Bellevue Real Estate Market Update – Week of October 10th 2008

The median single family home price in BELLEVUE this week is $890,000. The 765 homes have been on the market for an average of 137 days. Inventory has been tightening and days-on-market increasing recently. The Market Action Index has been basically flat, not providing strong indication for market conditions.

BELLEVUE THIS WEEK

The median single family home price in BELLEVUE this week is $890,000. The 765 homes have been on the market for an average of 137 days.

Inventory has been tightening and days-on-market increasing recently. The Market Action Index has been basically flat, not providing strong indication for market conditions.

Median List Price	$ 890,000
Average List Price	$ 1,338,517
Least Expensive Listing	$ 297,500
Most Expensive Listing	$ 22,800,000
Asking Price per Square Foot	$ 319
Average Days on Market	137
Total Inventory	765
Absorbed This Week*	37
Percent of Properties with Price Decrease	49 %
Percent Relisted (reset DOM)	16
Percent Flip (price increased)	1 %
Median House Size (sq ft)	2,899
Median Lot Size	0.25 – 0.50 acre
Median Number of Bedrooms	4.0
Median Number of Bathrooms	2.6
Median Age	35

Market Action Index	Cold! Buyers [14]

QUARTILES
To get a tightly targeted understanding of homes in the market, we break each locale into quartiles. Each quartile is 25% of the homes listed.

QUARTILE 1 – Most expensive 25% of homes
QUARTILE 2 – Upper-middle 25% of homes
QUARTILE 3 – Lower-middle 25% of homes
QUARTILE 4 – Least expensive 25% of homes

We’ll refer to the quartiles in the trend graphs below.

PRICE
The market has been on a downward trend recently and this week, while essentially flat, doesn’t break us out of that cycle.

QUARTILE PRICES
Often, we find insights by watching pricing trends within the quartile segments.

Pricing across most of the market has been relatively strong recently. While Quartile 4 is basically flat, all other segments are in an up trend period. Unless the Market Action Index has a persistent downward shift, expect that Quartile 4 will assume a similar trend with the other groups.

PRICE AND VALUE
This is a market where watching the value metrics (like price per square foot) can provide insight that you don’t get at first glance. Despite the fact that home prices are rising fairly consistently, the price per square foot of homes listed is declining. Often this can be attributed to new and remodeled homes on the market. Buyers in the area are paying more but also getting more for their money.

INVENTORY
Inventory has been falling in recent weeks. Note that declining inventory alone does not signal a strengthening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is changing with the available supply.

MARKET ACTION INDEX
The BELLEVUE market is currently quite strongly in the Buyer’s Market zone (below 30). The 90-day Market Action Index stands at 14. With several months of inventory available at the current sales rate, buyers should find ample choice.

Inventory levels have been relatively consistent relative to sales. Despite the fact that there is a relatively high amount of available inventory, this Buyer’s market is still seeing prices move higher. Given inventory levels, these price conditions are relatively fragile. If the market cools off further, the price trend is likely to reverse.

Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. “Hot Market”) because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a “Buyer’s Market” (a.k.a. “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will
typically cause prices to fall.

MARKET ACTION
Not surprisingly given the overall Market Action Index, all quartiles are in the Buyer’s Market zone with several months of inventory given the current rate of demand for homes in the quartile. Watch the quartile for changes before the overall market shifts. Often one end of the market (e.g. the low end) will improve and signal a strengthening market before the whole group changes.

DAYS ON MARKET
The properties have been on the market for an average of 137 days. Half of the listings have come newly on the market in the past 112 or so days.