“Extraordinary market conditions”
KIRKLAND, Washington (January, 2021) – “Insatiable buyer demand” is keeping inventory scarce as house hunters try to outmaneuver and outbid each other, according to reports from Northwest Multiple Listing Service (NWMLS). Its statistical summary for December showed strong activity throughout the holiday season with double-digit increases in new listings, pending sales, closed sales, and prices.
Northwest MLS brokers added 5,260 new listings to inventory during December, a hefty 39.3% increase over the same month a year ago. Last month’s additions fell short of meeting demand as members reported 6,883 pending sales (mutually accepted offers). That number surpassed the year-ago volume by 940 transactions for an increase of 15.8%. Pending sales were especially robust in several counties where year-over-year (YOY) gains of 25% or greater were notched, notably Grant (up 133%), Kittitas (up 55%) and Pacific (up nearly 43%). “As more people are working from home, they are also purchasing properties further afield from Seattle,” observed James Young, director of the Washington Center for Real Estate Research at the University of Washington. He singled out Chelan, Clallam, Grays Harbor, Kittitas, and Mason as counties that had year-over-year price growth of 20% or more. The MLS report also shows Pacific and Whatcom counties with 20% or higher price gains.
“The velocity of the December market is a harbinger of the 2021 market as tight listing inventory, low interest rates, and high buyer demand continue to drive momentum,” remarked NWMLS director John Deely, executive vice president, operations at Coldwell Banker Bain. “Every market serviced by NWMLS was trending below December 2019 for total active inventory,” he noted. “In King County, despite a nearly 62% increase in new listings compared to a year ago, the insatiable buyer demand quickly absorbed available properties,” he added Deely reviewed new listing activity during the month of December for the past decade and found last month’s total (5,260) was the largest since 2010 (5,460). At month end, there were 4,732 total active listings system-wide in the MLS database, which encompasses 25 counties. That’s down 44% from a year ago when the selection included 8,469 listings. Measured by months of inventory, there is only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market. “With just over a two-week supply of homes on the market, last month maintained the extraordinary market we have seen all year,” commented Young. “For demand and supply to remain this out of balance for this time of year is incredible,” he added.
NWMLS director Jason Wall, designated broker at Lake & Company Real Estate, said 2020 was unusual “and it ended in the same way – surprising.” Noting the market typically slows during the holiday season, Wall said, “This year, with little to no travel and not much else attracting homebuyers’ attention, many of them remained very active in the market. Homebuyers that hoped to take advantage of less competition in a relaxed housing market instead found the same competitive market.” NWMLS director Mike Larson, president/designated broker at ALLEN Realtors, described the market as “the best of times for sellers and a very challenging time for buyers. Sellers can be picky because there are almost always multiple offers. Buyers are being forced to add value to their offers in ways other than price.” Examples he cited included shorter contingencies, closing date flexibility, higher earnest money deposits, and agreeing upfront to pay the difference if a property’s appraised value is lower than the sales price. Home prices continue to rise. For the 9,008 sales of single family homes and condos that closed last month, prices jumped nearly 12.2% from a year ago, increasing from $435,000 to $488,000. Only three counties (Ferry, Okanogan, and San Juan) reported year-over-year price drops, while nearly all other counties had double-digit gains, according to the NWMLS report. Single family homes accounted for most of the price escalation. For the 7,848 closed sales of this property type, prices increased nearly 12.9%. YOY prices on the 1,160 closed sales of condos rose about 1.8%. “We see home prices continue to increase with jobs and lifestyle changes being two of the major factors in sales. Unbelievably low interest rate and buyer demand continue to drive the market,” commented Dean Rebhuhn, broker-owner at Village Homes and Properties. Smart buyers are winning in multiple offer situations by doing pre-inspections and having financing approved, according to Rebhuhn. “Housing market activity is truly off the charts,” exclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He described activity for new listings going under contract as “frenzy-level,” fueled by low interest rates and a huge backlog of buyers.
