To help get a perspective on what the housing market is comprised of, I have generated the tables below. The first details the five-county, Central Puget Sound’s residential sale activity by county for calendar year 2005.

Regionally, there were just over 86,000 residential sales closed through the brokers’ multiple listing service (NWMLS). Of these, 83% were single family houses, 17% were condominiums. As a comparison, the close in, urban neighborhoods (Leschi to West Seattle and north to the Seattle city limits at 145th St) produced a 31% ratio of condo sales, nearly double that of the regional market, but still a significantly smaller market share than single family houses.

Also note that the King County market comprises virtually one half of the region’s sale activity. Further, the market share of the adjacent Pierce and Snohomish Counties is identical at 20%, and the ex-urban counties have a nearly identical market share with Kitsap’s 6% and Thurston’s 5%. Interestingly, these geographic, market share statistics are very symmetrical.

I recently completed a study indicating that, although demand for the urban Seattle housing market is slightly better than this same time, last year, we have a sufficiently greater supply of available houses to render urban market conditions a bit weaker than March of 2005.

It is my expectation that, barring catastrophic events, we will maintain a steady level of activity but lack the high pressure on prices that we experienced during the first half of 2005.

The table immediately below details the market activity for King County during 2005, showing market share for new and resale properties, single family versus condominiums, plus the smaller (2-3-4 plex) multi-family and smaller (under 1.0 acre) residential lot sales.

Also included are the median prices and average marketing time for each group during the last business quarter of 2005. Note that the tallies may differ slightly from the previous table due to data irregularities in the MLS database. However, both tables represent a reasonably reliable perspective on the overall market activity.

Please note that in King County, new construction sales for the single family market represents 17% of all single family properties sold and that new condos represent 10% of all the condos sold.

Also note that the relatively low price for resale condominiums shows that this inventory will likely serve as the starter home for new entrants into the housing market. However, recent vintage resales in the condo market may face a tough time maintaining their value until the market pressure builds, again.

I urge you all to be most attentive to time on the market when you are selling your properties. Particularly so in a stable market, once you get past the average days on market for your area and/or property type, time on the market can cost you in terms of the credibility of the listing in the short term, and net sale price in the long term. The phrase, “I’m not going to give my property away” needs to be tempered with the concept that the seller will be giving away the cash at the time of the sale if an extended marketing time is ignored.

This brings us to the close of our latest Housing Update. Please note that this is a generalized perspective on market conditions. I encourage you to contact me if you have a need for more detailed research for the residential real estate sub-markets you are targeting for investment.

Please feel free to call if you have questions regarding the content of this market update letter or questions about the purchase or sale of real estate. I look forward to the opportunity to be of service.

Regards,

Robert E. Rothstein
206-525-7267 Seattle
HousingUpdate.com