2017/2018 Market Trends: Annual Stats & a Look at the Year Ahead
We are thrilled to share a review of 2017 market activity in the Puget Sound presented by Realogics Sotheby’s International Realty. Our acclaimed Research Editor and Data Analyst, William Hillis, has assembled an excellent year-over-year review of eight key counties in Western Washington along with data for 29 communities. In addition to providing in-depth market analysis, this year’s report includes a look at the effects of Chinese capital controls and Canada’s restrictions on foreign buyers, landmark sales on the Eastside, the “Condominium Conundrum,” and a timeline of Seattle’s performance on the S&P CoreLogic Case-Shiller Home Price Index. We offer the following key highlights from the reports, with a selection of trends to watch, as a conversation starter so we may discuss the impact on homes in your neighborhood.
In King County, the shortage of single-family homes for sale in 2017 allowed scarcely any more transactions than in the preceding year. Yet as prices escalated sharply due to supply constraints, selling volume likewise rose, though not by as much as in Snohomish or Pierce Counties. Median selling prices surpassed a million dollars in Bellevue and Mercer Island, and drew close to this threshold in Sammamish (at $955,000) and the Seattle neighborhoods of Queen Anne and Magnolia (at $946,000).
Due to the spillover of demand into the exurbs as detailed in RSIR’s May S&P CoreLogic Case-Shiller Home Price Index report, supply along I-5 North had been depleted to the point that Skagit County suffered an outright decline in new transactions in 2017. Both there and in Jefferson County, buyers paid higher selling prices, but these resulted in more modest selling volume than seen closer to the major employment centers to the south.
In Kitsap and Pierce Counties, supply rose to meet demand in 2017. These counties saw greater increases in transactions combined with moderately higher selling prices, leading to much higher selling volumes in both. These counties absorbed some of the excess demand from metropolitan Seattle. The prospects of improved services to commuters, such as those offered by Kitsap Fast Ferries and Sound Transit, probably influenced some buying decisions in these areas.
Comparatively subdued demand prevailed in Island and San Juan Counties, where sellers enjoyed moderate increases in transactions and selling prices, leading to higher selling volumes.
Landmark sales on the Eastside
The steady escalation in home prices dominated the year’s other real estate news, and was reflected in a series of high-value transactions for extraordinary properties on the Eastside. During the region’s peak season for waterfront sales, previously unheard-of prices well-exceeding $10 million were paid for waterfront properties beginning in August. These proved to be the start of a trend that has continued into the first months of 2018 including RSIR’s record Medina waterfront closing in February at $26.76 million.
Local government activism: the influence of restrictions on Mercer Island
Rising prices have locked many longtime residents into their current environs, provoking dissatisfaction with new development that has spurred steps to protect the quality of life. In the fall, residents’ complaints compelled action by the City Council of Mercer Island to preserve views and neighborhood character by restricting buildable footprints on lots, lowering height restrictions, increasing setbacks, and regulating tree removal on developed lots.
We will be monitoring the region to see whether Mercer Island’s example will be imitated by outlying communities, such as those in the San Juan Islands and Kitsap County, or whether such ordinances will be confined to certain enclaves of Central Puget Sound.
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