Overall, the citywide median condo sales price increased 17.1% over February to $236,500. Compared to last March, however, the median sales price reflected a 11.75% decline. Though, the gap narrowed last month.

Condo sales took off in March. Whether due to better values, low mortgage interest rates, greater confidence in the local economy or a more conclusive buy vs. rent decision, people are buying condos in Seattle. Pending transactions (offers accepted and under contract) spiked 23.4% over February and 33.5% over last March.

Excluding the tax credit bump in April 2010, the 311 pending transactions in March reflected the highest number of Seattle condo unit sales since August 2007, just before the market collapse.

The number of closed condo sales also improved last month, rising 22.7% over February and 6.8% over the same period last year. The trend should continue as we move forward through the summer season.

Seattle’s condo inventory shrank 7.7% from February to 620 units last month, and compared to a year ago, there were 42.8% fewer condos for sale in Seattle. Interestingly, I still hear from people who believe there is an excess of condo inventory. To put it in perspective, we are now at pre-construction boom levels and down 60% from the peak in 2008.

With constricting inventory and rising sales volume, the Seattle condo inventory supply rate dropped to 2-months of supply based on pending transactions, reflecting a seller’s market. Presently, active condo buyers are finding a dearth of supply in the sub-$300,000 price level, while multiple offers that result in sales over asking price are starting to increase in frequency.

Does that mean we’ll see prices start to rise? There will be condos that’ll sell over their asking prices and in my opinion we may see positive year-over-year median price figures by mid-year. Though, they will be tempered by the number of distressed properties, which account for one of every four condos for sale, keeping pressure on condo prices. An improving market may encourage some sidelined sellers to test out the market, thereby increasing supply.

Neighborhood Highlights:

• Northwest Seattle (north of the ship canal and west of I-5) was one of the only areas in Seattle that exhibited an increase in median sales price, rising 3.7% over the same period last year. It also reflected the largest increase in pending and closed condo sales, jumping 67.7% and 60% year-over-year, respectively.

• West Seattle had the tightest inventory supply in March with less than half of the number of units for sale compared to a year ago.

• The Queen Anne / Magnolia area reflected the worst overall results with a 17.7% drop in median sales price and a 26.7% decline in closed sales.

Source: NWMLS. Some figures were independently compiled by SeattleCondosAndLofts.com and were not published by the Northwest Multiple Listing Service.
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Median price aside, the Seattle condo market was very robust last month. Pending sales (properties going under contract) increased 52.7% over last February to 252 units, which also reflected a 45.7% rise over the prior month. This was highest number of sales since April 2010, the deadline for the last home buyer tax credit. Excluding the tax credit deadline periods, February reflected the highest volume of monthly unit sales since May 2009.

Closed sales also improved in February. The 128 closed Seattle condo units reflected a one-month increase of 4.1% and a 16.4% boost over the same period last year.

Normally, we experience a noticeable bump in the number of active condo listings for sale in February, but not this year. Active listings declined last month to 672 units citywide, down 38.9% from a year ago …nearly 49% from just two years ago. There were fewer units available last month than there were in December, which is significant.

The drop in available listings, combined with the sharp increase in condo sales, reduced the inventory supply rate (absorption) down to 2.7 months. That is technically a seller’s market – short supply and higher demand with fewer properties for sale and increasing occurrences of multiple offers – except prices continued to fall.

Prices can only go so low, and with inventory & interest rates down, we may very well see the bottom of Seattle’s condo market this year.

Seattle condo inventory supply reflects a seller’s market across the board throughout the city. Under three months of inventory is considered a seller’s market environment.

Queen Anne, Capitol Hill and North Seattle exhibited year-over-year improvement in pending and closed condo sales last month.

Source: NWMLS. Some figures were not compiled or published by the Northwest Multiple Listing Service.
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The lower selling prices, however, encouraged steady sales activity with unit sales dipping just 2.4% compared to 2010. That’s a pretty good result considering there were no external incentives (e.g. tax credit or condo auctions) to bolster sales last year.

Condominium sale prices declined throughout Seattle in 2011. However, there were a few exceptions – South Lake Union (+53.1%), Crown Hill/Broadview (+4.8) and Maple Leaf (+33.5%) experienced increased prices. Downtown remained flat.

