2018/2019 Annual 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 in 2018. Though things are changing in the Puget Sound region, the strong fundamentals underpinning economic growth have not. 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, analysis of the S&P Case-Shiller Home Price Index, and a 2019 outlook. Below I have outlined some key insights from the report.

King County

The number of residential selling transactions gradually started to decline in the third quarter of 2017, and accelerated in the third and fourth quarters of 2018. The year ended with 11.2 percent fewer home sales than in 2017.

For a second consecutive year, both in number and proportion of overall sales, fewer King County condominium units were sold in 2018 (6,885 units, compared with 7,898 in 2017). 

After steadily shorter market times since 2015, median cumulative days on market in the fourth quarter of 2018 shot to 26 days—a 16-day year-over-year increase—breaking through the 24-day market time last seen in the fourth quarter of 2014.

Of King County cities with more than 500 residential sales in 2018, those with the highest average (not median) selling prices were, in order of average price: Bellevue, Kirkland, Sammamish, Redmond, and Woodinville.

The 2018 median residential price was $680,000 and the compound annual growth rate from 2014 through 2018 was 11.5 percent.

Central Seattle

This area comprises a diverse patchwork of both affluent and 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 mil-lion, and seven in Broadmoor for an average of $3.52 million.

The median residential price in Central Seattle progressed at a compound 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.

West Bellevue

On a quarterly basis, residential selling transactions in West Bellevue and its environs were lower year over year throughout 2018, and bottomed in the third quarter at nearly 36 percent fewer sales than seen in 2017. For the year, there were fully 20 percent fewer residential sales in 2018.

Market times in this area vaulted by more than 300 percent year over year, from a median cumulative days on market of 14 in the fourth quarter of 2017 to 57 in the fourth quarter of 2018. Longer market times to sale should be factored into listing contracts for 2019.

This area comprises several distinctive communities west of Bellevue with annual sales in the single digits or fewer. Among these, six residential homes sold in Beaux Arts for an average of $2.57 million, 69 in Clyde Hill for an average of $3.17 million, 33 in Medina for an average of $4.46 million, 23 at Yarrow Point for an average of $4.53 million, and seven at Hunts Point for an average of $6.2 million.

In Bellevue proper, residential homes at Enatai, Meydenbauer, and Vuecrest sold for averages of $2.34 million, $2.83 million, and $3.43 million, respectively in 2018.

The median residential price in this area soared by 15 percent from 2014 through 2018, and is among those projected to reach new highs in 2019. 

Kirkland

Except for a very slight increase in the second quarter, the number of residential sales in Kirkland fell year-over-year throughout 2018, plummeting by 32.8 percent in the first quarter. The result was a 15.2 percent decline for the year.

Fewer Kirkland condominiums were sold in 2018 than in any year since 2014. However, condominiums continue to comprise a growing share of homes sold—36.4 percent, compared with 35.9 percent in 2017.

Like other communities in King County, Kirkland saw fewer days on market late in the year; but here, fourth quarter market times had not been so short for so long as in the City of Seattle. The 20 days to sell in the fourth quarter of 2018 was only three days more than in the fourth quarter of 2015 and four days fewer than in the fourth quarter of 2014.

However, lengthier market times were sufficient to curtail competitive bidding and force concessions from sellers.

The 39 residential homes sold at Holmes Point in 2018 averaged $1.41 million, 67 sold at East of Market averaged $1.59 million, and 31 sold at West of Market averaged $2.2 million. Among condominiums sold in 2018, 41 sold at Houghton averaged $776,000, 55 at Rose Hill averaged $924,000, and 117 in Downtown Kirkland averaged $1.02 million.

At a compound annual growth rate of 14.7 percent from 2014 through 2018, residential selling prices in Kirkland have increased faster than those in any city of King County with the exception of Shoreline (15.3 percent) and Burien (tied at 14.7 percent).

For additional market information, please review the full Market Report below. Would you like to know the implication for homes in your neighborhood? Contact me today for a complimentary analysis.