October 2018 Real Estate Market Update

November 12, 2018 | by Erin Sirianni

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As August and September marked a significant slowdown in the frenetic pace of the local real estate market, activity in October started picking back up again. On Mercer Island, we saw an increased number of pendings, sales, and new listings month-over-month, and inventory decreased for a second month in a row.

Regionally, prices are still generally increased year-over-year, though The Seattle Times noted that home prices are down from their peak earlier this year ($80,000 less in Seattle and $87,000 less on the Eastside), and that for the first time in four years, “the average home is selling for below list price.”

We are seeing this adjustment as well on Mercer Island. As you’ll notice in the graph below, the average sale price to original list price ratio dropped to 94% in October 2018. However, also take note that whenever this ratio percentage dips it coincides with months that also have higher average CDOM (November 2017, January 2018, and October 2018). The reason for this is related to the sales of more expensive, luxury properties – in most cases, these properties take longer to sell and often sell lower than list price, as buyers have more leverage in this market segment.

This was true for October market activity on Mercer Island.  In addition to contributing to a higher average CDOM and a lower sale/list price ratio, the sales of luxury homes on Mercer Island also contributed to a high average sales price for the month at $2,090,700.

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

In October, there were 27 new listings, just slightly down from the 26 new listings we saw in September, though quite a bit lower than the same month last year, when we saw 38 new listings in October 2017. There were 18 home sales last month, up from a surprising low of just 13 sales in September 2018. However, the number of home sales was still lower than what we saw last year, when there were 23 sales in October 2017

Mercer Island Price Trends
As shown in the table below, the Mercer Island median sale price has decreased month-over-month, though is still quite a bit higher than October 2017. The average sale price is significantly increased month-over-month and year-over-year – as we discussed earlier, this was due to three luxury homes sales above $3.5 million, including a nearly $6 million waterfront sale, that skewed the average sale price to the high side.

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.