I’ve been doing a lot of thinking about residential real estate market segments. Usually the market is divided into the following categories: First-Time Homebuyer, Move-up Buyer, Trophy-Home Buyer and Move-Down Buyer. These categories are probably alright, however, I believe we need a new category, what I am calling the Empty-Nester Buyer.

The Empty-Nester is usually considered a parent whose children have all left home–sometimes for good and sometimes to return later. But, that’s a discussion for another time.

The other day I was talking to a friend about this idea of creating a new category of “Empty-Nester” and she immediately said, “They may want to move to a single-story house or a condo.” I believe this is the response many people have to the idea of being an Empty-Nester. However, when you think about it, many parents are still quite young when all their children have left home.

In our case, we were 22 when we got married. We were 24 when we had our first child and three and a half years later we had our last child. We used to think in terms of “potentially” being an Empty-Nester by the time we were in our late 40s or early 50s. This would give us time to raise all three children and get them through college. Of course, plans don’t always work out quite as well as we might like and due to a variety of circumstances we were a little bit older than 50 when they all left the nest.

The important thing is that we were still in our early 50s with lots of life ahead. We were blessed with good health and could still go up and down stairs without problems, had sufficient energy to fulfill our obligations and still had dreams of things we wanted to do. For us, being an Empty-Nester certainly didn’t mean that we were ready to down-size or move into a condominium. Let me be clear, I don’t think there is anything wrong with moving into a condominium if that helps someone meet their needs better or helps them fulfill their dreams. My only point here is that is not the only thing that Empty-Nesters do.

In our case our dream was to have draft horses. And we knew that as much as we loved our home in Bellevue and as great a home as it was to raise a family it didn’t meet our needs for our new dream. So, we sold our Bellevue home and found country property where we could have open spaces and our horses. By the way, here is a picture of two of our horses, Duke and Jesse. They are English Shire Draft Horses and each one weighs about a ton. You can probably see why it wouldn’t work to have these in the city.

Duke and Jesse -- The Shire Team

So, from now on, I am going to add a new buyer category to my market segments–Empty-Nester Buyer. This is the buyer who wants to sell the home that “was perfect for raising a family” and find a new home that allows them to meet their new needs and dreams whether it is to get closer to the city to experience cultural opportunities, has less work to make it possible to travel or pursue hobbies, or to move to the country and live off the land.

These may be “Seniors,” those people over 55 years of age or younger folks who got an early start. It really doesn’t matter what the age is. All that matters is that these are people who are going through a transition in their life. I know from personal experience that it can be a challenging time as changes are faced. Many times when we think about making changes we focus on everything we have to give up and it may make us sad and resist change. However, if we focus on what we are moving toward and what we are gaining it can make the process a lot less stressful and more exhilarating.

So, UNITE!, all you baby-boomers and empty-nesters. There’s a lot of life ahead and you can still do some of those things you’ve wanted to do so long. Let’s get after it.

What do you think? I’d love to hear your ideas about Empty-Nesters.

Urban Style – Country Living

Overview Maps Photos Features Description Market Stats

$400,000 Single Family Home For Sale Main Features 3 Bedrooms 2 Bathrooms Interior: 2085 sqft Lot: 0.67 acre(s) Location Mann Road Sultan, WA 98294

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Glen Ellis Keller Williams Realty (425) 458-4563 kwglen@kw.com http://www.glenellis.com Listed by: Keller Williams Realty

Our recent listings Urban Style – Country Living Great Inglewood Location in Sammamish Country Living Close to Town Great Maywood Heights Location 4 BR Bellevue Home in Seattle Areas #1 Neighborhood Subscribe to our listing feed

See more Sultan, WA real estate for sale

Another month has passed.  They seem to roll by pretty quickly.  And now we can take another look at what the market is telling us based on the statistics from September 2009.  This report focuses on the Bellevue, WA market.  If you would like to see another market just let me know and I will prepare a report for your market area and email it to you.

As always, we begin our review by looking at the average days on the market for all sold properties.  For the month of September 2009 we were down to an average of 61 days.  This is an improvement over the 77 days for last month and compared to one year ago it is significantly better going from 81 days to 61 days.  This is an encourageing trend and one to watch closely.

Average Days on Market, Bellevue, WA

Next, we look at the total number of units sold.  This number is down from July and August of this year and almost dead even with one year ago.

