March Real Estate Report

Real estate market surges: what next?

Those looking for evidence that a comeback is underway in the local real estate market need look no further than the latest statistics from the Northwest Multiple Listing Service (MLS). For March, the MLS reported that homes sales in Seattle were up a stunning 62% over the same month in 2009, and pending home sales (where contracts have been signed but the deals have not yet closed) were up a comparable 58%. Pendings are regarded as a good indicator of future events, so there’s reason to hope that the new trend line is sustainable. The median price of a Seattle home sold in March was 3.2% higher than a year earlier, lending credence to the idea that Seattle is finally out of the trough. We were late, relative to other regions, in taking the real estate plunge; and we’re also later than some areas in the timing of our recovery. Just to put our market into perspective, however, it’s worth noting that many parts of the country—including Las Vegas, Phoenix, and parts of California—continue on a downward trajectory.

The news for our little part of town is even better than for Seattle as a whole. The MLS area that includes Madison Park, Capitol Hill, Montlake, and Madrona experienced a 103% surge in home sales, March-to-March, and a 77% increase in pending home sales. Not bad. Madison Park home sales, which had been averaging only 2.5 per month during the fall and winter of 2008/2009, have averaged 8 per month during the same period this year. This is how the market looked in terms of home sales for the past two years, based on data from Redfin and the King County Assessor’s Office (click on graph for larger image):

The number of homes actively listed shows a similar roller-coaster effect, moving from 71 listings in April 2008 to a peak of 116 in July 2009. Inventory has begun to climb again after hitting a recent low of only 67 listings in January:

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The relationship between home sales in the Park and the total number of listings has also moved back into line. In March 2008 we actually had a 38 month supply of homes. By last month the absorption rate had fallen to only 8 months, more in line with historic patterns:

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We’ve been reporting for several months that the under $1 million market appeared to be recovering rapidly. The problem for Madison Park is the rarefied nature of our market, with the median list price of for-sale homes hovering around $2 million for at least the past year. There have been few under $1 million buying opportunities in our market in recent months, leaving a lot of expensive inventory just sitting. This began to change towards the end of last year, and there now appears to be strong movement at least at the lower end of the upper market.

Lincoln Thompson, an associate broker at Windermere Real Estate-Madison Park, believes that the dam has finally broken, at least for the $1 million to $2 million segment. He provided me with some recent statistics showing a downward trend of inventory and a significant increase in pending sales. In June 2009, there were 57 of these pricier homes on the market in the 98112 zip code area, with just 3 sales and one pending sale. In March 2010 the market was down to 32 listings, with four sales and 16 pendings. If all of the pendings close, the market will be halved for that segment, assuming no new listings.

Overall, there have been a significant number of new listings in Madison Park during the last 30 days. Redfin, using data primarily from the MLS, reports a total of 21 new listings, which is certainly a record monthly increase for the past year or more. Some sellers clearly perceive that the market is on the move and now is the time to take advantage. Financing is reportedly loosening up, and rates remain relatively low.

This is all to the good, but the simple fact remains that it will take years for a full recovery to the pre-2008 price levels. In a report on the Seattle real estate market in February, Dr. Stan Humphries, Zillow’s chief economist, noted that Seattle remained one of the “bad” markets in the “good, bad, and ugly” continuum. The Zillow Home Value Index for Seattle fell 20% from the peak of the market. Zillow this month shows a 7.1% decline in home values for just the past year, so the rate of decline was already moderating before the recent evidence from MLS of an uptick. Madison Park, meanwhile, has been down about 17% from the peak, according to Zillow. So if the question is “Are we there yet?” the answer is certainly “No.”

Let’s do the numbers

Madison Park had a pretty good month in terms of home sales: seven houses changed hands, plus two condos. House sellers took a 12% discount, on average, from their original listing prices, but one Broadmoor home actually sold in only four days with a 1% discount. Although another Madison Park house also sold in under a month, most sellers were not as lucky. The average number of days on the market for sold houses was 194, though the average for the two condos was only 41. The median sales price of the houses was $1,170,000, which is significantly below the median listing price of the Madison Park houses still on the market. The condos, meanwhile, sold for an average price of only $442,500, but the condos were each quite small (763 and 1,045 sq. ft. respectively). The average discount taken by condo sellers from their original list price was only 2.8%.

Here is how the market looks in April, based on data supplied by Redfin:

Houses

Listings: 60
Median List Price: $1,985,000
Median Sq. Ft.: 4,430
Median Price per Sq. Ft.: $448
Average Days on Market: 127
Percentage with Price Reductions: 28%
Pending Sales: 11

Condos

Listings: 23
Median List Price: $495,000
Median Sq. Ft.: 1,025
Median Price per Sq. Ft.: $483
Percentage with Price Reductions: 48%
Pending Sales: 4

There are currently nine houses in Madison Park listed at $1,000,000 or less, 15% of total listings. These houses have been on the market for an average of 45 days. By contrast, the ten most expensive houses currently available have been listed for 209 days on average.

