Seattle Sales Plummet While Prices Merely Decline

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Mixed within an article on Forbes.com by Alex Veiga is both good and bad news regarding Seattle’s real estate market.  The bad news: home sales in Seattle are down 41% over last year. The good news:  home prices have only declined 11% over last year. Yup, an 11% price decline is good news… when you consider that the median home price in the West was down 24% from a year ago.

“Seattle and Portland, Ore., meanwhile, were among the top 10 metros in the nation with the most pronounced drop in home sales. The Las Vegas metro area, which has had among the highest foreclosure rates in the nation for more than a year, had the biggest sales spike, according to the AP-Re/Max report.”

Sorta makes sense that Las Vegas, with its fire-sale pricing is seeing more home sales than Seattle, where home prices have declined less. San Francisco also showed an increase in home sales. Though I’ve a feeling their 6% increase is due more to popularity than simple pricing trends. Just like in New York, if price is your primary consideration, these cities just aren’t for you.

I wonder if popularity can work for us too? Though with the rainy season almost here, I’m thinking further price declines are probably in store. I’m just hoping we can limit further declines to single-digits. 

  • Gene

    You make a good point about the rainy season. If people couldn’t sell houses with the gorgeous (post “Junuary”) weather we had this summer – good luck on dark cloudy days.

    Some people always have to move, but it looks like more are choosing to rent.

    I’ll be really surprised if we don’t see 10+% year over year drops in 2008 too, especially given the economy (bailout package or no).

  • Tom

    I’ll guess that the volume of home sales will stay down until prices decline further. Median home prices in the area are still well beyond the median income of the average potential homebuyer. Renting is still much cheaper than buying in many neighborhoods.

  • some guy

    The faster prices get closer to what people can afford the better off we will all be, so I disagree that 11% drop is good news. It’s bad news.

  • KT

    We were transferred here from the east coast & I have to say home prices here are seriously absurd.
    We are originally from the west coast and were totally jazzed about coming back “home”.
    We will be even more jazzed when the reality check of reasonably priced houses hits the Seattle area.
    Face it folks the 1,000 square foot of condo in West Seattle is NOT reasonably priced @ $480,000.

  • Michael P Lindekugel

    Don’t get your hopes up for Seattle prices becoming affordable any time in the near future for many reasons.

    During the last Seattle recession, the real estate market was hot by Seattle standards.

    Our economy is doing very well compared to the rest of the country.

    The local guvment puts restrictions and owner land use which creates an artificial supply problem and upward price pressure. The Growth Management Act adds an estimated $200k to the price of a house.

    The reason sales have fallen and prices have not fallen as much is the sticky price theory and pent up demand in a market with scarce housing. Our rental market has seen record high rents and record low vacancy despite the slow ownership market.

    Despite the sky is falling with foreclosures according the media, WA isn’t that bad. Not nearly as bad as many parts of the country which experienced hyper capital asset growth or appreciation, zero down, no income verification loans.