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Bottom may have been reached for Western Washington real estate

Inventory up here, May ’09 median price fell to $685,000

Reporter Staff

On Mercer Island, the number of listings of single family homes and condos has steadily increased over the last two months. As of Monday, the number of residential units for sale on the Island totaled 229, up from 186 which were active in May. The listing prices range from $32 million for an Island mega-mansion to $243,000 for a one-bedroom condo in the Town Center. The number of sales completed for the month of May fell from 19 a year ago to just 12. The median price for those homes was $685,000, down significantly from $1.1 million for the same month a year ago. However, the number of sales pending as May ended were up by six from 24 just a year ago to 31.

Waiting longer to buy a home is not likely to pay off, according to Northwest Multiple Listing Service Director Kathy Estey after reviewing reports summarizing May activity. Estey pointed to shrinking inventory (about 20 percent fewer listings than a year ago), double-digit increases in the number of pending sales (up 17.7 percent from a year ago), solid open house activity, and signs of stabilizing prices (eight of the 19 counties in the report show price gains since January) as indicators of an improving market. For the four-county Puget Sound area, pending sales jumped 21.5 percent from a year ago, rising from 4,526 to 5,498 transactions.

Buyers had fewer choices during May than at this time a year ago. At month-end, member-brokers reported 41,318 active listings throughout the NWMLS service area. A year ago, there were 51,817 active listings. Current inventory includes 11,278 single family homes and condos that brokers added during May. For the same month a year ago, brokers added 14,176 new listings to the inventory.

Estey, the managing broker at the Bellevue downtown office of John L. Scott Real Estate, said affordable homes inventory is down to the levels of a normal market and reaching for a sellers’ market. “Multiple offers are common in the under $400,000 range when the home is priced well, shows nicely and is marketed professionally,” Estey remarked. “Buyers who are waiting for prices to come down more have missed the bottom.”

Close-in markets are the most active, with rural areas still lagging, but Estey said there is now some activity where little to none had existed in the first quarter. She believes prices have adjusted and new, completed construction is still a very attractive purchase.

“Builder inventory is being absorbed, and there are fewer incentives. In January, builders were giving away the farm; by March, it was only half the farm, and now they may just give away a chicken or two in order to make the deal.”

In King County, prices dipped about 12 percent from 12 months ago and have declined about 3.5 percent since January, but a closer look shows considerable variation within sub-areas. Prices in southeast King County fell 20 percent from a year ago, but since January are down by only about 2.8 percent in north King County.

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