By Annie Gustafson

John L. Scott

The number of homes available for purchase in December 2017 was exceptionally low on Mercer Island, even by “typical” end-of-year standards, according to John L. Scott Real Estate.

“Inventory in November was already limited,” explained John L. Scott Managing Broker Sandra Levin, “And then we experienced a whopping 38 percent reduction in homes available for sale in December.”

In spite of the low inventory, sales activity on the Island was strong. Specifically, 16 percent more homes sold in December 2017, compared to November. Looking at the year over year trend, 34 percent more homes were sold in December 2017 than in December 2016. While Mercer Island shared the pattern of low inventory with high sales activity with cities such as Bellevue and Kirkland (which, similar to Mercer Island, also have a significant number of luxury properties), there is a distinguishing feature in Mercer Island’s December 2017 numbers: the median price went down, according to John L. Scott.

As of Dec. 31, 2017, the median price for a home on the Island was $1.4 million, which is an 11 percent decrease from November 2017. The year over year trend is the familiar tune: the median price increased by 19 percent from December 2016 to December 2017.

According to Levin, the biggest influencers in the real estate market on Mercer Island are job growth, low interest rates and livability. While local and national economic data uphold the first two, livability is considerably more subjective. Levin believes the central location of Mercer Island offering comparatively easier commutes than other parts of the region and the inherent novelty of living on an Island will continue to attract residents.

Regarding last month’s federal tax reform, Levin characterized the impact as minimal. For specific advice on how it relates to your circumstances and especially if you’re looking to buy or sell in the luxury market, she recommends consulting a tax professional. For those looking to buy, Levin recommends getting fully underwritten before making an offer or leveraging your buying power with cash.

In terms of the local real estate outlook for 2018, Levin predicts a continued imbalance between limited supply and strong demand. She cites both the strong economy and pent-up buyer demand as two reasons why inventory will continue to be limited for months to come.

“A number of our brokers are reporting an uptick in interested buyers so we are eager to see more inventory become available as we all anticipate the spring market,” Levin said.