There was a great article over the weekend in the Seattle P-I that looked at the townhouse market, which has slowed down considerably more than the single-family or condo markets so far this year.
Jamie Goodwin knew it would be a tough time to sell her Central Area townhouse.
“I’m a real estate attorney, and I knew that the market was soft,” she said Friday. That’s why she set her asking price at what another townhouse in her development fetched a year earlier.
Even so, agents weren’t even looking at the listing online, said Erin Goodwin, Jamie’s sister and an agent with Re/Max Mutual Realty. “We listed in October, and I think maybe there’s 23 clicks.”
Sitting in a townhouse he was trying to sell last month, Windermere Real Estate agent Alex Eckardt said he’d seen a fair amount of traffic since listing the home about a month earlier, but no offers.
“Six months ago this would have sold in the first week,” he said.
More and more, homes of all types in Seattle are chasing a buyer pool that has become smaller and more cautious over the past year. But real estate agents and sales statistics show that the slowdown in townhouse sales has brought price cuts out of proportion with the rest of the market.
“What we are seeing is these huge price reductions, where a guy’s asking $600,000 one week, then $550,000 the next week and $500,000 the week after that,” said Ryan Thompson, an agent with John L. Scott Real Estate.
Greg Bartell, a Re/Max Mutual Realty agent who specializes in townhouses, says he has seen particular slowing since August.
“I think the most apparent thing is prices coming down,” he said. “I’ve seen some come down $90,000 off the list” price.
Seattle townhouse prices were down from the prior year in six of the first 10 months of 2007, with October’s median townhouse price of $358,594 down 13.6 percent from October 2006, according to the Northwest Multiple Listing Service.
The statistics Aubrey cites in the article appear to be specially compiled for him by the NWMLS, as a specific breakdown for townhouses is not a part of the usually reported data. Kudos to Mr. Cohen for delving into the data to deliver a report that goes further than just quoting an NWMLS press release and a couple of real estate agents.
Some have argued that condos and townhouses are a leading indicator of where a local housing market is heading. I think that argument is fairly sound, since townhouses and condos typically represent the least expensive properties on the market, and if the low end isn’t selling, it will inevitably trickle up to the high end. When an existing owner of a townhouse wants to sell and “move up” the “equity ladder,” but finds they have to significantly reduce their price, it limits their ability to purchase a home on the next rung of the ladder.
Will a significant deterioration in the townhouse and condo market in Seattle lead to a similar meltdown in the single-family market? I’m guessing we’ll find out the answer to that question in 2008.
(Aubrey Cohen, Seattle P-I, 11.23.2007)
