Top 10 House Flops For Sale in King County

Since I took the time to take a complete snapshot of all the SFH on the market in King County yesterday, I thought we could have a little more fun with the data.

Here are the top 10 flops in the county by percent decrease from the previous sale to the current asking price. I’m excluding anything where the previous sale was prior to 2000 or less than a year ago. I’m also excluding short sales. While I have filtered some homes out of the list that were obviously just there due to some sort of data entry or retrieval error, some of these may still be due to a lot split or something similar.

Rank Address Last Sale Sale Date List Price % Drop
1 9441 SE 70th Pl, Mercer Island $1,500,000 06.26.2008 $749,950 -50.0%
2 17022 Military Rd S, SeaTac $450,000 08.23.2007 $244,950 -45.6%
3 19908 3rd Ave NW, Shoreline $696,500 04.27.2007 $425,000 -39.0%
4 29305 202 Ave SE, Kent $715,000 02.14.2003 $450,000 -37.1%
5 13050 SE 41st St, Bellevue $1,300,000 08.24.2007 $845,000 -35.0%
6 9148 7th Ave S, Seattle $375,000 12.05.2007 $249,900 -33.4%
7 3612 W Fulton St, Seattle $1,345,000 05.05.2006 $899,000 -33.2%
8 14910 NE Woodinville Duvall Rd, Woodinville $695,000 01.22.2007 $469,000 -32.5%
9 5129 S Morgan St, Seattle $932,500 12.07.2006 $629,500 -32.5%
10 28812 118th Ave SE, Auburn $724,950 10.30.2006 $499,900 -31.0%

And here are the top 10 in the county by the percent drop per year.

Rank Address Last Sale Sale Date List Price % per Year
1 9441 SE 70th Pl, Mercer Island $1,500,000 06.26.2008 $749,950 -31.7%
2 17022 Military Rd S, SeaTac $450,000 08.23.2007 $244,950 -20.4%
3 9148 7th Ave S, Seattle $375,000 12.05.2007 $249,900 -15.7%
4 19908 3rd Ave NW, Shoreline $696,500 04.27.2007 $425,000 -15.3%
5 13050 SE 41st St, Bellevue $1,300,000 08.24.2007 $845,000 -15.0%
6 2399 140th Way SE, Bellevue $1,030,000 12.12.2007 $725,000 -13.8%
7 2030 S Main St, Seattle $295,000 05.01.2008 $229,750 -11.9%
8 14910 NE Woodinville Duvall Rd, Woodinville $695,000 01.22.2007 $469,000 -11.4%
9 5129 S Morgan St, Seattle $932,500 12.07.2006 $629,500 -11.0%
10 629 11th Ave, Kirkland $1,600,000 10.24.2007 $1,200,000 -10.9%

Ain’t real estate grand? It’s like a forced savings account where you can lose ten percent per year, leveraged! Sweet!

Here’s a summary of all the homes that meet the criteria listed above, no matter their listing price to previous sold price ratio.

Flop Stats Snapshot
Total # on market: 2,747
Number of flops: 661 (24%)

Avg. Sale date: Sep. 2006
Average loss: -9.7%
Loss rate: -3.3% / yr

Number of non-flops: 2,086 (76%)

Avg. Sale date: Mar. 2004
Average gain: 35.7%
Gain rate: +4.7% / yr

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

33 comments:

  1. 1
    DavidB says:

    Here’s one on Magnolia that sold for $1.6M in 2006 and it’s now listed at $1.3M. So far that’s a decline of 18.75%.

    http://www.redfin.com/WA/Seattle/2200-32nd-Ave-W-98199/home/125769

    On the other end of the market in Magnolia, here’s one that sold for $383k in 2006 and it’s now for sale for $282k. So far a 26.5% decrease in price.

    http://www.redfin.com/WA/Seattle/2653-Thorndyke-Ave-W-98199/home/123084

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  2. 2
    DavidB says:

    I found another one on Magnolia. This one sold for $1.3M in 2007 and recently sold for $870K so a realized 33% loss.

    http://www.redfin.com/WA/Seattle/2614-39th-Ave-W-98199/home/125197

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  3. 3
    Jason says:

    Am I missing something, Tim, or are the “Last Sale” and “List Price” columns reversed? I’d be tickled pink (or delusional) if I bought a Mercer Island home for $750k and was now expecting to sell it for $1.5MM.

