It’s Eerily Quiet in the Seattle Market (October Insider Report)

Redfin’s monthly Seattle real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

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
Seattle -9.7% +3.7%
Bellevue -6.6% -7.3%
Federal Way -5.7% +8.4%
Issaquah -15.1% -11.1%
Kent -6.4% +5.3%
Kirkland -8.5% -6.5%
Renton -7.2% -1.5%
Shoreline -6.2% +21.5%
Redmond -6.9% +10.3%

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
Seattle +2.2% +7.0% -40.3% -37.5%
Bellevue -9.8% -5.5% -21.7% -18.0%
Federal Way -4.4% +0.1% -25.9% -22.3%
Issaquah +7.7% +12.8% -20.8% -17.0%
Kent -16.7% -12.7% -48.7% -46.3%
Kirkland -2.0% +2.6% -35.1% -32.0%
Renton -13.6% -9.5% -41.7% -38.9%
Shoreline +2.8% +7.7% -7.5% -3.1%
Redmond -7.9% -3.5% -5.4% -0.9%

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
Seattle $417,000 -3.9% -5.9%
Bellevue $581,000 -6.4% -12.4%
Federal Way $260,000 +8.3% -8.3%
Issaquah $489,500 +4.8% -7.2%
Kent $232,500 -2.1% -9.8%
Kirkland $489,500 -3.8% 0.0%
Renton $313,850 +0.6% +1.2%
Shoreline $309,000 +0.5% -13.2%
Redmond $499,950 +1.2% -0.4%

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!

Best,
Michelle Broderick, Redfin Analytics Team

  • Justlookingthanks!

    “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.”

    IMO this doesn't really seem to indicate a strong market but rather show how sellers are financially constrained by owing too much on their properties. This is a lose/lose situation for all parties involved and sadly why foreclosure rates are still trending upwards w/ no relief in sight.

    Anyhow, thanks for the update, Redfin.

    • http://twitter.com/MichelleBee Michelle Broderick

      Sorry if that was confusing. You are right, it wouldn't be a strong market simply because seller's are in a tight spot. It's a strong market because these neighborhoods are desirable areas* and they still have a lot of active buyers searching for homes. For example: we are seeing more demand for a home up on Capitol Hill than we are seeing for a home in Northgate.

      The seller's being in a tight spot only compounds the problem of more demand than supply.

      Thanks for teasing out the nuanced difference between these two factors.

      *For the sake of brevity let's let the numbers dictate that they are desirable areas, and not get into whether they are actually “good” areas to live.

  • Hmm

    I wouldn't describe a market where sellers actually cannot meet the asking price as a strong one. A slow moving one with little room for arbitrage, yes, but not a strong one. As Justlookingthanks! says, it's a bummer for everyone, but calling it a strong market while prices are stuck is probably not the most helpful call one can make.

    • http://twitter.com/MichelleBee Michelle Broderick

      You are definitely right. Thanks for providing this spot-on insight.

      To put a more fine point on it: the market is “strong” only in certain highly competitive neighborhoods, and even finer of a point, only in certain highly competitive parts of the neighborhood.

      I don't think anyone would feel comfortable calling the whole market “strong.”

  • treaty

    “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… 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.”

    Sounds like an old fashioned Mexican standoff to me…

    • Anon

      It's a Mexican standoff but the owners are standing in quicksand.

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