The most expensive home currently available is the lakeside Washington Park house we featured last month, listed at $12,900,000. With 6,600 sq. ft., that works out to a selling price of almost $2,000 per square foot, about four times the median cost of houses in Madison Park overall. Zillow values this 2009 Stuart Silk designed house at just $3,516,000, in line with the median cost of housing in the Park. I’m pretty sure the seller does not believe in Zillow as an arbiter of value. The teardown that preceded the current house on that property alone sold for over $4,000,000.

[Upper photo: This, 3,770 sq. ft. “traditional” brick Washington Park home (1121 38th Avenue E.) was built in 1928, was remodeled in the 1990s, has three bedrooms and two baths, and is priced at $1,985,000. It is the median priced home in the Madison Park market this month. Lower photo: One of the new listings in the last month, this 4,300 sq. ft. Craftsman, priced at $2,195,000, was built in 2006 and includes a detached garage with an upstairs apartment. It is located at 1622 42nd Avenue E.]

Thanks to Wendy Skerritt of Windermere Real Estate for some of the sales data cited in this column. The Northwest Multiple Listing Service was a primary data source. All statistics refer to Madison Park as a whole, including Broadmoor and Washington Park.

Blogging the blog: one year later

Madison Park Blogger today celebrates its first birthday with this, our* 207th posting. That’s a run rate of four posts per week, on average, during the MPB’s first year of slogging and blogging.

What began as a lark in the spring very quickly became a somewhat-consuming activity; and as blog readership has grown over the past 365 days, we’ve felt an increasing sense of responsibility for the product of our part-time efforts. By responsibility we mean taking our blog’s audience seriously: getting the story—and getting the story right. Our readers now expect that if it happens in Madison Park it will be covered by Madison Park Blogger.

While this knowledge conveys a sense of mission, it’s also cause for anxiety. It’s hard to know, in fact, if we’re really covering the territory. So we rely on you to keep us honest. Please tell us what you know and point out what we’re missing.

We’ve written several posts on the subject of blogging during our first year. We’ve noted, for example, that while there can be a real sense of public service in being a hyperlocal blogger, there’s also a certain degree of vanity involved. In this regard, I’ve definitely had my moments. A couple weeks ago, for example, I overheard someone at an event telling someone else “You know who that guy over there is? He’s the Madison Park Blogger!” (I took this as a good sign.) On the other hand, just today someone sent an email to the blog suggesting we do a particular story (one we’d already covered) and providing a hyperlink to a competing blog’s past coverage on the subject! (Ouch!)

I guess we still have a ways to go.

Bryan Tagas
Madison Park Blogger

[*My wife berates me for my use of "we" on this blog when, as she points out, there is only "me." Well, for those who have not heard of the convention, there is something known as the "editorial we." This is similar to the "royal we" or the "pontifical we." The use of the "editorial we" is known as nosism, and is frowned upon in many quarters. Mark Twain reportedly once said,"Only kings, presidents, editors, and people with tapeworms have the right to use the editorial 'we'."]

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Yes, it is my blog. But we are having fun with it.

'Soft opening' for The Independent Pizzeria

We've been waiting and waiting, but the day has finally arrived when we can test out the new eatery in the 'hood, The Independent Pizzeria, successor to Impromptu (4235 E Madison Street). They had sort of a stealth opening this evening at 5:00 (no big announcement, no fanfare), and by the time I arrived on the scene at 5:20 they had already served their first customer. I just missed getting the shot (I guess the guy took his pizza to go, though there is limited seating). Here are a couple of photos to give you an idea of the place.

All I can tell you is there are seven pizzas on the menu (that's a mini pizza in the shot above, not the regular size), with more pizzas to be added later. Wine and beer.

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Owner Tom Siegel promises to divulge all the details to me when they're fully up and running. In the meantime, you can go check the place out for yourselves. The pizza smelled great.

Broadmoor begins dredging

With all required permits in place, Broadmoor’s contractor began pulling the sludge from Union Bay yesterday around the intake pipe for the golf course’s watering system. As we’ve reported previously, Broadmoor wants green grass in the summer, and that apparently requires more water than the intake pipe could accommodate. Deepening the channel in the area surrounding the intake pipe will supposedly solve the problem for the immediate future.

Not everyone is happy about the situation, however. Canterbury resident Gene Brandzel led the effort to keep the City from approving Broadmoor’s permit request as originally submitted. His concern, and that of other wildlife enthusiasts, was that a nearby beaver lodge would be disrupted during the dredging and the beavers might be negatively impacted, perhaps even abandoning their home. In the end, the City decided that the Madison Park beavers were not in jeopardy.

Seattle’s Department of Planning & Development Director, Diane Sugimura, sent Brandzel an email today in which she stated “the beaver are not an endangered species, and their habitat is not protected.” She commented that based on discussions with the State’s Department of Fish & Wildlife, she believes the beavers will probably not leave the area, as they are used to an urban environment with a lot of noise and activity. As evidence she cited the lodge’s proximity to SR-520. In the end, she said, she was sorry that her decision to grant the permit was not what Brandzel wanted, but “I do feel that our decision meets our regulatory authority.”

