The summer in Redmond has been sizzling hot, and air conditioners have been cranked high for those lucky enough to have them. The report for Aug 2017 of the Redmond real estate market is equally Hot and unlike the weather which we expect to cool off in a few weeks, there seems to be no end in sight yet for home price appreciation. Let’s take a look at some charts with my comments and explanation. It doesn’t get too technical so stay with me…
Whena home sells over list (asking) price, the LP/SP ration is above 100%, andtypically the reason is due to multiple buyers making offers and a bidding warensuing. In the Redmond area, data forthe last 6 months show that in every price category up to $1.25m had more than100% LP/SP ratio.
From Days on Market (DOM) we see that it takesbetween 5-12 days of marketing time to sell a home below $1m. Most homes in this range instruct potentialBuyers to have their offers submitted on a specific date which is usually after5-12 days of marketing time. So therecontinues to be a strong demand for homes with bidding wars and very shortmarket times up to the $1.25m.
Above that $1.25m to$1.5m the LP/SP ratio is right around 100%. There is still a healthy and a strong seller’s market as homes areselling for asking price, but we see the market time start to jump up. There are fewer Buyers as prices get higher,and bidding wars are less common.
Once we get abovethe $2m price, market times increase substantially and when a buyer does comealong they have a little more negotiating power, and are getting offersaccepted lower than asking price.
Thischart shows the number of active properties, number of pending properties andthe Average number of closing per month (for the last 6 months). If we look at the $750k-850k price range,there are on average 15 homes sold per month (over the last 6 months), andcurrently there are about 21 properties pending. So there are more properties just gone undercontract (pending) than the average number recently closed per month. This is true for almost every price rangewhich would indicates the demand is still on the increase for homes. While there has been talk of the generalmarket cooling off a little since the spring, it would seem that in Redmond theopposite is true. With limited supplyand the demand increasing, it would seem price appreciation in Redmond can beexpected at least below $1.25m, where the market is most active.