Home Prices Up 11% from 2005
2005 and the first 6 months of 2006 has seen the Seattle Real Estate market continue to be very strong. As the Real Estate Market nationally has seen substantial corrections, Seattle has seen an over 11% increase in average selling price from the fist half of 2005 to the same period in 2006 in most close-in Seattle neighborhoods.
We thoroughly analyze the sales figures every month for the Magnolia neighborhood of Seattle and those numbers are pretty typical for most of the other in-city neighborhood that we work. It would be far too time consuming to analyze all the neighborhoods because of the depth we get into with our analysis. When the MLS shows the sales figures for a home that is sold it only accounts for the last List Price the home had before it sold. By only using this figure we may not get an accurate representation of that particular sale. We go back and search the "history" of each property sold to find out the exact sales history so we can compute the exact % of asking price vs. sales price. For example: If a home is Listed on March 1 for $800,000 but then has a price reduction on March 25 to $750,000 and then another price reduction on April 15 to $699,000 and sells on April 30 for $675,000 the MLS will show that the property was listed for $699,000 and sold for $675,000 or 96.5% of asking. The home actually sold however for 84.3% of the original list price. Then if a listing "expires" or is "canceled" and then re-listed the Days on Market (DOM) may not reflect the actual total time the home was on the market, thus giving us inaccurate statistic's. Some might say that these things don't occur enough times to really impact the average numbers, but they do happen enough to actually impact the averages.
We just completed doing a 18 month running average for single family homes on Magnolia from January 1, 2005 to June 30, 2006 and the numbers are quite interesting. The average List Price on Magnolia for the first half of 2005 was $699, 723 and the average List Price for the same period in 2006 was $746,953, an increase of about $70,000. The average Sold Price for homes for the first half of 2005 was $639,825 and the average Sold Price was $711,211 for the same period in 2006, for a $71,386 increase in Sold Prices or a 11% increase from 2005. There has been an interesting trend however with average days on market (DOM) during this strong sellers market. From January 2005 through June 2005 the average DOM was 36 days. Then it went to 27 DOM from July 05 to the end of 2005. Now for the first 6 months of 2006 the average DOM has increased to 54 days. And the total number of "Price Reductions" has increased over the same time period as well. Could all this be indicating the start of a market correction here in Seattle? We don't think so and here is why. A majority of price reduction have been in the over 1 million market and we are seeing a substantial increase in inventories in that market segment as well. In May 2006 there were only 6 properties for sale on Magnolia in the over 1 million range. As of mid July 2006 there are 17 Active Listing over 1 million, a substantial increase in inventory, but there are also 9 properties over 1 million that are Pending. 3 months ago the sales ratio between Active Listings and Pending/Sold Listings was 85% and now it's about 53%.
So where is this all going...? We believe that the market will slow in the over 1 million price range, flatten out for the next few months in the $750,000 to $1,000,000 range and continue to be strong in the lower ranges. If we see inventories building in the lower price ranges then we could see a little slower market in the fall. July and August historically are slow months for sales in Seattle and if a lot of people put their homes on the market now or at the beginning of September then we could see a slight slowdown, but we don't see prices dropping and much as simply stabilizing. This could be one of the better times we have had for the move up buyers. As the price of higher end homes are not increasing at the same rate as lower priced homes.
We thoroughly analyze the sales figures every month for the Magnolia neighborhood of Seattle and those numbers are pretty typical for most of the other in-city neighborhood that we work. It would be far too time consuming to analyze all the neighborhoods because of the depth we get into with our analysis. When the MLS shows the sales figures for a home that is sold it only accounts for the last List Price the home had before it sold. By only using this figure we may not get an accurate representation of that particular sale. We go back and search the "history" of each property sold to find out the exact sales history so we can compute the exact % of asking price vs. sales price. For example: If a home is Listed on March 1 for $800,000 but then has a price reduction on March 25 to $750,000 and then another price reduction on April 15 to $699,000 and sells on April 30 for $675,000 the MLS will show that the property was listed for $699,000 and sold for $675,000 or 96.5% of asking. The home actually sold however for 84.3% of the original list price. Then if a listing "expires" or is "canceled" and then re-listed the Days on Market (DOM) may not reflect the actual total time the home was on the market, thus giving us inaccurate statistic's. Some might say that these things don't occur enough times to really impact the average numbers, but they do happen enough to actually impact the averages.
We just completed doing a 18 month running average for single family homes on Magnolia from January 1, 2005 to June 30, 2006 and the numbers are quite interesting. The average List Price on Magnolia for the first half of 2005 was $699, 723 and the average List Price for the same period in 2006 was $746,953, an increase of about $70,000. The average Sold Price for homes for the first half of 2005 was $639,825 and the average Sold Price was $711,211 for the same period in 2006, for a $71,386 increase in Sold Prices or a 11% increase from 2005. There has been an interesting trend however with average days on market (DOM) during this strong sellers market. From January 2005 through June 2005 the average DOM was 36 days. Then it went to 27 DOM from July 05 to the end of 2005. Now for the first 6 months of 2006 the average DOM has increased to 54 days. And the total number of "Price Reductions" has increased over the same time period as well. Could all this be indicating the start of a market correction here in Seattle? We don't think so and here is why. A majority of price reduction have been in the over 1 million market and we are seeing a substantial increase in inventories in that market segment as well. In May 2006 there were only 6 properties for sale on Magnolia in the over 1 million range. As of mid July 2006 there are 17 Active Listing over 1 million, a substantial increase in inventory, but there are also 9 properties over 1 million that are Pending. 3 months ago the sales ratio between Active Listings and Pending/Sold Listings was 85% and now it's about 53%.
So where is this all going...? We believe that the market will slow in the over 1 million price range, flatten out for the next few months in the $750,000 to $1,000,000 range and continue to be strong in the lower ranges. If we see inventories building in the lower price ranges then we could see a little slower market in the fall. July and August historically are slow months for sales in Seattle and if a lot of people put their homes on the market now or at the beginning of September then we could see a slight slowdown, but we don't see prices dropping and much as simply stabilizing. This could be one of the better times we have had for the move up buyers. As the price of higher end homes are not increasing at the same rate as lower priced homes.
posted by David & Karen Bell at 9:15 AM
0 Comments:
Post a Comment
<< Home