It’s time for the roughly monthly update on Mercer Island real estate. Let’s kick things off with this bad news from the Seattle PI: Seattle Home Prices Post Decline.
Yup, the Seattle area had its first year-over-year price drop. Luckily, this is no Southern-California-style 20%-plus drop, but it is a drop. In my first post on Mercer Island real estate I argued that Seattle home prices, and Mercer Island in particular, benefit from a lower rate of foreclosure and positive underlying demographic trends- i.e., people are still moving here.
Redfin shows 159 homes for sale in Mercer Island, at a median home price of $1,339,000, with an average price per square foot of $509. That’s more homes on the market by 14%, but almost exactly the same median list price that I reported in January.
The best thing Mercer Island has going for it, other than our fantastic schools, is our high median home price. As a new home-buyer here, I am acutely aware of those. The P-I, relying on the S&P Case-Schiller Index of home prices, reports:
According to S&P, expensive houses in the Seattle area generally are holding their value better than houses in other tiers. The typical house in the high tier, defined as those costing more than $455,808, was worth 0.3 percent more in January than it was earlier, compared with declines of 2.1 percent in the middle tier and 2.2 percent in the low tier, defined as houses costing less than $313,686.
The high-tier value was down 2.2 percent from December, compared with declines of 1.3 percent and 1.5 percent in the middle and low tiers, but generally has held up better in previous months.
Here’s a detailed breakdown of high-tier home prices in Seattle, showing that the value of the most expensive homes grew more slowly than less expensive homes, but is falling less quickly as well. Altos Research shows a 90-day median price drop of more than 10%, but that may be the result of cheaper homes getting sold, something the Case Schiller index normalizes for. Ah, Case-Schiller: how would we understand the market without your normalizing effect?
Don’t sell the chickens yet. Home prices are down a little and might come down a little more on The MI. But not a lot.