Bellevue, WA Units Sold of Residential Real Estate Sold in September 2009

 The total volume sold in September 2009 is as follows.  As can be seen it is lower than July or August and a little lower than one year ago which parallels the number of units sold.  The lower prices help to account for the lower year-over-year numbers.

Bellevue, WA Total Volume of Residential Real Estate Sold in September 2009

We watch the median price to get a reading of what prices are doing in this area.  The trend is clearly downward as you compare the black line that compares September 2009 to September 2008.  Perhaps we can take some hope in the fact that the last few months appear to have stabilized somewhat.

Bellevue, WA Median Price of Residential Real Estate Sold in September 2009

The final chart demonstrates clearly that pricing a house right or correcting quickly is always the best and most effective marketing strategy.  Consistently, and with very very exceptions, the lower the number of days on the market the higher the sales price is compared to the listing price.

Bellevue, WA Asked to Sold Ratio of Residential Real Estate Sold in September 2009

If you would like more information about this market or your market send me a comment and I’ll be glad to help.

In the meantime, if you would like to be notified each time a house comes on the market that meets your requirements just click on the image below.  It will take you to a description of Home Buyers Scouting Report.  This is a free service without obligation.

Home Buyers Scouting Report

Or, if you would like to be able to keep track of the value of the houses in your neighborhood you can subscribe to Sold Homes Alert.  Once each month you will get a list, by email, of homes that have sold in your neighborhood.  Again, just click on the image to be taken to a page that explains all of this.

Click here to get a list of sold homes in your neighborhood each month

First, the good news: The federal government has set up a program that allows a first-time home-buyer to take an $8,000 tax credit on their income tax.  This is not a deduction.  This is a 100% tax credit.  You figure your tax and subtract the $8,000 from the amount your owe on your income tax.  And, if your owe less than $8,000 on your income tax the federal government will send you a check for the balance.  Now, this is a great deal.

First-Time Home-Buyer Defined: Anyone who has not owned a house in the last 3 years is considered a first-time home-buyer.  Does that surprise you?  It surprised me.  So, even if you have owned homes in the past as long as you have not owned one in the last three years you are a first-time-home-buyer.

Now, for the bad news: This great program is set to expire on November 30th, 2009.  As of the writing of this post that is 72 days away.  In today’s real estate and financing climate we are almost out of time.  It takes a minimum of 45 days to close a transaction right now and it would be better to allow 60 days.   And, of course, we have the Thanksgiving holiday in November where we will lose a few more days.  Moral:  If you want to take advantage of this great program you need to find a house quickly.

How do you find a house? You may have noticed that the news media is beginning to talk about the housing market reaching the bottom.  This means that house prices are beginning to stabilize and once the economy picks up they almost will certainly start to go back up again.  This is a very positive sign for the market and home owners.

For home buyers it means this is a great time to buy a house.  However, finding a house may not be quite as easy as you thought because investors have been quickly picking up the best deals in the market.  My nephew and his wife have been looking for a house.  Every time they find one that they think may work, perform their due diligence and make an offer someone has already had an offer accepted.  Multiple offers are not unheard of today for the best houses.

The key is to become very active in your house search.  Make a list of the things you must have in your new house.  Make another list of things that would be nice but aren’t mandatory.  Then, get on the Internet and search for houses in your geographic area that meet your criteria.  Find a good Realtor that you have confidence in and trust.   Select no more than 6 houses to look at.  You can’t remember more than that at any one time.  Set a time with the Realtor to view the houses.

After looking at the first house ask, “If this were the only house available would I buy it?”  If yes, then it becomes the standard to measure every other house against.  If no, drop it and move on.  When you view the second house ask, “Is this house better or worse than the first one that I set as my standard?”  Whichever one is better now becomes your new standard.  Continue this process until you have viewed all 6 houses.  It greatly simplifies the process of keeping things clear in your mind.

Another trick I have learned is to give each house you view a name.  This helps tremendously when you go back and review what you have seen.  And, if there is anyone else involved in your search process, it will make it much easier to describe the house you are talking about.  I learned this when my wife and I were looking for a new house.  I would try to describe the appearance or location of a house we had looked at and she couldn’t remember.  She would do the same thing with me and i couldn’t remember.  On some houses we found unique characteristics that we could label.  For example, there was one property where the seller required a 4-hour notice before showing the house.  We named it our “4-hour house” and to this day if I remind her of the 4-hour house she knows immediately which one I am talking about.  There are all kinds of tags you can use so be creative.

