When foreclosures began to rise in Seattle a few years ago, Bellevue didn't seem to feel the initial hit. Over time, though, there's been a growing inventory of distressed properties creeping into the more affluent communities around Puget Sound, and Bellevue has seen its own inventory of bank-owned homes on the rise.
To be fair, the number of foreclosures in Bellevue is fairly small compared to those in Seattle, even after taking into account population differences (Bellevue is about 1/5 the size of Seattle in terms of population). However, the rate of increase is still a significant trend on the Eastside this year.
There were 73 Bellevue bank-owned homes sold in 2010, more than doubling the 37 sales in 2009. In contrast, there were 437 Seattle bank-owned homes last year, and 295 in 2009. Both cities are showing a huge jump in the percentage of REO sales, but Bellevue's inventory numbers show a big difference in the two cities' markets.
Bellevue has just 21 bank-owned homes actively listed for sale today on the NWMLS. Seattle has 216. Although those numbers might seem to put both markets at around 5-6 months of inventory, the Bellevue numbers are so small that they don't give a large degree of confidence, statistically. 21 active bank-owned homes is really just a handful of inventory, and these foreclosed homes in Bellevue seem to sell more quickly than those in Seattle.
The condo market can be a bit tricker to gauge statistically, because of the large number of properties that are tied together by their developer. An entire project with 200 condos can be foreclosed upon in one year, even though the project had been going south for the past three years. 17 bank-owned condos were sold in Bellevue in 2009, and 50 were sold in 2010. Seattle had 57 bank-owned condos sold in 2009, and 159 sold in 2010.
In short, the Bellevue real estate market is still not particularly burdened with distressed properties. The trend, however, will likely continue in the short term with an increase in the small number of foreclosures and bank-owned homes. While some of these homes are listed at market prices, there are some that are sold at a discount for a faster close. Home buyers in Bellevue seem to be scooping those up quickly.