A Tale of Two Cities (January 2011 Insider Report)

Redfin’s monthly Seattle 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.

Greetings Redfinnians!

“It was the best of times, it was the worst of times… it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us.”

The opening line of Charles Dickens’ famous novel is a fitting description of the Seattle-area real estate market in January. Low prices are a buyer’s dream, but a seller’s nightmare. Inventory is still near record highs, but according to buyers, “there’s nothing out there.”

These are certainly interesting times to be buying or selling a home. Read on to find out the ins and outs of what happened in the local market in January.

Where’s the Beef…Er, I Mean the Inventory?

For buyers coming out of post-holiday hibernation, January’s inventory proved to be somewhat disappointing. Bucking the usual seasonal trend of an increase in new listings with the new year, the number of homes on the market fell across most of the Seattle region in January.

City Compared to Dec. 2010 Compared to Jan. 2010
Seattle -3.0% +2.0%
Bellevue -8.8% -14.8%
Federal Way -5.1% 0.0%
Issaquah -5.1% -3.8%
Kent -7.8% +10.8%
Kirkland -9.2% -11.6%
Renton -10.4% +0.7%
Shoreline -4.6% +17.1%
Redmond -6.1% +2.0%

Change in # of King County Houses for Sale on January 31st 2011, By City

January’s selection was particularly poor on the Eastside. Bellevue’s inventory was nearly fifteen percent lower than a year ago, and Kirkland was down twelve percent.

“The number one complaint I hear from my buyers today is ‘there’s nothing out there,’” said Loren Ellingson, a Redfin agent in Bellevue. “We’re all holding out, waiting and praying for more inventory in March.”

Kirkland Redfin agent Kathryn Rion agreed. “I have a lot of buyers who are really ready to go, but most of what’s out there is either overpriced or really yucky,” explained Kathryn.

Sales Still Slow as Buyers Wait on Selection

Sales were down from a month ago and a year ago pretty much everywhere you looked around Seattle in January. From what our agents are seeing, this is due at least partly to the fact that there just aren’t a lot of homes out there that buyers can get excited about.

City Compared to December 2010 Compared to December 2010 Adjusted for # Weekdays Compared to January 2010 Compared to January 2010 Adjusted for # Weekdays
Seattle -53.2% -48.7% -30.7% -30.7%
Bellevue -36.8% -30.8% -16.7% -16.7%
Federal Way -40.3% -34.6% -17.8% -17.8%
Issaquah -62.3% -58.7% -44.4% -44.4%
Kent -52.9% -48.5% -36.0% -36.0%
Kirkland -53.8% -49.5% -10.0% -10.0%
Renton -56.0% -51.8% +20.0% +20.0%
Shoreline -31.6% -25.1% -31.6% -31.6%
Redmond -51.3% -46.6% -40.6% -40.6%

Change in # of King County Houses That Sold in January 2011, By City

Although sales have been slow to pick up in 2011, there is some action beginning to slowly build.

“We have buyers who have been searching with us since July or August who are finally finding the perfect home and pulling the trigger,” said Trevor Smith, a Redfin agent in Ballard. “It feels like spring has come early in Ballard. Inventory is growing as sellers seem to be listing earlier, and we’re seeing a steady stream of buyers coming into the market.”

Despite the low overall sales volume on the Eastside, buyers there are encountering some frustrating situations. Loren and Kathryn are both beginning to see banks get a lot more aggressive with their listings, putting well-kept REO homes on the market at far below market value, often generating over a dozen offers (no joke!).

“When a nice bank-owned home hits the market in Bellevue, it inevitably gets a lot of offers,” said Loren. “Many of these listings are generating so much interest that the banks cut things off after receiving ten offers.”

Falling Prices Tempt Buyers

Across most of the Seattle area, prices continued to slide. In King County, the median price fell 7.3% from December, and 6.1% from January 2010, while the size-adjusted median was down 1.5% from December and 6.1% from January 2010. The most notable exception to this trend was in Bellevue, where although the median price is down double digits, the size of homes sold is increasing dramatically, pushing the size-adjusted median price up.

City Median Price in January 2011 Median $/SqFt Change since December 2010 Median $/SqFt Change since January 2010
Seattle $399,475 -3.2% -7.7%
Bellevue $485,750 +7.8% +9.4%
Federal Way $207,250 +2.2% -8.1%
Issaquah $444,900 -3.3% -10.5%
Kent $265,500 +0.8% -15.5%
Kirkland $471,500 -8.8% -14.1%
Renton $254,975 -3.2% -16.8%
Shoreline $289,750 -10.6% -13.8%
Redmond $450,000 +1.8% -1.3%

Change in Median Price of King County Houses That Sold in January 2011, By City

“Some of my buyers see today’s falling prices and get a little ahead of the market,” said Kathryn. “They’re concerned about losing their down payment to continued depreciation, so they want to make offers well under list price. Sellers may end up accepting a significant discount from their original list price, but it can take time for a listing to season.”

Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.