The Marketplace Third-Quarter Report

THE MARKETPLACE THIRD-QUARTER REPORT PERFORMANCE OF SINGLE FAMILY HOMES IN SELECT CITIES OF KING AND SNOHOMISH COUNTIES

2015 Q3 MARKET REPORT

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[1]

2015, A STRONG YEAR IS IT SUSTAINABLE OR ARE THERE CHANGES AHEAD? Recently we’ve seen double-digit drops in inventory and doubledigit increases in sales, an unsustainable long-term pattern. Like our fall weather, our prediction for the future is cloudy. The short-term forecast, fortunately, indicates that it’s a great time to be both a seller and buyer.

For sellers , available homes on the market remain scarce. A normal Puget Sound market has 3-4 months housing supply. Currently King County has 1.4 months, and Snohomish has 1.9! At September’s end, listings were down 23% from 2014. If you’re thinking of selling your home, this fall may be the best time in the foreseeable future simply because of supply and demand.

For buyers , 30-year fixed interest rates are hovering under 4%. For years, the Fed has discussed raising rates but has continually waited for market improvement. They can’t delay any longer and MUST raise soon. We suggest buying ASAP because over the next few years, current rates could increase up to 50%. In addition, the federal government recently introduced new mandatory closing disclosure requirements (TRID) that will delay all financed closings by at least 1-2 weeks.

“Those who cannot remember the past are condemned to repeat it.”

– George Santayana Since January 2013 (when our market began to recover), we’ve seen a consistent trend when the calendar turns over to the new year: prices increase steadily through spring, level off during summer, and fall as the holidays approach. 2016 will most likely be different. Why?

1) It’s an election year without an incumbent presidential candidate.

In 2000 and 2008, housing markets decreased and/ or were flat.

Unpredictability causes fear.

2) We are seeing a housing market similar to that of the 2006/07 election period that preceded the housing market crash in 2008.

Developable land is scarce, builders and buyers are overpaying with multiple offers over asking price, and we are experiencing a large amount of new construction starts.

3) Economic advisors are warning us that current trends are not sustainable, and we must heed the advice. When interest rates go up, affordability goes down. Where does that leave home prices? In the short-term, demand from foreign investors paying cash may continue to push pricing up. Those who rely on buyer financing will either rent, or adjust their real estate goals and buy “less” home than planned.

In summary, we are expecting a housing slowdown in 2016 and 2017.

Contact your MSIR real estate professional to determine your optimal real estate goals and future, or for a customized, in-depth analysis on your area of interest. This is a call to action — the time to act is NOW!

[2]

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CONTENTS

THE MARKET TRENDS

Q3 2015 MARKET REPORT

AVERAGES OF KING AND SNOHOMISH COUNTES

4 Woodinville Report 5 Redmond Report 6 Sammamish Report 7 Bellevue Report

This report focuses on single family homes in the cities where we conduct most business. While we’re a global brokerage, we mainly work on the Eastside of the Puget Sound region, Olympia to Bellingham. Our numbers only reflect the averages of the communities featured in this report but the trends still accurately reflect county-wide trends.

8 Bothell Report TOTAL $ VOLUME AND # OF SALES

9 Kirkland Report 10 Duvall Report 11 Carnation Report 12 Snoqualmie Report 13 North Bend Report 14 Issaquah Report 15 Fall City Report 16 Kenmore Report 17 Lake Forest Park 18 Mercer Island Report 19 Seattle Report 20 Maple Valley Report

The Total Dollar Volume increased an average of 21% in the first three quarters of 2015 over the first three quarters of 2014, from $12.6 billion to $15.2 billion. The Number of Sales increased 12% , from 25,743 in 2014 to 28,933 in 2015. These are the metrics we use to analzye the longterm trends in each market segment because they best summarize the general market activity over long periods of time.

AVERAGE PRICE PER SQUARE FOOT

The Price Per Square Foot ($/SqFt) increased 8% from 2014 to 2015, from $221 to $238. This metric helps identify trends in market segments when large numbers of transactions are considered together over a period of time, and also is useful when comparing two properties on an apples-to-apples basis. In this case, it helps us understand that properties in this region are increasing in value on a square-foot-basis, rather than growing in size.

21 Kent Report AVERAGE DAYS ON MARKET

22 Renton Report 23 Snohomish Report

The Average Days on Market (DOM) decreased 13% from 2014 to 2015, from 46 to 40 days. DOM is a good measure of Liquidity in a real estate market. Liquidity determines how quickly an asset can be sold and usually increases in parallel with price transparency and fungible assets. In liquid markets, fewer days are needed to sell a property. In the Greater Seattle Region, homes are selling in the blink of an eye, making it a highly liquid market. Seattle boasts the second lowest DOM in the U.S.

