It’s still very early but I noticed there was a slight uptick in activity in the core Belltown resale market in December.
In November, there were only two 2BR units in the $400-600K range in Belltown that went from Active to Contingent. In December, there were four units that went from Active to Contingent status (note: Decembers are historically a slower month than Novembers).
Perhaps this is an early indicator that some buyers, who seemed to be price inelastic over the last few months, are starting to pull the trigger once again.
How does the general economic environment play in the supply and demand of the condo market? It seems that what was rumored begins to materialize:
Excess inventory in housing rises supply, while credit tightening lowers demand, preasuring prices downward.
The acknowledging of these facts become shared knowledge, incentivating buyers to postpone their commitments.
The lag between planning, construction and occupancy of new condo buildings ensures ample supply the next 2 years.
If recession shows up, less employment will further lower the demand.
Any shocks to the system (higher interest rates due to inflation, USD fall, credit crisis, etc) will widen the gap between supply and demand.
All these lead me to consider more probable a slowdown than a pick up. Nevertheless, the jury is still out.
I’ve been leaning in the direction as Francisco since 2006 but to my dismay and landlord’s delight, the Seattle market continues to hold up. Perhaps the Seattle condo buying population is just growing faster than supply.
I agree with the beginnings of a recovery and am starting to work with a lot more buyers already. Let’s hope this trend continues.