We always look forward to looking at the quarterly data for providing insight on market appreciation since the data sets are larger. We don’t provide commentary on market appreciation in our monthly market updates because the number of sales in one month is just too small (a couple of waterfront sales, or the lack thereof, can inflate or deflate the numbers). However, even a quarterly data analysis can yield inflated numbers, and that’s what we have in this quarter’s report.
According to the data, the Q3 median sale price was 19.86% higher than that of Q3 2017. Did prices really increase that much on Mercer Island? The short answer, is “no, they did not.” The longer answer relates to the City of Mercer Island’s timeline for its residential development code revision, which took place last year. The new changes, which resulted in a more restrictive code, went into effect on November 1, 2017. Likely because of this, we saw more land-value sales transacting on the low-end of the price range between July 1 and September 30, as builders or anyone with plans of building a new residence on Mercer Island purchased entry-level properties with the hope of getting their plans submitted for permitting prior to the November 1 enactment date of the changes.
Taking a closer look at the numbers, we saw that there were 89 sales in Q3 2017 and of those, 45 were properties priced below $1.5 million. In Q3 2018, there were 74 sales, and of those, only 28 were priced below $1.5 million. The differential was almost entirely made up of entry-level and land value home sales, which further supports our theory.
So to get a more accurate sense of price appreciation on Mercer Island, we looked at comparable homes sold this year and last, and with an approach similar to that of the Case-Schiller Index, we determined that the median sale price increase was actually closer 9.0%, comparing Q3 2017 to Q3 2018. So while this number makes more sense to us, we are already looking forward to the upcoming annual reports, when we will compare data sets spanning a full year to give you additional analysis and insight of price appreciation on Mercer Island.
What’s happening with the market now?
As we’ve discussed in our monthly market updates, we’re seeing a shift in the local real estate market. There has been a 34% increase in the average number of single-family homes for sale on the island and a 17% decrease in the number of homes sold. The resulting increase in inventory has created a more balanced market. Buyers have more time to make decisions and room to negotiate the terms of their purchases. Homeowners who are selling their homes are adjusting to longer market times – 30 days has become the new 7 days for turn-key homes that were once thought to be snapped up off the market. However, homeowners and soon-to-be-sellers should also take heart, despite the sudden market shift, the median sale price has increased about 60% over the past five years (give or take).
Mercer Island, Seattle & Eastside Market Reports
For a complete overview of last quarter’s numbers and trends for the Mercer Island market, as well as for Seattle and the Greater Eastside, check out our reports below:
Questions about the real estate market? We would love to help – reach out to us today for a no-pressure, no-obligation conversation. Check out our recent sales here, visit our Listings Portfolio here, and read our testimonials here.
Charlie Sirianni, JD
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]
