Median Sales Price of Bellevue Homes

% of Traditional (non-distressed) Sales in Bellevue

The stark contrast in January and May's figures blatantly depicts the effect that distressed sales (the combination of bank owned foreclosure sales and short sales) have on the overall value of homes on paper. Headlines seen in the news can widely vary, but they typically tend to exacerbate the negative news…

… This is why rule 1 of real estate is that "real estate is local."

Additionally, real estate values are strongly tied to supply and demand, and the common perception is that a six month supply of homes is one that favors neither the seller nor the buyer (supply being defined as the amount of time it would take to clear the current inventory of listed homes, based on the current pace of sales, if no new listings are added). The supply of single family homes in Bellevue dropped below 4 months this past month! Further, of the 380 single family homes on the market in Bellevue, only 14.47% of those are distressed sales, which is a good sign moving forward.

It is also worth noting that May saw the highest amount of sold homes since June of 2010, a month that was certainly affected by a surplus of sales thanks to the expiring of the first time buyer tax credit.

So, prices have begun to climb due to the dwindling volume of distressed sales and the fact that buyers have fewer homes to choose from, which is leading to more competition in the market place. Multiple offers and homes selling above their asking price has made its way back into the market.

Adding condos to the equation suggests that the Bellevue condo market seems to be struggling more so than the market for single family homes. Nearly a third of all condo sales were distressed sales.

The trend holds relatively true when looking at Seattle as well, where distressed sales have dropped to a 20.58% market share of sold, single family homes in May compared to 30.04% in January. Over that time frame, the median price of sold, single family homes has risen to $380,000 in May from $359,000 in January. Distressed sales of condos, meanwhile, also sold at a higher clip in May than that of single family homes. Lastly, a noticeable overhanging concern with Seattle compared to Bellevue is that distressed listings of single family homes currently account for a larger percentage of active listings in Seattle, coming in at 24%.

Lastly, distressed sales will continue to be a concern region wide as they accounted for 31.2% of sales of single family homes in King County as a whole.

BOTTOM LINE: There are certainly signs of improvement taking place around Bellevue and Seattle, with some positive trends moving forward. Distressed sales will continue to be a sore spot on the housing market until a vast majority of the backlog of foreclosures is cleared out. Still, things are locally starting to look a lot more "normal" heading into the summer season.