CURRENT MONTHS OF INVENTORY With a surge of buyers and little increase in residential development, there is a shortage of inventory. The Months of Inventory of our market segments decreased 27% , from 2.2 to 1.6 months. With decreased inventory and increased demand, it doesn’t look like the scramble for homes will let up in the near future.

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[3]

*

WOODINVILLE REPORT SINGLE FAMILY HOMES

EQUESTRIAN ESTATE Just Listed for $1,825,000 YTD Q3 2015

%CHANGE

Number of Sales

380

451

19%

Total Dollar Volume

$230,717,000

$297,898,000

29%

Average Sale Price

$607,200

$660,500

9%

Average Days on Market

45

44

-2%

Sold / List Price %

99.1%

99.7%

0.6%

Average Price Per Square Foot

$222

$239

8%

Months of Inventory

2.2

1.6

-27%

Current Inventory in Units

141

90

-36%

10 YEAR PERFORMANCE OF WOODINVILLE HOMES

CHART

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[4]

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

WOODINVILLE

REDMOND REPORT SINGLE FAMILY HOMES

ENGLISH HILL ESTATE Sold for $910,000

CHART

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF REDMOND HOMES

REDMOND

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

838

926

11%

Total Dollar Volume

$555,238

$640,695,000

15%

Average Sale Price

$662,600

$691,900

4%

Average Days on Market

42

34

-19%

Sold / List Price %

100%

100.6%

0.6%

Average Price Per Square Foot

$257

$271

5%

Months of Inventory

2.1

1.3

-38%

Current Inventory in Units

220

115

-48%

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[5]

SAMMAMISH REPORT SINGLE FAMILY HOMES

TIMELESS ELEGANCE ON 4 ACRES Sold for $1,385,000 YTD Q3 2015

%CHANGE

Number of Sales

762

795

4%

Total Dollar Volume

$577,205,000

$643,377,000

12%

Average Sale Price

$757,500

$809,300

7%

Average Days on Market

37

40

8%

Sold / List Price %

99.7%

99.9%

0.2%

Average Price Per Square Foot

$253

$266

5%

Months of Inventory

1.8

1.4

-22%

Current Inventory in Units

176

117

-34%

10 YEAR PERFORMANCE OF SAMMAMISH HOMES

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[6]

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

SAMMAMISH

BELLEVUE REPORT SINGLE FAMILY HOMES

CUSTOM CONTEMPORARY Sold for $1,150,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF BELLEVUE HOMES

BELLEVUE

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

1,040

1,136

9%

Total Dollar Volume

$920,579,000

$1,133,071,000 23%

Average Sale Price

$885,200

$997,400

13%

Average Days on Market

30

28

-7%

Sold / List Price %

100.2%

100.1%

-0.1%

Average Price Per Square Foot

$314

$357

14%

Months of Inventory

1.6

1.2

-25%

Current Inventory in Units

237

172

-27%

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[7]

BOTHELL REPORT SINGLE FAMILY HOMES

PRIVATE CUSTOM HOME Sold for $810,000 YTD Q3 2015

%CHANGE

Number of Sales

1,129

1,330

18%

Total Dollar Volume

$517,266,000

$641,651,000

24%

Average Sale Price

$458,200

$482,400

5%

Average Days on Market

38

47

24%

Sold / List Price %

100%

100.4%

0.4%

Average Price Per Square Foot

$194

$207

6.7%

Months of Inventory

2.3

1.6

-30%

Current Inventory in Units

375

278

-26%

10 YEAR PERFORMANCE OF BOTHELL HOMES

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[8]

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

BOTHELL

KIRKLAND REPORT SINGLE FAMILY HOMES

SPECTACULAR WATERFRONT HOME Just listed for $3,800,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF KIRKLAND HOMES

KIRKLAND

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

835

879

5%

Total Dollar Volume

$574,677,000

$661,420,000

15%

Average Sale Price

$688,200

$752,500

9%

Average Days on Market

41

31

-24%

Sold / List Price %

99.2%

100.2%

1%

Average Price Per Square Foot

$291

$318

9%

Months of Inventory

2.1

1.6

-24%

Current Inventory in Units

241

202

-16%

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[9]

