Statistics. Are they reliable all of the time? Are they based on fact or assumptions? Or both? Do they really answer the questions, “Will my house sell quickly for a profit?” and “Will I get a good deal if I buy now?”
Every day new numbers are reported based on the job market, interest rates and new programs by the federal government. All are important indicators, but they encompass a broad spectrum of the country and do not always accurately reflect on what is happening in the Seattle area or even in any specific neighborhood.
A consistent pattern has been developing in the housing market in our area that should give hope to both buyers and sellers that this is a good time to make a move. This pattern is based on actual numbers of homes sold or listed in the Multiple Listing Service, not conjecture. And, it is calculated over a significantly long time.
There is good news for sellers. One year ago, we were looking at a balanced market, based on the so-called absorbtion rate (the amount of time it would take for all properties to enter into contract with a buyer if no new homes were listed, based on current inventory and "pending" sales; a "balanced" market would take between 3-6 months for all inventory to enter). Today, in all but four areas, that number has fallen below the three-month level making this a seller’s market. (Ed Note: Due to a wide variety of current economic factors, the absorbtion rate is not considered by most experts as an accurate predictor of present market conditions).
On Mercer Island during the month of February, there were 118 homes for sale, down 18 percent from the same time last year. Realtors also report 29 properties entered into contract (down 12 percent) and nine SFH homes and one condo sold — a 44 percent decline in sales activity. The median sales price of a home, however, rose 21 percent to $862,500.
On the Eastside overall, single-family home (SFH) inventory has fallen 29 percent from last February from 2,418 to 1,710. The median list price rose 2 percent from $638,348 to $649,801. Meanwhile, the SFH median sales price declined 9.5 percent, from $475,000 to $430,000.
A survey of the brokers in my office resulted in over half reporting more than two buyers that are presently not able to find homes in the correct price range.
Condominiums are following the same pattern with inventory down 29 percent.
Seattle has reported a decrease in months of inventory from 2.9 to a low of 1.6. Listings are down 35 percent and the median listing price has risen from $469,401 to $506,202, an increase of 8 percent. A positive sign is reflected in the small median sale price decrease of 2 percent from $404,479 to $394,476.
Multiple offers are becoming more prevalent in all areas.
According to a report by the MLS published on March 5th, …”within King County, pending sales were particularly robust in the Lake Forest Park/Kenmore neighborhoods (up 73 percent), Kent (up 61 percent), Burien/Normandy Park (up 58 percent) and central Seattle (up 56 percent). The northeast portion of Snohomish County also experienced strong sales (up 63 percent from a year ago).” Ask your Realtor® what your neighborhood is doing!
So how does this affect buyers?
“Buyers are beginning to realize that we may have seen the bottom of this real estate market,” remarked Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo and a member of the Northwest MLS board of directors. “Waiting to buy may only result in paying a higher interest rate, having fewer houses to choose from, or finding that sellers do not need to give up as much as they have in the past,” he added.
We may have not seen the actual bottom of the market, but statistics do show that the rate of decrease is slowing. With the low inventory, sellers have less competition leading to a quicker sale at a more attractive price. Interest rates are still at all-time lows with small signs that values are increasing. These are good signs that buyers should feel confident that they are making a good decision in stepping into the housing market.
Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales. She is president-elect (2012) of the Seattle King County Association of Realtors.