Eastside Saw Biggest Drop in August Sales

It’s time once again to take an updated look at how King County’s sales are shifting between the different regions around the county, since geographic shifts can and do affect the median price.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

  • low end: South County (areas 100-130 & 300-360)
  • mid range: Seattle / North County (areas 140, 380-390, & 700-800)
  • high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of August data:

  • low end: $251,900-$375,000
  • mid range: $325,000-$689,888
  • high end: $460,000-$1,672,500

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

Median Price of Single Family Homes Sold

The median price in the low and middle tiers fell for the second month in a row between July and August. Meanwhile the high tier (Eastside) continued rising. The low tier fell 4.3 percent in the month, the middle tier decreased 8.8 percent, and the high tier gained 2.3 percent.

After just two months of declines, the median price in the low and middle tiers is now down year-over-year. Nineteen of the twenty-nine NWMLS regions in King County with single-family home sales in August had a higher median price than a year ago, while just eleven had a month-over-month increase in the median price.

Here’s how the median prices changed year-over-year. Low tier: down 1.8 percent, middle tier: down 6.9 percent, high tier: up 11.0 percent.

Next up, the percentage of each month’s closed sales that took place in each of the three regions.

% of Total King Co. SFH Sales by NWMLS Area

The share of sales in the low and middle tiers of South King and Seattle both gained ground in August, while Eastside sales dipped. This alone is enough to explain the dramatic month-over-month dip in the county-wide median price. Year-over-year sales were down in all three tiers. Compared to a year ago, sales decreased 1.5 percent in the low tier, fell 9.6 percent in the middle tier, and dropped 8.9 percent in the high tier.

As of August 2014, 32.3 percent of sales were in the low end regions (up from 30.6 percent a year ago), 33.3 percent in the mid range (down from 34.3 percent a year ago), and 34.4 percent in the high end (down from 35.1 percent a year ago).

Here’s that information in a visual format:

Bank-Owned: Share of Total Sales - King County Single-Family

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

% of Total King Co. SFH Sales by NWMLS Area since 2000

Last month I pointed out that “much of the big spike in the county-wide median price last month can likely be attributed to a shift in sales toward the more expensive neighborhoods on the Eastside.” This month with those expensive sales falling off, the big decline in the median can also be pinned on a sales shift.

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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.

27 comments:

  1. 1
    Erik says:

    Seems like I buy when things are down and sell when things are hot. I think alki will catch up to the rest of seattle in 2 years so I can sell for a mammoth profit. Alki is where it’s at folks.

  2. 2
    Deerhawke says:

    Looking at the median price charts above, you can see that a substantial gap was opening up between the high-end east side and the middle and bottom tiers in Seattle and South King even before the recession. Coming out of the recession you can see that the East side was least effected and has rebounded fastest, Seattle is doing fine but the south end is still lagging.

    It is hard to say if the lower end areas are going to rebound and stage a catch-up.

    But the difference between good, better and best still seems to be widening. Even within neighborhoods I see that there can be $100,000-200,000 difference between what are seen as prime houses on prime streets and those almost as nice a few blocks away. That difference before the recession was more like $25,000 or $50,000.

    I think this might mirror changes in income distribution both in Seattle and nationwide.

  3. 3
    Erik says:

    RE: Deerhawke @ 2
    Going from a low tier scum bag to a respectable mid tier man myself, I can tell you there is a huge difference between a low tier person and a mid tier person.

  4. 4
    Scotsman says:

    South of I-90 coming back strong!

  5. 5

    Prices and Sales Volume are Two Separate Issues

    Comparing high end prices and sales volume in Magnolia and Queen Anne says it all:

    http://seattleluxuriousliving.com/magnolia-queen-anne-home-sales-in-2007-2011/

    I’ll believe the price increases represent a more stable real estate market, when sales volume goes back to its 2007 peak.

  6. 6
    RandomNumber says:

    How many times in the past couple years have we actually seen a year-on-year drop? It seems like it’s always been up, up, up.

  7. 7
    Andrea says:

    Back in 1Q-2007 and 1Q-2010 you can observe the Eastside price increasing while Seattle prices decreasing. These events were followed by two major legs down in the overall market. A similar disconnect between Eastside and Seattle price direction can be observed in the last two months, Eastside is up and Seattle is down.

    Maybe in the next months we will see a replay of 2007 and 2010 and the Eastside will follow Seattle? Or maybe I am just biased and I want to believe that the market is at the top?

