The Seattle condo market rebounded in October with increases in sales, number of closings and median price, likely fueled by the rush to qualify for the first time home buyers tax credit that was set to expire at the end of this month.
The median condo price rose to $300,000 last month, reflecting a 4.37% increase over last October and a one-month rise of 15.7% from September. That also reversed an 8-month slide in the year-over-year median price figures. In theory, the actual median price was higher than $300,000 as sales resulting from non-traditional means are not attributed in the NWMLS statistics. While I don’t have up-to-date closing numbers from the Brix and Gallery auctions (they were supposed to close by the end of October), only a handful of Brix sales were accounted for in the NWMLS figures, out of approximately 80 sales. The median sales price for the Brix and Gallery auctions was $330,000.
The number of Pending sales (under contract but not yet closed) increased dramatically in October to 272 units, an increase of 73.3% over the prior year and 8.4% more than September, presumably due to the tax credit deadline.
Closed sales increased 12.2% in October to 184 units compared to the same period last year. This is rather significant as it was the first year-over-year increase in closed unit sales since November 2007.
The number of active listings dropped to 1,337 units last month, a 5.2% decrease from October 2008 and a 1.1% dip from September.
The inventory supply rate decreased to 4.9 months, the lowest since August 2007, which would be indicative of normal market conditions. I base the supply rate on pending transactions rather than closed sales, which is the most common method. A case can be made that given the prevalence of short sale failures that using closed sales is a better option. In that case, the supply rate would be 7.3 months of inventory – a buyer’s market. However, supply is dependent on available properties and once a property goes pending it’s generally removed from active inventory and is no longer available to other buyers.
What does all this mean? Have we reached bottom and are now on the upward swing? For now, I’m going to say that October results were a little anomalous given that much of the activity was spurred by the pending deadline (at the time) of the first time home buyers tax credit. The same will hold true for November as well. Now with the credit extended through April 2010 and expanded to include existing homeowners, there’s no longer an urgency to incent buyers to act. On the other hand, the tax credit may provide just enough inertia to keep the condo wheels spinning through the end-of-the-year cyclical downturn.
Source disclaimer: Most, though not all, information and statistics were complied and published by the NWMLS.