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  4. 4

    I’ve looked into three of these and all three high priced sales were non-listed transactions. All sorts of odd things can happen with non-listed sales. One where there’s about a 50% drop from the high transaction was between family members, for 50% more than what they paid a short time prior, and the current list price is in excess of the 2006 sales price, but under the 2007 price where the family bought the property (in an amount that you would expect in that price range and area.)

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  5. 5
    EconE says:

    Looked into all of them in the first list.

    5 lot splits.

    Had to search by parcel number for a few.

    Here’s a fun one in the spirit of the hunt…

    http://www.redfin.com/WA/Bremerton/400-Washington-Ave-98337/unit-401/home/12099702

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  6. 6
    deejayoh says:

    did you notice that your article gets linked back to from the listing on Redfin?

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  7. 7
    The Tim says:

    By Jason @ 3:

    Am I missing something, Tim, or are the “Last Sale” and “List Price” columns reversed?

    Whoops, you’re right. Fixed that. Thanks.

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  8. 8
    PhinneyDawg says:

    By EconE @ 5:

    Looked into all of them in the first list.

    5 lot splits.

    Had to search by parcel number for a few.

    Here’s a fun one in the spirit of the hunt…

    http://www.redfin.com/WA/Bremerton/400-Washington-Ave-98337/unit-401/home/12099702

    So, it’s not surprising that these 5 are selling for significantly less than they were originally bought for. Less land = lower price. If they were able to sell the land or a house on the split land, they might actually come out with a profit.

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  9. 9
    me says:

    Ah, interesting finds. I personally draw the line at properties that I’d pay more tax on per year than I am currently paying in rent… fantasy prices, most of them.

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  10. 10
    EconE says:

    RE: PhinneyDawg @ 8

    Exactly. These are hardly flops.

    This is a flop.

    http://www5.kingcounty.gov/kcgisreports/property_report.aspx?PIN=1766002260

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  11. 11
    EconE says:

    This is a flop.

    http://www5.kingcounty.gov/kcgisreports/property_report.aspx?PIN=8729750100

    Tims examples…not so much.

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  12. 12
  13. 13
    Anthony says:

    Tim,

    The house on S Morgan St is one of 5 new builds constructed there in 2007. The last sale (2006) was for the ~1 acre plot of land on which they were then built.

    Nice list though!

    Anthony

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  14. 14
    Dave0 says:

    Why would you exclude short sales? Are short sales by definition a “flop” where the property must be sold at a loss?

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  15. 15
    joe dirt says:

    The one in Bellevue may have been a short plat (no house exists).

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  16. 16
    LA Relo says:

    RE: Kary L. Krismer @ 4

    Like realtor fraud?

    Seriously though, have you seen things like that go down? Realtor’s hawking foreclosures for friends/family or themselves when on the market they’d get far more?

    Please don’t take this as an accusation.

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  17. 17

    By Dave0 @ 14:

    Why would you exclude short sales? Are short sales by definition a “flop” where the property must be sold at a loss?

    You could actually make a better case for excluding REOs, since banks often do such a lousy job selling their properties.

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  18. 18

    RE: LA Relo @ 16 – No, I haven’t seen that sort of thing, but what I was describing was just the opposite. An unrepresented buyer not knowing the value of properties in a given area and paying too much.

    As to one of those 10 transactions above, I think there very well may have been some type of mortgage fraud involved. There certainly have been a number of published cases of mortgage fraud locally, and you would think that if they were good at their fraud they would top this sort of list. Such transactions typically would involve properties with at least one other transfer a short time prior to the transfer at issue.

