The 2018/2019 Market Update

Another year has passed, as have many pivotal milestones for Realogics Sotheby’s International Realty (RSIR), our brand and the local housing market that we serve. After meteoric home price growth in the region throughout 2016 and 2017, the market began to shift by the second half of 2018, spurred by increasing inventory; the fallout from Seattle’s adopted (then repealed) “head tax” and the outcome of Amazon’s HQ2; ongoing political banter at home and overseas; threats of interest rate increases; and a barrage of self-fulfilling headlines about a declining housing market. RSIR’s acclaimed Research Editor and Data Analyst, William Hillis, has assembled a year-over-year performance review of eight key counties and 31 regional market. Below I have compiled a few key insights from the report.

King County

The number of residential selling transactions gradually started to decline in the third quarter of 2017, and accelerated in the third and fourth quarters of 2018. The year ended with 11.2 percent fewer home sales than in 2017.

For a second consecutive year, both in number and proportion of overall sales, fewer King County condominium units were sold in 2018 (6,885 units, compared with 7,898 in 2017).

After steadily shorter market times since 2015, median cumulative days on market in the fourth quarter of 2018 shot to 26 days—a 16-day year-over-year increase—breaking through the 24-day market time last seen in the fourth quarter of 2014.

Of King County cities with more than 500 residential sales in 2018, those with the highest average (not median) selling prices were, in order of average price: Bellevue, Kirkland, Sammamish, Redmond, and Woodinville.

The 2018 median residential price was $680,000 and the compound annual growth rate from 2014 through 2018 was 11.5 percent.

Bellevue West of I-405

On a quarterly basis, residential selling transactions in West Bellevue and its environs were lower year over year throughout 2018, and bottomed in the third quarter at nearly 36 percent fewer sales than seen in 2017. For the year, there were fully 20 percent fewer residential sales in 2018.

Market times in this area vaulted by more than 300 percent year over year, from a median cumulative days on market of 14 in the fourth quarter of 2017 to 57 in the fourth quarter of 2018. Longer market times to sale should be factored into listing contracts for 2019.

This area comprises several distinctive communities west of Bellevue with annual sales in the single digits or fewer. Among these, six residential homes sold in Beaux Arts for an average of $2.57 million, 69 in Clyde Hill for an average of $3.17 million, 33 in Medina for an average of $4.46 million, 23 at Yarrow Point for an average of $4.53 million, and seven at Hunts Point for an average of $6.2 million. 2018 witnessed the top residential sale in the history of the Northwest Multiple Listing Service at $26.75 million, which was represented by Realogics Sotheby's International Realty.

In Bellevue proper, residential homes at Enatai, Meydenbauer, and Vuecrest sold for averages of $2.34 million, $2.83 million, and $3.43 million, respectively in 2018.

The median residential price in this area soared by 15 percent from 2014 through 2018, and is among those projected to reach new highs in 2019.

Kirkland

Except for a very slight increase in the second quarter, the number of residential sales in Kirkland fell year-over-year throughout 2018, plummeting by 32.8 percent in the first quarter. The result was a 15.2 percent decline for the year.

Fewer Kirkland condominiums were sold in 2018 than in any year since 2014. However, condominiums continue to comprise a growing share of homes sold—36.4 percent, compared with 35.9 percent in 2017.

Like other communities in King County, Kirkland saw fewer days on market late in the year; but here, fourth quarter market times had not been so short for so long as in the City of Seattle. The 20 days to sell in the fourth quarter of 2018 was only three days more than in the fourth quarter of 2015 and four days fewer than in the fourth quarter of 2014.

However, lengthier market times were sufficient to curtail competitive bidding and force concessions from sellers.

The 39 residential homes sold at Holmes Point in 2018 averaged $1.41 million, 67 sold at East of Market averaged $1.59 million, and 31 sold at West of Market averaged $2.2 million. Among condominiums sold in 2018, 41 sold at Houghton averaged $776,000, 55 at Rose Hill averaged $924,000, and 117 in Downtown Kirkland averaged $1.02 million.

At a compound annual growth rate of 14.7 percent from 2014 through 2018, residential selling prices in Kirkland have increased faster than those in any city of King County with the exception of Shoreline (15.3 percent) and Burien (tied at 14.7 percent).

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Sammamish

The number of residential home sales was up by 9.1 percent in the first quarter, but modestly lower year over year through the end of 2018, finishing the year with 9.3 percent fewer transactions than in 2017.

Condominium sales, which increased from 2015 through 2017, retreated in both number and proportion to levels not seen in four years. Sammamish is not a major condominium market, with residential sales comprising 91.2 percent of all home sales in town.

The median fourth-quarter cumulative days on market was 20 days greater than a year before, and nearly twice that of the fourth quarter of 2015. This market time remained below the peak cumulative days on market from 2014; and interestingly, second-quarter cumulative market times that year were just over a week.

Yet buyers in Sammamish ended 2018 in a stronger negotiating position than they had been in 15 quarters, especially at the entry level.

Of Sammamish residential homes sold in 2018, there were 56 at Trossachs averaging $1.19 million paid, 43 at Pine Lake averaging $1.24 million, and 88 at The Plateau averaging $1.32 million.

Continued price growth is forecast in Sammamish, where at a compound annual growth rate of nine percent over the past five years, the median residential price has steadily progressed, but more modestly than in Seattle or any other Eastside city.

Redmond

There were fewer residential selling transactions in Redmond in all but the third quarter of 2018, when they were effectively flat year-over-year. Down by 11 percent, the annual number of sales here fell for a third consecutive year.

Fewer condominiums were sold in Redmond than in any year since 2012. Residential homes comprised 73.7 percent of all homes sold in 2018.

The regional slowdown in market times in the fourth quarter of 2018 tripled Redmond's quarterly median cumulative days on market, nearly returning it to where it was in the fourth quarter of 2014. Above the median selling price, this protraction of market times impacted sellers' accommodation of buyers to a greater degree than seen since 2014.

At Education Hill, 236 residential homes were sold in 2018 at an average price of $1.1 million. Average prices of $1.12 million were paid for 79 homes at Union Hill, $1.18 million for 36 homes at English Hill, and $1.4 million for ten homes at Novelty Hill.

The median residential selling price in Redmond increased at a compound annual growth rate of 10.4 percent from 2014 through 2018. Prices are forecast to decline by 8.8 percent in 2019.

Woodinville

Along the northern border of King County, as well as further north, the number of homes sold year over year was better sustained by buyers willing to commute further to work. Residential transactions in Woodinville did not decline until the fourth quarter of 2018, and ended the year with just one fewer sale.

At not more than 80 condominium sales annually in the past five years, Woodinville's condominium market is similar in proportion to that of Sammamish. Residential transactions here comprised 91.4 percent of all home sales in 2018.

Throughout the year, Woodinville home sellers in the top tier of residential listings by price struggled to close without price reductions. Competition among buyers at lower price bounds faded in the second half of 2018.

Yet in recent years, the median price of a five-bedroom home in Woodinville has been gaining on that of comparable homes in Kirkland, from 22.5 percent less, to 15.2 percent less, to 11.1 percent less in 2016, 2017, and 2018, respectively.

The median residential price at Woodinville rose at a compound annual growth rate of 12.3 percent from 2014 through 2018. In 2019, that price is forecast to decline by an even 10 percent.


For additional details, browse the full report below and don’t hesitate to reach out if you’d like to discuss the latest trends and your real estate goals.