Cheapest Homes: June 2014 Edition

Let’s check in again on the cheapest homes around Seattle proper. Here’s our methodology: I search the listings for the cheapest homes currently on the market, excluding short sales, in the city of Seattle proper. Any properties that are in obvious states of extreme disrepair based on listing photos and descriptions will be excluded. This includes any listing that uses the phrases “fixer,” “rehab loan,” or “value in land.” I post the top (bottom) three, along with some overall stats on the low end of the market.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Address Price Beds Baths SqFt Lot Size Neighborhood $ / SqFt Notes
7764 10th Ave SW $175,000 2 1 630 4,200 sqft Delridge $278
4806 S Rose St $180,000 2 2 850 4,750 sqft Rainier Valley $212 bank owned
854 S Thistle St $199,000 2 1 2,020 7,500 sqft South Park $99

The #1 home from last month is now pending, #2 was taken off the market, and #3 was disqualified with the addition of a mention of rehab financing. To find three homes that fit our criteria I had to go all the way up to the $200,000 line. It may be time to retire this series, or adjust our threshold.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 8
Average number of beds: 2.0
Average number of baths: 1.3
Average square footage: 1,230
Average days on market: 55

Inventory of non-short sale homes under $200,000 in Seattle stayed at the new low point set in May. Beds and baths were the same as May, while square footage shot up and days on market fell.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Seattle's Cheapest Homes: Stat Trends
Seattle's Cheapest Homes: Stat Trends

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

Address Price Beds Baths SqFt Lot Size Neighborhood $ / SqFt Sold On
5965 21st Ave SW $120,000 2 1 720 7,598 sqft Delridge $167 05/21/2014
9012 2nd Ave S $121,000 3 2 1,430 2,550 sqft South Park $85 05/21/2014
7925 18th Ave SW $125,000 2 1 770 6,450 sqft Delridge $162 05/30/2014
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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

24 comments:

  1. 1

    I noticed a non-Redfin agent was being advertised on one of those pages, and looking further, Redfin now has a lot of “Redfin Partner Agents” who are with other firms and presumably pay a referral fee to Redfin. Anyone know what’s behind this? I thought the tight market would be tough on Redfin’s buyer side–maybe this is how they’re adapting????

  2. 2

    RE: Kary L. Krismer @ 1
    Perhaps Its Skill Related?

    I see American small businesses allege they want to hire, but are also alleging they’re finding a lack of skills by the applicants [perhaps its a lack of qualified applicants that accept lower pay?].

    Some firms use contract workers or temporaries during peak periods, them dump them quickly later too.

  3. 3
    Lo Ball Jones says:

    Are you serious about 9012 2nd Ave S selling for $120,000?!

    That’s what people pay three-quarters of a mill for in “real Seattle”!

    I mean, did you see those rooms, the newness of the home.

    Crap, I might have to call up Linda Strader to see if she’s got any more deals like that!

  4. 4
    Erik says:

    Crazy, these houses sure are cheap…

  5. 5
    The Tim says:

    RE: Kary L. Krismer @ 1 – Redfin has had the “Partner Program” for quite some time. It’s basically where they send the extra business when they have too many buyers for their in-house agents to handle.

    Here’s a good post Glenn wrote up back in 2011 about how the program works.

  6. 6

    RE: The Tim @ 5 – I knew they tended to refer out lower priced properties, but I’d not seen them advertise the other agents on their webpage. Then again, I don’t spend a lot of time on Redfin.com. ;-)

  7. 7
    Azucar says:

    RE: Erik @ 4

    $175,000 is cheap, but $130,000 is “fat stacks of cash”? I see a disconnect somewhere…

  8. 8
    Erik says:

    RE: Azucar @ 7
    Sugar is back on a tear, here we go. I accept your challenge Sugar.

