Since we participate in the Windermere Premier Properties program for our listings, we have just received a copy of the Windermere Premier Properties 2010 Luxury Home Market Report that I can share with you.

It is an interesting read. Though not specific to waterfront properties, the price range tends to include many of the local higher end waterfront sales. 2010 improved somewhat over 2009 for properties in the $1 Million+ price ranges, and I have seen further improvement continue into 2011. Prices are not necessarily going back up yet, but market activity is increasing as buyers are coming off the sidelines to purchase well priced quality homes.

Bill Virgin, the Seattle PI’s veteran business reporter, recently wrote an interesting article about area economic development efforts behind capitalizing on community waterfront locations. His article’s opening remarks are worth repeating. The concept certainly applies to individual waterfront homes as well as large scale waterfront community development:

“Our ancestors may have crawled out of the water millions of years ago, but we haven’t traveled far since then. Even in our present, highly evolved form, if we’re not playing on or in the water, then we like to live, dine or work next to water, or just spend a lot of time staring at water.

No denying it, water still holds considerable allure for humans. People flock to cities on water. And when humans want something that is in relatively finite supply, then its value goes up.”

Last month’s issue went on summer vacation with me (kayaking trip, staying at B&Bs; in seaside towns, exploring WaterHaven communities), but we’re back now.

In local waterfront news, the big stories have included controversy and possible government intervention in a 1 mile shoreline mining operation on Vashon-Maury island, proposals for state legislation of hillside tram inspections, addition of Wi-Fi on selected ferries and new passenger ferry routes, Seattle’s waterfront Olympic Sculpture park is underway, and a state validation to go ahead with replacing Seattle’s waterfront viaduct. See WaterHavens.com for more info on these and other waterfront stories.

The real estate market continues on at a juggernaut pace. In a complete turn of usual events, mortgage interest rates actually decreased after the Fed raised their rates, and have risen only a bit since. Lots of factors there, including a mix of indeterminate financial indicators plus financial institutions wanting to maintain the high pace of loan transactions. The King County market is maintaining a similar level of sales as compared to last year and also prior recent months, and the usual end of summer activity drop-off appears to be less than usual. King County average days on market dropped significantly from 56 to 44 days, and the median price rose significantly to about $330,000. We are in a “seller’s market”, where there is an imbalance between supply (less) and demand (more). Even more amazing, a wide range of experts from many different organizations all agree that there still does not appear to be the characteristics in place for a housing price bubble to burst. Improving economic indicators, low interest rates/payments, and steadily increasing demand are all supportive of continued positive market activity. Of course, I always recommend being conservative in your real estate appreciation projections and let the extra upside potential be a “cherry on top”.

The higher end waterfront market continues to be very strong, and many local waterfront communities are getting fairly picked over at this point in the year. Waterfront-heavy regions such as San Juan County and Island County have led the entire state in year-over-year price increases.

For the months of August and September, local waterfront house final sale prices ranged from $205,000 on Auburn’s Dolloff Lake to $9,000,000 for a Lake Washington home in Seattle. For certain areas of waterfront condominiums, prices ranged from $124,950 for a complex in Des Moines to $755,000 for a condo on the Alki strip in West Seattle. For floating homes, sales ranged from $363,500 to $633,500. Two waterfront duplexes were sold on Alki Beach, at $600,000 and $925,000. And for vacant waterfront land, finalized sales ranged from $100,000 on Auburn’s Dolloff Lake to $1,300,000 on Lake Washington in Bellevue’s Enatai community.

For a fascinating look at the state of our local luxury WaterHaven communities, contact me for a copy of our in depth review of the luxury home market from the first half of 2004. It shows how strong the upper end market has been in 2004, outpacing prior years very significantly in many cases. The desirability and ongoing investment value of WaterHaven communities shines through in this report.

Enjoy a WaterHaven! Our waterfront is the best in the world.

Our wonderful WaterHaven weather continues, making it still part of the best time to either buy or sell waterfront property. Demand tends to peak in the Spring and continue into the Summer as people think about the outdoor waterfront lifestyle and also families plan for moves during the Summer between school years.

WaterHaven inventory turnover is holding up well and the total number of properties are remaining fairly consistent over the past few months. However, some neighborhoods are getting picked over without much replacement of new listings, so the selection in some areas is getting tight. The importance of proper pricing is also apparent with some properties that have been sitting on the market quite a while now. Fairly priced WaterHavens sell well and quickly.
The general real estate market continues to hum along at a very strong pace, with year-over-year appreciation of 11.5% for the median priced home in King County. The factors that I discussed last month are contributing strongly to this. This upward pressure has helped WaterHavens, in that their prices are relatively more “reasonable” than before and people who had not considered WaterHavens are now doing so. WaterHavens are also moving upwards at a good pace, though not as fast as the median since they tend to have top end price ceiling pressures that exist above a community’s median.

There continues to be a lot of media discussion and focus on the investment potential of waterfront properties and also second homes, which of course only helps power the WaterHaven market. The cover story for Kiplinger Magazine’s August edition featured the above market investment returns attainable from WaterHavens, emphasizing how the investment can be enjoyed while making money on it by buying and selling. The Seattle Times just ran a feature story emphasizing the investment returns people have received on second homes, especially those that are WaterHavens. Recent books such as “How A Second Home Can Be Your Best Investment” are also powering the growing second home phenomenon, which is of course primarily fueled by recent real estate market gains. I always caution my clients to not rely upon the gains of the past 5+ years to continue indefinitely, and make sure that you can absorb both market bumps and rate increases if you use an adjustable rate mortgage. In my opinion, I’d rather have a nicer local WaterHaven so that I could enjoy a waterfront vacation every day, and only then move on to also purchasing a vacation home elsewhere. One higher end mortgage / property is certainly easier to handle than two lesser mortgages at properties located far from each other. But, I’m a big believer that it’s hard to get better than our local waterfront with its wonderful mix of beauty, location, and amenities.

Enjoy a WaterHaven! Our waterfront is the best in the world.