“Now that the holiday season is over, local housing markets will see a surge of buyers entering the market in 2021,” Scott predicts. He also reported those who can work from home are moving to lifestyle/destination markets further outside city centers. Inventory continues to be the biggest issue and challenge for buyers, reported Mike Grady, president and CEO of Coldwell Banker Bain. “We’re seeing sparse inventory play out in more rural areas,” he noted, adding, “There are indications people are continuing to move farther out as they’re now able to work from home. It is most definitely a sellers’ market and buyers should not depend on a significant increase in inventory or a decrease in prices in the coming months,” he stated.
Grady also advised would-be purchasers to have patience and prepare for multiple offer situations. “An example is a recent sale one of our brokers facilitated for her buyers on New Year’s Eve. The buyers had been looking for months and won a bidding war on a listing located near Monroe by paying 18% over list price. This is the reality of the market and it’s increasingly occurring outside the major metro areas.” “COVID has not slowed the demand for housing. In fact, it has driven it up as people search for the perfect work from home location,” said Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate. With open houses prohibited due to the pandemic, Wilson said brokers remain busy showing new listings by appointment and in accordance with protocols. “We’re seeing increases in website traffic and virtual tours.”
Wilson said the story in Kitsap County, where his office is located, is not just about low inventory. “It’s deeper than that. We’ve had more houses come on the market when compared to last year. The real story is about the pent-up demand of buyers.” He said buyers are coming from all areas of the buyer spectrum, including those who are moving to improve their quality of life or escape densely populated cities, those who can now afford a house due to low interest rates, and those who need a change based on life cycles. Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor, analyzed inventory and price changes in five Puget Sound area counties, concluding “The huge price rise in each county is driven by the extraordinarily low interest rates and incredible lack of inventory.” Beeson believes some King County sellers will opt for less expensive homes outside the county, such as the South Sound area encompassing Pierce, Thurston, and Kitsap counties. “With teleworking becoming the norm for many people, sellers in King County can buy a good home in a good neighborhood in the South Sound and have money left in their pocket. South Sound is a slowly awakening giant,” he predicts. “The 2020 housing market was remarkable for many reasons, not the least of which was its extraordinary resolve through the COVID-19 pandemic,” stated Windermere Chief Economist Matthew Gardner, adding, “Who would’ve thought back in April that we would be ending the year with strong increases in both sales and prices?”
Deely, Larson, Rebhuhn, and Wall expect activity in 2021 to resemble 2020:
• “Demand driven by the continued growth of the tech and biomedical sectors and our high quality of life with access to vast marine and alpine activities will continue to drive prices up and
growth toward the suburbs.” ~ John Deely
• “So much of what is driving the market is interest rates and I don’t see the Fed raising rates in the foreseeable future. I expect 2021 to be much like 2020.” ~ Mike Larson
• “2020 real estate activity ended with a bang, indicating that 2021 will be an explosive year for listings and sales.” ~ Dean Rebhuhn
• “I expect the first half of 2021 will be very similar to last year: low interest rates combined with low housing inventory resulting in a very active and competitive market. Multiple offers and waived contingencies will likely be the norm as we roll into the new year.” ~ Jason Wall
Economist Gardner echoed some of those sentiments, saying, “As we move into 2021, I expect continued strong demand from buyers, but unfortunately, the likelihood that there will be any significant increase in inventory is slim. As a result, I believe prices will continue to rise, which is good news for sellers, but raises concerns about affordability. This, combined with modestly rising mortgage rates, could end up taking some steam out of the market but overall, I expect housing to continue being a very bright spot inthe Puget Sound economy.”
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 25 counties and it operates 21 local
Real estate activity across Washington remains strong
KIRKLAND, Washington (December 7, 2020) – Some real estate brokers expect the competition for homes to ease somewhat over the holidays, but the latest statistics from Northwest Multiple Listing Service indicate activity is unusually strong heading into December. “The rush is on for housing,” exclaimed J. Lennox Scott, chairman and CEO at John L. Scott Real Estate. “Real estate activity typically chills as temperatures drop but buyer demand remains high. “With low unsold inventory, all eyes will be on each new home that comes on the market,” he suggested, adding,“This strong demand is present in the more affordable mid-price ranges and extends into high-end homes.” The Northwest MLS report summarizing November activity shows strong year-over-year (YOY) increases in closed sales (up about 23%) and prices (up 13.8%). Pending sales (mutually accepted offers) rose 7.9% from a year ago, and the year’s saga of depleted inventory continued last month with the number of total listings down nearly 43%.
