In recent weeks a statistic has surfaced at Maple Valley City Council meetings that 43 percent of homeowners in Maple Valley and Covington are underwater.
Essentially what that means is those homeowners have no equity in their homes and owe more than their homes are worth.
While that sounds alarming, it doesn’t necessarily paint the truest representation of the housing market in the two cities according to Sam Price, South King County housing specialist with the Seattle King County Realtors, and Tina McDonough, a Re/Max agent in Maple Valley.
The percentage was initially mentioned at a Maple Valley City Council meeting in May after City Manager David Johnston attended the annual housing issues briefing that South King County Realtors host for local officials and those running for office.
The number comes from Zillow.com, a website that is a database of information on homes, real estate, mortgages and home improvements according to the website.
Price cautioned that the data from Zillow is only updated every three months and that the market is constantly changing.
“It (Zillow) is not especially accurate but it’s a starting point,” Price said. “It (the market) is very dynamic right now.”
He also explained that Zillow is the only comprehensive source of data on the percentage of homeowners that are underwater.
The data is created by estimating the value of the property and then Zillow works with TransUnion, one of the major credit reporting agencies, to gather information on the total amount of debt against a property.
“They aggregate that data so it can be searched (on the website) by zip code or by city or by county,” Price said.
The data that was presented at the meeting Johnston attended was from the fourth quarter of 2012. Current numbers on Zillow still reflect the 43 percent estimate.
“Those with higher numbers generally have newer construction with recent sales,” Price said. “People who bought and haven’t had the time to pay down the mortgage.”
That describes Maple Valley perfectly.
“Some of that is because people financed a large portion of the purchase price, then the market dropped and it hasn’t caught up with where it was,” Price said.
Price also explained that while the Seattle area is seeing an increase in sales and skyrocketing prices as the number of properties on the market is low and therefore increases competition, the farther you get from the job centers the longer the recovery takes.
McDonough said that there are many factors that go into the market.
“It just depends on the area you’re in and when the person bought, too,” McDonough said in a phone interview Tuesday.
McDonough credited the Tahoma School District with being a driving force in Maple Valley, as people specifically cite the district when they are looking to buy in the area.
“I would say overall it’s just super busy and values are up and we don’t have the inventory that we had a year ago, even six months ago,” McDonough said. “So what we see as we go in is there are lots of pendings and not a lot of inventory.”
Kim Emmons, a John L. Scott broker in Maple Valley said that valuations are up to the levels they were in 2007 and homes are selling for 20 percent more than they were at this time last year and 40 percent faster.
“I think people’s perception is not what reality is,” Emmons said. “Reality is actually much better right now.
