Eastside Median Price Surges to New High as Sales Shift to Cheap South King County Neighborhoods

I’ve pointed out for years that geographic shifts can and do affect the median price, so it was nice to see none other than Lennox Scott (CEO of John L. Scott) joining the chorus in a recent Seattle Time’s piece.

Lennox Scott, CEO of John L. Scott Real Estate, said the lower price in July also could be due to the mix of homes that sold.

Of course, I pointed out that the geographic mix was likely the reason the county-wide median moved up so much between May and June, while Lennox only feels the need to mention the mix when the median moves down, but whatever. Let’s have a look at this month’s numbers to see how the mix shifted again in July.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

  • low end: South County (areas 100-130 & 300-360)
  • mid range: Seattle / North County (areas 140, 380-390, & 700-800)
  • high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of May data:

  • low end: $280,000-$366,325
  • mid range: $372,000-$810,000
  • high end: $536,500-$1,537,500

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

Median Price of Single Family Homes Sold

The low and high tiers saw month-over-month gains in their respective median-median price, while the middle tier fell slightly. The high tier shot up over $30,000 in July to a new all-time high of $723,988. The low tier hit its highest point in 84 months, but still fell short of its August 2007 high. Month-over-month, the median price in the low tier rose 1.9 percent, the middle tier decreased 6.5 percent, and the high tier gained 4.5 percent.

Twenty-five of the twenty-nine NWMLS regions in King County with single-family home sales in July had a higher median price than a year ago, while eleven had a month-over-month increase in the median price.

Here’s how the median prices changed year-over-year. Low tier: up 3.6 percent, middle tier: up 6.3 percent, high tier: up 9.2 percent.

Next up, the percentage of each month’s closed sales that took place in each of the three regions.

% of Total King Co. SFH Sales by NWMLS Area

Sales in the low tier neighborhoods rose again between June and July, but sales in the middle and high tier neighborhoods fell. The result was a shift back away from expensive Eastside and Seattle sales toward the cheaper South King County region. Month-over-month sales were up 8.0 percent in the low tier, down 3.0 percent in the middle tier, and down 5.0 percent in the high tier.

Year-over-year sales were mixed across the three tiers. Compared to a year ago, sales increased 20.2 percent in the low tier, rose 9.6 percent in the middle tier, and fell 2.1 percent in the high tier.

As of July 2015, 34.8 percent of sales were in the low end regions (up from 31.5 percent a year ago), 33.0 percent in the mid range (up just slightly from 32.8 percent a year ago), and 32.1 percent in the high end (down from 35.7 percent a year ago).

Here’s that information in a visual format:

Bank-Owned: Share of Total Sales - King County Single-Family

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

% of Total King Co. SFH Sales by NWMLS Area since 2000

Price-wise, things seem to have cooled down slightly in July, with fewer than half of the NWMLS-defined neighborhoods seeing a month-over-month increase in their respective median price. Sales in the more expensive regions also slowed down, but the increase in cheap regions seems to indicate that demand isn’t starting to dry up just yet. It will be interesting to see if any of these softening signs continue in the next few months.


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

25 comments:

  1. 1
    pfft says:

    Was I the only one here to predict a general rise in homes prices even though I was off a year or so?

  2. 2
    Erik says:

    The dirty south sound probably still has many foreclosures on the books keeping prices low and generating more sales. Once the poor are extracted from their foreclosures and their homes are sold, prices will go up and the number of sales will go down in the dirty dirty. I think that is true for my mid tier area in west Seattle. Too many foreclosures for median prices to go up.

  3. 3
    Simple Z. says:

    I am probably the only one who is thinking .. this jump in sales for non-eastside houses is going to continue exert pressure on freeways in and out of Bellevue / Redmond. Coming in from Bellevue to MS as late as 9:30AM I see backup all the way to I-405. Evenings is another story altogether.

  4. 4

    RE: Erik @ 2

    There’s Lots of Flippers and Landlords In That Poor Lot Too Erik

    In fact a desperate landlord flipper foreclosure is the perfect storm to grab up a foreclosed home, especially if the deal is seamless, no tenant eviction necessary.

