It’s a familiar story in Seattle: Low inventory is driving high prices. That’s been especially true for condos, where new construction is at a record low, at least in part due to a perceived riskiness to condo projects.
But the crunch isn’t just limited to new condos. Market analysis from Jeff J. Reynolds of Urban Condo Spaces shows a staggeringly low inventory not just compared to the rest of 2017, but compared to this time last year—so it’s not just a winter listing low.
Reynolds pulled data from three condo-heavy neighborhoods—downtown, Capitol Hill, and Queen Anne—and found both a dramatic drop in inventory and a huge uptick in selling price.
“The longer the disparity exists between inventory and price increases the wider the affordability gap becomes,” Reynolds told us over email. As the affordability index rises (making homes less affordable), the number of first time home buyers will continue to get priced out of the market.”
In Capitol Hill, where there’s typically an average of a condo sale every day, there are just five active listings. In December, there were 14 active listings—a full third fewer than December 2016. Sales took a proportionate downturn, too, with 30 percent fewer. That trend is even more dramatic looking over the past six years: In January 2012, Capitol Hill had around 110 units available.
In downtown, 44 condos sold per month in 2017—and inventory is now at 43, a 27 percent drop in inventory from this time last year. Sales are also down 36 percent. Just five years ago, downtown condo inventory was at more than 250.
The story’s similar in Queen Anne, where an average of about a condo a day sells. Since this time in 2012, inventory has dropped from more than 100 condos on the market to just 10.
Here’s why this data matters, other than just fewer condos available: All three of these neighborhoods saw a dramatic uptick in condo median sale price compared to 2012. In downtown, sale prices went up 60 percent. In Capitol Hill and Queen Anne, have prices doubled in the past six years: 97 percent and 116 percent, respectively.
Citywide, data from the Northwest Multiple Listing Service shows, total active condo listings are down 32.7 percent from this time last year—and median sale prices are up 23.4 percent. For single-family homes, the numbers weren’t nearly as dramatic, with a 15.1 percent reduction in active listings and 2.8 percent bump in sale price.
“It gets a little technical but we are just not building enough homes,” said Reynolds. “We have to look at zoning everywhere ‘in-city’ to create more density and build more homes that can appeal to the working class of Seattle. Sadly, I’m not certain we have time on our side.”
The problem is certainly technical; in Seattle, as well as most urban spaces experiencing an affordability crisis, there’s some debate about whether the problem is purely supply and demand or something a little deeper.
But with low supply driving bidding wars—especially at lower price points—it’s clear that the inventory crunch is putting home-buying further out of reach for many.