Anyone driving through the Madison Valley who'd been away from Seattle for two decades could be excused for feeling a little like Rip Van Winkle.
The once-depressed area is a different place.
On the approach from the downtown side the new Safeway at 20th Avenue, and Trader Joe's just before that, herald the transition.
The East Madison corridor is replete with upscale boutiques, art galleries and shops, Continental-style restaurants and condos and townhouses
Most of those townhouses start in the $400,000 range and are, in many cases, packed tightly together.
"I'm stunned at how close people are willing to live to each other," said Joan Askey, of Windermere Real Estate Northwest Inc.
"That's the trend," she said of Seattle's increasing density.
Here's one barometer of change: $365,000 might fetch you a two-bedroom cottage in Magnolia or outer Ballard, but in Madison Valley, "350,000 is a tear-down," according to The Landmark Group's Mark Anton.
Anton describes the Madison Valley real estate market as "crazy," adding that "houses we saw 10 years ago at $139,000 are now $500,000."
That's Seattle.
Rare deals in 'overpriced' market
In 2004 Seattle topped the Forbes list for "most overpriced cities" with a median home-purchase price of $282,500 (the national average was $170,800). Forbes looked at other factors, too, like earning expectations.
People want to live close to downtown. People want an easy commute to downtown or the Eastside. And people like to walk to restaurants and parks. Madison Valley rates high on all of those points.
"It's very easy to commute [from the Valley] anywhere," Askey said. Askey is a longtime Madison Park resident who saw the first stirrings of the Madison Valley renaissance in the 1980s.
"Young professional couples and retirees are moving in," she noted.
While real estate agent Anton pegs $350,000 as a "tear-down" price, Askey has handled some properties in that range that might be termed "fixer-uppers" and others that are in decent shape, including a two-story, four-bedroom, two-bath, 2,890-square-foot charmer built in 1987. The home sold for $371,000, $21,000 more than the asking price.
Still, those deals are rare.
As Askey put it, echoing Anton, the real estate market in the glacier-carved valley is "hot."
"East Madison Street is highly developed now," she said.
Valley homes slowly appreciating
Madison Valley's borders are generally agreed to be Madison Street to the north, 23rd Avenue East to the west, Denny Way to the south and Dorffel Drive on the east.
"The area was so underdeveloped for so long," Anton said, while houses in other areas like Denny-Blaine and Capitol Hill experienced rapid appreciation.
"You can't buy in Madrona proper for under $1 million," he said, though he did note there are a couple of homes on the market in the upper $800,000 range.
Madison Valley real estate isn't as precious as that.
Anton said he has one newly constructed Valley, neo-Craftsman house on the market with three bedrooms, a two-car garage, 1,400 to 1,500 square feet, for $500,000.
He added he just sold a newly constructed home off Martin Luther King Jr. Way East with 1,800 square feet for $599,000.
What is it about the Valley he points out to home-shoppers?
"Tons of parks," Anton said. "Great restaurants and coffeehouses. It's very diverse."
Anton is aware that diversity, in the face of soaring housing prices, is an endangered commodity.
"It's sad," Anton said.
Double-income homes
Still, if Madison Valley is not Madrona, neither is Seattle on a par with San Francisco. Anton pointed out Madison Valley's neighborhood equivalent in the city to the south might be Noe Valley, which borders the upper Castro district. There, he said, the same kind of Craftsman-style home in Madison Valley would sell for $1 million.
With those kinds of financial pressures, economics (if not love) dictates that it almost always takes two incomes to buy a home.
According to the U.S. Bureau of Labor Statistics, if you're just starting out as a nurse, you can expect to earn between $30,000 and $45,000 a year. A new plumber will begin at $35,000 to $41,500 annually, and a rookie engineer can look for $45,000 to $52,000.
For someone making an offer on a $500,00 home, those numbers, if they're flying solo, won't fly.
"Twenty percent down on a $600,000 house might mean $4,000 a month in payments," Anton said.
In the old days the financing formula called for monthly debt not to exceed one-third of the monthly household income. That template, these days, is almost quaint.
"We see situations where it's not uncommon to see 50 percent or more" of the debt-to-service ratio, said Pat Crandall, of Seattle's M&T Mortgage.
Anton currently has on the market a new, 2,600 square-foot, Craftsman-style house at 29th Avenue East and East Harrison Street. The asking price is in the low $700,000 range.
"People are lining up," Anton said.
It's a safe bet that many of them are high-wage couples standing two abreast.[[In-content Ad]]
