As with other segments in the economy, the Eastside – Seattle and Washington state real estate market is seeing improvement coincident with other markets in the nation.
Amazon is a key player in the commercial sector
Amazon has quickly become the dominant leader in the South Lake Union real estate market. They recently closed on 3 blocks of the Denny Triangle and plan to build 3, one million square foot office buildings. And, it has been rumored that Amazon is buying their new 1.8 million sq/ft corporate headquarters for upwards of $1 billion dollars.
Commercial properties which have seen a rather sizable vacancy rate over the past 3-4 years, are now seeing an increase in both activity and newly leased spaces.
Current statistics for the Central Business District of Bellevue are as follows:
Available – 9,051,989 Sq Ft
Vacancy – 8.2%
Average Asking Rental Rate/FS – $34.00-$40.00
The residential housing market rebound continues to be a welcome breath of fresh air, with many buyers, having been lulled into a state of “wait and see”, are now finding a need to quicken their pace as they find themselves in a “slow, unprepared buyer” status, settling for a 2nd choice home, after having been out bid and beat to the punch for higher demand properties. Home sales around western Washington continue to outpace activity of a year ago while inventory remains thin, according to new figures from Northwest Multiple Listing Service. Brokers say that this combination is resulting in disappointment for buyers who are slow to accept the reality of a recovering housing market. Commenting on September data from Northwest Multiple Listing Service that shows upticks in sales and prices, buyers who make unrealistic offers and requests are “back on the street looking at their second choice home.” Meanwhile, some sellers with well-priced, well-prepared homes are receiving multiple offers.
Northwest MLS figures for September show the pace of sales slowed from the past 6 months, but still surpassed activity of a year ago.
Members reported 5,535 closed sales, which compares to the year ago total of 4,988 for an increase of nearly 11%. Thirteen of the 21 counties served by the MLS reported double-digit gains in the number of completed transactions. Through three quarters of 2012, closed sales are up 14.6% from a year ago. (48,022 vs. 41,906)
The median price on last month’s closed sales rose more than 5.9%, to an area-wide figure of $250,000. That’s up from the year-ago median sales price of $236,000 for single family homes and condos combined, but tapered off from the July figure of $254,900. Clark County claimed the largest year-over-year gain at 18.%, followed by Cowlitz (18%), Mason (nearly 16%), and Kittitas (13.7%).
Prices on last month’s closed sales rose 9.2% from twelve months ago. The area-wide median price on single family homes and condos that sold last month was $255,500. Prices on single family homes (excluding condos) increased more than 12%, rising from $240,000 to $269,000.
The most expensive homes sold in San Juan County, which reported a median sales price of $380,000, and in King County, where the median selling price was $375,000.
Brokers added 7,300 new listings to inventory last month, the fewest number since January. With those additions, there were 25,476 active listings in the MLS system at the end of September. That total is down 27.7% from the year-ago selection that encompassed 35,254 listings.
The sharpest drop in active listings occurred in Snohomish County, which has about half the inventory of a year ago (2,187 currently versus 4,308 active listings at end of September 2011). Northwest MLS figures show year-over-year prices there jumped 14.6%. This imbalance between supply and demand is “wreaking havoc” with some buyers and sellers.
Some sellers are lamenting “missed opportunities”, but we believe positive momentum will continue with the combination of below-normal inventory, record-low interest rates and changing views on home ownership.
MLS members tallied nearly 600 more pending sales last month than a year ago. Brokers reported an increase of 8.7% from the year-ago total of pending transactions. Sales results were mixed across the MLS market area, with 12 counties reporting increases, eight reporting declines and one unchanged. The rapid pace of sales in some areas coupled with dwindling inventory means below-average # of months of supply in some counties. Area-wide there is about a 3.4 months worth of supply.
King, Pierce and Snohomish counties all report levels below three months of supply.
The all cash buyers are returning to the entire market. “Cash offers are being made across the price spectrum, including the million dollars-plus ranges“.
New home construction will continue making a rebound. Builders are moving cautiously in most markets, being careful to build only the sizes and quality of homes that are likely to sell before completion, and not starting too many foundations at one time.
With the dwindling number and lack of foreclosed homes coming on the market, the prices have been stabilized, but this has also created a lower number of homes for buyers to select from.
There are new reports on the recent rental activity which indicate a general trend for rent increases and a lower in the availability of good rentals in some key areas. Home ownership is “a better investment in many areas, even if buyers are thinking of holding the home for a relatively short time frame”. It is hard for someone to move into an apartment after having the freedom of a larger home, so displaced home owners are looking to rent homes first. This alone is driving investors back into the housing market.
While the story of a few years ago has flipped, the path to ownership remains constant. “We used to say the seller who priced and staged their home the best would get buyers”. Today, we’re saying buyers who are most realistic with their offers and pre-approved with a lender, and who are the most aggressive might get the house they want. This is what a normal market looks like — buyers and sellers negotiating fairly with each other and each feeling they may have left a little on the table. One of the benefits of a “normal” market is that it is not all about sales price. One must take into consideration closing costs, type of loan, closing date, possession date and work orders, each of which play a vital part in balancing out a normal transaction.
A buyer’s path for success includes pre-approval with a lender, sufficient funds to pay their own closing costs, and the patience to wait through the closing process, especially if they are buying a short sale or bank owned home.
September statistics for key Washington counties -
Average closing price
King - $424.085
Snohomish - $284,833
Pierce - $231,335
Kitsap - $282,866
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