Foreclosures continue to hamper Seattle sales – Zillow

One in four Seattle area home sales involves a foreclosure or distressed property transaction, according to the latest Zillow Real Estate Market Report.

Seattle home sales averaged $252,600 in November, down 8.6 percent from November 2010 and 33.1 percent from the peak of the market.
Regionally, home values appreciated or remained flat from October to November 2011 in 60 percent of the 165 housing markets covered by Zillow, compared to 24 percent last year.

On an annual basis, the median home value is down for nearly all (90 percent) of the 165 metropolitan statistical areas (MSAs) covered by Zillow, although the rate of annualized depreciation has slowed significantly in the majority of the markets.

Meanwhile, foreclosure liquidation rates have fallen steadily since the robo-signing controversy in late 2010 as banks slowed down their processing of foreclosures. In November, 8.1 out of every 10,000 U.S. homes were foreclosed upon. Seattle was above the national average at 10.9.

“Overall, we are seeing encouraging signs in housing data such as sequential months of slowing depreciation rates, stabilizing markets and organic improvement in value trends, largely in the absence of government policy intervention,” said Stan Humphries, Zillow’s chief economist.

“However, we’re not out of the woods yet. Supply and demand are still not in balance in many markets and we do expect higher foreclosure liquidation rates near-term, which will put additional downward pressure on home values.”

Humphries sees 2012 as a transitional year in which home values fall modestly followed by a prolonged period of flat home values.

“We’re still three to five years away from ‘normal’ housing market conditions,” Humphries said.