Ballard real estate market going sideways
By Conor MacEvilly, Coldwel Banker Danforth, www.mynorthseattlehome.com
Hallelujah! The Ballard real estate market is going up! Or is it?
A lot of recent news reports have enthusiastically stated that the Seattle real estate market is recovering and prices are going up again. Ballard homes are a popular first choice with many Seattle home buyers as it was for me when I bought my own home in Loyal Heights 10 years ago and have happily lived here since. Good Ballard homes that are priced correctly will usually sell quickly and many with multiple offers.
It’s human nature to unquestionably embrace positive news, especially when it involves the price of our homes going up. Before I became a Ballard Realtor I was a science guy (biochemist / chemist) and so I’m naturally wary of any and all statistics. They say smoking and baseball are the biggest causes of statistics but I think you can add real estate to that list as well.
OK so what is Ballard real estate market doing I hear you ask?
I looked at the monthly median sale price of non-distressed Ballard single family homes over the past 5 years. The median sale price is the price at which half the homes sold for above that price and half the homes sold for below that price. Single family homes refers to houses and townhomes. By non-distressed homes I mean homes that are not short sales and or bank-owned homes. I combined data for the Ballard, Loyal Heights and Sunset Hill areas. The number of homes that sold each month varied between 25 and 45 single family homes per month. The chart was generated using data from the NW Multiple Listing Service.
I my opinion, the median price of non-distressed Ballard homes has been bouncing sideways since 2009! Prices are currently going up but they have done so five times previously since 2009 only to drop back down again. Prices have been bouncing between and upper price of about $460,000 and a lower price of about $380,000. This is similar to what you see in day trading. When price of say, the S&P 500, is channeling sideways, price will go up and bounce off a resistance price and then come back down and bounce of a support price.
The short term trend is up but the long term trend is distinctly sideways. Until the median sale price emphatically breaks out of this price zone we cannot say with certainty which direction the market is going. Prices are once again knocking on the door of the resistance price, As to whether it will finally break out or go back down again, we have to wait and see. Personally I think this really interesting and my guess is that prices will go back down toward support price especially since we are now heading into the quieter winter months. But that’s just a guess.
Without trying to bore you to sleep, real estate statistics, as with all statistics, have limitations. Be especially wary of statistics generated from a low number of sales. As I mentioned above, the number of monthly non-distressed single family home sales varied between 25 and 45 which are a decent number of sales to generate stats from, more would better obviously. The 20% variation from the low to high prices in the sideways zone is due to seasonal variations, what’s mix of homes sell in a particular month plus real variation in price due to supply and demand. Regardless, the big picture trend is that prices are just going sideways. There was an obvious upwards trend to 2007 when prices peaked as was the subsequent price drop after the bubble popped. However, since 2009 it’s just a sideways yoyo movement. Month to data price changes are essentially meaningless. They may cheer you up while drinking your morning coffee and listing to the radio but you would better served by looking at the long term trends.
Note that this data related to non-distressed single family homes. For short sales and bank-owned homes the picture is different with prices continuing to drop in each case. More on that some other time.
The main factors driving the market for the past couple of years have been (1) the low number of Ballard homes for sale which generates a lot of competition (2) continuing low interest rates and (3) people moving to Seattle for jobs.
I will revisit Ballard home sale numbers will you in a few months and see if we have finally managed to break out of our current sideways trend bounce.