The past few months have been crazy busy for us Seattle Divas. Now it’s October, it’s sunny, and the recession seems way behind us. The market seems to be well on its way to recovery. But- is everything really coming up rose and daffodils in Seattle? Anecdotes about multiple offers are fun to hear; houses flying off the market in 2 hours, sellers getting 15 offers, buyers paying $100K over asking price. These stories might be true but this is not happening with every house, in every price point and in every hood. So the Divas think it is time to talk real stats. What is really going on out there in real estate land? Let’s check out the numbers!
Homes They Are a Movin’
The best way to see where we are is to see where we have been. Think back to that Â warm, sunny, sleepy August of 2011. Last year in AugustÂ only 22% of homes on the market were pending, a very small number – even for a sleepy Seattle summer. This year in August 41% of active listings were pending. Now this huge jump is slightly deceptive. The actual number of pending sales was only up by 90Â but that is still a solid increase. Part of this huge increase in pending sales/ actives is due to the huge drop in inventory. We have all heard talk of low inventory but the real numbers are quite astonishing. Last August there were 3,459 active homes for sale in the Seattle market. This year there were only 2,111. That’s about aÂ 40% drop in inventory in one year! No wonder we have a mini housing frenzy.
Demand is on the Rise
Along with the decrease in inventory – we have seen a steady rise in demand. Why? My optimistic nature says that it’s because many of us are basking in the glow of recovery. But – let’s be serious – loans are almost free. I mean 3.49% interest on a 30 year fixed loan with 10% down – out of control! If you can qualify for a loan and afford to buy Â – now is the time my friends. Now is the time! Thus the cycle starts. Buyers hop in the market faster than sellers can get ready to sell or builders can get permits/land/money to build and BOOM – you have drastic diminishing supply. Where last year we had a 5 month supply of active homes, we now have a 2 months supply.Â In hot Seattle hoods like Phinney Ridge pending sales and solds homes have out been out pacing active listings since March. Low supply and high demand also means buyers must move faster to make decisions which leads to homes coming on and off the market faster. And the cycle goes on until supply can catch up.
Decreasing Inventory + Rising Demand = Appreciation
I know all you homeowners and soon-to-be homeowners love that word – especially since it has been almost four years since I’ve been able to say it. Appreciation. In one year we have seen aÂ slight increase in median prices of Â about 4%. According to the Standard and Poors S&P/ Case-Shiller Home Price Indices – we seen a 3.1% increase in the Seattle area. Not anything to write home about but up is better than down. If we break that down into key Seattle neighborhoods – the price increases are even higher. For instance – single family home values in Capitol Hill are up almost by 8% since August of 2011. ThenÂ you have areas like Bellevue where even though demand and inventory haven’t changes quite as drastically – we’ve seen a price increase of over 10%.
From the perspective of this optimistic Diva, I would say everything is coming up roses in Seattle. At least right now. If you would like to know more about your home value or how the market is shaping up in your neighborhood – contact us today. Â Give us a call or drop us an email. We’ve love to chat numbers with you and your family. And – the coffee is on us!