It's not an utterance you'd normally expect to hear from your realtor, but Art Van der Wel said it anyway.
"I showed a couple a house in December," the long-time Magnolia real estate figure recalled. The pair was caught up in a bidding war. "They were offering way more money than the house was worth. I told them, 'I hope you don't get it.'"
That's how it is some days in the hot Magnolia real estate market, where a cool $425,000 will get you a 1,000 square-feet starter home with two bedrooms, one bath and a toehold in one of Seattle's most sought-after neighborhoods.
This is no place for the shipwrecked.
Home: It's a magical word in our language, taken from the ancient word ham, which meant a triangle at the confluence of two rivers, complete with a short wall which could be defended.
Nowadays it means a refuge from landlords, pride of ownership, putting down roots and the power of investment. It also means that in order to achieve the American home-ownership dream, Darwinian economics, if not true love, make it necessary for people to pool their incomes.
Houses in Seattle are fetching prices that are mind boggling to the Depression-era generation and their Baby Boomer offspring. Seattle topped the Forbes list for 2004's "most overpriced cities" with a median home price of $282,500, according to the National Association of Realtors, while the national average came in at $170,800. Forbes looked at other factors, too, like earning expectations.
In 2003, according to the association, 40 percent of homebuyers nationwide were first-time purchasers. Their average age was 32, and half of the newbies fell between ages 25-34.
In Seattle, there are approximately 20,000 more Gen-Xers than Baby Boomers, and some of those who can are moving to Magnolia.
David Rawlyk is one.
Rawlyk and his wife are remodeling a 1941 bungalow on Magnolia Boulevard West. The couple moved here two years ago from Vancouver, BC, after she was transferred to Starbucks corporate headquarters in SODO. He's a stay-at-home dad.
The Rawlyks checked out other parts of the city - Madison Park, Laurelhurst - before settling on Magnolia.
"We'd never live anywhere else," Rawlyk said. "Magnolia feels more friendly than other neighborhoods."
Even before the remodel, Rawlyk figures their bungalow appreciated by $100,000 in the past two years. Their houses' new incarnation will include a second story and a coveted view of the Olympics Mountains.
Magnolia's intangibles
There are any number of factors, other than square footage, contributing to Magnolia's real estate picture. The peninsula at the entrance to Elliott Bay, with only three roads in, offers a kind of splendid isolation less than 10 minutes from the downtown core.
As a result, Magnolia - with a population of just over 20,000, almost 91 percent white - is a true community. Its history book, "Magnolia: Memories and Milestones," published in 2000, is evidence of a strong sense of place.
Crime rates are low and the schools are good. There is a community club and there is the Normal Rockwell atmosphere of Magnolia Village. Too, there are events and activities that speak of community: Summer Festival, Trick or Treat in the Village, Little League.
The architectural gem of a library is noted for its collection of opera materials, and nearby Discovery Park offers expanses of green for the sidewalk-weary.
Magnolia lacks the mild, urbane hipness of Queen Anne and the burgeoning retro-hip of Ballard. Its Mayberry-like existence, however, is the exact reason some choose to live there.
And then there are the views. Magnolia is actually two hills running south to north. Its eastern, less expensive slope basks in the morning sun and offers perspectives of Queen Anne and Interbay. Looking west, beyond the scoop of a valley where the Village occupies the southern portal and dairy farms persisted into the 1930s, the other hill rises. Traverse the summit and it's almost like changing climates: You're nearing the Gold Coast.
True, Seattle historian Roger Sale has characterized much of Magnolia architecture as "miles and miles of upper bourgeois tedium," and there are 1950s, cul-de-sac style tracts along here. But there are also the brick Tudor demi-mansions on Westmont Way West and the million dollar mansions of Magnolia Boulevard West. And there's Perkins Lane, of course - out of sight and highly evolved from the 1950s, when a poverty-stricken poet like Richard Hugo could rent a shack down there with a million-dollar view.
