Every headline we see in this country is doom and gloom. Everywhere we turn there’s crooked images of giant “price reduced” and “foreclosed” signs on the news. It’s a problem – but do we really know how this is hurting us on a local level?
Take, for example, the Ballard/Green Lake area. There are currently 463 homes listed for sale within this area, which also covers Crown Hill, Phinney Ridge, Fremont and Wallingford, among other neighborhoods. Out of the 463 listed, 57 are bank or REO owned – a little over 12%. Another 66 are in short sale status (meaning they are still owned by the homeowner but the bank controls the sale) – just over 14%. That means that out of all the homes currently on the market in our neighborhood, 26% are in some kind of pre-foreclosure or post-foreclosure stage. OVER ONE QUARTER!
Before you panic, let me put this in perspective for you with another example. SE Snohomish county, (Bothell, Mill Creek etc) has a current total of 471 active listings. 59 are bank owned, and 130 are listed as short sales – that means 40% of homes for sale there are pre- or post-foreclosure.
Why the huge difference? In my experience, it has to do with the amount of construction in the area. Anyone that’s been to Bothell and the surrounding area has seen the miles and miles of new construction in the past five or so years. The loans that were handed out so freely were more prevalent on new construction that was aimed at first time buyers – hence, areas that had a big construction boom around 2005/2006 are the ones seeing the crisis hit the hardest.
Here in north Seattle, we saw only small pockets of new construction – since there wasn’t much of a “boom” in 05/06, we don’t see as much of a fall. Our average home price was higher too, making it more common for a buyer to have purchased before and have more knowledge of financing.
Don’t get me wrong, a 26% short sale/bank owned rate is not good. It hurts home prices in the area and moves our neighbors out – neighbors who spend money at local businesses and contribute to our economy.
What can we do to change this? Not much, unfortunately. But what we can do is continue to support our local businesses, and by doing so, support the people who live and work in our neighborhood. Keep the commercial space occupied, and it will lead to a higher level of homeownership and keep north Seattle a desirable place to live plus help keep our home prices stable. Are we all up for the challenge?