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Seattle Real Estate Market Starting to Come Back to Life

April 22nd, 2009

My wife Levi just spent a couple days analyzing the closed sales, Pending sales and active listings in a Seattle Eastside neighborhood (in Issaquah) where she is going to have a listing come on the market soon. Her assessment is that the market in Issaquah is the best it’s been for quite a long time. Inventory (number of homes on the market) has been dropping for many months and the number of Pending and closed sales has been increasing for the last three months. Data that confirms this market change can be seen at AlanPope.com (Alan Pope is a well known Seattle area real estate appraiser and consultant.

If I learned anything in my 10 years of real estate, it’s that real estate markets vary widely from neighborhood to neighborhood let alone between various cities. However, I find it encouraging that the Seattle area market seems to be starting to come back to life in addition to the turnaround I reported earlier in San Francisco.

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5 Responses to “Seattle Real Estate Market Starting to Come Back to Life”

  • Not to be a stickler, but that data is kinda useless… there is a stretch there from May-Dec 2008 where both “net pending sales” and “inventory” both dropped. This can’t happen from normal market mechanics. To me that sounds likes people pullings listings from the market that never sold. This is happening a lot in our neighborhood, which is a nice in-town neighborhood in Atlanta that hasn’t suffered too bad. Lots of nice houses sitting empty or turning into rentals because they wouldn’t sell or prevailing prices were unacceptable and thus homes pulled from market.

    Additionally, foreclosures in general have continued to accelerate yet banks aren’t listing all of their REO at this time due to poor market conditions.

    These are two huge drivers of “shadow inventory” and are typically stats that most agents don’t talk about, mostly I think because they can’t be measured, but also somewhat because shadow inventory is always bad news for the market and agents typically don’t like to talk about bad news.

    You have to be careful pointing to comebacks by looking at charts of data. If the input data is not complete, it can lead you to conclusions that don’t reflect reality.

    Alan

  • BTW I just looked at that chart again and noticed it’s for new construction only, so some of my analyses make no sense in that light.

    However, it does explain more about the chart. Really that data should not be presented without additional data on housing starts, housing “completions” (if available), and sales prices. Seeing inventory drop in new construction is not a useful measure of anything without these other numbers.

    Alan

  • @Alan- thanks for pointing out that I got the wrong chart. I didn’t intend to use the new construction chart.

    I agree, it’s a bit of a stretch to see and call a market-comeback just from the chart for all the reasons you raise.

    My main point is that in Issaquah, WA there are homes selling and there is more balance to the market (# buyers vs # sellers) than there has been in a long time.

  • It’s a very big stretch to call this a market that is coming back to life. The biggest thing that you can take away from this is the seasonal patterns of the Seattle market. Any spring time pickups are sure to fade in the later half of the year based on historical patterns.

  • We’re starting to see the Bend real estate market pick up as well. I think the whole Northwest is seeing signs of market improvement. This summer’s sales will be crutial.

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