All along the bluff's southwestern and western flank the view's the thing. The city's steel and glass towers stand surreally to the south, backed by the snows of Mount Rainier. Out on the sound the state ferries, like white game pieces, move back and forth on a blue board. To the west lies Bainbridge Island, the forested hills of Kitsap County and the jagged wall of the Olympic.
It's on Magnolia's southwestern flank that Van der Wel, associate broker for Windermere Real Estate/Wall St. Inc., can point to a $700,000 tear-down. He's also familiar with a house near the Magnolia Bridge that sold for $23,000 in 1970 and was resold, after considerable upgrading, for $795,000 in 2003.
Most of the modest 1940s homes on 34th Avenue West between the Village and Magnolia Thriftway, he says, fall into the $450,000 range. Nearness to the Village is a property-value plus.
Magnolia by the numbers
In 2004, according to Northwest Multiple Listing Service, there were 381 homes sold on Magnolia (not including condominiums) with a median price of $455,000. The lowest priced home sold for $190,000. Twenty-two homes, on the market for an average of 38 days, fetched one million dollars or more. The greatest numbers of houses, 56, sold in the $300,000-349,00 range, followed by 54 houses in the $350,000-$399,000 category.
On Beacon Hill, the 2004 median sales price reached $239,925; Green Lake, Phinney Ridge and the Greenwood areas were $385,000, and Ballard, up to Northwest 64th Street, registered $355,000.
Carol Batchelder - manager of Coldwell Banker Bain Associates' Magnolia office - is, like Van der Wel, a Magnolia real estate veteran.
"We're very short of listings," she said. "We have 44 listings on the market right now. Twelve are over $1 million."
Batchelder, who says the hottest market is still for homes under $500,000, cites the convergence of strong demand, short supply and low interest rates as driving the market.
"I'm seeing a lot of young couples," she says. "It's amazing."
Those young couples, according to census data, are entering a market where nearly 30 percent of Magnolia's 5,800-plus homes were built before 1939.
Is Magnolia too hot not to cool down?
As interest rates nose up to the 6-percent level (a rate bordering on nirvana for Baby Boomers who remember 18 percent and higher in the late '70s), there is reason to think so. And yet recent history indicates those neighborhoods ringing the downtown core will continue to appreciate. A survey conducted by the Wall Street Journal found Magnolia's 2004 real estate prices rose 53.4 percent over the previous five years.
Batchelder says the most inexpensive home she sold in 2004 - 980 square feet, three bedrooms at the north end of the bluff - went for $355,000.
At the high end of the scale, she sold a $5.4 million home in Lawtonwood.
Right now, Batchelder says, she has a $324,950 home that's been on the market since November, which speaks volumes: Depending on the condition of the house, there are limits to the seller's gold rush.
Making the numbers work
According to the U.S. Bureau of Labor Statistics, if you're just starting out as a nurse, expect to make between $30-45,000 a year. If you're setting out as a plumber, look for $35-$41,500 annually, and if you're an engineer, instead expect $45-$52,000.
For a prospective Magnolia resident making an offer of $425,000, those salary levels are no-go if you're flying solo. Living with someone who can match those numbers will probably get you there.
Pat Crandall of M&T Mortgage in Seattle has been in the business for 22 years. He's seen some changes.
"There's not the formula like there used to be," Crandall said, referring to the traditional model of monthly debt not exceeding one-third of household monthly income. The past half-dozen years have seen more flexibility on that front, he noted.
"We see situations where it's not uncommon to see 50 percent or more," Crandall said of the debt service to income ratio.
The classic three C's still apply - cash, credit, character.
Yet as long as interest rates stay relatively low, the old model of 20 percent down on a 30-year fixed mortgage and the one-third debt formula might be as quaint as the real estate advertisement appearing in this newspaper 10 years ago this week:
"Large 2 bedroom, 1-1/2 bath home in lovely, private area. Great yard, hardwoods and more. Use your good ideas or just move-in. Seller pays $2,500 for paint, etc. at closing. $219,950."
These days, if you're bidding on that Magnolia starter home you're probably a young, two-income team.
And you'll need to be willing to bring your own paint.
[[In-content Ad]]
