The Seattle Condo Blog

The condo market performed fairly well last month; aside from a median price decline it did show signs of stabilizing. Compared to August, the median condo price remained unchanged at $310,000, which also reflected a year-over-year decrease of 6.03%, the largest drop so far this year. It was also the third consecutive monthly drop in year-over-year median price value.

The number of active listings reversed its recent declines, increasing by 12 properties, or 0.08%, over August. Though, for the first time in years the number of active listings fell below the prior year’s figure. There were 1,503 actives in September ‘08 compared to 1,531 in September ‘07, a year-over-year decrease of 1.83%. Now, that’s just 28 properties, but it’s significant when you consider that in January there were 512 more active listings compared to the prior year. Given current market trends, though, it’s not unexpected. For many sellers, it makes more sense to ride out the downturn by taking advantage of the stronger rental market.

The number of pending transactions (under contract in escrow) showed improvement last month, reflected by a 14.3% increase over August. The year-over-year result improved as well. In August ‘08, the number of properties going under contract was just 55% of those that were under contract in August ‘07. In September, the number of pending transactions improved to 85.5% of the previous year’s level.

The improved pendings rate and falling inventory helped to reduce the inventory supply rate (absorption rate) to 6.7 months. It’s still a buyers market, but we’re seeing a little more parity in areas - Capitol Hill, Queen Anne and Downtown. Downtown’s supply rate actually dropped last month (compared to September ‘07) but that can be attributed to pendings at Gallery, particularly previously unrecorded pre-sales that just popped-up as pendings last month. To Gallery’s credit they are recording pendings and solds, something many developments haven’t done (more on this later).

September will likely go down as an anomaly. It had begun to show signs of improvement, which may have been the result of the Fannie Mae / Freddie Mac takeover. That news helped to spur just a little more confidence and briefly lowered mortgage interest rates. Going forward, the recent economic crisis, both nationally and locally, will wipe out the gains made last month. In all likelihood, we’ll see a downward movement in the number of active listings, median price and pending transactions through the remainder of the year.

As has been the case throughout much of the year, each passing month exhibits the fluidity of Seattle’s condo market.  A number of factors have contributed to the buoyancy such as new construction closings, seasonal changes, mortgage availability and rates as well as consumer confidence levels.

The citywide condo median price rose 3.3% in August to $310,000 compared to July.  Historically, though, August outperforms July along with an uptick in the median price so it’s to be expected.  In comparison to the prior year, the citywide condo median price in August fell 5.3%.  And, that’s significant when you consider it was the largest one-month YOY decrease spanning back several years.  Yet, keep in mind that only compares the results of two 31-day periods in time.  Looking at YTD median price figures, the citywide median price is unchanged relative to 2007, though a downward movement is expected.

Perhaps the best piece of news in August was the third consecutive decrease in the number of active condo listings, down to 1,491 or 48 fewer than July.  In comparison to August 2007, there were only 127 more listings, or 9.3%, the slimmest margin in YOY listings since the condo market softened. A fair number of sellers are mitigating the effects of the downturn by taking advantage of the rental market.  Interestingly, should the number of listings plateau in September, we’ll realize a YOY decrease in listings next month.

On the other hand, the inventory supply rate (a measure of months of inventory based on active listings and pending transactions) remains at a moderate 7.6 months, even though we’re seeing parity in the number of active listings compared to 2007 levels.  The main reason being that buyers are remaining on the sidelines, tepid about the market and concerned about the economy.  Compared to last year, the number of condo purchases is down 45.3%.

We may yet see a bounce in the market given two key factors - inventory options and recent government actions.  Buyers have the advantage of a buyers market resulting in more inventory choices (fewer active buyers in the market to compete against).  Slower sales volume may also translate into better deals in terms of price, contract terms and concessions.  The government’s recent takeover of Fannie Mae and Freddie Mac helps to instill confidence in the mortgage market and has resulted in lower rates, dropping below 6% this week.  Plus, low down payment loan options are still available.  Finally, the $7,500 first time home buyer tax credit (an interest-free loan) means a more immediate benefit to buyers.

As for sellers, September may result in a rebound as well.  Not in regards to price, which is likely to remain below 2007, but rather in the number of properties that are selling (pending transactions). Through the first week-and-a-half of September we’re seeing a rise in sales volume.  But, this is cyclical as well since we normally see a bump in September/October, though lower interest rates may be spurring buyers off the fence.

July exemplified the fluidity of the housing market…it was tough month for Seattle’s condominium market. After median price gains over the past couple of months, the median price took a tumble to $299,975 last month, which reflected a 4.5% decrease compared to the same period last year and the fourth year-over-year decrease this year.

Though, not all was negative. The number of active listings decreased for the second consecutive month to 1,539. That number reflects just 14% more listings compared to July 2007, the smallest year-over-year percentage we’ve seen in over two years, and a significant reduction since January’s 65% difference in actives.

Relative to last year, which was a seller’s market, there aren’t that many more properties on the market, yet we are considered to be in a buyer’s market. That distinction, though, is largely based on the fact that so few buyers are actively purchasing condos. The number of properties going under contract fell to just 202 units, or 19.5% fewer than June and 46.8% fewer compared to July 2007.