    Borrowing $175k is cheap because you could put 0% down and make payments on the rest or pay 5% and only put 8.75k down and make payments on the rest. The equation could look like this cost to buy a place for $175k… $8.75k+(payment-rent)/mo=cost to me. So, when I pocketed $130k greenbacks from my remodel, I could buy many of these and borrow the rest of the money. I don’t make loads of cash at my job, but I can borrow about $450k pretty easily because I made fat stacks of cash.

    I would never put 20% down. I am trying to get them at the auction for 80% of total assessed value. If I put a bid in $260k and get it and the place assesses for $325k, I owe nothing down. I only owe the monthly payment. Do you see how money in hand is able to afford a large loan? That is what I am referring to. I want to leverage myself like it’s 2007 again and see if I can get rich this time. If not, I will just have to give it back again. It’s a win-win situation really. The more casheroo in hand, the more the bank trusts you and they will give you more. I earned that trust and now it’s time to get paid. The banks owe me for playing by the rules and I am ready to collect.

    I was told this once by a very wealthy man that started out with nothing… “The more of someone else’s money you can use, the more money you will make, as long as you have a good plan.” He is a real estate man. He also said “The 3 most important things in real estate are location, location, location.” Years later, I finally learned the value of that advice. The biggest mistake I made was buying in North Everett, bad location. The second biggest mistake I made was not being able to borrow enough to finish my remodel.

    You can borrow a lot of money with $130k in your bank account Sugar. The only other big item for success is pick a desirable location and I learned my lesson on that. I will only stick to Seattle and the East side.

  9. 9
    Erik says:

    RE: Azucar @ 7
    I have no idea what you are talking about I guess sugar. I assumed the 130 was my approximate profit on my last remodel since I referred to it as fat stacks of cash before. I guess the 175 is what one of these houses is selling for. Okay, refer to the statement above. I would only have to give up a small portion of my fat stack of cash and finance the rest. I would bet my rent isn’t much cheaper than paying on that dump listed above.

    That place says “lots of potential.” Yeah right! It will take atleast 50 years for that area to become nice. As long as that house stays on the same lot, it has no potential. I learned this from my first house. Depressed areas stay depressed for a long time. If the buyer is lucky, some developer will buy their house to turn it into a parking lot so they can afford to get out of that area.

    My friend bought a house in Hadlock and he is finally getting out of there. He rents it. He came to the realization, with my help of course, that you don’t want a rental in a dumpy area unless you have a large positive cash flow. He was losing money on it. Better to count the losses and move buy a rental somewhere people will overpay to live.

  10. 10
    Jay says:

    RE: Erik @ 8 – Yup, Real Estate is all about location!

  11. 11
    Azucar says:

    By Erik @ 8:

    RE: Azucar @ 7

    I want to leverage myself like it’s 2007 again and see if I can get rich this time. If not, I will just have to give it back again. It’s a win-win situation really. The more casheroo in hand, the more the bank trusts you and they will give you more. I earned that trust and now it’s time to get paid. The banks owe me for playing by the rules and I am ready to collect.

    The biggest mistake I made was buying in North Everett, bad location. The second biggest mistake I made was not being able to borrow enough to finish my remodel.

    You ARE aware that 2007 was not really a great time to be highly leveraged into real estate… aren’t you?

    And as for a foreclosure or short sale being one of the “wins” in a “win-win” situation… I don’t think most people would agree. Didn’t you end up moving back in to your parent’s basement for a while after you short sold? Which win in “win-win” is that?

  12. 12
    Erik says:

    RE: Azucar @ 11
    I am aware that 2007 was a bad time to be leveraged in real estate. I was making a joke since the very conservative programmers and like minded that roam this site always tell everyone how bad it is to borrow money. Borrowing money is great as long as you can get it for cheap.

    I lived with my mom because I got laid off from my job the same day I sold my home for a $128k profit. It was a place to rest while I was in transition. I stayed there 3 months before placed back into society.

    Here is where the win-win comes in. The first house I bought was short sold. My punishment was to collect rent without paying my mortgage, hence stacking chips. Then in the mean time, I purchased and remodeled that condo to earn that motherload of cash. The only mistake I made was short selling and not foreclosing. I could have collected rent for 5 years while riding the hampster wheel instead of the 9 months.

