Diversity In Central Puget Sound's Single Family Housing Market

July 28, 2000

Dear Clients and Friends,

Over the past year, the member brokers of the Northwest Multiple Listing Service (NWMLS) closed about 55,000 single family sales, 8,800 condominium sales 1,100 sales of small, multifamily properties. The area covered generally includes King, Snohomish, Pierce and Kitsap Counties, as well as some of the outlying, rural areas.

The purpose of this market letter is to identify the diversity in the market conditions around the area. The table and graphs below detail market strength as measured by the patented Strand™ Index in 35 separate geographic areas in King and Snohomish Counties as of mid-July, 2000.

Using Strand™ Index methodology we have identified areas of relative strength and weakness based upon supply and demand patterns in these various geographic locations. Please let me stress that the graphs depict "relative" market strength. Just because one market segment registers a higher index than another doesn't mean that properties in the lower indexed segment can't be effectively marketed. Please also note that in other metropolitan areas across the continent, market conditions will differ from the information provided here.

Please see the table below which details statistics from various local market areas, as well as two graphs depicting the market strength as measured by the Strand™ Index for these areas. The first graph lists the areas numerically, using the MLS numbered system, while the second graph shows the same data as the first, but sorted by market strength.

It has been argued that demand is a direct function of price. I believe this to be partially the case. However, I would suggest broadening this perspective as price, alone, does not explain the measured differences in market strength between locations around the region. If price were the driving factor, in the market place, neighborhoods with lower prices should inherently reflect higher demand. The information provided below clearly indicates that other factors are at play.

Regards,

Robert E. Rothstein
Housing Market Analyst
© 2000

Same data as graph above, but sorted in order of indexed market strength

Note: Please allow me to express my appreciation to Mr. Tetsuya Nagahama for his questions about the real estate market which prompted completion of this letter. RER