Home values here continue to climb
You may have seen the recent headlines about U.S. home prices: up 12.1% year-over-year through the end of April, according to the S&P/Case-Shiller Index. Seattle, meanwhile, enjoyed an almost equally robust 11.37% increase over the same period, a full 2.65% increase in April alone, according to Case-Shiller. The national and regional markets are definitely continuing their upward spiral after years of decline and stagnation. The surge in home prices, indeed, has been so dramatic in some regions (22% in San Francisco and 21% in both Boston and Las Vegas, for example) that several analysts are already warning of a new national housing “bubble.” Given our region’s less-robust recovery, however, no one is warning of “irrational exuberance” here—at least not that we’ve noticed.
Comparatively, Seattle is still just warming up, not overheating. Our region did not experience the market highs of many other U.S. cities, and our decline from the high was delayed relative to that of the national market. Between January 2000 and the market-high in July 2006, the 20 largest American cities as a group experienced a 106.52% increase in house values. By contrast, Seattle (which had its market high in July 2007) saw an increase of 92.30% for the period since January 2000. Right now, according to Case-Shiller, the 20-City Composite Home Price Index stands at 148.65 and the Seattle Index comes in at 149.05 (through the end of April, the most recent data as we "go to press"). In other words, Seattle is up 49.05% in home values during this century, slightly less than the 52.37% increase of the Top-20. Things have generally equaled out.
But what about Madison Park? Are we hot or are we not? It’s bit hard to tell from the recorded home sales since the transaction numbers are too few and the homes sold each month are too different (different from each other, different from the homes sold in previous periods, and different from the overall stock of homes in the neighborhood) for any worthwhile statistic to be derived from such a small base. But there is a third-party evaluation that does provide some insight. That comes in the form of the Zillow Home Value Index. Though it has its detractors, the Index takes into account recent home sales in a particular geographic area and interpolates that data to create a median home value.
The Zillow Home Value Index for Madison Park currently stands at $883,500, representing a 15.6% increase year over year. The low point for the Madison Park Index was in October 2010, when the median home value stood at $725,000. According to Zillow, Madison Park’s market is currently rising more quickly than Laurelhurst (7.1% year over year), Madrona (13.3%), Wallingford (10.9%) and Windermere (10.7%) but less rapidly than Magnolia (17.2%), Madison Valley (18.8%), and Downtown (20.4%), just to name a few Seattle neighborhoods.
The annualized growth of Madison Park’s median-value house, according to Zillow, is 4% annualized for the past ten-year period. That’s one of the best rates for any Seattle neighborhood (18th of 86 neighborhoods). Of nearby neighborhoods Madrona (at 4.7%), Madison Valley (at 4.3%), the Central Area (at 4.2%) had better performance, while Capitol Hill (2.7%) and Montlake (3.4%) did worse than Madison Park in terms ten-year performance. Leschi and Mt. Baker, each at 4%, equaled Madison Park’s growth rate.
Madison Park homeowners can take additional comfort from one of the statistics underlying the Zillow market evaluation: the median value per sq. ft. of Madison Park residences is $472, second only to Downtown ($515).
Whether or not you accept Zillow’s methodology, it’s clear that there’s an upward trend to the local market; and based on recent sales statistics there’s no good reason to suppose that this trend is about to come to an abrupt stop. It’s a bit early for the second-quarter numbers to be evaluated, but in the month of May alone there were 20 home sales in Madison Park. Given that there are only 39 homes currently available for sale in the neighborhood, recent sales activity implies there’s less than a two-month supply of inventory. And the stock of for-sale housing, for the most part, is churning quickly. Of the 14 single-family residences that changed hands in May, six were sold within one week and two others within two weeks. Five of the six condo sales in May occurred within two weeks of their initial listing.
This is a dynamic market.
[Thanks to Laura Halliday of Windermere Real Estate for providing the market statistics from the Northwest Multiple Listing Service.]