‘Tis the Season for Seasonality (November Insider)

Redfin’s monthly Seattle-area real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Happy Holidays Redfinnians!

Redfin is delivering our holiday bag of agent insights and proprietary numbers on what’s going on with the Seattle area market. There are a few lumps of coal in there: November sales volume is down for King County by 22.3%, and inventory is continuing to be pulled off the market for winter at a quick pace. Of the homes withdrawn from the market, only 40% of them sold while the remaining 60% de-listed to wait out the winter.

On the bright side, at least if you’re a home-seller: prices dropped by only 2.6%. The median price of homes is holding pretty steady at a time when most of the rest of the country is down. Interest rates are starting to rise and home-buyers are getting antsy.

Inside Redfin, we’re preparing to launch a big upgrade to the website tomorrow that allows folks to log-in using their Facebook account. We’re also giving our own customers an online Deal Room for tracking the escrow process and — tell your friends! — we’re opening the Dallas market.

It has been a good year for Redfin, and we’re even more excited about 2011. Thanks for all your support! To get the detail on the Seattle area in November, read on!

Nobody’s Home

Once again inventory is down across the board. Unfortunately, this doesn’t mean that homes have been selling, it’s because 60% of the homes no longer for sale were pulled off the market to wait out the winter.

City Compared to Oct. 2010 Compared to Nov. 2009
Seattle -14.4% +4.7%
Bellevue -16.1% -14.5%
Federal Way -11.5% -3.4%
Issaquah -12.1% -16.9%
Kent -1.0% +12.8%
Kirkland -16.5% -14.6%
Renton -6.5% +7.2%
Shoreline -16.1% +12.4%
Redmond -12.6% +1.1%

Change in # of King County Houses for Sale on November 30th 2010, By City

With this dearth in inventory buyers are starting to get creative. “I’ve noticed an uptick in offers for short sales,” said Earnest Watts, a Redfin Agent specializing in Queen Anne and Magnolia. “This could be caused by the inventory being stagnant enough to make buyers accept the risk and time investment it takes to successfully navigate a short sale to closing.”

Will the number of buyers entertaining short sales keep rising into the spring? Probably not. Earnest said, “I see this trend fading once the holidays are over and inventory picks back up.”

Knock knock. Who’s there? First time home buyers.

With sellers boarding up their homes and waiting for spring and buyers nowhere to be found, the number of deals going through has plummeted by as much as 40% in some areas.

City Compared to October 2010 Compared to October 2010 Adjusted for # Weekdays Compared to November 2009 Compared to November 2009 Adjusted for # Weekdays
Seattle -5.2% -9.5% -21.8% -25.4%
Bellevue -21.7% -25.2% -38.7% -41.5%
Federal Way -23.9% -27.4% -45.3% -47.8%
Issaquah -11.4% -15.4% -29.1% -32.3%
Kent +0.0% -4.5% -32.4% -35.5%
Kirkland -8.2% -12.3% -34.8% -37.7%
Renton -24.4% -27.8% -30.6% -33.7%
Shoreline -36.6% -39.5% -38.1% -40.9%
Redmond -15.4% -19.2% -36.5% -39.4%

Change in # of King County Houses That Sold in November 2010, By City

So, who is buying in this market? First-time home buyers, according to Lori Bakken, a Redfin agent specializing in Renton and Auburn. Lori said, “The last three sales I closed were all first time buyers who told me their new payments were lower than their rents.” This trend was also noted by Christine Golborne, a Redfin coordinator who said, “Most of our clients this past month have been first time home buyers who realize they can’t pass up the affordability of today’s market and low interest rates.” Christine also said, “I’ve been seeing more investors pushing into the marketplace grabbing properties that are about 25-30% below what they would have paid at the peak of our market in 2006/2007, with the intent to subdivide or rent for income.”

With interest rates on the rise and not a lot of competition in the market you want to keep your eyes peeled for a good deal.

Prices Stay Flat, Loans Extend

The median price for a home in King County is hovering around $396,000, only a 2.6% decrease from last month. Some areas actually saw a surprising bump in median price, like Bellevue with an increase of 12.2%.

City Median Price in November 2010 Median $/SqFt Change since October 2010 Median $/SqFt Change since November 2009
Seattle $415,750 +4.1% -1.2%
Bellevue $612,500 +12.2% -0.3%
Federal Way $245,000 +0.7% -4.7%
Issaquah $460,000 -3.7% -8.3%
Kent $244,475 -4.3% -21.2%
Kirkland $420,000 +5.2% 0.0%
Renton $306,000 -5.3% -9.1%
Shoreline $318,500 -5.8% -21.6%
Redmond $625,000 -5.0% -5.0%

Change in Median Price of King County Houses That Sold in November, By City

This slow decline will probably be seen until the spring when more inventory comes back on the market and buyers are back to touring in force.

While median prices might be holding steady the time it takes to close has been lengthening. “About half of the buyers I’ve been working with have had their loans extended, and this is pushing out the buyers’ closing date,” said Coventry Merwin, a Redfin coordinator. “There doesn’t seem to be a pattern with respect to what type of bank it is, whether it’s a local or out of state lender, or the type of buyer. It seems to be a result of the lending climate in general. In November three of the six deals I worked on closed later than their contractual closing date. For December two out of the four of the deals will be closing late through no fault of the buyer. We find ourselves coaching buyers, these days, to expect the unexpected once the file goes to underwriting.”

That’s it for the last Seattle Area report of 2010! Want to dig into the raw data? Just download our spreadsheet. Questions or comments? Just post ‘em below! Thanks as always for your Redfin support, and happy solstice!

Best,
Michelle Broderick, Redfin Analytics Team