The story of the local real estate market, in line with what’s happening nationally, is primarily about how low inventory levels and apparently increasing demand may be forcing prices upward.
The Seattle Times, for example, recently touted the fact that home prices in King County are continuing to rise.
Quoting May information from the Northwest Multiple Listing Service (MLS), the paper reported on its front page in June that the median price of a single-family home in King County was up almost 5 percent year over year while Seattle’s median price had increased by more than 10 percent.
West Seattle, Leschi, Mount Baker, Queen Anne and Magnolia were among the Seattle neighborhoods singled out as having had the biggest increases in median prices, but Madison Park was not mentioned.
The MLS, however, does not break out sales information for this neighborhood, lumping Madison Park with Capitol Hill, Madrona, Leschi and Montlake. So it’s not clear how the MLS information might have been mined by The Times to indicate that Leschi is hot right now.
For the wider MLS region that includes both Madison Park and Leschi, the May data is actually a bit mixed. While the median price of homes rose from $394,500 to $447,500, a 13.4-percent increase, those numbers include condo sales.
Just looking at single-family homes, as The Times did, the median price for our part of town actually fell from $635,000 in May 2011 to $562,500 in May 2012. That was the third-largest decline of any King County area tracked by the MLS.
Statistics have their limitations, of course. We’ve often noted that small changes in the composition of Madison Park sales can have a big month-over-month impact on the numbers. This is true, but to a lesser extent, for the MLS real estate region we are part of and for the year-over-year numbers, as well.
For the Capitol Hill/Madison Park/Montlake/Madrona/Leschi neighborhoods as a whole, listings were down almost 33 percent year over year, while sales were up 30 percent. This data may represent a good sign for the future, since increasing demand should impact median prices in the long run, assuming inventory does not ramp up even faster.
A ‘flight to quality’
Hot on the heels of The Seattle Times’ coverage, the Wall Street Journal weighed in with a front-page story of its own in recent weeks. In it, Seattle’s real estate market was specifically called out for analysis.
The article, “Housing Comeback Remains Uneven,” noted that a recent analysis of national real estate trends by Zillow concluded, “Homes in sought-after neighborhoods, including those near transportation corridors and with top-notch public schools, are finding buyers.” Other neighborhoods not so blessed, however, are “languishing.”
A map of Seattle ZIP codes shows the 98112 area as being in the very top tier of Puget Sound communities, with a 5-percent January-through-April increase in home values.
According to Zillow’s chief economist, Stan Humphries, as quoted by the Journal, more than a third of Seattle’s ZIP codes showed increases during the period, a sharp increase from last year, when only 3 percent had rising values.
Redfin’s chief executive Glenn Kelman, meanwhile, is quoted by the paper as saying that Seattle’s market is characterized by a “flight to quality.” At the same time, median prices are still on the decline in “Seattle’s far-flung exurbs and emerging urban communities.”
The article’s accompanying colored map shows a lot of red and pink through the Puget Sound region (marking areas of decline), while bits of green (spotlighting areas with increases) are centered primarily in the core of Seattle. Our surrounding neighborhoods are all green, with the exception of the Laurelhurst and University District area just north of the ship canal.
Seeing more action?
Whether there really is a flight to quality should become more evident as the year progresses. Madison Park has apparently always bounced back very well from downturns in the past, and if good schools and close-in location are the most important variables, this neighborhood and the surrounding communities should continue to stand in good stead.
Anecdotally, local real estate agents report that there have recently been multiple-offer situations for several Madison Park properties, including for a couple of houses in the more-than-$1 million price range. It’s been a long time since we’ve heard of that kind of action.
Even so, it may be a bit premature to accept at face value the subject line of a recent e-mail from Redfin: “The Bottom? That Was So Last Year.”
BRYAN TAGAS writes the Madison Park blog (www.madisonparkblogger.com), from which this column was excerpted.