In 2009, the annualized citywide Seattle median condo price fell 10% from 2008 to $279,000. That’s a hefty decrease considering the citywide median value only dropped 0.9% between 2007 and 2008. Besides the overall economic conditions, other related factors contributing to declining values include the first-time home buyers tax credit, condo auctions and the proliferation of short sales and bank owned property sales.
Does this mean the average Seattle condo was worth 10% less in 2009 than in 2008? The simply answer is “no”. First, values vary widely by location. Each neighborhood has its own distinct market condition, and several neighborhoods realized increased values last year. Second, the median price can be affected by non-market factors.
Median is the mid-point of a set of numbers, in this case, the point where half of the properties sold were priced above and half below. During the second half of 2009 upwards of 65% of condo sales were priced under $300,000 as a result of the first time home buyers tax credit incentive. That’s a flip from 2008 sales figures. The increased number of entry-level sales last year also contributed in shifting the mid-point downward.
Most areas of the city experienced declining values, though six neighborhoods saw condo values increase – Admiral/Junction, Belltown, Greenwood/Phinney, Leschi, Magnolia and U-District. Of those, the Admiral/Junction and Leschi areas realized consecutive annual value appreciation.
There are some numbers that stand out in the table below, particularly Alki and Fauntleroy. In respects to Alki, I would attribute sales at Lighthouse Point to be a factor in the drop in median price. Approximately half of the 59 sales in 2009 were at Lighthouse Point where prices were predominately below $200,000, shifting the median point downwards. A primary factor I noticed with Fauntleroy was the different type/quality of condos sold in 2008 vs. 2009, besides having a small sample size.
Other Notes:
I adjusted the median price for Downtown by excluding sales at Marselle Condominium. The Marselle listings/sales were categorized in downtown when, technically, it’s located in lower Queen Anne (a different MLS area, also).
In light of the above, it should be noted the NWMLS database is not 100% accurate. It does not include properties sold at auction, private sales (by owner) or many pre-sale units. Additionally, listing agents may misclassify their listings, which can corrupt the data considerably. Without the Marselle correction, Downtown’s median price would have been $459,950 instead of $537,500.
Astute readers will note that the 2008 figures above may differ slightly from those I posted last year. This year I calculated median price utilizing the NWMLS method that resulted in adjustments for some of the neighborhood figures.
January 12th, 2010 at 1:52 pm
Ben- Thanks as always for the helpful report. What are your feelings about 2010? Has Seattle shed enough excess inventory to see some price gains, or are there more auctions and foreclosures looming?
I work in a much smaller market so inventory is easier to flood, but probably quicker to repair as well. I would be surprised if our condo market isn’t looking fairly healthy by the end of 2010, though some banks and some developers may get the brunt of the “market forces” in order for us to get there.
January 12th, 2010 at 5:40 pm
It was good to read such a comprehensive report because it show how not ‘all’ properties went down as some like to say or give the impression. In fact there is not even what you could call a ‘general drop’ as the percentages were so varied.
I feel this report will have given many people a better insight to what really happened to the property market as a whole.
January 12th, 2010 at 10:46 pm
Man, that is great to hear that year over year, you are only down 10%. We can only dream of that here in Arizona.
January 15th, 2010 at 5:14 pm
Great report! This really shows people the true numbers instead of just a “general” number. As the decrease for different types of homes varied, it is good that future home buyers know exactly what happened!
January 22nd, 2010 at 7:46 am
Really detailed and interesting stats. It helps so much to have informed opinions. The media all over the world has the tendency to look for attention grabbing headlines and preferably bad news. Whilst here in the Spanish property market we face some really serious challenges, it is helpful to see some balanced articles. Some areas of Spain have seen far greater falls in property prices in percentage terms than those you refer to in Seattle. Having said that we have seen an increase in new property enquiries in our area of Moraira but feel we have a long way yet to go.