We did not get the landslide of new listing this week and I had expected we would. We saw 7 more houses come on the market this week compared to last week, and 9 fewer condos. The total number of houses and condos available for sale has climbed again this week.
Other interesting thing to note is that we have 969 condos for sale. The last time we had this many condos for sale was 2011. Oye! We still don’t see as many condos in the 90+ days on market as we did last year, so at least over inventory is turning over in a reasonable amount of time. We may still have a few more weeks of increasing number of total properties for sale before the seasonal slowing starts.
For all of 2015, 2016 and 2017, each month I kept saying “it is another record high price for Seattle houses”. And then in 2018, prices took a steep drop, and we have stayed under peak pricing since. Until now. The median sales price for a single family house in the City of Seattle is now $817,000. That breaks the peak price of $802,000 in May 2018.
What is driving this crazy price increase? Three things:
People want BIGGER houses and bigger lots. Until COVID, we had continue to see a buyer preference for smaller homes in more dense and walkable neighborhoods. But with all this extra time at home, buyer demand has shifted to wanting more rooms and more outdoor space.
Low inventory. With new construction being put on a 3 month delay due to COVID and the outrageously expensive cost of goods and lack of skilled labor, new homes are not being completed as expected. And folks don’t really want move in the middle of all this, and they don’t want to have to be buyers in this competitive market, so we have some would-be sellers opting to stay in their home instead of sell.
Crazy low interest rates. Money has never been this cheap in my lifetime, and it is helping prop up buyers spending power so they can afford these rapidly rising prices.
Let’s look at all the data:
Prices are up across the board. Condos are still below their peak price, but this is the highest the condo price has been since October 2018.
Let’s talk about condos:
Condos sold for an average of 103% of list price?!!?!?! Haven’t I been telling you all year how soft the condo market is, and how hard it is to sell a condo? Well, that still rings true if you have a small condo, or a condo close to downtown. What happened this month was REALLY unusual in 2 ways:
One condo sold for $6M, one for $5.25M, one for $2.7M and one for $2.5M. That really skews pricing when we only had 235 condos sell.
And the condos that did sell were HUGE! Over the past 3 years, really consistently, the average size of sold condos is 950 square feet. This month it was 1,536 square feet!!! We also had a disproportionately high number of 3 bedroom condos sell (8% of all condos compared to a typical 5%) and 10% decline in the number of studios and one bedroom condos that sold.
Let’s talk about houses:
Not only did the median sales price jump up $37,000 in one month, we also saw the AVERAGE sales price jump $51,000 compared to last month. That is a prime indicator that not only are houses getting more expensive, but the bigger and more expensive houses are selling at a high rate than normal. Seattle had 47 homes priced over $2M sell in August, and 25 of those were over $3M. We saw a lot more houses sell this year than last year, but that is likely due to the delay COVID caused in the usual Spring rush. Faster faster, homes sold in just 16 days and are still selling for 102% of list price. Although things do seem to be slowing down. The popularity of the offer review date continues to decline week over week. Speaking of decline, this was the first week since mid February that we saw a decline in total number of homes for sale. More signs of us starting to wind down the peak home buying season.
We are still seeing a lot of new listings this week, but we may be on the decline officially for 2020.
This is the second week in a row that we have had fewer new listings for houses. Typically, we start to see fewer new listings starting late July, but since we had a delayed peak season (thanks COVID!), we are doing everything later this year. We also saw fewer condos come on the market this week when compared to last week. But I don’t think the peak has hit yet for condos.
When it comes to the offer review date (one way to measure how competitive the market is), we are seeing the prevalence of the offer review date drop just a bit. Houses are seeing about 40% of new listings come on the market with an offer review date, and of those homes about 2/3 of them go pending on the offer review date. Condos are a different story. only 13% of condos hit the market with an offer review date, and of those that do have the offer review date, only 1/3 of them go pending on the date.
The Big News is that we continue to see more total homes and condos for sale:
The market is still absorbing about 2/3 of all the new house listing each week, with our number of total houses for sale creeping up by about 15 houses per week, even though we are seeing about 200 new listing each week,
Condos continue to add inventory to an already over saturated market. Last week had 150 new condos come on the market, and only 57 go pending. We are adding roughly 40 total condos each week to the total number of condos for sale. We have not had this many condos for sale since I started tracking this weekly data 5 years ago:
Houses are still selling like hot-cakes, and condos continue to be challenging to sell. The homes that officially sold and closed in the past two weeks have sold, on average, for 105% of list price and condos are selling for an average of 98% of list price. Quite the drastic difference!