And, most importantly, get started.  The clock truly is ticking on this great program.

If I can be of help to you in your search please send me an email at glenellis@glenellis.com or call me at 425-458-4563.

By the way, here is a great FREE program that searches your local Multiple Listing Service continually and sends you an email every time it finds a property that meets your criteria.

Home Buyers Scouting Report

Everyone who owns a house, wants to sell a house or wants to buy a house is watching the real estate market.  We are indeed in a time of major changes.  The conventional wisdom that I grew up with is now “out the window.”  I was told when I bought my first house, “Buy all the house you can afford because the prices always go up and your income will go up, too, so in a few years you’ll be able to better afford your house.”  Although those ideas worked for a long time they aren’t working in this market.

We will return to a normal market eventually and, in fact, there are some very encouraging signs that say we may be turning the corner right now.  That’s why watching the market statistics is so important.  If you can spot the trends early in the turn around you have a better chance of buying and/or selling at the best time.

Here’s what August 2009 looked liked in Bellevue, Washington.

The trend for the average number of days on the market is going down.  Look at the black line on the chart and you will see that year-over-year August 2009 was just slightly better than August 2008.  This is hardly enough to get ecstatic over but it does show that consistently the market is improving slightly as we progress month-by-month through this real estate cycle.

Bellevue, WA August 2009 Days on Market

Days on Market August 2008-August 2009

Again this month we see that the total number of units sold in August 2009 is significantly more than August 2008.  This is another sign that the market is improving.

Bellevue, WA August 2009 Units Sold

Number of Units Sold, August 2008-August 2009

The total dollar volume of homes sold in Bellevue from July 2008 to July 2009 dropped a little.  This follows a pattern that we have seen over the past few months where the number units sold has increased and the total dollar volume has decreased or only increased a little.  We can expect this trend to continue as the market returns to a balanced condition.

Bellevue, WA August 2009 Total Volume

Total volume of all homes sold in Bellevue from August 2008 to August 2009.

There is not a lot of explanation needed for this chart and it only confirms what we already know or feel.  Prices are clearly and obviously coming down month-by-month.

Bellevue, WA August 2009 Units Sold

Median Price of single-family homes sold in Bellevue, WA from August 2008 to August 2009.

I wish there were another way to interpret this information.  Unfortunately, it is always the same.  The closer your price is to true market value the sooner your house will sell and the closer you will come to your asking price.  Pricing is the first and most important step in marketing your house.  You can’t sell an over-priced house no matter how much marketing you do.  Spend time doing the research.  Price your house competitively so that it stands out from the competition.  And, if you are wrong in your original pricing, adjust quickly.  You don’t want your house to become shop-worn and ignored.

Bellevue, WA August 2009 Asked Price to Sold Price

Asked to Sold ratio for homes sold in Bellevue, WA from August 2008 to August 2009.

If you are about to place your house on the market you might find it helpful to know what houses are selling for in your neighborhood.  We have a wonderful, free service that will notify you once a month by email what is going on in your neighborhood.  If you would like to sign up for this free, no-obligation service just click on the image below.

If you are planning on buying a new house you can be notified every time a new house comes on the market that meets your goals. Just click on the image below.  This is a no-cost, no-obligation service.

If you would like help selling your home or buying a new home I would be honored to help you.  Just give me a call at 425-458-4563.

Here are the statistics for Real Estate in Bellevue, Washington for July 2009.

I always like to look at the number of days a property has been on the market to get a sense of how fast the market is moving.  And then I like to compare the current month’s activity to the same month one year ago to take into account the normal market cycle for the year.  The black line on the chart, which shows year-over-year activity, also shows the direction the market is moving in each statistical category.  The days on the market chart has been bouncing around a bit this year and continues to trend upward.  The actual numbers are 73 days on the market in July 2008 compared to 87 days this year—a full two weeks longer.

Bellevue, WA Days on Market for July 2009

Days on Market July 2008-July 2009

When we look at the total number of units sold we have something to be excited about.  Not only has the number of units sold increased month after month since December, which we might expect due to the normal, annual cycle; but also the year-over-year shows significant improvement going from 89 units sold a year ago to 104 this year.

