As you’re enjoying the long overdue summer sun, some of you may be wondering how has the real estate marketed faired during the major summer selling months?
Put simply, the market held its ground this summer. We’ve seen increases in sales volumes, decreases in inventory and steady prices. While statistics accurate showing the relative number of distressed sales in the market are hard to come by – we know from being out in the market daily that distressed sales have seen modest growth in the past 6 months with more short sales and bank owned properties available.
Let’s look more specifically at a few statistics:
When we compare the number of active listings in a month with the number of closed sales, we can estimated the number of months of ‘inventory’ we have in our market. Generally, when we see more than 6 months of inventory, we think it’s a Buyer’s market while less than 6 months mean a favorable market for Sellers.
We started the year with nearly 10 months of inventory which steadily declined to a low of just 4.8 months in June and has returned to the year to date average inventory of about 5.2 months in August.
When we focus on houses, we find that the numbers are better ranging from a high of 8.8 months in January to a low of 4.4 months in June ending up at 4.9 months in August with an average inventory year to date of 6 months.
Condos presently are lagging behind in the recover mainly due to distress issues (foreclosure & short sales) which are creating higher inventories and resulting in slowly declining prices.
The best explanation for the improving inventory numbers has been the strong sales we’ve seen during the year which have put us on pace to meet and potentially exceed 2010 sales volume when we had very significant tax incentives for Buyers. From January to July 2010 there were 12,802 closed sales, while during the same period of 2011 there were 12,359 closed sales.
When we put this years inventory numbers in context with the past couple years, there is definite trend towards a more balanced market with reasonable inventory levels.
Flat and bumpy is the theme of the 2011 median home price stats… we started the year at $316,000, and then rattled around rising and falling from month to month between a high of $330,000 to a low of $313,000 coming in at $318,000 in August with a year to date average of about $320,000.
In our opinion, these median price statistics are neither good nor bad news. They simply illustrate that our housing market riding out a very bad event and hold its own and hopefully for preparing for improvement as the overall economy improves.
When we compare home prices over the past three years, the picture isn’t wonderful as we’ve certainly seen declines since 2009. However the declines have become much less steep, except for condos which are getting hit hard by foreclosures and short sales.
We expect to see the market have its seasonal soft patch from October through January when prices will likely decline and inventories will rise, however in 2012 we expect residential prices in King County to rises from the bottom levels set in 2011. As for condos, we expect the beginning of the recovery to lag houses by about 6-12 months as the backlog of short sales and foreclosures will clear.