    Anyway, now that I have that stack of bills, I can borrow a lot more than I could have in 2007. I am looking to buy a beach condo where I can sit out on the deck and drink espresso and listen to the waves of financial freedom roll in. I am not sure if you are as broke as I was 7 months ago, but if you are, I think you have nothing to lose. That’s how I always looked at it. If you are living paycheck to paycheck or have a few grand in your account, you will make your money back easily if you have to foreclose because you will get years of free rent which could equal $70k. Just pocket the money you would have paid on rent the whole time and you will be way ahead. The more you can borrow, the more you will make.

    I know Jay is stressed about buying a remodel, but there is no reason to be. The chances are you will be profitable. If not, the foreclosure process is a gift and there is nothing to be scared of. You just get years of free rent and that’s it. Just make sure you sign a cease and desist right away and they cannot call you and bother you about not paying. Then you sit back, go out to eat with that extra money. Maybe go on vacation. Go to the bar. Maybe just save the money you would have spent on your mortgage for your next purchase. Don’t worry, tax payers will cover you if you fail.

  13. 13
    SaffyThePook says:

    Oy! Is there no thread free of Erik’s $128K self-congratulation?

  14. 14

    RE: Erik @ 12

    You Have the Energy and Drive to be a Potential Landlord/Flipper

    My hesitation to go that route is not your’s. My old friend was renting for 10-15 years since 1990. Here’s some of his tennants fron Hades:

    One had him on the cross-hairs of a rifle.
    One brought unruly party animals, including violent criminals to disrupt the neighborhood.
    One sued him on false allegations and stalled the eviction, meanwhile his place was trashed.
    One later brought in two big dogs and a messy girlfriend, gutted the place again.
    One set up a possible drug operation in his rental.

    Yes, 50% of his tennants were OK….but 50% were HORRIFYING and he’ll never be a landlord losing money again….

  15. 15
    Erik says:

    RE: softwarengineer @ 14
    I want to do as mr peppers did and have 10 rentals and put the rest in the market. If I can get good deals and flip a few and rent the rest as mr peppers did, that should get me there.

    If that doesn’t work, maybe you still have the phone number of that lawyer you took to the baseball game that was hooking up with the pool boy on the side? Everyone has a price.

  16. 16
    wreckingbull says:

    RE: SaffyThePook @ 13 – I think there should be a dedicated thread for him, just like the dedicated health care thread. Unlimited posts are allowed, and he can congratulate himself into a froth. Sort of a sacrificial zinc anode for this blog, if you will. The rest of this site would then be protected from corrosion.

  17. 17
    redmondjp says:

    By wreckingbull @ 16:

    RE: SaffyThePook @ 13 – I think there should be a dedicated thread for him, just like the dedicated health care thread. Unlimited posts are allowed, and he can congratulate himself into a froth. Sort of a sacrificial zinc anode for this blog, if you will. The rest of this site would then be protected from corrosion.

    Awesome! Did you by chance used to watch MST3K?

    Bonus points for the housing-related water heater reference as well.

  18. 18
    mike says:

    RE: SaffyThePook @ 13 – Well, he did stop congratulating himself for having sold at the top…

  19. 19

    RE: Erik @ 12
    Timing is everything. What if you’d bought your North Everett place in 2004? You now might be saying what a great place it was to invest in. What if you’d bought the Juanita place in 2007?
    Also, we don’t know what the future holds. Just because it’s been easy to walk away from a house, some of that had to do with the fact that foreclosures were prevalent. This might not continue to be the case, as the housing market “recovers”.

  20. 20

    RE: Ira Sacharoff @ 19 – The main thing Erik did was not be part of the herd when he bought. That’s what allowed him to profit–more so than any work he did to improve the place, IMHO.

  21. 21
    Mike says:

    RE: Kary L. Krismer @ 20 – Which also appears to be a stroke of luck as most people who sold short weren’t able to finance another property for several years.

