The figures for condos in Seattle came in from the Northwest Multiple Listing Service for the 2nd quarter 2007 with some interesting signs.
Some takeaways from my point of view:
- We are still seeing a fairly balanced market showing stable pricing and healthy sales activity.
- Looking at specific neighborhoods or buildings, buyers looking for highly sought after neighborhoods or buildings will still pay top dollar but may not have to worry as much about escalation clauses and multiple offer situations.
- Looking at the overall Seattle numbers, buyers looking for more common or less popular properties will have more time to prepare their offers and will likely have some wiggle room if they find the list price too aggressive.
- June year-over-year growth in new listings added to the market (a key driver in holding or even lowering prices) was far smaller than April and May year-over-year growth. This suggests prices as they are now may remain stable or appreciate mildly for the foreseeable future.
The Seattle condo market seems to be expanding with both more buyers and sellers; we are seeing the volume of both new listings and closed sales outperforming first half of 2006. By end of June 2007, the total active (existing and new) listings on the market was 1,332 (671 Resale condominiums + 661 new construction condominiums), just about double the first half of 2006 largely due to all the new projects launched this year. Sold listings showed a more modest increase of a little over 25% from 2006 to 2007 growing from 1472 to 1853. This should not be too worrisome given the extreme seller power we saw in the first half of 2006. (See the chart below for Belltown condo pricing over the last 5 years courtesy of Zillow).
Back to the NWMLS data, approximately 40% of the new construction projects are found in Belltown/Downtown Seattle area. April 2007 showed the highest increase in additions to inventory -- 56% more added to the market versus April 2006. June 2007 showed a smaller 33% increase in new inventory compared to June 2006 which might indicate the beginnings of a soft landing for the volume of new units hitting the market. (Translation: unless new listings surge in July and August, nervous buyers waiting on the sidelines for major price reductions may decide it's time to pull the trigger.)
The amount of inventory closed on a monthly basis is more modest than the amount of inventory coming on the market on a monthly basis (although May 2007 saw a ~70% increase in closed sales compared to May 2006). This would further confirm the market's shift towards a balanced status with buyers who are open to less popular neighborhoods / buildings gaining the upper hand and buyers looking for popular condos in fair fight.
Ultimately, the Seattle condo market continues to buck the national trend with more purchases this year than last year and growth in inventory appearing to stabilize. I'll probably do an article in the next few weeks about why I think this is the case. Stay tuned.
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