Chicken Little

Is the sky really falling? Maybe it is falling indeed, and I just haven’t noticed it yet? Maybe it’s falling, and I don’t know it is, because I don’t know what to look for? With all the whispering going around about the end being near I had to look for myself. I don’t believe in gut feelings about the market. I don’t believe in listening to those whispers. I believe in numbers, hardcore math and data.

Numbers, numbers on my screen, tell me, tell me what’s to be…

So, I sit down, and I start loading reports. Reports starting from June 21^st ending in today. I keep the area as Redmond, otherwise there would be way too much numbers to crunch, but I’d be happy to the same in your zip, city or town if you asked me to. I pull data for residential listings. Anything residential that has been listed since June 21^st, regardless of price; active listings, pending listings and sold listings. I look at the Comparative Market Analysis. I pull the Area Market Survey and lastly, I grab the Statistical Market Analysis for Appraisers. I grab my calculator and I start doing math. Some of the numbers cannot be just pulled out of the report, some I have to calculate myself. The questions that I want to get answers for, besides if the sky is falling, are if listings are selling under or over asking price. How many months of inventory do we currently have. How many properties have been sold since first day of summer. What are the median days on market? How about average days on market?  How many listings over and under 1 million?

My blue dots with homes for sale, homes pending sale and homes sold since June 21st.

The map on my screen has blue dots on it, then red, green and finally yellow. I combine yellow and green to see the visual image, it doesn’t look alarming but let’s dig deeper. As of this morning we had 157 active listings in Redmond, meaning there currently 157 homes for sale. Less than half of the properties for sale are listed under $1 million. Almost a fourth (24%) of all homes for sale are listed above $1.5 million. Yet, I can promise you, you know; cross my heart and hope to die kinda promise that one out of four clients are not looking for a property at or above $1.5 million.

There are 120 listings pending sale. Pending means that the home is under contract, but the sale has not closed yet. Less than half of the pending properties were listed under $1 million, makes sense, one can’t buy something that isn’t available. 

Pending sales in Redmond

Looking at the properties sold since beginning of summer, we have 242 homes sold. 157 homes for sale and 362 homes either sold or pending sale. When looking at the sold homes just 1% is above $1.5 million and over half of all the homes sold are under $1 million. Are you starting to see a pattern here? Ummm… what we have isn’t quite what people are looking for is it? This is no news. It is no news that we don’t really have enough homes for the majority of people, people looking for a home, not for a luxury property.

Sold since Jun 21st.

Let’s look at a couple of these homes. The most affordable home for sale in Redmond is listed for $479,500. It is a 2 bedroom, 1,114 SqFt townhome with one parking spot, and a monthly HOA fee of $509. Next one up the list would be listed at $488,000, a 3 bedroom, 1,270 SqFt cottage with no covered parking, but it does have a larger, level lot and it is not a manufactured home. Your third most affordable option is listed at $527,900. This home is a 3 bedroom, 1,728 SqFt double-wide manufactured home, meaning it’s a mobile home. The lot is large at 1.4 acres and this listing includes a 4-stall barn.

Next, I will take you to the other end of the spectrum. Our most expensive listing in Redmond is another equestrian property with 3 barns accommodating 33 horse stalls. It has both indoor and outdoor arenas, and an expansive viewing field. This almost 20-acre property is listed for $6.5 million.

Property that takes the second place on the most expensive homes for sale list has the title of being the largest home in Redmond. It is a 13,540 SqFt mansion on 7 acres. This property has 7 bedrooms, 8 bathrooms, a gym, a dance room, a media room, three kitchens, an elevator and a 4-car garage. The annual property taxes are $44,250. The third place on the list of most expensive listings in Redmond goes to a presale. It will be a 7,052 SqFt Northwest Contemporary home on almost 5 acres. This home will have 5 bedrooms and 4.5 bathrooms, and it is currently listed at $3,825,000.

Homes for sale in Redmond.

So how did the properties that were sold sell? Did they go at list price or maybe under? Is everyone just dropping their price because the homes are not moving? Well, I wouldn’t quite say that. Looking at homes that sold under $1 million, 43% of all homes sold on or after June 21^st went above the listing price. 18% of homes sold at the asking price, meaning 61% of all homes sold went at or above the price they were listed for. The median days on market was 8 which is just a tad over one week. It used to be 6 in the spring, but 8 isn’t really that high either.

If we look at the absorption of the inventory, it looks like we currently have 1.3 months of homes for sale. That is way more than what we have had in a long time, as for quite some time our inventory was hovering somewhere around 0.6 to 0.8 months’ worth.  

Listed and pending combined.

So, is the sky falling? We are about to enter the fall sales after summer months. We still have way less inventory than what a healthy, balanced market would have. We have a gap between the homes our buyers have and homes available for them. The average sales price is currently $984,195 with +9.1% growth from last year. I don’t think the sky is falling. I think our market is reaching its pinnacle for now, and we may see a tad slower growth. Seattle Times headline stated that Seattle is no longer number 1 hottest real estatemarket, that is true as we currently are “only” the 2^nd hottest market in the United States.