What’s Wrong With This Picture?!

balanceBuyer’s Market! That is what the majority of consumers believe we are in… a buyer’s market! Though that may be true in most areas, the statement must have context. Let’s take a look.

The amount of homes available on the market in King County is running at 4.2 months (based on closed sales). In other words, if no other home came on the market, and buyers purchased homes at the present rate, there would be no homes left after four months.

Traditionally, markets have been labeled as Seller’s (3 months of inventory or less), Buyer’s (6 months of inventory or more), and finally, balanced markets (4-6 months).

Below is the inventory in King County based on closed sales.


What doesn’t get identified is the quality of the inventory. Parts of King County, particularly areas of the Eastside are very short on inventory. What is presently on the market is sometimes less than pristine. To exacerbate the low inventory problem, distressed properties are making up more and more of the inventory pie.

Below is the inventory in the 98008 zip code based on closed sales.


The West Lake Sammamish area (98008) in Bellevue has 2.4 months of inventory. In most consumer’s minds, this would qualify as a “seller’s market”. Only 34 of the 71 homes available are not short sales or bank owned. That is 50% of the market!

Are we really in a “balanced market”? When buyers, who are eager to pull the trigger on a home, are stymied due to the lack of supply, can we still call that a balanced market?

What consumers need, are well priced, great conditioned homes that can be sold with traditional buyers and sellers (not requiring bank approval or other considerations).

If you know of someone considering making a move, I would love the opportunity to sit down and talk to them.

The World of Distressed Real Estate – Always Changing

strategy-102-real-estate1-pop_178Foreclosures, Short Sales, REO… The real estate market is full of confusing terms. With so much misinformation surrounding these terms, I want to update you on these distressed property types.

Short Sales have been all the rage lately, with sellers marketing properties at prices well below the rest of the market. Many people believe that short sales offer an opportunity for a good deal on real estate.

A short sale is the sale of a home for a price less than what the owner owes on the mortgage. The sale may close if the lender agrees to a “short” payoff in exchange for release of the bank’s lien on the property — hence the term.

REO stands for Real Estate Owned. It is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction (more on that below). If there are no interested bidders at auction, then the bank will legally repossess the property. Once the bank repossesses the property, it is listed on their books as REO – Real Estate Owned – and is categorized as an asset (non-performing).

foreclosureAs an REO, the bank will go through the process of selling the property on its own. It will remove some of the liens and other expenses on the home and sell it to the public. These can also be deals listed below the rest of the market (often in need of rehab).

Foreclosure is used when a power of sale clause exists in a mortgage or deed of trust in which the borrower pre-authorizes the sale of the property to pay off the balance on a loan in the event of owner’s default. The lender will attempt to sell the property at auction through a trustee, hence the term “Trustee Sale”.

There is typically a three month period between when a property goes into the foreclosure process and when the property is actually sold at a courthouse auction. During this period, the house is referred to as a "Pre-Foreclosure".

Auction buyers are required to have cash in hand on the courthouse steps. Because of this, foreclosures have often been limited to investors who can bring cash to the sale. Now, John L. Scott Foreclosures is making auctions available to home buyers and investors alike, providing the same experience you’ve come to expect from the industry leader, now in the foreclosure realm. There may be an opportunity for you to take advantage of the current market conditions and get a great deal at auction.

If you are interested in knowing more, please contact me at 206-713-3244, or email me.

King County Most ‘Resilient’ On West Coast


Using a new online tool, researchers have measured more than 360 U.S. metros for their capacity to handle stresses ranging from economic recession to natural disasters.

Overall, Northeastern and Midwestern regions tend to be more resilient than those in the South or West, largely because these regions earn high scores for affordability, the size of their health-insured population, rates of homeownership, and metropolitan stability, as measured by recent population change.

The Resilience Capacity Index (RCI), developed by Kathryn Foster, a professor of urban and regional planning at the University at Buffalo, produces a single statistic for each region based on the region’s performance across 12 economic, socio-demographic, and community connectivity indicators.

As a gauge for how well a region is positioned to adapt to stress, the index can help regional leaders identify strengths and weaknesses and target related policy changes toward building their resilience capacity.

“Conceiving of regions as capable of adapting and transforming in response to challenges allows researchers and practitioners to understand the conditions and interventions that may make one place more or less resilient and why,” says Foster.

Foster developed the index as part of Building Resilient Regions, a national network of experts on metropolitan regions funded by the John D. and Catherine T. MacArthur Foundation and administered by the University of California, Berkeley. The index features maps revealing geographic patterns in resilience capacity, detailed data profiles for each metro and a “compare metros” tool.

The top-scoring metros are geographically diverse. Raleigh, N.C., with leading technology firms, medical centers and universities, heads the economic category. Ames, Iowa, ranks first for socio-demographic capacity due to its exceptionally high level of educational attainment (Iowa State University is located there). For community connectivity, Bismarck, N.D., scores highest given its critical mass of civic institutions as the state capital.

Metropolitan areas with populations over 1 million vary widely in their resilience capacity. The top-ranking large metropolitan area, Minneapolis-St. Paul, achieves its status with very high socio-demographic capacity and levels of community connection, the latter reflecting the region’s No. 1 rank for voter participation.

The lowest-ranking large metropolitan area is Miami, Fla., a region with very low regional affordability and income equality.

Foster points out that a region’s RCI score is not necessarily a sentence for success or failure in the face of the next population boom, economic recession, or industry shutdown.

“What it does tell us is that some regions are structurally more prepared than others, and thus have greater capacity to bounce back in the wake of stress,” she says. “Still, regions with a high capacity for resilience can squander their strengths just as those ranked low can rise to the occasion and perform above expectations.”

Additional research efforts, a number of which are highlighted on the Building Resilient Regions site, are under way to measure how regions actually respond to stress. Future studies will explore which resilience capacity measures matter most for different kinds of stresses as well as the significance of key governance and environmental factors not captured by the RCI.

Looks like King County is one of only two (both in Washington) areas resilient on the West Coast.