Seattle’s real estate market was one of the first to recover from the recession, due to the growth and strength of Seattle’s job market. As Seattle’s economy has continued to grow, more people are drawn to the area. As the nation climbed out of the recession, Seattle’s recovering home values kept inventory low, and a combination of low interest rates and job growth kept the pool of buyers strong. This was the beginning of Seattle’s hot real estate market. For the past few years, Seattle’s market has been near the top of every national “hot market” list; 2015 was no exception!
Now we are post-recession and in most Seattle neighborhoods, values have surpassed pre-recession values. Queen Anne and Magnolia continued to be among the most desirable neighborhoods due to their proximity to Downtown and South Lake Union. For 2016, these areas’ desirability is projected to continue as the influx of jobs to the area remains and potentially increases! This is great news for home values and potential sellers, but will likely mean a continuation of multiple-offer bidding for buyers. Here is a re-cap of the Queen Anne and Magnolia real estate markets in 2015:
Queen Anne Median Sales Price: $799,950 (Median Sales price in 2014 was $731,000)
Magnolia Median Sales Price: $731,475 (Median Sales price in 2014 was $667,000)
In 2015, listing inventory was significantly lower than in 2014. Every month saw a lower level of listings when compared to the same month the previous year. The most dramatic dip was July, which was down by 53%. There are many contributing factors to 2015’s drop in listing volume. In general, it can be attributed to two primary considerations. The first is rather simple: more people are moving into the area than out of it. Second, many homeowners who would like to sell are opting to wait out of fear of entering the competitive market as a buyer. One reason for this is that many homeowners need to sell in order to purchase a new property. This market is not conducive to added contingencies, like a home-sale contingency. As a result, many feel unable to successfully enter the market as a buyer.
In 2015, the combination of low listing inventory and high levels of demand caused most homes priced under $1 million to sell in fewer than 30 days. Many sold in less than a week (see below).
The second impact of low inventory and high demand was that many properties received offers from multiple buyers. The frenzy of buyers resulted in offers that escalated above listed prices. As a result, the majority of single-family listings sold for above the listed price (see below).
In keeping with traditional economic models, the result of low supply and high demand is a market where values increase. In 2016, we can expect to see a continuation of high levels of demand, and therefore expect the competitive market atmosphere of 2015 to continue.