August was hot, but not in the way that we usually measure heat. Weather bloggers noted that the average daily low temperature last month was the highest of any month in Seattle since record keeping began back in 1891. Simply put, at just a tick under 60 degrees, no month in the last 112 years has ever been warmer at night than last month.
In the real estate market, the number of Mercer Island homes whose sales were final last month was up by nearly 10 percent from a year ago.
As a result, the number of homes active on the market as of Labor Day were down.
According to Northwest Multiple Listing Service numbers, 38 new homes were added to the market during August 2012, making a total of 104 homes available for sale that month.
This year, the same number of homes and condos were added to the market in August. But as quickly as homes were added, homes were sold. As a result, just 57 were counted as active for the entire month.
The number of pending sales during the month also jumped 72 percent to 38 units, up from 22 in process a year ago.
The median price for final home sales went up as well, from $587,500 to $975,000 — a 72 percent increase from over a year ago.
What is more difficult to ascertain is how long such a trend will last.
With higher demand for Island homes, and the lower inventory, it makes sense that prices are trending higher — all of the ingredients that might make for a tighter real estate market. But what about those interest rates?
Mike Gain, the CEO and president of Prudential Northwest Realty Associates, said many industry watchers predicted that rising interest rates would slow down the market.
“Well, it has not because despite jumps in prices and interest rates, homes are still more affordable than they have been in decades,” he said. He stated that buyers are on “heightened alert” because of the recent upward movement in interest rates.
Darin Stenvers, a director with Northwest MLS, offered advice to sellers who have unrealistic expectations.
“Sellers should still be concerned about overpricing their homes,” he emphasized. “Some markets may handle the overpricing; others will not,” he noted, adding, “While sales are brisk, many sellers are not getting the full listing price.”