We are a few weeks into 2017, and the market is slowly and surely picking up. We hit the ground running, and we’re already under contract on our first Mercer Island home sale of the year.
Before January turns into February, we wanted to take a look back on 2016 and share the statistics and trends of our local real estate market. As an overview, the year marked another sellers’ market, especially for properties under $2 million. We saw 10% appreciation in home prices over 2015, and we continued to experience a shortage of inventory, particularly “affordable” inventory.
Here’s an infographic providing a market visual snapshot, along with the year’s real estate statistics.
Overview of 2016 residential market
- 289 sold single-family homes in 2016
- Average sale price (waterfront & non-waterfront): $1,643,232 (2015: $1,518,165)
- Median sale price (waterfront & non-waterfront): $1,320,000 (2015: $1,199,500)
- 52 condos sold
- 24 waterfront homes sold (2015: 30)
- Highest sale price: $9,751,880 (waterfront)
- Lowest sale price: $180,500 (condo)
- Average cost per square foot: $497 (single-family homes)
- Average days on market: 38 (single-family homes)
- 17 off-market sales
Single-Family Residential Homes – Non-Waterfront*
- 265 sold homes (2015: 289)
- Average sale price: $1,418,169
- Median sale price: $1,280,000
- Lowest sale price: $610,000
- Highest sale price: $3,800,000
- Homes sold under $1 million: 59
- Homes sold between $1 – 1.5 million: 108
- Homes sold between $1.5 – 2 million: 66
- Homes sold over $2 – 3 million: 29
- Homes sold over $3 million: 3
*Not including off-market sales
- 24 sold homes
- Average sale price: $4,128,295
- Median sale price: $3,500,000
- Lowest sale price: $2,290,500
- Highest sale price: $9,751,880
- East Mercer sales: 12
- West Mercer sales: 10
- North Mercer sales: 2
- 52 sold listings
- Average sale price: $491,810
- Median sale price: $469,750
- Lowest sale price: $180,500
- Highest sale price: $1,075,000
- 17 sold listings
- 15 sold single-family residential homes
- 2 sold condominium homes
- 0 waterfront homes
- Highest sale price: $2,980,000
- Lowest sale price: $322,000 (condominium)
Mercer Island Home Appreciation Trends
The median sale price of Mercer Island single-family homes increased by 10.0% in 2016, and the average sale price increased by approximately 8.2%. As the chart shows below, the Mercer Island market has appreciated at a consistent rate since 2013, and we expect to see similar appreciation in 2017.
Continued Inventory Shortage
Mercer Island continues to experience a severe inventory shortage, especially for entry-level homes on Mercer Island. The market of homes for sale under $1 million is dwindling, and of the 289 homes sold in 2016, only 59 of them sold for under $1 million. In contrast, 2015 had nearly twice the number of homes that sold for under $1 million (110). If you are looking for a move-in ready, entry-level home on Mercer Island, $1 million to $1.1 million is becoming the new benchmark. Buyers should also be prepared that this is a very competitive market segment with the most bidding wars and homes selling over list price.
As we noted in our Q2 2016 market report, we saw a strong sellers’ market in 2017 with an abundance of luxury listings (priced above $2 million) in 2016. The new construction market provided many new listings with most homes starting at $2.5 million and above. Waterfront sales slowed last year with 24 homes sold compared to 30 in 2015.
Highest & Lowest Sales
The highest home sale was a westside waterfront home – a 1982-built, 9,750 square-foot, 4-bedroom home located on over an acre with 250 feet of level waterfront. It was listed at $10,868,860 and sold for $9,751,880.
The lowest priced sale was a small rambler (just over 1000 square feet) on Island Crest Way, which was listed at $599,999 and sold for $610,000.
What to expect in 2017
Windermere Economist Matthew Gardner shared his prediction for the 2017 Seattle housing market in this blog post, and we expect to see similar trends on Mercer Island. While Gardner predicts Seattle area home prices to increase by an average of 7.5 to 8.5% in 2017, we expect slightly higher increases on Mercer Island with our inventory shortage. There are so few options for Mercer Island residents who want to downsize but also want to stay on the island (Aegis Assisted Living Center is the works, but not projected to open until Fall of 2018). What we really could use are more upscale condo options on Mercer Island!
On the flip side, many Mercer Island residents are concerned about impacts of Sound Transit’s East Link light rail expansion on property values, especially when the center I-90 roadway closes in June 2017. Increased travel times stand to have the most impact on Mercer Island residents who frequently travel on and off Mercer Island for work and other reasons. Members of our greater community will also be impacted, especially those who travel to Mercer Island to work, including teachers and staff of the Mercer Island School District, the city’s largest employer.
When the light rail is completed in 2023, the impact on Mercer Island property values is expected to be positive, but what happens to inventory and property values in the short-term remains to be seen.
Mercer Island, Waterfront & Condo Market Reports
For a closer look at last year’s numbers and trends – residential, condo, and waterfront – check out the full reports below:
Do you have questions about Mercer Island real estate trends or are you in need of real estate services? We would love to help. Please feel free to reach out anytime. Call or send us a text for a quicker response.
Windermere Mercer Island
My MI Founder & Editor / Residential Broker
Windermere Mercer Island