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Real Estate has gone crazy in Kirkland!

Bigkirklandhome Before you all start commenting on this post, let me start by saying that I am no real estate expert and don't claim to be either.  That being said, I think real estate has gone crazy (that pic on the left is a home in Kirkland priced at $8 million), especially at the high end of the market, in Kirkland.   I just ran some searches on Windermere and here is what I found out from looking at the 447 properties currently for sale in Kirkland:

  • Number of properties (homes/condos/land) over $1 million = 152 listings
  • Number of properties (homes/condos) over $2 million = 44 listings

In our West of Market neighborhood alone we are seeing homes with little or no view, set way back from Lake Washington on average sized lots (7200 sq. ft.), asking over $2 million.   One real estate agent I interviewed said that although "everyone is asking for these prices, hardly anyone is getting them."  They are just sitting.  A non-waterfront home just got listed last week for about $3.5 million--no one I know can figure out how they came up with the price tag.  It's a nice house, but $3.5?   Click here to see what I am talking about.

In further (very unscientific) research only about one home per month sells in Kirkland over $2 million dollars and a few end up selling over $1 million.   Couple this fact, with the fact that more and more homes keep getting listed in these price ranges and it would take years to sell all the high end inventory currently listed.   Sellers, I hope you can sit tight for the long haul because that is what it might take for you to get your price!  Buyers, if you are in the high end of the market you have the leverage right now--use it wisely!  BTW, I got these stats by looking at the Kirkland Courier and their past real estate sales from the previous month. I know, I know, very unscientific, but it's just me doing some back of the napkin type analysis.  You got to admit it's interesting, no?

I think the hotter part of the market is for homes selling under or close to $1 million.  By having all the $2 million dollar homes on the market buyers are feeling good about getting into Kirkland's high rent district in this price range or buying fixer-uppers/tear downs.  With all the high-end stuff it gives buyers comfort that their investment will go nowhere but up.  Unfortunately if you are trying to buy in this range and looking for a deal you are also competing with builders, like Lux,  or very motivated buyers.   Look out for competing offers with no contingencies (do a pre-inspection if you want the property but are not going to tear it down), escalation clauses, and quick closes--not to mention all cash offers.    

I also found a bunch of very cool real estate sites that can help you in your quest for buying or selling real estate. Check these out:

Janis and I have thought about buying a new (and larger) home in the past few months.  We also want to stay in the West of Market area, but as we have seen the prices continue to rise to the crazy levels we are now seeing it caused us to reconsider.   We have decided to stay put for the next several years and possibly remodel to accommodate our needs (and make room for the small tribe of kids we have).   Who knows maybe there is a bubble...or maybe these multi-million dollar homes will start selling like hot cakes?  We will watch from the sidelines either way...

I feel bad for our real estate agent, Laura Brodniak from Windermere, who has been awesome in trying to find us our next home.   Who knows, maybe she will find us an incredible home that is priced right and we will change our minds. 

Steve

Comments

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Joshua

I found this series in the PI about the real estate market (in general) to be really informative so far. It's written by Greg Wharton, who's an architect and developer: http://blog.seattlepi.nwsource.com/realestate/archives/104176.asp

I've noticed some of the same thing as you. Homes over $1 million sit for a while. Homes under $1 million (we're on North Capitol Hill, in Seattle) go really quickly unless there's something seriously wrong with them. In fact, four homes sold on a single block in our neighborhood in under a week for $600-700k - all needing serious work (one looked like a tear-down to me, but what do I know).

I'm not saying we have a bubble, but there's just no way price appreciation can continue at this rate!

Jennifer

I think the top end of Kirkland Real Estate is getting overheated and overpriced. We need a bigger home but don't want to buy one of those ugly new homes that Lux, Jet City and all those other builders/developers churn out. Those homes are NOT worth $1.5k upwards IMHO.

We live East of Market and there are ton of ugly new homes sitting on the market both in East and West of Market. We have a lovely city which we are desecrating with seriously ugly design.

Kirkland Neighbor

It's speculation whether we are in a bubble or not but I'd say it's getting pretty Bubbly in Kirkland right now. See http://seattlebubble.blogspot.com/

I know many families who plan on staying in their current Kirkland home for the forseeable future because they cannot afford to buy a bigger home in their own neighborhood. Many built (or are planning to build) new homes on their current lot as it's cheaper.

Kirkland is a great town but much of the development happened too fast with little oversight due to a few developers getting WAY too much influence over at city hall..

mike

I just did a search on Coldwellbankerbain 's website for property in Kirkland for $1 million and above. I got 16 pages of listings, a total of 154 homes.

Does anyone seriously think we have 154 millionaire families hanging out in Kirkland ready to buy their Mcmansion?

I hate to tell you kids but the party is over. Haven't you noticed that Sacramento and San Diego have become completely derailed? The housing market in Sacramento just drove off a cliff. The constant stream of Californians who were arriving in Kirkland flush with equity will dry up very fast because now they can't sell their homes.

Their markets were considered to be overpriced by at least 50%. Seattle is considered (conservatively) to be 20% overpriced. So a 1 mil house should really be priced at 800,000k or lower.

I predict lots of inventory at the top end and a stalling of house prices by next spring/summer 2007.

Mike

Actually Steve, you may not be competing for builders like Lux for lots. I spoke to a local real estate aent today who said that Lux is not buying any lots/land because they have too much unsold inventory. If you've seen those "Mediterranean" homes up on State Street that are near completion, you'll know why.

Steve

Hi, just a quick (and unofficial)update to the count. There are roughly 160 properties listed in Kirkland for over $1 million and 44 of those are listed over $2 million. Overall the inventory has grown a bit and we are headed into fall. Kids go back to school and home sales start to slow down after the spring/summer peak. It will be interesting to see what happens to the inventory in Kirkland and if people expecting to get premium prices either lower their asking price or take their homes off the market.

E. Diello

LUX = YUX

Can it get any worse?? How many Square boxes do we need in this city?

Can we stop LUX from ruining Kirkland? State Street @ 7th Ave S is a perfect example.

How can you fit any more homes into this little tiny area?

Abdul Sumar

A $3.5 million condo and they don't know how they came up with that price? That's insane. I did a quick monthly mortgage payments calculation using www.2mortgageloancalculator.com for a home loan of $3.5 million with $100k down, monthly payment = $21,490.31!!

I don't know who can come up with that kind of a mortgage payment every month, but we really are in a real estate bubble. There's no way home prices can keep appreciating like they have, pretty soon people will stop buying?

Lease Option

Looks like a nice place to live.
Hope your market stays strong.

Good Luck

Marious

Real estate investing is not a business that you can jump into today and tomorrow you’re sitting on a bundle of cash. It takes knowledge, persistence and a positive mindset to become successful and stay successful.

Marious
http://www.steadyincomegenerator.com/helpful-tips-on-real-estate-investment.html

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