Bellevue, WA Total Units Sold for July 2009

Number of Units Sold, July 2008-July 2009

The total dollar volume of homes sold in Bellevue from July 2008 to July 2009 crept up a little.  Even though there was a 16.9% increase in the number of homes sold year-over-year there was only a 5.9% increase in the total volume.  This is another indication of how the prices are coming down for houses on the market.

Bellevue, WA Total Volume for July 2009

Total volume of all homes sold in Bellevue from July 2008 to July 2009.

There is not a lot of explanation needed for this chart and it only confirms what we already know or feel.  Prices are clearly and obviously coming down month-by-month.

Bellevue, WA Meidan Price for July 2009

Median Price of single-family homes sold in Bellevue, WA from July 2008 to July 2009.

As you study this chart it becomes clear that the trend is always the same.  The closer the house is priced to market value the sooner it will sell and the longer it is on the market the lower the sale price will be to the asking price.  This has always been the case even in good times, however, now the pattern is even stronger.  Moral:  Price right and adjust quickly.

Bellevue, WA Asked to Solf Comparison for July 2009

Asked to Sold ratio for homes sold in Bellevue, WA from June 2008 to June 2009.

If you are about to place your house on the market you might find it helpful to know what houses are selling for in your neighborhood.  We have a wonderful, free service that will notify you once a month by email what is going on in your neighborhood.  If you would like to sign up for this free, no-obligation service just click on the image below.

If you are planning on buying a new house you can be notified every time a new house comes on the market that meets your goals. Just click on the image below.  This is a no-cost, no-obligation service.

If you would like some help selling your home or buying a new home I would be honored to help you.  Just give me a call at 425-458-4563.

Real Estate in Bellevue, Washington in June 2009 looked like this.

One of the most basic statistics to look at is the number of days on market (DOM).  This is an indication of how quickly houses are being sold in the market place.   There are always seasonal changes from month to month with the winter months usually being slower thus showing more “Days on Market” and the spring and summer being faster or fewer days on the market.  The chart below shows the month to month activity for 13 months–from June 2008 to June 2009.  The black line shows the year-over-year trend in this market.  Even though, in general, the market is showing some signs of improvement  those who have had their homes on the market for a while are still seeing some long times on the market.

Days on Market June 2008-June 2009

The next statistic we want to take a look at is the total number of units sold during the last year.  As we look at the year-over-year line it is clear that the activity this year is better than last year.  This is an encouraging sign and one we want to keep watching as we go forward.

Number of Units Sold, June 2008-June 2009

Total dollar volume of all single-family homes sold in Bellevue from June 2008 to June 2009 showed an encouraging improvement.  With the improvement in the number of units sold we might have expected this number to improve even more.  However, this is a reflection of the drop in home prices that we have witnessed over the past year.

Total volume of all homes sold in Bellevue from June 2008 to June 2009.

As stated above we have seen prices coming down throughout the year.  Some suggest that we are at 2005 levels.  The trend is expected and we need to continue to watch for the bottom.  I hear many people suggesting we may be there now–or close to it.  Let’s watch this carefully for the correction we all want to see so much.  On the positive side, first-time buyers, this is the best opportunity you will have for a long time.  House prices are the lowest they have been in 5 years, interest rates are the lowest they have been in 40 years and there are great programs to help you get started.

Median Price of single-family homes sold in Bellevue, WA from June 2008 to June 2009.

There is a lot of information in this chart which represents the ratio between the price asked by the seller and what the property actually sold for based upon the length of time the house was on the market.  Not surprisingly, the ratio is significantly higher when the house is sold within the first 30 days than when it remains on the market for a longer period of time.  The moral of this story is that if it’s important to sell the house then the house must be priced right in the first place or corrected quickly when you are not getting offers from buyers.

Asked to Sold ratio for homes sold in Bellevue, WA from June 2008 to June 2009.

If you would like to be notified every time a new house comes on the market that meets your goals just click on the image below.  This is a no-cost, no-obligation service.

I’ve said it before and I’ll say it again, “The market will improve.  We are Americans and we are tough.”

I was born and raised in Montana.  What a beautiful, interesting and challenging state it is.

It is beautiful because of the mountains in the west and the vast plains in the east.  It is bisected by the Missouri River which begins in Three Forks, Montana where the Madison, Gallatin and Jefferson join together to form that mighty river.  If you remember your American History you will recognize these three names as important people in expediting the Louisiana Purchase which brought all of this great country into the United States.

