The April numbers are in and there’s good news and bad news. Let’s start with the bad news.
- For the first time in a long time, median prices in Belltown dropped. If you remember my last update in March, we saw median prices rise over 13% versus March 2007. In April, we saw median prices drop by 7%. We’ll have to see how the next few months play out to determine if this is the adjustment we’ve all been waiting for so that buyers on the sidelines can come back in or if prices drop further.
The good news:
- April over Apil inventory (April 2008 as a proportion of April 2007 inventory) has come down compared to March over March numbers. In March, Belltown inventory was 51% higher than March of 2007. In April, Belltown inventory was 41% higher than April of 2007. If this trend continues, it would suggest that there while we are certainly seeing more units on the market than last year, there does appear to be a ceiling in terms of how much more supply is entering the market and as a result (all else equal), we will have a floor on how low prices will ultimately go.
So the big question: was April’s price correction enough to motivate more buyers to pull the trigger or will they continue their waiting game in hopes that sellers will capitulate further? My sense is that there’s probably at least 6 months worth of potential buyers who have deferred their purchase month after month and are just waiting for the right time to get in. I wouldn’t be surprised if they started returning in the summer but it may have more to do with concerns about the national economy than any local supply and demand issues.