The year-end reports are in and show continued recovery of the real estate market across the Seattle area…

Mercer Island

2012 marked a change of course for Mercer Island home prices with year-over year gains in both the median and average sales price for the first time in five years. Sales activity has continued at a brisk pace with 297 residential homes sales compared to 260 in 2011 and 220 in 2010.

While rising prices are a welcome sight to sellers, buyers are benefiting from our record-low interest rates. The Annual Monthly Cost Index shows that the monthly interest expense of owning a home–what matters most to the bottom line–is on par with that of 1998. This is pretty remarkable when you consider wages have risen considerably since 1998.

2012 also saw the number of Mercer Island homes for sale drop to its lowest level in the past 15 years (as far back as we have been keeping record). The success of the 2013 real estate market will pivot on the available inventory of homes for sale to meet the demand of serious buyers in the market.

Of the year’s home sales, 106 were above $1,000,000, while only 24 were below $500,000. Bank-owned and short sales made up only 5% of the sales in 2012.

At 45 condominium sales for the year, buyers have purchased almost all of the available units for sale. Distressed sales dropped to 16% as compared to 50% in 2011. While sales prices continue to be impacted by the previous distressed sales, all indications are that they will rise in 2013.

Private waterfront homes continued to sell at a brisk pace with 29 sales in 2012 ranging from $1,132,000 to $21,625,000. The average cost per waterfront foot increased 14% to $39,274 and the average cost per home square foot increased 13% to $780.

With its proximity to major employment centers, excellent schools and strong community presence, Mercer Island continues to be positioned for solid growth in 2013.

Click here for the full report and neighborhood-by-neighborhood statistics!

The Eastside

The Eastside–comprised of Bellevue, Kirkland, Redmond, Issaquah, Mercer Island, Woodinville, Bothell, Carnation and Duvall–saw a moderate increase in both median and average sales prices.  Sales activity increased substantially from 5,883 homes sold in 2011 to 7,226 homes sold in 2012.

Record low inventory has been a challenge on the Eastside with homes listed for sale at the lowest level in the past 15 years (as far back as we have been keeping record). The availability of homes for sale will greatly affect the 2013 market.

As sellers benefit from rising prices, buyers are enjoying lower monthly mortgage payments and significant overall cost savings due to our record-low interest rates. The Annual Monthly Cost Index shows that the monthly interest expense of owning a home is on par with that of 2000.

Of the year’s home sales, 620 were above $1,000,000–a significant increase from 471 in 2011. Bank-owned and short sales made up 16% of the sales in 2012. The average cost per square foot increased slightly to $227.

Condominium sales jumped 27% in volume from 1,802 units sold in 2011 to 2,295 in 2012. The median sales price increased a whopping 30% from $225,000 last year to $293,800 and the average sales price from $278,576 to $362,160 in 2012. Of note is that many of the sales where of newer and larger units–likely bringing sales prices up as a result.

Homes closest to the Seattle and Bellevue employment hubs will continue to see the greatest levels of appreciation in the coming year. The laws of supply and demand will definitely be a dominating factor in 2013.

Click here for the full report and to see how prices fared in your neighborhood!

Seattle

Seattle median and average sales prices are up for 2012 following a challenging 2011 year in spite of an increase in distressed home sales. The median price of residential homes increased to $399,950 from $371,000 in 2011. The average sales price was also up, to $467,275 from $454,783. The volume of sales increased to 6864 homes sold from 5714 in 2011.

Still a major influence on price, bank-owned property sales increased yet again after more than doubling in 2011. Combined, bank-owned (531 sales) and short sale transactions (637 sales) made up 17% of all homes closed.

A welcome reprise for homes sellers longing to see prices on the mend, with record low interest rates, the current market has been a boon to buyers as well. The Annual Monthly Cost Index shows that the monthly interest expense of owning a home–what matters most to the bottom line–is on par with pre-2000 levels (the earliest year we have records for). Remarkable when you consider that wages have risen considerably since 2000.

Record low inventory dominates the market with Seattle homes for sale at the lowest level in the past 15 years (as far back as we have been keeping record). As in other areas, the success of the 2013 Seattle real estate market will pivot on the availability of enough homes for sale to meet the demand of buyers.

Activity in the Seattle condo market was brisk in 2012 with condo sales up 26% over 2011 to 2278 condos sold from 1806 the year prior. The median price increased slightly to $249,900 from $245,000 the year before–a good sign of recovery in the non-distressed buildings considering overall distressed condo sales made up 29% of the Seattle condo market in 2012.

With less than 2 months inventory of homes currently for sale (4-5 months is a balanced market), Seattle will see a strong seller’s market at many price points and in the most desirable neighborhoods–with shorter commute times, local flavor and coveted community amenities.

Click here for the full report and to see how prices have changed in your neighborhood!

© Copyright 2013, Windermere Real Estate/Mercer Island. Statistics provided by the Northwest Multiple Listing service and deemed accurate but not guaranteed.