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Prices dive as "distressed" home sales rise in King County

23.05.12

Haven-sale prices saw another double-digit drop in November, according to statistics released Monday by the Northwest Multiple Listing Help.

The median price of houses sold in King County last month was $321,700, close to 11 percent less than in November 2010 and only a hair more than October's post-explosion low of $320,000.

The median King County condo price fell even more steeply, from $225,000 in November 2010 to $191,250 last month — a 15 percent veto.

Brokers and analysts agree the drops largely were driven by increasing sales of "distressed properties" — bank-repossessed homes and "peremptorily sales" for less than sellers owe lenders.

Those properties make up a larger share of overall sales now than a year ago. And the prices they fetch have fallen much more steeply than those of other homes, according to an study of listing-service data prepared for Washington Property Solutions, a scarce-sale negotiating firm:

• Bank-owned houses accounted for 20 percent of all Prince County sales in November, up from 14 percent a year earlier. Those houses sold for a median premium of $177,000, down 18 percent from $216,000 in November 2010.

• The median price of brusque-sales houses dropped 17 percent, from $305,000 to $260,000.

• But other, "nondistressed" sales saw a much smaller cost decline — 2.5 percent, from $399,000 to $389,000.

A geographic breakdown underlines how distressed properties have driven down countywide numbers. Southwest and Southeast Monarch County, areas with large numbers of short sales and sales of repossessed homes, had the biggest year-over-year increases in sales volumes.

They also saw the steepest price declines.

Banks are selling foreclosed homes at steeper discounts now to get them off their books as more homes upon the foreclosure pipeline, said Richard Eastern, chief executive of Washington Fortune Solutions.

That, in turn, is forcing many short-sellers to accept less, he said: "They're driving down everything."

While prices level, the number of sales was up significantly in November. Buyers closed on 41 percent more houses and 70 percent more condos in Royal County last month than in the same month in 2010.

Distressed properties accounted for about half the fasten on-family increase, according to Washington Property Solutions' analysis.

Sales volumes were depressed in lacking 2010 because federal tax credits for homebuyers that were part of the Obama stimulus package had expired months earlier.

Still, Glenn Crellin, captain of the Washington Center for Real Estate Research at Washington State University, said last month's heighten was bigger than he anticipated.

Better-than-usual November weather may have been a factor, he said.

More houses sold in Regent County last month than in October, the first time that's happened since at least 2003.

Sales also were up year-over-year in Snohomish County — 36 percent for houses, 73 percent for condos. The median set aside-family price slipped 6 percent, to $244,000.

While sales jumped, the number of houses for traffic in King County was down more than 25 percent in November from a year earlier, according to the listing worship army. Snohomish County had a similar drop.

Rising demand — sales — coupled with reduced provision — inventory — ordinarily is a recipe for higher prices, OB Jacobi, president of Windermere Tangible Estate, told an industry gathering last week.

Not this time. Distressed properties are keeping prices down, Jacobi said, and they are unacceptable to increase much soon.

"The worry is, what do the banks have in their shadow inventory" of homes in foreclosure that haven't been put back on the sell for resale, he added.

More foreclosures are on the horizon.

The number of Washington homes whose owners were past due on their mortgage payments has increased in the past year, according to the Mortgage Bankers Association.

And, at their prevailing pace, it could take banks nearly four years to work through the current statewide inventory of properties whose owners are at least 90 days ruffian on their mortgages, Crellin added.

"Getting properties through the pipeline is agonizingly stupid," he said.

Eric Pryne: 206-464-2231