My prediction has been, that the 2007 Market will be similar to the market of 2006, that being strong and upwardly mobile. Not necessarily as strong as 2005, when interest rates were lower, but on an even keel with, or better than, last year.
To determine momentum of the market, I look at absorption issues, and reduce the study to a somewhat predictable and mainstream market segment. To keep apples to apples, I target that portion of the market with the highest number of sales in a year’s time. The results are almost startling, with regard to upward momentum since the first of the year, and even better than I expected to see.
Where “in escrow”, which is both STI and Pending, is much higher than “for sale” and/or closed in January 07, the forward momentum of the market is strongest.
Seattle has too many new properties not reflected in the stats (i.e.”1 of 8 townhomes”), as does high end. I am using the market segment I find is best for prediction purposes using the MLS, that being Redmond (98052 only), Bellevue, Kirkland and Bothell (98011 only). I am also using “up to $650,000” as that is the segment with the most properties changing hands in a year’s time, based on the stats I did on a running basis last year.
I also use this market segment because I can readily visualise the properties involved, and so my conclusions are more valid than areas like Tacoma or Snohomish or even all of King County. The segment I use, accounts for both strongest and weaker markets and “residential” vs. condo.
98052 – Redmond – 37 residential for sale, 40 in escrow and 18 closed in Jan. 07; 44 condos for sale, 69 in escrow and 19 closed in Jan. 07.
98011 – Bothell – 40 residential for sale, 37 in escrow and 18 closed in Jan. 07; 15 condos for sale, 28 in escrow and 15 closed in Jan. 07
98034 – Kirkland – 35 residential for sale, 29 in escrow and 27 closed in Jan. 07; 32 condos for sale, 37 in escrow and 25 closed in Jan. 07
98033 – Kirkland “proper” – 23 residential for sale, 15 in escrow and 19 closed in Jan. 06; 50 condos for sale, 62 in escrow and 21 closed in Jan. 07
98004 – Bellevue – 4 residential for sale, 2 in escrow and 1 closed in Jan. 07; 27 condos for sale, 21 in escrow and 8 closed in Jan. 07
98005 – Bellevue – 5 residential for sale, 4 in escrow and 2 closed in Jan. 07; 14 residential for sale, 40 in escrow and 8 closed in Jan. 07.
98006 – Bellevue – 17 residential for sale, 13 in escrow and 9 closed in Jan. 07; 20 condos for sale, 14 in escrow and 6 closed in Jan. 07
98007 – Bellevue – 5 residential for sale, 9 in escrow and 5 closed in Jan. 07; 6 condos for sale, 12 in escrow and 16 closed in Jan. 07
98008 – Bellevue – 18 residential for sale, 20 in escrow and 11 closed in Jan. 07; 1 condo for sale, 4 in escrow and 4 closed in Jan. 07
98005 is a bit skewed, as Woodbridge and Oasis are long escrows, so 40 in escrow is not reflective of a less than 30 day market activity. New construction in escrow will always throw off momentum stats. That is why I don’t do the high end this way when I am looking for “people’s recent decision to purchase” forward momentum. There is some of that in others, but not as much as in 98005.
I also break it down this way, so people can see where they might most likely find a single family home priced under $650,000, or where they might most likely find a condo at an entry level price. The highest numbers will equal the highest ongoing availability, or whether you are looking “for a needle in a haystack” in that area.
2007? If you list it, price it well, it looks good and is priced under $650,000…it WILL sell.