The Seattle Condo Blog | Seattle Condos and Lofts

Seattle’s condo market reflected robust activity through the first quarter of 2012 (January – March). Compared to first quarter 2011, closed condo sales increased 9.2% to 404 units, though the number of closed sales dipped slightly from the fourth quarter 2011 (October – December).

The citywide median sales price for the first quarter 2012 slid 23.5% to $215,000 compared to the same period last year and 8.5% from the prior quarter.

- South and Northeast Seattle reflected highest increase in closed sales, doubling the number of units sold.

- Queen Anne / Magnolia and the downtown area realized fewer sales in the quarter compared to last year.

- South Seattle was the only area in the city that exhibited improvement in the median sales price, while Queen Anne / Magnolia had the largest decline.

However, the market has changed rather significantly over the past 6-8 weeks and the initial numbers for April are showing a considerable improvement over the first quarter figures shown here.

Source: NWMLS. All figures were independently compiled by SeattleCondosAndLofts.com and were not published by the Northwest Multiple Listing Service.

The Seattle condo market tightened in March with increased unit sales combined with a diminishing condo inventory and improving median sale prices.

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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With one exception, the metrics reflected a very active and forward moving condo market in February. If you’re a condo buyer, it was a pleasant exception. The median Seattle condo sale price fell to $202,000, a 35.41% drop from last February and a one-month slide of 2.9%. The market was very close to breaking a nine-year median price record. As a comparison, single family home sale prices in Seattle increased 2.82% in February.

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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© Seattle Condos And Lofts

It goes without saying that 2011 was not a banner year for Seattle condo values. The citywide median condo sales price dipped 11.6% from 2010 to $252,000. Distressed properties, which accounted for 29% of the condos sold last year, were a significant factor in lowering Seattle condo sale prices.

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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© Seattle Condos And Lofts
Cover photo by Christian Terboven available under a Creative Commons Attribution 2.0 commercial license.

January’s market figures were a mixed bag with that big red line in the graph below looking rather ominous. Seattle’s median condo sales price plummeted 28.64% last month to $208,000 compared to last January. It also reflected a one-month dip of 11.1% from December. Granted, it’s just one month and could completely reverse in February. However, it is significant; it’s the lowest citywide median condo sale price since February 2003, a 9-year low.

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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Overall, 2011 was a good year for the Seattle condominium market. Although sale prices fluctuated, unit sales activity was brisk even without a tax credit inducement or an auction to boost sales this past year.

On the new construction front, 2011 brought good tidings to developers, marketers and banks. Several developments sold out including the Gallery in Belltown, Enso in South Lake Union, Trace North and Trace Lofts on Capitol Hill. Other buildings are close to selling out, surpassing the 75% sold mark – 1521 Second, Hjarta, Marselle, 1111 E Pike and the Daneille – with Olive 8 not far behind. Escala reached the 50% milestone gaining Fannie Mae approval status, while on the Eastside, Bellevue Towers closed 144 units last year.

On the resale side, fewer owners took to selling last year, many perhaps, taking advantage of the hot rental market or waiting it out for a recovery before attempting to sell. The available listed inventory supply dropped approximately 30% from 2010 levels, which resulted in quite a few multiple offer situations…something we haven’t seen in a while.

Buyers, who may have been encouraged by the job outlook in the Seattle area (e.g. tech and manufacturing sectors), historic low mortgage interest rates and declining prices, kept Seattle’s condo market rolling along.

2011 By The Numbers

Condo unit sales remained relatively even with 2010 with just 43 fewer units, 1,783 to 1,740, or a decrease of 2.4%. The largest dip was in South Seattle with -14.0%. West Seattle unit sales decreased 11.4%, Capitol Hill was down 9.3% and Northeast Seattle had 5.4% fewer sales.

One the other hand, several areas saw increased unit sales over 2010 – Queen Anne & Magnolia (+7.8%), downtown/Belltown (+4.1%) and Northwest Seattle (+0.7%) – neighborhoods with a high density of condominiums.

