Redmond homes still selling like hot cakes?

[EastSider]

Can anyone enlighten me on the state of affairs in Redmond? I keep hearing that inventory is raising & sales are slowing, but I came across the home listed at

Listing price for this home was $785K and was sold in less than a month (ZEstimate is $669K; last sale was in 2005 for $588K). How could this be possible in this market?

Granted that the sale-price is still not available, but I doubt if the seller would have accepted a very low price in the first month of listing.

[Cougar]

I wouldn't go as far and say "Redmond homes still selling like hot cakes?". This home has a great location and nicely updated with new roof, white solid core doors, Milgard windows, Stainless fridge, new GE oven, custom built-ins, new skylights. One other home for sale on the street is no competition. It is always interesting what the final sale price will be. Bidding war, higher. Sole bidder may be less.

Greg Perry had a good post on Re: Median price in Issaquah drops by 23.5% this morning as follows;

"Area 500 is below I-90 and includes So. Bellevue, Newcastle,Issaquah.

From a median price standpoint, area 500 by far is the worst performing area (by far) on the Eastside for the last 3 months. I really don't know why it's as bad as it is. 500 is holding 41 weeks of inventory. There doesn't seem to be really any hot price ranges in this area either.

The Plateau (NWMLS 540) has 33 weeks of inventory. Sellers above $900,000 have between 1 and 2 years of inventory at current rate of sale. Medians in 540 have been flat.

Two areas to watch closely are 560 Kirkland and 520 West Bellevue. Currently 52 weeks in both areas. Inventory is stacking up when the price tag goes over 1 mil. (Kirkland -- a small area-- has 216 homes for sale over 1 mil.)
--
Redmond (550) had more PENDINGS this year than last year. Lower price ranges are moving nicely. Overall Redmond has 28 weeks of inventory. Above 1 mil -- again no movement. For instance the between 1 and 1.5mil there is 168 weeks of inventory with dozen of homes to compete with!

550 Redmond and 600 Woodinville are HUGE areas. The vast majority of sales are happening in the western parts of these areas. For instance Thomas Guide map page 506 has the majority of sales in area 600.

Overall Eastside absorption rates are respectable in lower priced, western parts of the Eastside. The high end is VERY SLOW and dragging everything down.
(stats compiled from but not verified from NWMLS)"

[EastSider]

[Greg Perry]

"I guess that there's always the possiblity that the ZEstimate is way off for this home"

Zestimates are off for most homes. FWIW, they should be treated like anecdotal stories, not data.

The location and price range of this home is in an area where homes are moving well. In fact, for nice emotionally appealing homes we're seeing multiple offers. (This years multiple offers are much more conservative....they are not driving prices as much, but are cementing better terms for the seller).

[Cougar]

zestimate is as good as a guesstimate.

guestimate - an estimate that combines reasoning with guessing.

Or from the Zillow's mouth;

"The Zestimate (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is pulled from data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. Variations in price also occur because of negotiating factors, closing costs, and timing of closing. We encourage buyers, sellers, and homeowners to supplement Zillow's information by doing other research such as:"

"proving us wrong"

[EastSider]

[Greg Perry]

In this price range in 550, there's about 20 weeks of inventory. Again sales are better in the western half over the eastern half, so if I broke down the AR to the neighborhood level, it should come in with even better performance.

Big trouble starts at 1mil. The most recent 7 week average shows weeks of inventory jumped from 168 to 341 between 1mil and 1.5 mil (1 sold in the last 7 weeks with an average of 48.5 active homes)

[rose-colored-coolaid]

[Greg Perry]

"Was that weeks of inventory correct? The average expected time to sell a 1mil-1.5mil home is between 3 and 7 years?"

Actually more correctly stated, at the current rate of sale, it will take between 3 and 7 years to sell through the inventory. And yes, the absorption rates in these price ranges aren't pretty.

Weekly sales by price range are tracked and then averaged over a 7 week period. In the price range between 1mil and 1.5 mil there was 1 sale (.143 per week) out of an average of 48.7 on the market during that 7 week period. Keep in mind this is a small sampling of numbers, so it's quite volatile. 4 new active listings came into the market last week without a sale, hence the jump from 168 to 341 weeks.

Let's expand the numbers a touch. There was an average of 86.8 homes for ALL PRICE ranges over 1 mil in 550. Total sales were 5 (.714 per week) for 122 weeks supply of inventory.

For all inventory under 1 mil in 550 there were 340 listings with a sales rate of 14.5 /week for 23.4 weeks of inventory.

Overall 550 is holding 28 weeks.

Again, keep in mind 550 is a HUGE area. If we break it down east vs. west, we'll find over 3/4 of sales are happening close in (west).

Kirkland (560) has over 200 homes currently active over 1 mil.
W Bellevue (520) has over 230 homes currently active over 1 mil.


I had a listing in 550 last year for 1.4 mil. At that time we had around 48 weeks absorption rates. We did get a couple of offers for 1.1, which the seller turned down. As the listing was about the expire, the seller indicated he would take it off for the winter. We had a good relationship, but I told him If absorption rates didn't improve, I wouldn't handle it again unless he dropped by at least $100k.

He did go back on the market again this spring. (not with me)

He raised his price $100k. AR's are now 341 weeks.

It's not selling.

Go figure.

[Alan]

Greg,

Is he living in the property or is it sitting vacant? I've wondered how the people in this market feel about holding costs. If it takes you three years to sell but you make a few hundred thousand dollars for the trouble then maybe the juice is worth the squeeze. Property taxes alone on a $1.3M house eat $13k/year, but $300k after three years covers that nicely.

[Greg Perry]

Alan,
No, the sellers are still there. This is one of situations where the don't have to sell, they just want to sell to move closer in. (not very motivated)

There is a difference between being "on the market" and being "in the market".