Another year is in the books – the “priciest year in history for Puget Sound-area real estate” as noted by the The Seattle Times, and a year which ended with new records for the greater Seattle region and for Mercer Island.
According to the article, Eastside home prices climbed 16.8% in just a year, and we saw prices gain 10% from December 2016 to December 2017 on Mercer Island. We also saw the Mercer Island absorption rate reach 100% for what appears to be the first time in history, which we discuss in more detail below.
I never wonder if we’ll have something new to say in these monthly market updates, because there’s always a story in the numbers. We’re also eager to take a look at overall Mercer Island real estate trends for 2017. Stay tuned for our Mercer Island Real Estate Year in Review – coming soon!
In the mean time, here’s a look at the last month in Mercer Island real estate.
An Overview of Mercer Island’s Single-Family Residential Market
In December, there were 9 new listings on Mercer Island, a slight drop from the 12 new listings that came on the market in November, though exactly the same number of listings brought on the market in December 2016.
The number of sales increased month over month, along with a considerable increase year over year. December marked 30 sales, and with that, Mercer Island hit a never-before-seen 100% absorption rate, based on available records. The absorption rate indicates how quickly homes are selling, and with approximately 30 homes for sale in December and 30 homes sold during the same month, our local absorption rate was 100% when it was calculated at the end of the month. Historically, Mercer Island’s highest absorption rate was 86.5% in August 2015.
As an inverse of the absorption rate, “months of inventory” is another way to look at the velocity at which homes are selling on Mercer Island, and in December, we had only 1 month of inventory. This basically means that if no other homes are listed, it will take one month for available homes to sell based on the current rate. Last year at this time, Mercer Island had 2.5 months of inventory, which indicates just how unusually active buyers have been during this recent holiday season.
We were curious about the historical trends, so we looked at the Mercer Island absorption rate prior to the financial crisis of 2008. Between January 2006 and January 2008, the absorption rate fluctuated around 25%, hitting a high of 37% in June 2006. But back then, the inventory looked completely different, as nearly 120 homes were available for sale that month. After the crash of 2008, the number of Mercer Island homes for sale climbed to a high of about 210 in June 2008, and the absorption rate dipped to 11%.
Between 2006 and 2008, Mercer Island looked almost like a balanced market, though edging toward a sellers’ market before the crash. Today’s very limited inventory is causing prices to climb, as our strong economy is bringing more prospective home buyers to the region, and many would-be sellers are staying put.
Last month, home prices appreciated about 10% compared to December 2016. Home prices decreased month-over-month, but as we noted in last month’s market update, there were two waterfront sales and four new construction sales in November – perhaps luxury buyers were eager to be “home for the holidays.”
A quick note about our new “Trends at a Glance” table in regard to median and average sale price: The Mercer Island monthly sales data set is small, and we provide the median and average sale prices from one month ago and one year ago as an interesting comparison. However, waterfront or luxury sales can skew the average and median monthly sale prices to the high side. To get a more accurate sense of appreciation on Mercer Island, we suggest that you look at quarterly and annual Mercer Island market reports.
A Snapshot of the Current Inventory
As of today, Mercer Island has only 29 active listings available. This is remarkably low. The lowest we’ve ever seen residential inventory on Mercer Island was in February 2016 when there were only 25 homes available for sale at the end of the month. Looking back over the year, Mercer Island had the highest number of homes for sale in October with 72 active listings at the end of the month.
The most affordable home currently on the market is listed at $1,299,000. Two-thirds of available inventory is priced above $2 million.
We are expecting new listings to finally pick up again next week and the week after. We’ll also be bringing on a new listing on Mercer Island this month – stay tuned!
Mercer Island new listings, pending sales, homes for sale, and homes sold for the past 15 months (single-family homes – does not include condos)*
*Trendgraphix data may vary from other data provided in this monthly market update. For example, while a listing may appear to be a “new listing” to Trendgraphix, it may have been canceled and re-entered into the MLS as a strategy to repopulate IDX feeds. Additionally, town homes are occasionally listed as both a single-family home and as a condominium home. We filter for these types of “new” listings and duplicate listings.
Mercer Island absorption rate based on homes sold for the past 15 months (single-family homes)*
The absorption rate indicates how quickly homes are selling. It is calculated by taking the number of properties sold divided by the number of properties for sale (as a percentage). In a buyer’s market, the absorption rate is 16.67% or lower. In a balanced market, the absorption rate range is from 16.67% to 33.33%, and in a seller’s market, the absorption rate is 33.33% and above.
December 2017 Real Estate Market Stats
Single-Family Residential Market (All)
- 9 new listings
- 30 sold homes
- Average sold price: $1,789,428
- Median sold price: $1,547,375
- Lowest sold price: $883,000
- Highest sold price: $4,100,000
- 7 new listings
- 29 sold homes
- 2 new listings
- 1 sold homes (1 Eastside)
- Sold price of listing: $4,100,000
Mercer Island Condo Market
- 1 new listing
- 3 sold listings
- Lowest sold price: $580,000
- Highest sold price: $945,000
Mercer Island “Nosy Neighbor Report” – December 2017
Here’s our new monthly “nosy neighbor” report with data for all single-family home sales on Mercer Island (not including unlisted sales). If you’re curious about a recent sale in your neighborhood, you can learn the details with a quick glance at the report below or by clicking on the map for sale details.
Current Mercer Island Listings
By Home Type / Location
- Mercer Island Condos
- Single-Family Residential Homes (All)
- New Construction Homes
- Waterfront Homes
- Search by Neighborhood
- $1 million or less
- $1 million to $1.5 million
- $1.5 million to $2 million
- $2 million to $2.5 million
- $2.5 million to $3 million
- $3 million to $4 million
- $4 million to $5 million
- $5 million or more
Windermere Mercer Island
My MI Founder & Editor / Residential Broker
Windermere Mercer Island
Photo above: The sun sets behind Mercer Island as seen from Enatai Beach Park.