Market Update: Low Inventory, Higher Prices, and Homes on Holiday Shopping Lists
Despite very low inventory levels, prices higher than last year by double-digit percentages, and high demand, many people are hoping to find a home purchase contract under their holiday tree this year. For some, that wish will be fulfilled; others will still be waiting. Challenges in the form of low inventory extend through both single-family homes and condominiums.
We have observed for months a deep shortage of available condominium units for sale. The depth of that shortage is apparent when we understand that 20 years ago, buyers had some 2,000 units to choose from; today there are only 350. Prices of condo units have risen as quickly as single-family home prices – in some areas, even faster. For example, three years ago, the average Seattle condo cost less than $300,000. Today, that average condo costs $453,000.
The shortage of available single-family homes continues, and prices continue to rise. Although price increases have eased very slightly since their peak during the spring, home prices remain at record levels. This situation is now extending throughout the area.
- The median price of a Seattle house was $741,000 in November: 20.6 percent higher than a year ago.
- On the Eastside, the median price was $851,000, a 12 percent increase.
- On Mercer Island, a 27 percent increase to a median price of $1, 462,500
- In Bellevue, west of 405, however, the median price of $2,144,000 represents a decrease of 2 percent from last year.
Despite low inventory levels and rising prices, it is still a great time to buy a home in the Seattle metro area. Maybe you will find a sales contract under your holiday tree after all!
Mortgage Interest Rate Update
Average mortgage interest rates announced by Freddie Mac on Thursday, December 8:
30 year fixed 3.94%
15 year fixed 3.36%
5/1 year ARM 3.35%