Inventory increased as expected, up 8.7% over January and 1.9% above last February. However, the inventory supply rate dipped to 6.2 months of supply. When factoring in the phantom inventory of unlisted new construction condos, the rate rises to 8.8 months of supply citywide. Though, in the Belltown/Downtown area, the rate shoots up from 7.8 to a 21-month supply.

The number of pending transactions rose 51.1% over last February and 11.7% above January, fueled by the robust sales of affordable condos and the tax credit incentive. Closed sales also increased 18.4% compared to last February, but down slightly from January.

In respects to the chart below, the two principal condo marketing firms have misclassified buildings on Capitol Hill (1111 E. Pike) and lower Queen Anne (Marselle) in downtown/Belltown, skewing the Area 701 figures. Adjusting for the misclassification, Area 701’s median price was $400,000 last month instead of $360,000. Therefore, year-over-year median price change should be -3.6% rather than -13.3%.

Source: NWMLS. Though some figures were compiled independently and were not published by the NWMLS.

The citywide median condo price of $314,000 reflected a one-month improvement of 20.8% but declined 6.3% compared to last January. However, it was also the highest monthly median price since last January. The downtown/Belltown area noted the largest year-over-year decrease in median price, down 35.4%, which was mostly attributed to fewer high-end sales compared to January of last year (11 of 28 sales in January 2008 were over $1 million vs. only 4 of 35 last month, sliding the mid-point downward).

As expected, the number listings increased in January, up 19.2% above December and 2.2% more than last January. On the other hand, the improved sales volume reduced the inventory supply rate to 6.4 months. Overall, that’s still a buyer’s market, however, in the sub-$300,000 price range the supply rate has dipped below 3 months, closer to a seller’s market with constricted inventory.

With interest rates dropping below 5% again and the home buyer tax credit extension, the current momentum should continue through the next few months spurred by first-time condo buyers.

Source: NWMLS. Though some figures were compiled independently and were not published by the NWMLS.

• More than 52,000 closed residential sales in 2009 accounting for more than $17 billions in total sales volume, of which 6,800 were condos valued at $1.9 billion in sales.
• King County realized just over 20,200 residential sales valued at $8.6 billion, of which 4,191 were condos (down 18.8% from 2008) with a value of $1.3 billion.
• Only 43% of King County condo sales were located in Seattle.
• There were 1,793 condo sales in Seattle (down 15.5% from 2008) valued at $645 million. Condos accounted for 25% of all residential sales in Seattle.
• There were 802 sales of single family homes and 66 sales of condos priced $1 million or greater in 2009. Bellevue had the highest number of $1+ million sales overall, though Seattle accounted for 67% of all $1+ million condo sales (44 units).
• In Seattle, 56% of condo sales were priced under $300,000, 11% were priced above $500,000 and only 2.5% were $1 million or greater. For comparison, in 2008 46% of condo sales were priced under $300,000, 15% were priced above $500,000 and 3.2% were $1 million or greater.
• The median condo price in King County was $255,000; Seattle’s median condo price was $279,000.

Note: The NWMLS database and statistics do not include many new construction pre-sale units, private sales or auction sales.

Source: Data was obtained from the NWMLS’ 2009 Statistical Review and Highlights report, though the Seattle figures were compiled independently. Some figures were rounded.

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.

While the one-month sales volume fell from November to December, the year-over-year figures showed marked improvement. Compared to December of last year, pending transactions were up 21.1% and closed sale rose 43.3%, which can be attributed to the tax credit.

The number of active condo listings dropped to 1,008 units, the fewest number of units available since March 2007. While that may mean fewer choices for buyers today, the number of listings will increase as we head towards spring. This figure only contemplates those units listed in the NWMLS database and does not include available properties in newly constructed buildings such as Enso, Olive 8 and Escala.

With fewer listings available, the inventory supply rate dipped slightly in December to 6.8 months of supply – the cusp between a buyers market and a normal market. Citywide, the area inventory supply rates fared well compared to last December.

Looking forward, we’ll continue to see a challenging condo market place this year. Though, we experienced an uptick in activity (new listings and buyers entering the market) at the end of December so that may bode well for the start of this new year.

The citywide median condo price slipped 10.2% to $272,000 last month, which I mostly contribute to the original November 30th expiration of the first time home buyers tax credit. The considerable increase in the number of lower-priced sales shifted the median price point downward. In November 2009, 62.2% of all sales (120 units) were priced below $300,000 compared to just 48.3% in November 2008 (57 units).

The number of available listed units continued to decrease, down 7.9% to 1,230 properties last month. However, with the decrease in pending transactions (seasonal fluctuation, tax credit extension, economy), the inventory supply rate rose sharply from 4.9 to 8 months. Still, though, that’s quite a bit less than last November’s 12 month supply rate.

If recent history holds true, we’ll see an bump in December’s median condo price. For the past four years, the median price in December increased over November even with few sales.

Source disclaimer: Most, though not all, information and statistics were complied and published by the NWMLS.

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.

The $259,250 median condo price last month marked the lowest value point since February 2006 when the median price was $251,725. Historically, median prices tend to plateau or decline between August and September, then drop considerably in October. However, in addition to the down market and seasonal fluctuation, the first-time home buyers tax credit also contributed to the price slide. The median price is the middle point of homes sold, that is, half above and half below. In September 2007 and 2008, condos under $350,000 made up 61.9% and 64.2% of the total number of units sold. In September 2009, condos priced under $350,000 accounted for 80% of the total units sold, a significant increase in the number of lower-priced properties that shifted the median point downward. The pricing trend will continue for the next two months with the rush to buy before the tax credit expires at the end November and the seasonal Fall downturn.