Windermere Chief Economist Matthew Gardner said even though the housing market has started to show some signs of its traditional winter slowdown “activity remains higher than we would normally see at this time of year. This isn’t too surprising given the fact that the spring selling season was essentially cancelled due to COVID-19.” Commenting on the low inventory, NWMLS director Meredith Hansen emphasized buyers need to be ready to compete. “Offers that have the best chance of acceptance are from buyers who are pre-approved with a local lender or have cash. Buyers also need to be prepared to have a pre-inspection in order to waive that contingency, and be ready to escalate in price if necessary,” suggested Hansen, the owner/designated broker at Keller Williams Greater Seattle. Although inventory is limited, a check of the supply by price range shows about 25% of the listings across the 23 counties served by Northwest MLS are priced under $400,000, and a similar number (24.4%) are priced from $400,000 to $600,000. At the high end of the spectrum, about 21% of homes and condominiums in the database have asking prices of $1 million and higher. “With listings down 42.8%, record low interest rates, and demand very high in outer suburban areas, it seems like the perfect price storm has hit,” suggested James Young, director of the Washington Center for Real Estate Research at the University of Washington.
While overall inventory is down, a comparison of counties shows a wide range of deficits, according to NWMLS data. Perhaps surprisingly, King County’s supply declined “only” about 18% from a year ago, while five counties (Clallam, Clark, Island, Mason, and Snohomish) reported drops of at least 63%. A closer look at the MLS report for all counties shows the shortages are most acute for single family homes (off 50.6% area-wide), while the condo supply improved (up 7.1%).
Thirteen of the 23 counties in the MLS report had less than one month of supply at month end. Overall, there was about three weeks (0.73) of inventory at the end of November, well below the four-to-six months many analysts use as a gauge of a balanced market. Commenting on the depleted supply, NWMLS director John Deely noted the absorption of standing inventory kept King County’s residential supply (single family homes) at 0.67 months and condo supply at 1.88 months by the end of November. “These are indicators of a solid sellers’ market for both but reflect differences in the demand for these two types of housing,” stated Deely, principal managing broker at Coldwell Banker Bain. Deely described the real estate market in King County as a “tale of two cities” in November, explaining, “While the residential market continued its trend of record low inventory, the condo market holds record high inventory when looking at the second half of the year, compared to the same periods over the past eight years.” For many first-time buyers, a condominium is the path to homeownership.
Economist Gardner said there have been some “interesting shifts in the King County condominium market.” While the supply of single family listings across the county remains painfully low, condo listings are 39% higher YOY. “Some are suggesting the increase in condo inventory is COVID-19 induced, but I think it’s too early to call this a trend as condo sales are actually higher than a year ago.” A check of Northwest MLS statistics shows condo listings system-wide are up more than 7% from a year ago. Closed sales jumped nearly 34% overall and condo prices increased more than 11%. The MLS map areas encompassing Seattle have about 61% more condo listings than a year ago; the Eastside selection is up 36%. Year-over-year condo prices in Seattle rose about 8.7% while on the Eastside prices on condos that sold in November surged nearly 32%. In South King County, condo prices jumped 24% on shrinking inventory (down nearly 33%). “The lack of inventory in all price ranges has caused a ‘gold rush’ of buyers,” reported Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor. Noting inventory in Pierce County is at about half of last year’s selection, setting the stage for increasing prices, he said the coronavirus pandemic has not fazed the multitude of house hunters. “It is not deterring determined buyers who know that competing buyers from outside the state are floating into town with a boatload of cash from sales of their previous digs.”
