Greater Seattle Real Estate Trends – 2015 Year in Review
Unless you’ve been hiding under a rock, you’ve probably noticed that real estate has been hot around the Greater Seattle real estate market. Whether you currently own a home or have been thinking about purchasing a home or condo, here are some of the important Greater Seattle real estate trends to close out 2015.
First and foremost, Seattle has one of the top job markets in the nation. Our unemployment rate is extremely low, and people continue to move here for jobs. The strong job market applies an upward pressure on demand for real estate.
In 2015, the total sales of single family homes in Seattle came in at 7,963, which outpaced 2014’s total of 7,559 by 5.3%.
Meanwhile, inventory continued to dry up throughout the year. As of January 1st, 2016, there were 336 active single family homes available for sale in Seattle. Exactly one year prior, there were 564 active homes for sale, and 709 two years prior on January 1st, 2014. That equates to a 40% drop in inventory compared to last year, and a 53% drop compared to two years ago.
Thus, the simple economic principle of supply and demand prevails: increasing demand and falling inventory leads to higher prices.
So how much have home values risen? The median selling price for Seattle single family homes came in at $575,000 in December. Back in December 2014, the median selling price was exactly $485,000… that’s an 18.6% increase over the course of 2015.
King County wide, December’s $508,000 median selling price was a 15.5% year over year increase, while the total closed sales for 2015 outpaced 2014 by 9.4%. Active inventory is down about 36% compared to a year ago.
The data suggests additional price gains in 2016.
“Supply,” as defined by the amount of months it would take to clear out the existing inventory based on the current pace of sales, is as far below neutral as I’ve logged since the onset of the Great Recession.
Analysts consider a 4-6 month range as being a neutral market favoring neither buyer nor seller. Seattle currently has a supply of .55 months while King County as a whole is at .86 months. That’s low. Really low.
Good luck to everyone in 2016!