How Did Real Estate Do in 2010?

2010 Year in Review by Windermere Mercer IslandIt’s that time of year where we look back at what the real estate market did in 2010 and speculate about where home prices and values might go as 2011 unfolds. Most of the news is good…prices are slightly up across the region and sales activity saw a healthy boost. Scroll down to find more details on your area!

Mercer Island continued to tread water through much of 2010. While sales prices increased slightly during the year, buyers got far more home for their money–about 450 more square feet for nearly the same price. With markedly lower prices and more favorable jumbo financing terms, waterfront home sales more than tripled to a count of 27 in 2010 compared to 7 in 2009.

The condo market continued to struggle in 2010 with an oversupply of units on the Island and also in the downtown core markets of Seattle and Bellevue. However, lower prices have boosted sales and begun to reduce the number of available condos–a first step toward stability.

Short sales and bank-owned properties made up only 10% of all homes closed (23 of 220)-the lowest level in the Seattle-Eastside region. On the other hand, they accounted for a remarkable 40% of all condos sold on the Island in 2010 (16 of 40)-the highest level in the region. Click here for a full report.

The Eastside real estate market showed the greatest strength of any area in the Puget Sound region in 2010. Gains were seen nearly across the board with a year over year increase in sales of more than 12%. Sales of homes priced above $1 million increased 29% as high-end buyers took advantage of rock bottom prices and favorable interest rates. Bank-owned properties and short sale transactions made up just over 17% of all homes closed, 911 sales, throughout the year.

The bad news for The Eastside was the continued decline of the condo market, with sales prices and cost per square foot now down to 2005 levels. 2011 will be a year to watch as potential buyers, banks and developers set the tone for demand, prices and stability throughout the Eastside region. Click here for more.

The Seattle real estate market posted its first year over year price gains since 2007. Cost per square foot, days on market and list price to sales price ratios all indicated a return to stability and balance after two years of freefall. Current prices land somewhere between those of 2005 and 2006 levels-bringing affordability to its highest levels in recent history. Sales of homes priced above $1 million increased 27% due to low prices and record-low interest rates. Bank-owned properties and short sale transactions made up just over 13% of all homes closed, 773 sales, throughout the year.

The Seattle condo market was very diverse with some buildings posting strong sales and others faltering. Stability will only come when demand meets up with the over-supply of available units for sale. With no new construction permits expected to be issued for condos for some time, we could see a shift by 2012 as buyers snap up the available supply of units for sale. Click here for the full Seattle report.

While the days of falling prices appear to be behind us and double-digit appreciation only a faint memory, 2011 and the years ahead should see slow and steady appreciation of 1% to 4% per year. Interest rates will likely begin to volley in an upward direction spending much of the year in the 5% to 5.5% range.

Find more up-the-minute trends on our website.