  8. 8
  9. 9
    Mike says:

    RE: RandomNumber @ 6 – I’m not necessarily sure people unloading en-mass to bag holders in 2007 was representative of normal volume either.

  10. 10
    Mike says:

    RE: Andrea @ 7 – Yet somehow Erik’s agent managed to find and buy the one house in a prime Kirkland neighborhood that lost 50% of it’s value between 2007 and 2010. Some people have that magic touch, others do not.

  11. 11
    Erik says:

    RE: Mike @ 10
    I found that one mike, not my agent. I look obsessively online for deals until I find one. Nobody was allowed inside that condo because the owner that spent around $300k ended up foreclosing and wouldn’t let anyone in. I found it on redfin, visited it, then called my agent to make a full price offer of $92.7k.

    My new place I also bought site unseen. This one was $300,500 at the auction. I live in the only condominium complex that sits over the water. I am listening to the waves crash on the shore around me right now. This place is amazing. I hope to sell for $500k or so in the next couple years. I think this complex is way underpriced. 3717 beach drive sw seattle wa 98116. There are places selling for $350,000 here. I think anyone that buys one will make money in the next couple years. This place has to be worth more. I think the places in this complex are $70k under valued. Our hoa is turning things around after years of maintenance neglect. Another $100k profit in 2 years would satisfy me. It could be more though… stay tuned.

  12. 12
    Erik says:

    RE: Blurtman @ 8
    The buying, remodeling, and selling thing seems to be working well. I just need to fine tune it now.

  13. 13
    Kary L. Krismer says:

    By Mike @ 10:

    RE: Andrea @ 7 – Yet somehow Erik’s agent managed to find and buy the one house in a prime Kirkland neighborhood that lost 50% of it’s value between 2007 and 2010. Some people have that magic touch, others do not.

    That is not that unique. There are others here who did that same thing.

  14. 14
    Voight-kampff says:

    RE: Erik @ 11

    I have looked at those condos over the water. I wish you luck, but a special assessment could easily wipe out some, or all of your profits. Being perched over the water looks great and all, but it can have very expensive structural issues… Especially “after years of maintenance neglect”.
    Your risk tolerance is higher than mine, but that could pay off for you.

  15. 15

    RE: Voight-kampff @ 14 – I’m not sure which condos you’re referring to, but your point is good. About 2-4 years ago there was that on condo complex over Lake Washington where the units were being listed for about $50-75k because of those types of issues. I wonder how that ever worked out for that project?????

  16. 16
    redmondjp says:

    By Mike @ 10:

    RE: Andrea @ 7 – Yet somehow Erik’s agent managed to find and buy the one house in a prime Kirkland neighborhood that lost 50% of it’s value between 2007 and 2010. Some people have that magic touch, others do not.

    Or, as they say, even a blind squirrel finds a nut sometimes . . .

    I bought my house in Redmond for 3x my annual salary at the time back in 1998, and it will be paid off in 2.5 years. Was I lucky? You bet. Could I afford it today? Only if I could sleep being in debt up to my eyeballs! I bought it as a place to live, not as an investment. At this time, being close to Microsoft makes one’s plat of dirt valuable – that is always subject to change.

    I have been tempted to sell many times, but I really like (most of) my neighbors and my neighborhood. Plus, I finally wore down the city after working with them for 15 years and now have a city sewer line into our cul-de-sac, so I don’t have to maintain a private lift station any longer. That alone makes me do the happy dance every time I think about it . . .

  17. 17
    Erik says:

    RE: Voight-kampff @ 14
    The hoa got their insurance to pay 4 million to fix the structure. Those columns are all 2 years old and steel. The hoa owns a unit they give to the maintenance guy. The people that live there are smart, old and retired. They invest all their time and energy into dotting their i’s and crossing their t’s. They remind me of Kary in a good way. You want them on your side. I am convinced they are on top of it. Dig into the details yourself. It is a good investment at $350k if you fix them up. It is worth looking into. We can be neighbors. I have made friends with all the neighbors except the one above me that beats on the floor when I work on remodeling too late after work.

  18. 18
    Mike says:

    RE: Erik @ 11 – I was referring to the house YOUR AGENT bought in 2005, planned to sell for $1.1M in 2007, and ended up selling for $550K shortly thereafter.