This is not quite a “Beavers be Damned” story, however, since the opposition by Brandzel and others to Broadmoor’s original plans did result, as Sugimura noted in her email, in a significantly reduced area and depth of dredging. Nevertheless, as can be seen in the photo below, the boom area is pretty close to the beaver damn, which is visible directly in front the dock at the 37th Avenue E. road end.

Brandzel, meanwhile, is unhappy not only with the outcome but with the process as well. “These are not ordinary beavers” he wrote in response to Sigimura, “and treating them as if they are is closing one’s eyes to the uniqueness of having these creatures as part of an urban community.” Brandzel is calling for volunteers to monitor the dredging activity to be sure that it complies with the permit. If you’re interested in helping, you can contact him at genebb@gmail.com or (206) 940-4489.

Dredging is expected to continue for two to three weeks.

Short takes – 7

Competition for Bert’s meat department?

Neighboring blog, Central District News, reports on Bill the Butcher’s new Madison Valley location in a posting yesterday. Bill the Butcher is all about meat derived from sustainable farming practices that don’t rely on hormones, genetically modified feed, or steroids. The shop also features organically or naturally grass-fed beef. This is Bill’s fourth location. The new shop is at 2911 E. Madison Street.


Martha Harris’s connection to Conan O’Brien

The Seattle Times published a cute piece on Conan O’Brien’s Seattle in-laws this week, a story in which well known Madison Park floral and home décor store owner Martha E. Harris gets prominent mention. It turns out that O’Brien’s wife Liza is a former employee of Martha’s. Is it true that everyone but me already knew?


New incarnation for Voila! chef

Another neighboring blog—this one across the water—reports today that Laurent Gabrel, owner of Madison Valley’s Voila! and (until he sold it in December) La Cote Creperie is about to open a new restaurant in Laurelhurst. The Laurelhurst Blogger says that Gabrel will be taking on the space once occupied by Enotria (previously the location of the Union Bay Café) at 3515 Northeast 45th Street. The new restaurant will be called Chloé and will open in June.


Madison Park wins recycling prize

CleanScapes, our friendly garbage company, has announced that the Thursday pickup area, which includes Madison Park, is the winner of the 2010 Neighborhood Waste Reduction Rewards competition. In addition to our neighborhood, First Hill, Capitol Hill, Montlake, Madrona and Madison Valley are all part of the Thursday collection area, and representatives of the respective community councils will soon meet to decide what worthy improvement project from one or more of the neighborhoods will be funded with the prize money.

Bees evacuated from the neighborhood

And we mean literally evacuated, with a vacuum no less. It happened earlier this week, though I was not on hand to see the operation performed. Madison Park resident and blog reader Kay Bean emailed me on Tuesday to say that a gimongous swarm of honey bees was going to be removed from a tree in the neighborhood and that I might want to get down there and cover the story. Well I did want to. But unfortunately, my day job precluded bee coverage that day.

Fortunately, however, KING-TV was on the job. And since that particular TV channel is not trying to run a competing Madison Park blog, I am happy to provide a link to their coverage. It’s a video of Jerry "The Bee Guy" Mixon (that’s him in a file photo to the right) very carefully removing the bees from their chosen branch on E. Newton Street.
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By the way, Jerry is a beekeeper. The bees were not killed in the process of removal and are now presumably enjoying happy and productive lives in their new location, unnamed.

Naked came the stranger

It ‘s the night before Easter and all through the house not a creature is stirring--except for the naked intruder who earlier crawled through an open window and is now audibly urinating in the bathroom.

In the little cottage at 42nd and E. Galer it’s four in the morning. A single mother and her two children are awakened by the sound. Realizing that it’s not the Easter Bunny in the bathroom, the mother waits until she hears the man move to another part of the house, rushes the kids into the now-vacated bathroom, locks the door, and calls the police. They arrive to discover a naked male sprawled across the children’s bed, clearly in an advanced state of intoxication.

I am indebted to Seattlecrime.com for noticing the East Precinct police report on this incident. Since this is a family blog, I have restrained myself from reporting the sordid details of this little home invasion, but I encourage those who are interested to check out that hyperlinked source. Suffice it to say that at least one piece of furniture in that little house needed cleaning.

The male, a student in his 20s, was chagrined upon his arrest to find that he was not sleeping it off in the house of a friend--who as it turns out actually lives three blocks to the west. A neighbor, who witnessed the police taking the man into custody, described the perpetrator as a “clean-cut college kid” who probably had a heck of a story to tell his parents when phoning from the jail the next morning.

A codicil to our story. On Easter day the little boy finds an unexpected surprise somewhere on the property and promptly brings it to his mother: a pair of men’s boxer shorts.

[Photo: no, that's not the perpetrator.]