Buyers bought bigger and cheaper in 2011. The citywide median condo sales price declined 11.5% to $252,000. Bucking that trend were downtown/Belltown and West Seattle, which saw median sale prices increase 4.7% and 0.8%, respectively for the year. The total aggregate dollar value of condos sold in Seattle dropped 8.2% to $596,022,458.

The average condo unit that sold in 2010 was a one-bedroom at 946 square feet. In 2011, the average unit sold was a 991 square foot two-bedroom. Buyers got more for less.

For sellers, besides seeing sale prices fall, it also took much longer to sell a condo in Seattle last year. The average cumulative days on market rose 12.4% to 136 days. Pricing, property condition, location and whether or not it was a distressed property greatly influenced the time it took to sell a property.

Distressed properties currently account for 29.0% of the available condos for sale. Of that, short sales (pre-foreclosure) make up 9.9% and bank-owned (foreclosed) make up 19.1% of Seattle’s condominium inventory.

The sold condo figures last year reflected a similar overall split between distressed and equity properties but with bank-owned and short sales switching places. Equity sales accounted for 70.9% of the condos sold in 2011, while 18.9% were bank-owned and 10.2% were successful short sales. The numbers bear out the fact that short sales, which make up 1 in 5 properties on the market only account for 1 in 10 closed sales, do not have the same appeal as equity or bank-owned properties and have a high purchase failure rate.

Moving ahead through 2012…personally, I think we’ll see more of the same this year. I expect sales to remain brisk with continued pressure on values and further reduction of inventory. Even though supply will shrink I’m not betting that prices will stabilize or recover citywide, not with the significant number of distressed owners and the shadow inventory. However, it is not inconceivable that prices could improve in certain neighborhoods or price tiers.

Source: NWMLS database. Some figures were compiled independently and were not published by the Northwest Multiple Listing Service.
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Seattle’s condo market experienced more of the same in December…increased unit sales volume and lower selling prices. The median sold condo price in December 2011 slid 2.75% from November to $234,000, which also reflected a year-over-year dip of 6.77%, the slimmest in 7 months.

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

Despite the year-over-year median sales price declining for another month, November was actually a good month for Seattle’s condo market – robust sales, shrinking inventory and appealing condo values.

Compared to last November, the median sales price dipped 8.92%. On the surface, that’s not good (unless you’re a buyer), however, it was the smallest YOY decline in six months and the $240,000 median sales price reflected a one-month increase of 6.9%.

The number of properties going under contract dipped from the prior month, which is normal given the seasonal slow down in November and December. Compared to last November, though, the number of pending transactions increased 21.9%. Presently, distressed properties account for nearly 57% of the pendings (41.6% short sales and 15.2% bank-owned).

The one figure that stood out was the number of closed sales, which increased an amazing 43.9% over November of last year. That’s a significant improvement and shows buyers confidence in Seattle’s condo market…or at least they’re seeing value in the current price levels. Of the closings last month, 12% were short sales, 24% were bank-owned and 64% were equity sales.

King County condo sales were even more impressive with a 69.9% increase of closed condo sales over November 2010.

Seattle’s condo inventory continued to constrict with just 824 condo units listed in the NWMLS for sale in November, a 68-month low. That reflected a one-year decline of 31.2% and a one-month reduction of 9.5%. Granted, we expect inventory to drop during the holiday season. However, the current inventory level is reminiscent of late 2006, just as the construction boom took off. While that may still seem high to some, to provide perspective, at the height of the glut there were around 1,900 units available.

The improved sales volume, combined with shrinking inventory, kept the citywide inventory supply rate (absorption rate) in a neutral, or balanced, market environment. That is, neither a seller’s market nor a buyer’s market. The supply rate varies by neighborhood and price point. Presently, inventory for in-city condos under $200,000 is fairly tight, while higher-price points and outlying neighborhoods tend to have excess inventory.

If inventory continues to drop, which it likely will through 2012 and 2013 even with the shadow inventory, we may return to pre-2006 levels by 2013…back to a seller’s market based on the current rate of sales and lack of any new projects in the pipeline.

