Realtors See Positives in Slow February Home Sales

The broker-owned Northwest Multiple Listing Service (NWMLS) released February on Thursday, showing a modest increase in sales activity on Mercer Island in a traditionally slow period. 

Local brokers reported 15 single family homes sold on Mercer Island in February — the most sold that month since 2007. Mercer Island is also one of a handful of areas to buck a trend of slumping countywide pending overall sales, beating last year for the second consecutive month with potential buyers making 33 offers — 14 more during the same period last year. 

"I feel good about the economy, wages are stable and housing prices are stabilizing" said Joshua Thurman, a Realtor with . "The winter was not dead for us."

Pending offers, however, do not necessarily translate to an actual sale. While the figure is a good indicator of interest, only 218 homes were sold on Mercer Island from 352 pending sales in 2010 according to NWMLS, a 62 percent sales success rate. 

According to the NWMLS press release, a glut of "distressed properties" are pushing median prices for homes — even on tony Mercer Island — lower. The median value of a local single family home is $740,000, down year-over-year from last February's median price of $1,325,000. Including condominiums, the median price on Mercer Island falls to $712,500. The median home price in King County was $320,000, down nearly 7 percent from last year's median of $343,500. 

Mike Grady, COO of Coldwell Banker Bain, said the impact of distressed sales on price is "minimal" in Mercer Island and West Bellevue, compared to other neighborhoods in King County. 

"Distressed properties" are considered a dwelling that is in danger of foreclosure or that is in the process of being foreclosed due to a default under the terms of a mortgage.

"There is reason for optimism as we approach the busiest time of the year for home sales," Grady said of home sellers, citing only one bank-owned home for sale on Mercer Island.

According to NWMLS statistics, however, there are also eight "short-sales" (another form of distressed property) currently available on the Mercer Island real estate market, with a median asking price of $709,975. A short sale is a sale agreed to by the bank for less than the value of the outstanding mortgage.

Last year, over 10 percent of Mercer Island real estate sales were distressed properties. The median price of 14 "short-sales" — a sale agreed to by the bank for less than the value of the outstanding mortgage — was $725,000 in 2010. Banks also sold 10 foreclosed homes on Mercer Island for a median price of $495,000. There are also currently six foreclosed properties locally that have not returned to the market  and could impact price — sometimes referred to as "shadow inventory".