It can be very confusing to try to get an accurate picture of what home prices are doing in the Seattle area in 2012 because so many different variables are involved, and the way the information is published in newspapers and blogs is not at all consistent. One big drawback, in my opinion, is that home prices are usually quoted without any differentiation made between “distressed properties,” meaning short sales and lender-owned (also referred to as REOs), and “non-distressed properties,” which are regular home sales that are neither short sales nor lender-owned.
These are essentially three different markets, as the following graph shows, so let’s look at them that way. Here’s what median house prices have done over the last two years in each separate category:
Prices for houses (excluding condos) in King County from Dec. 2009 to Dec. 2011.
The data above is for houses (not condos) in King County, and you can clearly see that non-distressed homes sell for significantly more than short sales and lender-owned properties. There has been a decline in median home price in all three categories, but what’s driving the overall decline in local home prices is the large number of distressed properties on the market, especially lender-owned homes. Here’s how median prices changed in 2011 compared to 2010:
King County Median Home Prices - 2011 versus 2011
King County houses (excluding condos) separated by category.| Category | 2011 Average Median Price | 2010 Average Median Price | % Change |
|---|---|---|---|
| Non-Distressed | $403,000 | $408,000 | (- 1.2%) |
| Short Sales | $286,000 | $315,000 | (- 9.2%) |
| Lender-Owned | $204,000 | $238,000 | (- 14.3%) |
The average median price of a house that sold as a non-distressed listing (neither a short sale nor a lender-owned property) decreased by 1.2 percent in King County between 2010 and 2011.