A word on how we calculated the downtown Seattle neighborhood districts. In our monthly market reports we provide stats based on the MLS defined area for downtown, known as Area 701, which includes downtown, Belltown, Denny Triangle, Pioneer Square, the International District and parts of South Lake Union. For our annual report, we separated the districts into their distinctive neighborhoods and manually scrubbed the sold listing data for greater accuracy. For instance, an MLS classification limitation and agent preference placed sales at Marselle, Veer, Enso and several First Hill and Queen Anne condos in “downtown”. Because of scrubbing and re-classification, we have adjusted the 2010 median prices for downtown and South Lake Union.

A greater number of lower priced property sales also influenced the median sales price. Compared to 2010, there was a 25.6% increase in the number of condos sold under $250,000 last year. Nearly half (49.1%) of all Seattle condos sold in 2011 were priced under $250,000, which weighted the mid-point downward.

Interestingly, there was a significant increase in million-plus dollar condominiums as well, up 24.6% over the prior year. That’s reflected in SLU’s strong showing and kept downtown on par with 2010.

Finally, the figures reflect median sold prices and not property values. In some neighborhoods, there were too few condo sales to be meaningful, such as the two sales in Fauntleroy or zero sales in Leschi. When looking at the chart, it’s important to note that property values did not fall, or increase, by the numbers shown. For instance, condo values in Fauntleroy did not drop 64.4% or Lake City by 51.4%; and conversely, condos in SLU did not rise 53.1% in value.

While foreclosures remain an important factor affecting local condo values and sale prices, it may not be as prevalent in the near future has they’ve been in the past. King County foreclosure filings have reduced significantly compared to 2010 and shrinking inventory is accelerating multiple offers (in the lower price points), which may eventually lead to a pricing recovery.

Sales information provided by the NWMLS; all figures were independently calculated by SeattleCondosAndLofts.com. Private sales (by owner) and some new construction unit sales were not reflected in the NWMLS database.

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Cover photo by Christian Terboven available under a Creative Commons Attribution 2.0 commercial license.

What may be heartbreaking for sellers may offer a boon for buyers. Back in 2003, mortgage interest rates were hovering between 5.5% and 6% for a conventional 30-year loan. With current rates around 4%, buyers are shaving up to $200 off their monthly mortgage payment for a $200,000 loan compared to if they purchased in 2003. With prices down to 2003 levels combined low interest rates, condos are more affordable than they’ve been in years.

Pending sales improved 6.1% over December to 173 units, but did reflect a 1.1% slide from last January, or 2 fewer units under contract.

The number of closed sales declined 11.5% from December to 123 units, but increased 8.9% over January of last year.

Although inventory rose slightly from December, Seattle’s condominium inventory remains low. The 704 condo units available in January reflected 32.4% fewer units for sale compared to the same period last year. In the sub-$200,000 price point, inventory is becoming scarce and agents have reported encountering more multiple offer situations.

Lower prices and interest rates offer a compelling alternative to renting for many likely first-time homebuyers, but they’re not finding a whole lot out there. On the other hand, the luxury condo market has more than adequate inventory available and we’re seeing more pricing adjustments as high-end units sit on the market.

The inventory supply rate tightened slightly based on the rate of pending sales but increased when based on closed sales volume. Currently, Seattle continues to reflect a normal/neutral market condition. That’s probably not likely to change – seasonally, heading into spring we’ll see more listings along with increased sales that should keep the market in balance.

A few notes about the year-over-year figures below. Area 700, which includes Queen Anne and Magnolia, is skewed. The 2011 stats include 11 units at the 2200 Condominium complex, which should have been reflected in Area 701 (Downtown, Belltown, Denny Triangle). Excluding those units, the Area 700 median sales price would have been $294,605, resulting in year-over-year decrease of 42% instead of 77.2%.

Area 701 was the only area of the city to realize an increase in median sales price, up 10.5% over last January, mainly due to sales of higher valued properties.

While most areas of the city saw fewer closed sales, Capitol Hill and North Seattle realized increased closings compared to last year.

