Market Watch – August 2016

The wait is OVER!  Let’s take a look the Seattle real estate market activity in August 2016.

july-16-market-watch

Prefer to watch the news instead of read it?  Watch the market recap video here.

A look at Single-Family Homes:
  • Average sales price = $594,550
  • Average Days on Market = 15
  • Homes sold for 104% of list price
  • 735 homes sold in Seattle in August

Now, let’s talk about how those numbers are interesting.  Our average sales price is up only 1% from July and 9% from August 2015.  That is a noticeable change.  Prices month to month have been bouncing up and down all year, but this is the first time we have seen less than 10% increase in prices year over year.

At 15 days on the market, we are also seeing a slight slowing of the market.  Also, from an observational standpoint, I am seeing more and more homes not selling by the offer review date, and many homes are coming on the market without an offer review date.  This is a sign of both increased inventory and a decrease in the wide-spread frenzy of multiple offers.

Homes are still selling for an average of 104% of list price.  This is down from the 106% and 107% of the Spring months, and is also down from 105% last August.  My prediction is that this number will continue to creep down towards 100% as we see more inventory and a cooling in prices over the Fall and Winter months.

The most interesting metric this month is the number of homes sold.  We sold 735 homes last month, and that is an increase of 12% from July 2016 and a 14% increase from August 2015.   When the volume of homes sold increases, it can be a sign that the number of sellers is increasing to match the number of available buyers.  The more homes for sale, the more likely we are headed for a more balanced market.

A Look at Condos:
  • Average sales price = $445,483
  • Average Days on Market = 16
  • Condos sold for 102% of list price
  • 318 condos sold in Seattle in August

We are seeing a noticeable drop in average sales price for condos.  The average sold price was down 4% from July 2016 and up only 2% from August 2015.  Condo prices have been a real roller coaster over the past 22 months:

condo-prices

We are also seeing an increase in days on the market.  Last month we had an average of 16 days on the market, a jump from the 13 days of June and July.  In alignment with the behavior of the single family market, many condos are coming on the market with no offer review dates, and many of the condos with set offer review dates are NOT selling during that time.

The total number of condos selling is down.  We sold 8% less condos in August than we did in July, and 6% less than in August of 2015.   With the recent release and sales of Insignia and a few other smaller new condo projects, we may have helped to ease the backlog of buyers.  With less pent up demand, we will continue to see softening prices and longer days on the market.

In conclusion:

Well, once again, I don’t share the same message that many of my peers and the NWMLS does.  The NWMLS expects inventory to drop and prices to surge during the final quarter of 2016.   My prediction is that there is a storm brewing.  I expect more and more single family homes to come on the market, and that the days on market will increase, while average prices stay flat or have just modest increases.  Election years historically cause a dramatic drop in both sales activity and sales prices, and this election may have a noticeable impact on our housing market.

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