Source: NWMLS. Some figures were not compiled or published by the Northwest Multiple Listing Service.

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In October, Seattle’s condo market reflected another month of strong sales velocity, constricting inventory and falling condo prices.

The median Seattle condo sales price in October fell to $226,000, a 9.6% drop from last October and a one-month slide of 5.8%. That’s the lowest point the median has been since March 2004…prior to the construction boom. Only West Seattle realized an increase in median price, up 12.8% over last year.

Whether that’s good or grim depends on whether you’re a condo owner or a buyer. We tend to think of declining home values as negative, and if you own a condo, it can be financially devastating. Yet, for those seeking homeownership, the current marketplace offers opportunity.

Seattle condo sales improved with the number of properties going under contract rising 56.3% over last October to 211 units, and a one-month gain of 4.5% over September. Pending transactions increased citywide with North Seattle (north of the ship canal) and West Seattle more than doubling the number of pendings in October.

The 137 closed condo transactions reflected a 10.5% increase from last October and were unchanged from September. With the exception of Capitol Hill, the number of closed sales increased citywide. Queen Anne / Magnolia reflected the biggest jump increasing 75% year-over-year.

The number of available Seattle condos for sale reduced significantly, down 32.5% to 911 units compared to the same period last year. That’s the fewest since February 2007. Active listings will continue to decline through the end of the year.

Seattle’s condominium inventory supply rate – a measure of how long the current inventory will take to sell based on recently sales volume – dropped to an 18-month low of 4.3 months based on pending transactions. The rate based on closed transactions also improved to 6.6 months.

The inventory supply rate suggests Seattle is in a neutral market, neither a buyer’s nor seller’s market. However, that’s not a completely accurate picture as Seattle’s real estate market is dependent on locality and price point. For example, Northwest Seattle and Belltown reflect a seller’s-to-neutral market while West Seattle is a buyer’s market. Properties under $250,000 represented 54% of closed sales last month but only 45% of the available inventory creating scarcity and competition among lower priced condos.

Through October 31, 2011 there were 1,459 closed condo sales in Seattle with a total dollar volume of $513,065,628 and a median sales price of $257,000, per recorded NWMLS sales (does not include foreclosure, auction and private sales). During the same period in 2010 there were 1,563 closed sales with a total dollar volume of $569,856,374 and a median sales price of $286,000. Through the first 10-months the citywide median sales price is off by 10.1% from the same period last year.

Source: NWMLS. Some statistics were independently calculated using NWMLS data.

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September’s Seattle condo market results continued the trend we’ve seen throughout the year – consistent sales volume from falling prices and low mortgage interest rates.

The median Seattle condo sales price took a big hit in September, dropping to $240,000, a decline of 19.19% compared the same period last year and 2.4% from August..the lowest point since October 2004. In spite of that, median condo prices rose in two areas last month – Queen Anne and Northeast Seattle. Although the year-over-year figures have shown considerable decline, citywide median prices have remained relatively flat over the past five months.

Seattle condo sales continued to do well reflected by a 34.7% year-over-year increase in pending transactions (202). Lower condo prices and historic low interest rates have created opportunities for home buyers and investors. Currently, 15% of the condos for sale in Seattle are priced less than $150,000 and 40 units are priced under $100,000.

The number of closed sales (137) reflected a 20.3% one-month drop, but still outpaced last September closings by 4.6%.

The number of active condo listings for sale continued to reduce, down to 983 properties last month, inching the market back to pre-boom inventory levels.

With fewer available condos and a stable sales volume, the Seattle condo inventory supply rate (absorption rate) dipped slightly to 4.9 months based on pendings, though it increased to 7.2 months based on closed sales. Both methods indicate the city continues to reflect neutral/balanced market conditions, presently.

Heading into fall, the seasonal market slow down will reflect fewer listings, reduced sales and likely lower prices, still. One thing I noticed in the past month is the increasing number of Fannie Mae foreclosed condos coming on the market. This will place even greater pressure on Seattle condo values.