The current, and fleeting, combination of lowering home prices and low mortgage interest rates is favoring Queen Anne and Magnolia home buyers, said Managing Broker with John L. Scott Real Estate John Madrid. With conditions expected to persist for another year, this makes it a difficult time for Queen Anne area sellers.
According to figures Madrid processed from Northwest Multiple Listing Service data, there was a 110 percent increase in new houses on the market with a 30 percent drop in the number of homes sold from Dec. 10 to Jan. 11. During the same period, the months of inventory numbers, or the amount of homes on the market divided by the average monthly sales, increased 80 percent from the month before and 14 percent from the same month last year.
Queen Anne and Magnolia home prices have suffered from the increasingly competitive market. The average price of homes sold in January dropped almost 17 percent compared to the previous month, and 14.5 percent compared to the same month last year. Similarly, the median price of homes in Queen Anne and Magnolia fell from $495,000 to $475,000, a 22 percent decrease from the same month last year ($600,000 in Jan. 2010). But home prices in the Queen Anne and Magnolia area remain relatively high, and homes priced on the higher end generally take more time to move.
But Queen Anne sellers still have a few reasons for optimism.
“We have a relatively strong market here, people want to be in the city,” said Madrid. “Queen Anne and Magnolia are definitely great communities where people want to be, so there will always be demand.”
With the increasingly competitive home pricing, the average time homes spend on the market fell compared to the year before, from 114 days to 67, according to Madrid in a post on his blog.
“A lot of buyers are finding new motivation to actually purchase because interest rates have started to tick up, which could be good news for sellers,” said Madrid. He added that “if a home is nicely updated and is competitively priced then there’s always going to be interest in those homes.”
Home sellers who are looking to trade up in the housing market will find this is the time to do it, said Madrid. Despite a lower than desired price for their current home, they’re likely to get a good price for a home on the higher end of the market, Madrid said.
The Seattle-area real estate market lagged behind the rest of the country 12 to 18 months with respect to the collapse of the housing market, which explains the dip in price we see relative to other parts of the country, said Madrid. Prices are expected to generally stabilize this year and then begin to slowly rise in 2012, but without the dramatic increases seen in 2004 through 2007.