News stories are “new” stories, or put more simply – what is new is news. But for this first newsletter of 2018, we will be writing about a market trend that is not new, and yet that is news in itself.
There was a day not too many years ago, when home prices were in a downward spiral, that an occasional prediction would be offered by one more wise than I, that one day there would be a critical shortage of homes to sell. As difficult to imagine as that prediction was, it happened. And it continues to happen.
In the Beginnng…
Since the beginning of 2015, the available inventory of homes on the Eastside has been dwindling while buyer demand has been rising. On many parts of the Eastside market in 2014, there was usually more than 2 months of inventory, sometimes as much as 3 or more months.
Now 3 Years Later…
With the exception of Mercer Island and West Bellevue, every geographical area on the Eastside is now measuring the available inventory in fractions of a month. Both Mercer Island and West Bellevue are exceptions to this primarly because of the significantly higher price point found in these areas. Here homes appeal to needs and desires that go well beyond the basic housing equation.
Our New Normal
We have now been measuring the available inventory on the Eastside in fractions of a month for more than 2 years, and it does not look to end anytime soon. The spring season is when we generally expect to see a great many new listings appear on the market – and they will again this year – but the buyer pressure is so strong now that even those new springtime listings will be hustled off in contract by eager buyers who have learned that to be successful, they will have to compete. And they do. And so homes often sell for far more than what they were originally listed for.
2018 Will Be A Repeat of the Past 2 Years, but Most Likely Even Tighter
A preview of what will come in 2018 was what was experienced in the month of December, 2017. Typically, the month of December is not a month to introduce a home to the market. Historically, December has always been a super slow month for home sales. Winter weather, the approach of Christmas, holiday mindset, whatever, December has generally been a month to avoid listing- better to wait until the new year. Not so in December 2017.
Throughout all the Eastside (excluding Mercer Island and West Bellevue) there were 536 homes sold in December 2017, and of those, 400 sold in in less than 31 days on the market. Perhaps even more astounding than that, 236 sold in 7 days or less.
Normally, this much pressure on the market doesn’t occur until the next spring, but the pent-up demand is now putting pressure on the market well before the spring season usually brings it to bear.
The first chart shows the period beginning with January 2014 and ending in December 2015. The “Active” home listings greatly outnumber the “Pending” contracts. The seasonal fluctuations are typical, but by the end of 2015, we see the available inventory beginning to diminish.
The second chart shows the same area but now with the calendar moved forward to the current date, ending on Monday, February 12th.
And prices will continue to rise. But this discussion will be the topic of our next newsletter, so stay tuned.