Seattle Prices Increase in May, But Demand Weakens and Inventory Drops

Seattle Prices Increase in May, But Demand Weakens and Inventory Drops

Seattle, WA – June 16, 2010 – (RealEstateRama) — Redfin today released new data on the King County real estate market showing that the median price of a single-family home increased 2.5% from April to May, and 2.5% year over year as well. Redfin attributes the increase in median price in part to the federal tax credit, which required buyers to be under contract on a home sale by April 30. Other metrics were weak: sales volume for King County was mixed from April to May and competition among home-buyers declined, even though the number of houses for sale dropped 5.4%.

Inventory Declines 5.4% Across King County

From April to May, the number of houses for sale declined significantly across all the major cities in King County, particularly in more affordable markets to the north and south of Seattle:

City Compared to April 2010 Compared to May 2009

# of King County Houses for Sale in May 2010, By City

“We’ve seen a lull in tour activity and offers since the tax credit expired, with buyers telling us the current inventory has become stale,” said Allie Howard, who runs Redfin’s business in Capitol Hill and along Lake Washington. “But when high-quality new listings come on the market we still see a frenzy over them. A charming turn-key home in the heart of Mt. Baker is likely going to have multiple offers the first week it’s on the market.”

Within Seattle, the biggest drops in inventory were in Ravenna and Capitol Hill:

Neighborhood Compared to April 2010 Compared to May 2009

# of Seattle Houses for Sale in May 2010, By Neighborhood

Based on listing activity in the past two weeks, Redfin expects inventory to increase in June.

King County Sales Volume Data Mixed

Compared to other markets across the country that Redfin monitors, Seattle’s sales growth was weak; in absolute terms, sales for the county declined 1.3% from April to May. But since virtually all closings occur on a weekday, Redfin adjusts for the fact that May had fewer weekdays than April; by this math, the number of sales occurring per weekday in King County was 3.4% higher in April than May. Year over year, sales were 33.4% higher.

The biggest monthly gains occurred in more-expensive cities like Seattle, Bellevue and Issaquah:

City Compared to April 2010 Compared to April 2010
Adjusted for # Weekdays
Compared to May 2009

# of King County Houses That Sold in May 2010, By City

Within Seattle, the month-over-month increase was consistent across 10 of 12 neighborhoods:

Neighborhood Compared to April 2010 Compared to April 2010
Adjusted for # Weekdays
Compared to May 2009

# of Seattle Houses That Sold in May 2010, By Neighborhood

Sales actually declined year over year in Beacon Hill, which is still recovering from a 2008 – 2009 boom.

King County Median Prices Up 2.5%

Driven at least in part by the federal tax credit, prices of houses closed in May increased from the previous month by 2.5% in King County; the annual increase was also 2.5%. The big monthly gains were all on the Eastside:

City Change in Median Price
Since April 2010
Change in Median Price
Since May 2009
Median $/Square Foot

Change in Median Price of King County Houses That Sold in May 2010, By City

Within Seattle, the data were mixed:

Neighborhood Change in Median Price
Since April 2010
Change in Median Price
Since May 2009
Median $/Square Foot

Change in Median Price of Seattle Houses That Sold in May 2010, By Neighborhood

Sellers are responding to the softening of demand more quickly than they have in the past. “The listing clients I’m working with seem to be more realistic about market prices and a little more willing to cut their losses than they were six months ago,” said Febe Cude, Redfin agent for Laurelhurst, Wedgwood and Ravenna. In a few markets over the past few months, activity has been too light and fluky to prepare a comparative market analysis, so pricing has been tricky — particularly for condos.

Redfin agent Trevor Smith, who leads a team covering Ballard, Green Lake and Wallingford, is still seeing plenty of competitive offers in his area, even though our brokerage data for all of King County show that bidding wars have become slightly less common. “Eight of my past ten offers have been competitive; the competition has been most intense in the $300,000 to $450,000 price-range. We’re offering $40,000 over list price and still losing.”

“We see two types of listings on the market,” said Redfin CEO Glenn Kelman. “The stuff that has been out there a while without any bidders drifts down in price until it finally gets an offer. Then when a new listing does hit, it is usually well priced, and often gets three or four offers.”

About Redfin Real Estate Reports

Market-wide data spans seventeen counties: Chelan, Grant, Grays Harbor, Island, Jefferson, King, Kitsap, Kittitas, Lewis, Mason, Okanogan, Pacific, Pierce, Skagit, Snohomish, Thurston and Whatcom. The full report, with data at county, city, neighborhood and postal-code levels, is available at:

http://blog.redfin.com/seattle/files/2010/06/Redfin-Seattle-Real-Estate-Market-Report-May-2010.xls

Redfin’s real estate market reports draw data from more sources than any other, including the Multiple Listing Services (MLSs) that brokers use to take properties on and off the market in real time; for-sale-by-owner websites used to market properties unrepresented by brokers; government records that officially record any property sale; and government records on city and county borders. Because Redfin as a broker has access to MLS databases, it is able to identify market changes before sales are publicly recorded. Unlike other reports, Redfin also provides county-, city-, neighborhood and zip code-level detail, disclosing the number of records available in each area.

No report based on tens of thousands of records, all captured by human beings, can eliminate every error, but Redfin has been careful to do so wherever reasonably possible. Reconciling multiple data sources allows Redfin to correct errors in each; sales aren’t double-counted, and records for the same property but with conflicting prices and square footages are flagged for further analysis. The reports analyze houses and condos separately, and exclude townhouses. More detail on Redfin’s reporting methodology is available here: http://www.redfin.com/about/monthly-report-methodology

About Redfin

Redfin (www.redfin.com) is the real estate industry’s first online brokerage, combining a customer-focused team of real estate agents with online tools for making the process of buying or selling a home easy. Redfin’s agents handle every facet of a transaction, including tours, pricing analyses, negotiations, inspections and closings. Redfin is the only major search site to feature listings direct from broker databases as well as for-sale-by-owner and foreclosure properties from across the Internet. The company pays its agents customer-satisfaction bonuses, not commissions, and surveys every client, publishing each survey alongside the agent’s complete deal history. Redfin’s service is available in the metropolitan areas of Atlanta, Boston, Chicago, Seattle, Phoenix, Portland, OR, Washington DC, Baltimore, New York’s Long Island and Westchester County as well as most of California, including the San Francisco Bay Area, Southern California and Sacramento. To keep track of our daring exploits, subscribe to blog.redfin.com or our Twitter feed @redfin.

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