Seattle Housing Buzz

There have been significant news reports about the housing market in the media lately. Most of the reports focus on falling prices, increasing foreclosure rates and rising inventory, but at a national level. Locally, how has Seattle fared?

In November, Seattle’s residential median price of $405,000 reflected a 2.2% increase over October, but a 4.7% decrease compared to the same period last year. As the graph below shows, the median price has been underperforming for the past few months.

In reviewing month over month figures, the single family home median price has stabilized while condominiums have declined the past two months. However, when compared to last November, both single family homes and condos saw higher median prices in November 2007, increasing 3.3% and 2.5%, respectively.

The year over year residential median price will likely continue to slide over the short term. I anticipate condominium prices to stabilize through the first quarter of next year but may not meet early 2007 pricing levels. On the other hand, I foresee a modest increase in single family homes prices as more buyers enter the market after the holidays.

Inventory Level

The overall residential inventory supply at the end of November stood at 5.1 months, meaning if no new listings come on the market it will take 5.1 months to sell the current inventory, based on pending transactions. The inventory supply rate is a barometer used to determine market status. At a 5.1 month supply, Seattle is in a normal housing market.

There was a 10% decrease in active listings in November. For the most part, the decrease can be attributed to a combination of the traditional seasonal slow down and sellers waiting the market out, hoping for an improvement next year. I expect active listings to plateau or decrease in December, but start climbing with the start of the new year.

Seattle’s current real estate market reflects normal conditions though with the widening gap between actives and pendings (properties under contract but not yet closed), it’s not unreasonable to anticipate a buyers market within a few months.

For buyers, it’s a pretty good time to purchase with several advantages:

• Ample choices with rising inventory
• A stronger negotiating position
• Possibly better contract terms, especially if buyers need to make a contingent offer
• On-going low mortgage rates

Sellers, on the other hand, may realize smaller appreciation gains, see more contingent offers and savvier buyers.

Tags: Seattle Condos, Seattle Housing, Seattle Housing Market, Seattle Real Estate