August 2007 statistics came in from the Northwest Multiple Listing service. Last month’s numbers show a reduction in closed sales compared to the same time last year. Pending sales went down for Queen Anne/Lake Union/Magnolia area by 34.21% compared to same time last year. Capitol Hill/Central/Madison Park are also experiencing a drop in pending sales by 19.31%. Belltown/downtown bucked the trend, showing an increase in pending sales by 11.29%.
Overall, in Seattle, pending sales went down by 7.25%. One of the big reasons is probably buyer hesitation as a result of the sub-prime mortgage news. Many home buyers are choosing to wait to play it safe and hoping prices will drop. So far, major price reductions don’t seem to be happening too much, at least not in a big way. Looking at the median price for Aug 2007 compared to July 2007, prices are still holding up even though demand has decreased for the month of August.
Neighborhood July 2007 Aug 2007
Belltown/Downtown $420,000 $430,000
Queen Anne/Lake Union/ $360,425 $385,970
Capitol Hill/Central/ $270,000 $314,000
Understandably, most sellers are not anxious to chase the market down. This is especially the case since it appears that many buyers are simply deferring their search till next year. In response, a number of my selling clients are preparing to pull their properties off the market in anticipation of a more favorable environment next Spring.
Things to keep an eye out for:
- Will sellers continue to remain firm on pricing as many buyers decide to delay their entrance into the market? If yes, next year could be a balanced environment. If sellers start a race to the bottom, buyers will benefit big time. If not, it will probably be balanced or favor sellers (if enough deferred demand hits the market at the same time early next year).
- What will Feb data look like? The slowing we see now is partly seasonal, partly sub-prime jitters, and partly fear of recession. Since the last 2 are partly speculative and occasionally self-fulfilling, whether Feb 2008 looks strong or not will be a great early indicator of whether next year will be business as usual or something worse.