2012 marked a change of course for Mercer Island home prices with year-over year gains in both the median and average sales price for the first time in five years. Sales activity has continued at a brisk pace with 297 residential homes sales compared to 260 in 2011 and 220 in 2010.
Certainly a welcome sight to homes sellers longing to see prices on the mend, with record low interest rates the current market has been a boon to buyers as well. The Annual Monthly Cost Index shows that the monthly interest expense of owning a home—what matters most to the bottom line—is on par with that of 1998. A median priced $458,125 home in 1998 at 6.94% interest costs about the same per month as an $856,000 median priced home today at 3.66% interest. This is pretty remarkable when you consider that wages have risen considerably since 1998.
Record low inventory shares the headlines though with Mercer Island homes for sale at the lowest level in the past 15 years (as far back as we have been keeping record). The success of the 2013 real estate market will pivot on the available inventory of homes for sale to meet the demand of serious buyers in the market.
Of the year’s home sales, 106 were above $1,000,000, while only 24 were below $500,000. With only 16 out of 297 residential sales, bank-owned and short sales made up only 5% of the sales in 2012. The lowest sale was $280,000 and the highest sale was $21,625,000.
At 45 sales for the year, buyers in the condominium market have absorbed almost all of the available condominiums for sale. Distressed sales were much more moderate in 2012 finishing the year at 16% as compared to 50% in 2011. Sales prices continue to remain impacted by the previous distressed sales but all indications are that they will rise in 2013.
Private waterfront homes continued to change hands at a brisk pace with 29 sales in 2012 ranging from $1,132,000 to $21,625,000. The average cost per waterfront foot on the Island increased 14% to $39,274 and the average cost per home square foot increased 13% to $780.
With its proximity to major employment centers, excellent school district and strong community presence, Mercer Island continues to be positioned for solid growth in 2013.
Photos courtesy of Dan Achatz Photography, danachatz.com