Our Parkwood-ish house when we bought it in 2010
Five years ago this month, Charlie and I bought a home on Mercer Island. We live in what I call the “Parkwood-ish” neighborhood of Mercer Island, since Parkwood is relatively well-known (a great trick-or-treating neighborhood) and well-marked with a sign off Island Crest Way right across from Island Park elementary school.
We technically live in “El Dorado Estates” a few houses down the street from Parkwood. I joke to Charlie that we live “on the wrong side of the hedge” since there’s a giant Laurel hedge that separates the HOA neighborhood of Parkwood from our non-HOA neighborhood with the less sexy name.
But the truth is, there is no “wrong side” of anywhere on Mercer Island, one of the most highly desirable communities in the greater Seattle area that is becoming less and less affordable for entry-level buyers.
Windermere’s Quarter Three Report for 2015 just came out, and in reflecting on the stats, Julie Barrows, my designated broker and owner of Windermere Mercer Island, noted:
“The biggest news on Mercer Island has been the near absence of available homes priced under one million dollars—yes, $1,000,000. Those few that come to market are often snatched up by home builders looking for future new home sites. Sadly, Mercer Island is becoming less and less affordable as time goes on. Fewer high-end sales have balanced the small number of lower-priced home sales, leaving the average sale price deceptively, well, average, when what has truly occurred is a run up of sales prices at price points below $1.3 million.”
A lot has changed in five years
In 2010 when we bought our home, the median sales price on Mercer Island was $892,000. Today the median sales price is $1,160,000. Additionally the number of homes available for sale on Mercer Island has plummeted. When we were house-hunting, there was three times the inventory on Mercer Island than there is today.
To provide some perspective, in July of 2015, there were only 54 active listings on Mercer Island (compared to 97 in 2014, 116 in 2012, 160 in 2010, and 212 in 2008).
Number of Active Listings on Mercer Island from 2008-2015.
Crazy times for home buyers
If you or anyone you know is trying to buy a home on Mercer Island (or practically anywhere in Seattle or Bellevue, for that matter), you probably know that this is a pretty crazy market.
The lack of inventory has resulted in a cut-throat competition particularly for desirable properties, marked by offer-review dates (when the selling agent shares a date when multiple offers will be reviewed), pre-inspections (when the buyer hires an inspector to do an inspection before an offer is a submitted, so the buyer can waive the inspection to make a more competitive offer), and escalation addenda (when the buyer includes an addendum in his/her offer that will escalate the offer price higher than a competing buyer’s offer).
Golden days for home sellers
With this kind of demand, many home sellers these days don’t have to negotiate much. Sales are happening lightning fast, especially for the non-waterfront resale market on Mercer Island. For this market, the average cumulative days on market (CDOM) from June through September 2015 was 26.25 days, indicating a very fast time frame from when the house was listed to the date it was sold. (By comparison, the average CDOM in September 2013 was 40, 56 in September 2011, and 119 in September 2009.)
For the same market, the original list price to sold price percentage for this year has ranged from 97% to 102%, as an average. And for the most highly desirable properties, bidding wars have pushed sold prices even higher than 110% of list price.
The longer view shows a recovered market on Mercer Island
Even as Mercer Island seems to become increasingly expensive, especially for aspiring new homeowners, the market appears to have finally recovered to previous levels. According to the “10 Year Look Back” chart below, the Mercer Island housing market peaked in 2008 with a median home price at $1,160,000. The good news is we’re back to pre-bubble pricing. The median price again this year is $1,160,000.
Many home owners are noticing that that they’ve made an excellent investment in real estate on Mercer Island. According to Windermere’s quarterly report, compared to the third quarter last year, the average sales price on Mercer Island has increased by 12.9% and the average cost per home square foot is 9.2% higher.
If you are curious about the current value of your home, feel free to get in touch with me and I would be happy to provide you with a complimentary market analysis and home value estimate. Feel free to email me at [email protected].
Also, be sure to check out our new page on My Mercer Island that provides dynamic real estate charts showing local trends based on NWMLS data. Visit My MI’s real estate statistics page >>
What are your observations about Mercer Island’s real estate market this year? Share your thoughts in the comments below.
Considering buying or selling a home on Mercer Island? We’d love to help. Erin is a local neighborhood expert and a residential real estate broker with Windermere Mercer Island. She is co-founder of the Sirianni Group, in partnership with her husband, Charlie Sirianni. Charlie is a Mercer Island native, Managing Broker with Windermere Mercer Island, and former real estate attorney of 10+ years. Get in touch with Erin (email / phone) or Charlie (email / phone) today.
