across all price segments in September, buyers paid a median $259,000 for all new and resale houses and condos sold in the three-county Seattle region. That was down 1.7 percent from the prior month and down 9.1 percent from a year earlier.
September’s median was 29.1 percent lower than the Seattle area’s peak $365,200 median in June 2007. The last time the median was lower than this September’s $259,000 was in September 2004, when it was $258,240.
Distressed property sales — foreclosure resales and "short sales" combined — represented 47.1% of the Seattle area’s resale market in September, which was the highest since March. Foreclosure resales — properties foreclosed on in the prior 12 months — represented 29.1 percent of the resale market in September, up from 28.6 percent in August and up from 21.9 percent a year earlier. The peak was 32.8 percent in March this year.
Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 18% percent of Seattle-area resales in September, the second highest level, behind 18.1% in June 2010, for the current real estate cycle. Many distressed properties are purchased by investors and first-time buyers.
Absentee buyers accounted for 16.7% of the Seattle area’s September home sales, about even with 16.6 percent in August but up from 14.7 percent a year ago. Absentee buyers paid a median $196,500 in September, down 1.8% from August and down 14.6% from a year earlier. While many of these buyers are investors, they can include second-home buyers and others who indicated at the time of sale that the property tax bill would be sent to a different address.
Many investors are among today’s cash buyers, who accounted for 19.9% of all September sales, down from 22.2% in August and 20.6% a year earlier.
This article was republished with permission from TheStreet.