It is interesting because there is so much history—natural, military, political and cultural—available wherever you may travel.  Probably one of the best known political and military events is Custer’s Last Stand which took place in the eastern part of the state.

Finally, Montana is challenging because of the climate, location and small population.  We used to say, “Montana is a great place to live but not make a living.”  This was the case because, although rich in natural resources, its location made it difficult to develop those natural resources into end-user products that could be shipped affordably across the nation.  And, the small population base limited the number of local buyers in the market.

But these things are changing dramatically!  Over the past twenty-five years Montana has been discovered by the “rich and famous.”  Vast cattle ranches that were hewn out of the rugged landscape are now being sold to celebrities, entrepreneurs and wealthy business people.  Skiing, hunting, fishing and hiking, which have always been important to native Montanans, have now been discovered by people from all over the world, thanks in large part to the Internet.

And that same Internet has made it possible to live in Montana and have a thriving business.  Many writers, artists, computer-code writers, craftsman and Internet business specialists are now able to not only live in the beauty of Montana but also make a significant living.  Montana is changing from a mysterious place to a prime destination.

I was blessed to live in a small town in the heart of the Rocky Mountain.  As Sarah Palin might say, “I can see the Continental Divide from my house.”  You can’t get much closer to the heart of the Rockies that that.  In 15 minutes we could drive to the best deer, elk, bear and moose hunting country in the United States.  And, great fishing could be found within that same distance.  As I sit here writing this now I am asking myself the question, “Why did I ever leave there?”  And, the answer to that question is that when I lived there “it was a good place to live but not make a living.”

I’ve never lost my love for Montana and over the years no matter where we lived we would make the trek back to our little town of Deer Lodge for a shot of mountain inspiration.  After I left home, my mother and father purchased 36 acres in the mountains very near Nevada Creek Lake where they built a solid hunting cabin where they could go to hunt deer and elk.

Well-built hunting cabin in Montana

In fact, deer live on the property year-round and elk winter on the meadow above the cabin.  Bears and cougars have frequented the area, as well.

Elk winter on this meadow above the cabin

Because the cabin was built on the crest of a ridge there are beautiful views from just about every direction you turn.  On of the amazing sights is to look down at eagles soaring in the distance below the cabin.

Watch eagles flying below the cabin

When my parents left this world they also left this cabin to my brother and me.  Over the years as we continued our frequent treks to the cabin my brother would also make his annual trip to the cabin from Minnesota.  It is hard to express the feeling you have when you are in this unique spot.  As you listen to the breeze blowing through the pines and firs it is like a soothing ointment on your psyche.  As you take in the vast panorama spreading out before you, it reminds you of how small you really are and lucky you are to be able to enjoy this moment.  As you walk around the property you are treated to the beauty of nature as you take in the ever-changing sites throughout the seasons.  When you go there it is like going on vacation, getting therapy, recharging your batteries and experiencing deep relaxation all at once.  What an experience!

And, so it is with much regret that we have come to the realization that it is time for us to pass this gem along to another lucky family.  We always knew that this time would come and hoped that it wouldn’t be for a long time.  How fortunate we have been to be able to experience such a piece of property like this for so long.

These beautiful 36 acres, hunting cabin, and “bunk house” are being offered at the unbelievable price of $168,000.  What an opportunity to enjoy a year-round cabin property where you can fish, hike, ATV or just read a book and relax in the summer and hunt deer, elk and bear and ice fish in the winter.  If you know of anyone who might be interested in this property please forward this information to them and ask them to contact me.  I can always be reached at 425-458-4563 or glenellis@glenellis.com.  Because this property is located in Montana we have asked our friends, Dan and Jeanne Senecal, to handle this sale for us.  For more information click on Montana Cabin.

When you are thinking about buying, selling or investing in real estate in the state of Washington please give me a call at 425-458-4563.  And, if you have friends or relatives who are interested in buying or selling real estate I appreciate having you tell them about me.  It is my pleasure to work for people like you and it is my commitment to always serve you by providing the best information, the strongest negotiation and the best service possible throughout the transaction.

I look forward to hearing from you.

Introduction

The wringing of hands.  The gnashing of teeth.  The tension.  The confusion.  The concern.  These are all the symptoms of the uncertainty and fear we have been living with for the last couple of years as the real estate market has continued it’s downward slide.  I read the blogs and the columns and listen to the talking heads just like you do.  I find it fascinating that there is as much hope expressed as there is despair.  You don’t have to read or listen very long before you hear both extremes and everything in between.  I’m not sure if it comes from their information sources or their personality.  Or, maybe it’s a little of both.