The condo inventory supply rate (absorption rate) rose to 7.6 months based on pending sales, the highest level spanning back several years. Downtown, MLS area 701, and West Seattle, MLS area 140, led the city with 9.8 and 9.9 months, respectively. Yet, Downtown’s high rate wasn’t due to rising inventory (same number of actives in both 2007 and 2008) but due to the number of properties purchased, 83 in July 2007 compared to just 33 last month. Based on my observations so far this month I expect more of the same.

Whether this is good or bad news depends on if you’re a seller or a potential condo buyer. If you’re a seller you’re faced with a shrinking pool of interested buyers and volatile prices. Though, if you need to sell, are willing to accept the current market environment and price your property accordingly, you shouldn’t have difficulty selling.

If you’re a buyer, you have the benefit of downward pricing trends and less competition from other buyers, yet there isn’t a fire sale on condos in the city. Additionally, buyers can now take advantage of a first time buyers tax credit. The credit is based on the purchase price and maxes out at $7,500, subject to eligibility requirements.

There is a potential that the number of active listings may continue to drop as seller’s pull their properties off the market, many renting them out instead, while waiting for the housing environment to improve. And, that may help to normalize the market.

June exhibited a solid month for Seattle’s condo market. Though unchanged from May, the citywide condo median price of $320,000 reflected a 6.7% increase over June of last year, marking the second consecutive year-over-year increase since December. In fact, most neighborhoods recognized value appreciation last month.

Read the full story

May’s condo market performance reflected an improvement over April marking the second year-over-year increase in median price this year. At $320,000, Seattle’s condo median price increased 2.4% over April and 4.1% over May of last year.

Read the full story

February performance results expressed the buoyancy of Seattle’s condo market. As we’d expect moving towards Spring the market is beginning to pickup with increases in the number of sales, closings and median price. Compared to January there was a 20.7% increase in the number of properties going under contract (pendings), a sign of buyer’s confidence in the market. As a result, the median price showed an upward movement of 3.1% over January to $314,500.

Looking at year over year figures we get a different picture. In comparison to the same period last year, the market reflected a slight decrease in citywide median price by .9%, the second consecutive month that YoY median price decreased. Most areas of the city underperformed compared to last year’s figures as well.

Read the full story

Seattle’s condo market continues to exhibit a state of flux. Last month the condo median price dropped .49% to $305,000 compared to January 2007, the first year-over-year decrease in over 24+ months. Compared to December, the median price was down 4.7%, though typically the median price in January is lower than December.

As anticipated, the start of the new year brought sellers and buyers out of their holiday slumber. Sellers added 535 new listings in January bringing the total number of active listings to 1,298, a 15% increase over December. On the other hand, properties continue to sell well. The number of condos going under contract last month rose 8% over December but dropped 22% compared to the same period last year.

Read the full story

The NWMLS just released its Brokers Report on 2007 home sales. Here are some highlights pertaining to condos:

• The NWMLS reported $32.3 billion in total home sales in its 19 county territory. Just about one-half of that dollar volume, $16.5 billion, was realized in King County. And, of the $16.5 billion, $13.4 billion were single family homes sales and $3.1 billion were condominiums sales.
• Condominium prices jumped 10.6 percent from 2006 to 2007. The 19 county area-wide median price rose from $235,000 to $260,000.
• King County’s condo median price ($285,400) was up 12.35% over the prior year, but the number of units sold (9,420) was down 2.83% from 2006.
• NWMLS members sold more than 15,000 condominiums, about the same number as the previous year (15,038 in 2007 compared to 15,318 in 2006).
• 62.6% of all condo sales in the NWMLS territory were in King County.
• Condos represented 28.5% of all residential sales in King County.
• 1,115 condos sold for more than $500,000 of which 125 were priced over $1 million.
• Of the 1,115 condos high-end condos, 507 were in Seattle with 201 in Belltown alone.

The NWMLS press release can be viewed here. Note, some of the information above was obtained from the actual report which may not be reflected in the press release.

As a follow-up to the December Market Update post I’ve included charts comparing the monthly median condo price of various neighborhoods for 2006 and 2007 by MLS area. I also calculated the annual median price appreciation rate based on closed sales for 2007.

For the year, Downtown, Capitol Hill and West Seattle underperformed with single-digit appreciation rates. West Seattle was particularly disappointing, eeking out a 1% increase in value. However, the North Seattle neighborhoods and Queen Anne performed exceptionally well.

Capitol Hill / Madison Park / Central - MLS Area 390
Annual Median Price Appreciation 2007: 3.1%

Read the full story

Lets start with the bad news first. The median price for Seattle condos fell for the third consecutive month; it now stands at $305,000, a 3.3% decrease compared to October. And, as we’d expect with cyclical patterns, fewer condos were sold last month, though pendings transactions remained unchanged.

The good news? Overall, Seattle’s condo market performed very well in November. While the month over month figures show a downward trend in the median price, compared to a year ago, median price rose 2.5%, the 11th consecutive month that 2007 sale prices have outpaced 2006. Additionally, the number of closed sales increased 15.3% over the prior year. Buyers are still buying and sellers are still experiencing value appreciation.

Read the full story