Market update from my Monday morning meeting

 

Every Monday morning I attend a meeting with Realtors from Coldwell Banker Bain in Bellevue.  We discuss our new listings, talk about the market, then pile into cars and view homes that our agents have recently listed in the greater Seattle/Eastside area.  It is a highlight of my week. One of my favorite portions of our meeting is when one of the Managing Brokers explains the market statistics showing what is happening in our current market .  Here is what the board looked like this morning. 

 

 

As you can see, there is a huge difference between our market in 2008 and now, four years later. On the Eastside, September 1, 2008, there were 3322 active listings, with 581 homes pending.  If you divide the active listings by the pending listings, you get a ratio that tells us that for every active listing, how many homes are pending.  This ratio helps us understand if we have a market that is more favorable for buyers or sellers or is a balanced/neutral market. 

 

A ratio of 2.5 or less is generally thought of as a seller's market. 

A ratio of 4.5 is a neutral market.

A ratio of 6.5 or more is considered a buyer's market. 

For homes in the luxury market over $1M, add 2 to the ratios. 

 

So let's look at the Eastside market again.  In 2008 the ratio was 5.7:1, which tells us the market favored the buyers.  In 2012, we see less than half the active listings and more than double the pending sales, so we know there has been a big shift in our market.  In fact, currently, pending sales in the Eastside market are nearly equal to the active sales.  The ratio shows this with a very low score of 1.17:1.  That means for every 1.17 homes that enter the market, we see 1 home go pending.  This clearly demonstrates that we have a strong seller's market (seller's market being 2.5 or less). 

 

Remember, just four years ago, it was almost six homes active on the market for every home that went pending.  That meant five of the six homes were not selling, so according to the law of supply and demand, prices had to go down in order to move inventory. 

 

We see the converse in effect as well. Take a look at the right side of the white board above:  In the past year in King County, with low inventory, active listings averaged 21% higher price than they did a year ago.  The year to date average price of an active listing in King County is $696,436.  Now let's look at pendings: The average price of a pending home in King County, YTD is $445,617., which is 9% higher than pendings were last year.  Finally, note the trend in sales:  the average King county home, YTD sold for $455,429. which is 5% higher than last year's average.  For homeowners in King County, this is very good news.

 

If you look at the left side of the white board above, you can see that the Eastside luxury market and the Seattle market have similar stories to tell.  In fact, the current Seattle market is white hot with only 908 active listings, but 1512 pendings.  The ratio of .83:1 reveals that now is an excellent time to sell your Seattle home!

 

If you or someone you know is interested in selling a home and wondering if now really is the best time to sell, give me a call for a private and confidential consultation:  (206) 383-3119.  I would be happy to go over statistics for your area and provide a complimentary market analysis.

You call this a bedroom?

Sometimes when I am showing homes to buyers, they are surprised at what sellers will call a bedroom.  Of course if a room can be called a bedroom, it increases the value of a home, since four bedroom homes generally are more appealing to buyers than three bedroom homes.  But can any room or closet be called a bedroom?  Are there any standards?  Well, yes, it turns out there are! 

1. According to  SRC 2009 R.304-305 & R.310 and the Client Assistant Memo prepared by the Seattle Department of Planning and Development, the bedroom code requires 70 square feet as a minimum  for a bedroom.  The width of a room cannot be less than 7', so a 6'x12' room really cannot be called a bedroom.  Height of a room must also be a minimum of 7'.

2.  A bedroom must also have an egress window that fully opens and is no more than 44" off the ground with a minimum of 5.0 square feet net clear open area with 24" minimum clear opening height and 20" minimum clear opening width. 

3.  In the greater Seattle area, there is no requirement for a bedroom to have a closet, but real estate standards say there should be a closet as well as a door than can close.

In addition, Statutory law requires that all homes sold after April 1, 2012 must be equipped with carbon monoxide alarms at each floor and audible to sleeping areas, so sellers should get these installed prior to listing a home for sale.