I've spoken at length for many moons now about the major role of distressed sales (short sales and bank owned sales) in the timing of the real estate recovery. Earlier this month I presented the stark contrast in current foreclosure activity in our neck of the woods compared to the rest of the nation. If the foreclosure activity holds its current course in Bellevue, then a healthy real estate market is much closer than most of the nation.

So, because it is such an important topic, I would like to add some more depth to the existing volume of distressed sales on the market and their pace of sales.

As of today, there are currently 415 actively listed single family homes on the market in Bellevue, and of those 415 only 55 are either bank owned listings or short sales (13.3%). Not a bad percentage at all. Of those 55 distressed listings, 18 are bank owned while 37 are short sales.

Bank owned listings typically sell for noticeable discounts, so it doesn't come as much surprise that these listings are selling nearly as fast as they come on the market. In August, 11 bank owned listings sold for a bank owned supply of only 1.64 months (supply is the months it takes to sell the existing inventory at the current pace of sales). Analysts point to a "normal" supply as being 5-6 months and one that favors neither the buyer nor seller. A supply of less than two months means that there is fierce buyer competition for a very small supply of homes, and this is why I say buyers need to be prepared to move quickly when they find a bank owned home they like.

Though not on the topic of distressed sales, this would be a good time to point out that the monthly supply of all Bellevue single family homes has been holding in the 3.2 - 4.5 month range.

Back to distressed sales… In August, 14.7% of all Bellevue single family homes sales were distressed sales. To put that into perspective, the percentages for some other King County cities are: Seattle - 20.7%, Renton - 33.0%, and Kent came in at a whopping 62.1%. Yikes.

I often get asked "how's the real estate market?" My response is always "it depends on who you ask and where you're asking about," followed by something along the lines of "there are a lot of good things going on and positive trends solidifying in some areas, while others are still struggling." The aforementioned distressed sale figures are a perfect example of how real estate is local and why some areas are performing in a more "normal" or "healthy" manner than others.

Have questions about a particular area, community, or neighborhood? Give me a call and I'd be happy to research the sales data and shed some light on the market place…

- Robert E. Wasser - Bellevue real estate specialist