The problem

What we have witnessed over the last year and a half is one of the biggest melt-downs of the real estate industry in history.  It started with the sub-prime crisis when the banks became aware that a lot of the people they loaned money to had no chance of ever being able to pay it back.  I find it amazing that such intelligent people as bankers could make the decisions they made to loan so much money to so many people with such little financial ability to pay.  I am presently working on two different short sales where the buyers bought there properties for $100,000 a few years ago.  In the course of several years they repeatedly refinanced their properties up to $200,000.  In one case, the sellers refinanced their house just one year ago for $200,000.  We have had it on the market now for three months and finally got an offer for $120,000.  I don’t know whether the bank will accept this or not but it certainly demonstrates what the market thinks it is worth.

The next big concern is the re-setting of the Adjustable Rate Mortgages (ARM).  Again, the wisdom of the bankers concluded that if they could use teaser rates to get people into houses they could re-set the rates later and make up for lost time.  This worked great when the value of property was continuing to escalate.  When it came time to re-set the interest rate buyers had more equity in their property and could re-finance at a better rate.  Unfortunately, when the value of property began to fall this technique failed to work.  We are already seeing a lot of these mortgages starting to re-set and seeing many of these properties being sold as a short sale or being repossessed.  It looks like there will be a lot more before we bottom out of this crises.

What is happening right now

What we see happening in the real estate market right now actually shows some signs of encouragement.  The two largest categories of people buying are first-time homebuyers and investors.

First time homebuyers are buying because they recognize that with house prices returning to 2005-2006 levels, interest rates being very low and some great incentives like the $8,000 Federal Income Tax credit this is a great time to buy.  As a word of caution, I would say that all the fundamentals for buying a house are there, however, it is only a good time to buy if your personal financial house is in order and you can support the payment and the upkeep on the house.  Recently, I have witnessed some first-time buyers who are trying to stretch a little too far.  If this is allowed to happen it will only lead to another collapse a few years down the road.

Investors are also buying a lot of property now.  Many of them are paying cash.  Sellers, especially banks, love this because it takes the financing contingency out of play and provides a better chance that the sale will actually close.  It also means that investors can drive some very hard bargains because “cash talks.”  My nephew is trying to buy a house right now.  Each time they have made an offer a cash-paying investor has shown up and beat them out.  This is very discouraging to first-time homebuyers but it is part of the process we are working through right now.

I am actually glad to see these properties beging bought and taken off the market. Move-up buyers cannot move-up unless they can sell their first house.  Trophy home buyers cannot buy their trophy until they sell their move-up house.  So, I see this as a very positive sign and would like to see us work through this phase as quickly as possible.  The sooner most of the short sales and bank-owned properties are taken off the market the sooner we can return to a normal market.  And I do hope that we return to a normal, balanced market and not an over-heated market.

What we can expect in the short term

As we look ahead we will see more and more distressed properties coming on the market as discussed above.  As we see our national economy recover and confidence return to the marketplace more of these properties will be purchased and help us return to that balanced market that is healthy for everyone.  It’s hard to tell how effective the government bailouts and interventions are going to be.  I think the jury is still out on this question.  Nonetheless, the statistical signs seem to be pointing to an improvement in the overall economy.  As more people go back to work and wages start to flow again more confidence will return and people will once again begin to buy and sell homes in a normal market climate.  This should lead us to a more healthy and stable long-term climate.

Hope for the long term

As an eternal optimist I choose to see the glass as half-full rather than half-empty.  Real estate has always been a solid investment.  More wealth has been created through real estate than any other industry.  As we are often reminded, there is no way to create more land than we already have so the only choice, long term, is for value to continue to rise.  Oh yes, we will continue to experience the ups and downs of the marketplace because people forget.  It will be difficult for the next generation to remember the lessons that we are learning today just as it is difficult for us to remember the lessons that the depression-era generation learned.  Of course, we’ve heard about it but we didn’t experience it first hand so we don’t have the visceral response that our parents and grandparents had.

I believe the bottom line is as it has always been.  Buy wisely by buying properties that are good values, make sure you can really afford it, and plan to hold on to it for the long haul.  Most of the time real estate is not the best commodity for speculation but its a great vehicle for wealth building.

