City-wide, the condo market remains stable and is outperforming 2006 levels. Compared to 3rd Quarter ‘06, condo sales are up 4.9% while the median price increased a respectable 7.7% to $323,000. A few neighborhoods showed decreases in unit sales while others like Ballard & Greenwood reflected significant growth due to sales at new construction & conversion projects.
Compared to 2nd Quarter ‘07, the results confirm a softening market with fewer unit sales across the board even with greater selection options. The exception was the Ballard/Greenwood area (NW Seattle). On the other hand, market values continued to show positive results with the city-wide median price up 4.5% over 2nd Quarter ‘07.
As we head into 4th Quarter, I expect even lower sales volume than normal due to the seasonal market change, the mortgage turmoil, buyers waiting the market out and sellers foregoing 2007 and instead opting to list next year. Prices are reaching a plateau and we’re unlikely to see a lot movement for the remainder of the year.
One surprising statistic is the jump in the city-wide absorption rate (inventory level) in September to 5.8 months from 3.8 months in August based on pending sales. That is, if no new listings come on the market, it will take 5.8 months to sell the current inventory which essentially returns Seattle to a normal market. We have not seen this level since January 2004.
The absorption rate will likely continue in the high 5’s to low 6’s throughout the remainder of the year. While the 2 point jump is surprising, I don’t feel it’s alarming at this time. We’ll need to track the rate for a bit, though if it stays the sames or starts to trend upward we’ll see some bargains.
That said, one thing I’ve seen recently are newly added listings in the NWMLS for current projects - Trio, Enso, Rollin Street, Escala, Tobira, Press, etc - that’s boosting the NWMLS inventory numbers. This is deceiving as the inventory hasn’t actually increased…those units have always been on the market, they just weren’t reflected in NWMLS statistics previously. Thus, the absorption rate for the past few years has been under-stated so the increase seen in September may not be as great as it seems.
Sources: NWMLS & Trendgraphix. Information deemed reliable but not guaranteed.
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