As had been expected, the October figures for Seattle’s condo market performance took a hit. The slowing local economy, national economic concerns and the continuing mortgage upheaval ran into the sputtering condo market.
The citywide condo median price was $287,450 last month, an 8.82% drop compared to October 2007 and the lowest its been over the past 24 months. Keep in mind, all this indicates, is that for a 31-day period in time the median price last month, based on 164 units sold, is 8.82% less than the same 31-day period last year, which was based on 324 units sold. Median price is that point where half the units sold is above and half is below, and last year there were 51% more units sold. In October 2006 the Seattle condo median price was $284,000 based on 272 units sold.
The number of active condo listings also declined last month to 1,410 units. That’s 6.2% fewer compared to September and a 10.4% drop compared to October of last year. Yet, even with fewer listings, the inventory supply rate (active listings divided by pending sales), the key figure used to measure market condition, increased to 8.9 months. The higher the number of months, the more entrenched we are in a buyer’s market. The supply rate was most impacted by the sharp decrease in the number of units being purchased. The 157 pending transactions last month represented a one month drop of 30% in the properties going under contract and a 44.5% drop compared to October 2007.
The supply rate is exceptional for Seattle and we’d have go back more than a half dozen years, if not a decade, to find rates this high. But, just to provide some perspective, the condo inventory supply rate in Miami is 80 months. You’ll definitely get screaming deals in South Beach but probably not in Belltown. I mention this as I’m seeing, more so now, a greater disparity between buyers (as well as sellers) perception of the market and the reality of the market. And, I think that’s attributed to growing levels of disappointment and frustration among buyers. There are buyers who’ve overstated the softness of the market, expecting that offers 30% below asking is fair and that sellers will jump. While the market is heading south, it hasn’t collapsed to such a degree that a 30% loss in value will be taken seriously by sellers, who also have the opportunity to take advantage of the strong rental market. Though, there will likely be cases in which such bargains can be had, even in the city center.
Price trends are most notable when viewing the figures in different areas of the city with downtown and NW Seattle fairing better. Again, the figures below are just a snap shot of the month of October and are not necessarily indicative of the market as a whole. Year-to-date, the Seattle condo median price is just 0.8% below the same 10-month period last year, though prices will likely continue to fall for some time.
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November 9th, 2008 at 9:27 am
The market is obviously down but the one factor that was pretty interesting is that the number of actives is down compared to last year. This would seem to be a positive sign moving forward.
November 20th, 2008 at 1:52 pm
With all the trouble going on in the economy a drop in price is not at all out of the ordinary. I have been charting price drops in the markets I follow of 4% to as much as 13% year over year.