King County home sales still soft, prices flat

Eric and Whitney Johnsen loved the West Seattle Craftsman they purchased four years ago this month. Then along came baby Jack and suddenly the cozy home seemed cramped.

So in a move new parents know only too well, the Johnsens prepared to sell their house as they shopped for a larger replacement. Recently they found it, in Newcastle, near relatives eager to baby-sit.

"We found a house we liked and fell in love too fast and there was a huge variable — we had to sell our house and the market was terrible," Eric Johnsen says. They didn't want to own two homes.

A year or so ago, sellers generally wouldn't agree to the Johnsens' solution to their dilemma: a contingency allowing buyers weeks to get their home sold or back out of the deal. Sellers didn't have to.

But with sales soft, prices flat and buyers cautious, real-estate agents say, contingencies have returned with a roar. They're just one of many negotiating tools, from price cuts to help with closing costs, necessary to get homes sold these days.

The Newcastle sellers agreed to give the Johnsens 30 days to sell their old home and also shaved 2 percent off their already reduced asking price.

February home-sales numbers show why such tactics increasingly are necessary.

In King County, single-family house and condominium sales were down 36 percent last month, available properties increased 69 percent and prices were nearly unchanged from a year earlier, the Northwest Multiple Listing Service reported Wednesday.

The median single-family house price had been unchanged for three months until it fell $5,000 in February to $429,900, but that price was just $25 less than in the previous February.

There were fewer buyers and abundant inventory for King County condominiums, whose prices were up a slim 1.3 percent to $289,000 year-over-year.

The number of available condos almost doubled, while sales fell 45 percent.

Surrounding counties also reported slow sales, price breaks and lots to choose from.

On the day before the Johnsens' contingent offer was to expire and their purchase die, buyers materialized for their West Seattle home.

Those buyers also wanted to talk let's-make-a-deal, and so the Johnsens did. They agreed to drop their asking price 2 percent.

That didn't upset Eric.

"We kind of approached it from the bargain we'd get on the buying end would outweigh the hit we'd take on the selling end."

Still, that created a problem. To make their finances work, the couple couldn't afford to pay what they'd agreed to for the Newcastle house.

So Kari Scott, their agent, went back to the negotiating table for a last-minute price concession — something she says has been extraordinarily rare until recently.

Ultimately, the Johnsens got their nearly new four-bedroom home for 7.6 percent less than the original price.

"We had to negotiate on every side, up and down, to make it work," says Scott, a John L. Scott agent.

"It's a whole different atmosphere," seconds Diedre Haines, a Coldwell Banker Bain managing broker.

"In the last five years, we saw very little negotiation. Instead it was multiple offers with escalator clauses. Now sellers are more open to negotiation than they were a year ago."

More than soft sales are behind the shift, senses Kevin Broveliet, the designated broker in Redfin Real Estate's Seattle office.

"There's just so much more information available, and it changes how buyers negotiate. They're being much more methodical," he offers.

Savvy buyers know the longer a home is for sale, the more likely the price will decline. Web sites such as Redfin's identify languishing properties and even whether the price has been cut.

Here's what that means for buyers interested in Ballard, a neighborhood where homes sell in less than 30 days.

Houses there that sell within the first 30 days are fetching an average of 101 percent of their listing price even now, Broveliet says.

But Ballard homes that take 100-plus days to sell realize just 97.2 percent of the last price asked — and the last price is likely a reduction from the original price.

So patient buyers know there are deals to be had, and they're willing to research, wait and negotiate, Broveliet says.

Scott, the Johnsens' agent, cautions, however, that while most sellers are more flexible than in the past, they're not frantic and buyers need to know that.

"The reality is we're not desperate; we're not California; we're not Florida," she says, recalling a recent bid. Those two states are among the national leaders in foreclosures and home-price declines. Someone offered 30 percent less than the asking price for a million-dollar house. The sellers laughed.

"It's fruitless when people put in a ridiculous offer instead of a reasonable offer," Scott says.

An additional factor in slow sales may be the increased time it's taking to ink deals.

Where it used to take a day or so, Broveliet says it now can take a week of give-and-take before the contract is signed.

Getting financing squared away adds to that. While loans are readily available to buyers with good credit and a healthy down payment of 5 percent or more, lenders are scrutinizing home purchases more than ever.

"We get more closing delays for financing than we've seen in the past. They're just really being cautious," Broveliet says. "Maybe it's a litmus test to make sure they're not funding a house of cards."

With his moving day a couple of weeks away, Eric Johnsen has no qualms that he and his wife bought at the wrong time.

"Knowing the market was the way it was, we knew it was a good time to upgrade," he says.

Elizabeth Rhodes: erhodes@seattletimes.com