Source: NWMLS. Some figures were not compiled or published by the Northwest Multiple Listing Service.
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The number of pending transactions (properties going under contract) seasonally declined 11.4% from the prior month to 163 units; however, pendings sales reflected a 32.5% increase over last December. The number of closed condominium purchases improved 15.8% to 139 units compared to December of last year, which continued to reflect the robust sales activity we’ve experienced during the second half of 2011. Favorable condo prices and mortgage interest rates kept the market rolling along.

King County results didn’t fare as well as Seattle. The county’s median condo sales price was $185,000 in December reflecting a year-over-year median price drop of -17.78%. Seattle accounts for approximately 35% of the county’s condo sales volume.

Since peaking in June, the number of active listings for sale reduced significantly last month. Available Seattle condo units for sale were down 30.4% to 689 properties compared to last December. However, listings always drop at year-end and we’ll see it creep up shortly.

The low number of units available, combined with strong sales volume, helped Seattle’s condo inventory supply rate reduce to the lowest level in over 4 years. Based on pending sales volume, the supply rate dropped to 4.2 months while the closed sales volume method reduced to a 4.9 month supply.

Essentially, at the current rate of sales, it would take 4.2 months to sell the existing inventory (assuming there are no new listings). This is a common measurement to determine the present housing market evironment. A 4.2 month supply rate suggests Seattle’s condo market is exhibiting a neutral-to-slight seller’s market. King County also has a 4.2 month condo supply rate. As a comparison, single-family homes in Seattle have a tighter 2.7 month supply rate.

Low inventory with strong demand would indicate movement towards a seller’s market and rising prices. Unfortunately, for condo sellers, the latter part of the equation isn’t holding true…increased prices. The high number of distressed properties currently available along with the anticipation of more foreclosures in 2012-2013 is keeping pressure on condo prices. Fortunately, for Seattle condo buyers 2012 will continue to provide opportunities for homeownership.

Source: NWMLS. Some figures were not compiled or published by the Northwest Multiple Listing Service.
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© 2012 Seattle Condos And Lofts

The $246,000 citywide median condo sales price in June reflected a 13.68% year-over-year drop and a slight one-month decline of 1.5%. Prices slid in all Seattle MLS areas except for West Seattle, which improved 15.7%. The attractive, lower prices continued to stimulate sales of entry-level condominiums. In June, 50.8% of all condos sold in Seattle were priced below $250,000 compared to 37.9% last year. The higher number of lower price condos sales, along with depressed values, shifted the median sales price point downward compared to the same period last year.

Overall, June’s condo sales volume was healthy with a 31.1% year-over-year increase in the number of pending transactions (condos going under contract). Though, anything compared to the stalled sales following the expiration of the tax credit last year would look good. The number of pending transactions also reflected a one-month dip of 9.8%. Nevertheless, it was one of the better months for condo sales over the past 13-months.

The number of closed condo sales continued to trend upward with a one-month increase of 2.8%. Compared to a year ago, closings were down 14.2%. However, the closing deadline for the tax credit was last June, which resulted in a higher than normal closing volume. Thus, the 30 unit difference was remarkable given there were no incentives to propel sales this year…the market drove sales on its own.

The number of active condo listings continued to remain flat this year, and was down 27.9% compared to June of last year. For many condo owners, the hot rental market offers a compelling alternative to selling at depressed prices.

Seattle’s condo inventory supply rate was moderate in June, indicating a relatively normal market environment. While the lower supply tend to benefit sellers, the lower values definitely favor buyers in this market. Anecdotally, our first-time home buyers are starting to find the number of choices scarce, particularly in the lower price ranges, and lately, are experiencing competition from other buyers.

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Condo prices continue to fluctuate; last month’s citywide median sales price of $249,975 reflected a decline of 12.29% compared to last May. Keep in mind, this is the median sales price of all condos sold and not market value. A significant number of lower priced condo sales in May weighted the median sales price mid-point downward.

Half of all condominium sales in Seattle (50.3%) in May were priced under $250,000 compared to 35.2% for the same period last year. However, the increased sales were due to declining values, which have made condos affordable for many buyers.

