Seattle Bubble, not easily impressed, is impressed: “the spring bounce in 2012 has shot the median list price per square foot to its highest point since November 2010.” Sale price, at about $175 per square foot, is lagging list price, which is north of $195 per square foot, but catching up as sellers latch on to their leverage: very low inventory. King County has the fewest single-family homes on the spring market in over a decade.
It’s a little counterintuitive, but this pricing situation is strengthening buyer confidence that the value of their purchase won’t continue to fall. Real estate mavens Redfin just completed a Q2 survey of home buyers, and the Seattle respondents were almost unanimous in reporting that they were most surprised by the tight inventory (much of which is in terrible condition, they say), and the speed of sales of good homes. Sales volume in Seattle was up 22 percent in May, year-over-year.
It’s worth noting that sales of bank-owned homes dropped to less than 14 percent of the sales total in May (again, King County single-family). A search on foreclosures listed in the Seattle area through Redfin yields just 233 listings (from a total of 2,179). Underwater home owners aside, there appears to be no hidden-inventory tsunami threatening. It’s a big change.
So who’s buying? 83 percent of the 222 Redfin respondents in Seattle reported being between 25 and 44 years old. Just over half were shopping for a home in the $250,000-to-$500,000 range. 63 percent were currently renting, and 82 percent thought it was a good time to buy (only one-third were worried about prices falling). 16 percent had already made an offer and lost out to a higher bidder.
“Conventional sellers haven’t stepped in to replace the liquidity that once came from banks dumping lots of foreclosures,” writes Redfin’s Glenn Kelman in a blog post. “In our own business, we are seeing website traffic slowing due to lack of inventory even as activity levels remain high among the customers we have.”