The 2018/2019 Market Report

Another year has passed, as have many pivotal milestones for Realogics Sotheby's International Realty (RSIR), our brand and the local housing market that we serve. After meteoric home price growth in the region throughout 2016 and 2017, the market began to shift by the second half of 2018, spurred by increasing inventory; the fallout from Seattle's adopted (then repealed) "head tax" and the outcome of Amazon's HQ2; ongoing political banter at home and overseas; threats of interest rate increases; and a barrage of self-fulfilling headlines about a declining market. Now that the data is in, our acclaimed Research Editor and Data Analyst, William Hillis, has assembled a year-over-year performance review of eight key counties and 31 regional markets with a 2018 retrospective and look ahead at the coming year. I offer the below key thoughts and observations from the report.

Central Seattle

This area comprises middle-income neighborhoods northeast of downtown. Some, including Madison Park, Denny Blaine, and Leschi, offer frontage on Lake Washington; but Capitol Hill and Madison Valley are also included.

Quarterly numbers of residential homes sold in Central Seattle were lower year-over-year in all but the second quarter of 2018. There were nearly 23 percent fewer sold in the fourth quarter and 11.6 percent fewer over the entire year.

In both the first and second halves of 2018, fewer condominiums were sold in Central Seattle than in the equivalent periods since the first half of 2014. Condominiums comprised 41.1 percent of 2018 home sales in Central Seattle and 69.2 percent of home sales in Capitol Hill.

Central Seattle was one of several areas that saw an end to 15 consecutive quarters of median residential market times shorter than two weeks. Cumulative days on market in the area nearly tripled from the third to the fourth quarter of 2018, from nine days to 26.

There were 31 residential homes sold in Madison Park for an average of $1.83 million, 24 in Washington Park for an average of $2.17 million, and seven in Broadmoor for an average of $3.52 million.

The median residential price in Central Seattle progressed at a com-pound annual growth rate of 8.9 percent from 2014 through 2018. This is one of the areas in which Realogics Sotheby's International Realty is forecasting a still higher median price in 2019: to $990,000 from $950,000 in 2018.

Queen Anne/Magnolia

The quarterly number of residential home-selling transactions in Queen Anne and Magnolia fell throughout 2018—but especially in the third quarter, when they dropped by nearly a third. The unit transaction volume ended the year nearly 20 percent lower than in 2017.

Condominium units comprised 37.8 percent of all homes sold in Queen Anne and Magnolia in 2018, down from 39.5 percent in 2017.

Residential sellers in the twin neighborhoods of Queen Anne and Magnolia drew similar prices for homes they sold in 2018. Those in Magnolia averaged $1.21 million; in Queen Anne, they averaged $1.3 million.

From 2014 through 2018, the median price of a residential home in Queen Anne and Magnolia advanced at a compound annual growth rate of 10.8 percent, surpassing a million dollars. As in Central Seattle, the price in Queen Anne and Magnolia is forecast to continue upward in 2019. Yet market times here rose even more sharply than in Central Seattle—fully tripling in 2018 from a year earlier, from nine days to 27.

Belltown/Downtown

The fourth quarter of 2018 saw fewer than 100 units sold, the least Belltown/Downtown Seattle condominium units sold quarterly since the first quarter of 2015. For the year, however, two more units were sold than in 2017.

Also in the fourth quarter, market times of units listed for resale lingered for a median 52 cumulative days on market, although these units were competing with recent new construction offerings in pre-sales that have not yet opened for occupancy. To entice buyers away from new projects, sellers of existing units sold in the second half of 2018 were compelled to negotiate lower-than-list prices more frequently than seen since 2016.

Selling prices of re-sold condominium units in Belltown and Downtown have increased at a compound annual growth rate of 12.0 percent annually since 2014. The median selling price in 2018 was $675,000.

The Belltown and Downtown area is also undergoing a "condominium comeback," with several exciting projects in the new development pipeline that are scheduled to deliver over the next few years. The 389-unit NEXUS Condominium Tower will be the first to completion and is scheduled for occupancy late 2019. KODA has broken ground on a 17-story building with 201 condominium homes in the growing Chinatown-International District and SPIRE will grace the Seattle skyline with occupancy in late 2020 to early 2021. An impressive uptick in presales hit in the fourth quarter of 2018 with the arrival of new projects such as SPIRE and First Light, which combined, outsold resales 2:1 (albeit mostly to international buyers).

For additional market data, read the full report below or contact me to discuss the implication for homes in your community.