We have all seen the home at the corner of S.E. 24th Street and West Mercer Way on our way back from Seattle via the West Mercer Way exit. It’s a newer home, built up high off the street. Its view is dead on with the I-90 bridge and the city lights across the lake. Yet after being lived in for barely a year or two, the home is now empty, the grass untouched. What happened?
The house is listed as a short sale, a term used when the seller owes more than a home is worth.
Statistics about residential real estate used to center around prices and inventory. But distressed properties sold by banks do affect the real estate market.
An index of the 20 largest metropolitan areas in the U.S. revealed that the Seattle area experienced the largest year-over-year increase in foreclosures as reported by the real estate Web site Redfin.
The overall rank for the rate of foreclosure is 63 out of the 206 metro areas ranked by RealtyTrac, a real estate Web Site that keeps track of area foreclosures.
Mercer Island is not immune to foreclosure. RealtyTrac shows 13 foreclosed properties on the market on the Island at present, whereas RealQuest Express states that eight homes on the Island are bank-owned, representing 5 percent of the residential market, with another 30 headed for auction. The highest priced repo on Mercer Island is listed at $1,335,000 with the low end at $268,000 per RealQuest.
However, Bob Gent, the director of business development for the Northwest Multiple Listing service based in Kirkland, said there is only one repossessed home for sale on the Island.
The reason for the discrepancy in number of distressed properties on the Island, Gent said, is that it’s not a very scientific process. Homes that are pending may still show as active; active repos may show up as privately owned if an agent enters data incorrectly. Nonetheless it appears that 25 percent of the homes on the market on Mercer Island fall into a category of questionable circumstances. Even the custom home at 2408 West Mercer Way is being marketed as a short sale.
Realtor Mark Gill with Coldwell Banker also said it’s extremely hard to figure out how many REOs are on the island. Part of the problem is the time lag between when a house is vacated to when it actually comes on the market.
“The process is almost a two-year process from the time the homeowner first requests help on their mortgage,” said Carol Wall, a Realtor with John L. Scott, Inc. Wall and her partner Georgia Schoonover have several REO listings, including one that is pending sale now on E. Mercer Way which belongs to U.S. National Bank.
Wall said she doesn’t think Mercer Island is any different than anywhere else. We are not an isolated community, whether we like it or not.
According to the case study of the 20-cities, Seattle area home prices peaked in July 2007, a year later than the national trend. Since that time prices have dropped 24.6 percent.
The Northwest Multiple Listing Service reported that 11,867 homes/condos were on the market this November in all of King County as compared to 11,474 last year at the same time. However a year ago there were 2,025 closings in King County in November compared to this year’s 1,331.
On Mercer Island, 14 residential properties closed last month, down one from last year when 15 homes closed in November. In 2009, 29 homes were pending in Nov., as opposed to 35 this year. 29 homes came on the market on Mercer Island in November — exactly the same as a year ago. All told, there are 163 residential properties on Mercer Island that are on the market, as compared to 170 last year.
Median sales price on the Island in November was $743,750, up 16.03 percent from November of last year when the median sales price was $641,000.
Chris Eng, a private mortgage banker with Wells Fargo on Mercer Island said she has seen four new purchase transactions in the first few days of December. Each case is different; one family deciding to finally get that bigger home, the couple buying a second home and one case of a renter buying the house they are already living in.
Eng is optimistic. Wells Fargo has no new REOs in the pipe, she said, and she said that in 2011 the Seattle single family home market should see some slight appreciation. That statement does not include condos, she said, as there is still too much of a glut. Bank of America and Chase Bank’s Web site show no REOs on Mercer Island, but who knows what’s going on behind closed doors.
Even if you do find the perfect deal, with tightening lending practices the process can be painful.