  22. 22

    By Kary L. Krismer @ 20:

    RE: Ira Sacharoff @ 19 – The main thing Erik did was not be part of the herd when he bought. That’s what allowed him to profit–more so than any work he did to improve the place, IMHO.

    Yes, when he bought in Juanita. But when he bought the house in North Everett, that was more following the herd, wasn’t it?
    I guess you can also not follow the herd , and fail. What if you’d bought in Spring of ’08? Sales were way down due to the crash, but prices still had a long way to drop. What if you’d bought then , and then decided that you had to get out in 2011? Sure, you’d have been misguided and stupid, but with the best of intentions thinking that you waited for the price to drop.

  23. 23
    Azucar says:

    By Erik @ 12:

    RE: Azucar @ 11
    I am aware that 2007 was a bad time to be leveraged in real estate. I was making a joke since the very conservative programmers and like minded that roam this site always tell everyone how bad it is to borrow money. Borrowing money is great as long as you can get it for cheap.

    I lived with my mom because I got laid off from my job the same day I sold my home for a $128k profit. It was a place to rest while I was in transition. I stayed there 3 months before placed back into society.

    Here is where the win-win comes in. The first house I bought was short sold. My punishment was to collect rent without paying my mortgage, hence stacking chips. Then in the mean time, I purchased and remodeled that condo to earn that motherload of cash. The only mistake I made was short selling and not foreclosing. I could have collected rent for 5 years while riding the hampster wheel instead of the 9 months.

    Anyway, now that I have that stack of bills, I can borrow a lot more than I could have in 2007. I am looking to buy a beach condo where I can sit out on the deck and drink espresso and listen to the waves of financial freedom roll in. I am not sure if you are as broke as I was 7 months ago, but if you are, I think you have nothing to lose. That’s how I always looked at it. If you are living paycheck to paycheck or have a few grand in your account, you will make your money back easily if you have to foreclose because you will get years of free rent which could equal $70k. Just pocket the money you would have paid on rent the whole time and you will be way ahead. The more you can borrow, the more you will make.

    I know Jay is stressed about buying a remodel, but there is no reason to be. The chances are you will be profitable. If not, the foreclosure process is a gift and there is nothing to be scared of. You just get years of free rent and that’s it. Just make sure you sign a cease and desist right away and they cannot call you and bother you about not paying. Then you sit back, go out to eat with that extra money. Maybe go on vacation. Go to the bar. Maybe just save the money you would have spent on your mortgage for your next purchase. Don’t worry, tax payers will cover you if you fail.

    I don’t generally have an issue with someone going into foreclosure or having to short sell if it occurs due to something unpredictable or beyond their control, but to intentionally over-leverage one’s self by borrowing as much as is possible, with a back-up plan of stonewalling on making mortgage payments if the market does not continue to go up is, in my opinion, not ethical. A mortgage contract is a contract, so there are remedies if one defaults on the contract… but there should also be an element of “good faith” when anyone enters into any agreement.

    Knowing your position on the above, it does not surprise me that you have had changes in your employment recently, and it would not surprise me to learn if you have more in the future as your future employers learn more about you.

  24. 24
    mmmarvel says:

    Y’all must be rolling in cash. You MUST have jobs (evidently everyone has these) that pay well in excess of $100K per year. Good for you, but what about the rest of the folks?

    Look, I’m a building inspector. I’m proud of what I do and I think I’m pretty good at it. However, most building inspectors, including those who live in Seattle make from about $55K to $70k a year. Where do those folks live? Where do they buy?

    I’m down here in Houston because I’m making in the range that I posted, but houses are much more reasonable. I mean that $175K house would sell for about $40K down here (not that I’d buy it). I understand that people should get whatever anyone is ready to pay for your house … but … that is but one of the many reasons that I left the Pacific Northwest, I figured out that I’d never be able to afford a house that I’d want to live in. Just incredible to me.

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