National statistics notwithstanding, there are neighborhoods where homes retain their value. This is especially true for homes that are only slightly less desirable than the very best in the same upscale neighborhood. That’s true, for example, for Kirkland homes west of Market Street and, across Lake Washington, it applies to Seattle’s Capitol Hill neighborhood. In both neighborhoods, the supply of homes these days is sparse.
One of my clients who moved from NY City to Seattle in the Spring of 2010 was interested in buying a home in Capitol Hill. After a few weeks of looking at several homes there and also in the Queen Anne area, he and his wife decided to wait a while and rent instead. They were and still are looking in the 750,000 to 1 million price range in Capitol Hill. As the graph below illustrates, that’s not getting any easier with a dwindling inventory.
The price per square foot over the same period fluctuates but shows no consistent down trend.
For homes listed from $1 to $1.5 million the supply is naturally small but it is fairly steady over the months. In fact, in December 2011 there were twice as many homes for sale in this price range than in the $750,000 to $1 million range.
Looking at the Capitol Hill homes that sold in 2011, one in particular caught my eye. It was on the market for just four days and sold for $1,025,010 which is some 14 percent above the $899,950 listing price. I did not have the opportunity to see the home in person but, judging by the pictures, it may have been worth the price. The home sold last in 2003 for $680,000 which translates into an annual appreciation of about 5 percent.