How much would you pay for a mold-infested, toxic home with collapsing ceilings and five feet of standing water in the basement? How about $427,000?
That’s what one buyer shelled out for a ramshackle Seattle house in May, after beating out 40 others desperate to buy the property in what has become a frenzied housing market in the Northwest city. The house was on the market for only 10 days, according to a local report, and the sales price was more than double its $200,000 listing price.
The three-bedroom home had been vacant for several years, but it appears to have been in disrepair for at least a decade. The floors are crumbling and the appliances had deteriorated beyond rescue. The standing water in the basement created air toxicity concerns, not to mention mold problems. The home was so dangerous that only licensed contractors who signed a legal waiver were allowed to inspect it on behalf of potential buyers.
Those hazards weren’t enough to keep away droves of builders, rehab firms and regular homebuyers looking for a bargain in a neighborhood where the median price of a home exceeds a half-million dollars, according to the report.
The story reflects the overall greater Seattle market. Last week, the metro area was among seven cities in the Case-Shiller 20-City Composite index that set new highs in home values. Prices there jumped 10.7 percent in April (the latest data available) compared to a year ago, the second-highest gain after Portland, Oregon.
The increase is largely because there are too few houses on the market to satisfy the number of buyers looking for one. In May, when the toxic house sold, the number of active listings was down more than 22 percent from a year ago. It would take less than two months to sell all of the current number of homes on the market, down from the four to six-month timeframe that’s considered normal.
“The May housing market was not just hot, it was frenzy hot,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, in a statement. “Many sell within the first week. A healthy/normal market would have 30 percent selling in the first 30 days.”