  5. 5
    sleepless says:

    Lets see where all those landlords run when the DOJ drops another 1-2K points and how quickly the “no bubble here” starts to deflate. I think, 16K is the psychological barrier for DOJ, once broken, there is no coming back. Also, if the FED does get balls to go ahead with the interest rates hike, the liquidity and the easy money will start evaporating even quicker…

  6. 6
    sleepless says:

    We also have a glut of new apartments coming to the market here, in Bellevue. Some apartments that came a year ago or so (Park Metro) still have plenty of vacancies. I see more and more “leasing now” signs popping up through out the downtown as well as more and more “office space available” signs… I wonder what it is going to look like a year from now… New apartment buildings popping up right and left all over the city…

  7. 7
    Erik says:

    RE: sleepless @ 4
    The Dow jones is over 17000. You aren’t making sense.

  8. 8

    RE: Erik @ 6

    Erik I follow the DOW

    Its been wobbling up and down erratically at 17.3-18.2K the last 6 months, most investors lost money YTD.

  9. 9

    RE: sleepless @ 5

    I See More Help Wanted Signs Popping Up all Over the Place Too

    So they can hire more 20 hrs/week ones with no health benefits.

  10. 10
    Erik says:

    RE: softwarengineer @ 7
    Yeah, housing seems more predictable than stocks. I have no idea what the stock market will do. Plus with houses, you can invest with someone else’s money and never have to pay it back if you lose it.

  11. 11
    ess says:

    Prices may come down, but people are still going to need to live somewhere. And when the market tanks, quite often the rental market firms up because those who were planning to buy put it off and they rent. It isn’t only a question if real estate prices cool off, but there are many other factors involved. Are there job loses in the area, what kind of jobs have been lost, are they being replaced by other jobs and what kind of jobs are those, is the area losing population, are people doubling up and sharing apartments and houses, are kids staying home later rather than moving out, is there less new family and housing formation as a result of economic factors? Actually most landlords have weathered past drops in real estate prices pretty well – most of them survived the great recession intact. They may have to rent their property at somewhat lower rents, they may have to throw in a few incentives to get new tenants, they may have to take a less than stellar renter, they may not be able to get first, last and a huge security deposit, but a vast majority of them made it through the great recession still owning their properties. Have been through it all.

  12. 12

    RE: ess @ 10

    Yes ESS

    My friend is a past landlord and won’t ever do it again. For the last 15 years from 1994 he rented out a mother in law cottage to several different tenants [including me, from 1994-1999]; he made no money and lost more than he made. BTW, he considered me one of his best tenants, although he spent too much money on me building fences, new bedrooms and playgrounds for my two children, which I eventually raised on my own….LOL.

  13. 13
    Azucar says:

    By Erik @ 7:

    RE: sleepless @ 4
    The Dow jones is over 17000. You aren’t making sense.

    What doesn’t make sense? Sleepless said that when the DOW drops another 1,000-2,000 points (which, since it’s a little over 17,000 now means getting below about 16,000) it will have broken through a psychological barrier and will continue to decline (and will bring housing prices down with it).

    For someone who thinks that they are as smart as you think you are, you sure do get confused easily.

  14. 14
    Erik says:

    RE: Azucar @ 13
    There are a lot of assumptions here. Firstly, I don’t think the Dow will go under 16000. It could, but not likely. Second, housing prices aren’t dependent on the Dow jones.

  15. 15

    By Erik @ 14:

    RE: Azucar @ 13
    There are a lot of assumptions here. Firstly, I don’t think the Dow will go under 16000. It could, but not likely. Second, housing prices aren’t dependent on the Dow jones.

    I have a lot more confidence in my ability to pick stocks than to predict the housing market, but that’s just me. As far as housing prices not being dependent on the Dow Jones, well, maybe some? Everything’s connected. If stocks is where people have their down payments, or 401k’s, and the market tanks, of course it’s going to have some impact on what you buy.

  16. 16
    ARDELL says:

    RE: Erik @ 14

    Should go below 16,000 between now and the election next year. The indirect correlation to housing market is the stock market drop impacts consumer confidence numbers.

  17. 17

    The impact of the Dow on housing prices varies by price range, with it having more impact on the upper price ranges. If you have $6,000,000 of stock that you paid $2,000,000 for, you’re more likely to buy a $2,000,000 house, than if your $6,000,000 portfolio drops to $4,000,000.

  18. 18
    Cap''n says:

    RE: Kary L. Krismer @ 17

    Good point. I know the numerous followers of this blog in that position will chime in to agree. Crickets.

    Regarding mix, I think the east side will no longer be the high end tier within the next few years. Close in Seattle proper will rise. Ballard/Fremont/Phinney/Wallingford/Ravenna providing the amenities all those techies need once they decide to have 2.2 kids with their golden retrievers.