Condo sales volume has remained stable over the past three months. Statistically, pending transactions (units going under contract) were up 52% in May compared to last year. However, condo sales crashed last May following the tax credit deadline so the 52% figure is anomalous. Nevertheless, we’ve had three solid months of steady sales activity without any artificial inducements as noted below.

More impressive then pending transactions was the number of closed sales last month. The 176 closed condo sales in May reflected a 22.2% increase over April and just a 10.7% decrease (21 fewer sales) compared to last May. That’s noteworthy considering that closings last year were buoyed by the tax credit deadline. Sales activity is recovering.

The number of active Seattle condo listings essentially remained unchanged over the past 4-5 months. The 1,111 condo listings in May represented a significant 28% drop in inventory compared to last year. We just haven’t seen the rise in inventory this year as we normal do from late winter through summer. Part of that is likely due to absorption of the remaining new construction units, sellers waiting for values to improve and reforms/programs encouraging mitigation over foreclosure.

The improved sales activity combined with fewer units for sale has resulted in a drop to the inventory supply rate. With the pending-based rate at 4.7 months and the closed-based rate at 6.3 months, we are for time being, back to a balanced market environment.

In April, Seattle’s median condo sales price rose 4.5% over the prior month and 1.82% year-over-year to $280,000, a slight reprieve from the lows of the past six months.

Much is being made in the media about the sizable 37% year-over-year decrease in the number of pending sales that has reporters surmising the market is slowing and buyers are hesitating. I disagree. The sales volume recorded in April 2010 was anomalous, spiked by the tax credit deadline as noted in the chart below.

Excluding the deadlines in 2009 and 2010, the sales volume in April was robust for the second consecutive month, especially without having the benefit of a tax credit to buoy purchases. In fact, it was the second best month for Seattle condo sales since the tax credit expired. In some respect, it’s more of a market normalization compared to the tax credit euphoria last year.

As expected, the number of closed sales declined 20.9% in April compared to the same period last year due the tax credit, yet remained on par with March. Although closings have lagged relative to the number of pendings, April’s closed sales volume was the third highest recorded over the past 10 months.

Seattle’s condo inventory has been holding steady. Normally, we would see a considerable increase in in the number of available condo units for sale from late winter/early spring into summer, but not this year. Inventory levels over past 5 months have been reflective of the first half of 2007, just as the glut of new construction and conversion units started to hit the market.

The low inventory level, combined with a healthy sales volume, is keeping the inventory supply rate down. At 4.8 months of inventory based on pending sales Seattle’s condo market exhibited normal conditions for the second month in a row. Based on closed sales, we have 7.7 months of inventory, which would indicate a normal-to-buyer market conditions.

With mortgage interest rates remaining low, inventory levels plateauing and a better economic outlook, we should continue to see stable unit sales activity through summer. Anecdotally, we are experiencing a more active market, predominately among first-time homebuyers and those looking for an in-city second home. Our buyers have encountered more instances of competing offers than we’ve seen in quite a while. So from our experience, in terms of activity level (not values), the market appears to be rebounding.

Condo values, on the other hand, probably won’t recover for some time with foreclosures and short sales keeping prices down. But, that’s not necessarily a bad thing, particularly if you’re a buyer.

© Seattle Condos and Lofts

The most notable figure was the median Seattle condo sales price, which decreased 7.9% from a year ago to $268,000. That’s also a 14.3% drop from February. The median sales price is the mid-point price of the condos that sold and not necessarily indicative of value trends. In March, a higher number of lower priced condo sales weighted the mid-point downward. Nevertheless, values continued to decline.

Falling condo values, though, have been having a positive impact on the market place. We’re seeing a greater number of buyers across the spectrum from first-time buyers to investors to the luxury home buyer. Compared to March 2010, unit sales of condos priced under $250,000 were up 19.3% while sales of condos over $1 million increased a staggering 233%.

Last month there were 147 closed sales and 233 properties that went under contract. Compared to the same period last year, those figures were down 17% and 12.7%, respectively. It is important to note, the tax credit inflated sales last year so we fully expected year-over-year figures to be lower. If we just left it there it would seem Seattle condo sales did poorly last month. But, it didn’t…in fact, it was rather exceptional considering. Closed unit sales reflected a one-month increase of 33.6% while pending transactions rose 41.2%. In March 2011, we had the most monthly closed sales since June 2010 and the highest number of pending transactions in 11 months. Condo unit sales are rebounding without governmental incentives.

