August Insider Report: Seattle-Area Real Estate Market Still Chilled

Redfin National Heat IndexGreetings, Redfinnians!

We’re working on some new changes to our monthly Insider Reports that will bring together the expertise of our local agents with the unique market insights that we dig out of our vast array of real estate data every month.

In the mean time, rather than skipping out on August’s data entirely, here’s a “lite” version of our monthly report, including our Redfin Heat Index, the heat map, and the hottest / coldest neighborhoods.

First up is our national Redfin Heat Index* ranking table at right. As you can see, not much change for Seattle. With prices down eight percent balanced out by a slightly tight 4.2 months of supply, we’re still on the cool end of the scale, but not dramatically lower than most of the other cities Redfin serves.

Washington DC continues to be the hottest market in the nation, while Long Island is still pulling up the rear with falling prices and a dramatic 11.1 months of supply. Yikes!

Next up, let’s have a look at an update to our interactive Redfin Heat Index map broken down by zip code, based on August data. Note that we only calculate the Redfin Heat Index for zip codes with at least 20 sales in August 2011 and August 2010.

Heat Map Color Legend

Next, let’s have a look at the hottest and coldest Seattle-area neighborhoods in August.

King County’s 5 Hottest Neighborhoods in August

Rank Neighborhood Price Months of Supply Heat
1 Capitol Hill +14.0% 2.0 120.7
2 Wallingford +12.6% 1.7 120.5
3 Somerset +4.2% 1.7 103.3
4 Delridge +12.6% 5.5 93.7
5 Queen Anne +1.4% 2.9 89.8

The only real surprise in that hottest list is Delridge. Perhaps homes in Delridge have gotten cheap enough to drive some heat back into that area?

King County’s 5 Coldest Neighborhoods in August

Rank Neighborhood Price Months of Supply Heat
1 Rainier Valley -14.8% 4.9 42.9
2 Beacon Hill -15.0% 4.2 47.8
3 Admiral -9.1% 4.3 59.0
4 Magnolia -13.9% 2.8 59.6
5 Snoqualmie Ridge -8.7% 4.0 61.7

All righty, that’s it for this month. Stay tuned next month for our new and improved Insider Report!

As usual, you can download our comprehensive spreadsheet and dig into the data for yourself. Inside you’ll find county, city, and neighborhood information galore. You can also liven up the place by posting a comment below.

*Methodology
The Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:
  • MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
  • $YOY = Year-over-year change in the median price per square foot.
  • Heat Index = ((MOS – 6.0) * -7) + (($YOY – 5%) * 2) + 75