(This sponsored post provided by Wallingford realtors Kris Murphy & Daniela Dombrowski of Keller Williams Greater Seattle)
Seattle – #1 in Appreciation and 2nd Tightest Housing Market in the US – 2016 Wallingford & Tangletown Real Estate in Review
For the last few years when writing our annual review of the neighborhood real estate market we have been talking about rising prices, bidding wars and the shortage of inventory. Well, 2016 was no different, if anything, there are even fewer homes for sale and the competition among buyers has intensified. According to a recent Seattle Times article, Seattle is now the 2nd tightest real estate market in the nation right after San Francisco. Homes sell the fastest (15 days on average) and we have the second highest number of bidding wars (also behind San Francisco).
According to the latest Case-Shiller National Index, Seattle has seen the highest appreciation at 10.7%, right after Portland at 10.3%. These two NW cities were the only ones with double digit year over year price increases. Nationwide the annual gain was at 5.6%.
How does our neighborhood compare?
Statistics in the table below are based on home sales in the area outlined on the map and are derived from the Northwest Multiple Listing Service data.
Year over Year Comparison 2015 to 2016
Single Family Homes
One more home was sold in 2016 vs 2015 so the number of sales stayed almost the same over the last two years but is lower than in 2013 when 270 sales closed. The median sales price rose by 7.9% which is about 3% lower than Seattle and the 2015 price gain in Wallingford. Average sales prices came in 3.4% over list price which is about half compared to 2015 when the sales prices were 6.9% higher than list prices. Average days on market went up by 3 with 14 days on market, in line with market times in Seattle overall. The median sales price is now $750,000 in the neighborhood. Just 4 years ago, our median sales price was $512,000 or 46% lower. In the adjacent Green Lake area the median sales price is now also $750,000.
What the Trends are Telling Us
The following charts capture Wallingford (area as defined by NWMLS data) real estate trends for 2015 and 2016. This bar graph tells us how many homes were available for sale (light green), how many went under contract (red line) and how many sales closed each month (dark green). We can see from the light green bars that there wasn’t a significant difference in the amount of available homes throughout the year and demand by far outpaced supply. Buying activity was strong throughout the year with a less pronounced summer and holiday dip than last year (see red line). Actual closed sales (dark green) increased a bit over last year, especially, in the summer months but also in November.
In the chart below, the yellow bars represent the average number of days a home is on the market. Overall, days on market were very similar in 2016 and 2015 when we exclude January and February of 2015 which were clearly higher than all the following months. This number could be even lower, except that real estate brokers hold a home on the market for about a week before entertaining offers from potential buyers in order to secure the best offer. The line at the top of the chart represents the relationship between average sales and list price. In 2016, you can see that sales prices for most months were well over 100% of list price with March and May showing about 10% higher sales than list prices, then a little slowing to about 100% sales to list price ratio in the fall and winter.
Finally, this chart illustrates months of inventory. It is derived based on a calculation dividing the number of active homes for sale by the number of homes that have closed in a given month and attempts to project how many months it will take for the entire available inventory to sell. Anything under 2 months of inventory represents a sellers’ market, between 3-5 months is considered a balanced market and over 6 months represents a buyers’ market. In 2016, most of the time, inventory was under one month and went as low as 0.4 to 0.5 in May and August as well as in November. This translates into a “crazy sellers’ market” just like 2015 when months of inventory were also under one month all year long even a smidge lower than this year.
And here we thought the market could not possibly get more competitive! So what about 2017? Are we going to see a turnaround or correction? Not according to the Home Buying Institute which compiled a number of different forecasts from different experts in the field. Their conclusion is that: “Seattle, one of the hottest real estate markets in 2016, is expected to continue sizzling in 2017.” A great job market driven primarily by our booming tech industry continues to make Seattle a popular place to live and work and have fun, although rising interest rates may eventually have a slowing effect on the market.
Kris Murphy and Daniela Dombrowski are Wallyhood sponsors and real estate brokers who live and specialize in the Wallingford and Green Lake neighborhoods. They practice out of the Keller Williams Greater Seattle office located on the corner of Stone Way and N 45th St.