May 2007 data came in fairly strong – despite all the pessimists who were forecasting a steep decline in the making. In Belltown/Downtown, inventory shot up from 120 active listings in May 2006 to 308 active listings in May 2007. While this may seem like a major increase, closed sales went up by almost the same percentage from 26 sold in May 2006 to 67 sold in May 2007.
In contrast, Queen Anne, Lake Union, and Magnolia and Capitol Hill, Central, and Madison Park had active listings increase at a higher rate year over year than closed sales.
Offsetting this apparently disturbing trend for those two areas is the fact that there are only 2.8 active listings for every 1 sold listing and median prices rose almost 5% in both the Queen Anne, Lake Union, and Magnolia as well as the Capitol Hill, Central, and Madison Park. Indications are the sellers are still in the catbird seat in these neighborhoods.
Belltown’s/Downtown’s active to sold ratio on the other hand was a deeper 4.6. While this may seem a bit disconcerting, that ratio was almost identical for Belltown/Downtown the same time last year. Optimists will argue having 4.6 active listings for every 1 sold listing is fine so long as there isn’t a further surge in inventory and/or a contraction of sales in June. Given the local economy’s employment strength, they might be right. Pessimists will argue an active/sold ratio of 4.6 was ok in 2006 when there was an ample supply of speculators but those folks have moved on to other markets / investment opportunities in 2007.
With pricing still growing (albeit incrementally) and sales growing as fast as supply, it would appear the market is holding up quite well and the doomsday projections at the end of last year are not coming to fruition — at least not yet. One thing is for sure though: Belltown / Downtown is becoming a genuine owner and patient investor’s market which is good news for everyone in the long run.