Seattle’s condo inventory has been holding relatively steady over the past four months. Normally, we would see a rise in inventory this time of year, but the 1,084 condos for sale in March reflected a decline of 1.4% from February and 24.8% from last March. Though, I expect inventory to rise going forward.

The higher unit sales volume and stable inventory have reduced the inventory supply rate considerably. Based on pending transactions the supply rate was 4.7 months and based on closed sales it was 7.4 months. Both figures indicate a shift towards normal market conditions. The supply rate is prone to fluctuations, however, so I wouldn’t say we’re back to a normalized market environment just yet.

In short, the median condo sales priced dropped last month, a combination of falling values and more sales of lower-priced condos that migrated the mid-point downwards. Buyers reacted positively to those falling prices, and along with low interest rates, returned to the market place seeing value in condos. Excluding the three artificial bumps (tax credits in 2008/2009/2010), March’s unit sales volume was among the better performing months over the past three years.

Without any new deliverable units (new construction) for at least 24-36 months, Seattle’s once endless glut of inventory will continue to reduce, which over time will allow values to stabilize and appreciate. However, we’re not there yet, and if you’re a buyer, that can be a good thing.

First Quarter Results
During the first quarter of 2011, 378 condos in Seattle sold with a total dollar volume of $148,751,000 and a median sales price of $285,000. In the first quarter of 2010, 419 condos sold with a total dollar volume of $152,200,000 and a median sales price of $295,000. Compared to last year, unit sales decreased 9.7% and median price declined 3.4%, however, the average sales price rose 8.3%.

Seattle condo market charts:




Distressed condo properties, short sales and bank-owned, accounted for 25.5% of the closed unit sales volume in March 2010. Currently, distressed condo properties represent 23% of the available condo inventory.

© The Seattle Condo Blog

That’s an increased median selling price, not necessarily an increase in value. Overall, I believe condo values remain depressed and will continue to trend downwards. What we’re seeing is a shifting of the median point resulting from a turnaround of the high-end market and fewer lower-valued condo sales.

Through parts of 2009 and the first half of 2010, the first-time home buyer’s tax credit weighted Seattle condo unit sales towards the lower pricing points. At the same time, many high-end buyers shied away from investing in the gluttonous luxury condominium market. Now we’re seeing a reversal. Last month, the number of unit sales priced under $300,000 dropped 15.4% while the number of unit sales priced over $500,000 jumped 92.9% and $1 million-plus sales tripled compared to the same period last year. Granted, that’s just one month’s figures, but the trend has been holding for some time now.

As expected, the number of pending transactions and closed sales lagged behind last year’s volume, down 21.4% and 5.2% respectively compared to February 2010. Without sounding like a broken record, the April 2010 deadline for the tax credit drove higher than normal sales volume last spring. Compared to January, the number of pending and closed transactions also dipped.

There were 1,100 active listings in the MLS last month, which is increasing every month. However, that was well under the 1,306 condo listings last February. The decrease may be attributable to potential sellers holding out for the market to rebound or that are so exasperated they are waiting for the property to foreclosure rather than try to sell short. Nonetheless, the inventory supply rate remains high at 10-months of supply based on closed sales. The pending-based method suggests a more reasonable 6.7-month rate. However, given that most pending short sale transactions fail to close, it’s a less reliable measurement.

In light of frequent news reports about the depressed housing market and economy, condo sales activity have not fluctuated that significantly over the past six months. The seasonal change is also beginning to bring buyers out. Are you one? If not, what factors are influencing your decision?

On a side note, I did want to mention the Mortgage Credit Certificate tax credit. Not many first-time home buyers are aware of it as there are some limitations and qualification requirements, but it is potentially worth a few thousand dollars annually.

Belltown experienced a one-month bounce with a 31.3% jump in median price and more sales and closings compared to last a year ago. Prices in Northeast and West Seattle areas also reflected higher median selling prices, while the condo sales and prices in the Capitol Hill area lagged.

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