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Seattle's Urban Single Family Housing Market - 18 Month Perspective

Dear Friends,

The table and graph below detail market activity for the urban Seattle, single family housing market, beginning at the long term cycle's ten year peak, about eighteen months ago, and up to the present time.

The continuation of uncertain financial markets, reticent consumer confidence, broadbased industry layoffs, national energy supply and policy dilemmas are all continuing the slower pace in the overall economy.

Housing market dynamics as measured by Strand™ Index methodology indicate that we are following the typical early-decade patterns of the long term cycles, which prompts me to suggest that this is the time to be very critical with the pricing of your listings. It is my expectation that the current pace of selling activity will continue to slow, at least until the Fall market.

Listings that are well priced are still able to generate reasonable buyer interest and the average marketing time of 28 days for the urban market indicate a healthy climate. But as we head into the middle of the year (mid-cycle in the short term cycle) it appears that there will be little tolerance in the marketplace for overpriced listings.

Please study the downward slope of the Strand™ Index graph line, below. This index is compiled by measuring supply and demand in the housing market. A high demand and low supply will push the index up. If demand decreases, or supply increases, (as measured by Strand™ Index methodology) the index will respond immediately ...... and typically weeks prior to feeling it through field experience. Demand has remained steady over the past month as has the supply trend, showing virtually no change in the market strength index.

Also note, the average price has jumped back up to just over $350k, but still lower than the price peak of $361,550 in early August of 2000.

The data below is representative of dynamics in the urban Seattle, single family housing market. Historically, this sub-market represents the strongest segment of the regional market. Market strength tends to be lower in the suburbs, higher price ranges, and condominium market.

If you have a listing currently on the market and it is not generating showing activity or offers, it's time to get competitively priced. Also, experience has shown that as the Strand™ Index graph line descends a long downward slope, it is imperative that you adjust your asking price (down) far enough so that you undercut the market. Otherwise, you'll be chasing the market down, and ultimately sell for less than if you had 'bitten the bullet' on a price reduction earlier in the game.

Regards,

Robert Rothstein
Housing Market Analyst