Fall and Winter of 2012 Shaping Up to Be Seller’s Market in Washington

[break]The fall and winter months typically accompany a slowdown in the real estate market as month-over-month prices decline along with home sales. This seasonality effect is a persistent trend in the real estate market, however, current conditions suggest that the next few months may not be such a bad time to take a home to market. In fact, the marked improvement in the housing market (as evinced by the positive year-over-year numbers in median home prices and home sales) coupled with tight inventory may make this holiday season an attractive time to sell.

Using city-level data from Zillow.com we took a look at some metrics that help capture the attractiveness of the current selling environment for Everett, Bellevue, Seattle, and Tacoma. The first measurement is the median sales-to-list price ratio, which shows how close the median sale price was to the median list price. A value closer to one indicates an attractive selling environment in which most homes are selling at (or above) their list price.

Sales-to-list Price ratio - Seattle, Bellevue, Everett, Tacoma

The second two metrics show both the percentage of homes for sale which have had price cuts as well as the median magnitude of those price cuts. Much like the sales-to-list price ratio, both of these figures highlight the attractiveness of the current selling environment. The downward trend of both of the charts below suggests that homes are selling at or near their list price and even when prices are lowered to expedite a home sale, the cuts aren’t nearly as steep as in previous years.

Percentage of Listings with Price Cuts

Size of Listing Price Cut

These metrics, together with the other positive signs coming out of the housing market (see our previous post), suggest a relatively attractive market for real estate investors in the coming months. Add in the abnormally low levels of housing inventory – the number of homes for sale is down over 44% from the same period one year ago according to Redfin.com – and you get a perfect storm for fix and flip investors looking to making a bonus this holiday season.


Tyler

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