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True to its spooky reputation, the month of October made Seattle’s real estate market look like a ghost town. Inventory was down by 8.5% due to sellers pulling a vanishing act until the end of winter, and the number of homes sold got a nearly imperceptible bump of 1.2%.
Last month we predicted that the change in the median price of homes per square foot would be flat between September and October, and boy were we right. The change in the size adjusted median was an even 0.0%. Spooky.
So what’s going to happen in the next few months? We are going to predict the usual seasonal dip in the price of homes during November and December, with the inevitable seasonal increase in prices after the holidays. The market doesn’t seem to be pulling any tricks, but we are riding the gentle seasonality rollercoaster.
Inventory Stands Still
The number of homes for sale in October was down across the board by at least 5% and by as much as 15% over in Issaquah.
|City||Compared to Sept. 2010||Compared to Oct. 2009|
Change in # of King County Houses for Sale on October 31st 2010, By City
This decrease in inventory isn’t due to homes selling like hotcakes. The decrease is due to frustrated sellers pulling their listing off the market until the market picks back up in the spring.
“The majority of buyers I am working with are not in any hurry to purchase, but want to take advantage of the lower house values we see in the winter,” said Cheryl McLaine, a Redfin agent in Redmond and Kirkland. “On the other side, sellers who have been on the market for over several months with regular price drops seem to have little financial room to negotiate.”
This type of apathy leaves everyone a bit frustrated since nothing ends up happening, but we think the inertia will thaw in the spring.
Homes are Moving like a Three-Toed Sloth
The monthly change in the number of homes that sold in King County stayed relatively flat as a whole, but swung fairly wildly between a drop of 13% and an increase of 13% depending upon the city and neighborhood.
|City||Compared to September 2010||Compared to September 2010 Adjusted for # Weekdays||Compared to October 2009||Compared to October 2009 Adjusted for # Weekdays|
Change in # of King County Houses That Sold in October 2010, By City
“A lot of the first time buyers I’ve talked with recently have been super skeptical about the near future of the market after hearing all sorts of doom and gloom media reports predicting a downward trend over the next 3 months,” said Corey St John, a Redfin agent in Capitol Hill, “They want to write pretty low offers, around 8-15% off list, but they don’t understand that some neighborhoods like Belltown, Capitol Hill and parts of the Central District are still experiencing a strong market. Many sellers in these areas are putting their homes on the market after owning for only a few years, so most of them don’t have much room to negotiate.”
He said, “Recently, I’ve had three multiple offer situations where two of my buyers lost to someone else and one of them beat out the other buyer. This competitive situation is confusing to the buyer who keeps hearing ‘it’s a buyers market,’ which is only true in certain parts of the city.”
Guess it really is the old “location, location, location” mantra at work.
Prices Locked or Stuck
Any substantial change in the median price reported is mainly due to low activity in that area, allowing any movement to sway the outcome of the numbers disproportionately.
|City||Median Price in October 2010||Median $/SqFt Change since September 2010||Median $/SqFt Change since October 2009|
Change in Median Price of King County Houses That Sold in October, By City
“Right now, the market is experiencing an unusual period of calm,” says Trevor Smith, a Redfin agent in Ballard. “There is a feeling that interest rates are going nowhere, buyers are going nowhere, sellers are going nowhere…” This kind of inertia is keeping the pressure off housing prices across the board.
If you want to dig into more market data feel free to download our comprehensive spreadsheet where you’ll find county, city, and neighborhood information galore. You can also liven up the place by posting a comment below.
But, before you go, we wanted to let you know that Redfin just launched a bunch of new features including a nifty new way to cluster listings, an interactive Good Faith Estimate, an interactive HUD-1 statement, and an inspector’s report with tell-all photos. We also opened Las Vegas and Austin, so if you know anyone who wears cowboy boots — tell ‘em about Redfin!
Michelle Broderick, Redfin Analytics Team