SEATTLE HOUSING MARKET UPDATE
Last month I reported that the median price of a Seattle home reached a NEW ALL TIME RECORD. The median price for July was $525,000.
In August 2014 the median price of a Seattle home took a SUBSTANTIAL drop to $475,000.
SO did home prices drop 10% in from July to August?
Please also note that the median price for a Seattle home in June 2014 was $489,000. June Seattle median home price = $490,000 July Seattle median home price = $525,000 August Seattle median home price = $475,000
So how does the median price of a Seattle home increase by $35,000 or over 7% in just one month?? And then drop by $50,000 (10%) the next month?
ANSWER = This is a statistical anomaly. Every now and then you will see big jumps month over month in Seattle median price or Seattle average prices only to come back closer to the mean the following month.
In this case JULY 2014 is the OUTLIER that we should not pay close attention to.
Instead let’s focus on August 2013 median price of $450,000 and the August 2014 median price of $475,000 which means the median price of a Seattle home has increased 6% year over year.
SO WHAT HAPPENED TO SEATTLE REAL ESTATE IN AUGUST?
Well, August was another great month for sellers.
In August there were 1,077 ACTIVE listings in the Seattle real estate market.
In August 758 homes went PENDING.
Which means that 1 out of every 1.4 homes on the market went pending in August.
This 1.4 ratio implies a 1.4 month supply of inventory.
The 1.4 ratio is a strong SELLER’S MARKET INDICATOR.
Any ratio under 3.0 is a seller’s market indicator.
Any ratio between 3.0 and 6.0 is a neutral market indicator.
Any ratio over 6.0 is a buyer’s market indicator.
The story remains LACK OF INVENTORY.
The 1,077 ACTIVE listings is 46% under our 10 year average for August inventory.
The August ten year moving average for inventory is 1,979 ACTIVE listings.
Also please note that August was the 7th month in a row that the AVERAGE list price vs SALES price was 100% or more.
In the month of August the list price vs sales price was 100%.
WHAT TO EXPECT IN SEPTEMBER?
I expect September to be a stronger month than August.
This is because many agents and buyers vacation in August.
The real estate agents that were on vacation in August come back to work in September and buyers come back from their vacation.
Interest rates which are at historic low rates of approximately 4% are very attractive to buyers.
And the Seattle economy is very strong and diverse with unemployment levels hovering around 4%.
The activity in my office has been very strong since Labor Day (lots of activity and buzz in the office).
Therefore due to all of the above factors I expect September to be stronger than August.
PLEASE VIEW THE GRAPH AND DATA BELOW
If you have any questions or if I can be of any assistance please contact me.