In our last newsletter (March, 2018) we talked about where the market will take us in 2018, the question was prompted by the high demand for housing compared to the very thin supply of same. To continue with that thought we want to share what we already see in this spring season.
The Chart – the best picture.
The chart to the left shows the average percentage over full list price that homes are selling for in each of the NWMLS areas shown. The areas begin with West Seattle at the bottom of the chart and list the more familiar areas (vertically upward) through the Eastside with Woodinville/Bothell/Snohomish at the top of the chart.
Percent Over Explained.
Each of the percentage over numbers represents the average sold price over the asking price for all homes sold in each area (within the last 30 days) as of Monday, April 2, 2018. The percentage is calculated across all homes sold, regardless of price. Most sold for more, some for less, and some for asking price.
Months of Inventory
Until the supply side of the market became so tight, we measured the strength of the housing market by comparing the number of homes “pending” in the previous 30 days against all the available homes for sale, to give us the number of months of remaining inventory if no new inventory was introduced to the market. A balanced market would generally have 3 – 6 months of inventory.
Our New Metric
For the last couple of years, the inventory levels across our region have diminished to the point that we seldom see inventory levels greater than 2 – 3 weeks. We know this is a seller’s market at these inventory levels, but the “months of inventory” metric is now so low that it’s difficult (if not impossible) to derive the actual strength of the market from it.
The “Percent Over” metric has been a component of our weekly statistical compilations for years, but was largely ignored until about a year ago. In years gone by, this percentage might have been as low as 90% to 91% of list price, but those days are a distant memory. Now the numbers are generally at 100%, or higher (as depicted on the chart, back page).
The Trend Line
The chart to the left is specific to the real estate market as of Monday, April 2, 2018. What does not show (but can been easily seen from the raw data) is that the trend line for each NWMLS areas shown is upwards. The pressure is on and will remain so.