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  19. 19
    The Danza says:

    RE: Kary L. Krismer @ 18RE: Kary L. Krismer @ 18 – Kary, take a look at the price action on this house that I looked at. Seems like something fishy was going on with this property.

    http://www.redfin.com/WA/Edmonds/7529-Braemar-Dr-98026/home/2718793

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  20. 20
    The Griddler says:

    RE is just another investment. Liquidity and flexibility are features of an investment that make it more valuable in today’s economy. RE has neither of those features. In fact, most people have leveraged their savings to own RE, which makes it a risky investment, as well.

    Paying a mortage is the same as paying rent to a banker. You don’t own the home. In addition, the US is the only country in the world that requires individuals to pay property tax after the mortgage is paid off. In other words, there is no way to own property in the US.

    All of the above makes RE a lousy investment, in the US. Outside of the US, RE may be a fantastic investment. May I introduce you to Mexico? Prices are diving because of sensationalistic news headlines based on extremely over-exaggerated violence — the kind of violence that has existed for a loooonggg time in Mexico, and there’s just as much violence if not more in the good ol’ USA. Our citizens earn far more than the $5K annual salary of the avg Mexican, and we can all own a gun here in the US — especially our criminals.

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  21. 21
    Ross Jordan says:

    “the US is the only country in the world that requires individuals to pay property tax after the mortgage is paid off”

    Huh?? There are many (most, as far as I know) countries that always charge property taxes. Canada, for example, has a very similar property tax system as the US, and funding for schools and things of that nature come from property tax. Other than extremely rare “allodial title”, most property title is subject to property tax, easement and other restrictions. There’s more info about that in the wikipedia article: http://en.wikipedia.org/wiki/Allodial_title

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  22. 22
    DavidB says:

    This one on Magnolia was just listed today. It’s listed at $1M and it sold in 2007 for $1.5M.

    http://www.redfin.com/WA/Seattle/2409-Montavista-Pl-W-98199/home/126165

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  23. 23

    By The Danza @ 19:

    RE: Kary L. Krismer @ 18RE: Kary L. Krismer @ 18 – Kary, take a look at the price action on this house that I looked at. Seems like something fishy was going on with this property.

    http://www.redfin.com/WA/Edmonds/7529-Braemar-Dr-98026/home/2718793

    That’s probably a good example of why you shouldn’t look at individual properties that have had extreme drops to use as examples of anything.

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  24. 24

    RE: Kary L. Krismer @ 4

    Omitting Data Points to Raise Avg Sales Prices

    I disagree Kary, a sale is a sale. The minute we start omitting sweetheart deals from the date base, perhaps we need to omit the idiots who “over-paid” too?

    Nope, leave 100% of the sales base figures alone and live with it.

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  25. 25

    RE: Ross Jordan @ 21

    How About Kids Who Inherit Grandma’s Home

    And she was paying 20% of the property tax the rest of us were the last couple decades and the kids getting the house don’t have to reimburse the county?

    Not fair at all in my book.

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  26. 26

    RE: softwarengineer @ 24 – If you’re talking about the various averages, the extreme highs and lows tend to cancel each other out, and are not really important. But when you’re trying to look at what’s happening in the market, using either extreme highs and lows is misleading.

    Often when doing a CMA you’ll find sales that simply are outside the range (either direction) of the other sales. Using an example I came across recently, the property was listed for about six months, without success, and then listed again just over a week later for more than 125% of the prior list price. It went pending inspection in one day and sold for 100% of the new list price. Clearly that sale provides you no indication whatsoever of the value of that property, and a subsequent private party listing of that property (after foreclosure by the stupid lender that loaned 100% of the list price) gives you no indication of where the market has been heading.

    If you don’t believe that, I hope that you become interested in one of my clients’ listings and are willing to make an offer over the list price based on one of these high sales price transactions. ;-)

    Edit: BTW, I was only talking about omitting transactions where “idiots” overpaid.

