Seattle Real Estate Starting to Pop…Home Prices Rise 10.5% and Sales up 24%

This month’s report on real estate sales in Seattle is the most dramatic we’ve seen in at least five years. While home sales have been on the rise for months, the previous gains in homes prices had been minor. May’s real estate statistics have solidified the trend and pushed it into overdrive.
Home prices last month increased over much of Seattle and the Eastside, while sales continued to climb.  Prices of houses sold in Seattle increased 10.5% year-over-year.   The lack of inventory in the most popular neighborhoods in Seattle has created bidding wars and sellers are becoming more confident in pricing their homes higher in recent months. Condo prices gained 7.4%, with the same dearth of inventory creating a serious shortage as buyers struggle find available condos in South Lake Union, Downtown, and Capitol Hill.
Total sales of houses in Seattle climbed 22.3% in May, as compared to the same month in 2011. Sales of condos increased 29.6%, a whopping increase of nearly 1/3 more sales, while at the same time inventory of available Seattle homes for sale was down 37%.
The picture is similar on the Eastside with slightly muted numbers, as we’re seeing 1-2 percent gains in home prices, but a 19% increase in the number of total Eastside home sales.  Based on Seattle’s trend, the Eastside may follow suit shortly and be in for a significant bump. Overall, King County house prices saw a gain of around 5% and condo prices saw a drop of about 2%, with Seattle’s large gains offsetting some price drops in outlying areas of the county.   Total sales in King County increased 24% for houses, and 25% for condos.
The longer Seattle housing inventory numbers stay this low, the more pricing will be pushed upward as the employment market continues to strengthen and well-qualified buyers compete for scarce high-quality, non-distressed homes for sale in the Greater Seattle market.  While there will certainly be more short sales and foreclosures coming to the market in the future, the current market for traditional resale and new construction home sellers hasn’t looked this strong since 2006–which feels like a lifetime ago.
This article is courtesy of the Seattle Times and NWMLS.