|Real Estate Market Overview|
Residential real estate market prices in our Greater Seattle & Eastside area continue to be stable. The improved availability of jumbo financing for higher-end homes appears to be starting to have an effect, as sales in the top 10% range are showing an uptick.
Monthly sales rates (number of transactions) are significantly lower that at the same time last year. However, the number of new listings coming on the market has slowed proportionately, so our Months Supply inventory number actually shows a slight improvement. That is good - if the supply/demand action is fairly balanced, then neither Buyers nor Sellers have to compete with each other, and prices tend to stay stable.
The condominium sales rate is still significantly below a year ago, but the median price is holding steady - still right in the stable range we've been in for the past 16 months. Condominium inventory dropped significantly, helping our Months Supply rating, although it is still a bit on the high side.
|Current Market Statistics|
The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/Bellevue/King County area over the most recent 3+ years, for single-family homes and for condominiums. You can see clearly in the thumbnails and in the main charts the big drop in Closed Sales in July, which represents the end of the tax-credit boost. So now we're done with the tax credit, and I won't mention it again - we are back to normal. But it is a lower-volume normal, continuing to reflect economic uncertainty as well as tightened lending standards.
Months Supply has moved up to 8 months for single family homes, which is getting pretty high in the balanced-market range, but inventory is starting to fall as we head in to the later part of the season. We'll see if they can stay in balance.
Condominium Sales perked up a bit, and new listings slowed up enough that total Inventory finally started dropping. We are back under 12-Months Supply on condominiums, less far into Buyer's Market territory, and maybe condominium prices can continue to hold steady.
Here's the charts for the current stats through August: (Required disclaimer: Statistics and graphs not compiled, reviewed or verified by the Northwest Multiple Listing Service)
The Fall-Out Ratio charts are looking more normal now - they are intended to show something about how many transactions go into escrow with a signed contract but never come out with a funded and closed sale. The normal fall-out rate for years was about 10%. Then in '08 and '09 we started seeing a dramatic rise in the number of transaction that failed to complete or stayed an unusually long time in escrow. Often that was attributed to short sales which couldn't get prompt lender approval, and the 'new normal' was running 20 - 30% fallout. Last month showed a precipitous drop in the index, but it was an artifact of a sharply falling sales rate as the tax credit expired, because I use a rolling two-month average. Think of it as a data speed bump J
In last months newsletter, I promised I would figure out the oddity in the last few month's statistics in Days on Market, where the index jumped up dramatically in May as the new MLS system went in. I regret to inform you that the new numbers are correct, and it really is taking that long on the average for a home to sell. Unfortunately it seems that as houses started taking longer and longer to sell, some real estate agents became more and more adept at gaming the MLS system's Cumulative Days on Market (CDOM) counter, and the data got skewed. The new system is much better at making sure CDOM is correct, thus the jump.
That high average CDOM number includes a lot of houses where the owner is not willing to sell at current fair-market price, and just hangs there for a long time hoping the 'right' (but not bright) buyer will come along. My suggestion is that if you need to sell, price it right, and if you don't need to sell, don't.
From now on I'll try not to get so buried in statistics issues, but I figured I should explain for you these odd things that show up in my reports from time to time.
By the way, all of our newsletter articles are posted on our Greater Seattle Homes blog. So if you want to go back and check a previous one again, just click here.
Managing Broker Veritus Realty Group (206) 850-3507