DUVALL REPORT SINGLE FAMILY HOMES

CHARMING COUNTRY ACREAGE Sold for $585,000 YTD Q3 2015

%CHANGE

Number of Sales

154

191

24%

Total Dollar Volume

$64,714,000

$89,673,000

39%

Average Sale Price

$420,200

$469,500

12%

Average Days on Market

40

41

3%

Sold / List Price %

99.2%

99.5%

0.3%

Average Price Per Square Foot

$189

$202

7%

Months of Inventory

1.8

1.5

-17%

Current Inventory in Units

39

34

-13%

10 YEAR PERFORMANCE OF DUVALL HOMES

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

DUVALL

CARNATION REPORT SINGLE FAMILY HOMES

RESERVE AT LAKE JOY ESTATE Sold for $799,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF CARNATION HOMES

CARNATION

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

95

86

-10%

Total Dollar Volume

$47,285,000

$44,899,000

-5%

Average Sale Price

$497,700

$522,100

5%

Average Days on Market

89

80

-10%

Sold / List Price %

99.2%

98.4%

-0.8%

Average Price Per Square Foot

$205

$213

4%

Months of Inventory

3.3

2.7

-18%

Current Inventory in Units

37

30

-19%

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[ 11 ]

SNOQUALMIE REPORT SINGLE FAMILY HOMES

PRIVATE WOODED GETAWAY Sold for $579,500 YTD Q3 2015

%CHANGE

Number of Sales

321

354

10%

Total Dollar Volume

$171,955,000

$192,282,000

12%

Average Sale Price

$535,700

$543,200

1%

Average Days on Market

53

35

-34%

Sold / List Price %

99.2%

100.6%

1%

Average Price Per Square Foot

$202

$211

4%

Months of Inventory

1.9

0.7

-63%

Current Inventory in Units

77

26

-66%

10 YEAR PERFORMANCE OF SNOQUALMIE HOMES

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[ 12 ]

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

SNOQUALMIE

NORTH BEND REPORT SINGLE FAMILY HOMES

MOUNT SI VIEW HOME Sold for $584,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF NORTH BEND HOMES

NORTH BEND

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

226

217

-4%

Total Dollar Volume

$95,907,000

$99,761,000

4%

Average Sale Price

$424,400

$459,700

8%

Average Days on Market

59

57

-3%

Sold / List Price %

98.7%

99.9%

1.2%

Average Price Per Square Foot

$194

$211

9%

Months of Inventory

2.7

2.1

-22%

Current Inventory in Units

77

52

-33%

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[ 13 ]

ISSAQUAH REPORT SINGLE FAMILY HOMES

BRIGHT VIEW HOME Sold for $450,000 YTD Q3 2015

%CHANGE

Number of Sales

629

612

-3%

Total Dollar Volume

$388,796,000

$405,864,000

4%

Average Sale Price

$618,100

$663,200

7%

Average Days on Market

30

33

10%

Sold / List Price %

100.2%

100.6%

0.4%

Average Price Per Square Foot

$241

$268

11%

Months of Inventory

1.6

1.3

-19%

Current Inventory in Units

156

110

-30%

10 YEAR PERFORMANCE OF ISSAQUAH HOMES

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

ISSAQUAH

FALL CITY REPORT SINGLE FAMILY HOMES

TRADITIONAL HOME ON ACREAGE Sold for $774,850

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF FALL CITY HOMES

FALL CITY

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

48

55

15%

Total Dollar Volume

$29,364,000

$35,900,000

22%

Average Sale Price

$611,800

$652,700

7%

Average Days on Market

113

74

-35%

Sold / List Price %

97.1%

95.7%

-1.4%

Average Price Per Square Foot

$219

$244

12%

Months of Inventory

4.4

3.2

-27%

Current Inventory in Units

30

19

-37%

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[ 15 ]

KENMORE REPORT SINGLE FAMILY HOMES

BRIGHT HOME IN QUIET LOCATION Sold for $389,000 YTD Q3 2015

%CHANGE

Number of Sales

226

318

41%

Total Dollar Volume

$105,885,000

$172,503,000

63%

Average Sale Price

$468,500

$542,500

16%

Average Days on Market

38

36

-5%

Sold / List Price %

100.2%

99.9%

-0.3%

Average Price Per Square Foot

$207

$225

9%

Months of Inventory

2.1

1.8

-14%

Current Inventory in Units

74

68

-8%

10 YEAR PERFORMANCE OF KENMORE HOMES

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

KENMORE

LAKE FOREST PARK REPORT SINGLE FAMILY HOMES

SPACIOUS HOME ON LARGE LOT Listed for $1.3 million

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF LAKE FOREST PARK HOMES

LAKE FOREST PARK

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

141

155

10%

Total Dollar Volume

$76,756,000

$93,011,000

21%

Average Sale Price

$544,400

$600,100

10%

Average Days on Market

37

32

-14%

Sold / List Price %

99.8%

99%

-0.8%

Average Price Per Square Foot

$221

$243

10%

Months of Inventory

2

1.3

-35%

Current Inventory in Units

46

30

-35%

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[ 17 ]

