The market: 2019 vs 2018
We are about a month into 2020, and the real estate market is off to a positive start in our area. At the end of 2019 we noticed an upswing in the market; unusual during the typical November/December slowdown.
Some of this uptick in activity could have been attributed to high-end homeowners looking to sell before 2020 with the Jan. 1 implementation of the graduated Real Estate Excise Tax (REET.) However, the first few weeks of 2020 point to continued strength in our local market.
Year in Review: 2019 vs 2018
2018 Madison Park/Washington Park/Broadmoor
• 103 sales
• Average sales price: $1,893,158
• Average price per square foot: $739
• Average days on market: 26
• Highest sale: $12.5 million
• 33 sales less than $1 million
• Four sales more than $4 million
2019 Madison Park/Washington Park/Broadmoor
• 87 sales
• Average sale price: $2,191,222
• Average price per square foot: $699
• Average days on market: 69
• Highest sale: $13,750,000
• 19 sales less than $1 million
• Eight sales more than $4 million
Takeaways
In 2019, there was uncertainty on the market, including fears of a recession, which led to longer market times. At the same time, less inventory translated to fewer sales, but with an increase in average sale price; up 15 percent on average.
From four to eight sales at more than $4 million shows buyers are willing to pay more to be in our area. Fourteen fewer sales less than $1 million in 2019 shows increasing pressure on pricing.
The lack of inventory continues to be one of the biggest drivers in our market. According a recent report from Zillow, Seattle experienced the largest drop in inventory in the 50 largest markets in the country.
“Inventory overall was down year-over-year in 46 of the 50 largest markets. For-sale inventory fell the most from a year ago in Seattle (-28.5% year-over-year.),” according to the online real estate site.
Real estate brokers in our area will tell you: the buyers are out there, we just don’t have homes to sell them.
In other words: if you have a home to sell, now is a great time.
There is strong evidence that the jobs economy in Seattle will continue to grow, and we will have even more buyers looking for homes. Kiplinger recently rated Washington fifth for fastest projected rates of job growth for 2020.
“A big boost to the state’s economy comes from the information services sector, which is little surprise as Seattle is home to fast-growing Amazon, and Redmond is headquarters for Microsoft. Construction, manufacturing, health care, and hospitality are also growing briskly. Competition for skilled employees among high-tech companies in the region is fierce,” according to Kiplinger.
According to the Puget Sound Regional Council, the region will have nearly 3.4 million jobs by 2050— an increase of 1.2 million. Amazon continues to drive Seattle growth and vibrancy, holding nearly 13 million square feet of current and future office space, and the need for housing more than 50,000 employees.
Because the jobs being created in Seattle are high-paying, this relatively wealthy workforce is seeking homes in our neighborhood. As more people move into and around the region, our lack of inventory should cause home prices to remain stable, if not go up. Mortgage rates are also a key consideration for the 2020 outlook. The average rate for a 30-year fixed mortgage has been hovering below 4 percent for a lengthy period of time, and most industry analysts expect to see those rates for the foreseeable future. Between these low interest rates and continued job/economic growth, real estate in the Seattle area continues to be a wise investment.
No matter how tight the inventory, pricing and presentation will always be key principles to a successful transaction. Working with a savvy broker with extensive neighborhood knowledge will help you price your home competitively.
If a home goes on the market even a bit too high, it can sit, and that may result in a larger price reduction than if the home had come on the market at a reasonable listing price. It is important to work with a broker who can help you be objective about price.
With regard to presentation, homes that hit this market should be show-ready; otherwise you are likely leaving money on the table. Our Compass Concierge program was designed to help sellers through this process without hassle. From staging to flooring to painting and tiling, we front the cost to transform a home before it hits the market, increasing the likelihood of a quick sale, and for more money. In this Seattle market, buyers will pay for a house that is turnkey, and our Concierge program is designed with that in mind.
For buyers, as the market continues to heat up, having your financing ready is critical. Our new Compass Bridge Loan program can give you an edge in a competitive situation. Imagine a house you love hits the market, but your existing home isn’t quite ready for sale, and a contingent offer just won’t do. Compass Bridge Loans Services gets you access to competitive rates and dedicated support from industry-leading lenders, with the exclusive option to receive up to six months of your loan payments fronted.
As of press time, there are 12 homes for sale in Madison Park, including Broadmoor. The most expensive is a Broadmoor home with extensive updates for $4,975,000, and the least expensive is a condo in the heart of Madison Park for $595,000. If you have given any thought to taking advantage of the continued strong market, now may be the time for you to make your move.
Our Compass experts have a long history in Madison Park, and are ready to help you navigate this market to your advantage with the latest technology, top-notch marketing and proven pricing strategies. If you’re buying, our knowledgeable agents will help you achieve success in this still competitive market.
Evan Wyman is a partner and broker with The Wyman Group at Compass.