  19. 19
    ess says:

    By Cap”n @ 18:

    RE: Kary L. Krismer @ 17

    Good point. I know the numerous followers of this blog in that position will chime in to agree. Crickets.

    Regarding mix, I think the east side will no longer be the high end tier within the next few years. Close in Seattle proper will rise. Ballard/Fremont/Phinney/Wallingford/Ravenna providing the amenities all those techies need once they decide to have 2.2 kids with their golden retrievers.

    A few questions about the above statement which I happen to agree with, especially if Seattle continues to be a major technological center as all signs seem to indicate.

    If all the techies wish to move to the above mentioned neighborhoods, how much can and will prices go up? Will those areas transform into another Silicon Valley housing area?

    Will there be enough houses with picket fences for all those techies, kids and dogs?

    If not – where will the overflow go, and what will be the new hot areas?

    Assuming those areas continue to be red hot and prices escalate, where will all of those who either can’t afford the prices or don’t want to pay the prices reside?

    Assuming that there will be a ripple affect of increased prices because of popularity, where will the ripple effect be felt most? Upper north end of Seattle by Shoreline? Shoreline? South Snohomish County, south Seattle, south of south Seattle?

    These are exciting times for those who own houses, and anxious ones for those who are worried about being priced out of the market.

  20. 20
    HN says:

    1. Why are North King and Vashon included in Seattle? That doesn’t make any sense to me. Why isn’t it just Seattle?
    2. Re: Inventory tight… could we get some reporting on that? I know we keep hearing the “Seattle is now a tech center” mantra. And obv the Wallingford/Ballard/etc. area is safe and profitable for rich techies. But at the same time, I also keep seeing articles about institutional investors in the housing market. What I am reading is that they bought up inventory everywhere, making it suddenly tight starting around 2012, and the vast majority have sold their inventory this year. Even if Seattle hasn’t seen as much institutional investment as other cities (and all these new apartments EVERYWHERE, ie Ballard, tells me it has seen significant institutional investment), As (The Tim?) has pointed out before, Seattle is not immune to developments in the rest of the country. So what is the deal with this inventory shortage? Is it entirely techies, as they keep saying, or is there a deeper story?

  21. 21
    wreckingbull says:

    RE: Cap”n @ 18 – It’s funny, but the techies I know that live in those neighborhoods are finding the schools are not quite up to snuff. I don’t have kids, but if I did – I’d have to give the Eastside a hard look for that reason alone, regardless of my thoughts on suburbia.

  22. 22
    ess says:

    By HN @ 20:

    1. Why are North King and Vashon included in Seattle? That doesn’t make any sense to me. Why isn’t it just Seattle?
    2. Re: Inventory tight… could we get some reporting on that? I know we keep hearing the “Seattle is now a tech center” mantra. And obv the Wallingford/Ballard/etc. area is safe and profitable for rich techies. But at the same time, I also keep seeing articles about institutional investors in the housing market. What I am reading is that they bought up inventory everywhere, making it suddenly tight starting around 2012, and the vast majority have sold their inventory this year. Even if Seattle hasn’t seen as much institutional investment as other cities (and all these new apartments EVERYWHERE, ie Ballard, tells me it has seen significant institutional investment), As (The Tim?) has pointed out before, Seattle is not immune to developments in the rest of the country. So what is the deal with this inventory shortage? Is it entirely techies, as they keep saying, or is there a deeper story?

    Today I read a story that indicated that one problem is the lack of buildable lots. The Urban Growth Management Act has always been a contributor, but no one wants to admit it because no one wants “sprawl”
    To paraphrase an old cartoon character –
    we have met the problem, and it is us

  23. 23
    I'm just here so I won't get fined says:

    RE: HN @ 20
    I don’ know why Vashon is included with Seattle but North King ie Shoreline used to be unincorporated Seattle before it became its own city 25 or 30 years ago.

  24. 24
    Mike says:

    By wreckingbull @ 21:

    RE: Cap”n @ 18 – It’s funny, but the techies I know that live in those neighborhoods are finding the schools are not quite up to snuff. I don’t have kids, but if I did – I’d have to give the Eastside a hard look for that reason alone, regardless of my thoughts on suburbia.

    There is the issue that most of the new schools are being built in South Seattle while the north end schools are really showing their age. However many of the north end schools are scheduled to be replaced over the next 5 years.

  25. 25
    Cap'n says:

    RE: Mike @ 23

    And as home values/property taxes increase, and the wealthy demand improvements, the schools will become the envy of the east side.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.