The question persists.  Where is the market going?  Are we close to a bottom?  Is this a good time to buy?  Is this a good time to sell?

The national media gives us lots of information about the market on a national scale, however, it is not a good idea to generalize national trends to specific, local markets.  Each market area is unique.  Indeed, neighborhoods within market areas are often uniquely different.

The purpose of this monthly update is to look at the Bellevue, Washington market to look for trends that may help to answer some of the questions we have.  Although this blog focuses on the city of Bellevue specifically you may find similar trends in other markets.  If you are interested in learning about the trends in your market or neighborhood just send me an email at glenellis@glenellis.com.

Each month we are looking at the same data markers and the first one is Average Days on the Market for all single-family homes in Bellevue, Washington.

Year-to-year Chart of Days on Market

This shows a significant drop from the average Days On Market in April 2009–a full 27 days less time.  This is an encouraging sign of more buyer activity and realistic pricing by sellers.  As a word of caution, however, March 2009 was at 72 days compared to May 2009 at 76 days so this number does move around.  That is why I use the black trend line to even out the ups and downs from month to month.  In this case the trend line is still on an upward slant but at a much flatter angle than last month.  Another good sign of an improving market.

Next we look at the Total Number of Units Sold in Bellevue during May 2009.

Graph of Units Sold in Bellevue, WA

For the second month in a row we see an increase in the number of units sold.  Part of this can be attributed to seasonal activity, however, seasonal increase in units sold usually starts to show up in March and this year it has been flat until April 2009.  There was an increase of nearly 42% in May over April.  These numbers are far lower than the heyday of 2005 and 2006 but at least they are headed in the right direction.  The trend line still shows a downward direction however not at nearly the steep slope of last month.  It is particularly interesting to compare May 2009 when 68 properties sold to May 2008 when 73 sold.

Next is Total Volume which is a reflection of the number of units sold but also gives us an idea of what type of properties is being sold.  Obviously, if you have a large number of “units sold” and the dollar volume is lower than normal you could presume that lower priced properties are what is selling.  This is, in fact, what we are seeing in the market where approximately 45% of homes sold are being purchased by first-time homebuyers.  We are also hearing examples of cash investors creating serious competition for the first-time buyers because the bank would rather take a cash offer than to take a chance on waiting for a first-time homebuyer to find out about financing.  Here is this month’s chart.

Graph of Total Volume in Bellevue, WA

Median price is our fourth marker.

Graph Showing Median Price in Bellevue, WA

Although the median price of homes sold in Bellevue in May 2009 was nearly the same as in April 2009, it is clear that the downward trend continues.  Hopefully this stability for the last two months will hold and show that the market is stabilizing.

And the last marker is the ratio of Price Asked to Price Sold.

Graph Comparing Asking Price to Selling Price in Bellevue

There is a lot of information in this chart and it is valuable.  First note that it has been a long time since the Selling Price was 100% of the asking price.  This is clearly an example of intense competition with so many properties on the market, sellers pricing higher than market value and the impact of short sales and bank-owned properties.  This is a trend that will likely continue until the excessive inventory has been reduced.  And, in Belevue, we are far better off than in many markets across the country.

The other interesting thing this chart shows is that properties that are sold within 30 days of coming on the market receive the highest selling price compared to the asking price.  It means that the properties were priced close to market value and probably were in good showing condition.  Many properties are selling much better today if they are staged and have lots of high-quality photographs.

The ratio of the selling price compared to the asking price continues to go down the longer the property is on the market until you get to the 91-120 days category where it jumps up significantly.  Maybe this suggests that if you hold on long enough you may get closer to the price you are aiming at.

In conclusion, if you are thinking about selling or need to sell the same guidelines apply as in any market.  Prepare your home to be attractive to potential buyers.  We live in a house one way but when we go to sell our house we need to shift our thinking and begin to look at is as a “product” on the shelf.  Make the repairs that are needed.  Spruce up the curb appeal to invite buyers to come inside and take a look.  And, above all, price it right for your market.

Buyers, I can not stress too much what a great time this is for buying a house.  The federal government has decided to allow first-time buyers to use their $8,000 tax credit to apply to closing costs.  In other words, you don’t have to spend the money now and wait until tax time to get it back.  There are also wonderful programs available to help home buyers.    And, don’t forget the low interest rates.  We don’t know how long they will be around so with all the well-priced homes available, down-payment assistance and great interest rates this is the time to buy.