August 2018 Real Estate Market Update

September 10, 2018 | by Erin Sirianni

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This speed limit sign in the Lakes neighborhood always makes me smile, and now that kids are out and about in great numbers on their walks to and from school and their bus stops, it’s a good reminder to drive slowly in all of our Mercer Island neighborhoods.

With two weeks of hazy skies and poor air quality caused by rampant wildfires of British Columbia, August was not the month we hoped for in the Pacific Northwest, and we welcomed the back-to-school season, the crisp, cooler weather of September, and even the recent rain. Real estate activity was also slower than expected last month, and the weather may have certainly been a factor. Region-wide trends continue to point to a more balanced market, as prices stabilize and inventory increases.

Of recent real estate media coverage, we were especially interested to read Puget Sound Business Journal’s article, “Condos are suddenly worth the risk as the apartment market cools.” The significant buyer demand for condos has lead to considerable price gains in the condo market; on Mercer Island, median condo prices increased by 16.5% in the second quarter of 2018 compared to the same quarter last year.

On the same note, we were also very interested to learn of a possible new mixed-use development in downtown Mercer Island, planned by the City of Mercer Island, that will likely include a residential component. As you might guess, we are hopeful for more condos, as we see this as a significant need for our community. Stay tuned for updates, and in the mean time, here’s what happened last month in Mercer Island real estate.

An Overview of Mercer Island’s Single-Family Residential Market

In August, there were 30 new listings, down from the 37 new listings we saw in July, though consistent with August 2017, when there were also 30 new listings. The number of sales was consistent month-over-month and year-over-year. We saw 32 sales in August, slightly increased from the 30 homes sold in July 2018, and slightly decreased from 34 homes sold in August 2017.

Despite the consistency in sales data, the number of pending properties was unseasonably low last month with only 17 homes under contract at the end of the month. By contrast, there were 27 homes under contract at the end of August 2017; and even more impressive, there were 49 homes under contract at the end of August 2016 (see these trends in the chart below). With fewer homes going under contract, inventory climbed, reaching 89 properties available for sale at the end of month.

The increase in inventory is a region-wide phenomenon, and The Seattle Times noted in its latest monthly report that the number of homes for sale across King County is up 66% compared to a year prior. Our data similarly supports the Times observation that “[t]he surge in listings is not the result of new homes coming on the market, but rather because houses are sitting unsold for longer.”

Mercer Island Price Trends
As shown in the table below, Mercer Island median and average sale prices are slightly decreased month-over-month, though significantly increased year over year. While the price increase suggests strong appreciation across all price points, in actuality, there was simply a higher number of luxury home sales last month, including 6 homes with sale prices over $2.5 million, including 4 homes sold over $3 million. By contrast in August 2017, there was only one sale of a home priced over $2.5 million.

A quick note about our new “Trends at a Glance” table in regard to median and average sale price:  The Mercer Island monthly sales data set is small, and we provide the median and average sale prices from one month ago and one year ago as an interesting comparison. However, waterfront or luxury sales can skew the average and median monthly sale prices to the high side. To get a more accurate sense of appreciation on Mercer Island, we suggest that you look at quarterly and annual Mercer Island market reports.

A Snapshot of the Current Inventory

Mercer Island had 87 active listings on September 8th, 2018. Inventory has increased in the segment of homes priced between $1.75 and $3 million. Meanwhile, the number of homes for sale priced between $1.25 and $1.5 million dropped. Other price segments remain very similar to last month’s numbers.

Mercer Island new listings, pending sales, homes for sale, and homes sold for the past 15 months (single-family homes – does not include condos)*

*Trendgraphix data may vary from other data provided in this monthly market update. For example, while a listing may appear to be a “new listing” to Trendgraphix, it may have been canceled and re-entered into the MLS as a strategy to repopulate IDX feeds. Additionally, town homes are occasionally listed as both a single-family home and as a condominium home. We filter for these types of “new” listings and duplicate listings.

Mercer Island absorption rate based on homes sold for the past 15 months (single-family homes)*

The absorption rate indicates how quickly homes are selling. It is calculated by taking the number of properties sold divided by the number of properties for sale (as a percentage). In a buyer’s market, the absorption rate is 16.67% or lower. In a balanced market, the absorption rate range is from 16.67% to 33.33%, and in a seller’s market, the absorption rate is 33.33% and above.

August 2018 Real Estate Market Stats

Single-Family Residential Market (All)

  • 30 new listings
  • 32 sold homes
  • Median sale price:  $1,747,500
  • Average sale price:  $1,909,456
  • Lowest sale price:  $847,000
  • Highest sale price:  $4,800,000

Non-Waterfront Homes

  • 25 new listings
  • 31 sold homes

Waterfront Homes

  • 5 new listings (3 Westside, 1 North End & 1 Southpoint)
  • 1 sold home (Eastside)

Mercer Island Condo Market

  • 6 new listings
  • 6 sold homes
  • Lowest sale price:  $340,000
  • Highest sale price:  $710,000

Mercer Island “Nosy Neighbor Report” – August 2018

Here’s our monthly “nosy neighbor” report with data for all single-family home sales on Mercer Island (not including unlisted sales). If you’re curious about a recent sale in your neighborhood, you can learn the details with a quick glance at the report below or by clicking on the map for sale details.

Click here for full-size PDF.

Current Mercer Island Listings

By Home Type / Location

  • Mercer Island Condos
  • Single-Family Residential Homes (All)
  • New Construction Homes
  • Waterfront Homes
  • Search by Neighborhood

By Price

  • $1 million or less
  • $1 million to $1.5 million
  • $1.5 million to $2 million
  • $2 million to $2.5 million
  • $2.5 million to $3 million
  • $3 million to $4 million
  • $4 million to $5 million
  • $5 million or more

If you are in need of real estate services, we would love to help. Get in touch today. Check out all of our recent sales here, visit our Listings Portfolio here, and read our testimonials here.

Charlie Sirianni, JD, ABR
Managing Broker
Windermere Mercer Island
Call: 206-992-6151
Email: [email protected]

Erin Sirianni
My MI Founder & Editor / Residential Broker
Windermere Mercer Island
Call: 206-992-5272
Email: [email protected]