    I checked out the complex you bought in and I agree it’s a unique property, but I’d have to look deeper into why the units are so inexpensive to determine whether it’s a good investment. The recent listings and sale prices seem suspiciously low given it’s a type of property that is rare and won’t likely be built again in this area. There are other condos built over water – notably the large complex near Shilshole Marina (though part of that one is on land, many of the decks are over water – not sure what difference that makes) and that complex sells at a significant premium – quite pricey! There are a few of the older buildings in Madrona on water as well, but in that case it’s Lake Washington, so not exactly comparable.

  19. 19

    By Mike @ 18:

    RE: Erik @ 11 – I was referring to the house YOUR AGENT bought in 2005, planned to sell for $1.1M in 2007, and ended up selling for $550K shortly thereafter.

    I don’t know where you’re getting the $1.1M figure, but as I mentioned above, she’s not the only one to have bought in 2005 and then got caught with an over-encumbered property. So I don’t have a big problem with that. What I do have a problem with though is the fact that she did that and also:

    1. Continued to make predictions of where real estate prices were headed, intending others to act on her predictions.

    2. Argued that sellers shouldn’t be required to disclose in their listings that they were selling short (without disclosing that her position on that issue was based on her own personal situation).

    3. Argued with Marc and myself over whether a foreclosure of a first would wipe out the obligation owing on a second (again without disclosing that her position was again based on her own personal situation).

    When someone here did point out her short sale situation that did explain why her arguments on #2 and #3 were so “intense.” There’s no explanation for #1, other than again she’s hardly unique there (e.g. Cramer).

  20. 20

    RE: Kary L. Krismer @ 19

    I lost not a dime on that…I made money…and I brought the bank a price and offer at which they would lose nothing. That they decided to take $200k less a year later is not my problem. They were acting foolishly back then , as you know.

    Mike, it was never my intention to sell it at a profit. It was my intention for it to replace the downtown office space cost, which it did. It was a business move, not a personal one, and it worked out well for its intended purpose. But feel free to interject your own theories and cast your stones. I’ve got pretty thick skin.

    I’ve owned about a dozen homes in my life. Never lost money an any of them.

  21. 21
    Jay says:

    RE: Mike @ 18 – You mean this house: 127 10th Ave Kirkland WA 98033 ( http://info.kingcounty.gov/Assessor/eRealProperty/Detail.aspx?ParcelNbr=1245003770 )

    8/10/2009 $550,000.00 DELLALOGGIA ARDELL (seller) GANDOLFO DEBORAH (buyer)
    9/1/2005 $850,000.00 SWEENEY DANIEL B (seller) DELLALOGGIA ARDELL (buyer)

  22. 22

    By Ardell DellaLoggia @ 20:

    RE: Kary L. Krismer @ 19

    I lost not a dime on that…I made money…and I brought the bank a price and offer at which they would lose nothing. That they decided to take $200k less a year later is not my problem. They were acting foolishly back then , as you know.

    If that were the case (that they would not lose anything), then you wouldn’t have needed their permission to close, and the sale would have just closed as a normal sale. Or are you just talking about the first position creditor?

  23. 23
    Blurtman says:

    RE: Erik @ 12 – Good for you. But today’s “plastics” is media. Get another successful flip under your belt and a show may be in your future. Listen up, I am Phi Beta Kappa.

  24. 24
    redmondjp says:

    By Blurtman @ 23:

    RE: Erik @ 12 – Good for you. But today’s “plastics” is media. Get another successful flip under your belt and a show may be in your future. Listen up, I am Phi Beta Kappa.

    Yes, that’s right! Coming to a city near you: TV show house-flippers that are so incredibly successful (and generous) that they want to show you how to do the same.

  25. 25

    RE: Kary L. Krismer @ 22

    Sorry. Lost track of this thread. I thought you would remember how that played out. There would have been a small difference carried as a short note without a “forgiveness” issue.

  26. 26
    Mike says:

    RE: Kary L. Krismer @ 19 – When she first discussed selling (it was either on rain city or her blog, IDK, it was a while ago) someone asked what the listing price would be, $1.1M was the reply.

    RE: Ardell DellaLoggia @ 20 – I’m not sure why you see this as casting stones. It’s just what happened. As for your explanation that the house was a business purchase that turned sour, I believe you explained it quite differently when writing about it in the past.

  27. 27

    RE: Mike @ 26 – Thanks for the explanation on price. I don’t remember that, but I also don’t remember her explanation all that different today than before. Before she said they needed a place for an office. They could buy this place with 0 down using an 80/20 loan, and the kicker was she got a commission on the purchase. That’s my recollection, and except for the commission part which she might have alluded to with the “I haven’t lost money” comment, it seems the same as what she’s saying now.

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