We’re well into December, and that means a lot of Seattle condo buyers are shelving their purchasing plans until after the holidays. And many are wondering the same thing: What will the Seattle condo market be like in 2017? Are prices expected to continue rising? And what about inventory?
In order to create a forecast for the Seattle condo market in 2017, we have to look at what’s happening right now. So let’s start with some current trends.
Seattle Condo Market Trends at Year’s End
According to the Seattle Post Intelligencer, the city’s condo market remained tight in November 2016 due to inventory decline. This supply-and-demand imbalance is pushing prices north.
Citywide, the median condo sales price rose more than 11% from November 2015 to November 2016, climbing to $389,250. That marked 21 consecutive months of year-over-year price gains for the Seattle condo market.
Inventory is the big story here — or lack thereof. Last month, the available (for sale) inventory of Seattle condo units dropped to 171, the lowest point of 2016. The close-out of Insignia and Luma (the only new condominium towers completed in Seattle within the last six years) has also contributed to the inventory crunch.
These trends are forcing condo buyers to compete fiercely for limited inventory. Units that come onto the market are typically sold quickly, at or near the asking price.
Here are some numbers to illustrate just how tight the Seattle condo market is, heading into 2017. When last measured, the inventory supply rate was a mere 0.8 months. Three to six months of supply is considered a balanced market, while three months or less is considered a seller’s market.
Forecast for the Condo Market in 2017
With inventory tight and demand soaring, condo prices in Seattle will likely continue rising in 2017. Prices will probably rise most in the downtown area, where there is typically a higher level of demand for condominium units.
With that being said, real estate prices citywide are expected to rise more slowly in 2017 than they did in 2016. The market is approaching peak levels, in terms of affordability. So the double-digit price gains we saw in 2016 might not carry over into 2017.
Get Your Financing Lined Up Early
The 2017 forecast for Seattle’s condo market suggests that conditions will remain tight over the coming months. Limited supply and strong demand will likely continue to drive prices north. Properties will sell quickly (faster than the historical average) for much of 2017.
As a result of these conditions, Seattle condo buyers would be wise to arrange their financing before entering the market. For cash buyers, this means having the money in the bank with documents to verify it. Condo buyers who use mortgage loans can get a head start by getting pre-approved for a loan. In a competitive real estate market like Seattle, a pre-approval letter can make the difference between a purchase offer being accepted or rejected.