We've reported in the last few months that home values have steadily risen since the beginning of the year in Bellevue and Seattle. An increased in buyer demand and sales certainly played a role, but the decline in foreclosure sales was the primary contributing factor to rising median home sale prices.

Recap: foreclosures and short sales typically sell at deep discounts which alters the median sale price, and of course there is the fact that traditional sellers are often forced to compete with these low prices. So, the median sale price of single family homes jumped over the first half of 2011 as the volume of distressed sales (foreclosures and short sales) dropped rapidly.

In May, foreclosure tracker RealtyTrac reported that 1 in every 1009 homes in King County received a foreclosure filing. In general, the trend had been toward fewer filings up until June's number was reported at 1 in every 459. This is obviously a stark contrast to May and is a sign that banks are getting back on track with their paperwork after the "robo-signing" mess slowed their processes.

Of course, this is just a one month reprieve and a trend is yet to form. But regardless, this does put the possibility of a larger volume of distressed homes entering the market on the radar.

What does this mean for buyers? For buyers it means that there is the possibility that home prices will remain stagnate for a longer duration which will help offset the increased cost of financing the purchase as interest rates rise (the government is working on tightening the definition of a "quality" mortgage and plans to wind down Fannie Mae and Freddie Mac in the future… both of these actions will attribute to more risk and cost for the banks issuing the loans which will be passed onto the buyer in the form of higher down payments, interest rates, and fees).

What does this mean for sellers? For sellers it means that the current reprieve in the volume of distressed properties on the market, which has led to higher priced home sales, may prove to be the best time in the near future to sell. Increased buyer demand and fewer distressed properties on the market has led to higher priced home sales through the first half of 2011 making now the best opportunity sellers have had in quite some time. Additionally, sales typically spike during the "summer selling season" when more active buyers are looking at homes before dwindling into the winter and holiday months.

For some homeowners now may be the best time, while for others we may recommend holding onto the home for a longer period of time if possible. We would be happy to perform a market analysis of your home and present the current conditions of your neighborhood if you would like to find out if now is indeed a good time for you to sell. Understanding your direct competition plays heavily into understanding the likelihood of success at a particular price when selling your home. Our job as real estate brokers starts with providing you the facts so you can make the best choice for your family.

- Prospera Real Estate's Seattle and Bellevue area real estate trends, statistics, news, and blog