It's July and the summer sun has finally come to Seattle. You're taking some time off from work, ready to shop for a new home, and what better place is there to buy than on the waterfront? Everyone's out boating, wakeboarding, fishing, or just diving off the end of the dock.
Seattle's Lake Washington waterfront in Denny Blaine
The rush of emotion may be enough to push you into buying a waterfront home in the summer, but does the timing make sense? You'll clearly get the most use out of the waterfront during the summer, but what if there was a lot of financial gain that could be made by purchasing that home in the "off-season"?
Real estate is known to be seasonally cyclical, with the majority of sales between late spring and early fall. There are many reasons for this--bad weather during winter, darker evenings, holidays, children in school, etc. Buyers just find more time to house hunt in the summer months. It turns out that while this effect is similar in the waterfront real estate market, it's actually even more strongly marked.
All King County Sales vs. Waterfront Sales by Monthly Percentage, 2006-2008
I've used the statistics from 2006-2008, as we had an artifically strong fall in 2009 based on the home buyer income tax credit, which skewed statistics away from the usual yearly trends. In the winter months of 2006-2008, waterfront homes dove below total sales in terms of the percentage of sales for the year. When sales spiked in the summer, waterfront homes lagged the general market just slightly, but held on to the strong sales months a bit longer than the rest of the market. August through October are still fairly strong sales months on the waterfront, while the rest of the market has already started its fast slide toward winter.
Waterfront sales are clearly associated with good weather. While it seems simplistic to associate buyers' purchases with a sunny day, there are very few industries where sales aren't partly based on emotion. When it gets sunny in Seattle, we get excited. We want to get out on the water, and spend every possible moment in the sunshine. Waterfront home owners in the Seattle area are the envy of their neighbors every year when Seafair and the Blue Angels come calling.
What does this mean for the waterfront home buyer? If you can hold back your emotion, you might be much better off buying during the winter or early spring months. There are far fewer buyers in the market, which puts you in the driver's seat. What's more, sellers who remain on the market during the winter months seem to be more willing to negotiate. Open houses are sparsely attended, buyer showings are slow, and interested buyers are treated with extra attention. Besides, don't you want a couple of months to clean up the dock and get the boat in the water?
King County, Seattle Waterfront Monthly Home Sales As A Percentage of Annual Sales
Interestingly, the end of 2009 gave a big bump to the waterfront market. While most expectations were that the first-time buyer credit would only push sales in lower-end homes and condos, the last few months of 2009 showed a strong growth trend in waterfront sales. Compared to the previous three years, there was only a bit of a leveling off this past winter. This could be attributed to a couple of factors:
A) Home sales in general were picking up and this was just a temporary market bump overall.
B) There is truly a recovery on the way for the waterfront market, as we've kicked the traditional winter slump and will roll right into a big summer sales season.
We'll find out more in a few months.
Sam DeBord and Brian Wiegand
SeattleHome.com - Washington State Realty - (206) 658-3225
Real Estate Brokers, Realtors, Green Certified Pros
SeattleHome.com - Washington State Realty - (206) 658-3225
Real Estate Brokers, Realtors, Green Certified Pros
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