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  27. 27
    Scotsman says:

    The real flops are in the out lying areas. My admittedly unscientific survey has values down a solid 35% from peak with homes that have completed foreclosure selling at half of the last purchase price. These are all high-end homes that were in the low 7 figures, a segment that has been hit especially hard. The home across the street from me is down to $625K from $995K, others have taken similar hits and still aren’t selling.

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  28. 28
    Ross says:

    By softwarengineer @ 25:

    RE: Ross Jordan @ 21

    How About Kids Who Inherit Grandma’s Home

    And she was paying 20% of the property tax the rest of us were the last couple decades and the kids getting the house don’t have to reimburse the county?

    Not fair at all in my book.

    I’m not debating the fairness of it. Just the reality.

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  29. 29

    By softwarengineer @ 25:

    RE: Ross Jordan @ 21 – How About Kids Who Inherit Grandma’s Home
    And she was paying 20% of the property tax the rest of us were the last couple decades and the kids getting the house don’t have to reimburse the county?

    Rhonda Porter recently posted this link regarding elderly and real estate taxes in Washington.

    http://talonnw.typepad.com/talon_northwest_neighborh/2010/04/senior-property-tax-exemption-or-deferral-one-places-a-lien-on-property.html

    To get an exemption you have to be making less than $30,000 a year. There’s also a deferral program, for those making less than $40,000 a year. Otherwise you’re paying full.

    BTW, my guess is the exemption is probably unconstitutional, but I doubt anyone wants to challenge that one.

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  30. 30
    Jonness says:

    By Scotsman @ 27:

    The real flops are in the outlying areas. My admittedly unscientific survey has values down a solid 35% from peak with homes that have completed foreclosure selling at half of the last purchase price. These are all high-end homes that were in the low 7 figures, a segment that has been hit especially hard. The home across the street from me is down to $625K from $995K, others have taken similar hits and still aren’t selling.

    They are coming down slowly but surely. Last year at this time, a distressed sell in the areas I’m watching priced at 2005 levels seemed like a slamming good deal. This year, they have to price them at 2004 levels to get the same effect. I suppose next year they’ll be at 2003 levels. I suspect the slide will stop when we see about 2002 levels. However, when it gets that low, it can result in a self-reinforcing feedback loop as homeowners wealth is annihilated, credit contracts immensely, and nobody is left with means to buy a house. This can cause an extreme overshoot of the bottom.

    For instance, Vegas is at 2000 levels. My impression is, despite the rush of investors snapping up bargains well below replacement costs, there doesn’t appear to be a lot of price support in the market. Ray Pepper can probably weigh in on this, as he knows the Vegas market like the back of his hand. I’ve noticed some unbelievable deals on McMansions in that market.

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  31. 31
    Jonness says:

    What gets me is the absolute junk on the market that people paid unbelievable prices for during the bubble. For instance, This one when pending on a $62K listing. In 2006 somebody thought it was worth $275K, and found out the hard way that it wasn’t.

    http://www.redfin.com/WA/Port-Orchard/9164-Fragaria-Rd-98367/home/2432451

    I looked at the home prior to it selling, and it was the worst piece of junk I’ve ever seen. It had all kinds of weird permit-less renovations and needed all new pier support underneath. Some idiot cut off the front portion of the house and installed a freaky bathroom with a jacuzzi tub. The place has a 1500 gallon closed septic tank that needs pumped when full. How many baths do you get before you have to have the tank pumped? That’s just weird. In addition, the place has moldy indoor air quality issues. It might be worth $40K tops if you are willing to put a lot of time and money into fixing it up. It will cost a bundle in the end.

    It actually looks kind of cute in the picture, but if you know anything about building codes and illegal renovations, it’s nothing more than a nightmare waiting to happen.

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  32. 32

    RE: Jonness @ 31 – Kitsap county really shot up when King County prices started getting so high.

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  33. 33
    Boyflux says:

    I love that the Redfin posting shows the pages linked to it, so if people scroll down they see the “Top 10 House Flops…” headline.

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