December 2008 Condo Market Update
Bucking conventional wisdom December results turned out better than had been prognosticated. The citywide condo median price rose 6.1% over November to $321,500, the second best (highest) monthly median price amount recorded for 2008. Additionally, December reversed a 5-month decline in the year-over-year median price figure ever so slightly, increasing 0.47% over December 2007.
Interestingly, sales in West Seattle and Queen Anne contributed to the bump in value last month. With new construction projects closing in downtown I would have expected better results but downtown’s median price actually fell below both November 2008 and last December’s levels.
The number of active MLS listings continued to decline, down to 1,128 properties in December, which incidentally was the fewest per month experienced thoughout last year. Unfortunately, the number of closed sales also declined. Citywide, there were only 97 condo sales that closed in December. On the other hand, the number of pending transactions improved as more properties went under contract in December than in November even with the holidays and a faltering economy. Compared to December 2007 the number of pending transactions was down 29.3%. That’s an improvement as November and October pending transactions were below as much as 60% compared to 2007.
The inventory supply rate, or absorption rate, declined last month to 9.3 months based on pending transactions. While that still keeps Seattle in a strong buyers market some areas such as NE Seattle reflect normal market conditions given its 6.4 month supply rate.
Though our supply/absorption rate remains high, Seattle does not actually have a glut of properties…the available inventory supply has been declining since May 2008 and is now at its lowest level since April 2007. Additionally, aside from Escala, there will be no new major condo developments delivered in the greater downtown area until 2012 at the earliest.
Going forward, there are certainly a number of challenges facing Seattle’s housing market. Yet, from what we’ve experienced so far, the new year has generated a surprising level of activity from both buyers and sellers. Better pricing and continued low interest rates are providing buyers with more value. Plus, the $7,500 first-time home buyer’s credit is still available.
