At the sub-market level, Kirkland remains as the most expensive submarket in the Seattle metro area for single family new construction during the fourth quarter of 2011 with the average price of transacted units of approximately $827,000. Sammamish was second at $691,000 and Bellevue/Mercer Island ($668,000) rounds out the top three. The most affordable markets were Black Diamond/Enumclaw ($222,000), Sultan/Gold Bar/Index ($235,000) and Marysville ($254,000).

The sharpest single family home price escalation was seen in the Sultan/Gold Bar/Index sub-market where, as a function of very little development, prices rose by 366%. This was followed by Stanwood (76.6%, Carnation/Duvall (58.1% and Arlington/Granite Falls (41.2%). The most prominent declines were found in Black Diamond/Enumclaw (-36.3%) and North Seattle (-27%). When we look at the market, one thing remains clear, and that is the lack of inventory for sale. This has started to have an effect on transactional activity which is sure to continue to decline unless more houses come onto the market for sale.

In all, several sub-markets appear to be showing signs of stabilizing relative to values. When placed in concert with increasing incomes and an improving employment situation, it may be possible to
speculate that the residential market is in its trough and that further pronounced declines in price are unlikely.

That said, we will be looking for some good numbers come out for the first quarter before we are willing to suggest that the market is in any form of recovery on a regional basis.