MERCER ISLAND REPORT SINGLE FAMILY HOMES

TRANQUIL CONTEMPORARY HOME Sold for $459,000 YTD Q3 2015

%CHANGE

Number of Sales

276

266

-4%

Total Dollar Volume

$378,503,000

$403,263,000

7%

Average Sale Price

$1,371,400

$1,516,000

11%

Average Days on Market

67

47

-30%

Sold / List Price %

97.4%

97.9%

0.5%

Average Price Per Square Foot

$408

$441

8%

Months of Inventory

2.7

1.8

-33%

Current Inventory in Units

77

53

-31%

10 YEAR PERFORMANCE OF MERCER ISLAND HOMES

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

MERCER ISLAND

SEATTLE REPORT SINGLE FAMILY HOMES

SEATTLE LUXURY PENTHOUSE Listed for $1,200,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF SEATTLE HOMES

SEATTLE

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

5,909

6,243

6%

Total Dollar Volume

$3,312,687,000 $3,879,869,000 17%

Average Sale Price

$560,600

$612.500

11%

Average Days on Market

33

26

-21%

Sold / List Price %

100.9%

102.9%

2%

Average Price Per Square Foot

$277

$309

12%

Months of Inventory

1.5

0.9

-40%

Current Inventory in Units

1,193

778

-35%

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[ 19 ]

MAPLE VALLEY REPORT SINGLE FAMILY HOMES

EXTRAORDINARY HOME ON PRIVATE LOT Sold for $500,000 YTD Q3 2015

%CHANGE

Number of Sales

497

585

18%

Total Dollar Volume

$180,267,000

$226,222,000

26%

Average Sale Price

$362,700

$386,700

7%

Average Days on Market

37

34

-8%

Sold / List Price %

99.2%

99.6%

0.4%

Average Price Per Square Foot

$161

$175

9%

Months of Inventory

$2

1.2

-40%

Current Inventory in Units

140

86

-39%

10 YEAR PERFORMANCE OF MAPLE VALLEY HOMES

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

MAPLE VALLEY

KENT REPORT SINGLE FAMILY HOMES

UPDATED COUNTRY CLUB HOME Sold for $425,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF KENT HOMES

KENT

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

849

1,087

28%

Total Dollar Volume

$248,965,000

$357,192,000

44%

Average Sale Price

$293,200

$328,600

12%

Average Days on Market

55

49

-11%

Sold / List Price %

99.3%

100.1%

0.8%

Average Price Per Square Foot

$143

$155

9%

Months of Inventory

2.7

1.7

-37%

Current Inventory in Units

306

205

-33%

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[ 21 ]

RENTON REPORT SINGLE FAMILY HOMES

CRAFTSMAN HOME ON ACREAGE Listed for $1,090,000 YTD Q3 2015

%CHANGE

Number of Sales

1,222

1,480

21%

Total Dollar Volume

$479,188,000

$608,029,000

27%

Average Sale Price

$392,100

$410,800

5%

Average Days on Market

47

43

-9%

Sold / List Price %

99.7%

100%

0.3%

Average Price Per Square Foot

$178

$188

5%

Months of Inventory

$2.3

1.5

-35%

Current Inventory in Units

384

246

-36%

10 YEAR PERFORMANCE OF RENTON HOMES

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[ 22 ]

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Number of Sales

YTD Q3 2014

Total Dollar Volume Sold

RENTON

SNOHOMISH REPORT SINGLE FAMILY HOMES

BEAUTIFUL TRADITIONAL HOME Sold for $910,000

Number of Sales

Total Dollar Volume Sold

10 YEAR PERFORMANCE OF SNOHOMISH HOMES

SNOHOMISH

YTD Q3 2014

YTD Q3 2015

%CHANGE

Number of Sales

671

796

19%

Total Dollar Volume

$273,300,000

$354,369,000

30%

Average Sale Price

$407,300

$445,200

9%

Average Days on Market

60

49

-18%

Sold / List Price %

99%

99.2%

0.2%

Average Price Per Square Foot

$170

$183

8%

Months of Inventory

3

2.4

-20%

Current Inventory in Units

273

277

2%

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[ 23 ]

IMAGINE IT’S NOT LUXURY PRICES WE SERVE. IT’S LUXURY SERVICE CLIENTS EXPECT.

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