The condo inventory supply rate decreased to 5.4 months in September due to a drop in active listings and a rise in the number of properties going under contract (Pendings), which would move Seattle back towards normal market conditions. However, pendings generally decline between August and September so last month’s bump may be attributed to the tax credit. Additionally, mortgage rates on 30-year fixed recently dipped below 5%, increasing affordability and buying power, which may have spurred sales as well.

The data used in this report comes directly from the Northwest Multiple Listing Service (NWMLS) database and are either compiled and published by the NWMLS or compiled by myself. The database, however, does not include all properties for sale or that have sold, and is missing a good chunk of sales last month. The 80 or so units sold (pending) at auction last month – Brix and Gallery – are not reflected in the NWMLS database, therefore, understating the number of pending transactions. Officially, there were 251 pendings last month, though it’s probably closer to 330. It will have a greater effect next month as it’ll not only under count the number of closed sales for October, but their exclusion will deflate the median price. The median price of the Brix and Gallery auctions was $330,000.

Some say the tax credit artificially boosts sales volume, others say it provides the needed inertia for the market to rebound. In any case, the tax credit is slated to expire on November 30th. Given the current escrow time frame (about 45 days), the long Thanksgiving weekend and the rush to get sales closed in time, properties should be under contract by the end of this week at the latest to ensure eligibility for the credit.

The National Association of Realtors has been lobbying Congress to extend and/or expand the credit beyond November 30th, but at this time, opinion is mixed on the outcome. Given more pressing issues like health care, Congress is unlikely to vote on the tax credit any time soon, which according to Lennox Scott, CEO of John L. Scott, means that the credit will cease on November 30th. Scott, who is involved with NAR’s legislative arm, stated it takes about 45 days from passing a bill until its implementation; therefore, October 15th is basically the last day to pass the extension bill in order continue the credit uninterrupted. It is hoped that the credit will be continued in 2010.

The inventory supply rate shows months of supply. For September 2009, the supply rate was 5.4 months.

Source disclaimer: Most, though not all, information and statistics were complied and published by the NWMLS.

Two areas realized increases in median price last month. The downtown/Belltown area median price increased 8% over July and 11.5% over August of last year, mostly due to to closings at newer developments. West Seattle exhibited a 10.4% one month increase and an 11.7% year-over-year increase. On the other hand, Queen Anne and NW Seattle showed the largest year-over-year decreases in median price, down 10.6% and 9.6%, respectively.

The condo inventory supply dipped slightly in August, down 1.1% from July and 6.4% compared to last August according the the NWMLS. In actuality, the decrease in supply was a bit more substantial with Equinox’s conversion to apartments last month, which effectively removed 200+ units from inventory (most were not listed).

Northeast Seattle and downtown/Belltown reflected increased inventory last month, up 7.4% and 34.4%, respectively. Most of downtown’s increase was attributed to newly listed units at several new developments, while NE Seattle were predominately re-sales. Although the stats show downtown’s inventory increased 7.4%, it actually changed very little as many of those newly listed units were always available. The NWMLS stats are based on properties entered into the NWMLS database and few of the hundreds of new construction units are reflected in the NWMLS database. The NWMLS is expected to change this practice.

The supply rate, now at 7 months, has been trending upwards indicating fewer sales relative to inventory. This is evidenced by the drop in the number of units going under contract last month by 6.1% from July (13 properties), though it did exceed the number of pendings in August 2008 by 1.5% (3 properties). At 7 months, Seattle remains in a marginal buyer’s market.

There is no doubt that condo sales this year were boosted by the first-time home buyers tax credit. In reviewing closed sales data for the past three months (June – August), condos under $350,000 accounted for 74.8% of all condo sales while those over $500,000 accounted for 10.6%. Compared to the same three-month period last year, only 64.4% of sales were under $350,000 and 14.9% were priced over $500,000. Comparing year-over-year, the number of sales under $350,000 increased 16.1% while those priced over $500,000 dropped 28.8%. Currently, the tax credit will expire on November 30th and unless it is extended or the economy improves, we may see a decline in sales.

Source: NWMLS, not all statistics were compiled or published by the NWMLS.

The number of condo units going under contract in July declined 7.8% from the prior month, though it did reflect a modest 5% increase compared to a year ago. Though pending transactions are now trending downward, recent activity is still higher most of 2008.

The citywide condo inventory supply rate increased to 6.7 months pushing the market further towards a buyers market. Interestingly, looking at the supply rate by neighborhood (MLS area), the supply rate in July were, for the most part, on par or were lower than 2008 levels.

If we’re looking for signs of recovery, we’ve not quite seen it reflected in Seattle’s condo market yet, which has a way to go before bottoming out. The downward pricing trend remains good news for buyers. While in the short term new buyers may see values slide, they’re able to buy at 2005 / 2006 pricing levels. The $8,500 first-time home buyer tax credit may also sweeten the deal. Conversely, the market remains a challenge for sellers. Though, properly (realistically) priced, cleaned and staged units do have an advantage in this market.

Source: Northwest Multiple Listing Service