Since I posted about homes without permits, wells, or septics being put on the market we have seen a few more. Both are being offered under $100,000 and fit into the tear down category. The previous offerings were nice little cabins, even if they didn't meet current legal or health requirments. The newest offerings? Little to no value as structures, in my opinion. (I think the prices reflect that, so a pat on the back to the listing agents.) I wonder what other strange listings this Summer will bring.
Saturday, May 27, 2006
Absorption Rates
What is an absorption rate? It is the average number of houses that sell per month and it tells us what kind of inventory we have. I ran some numbers today which confirm what I thought was the case. Currently there are 57 single family homes (not including condos or manufactured homes) in the general Leavenworth market. This includes Plain, Peshastin, and Lake Wenatchee. The average home is listed at $536,000. From the buyers I talk to and e-mail day in and day out, this is out of most folks price range. For 2006 so far this year, the average sold price is $310,000. From these numbers, you might guess that high price homes stay on the market and more reasonable homes sell quicker. You would be right. There is currently a 2.4 month supply of homes between $150,000 and $350,000. These are the homes most of my clients are searching for. If you are trying to sell a home in this market, the odds are in your favor. Between $350 and 450,000 there is a 5.69 month supply. A little longer wait, but you're likely to sell this summer if the house is priced competitively and shows well. But wait, Geordie. You said the average home is listed at more than $500,000! We haven't gotten there yet. For homes listed at above $450,000 (there are 27) the absorption rate is much smaller. We currently have 10.8 months of supply. I would guess that we could tease some more info out of this if we needed to. My guess? The absorption rate for waterfront homes is much higher than for non-waterfront homes in the higher prices. What is the overall message here? Even in a healthy market, there are segments of the market that are more friendly to sellers (under $300,000) and there are segments that favor buyers (over $450,000).
Sunday, May 07, 2006
No permit, no well, no septic
Think this might be a problem for selling a house? Apparently not in today's real estate market for Leavenworth Washington. Two homes recently popped on the market just outside of town. Nice little fixer upper cabins. Cabins without water, wired for generators and hooked up to sketchy homemade septic systems. Both received multiple offers in just a few days. A surprise to a number of agents in the area. How to finance? Obviously cash is the best option. Next up would be a land loan or a construction loan. Probably time to dump the mortgage broker and go with a local bank as this might be a little tricky. We'll see how these deals play out over the next month. If they go quick we may see more sales of similar homes. If the sales fail, we might see these properties sit on the market a long time. I think the market's response to these homes is pretty clear. There's no bubble in Leavenworth. It's actually possible that the market is a little more aggressive than this time last Spring.
Fortune Magazine "Real Estate Survival guide"
My new issue of Fortune came in the mail today. I've been a fan of the mag the last year or so. I don't really have the energy to pour through the Economist like I used to, nor do I feel like I need to start each day with the WSJ or NYT. I tried Money, but was often dismayed by their lack of insight on real estate matters. Anyhow, the new issue of Fortune: The first article about the bubble deflating was a lot of hype. Real Estate is local, some bubbles will deflate, some markets will continue to shine. After you read the first article "Harsh Reality" you will swear off real estate, but the second article "Ten Tips for Today's Market" tempers the first. "It never pays to get caught up in group hysteria, especially when it comes to real estate. Conditions vary from town to town, and no national statistics can give you a clear picture of what's happening in your neighborhood. So don't let headlines spook you into making a costly mistake." Amen! I'm tired of hearing glaring generalizations about the market that are irrelevant to the hot market I deal in daily. Additionally, I love the common sense tips. I'd link to the article here but Fortune mag online doesn't have the article. :( Here are my favorites: Price it right. (Not as common as you think it is..) Hire an Agent (Obviously, I have strong feelings on this one. I won't say any more) Set the Stage ( Even in a hot market, no one wants to buy a dump.) The cover price is $4.99. go pick up a copy or at least read the article at the library.
Tuesday, May 02, 2006
Market Review
The local Windermere offices in Wenatchee and Leavenworth have recently published a market review which has local real estate statistics for 2005. (I will mail you one for free if you ask.) Average prices for local towns (excluding new construction): Wenatchee $189,000 E. Wenatchee $188,000 Cashmere $182,000 Leavenworth $267,000 Those prices seem ridiculously low, don't they. Yep, that was 2005. Old news. As of May 1, 2006. The average pending home sale in Leavenworth is a home listed at $331,000. Since the average home here is selling at 95% of list we get a price of $314,000. We're certainly heading towards another record year. Currently there are only 44 homes on the Multiple Listing Service in the greater Leavenworth, Washington area. The average list price? $518,000. What's my point? $266,000 homes are harder and harder to find. If you own a modest home in the Leavenworth home, especially if it isn't your primary residence, this might be a good time to sell. (or more likely a GREAT time) Cashmere is hopping too. Because it's a smaller portion of the market the numbers are easier to skew with a few listings. The average pending sale is $278,000. A little different than last year eh? A hundred thousand different! Average listing prices are astronomical, but easily explained. 2 multi-million dollar homes on 100+ acres bump the average up to $640,000. But with only 11 homes to choose from, prices are going up. I guess the real estate bubble hasn't popped here...
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