One indicator of brisk activity is the ratio of pending sales to new listings. November’s 8,584 pending sales outgained the month’s new listings, which totaled 6,425 area-wide, continuing a pattern reported during much of the year. New listings surpassed pending sales during only two months (March and April) this year, resulting in the depleted supply of active listings. Brokers reported 6,505 total active listings at the end of November, down from the year-ago total of 11,366. Supply was at the lowest level since February. Despite the limited selection, Deely said buyer demand remained strong through November and is more active than in previous years. “Even though open houses were curtailed in mid-November, buyers were making in-person appointments to view properties and many desirable listings had solid activity right up to the offer review date,” he reported. As Young noted, attractive mortgage rates continued to fuel demand. Rates on a 30-year fixed-rate mortgage fell to their lowest level, at 2.71%, for the 14th time this year, according to Freddie Mac. The record-low rates are allowing people to bid up prices, Young stated.
“November has been one of our busiest months for sales and closings in years,” stated Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties. “Consumer confidence in both real estate and employment have been the benchmarks of our strong real estate market,” he added. O’Leyar said the COVID-19 crisis has many households investing more time and monetary resources into their primary residences, with many of these homes becoming primary workplaces as well. “I see this as an ongoing trend even as we move out of the COVID crisis into the next phase of the real estate market,” he remarked. Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville, said the “COVID Effect” is causing purchasers to want more space, both inside and outside. “Working and schooling from home, whether full- or part-time is the new normal,” he commented, noting buyers are finding suburban and rural solutions to these lifestyle changes. Industry watchers say the in-migration of people from larger, more expensive locales is driven not only by low interest rates, but also by workers freed by the pandemic to work from home long-term, and by a desire for more living space by those who are working remotely, supervising their children’s schooling, or accommodating adult children and aging parents who may have been displaced because of the virus. Organizers of a forum for the Pacific NorthWest Economic Region (PNWER) said the rise of virtual platforms like Zoom has prompted knowledge workers to flock to new frontiers known as “Zoom towns” – scenic destinations where they can live more cheaply and “achieve a work/life balance which many never dreamed of achieving.” Speakers identified several “Zoom towns” including two areas in Washington, the San Juan Islands and the Methow Valley.
Year-to-date closed sales in San Juan County are up more than 48% compared to the same period last year. In Okanogan County, where the Methow Valley is located, sales are up more than 17%. “People are seeking space and value since they feel working from home may be a feature of their lives into the future,” commented Young, from the Center for Real Estate Research. He said Chelan County’s price movement is notable, saying it reflects that trend. Prices for sales that closed in that county last month surged 36% from a year ago. Prices on last month’s 8,875 closed sales were up nearly 14% from a year ago, rising from $434,900 to $495,000. Seventeen of the 23 counties in the report had double-digit price gains compared to a year ago. Kitsap County is among the areas experiencing double-digit activity in pending sales, closed sales, and prices. “Competition in the fast-moving market is fierce with buyers now using non-refundable earnest money and waiving inspections and financing. This is unprecedented compared to past markets,” stated Frank Leach, broker/owner at RE/MAX Platinum Services. Leach said new construction in Kitsap County is at an “all-time high with numbers not seen since the ‘90s.” Even so, he said new construction is not keeping pace with demand. “That coupled with people looking to upsize for in-home offices or expanding families, or downsize for retirement, or looking for starter homes makes for an extremely competitive market.” Additionally, he continued, the sub-3% interest rates are converting many renters into homeowners. “This is a pivotal time for many and an opportunity of a lifetime to be a homeowner versus renting.”
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers.
Shortage of homes across much of Washington state
KIRKLAND, Washington (November 5, 2020) – “Finding and buying a home today is more difficult than at any time in the past 40 years of my career,” was how broker Dick Beeson summed up the latest statistics from Northwest Multiple Listing Service. The Northwest MLS report recapping October activity showed a 40% drop in active listings compared to the same month a year ago, an increase of 16% in pending sales (mutually accepted offers), and a yearover-year (YOY) jump of nearly 30% in closed sales. The median price of single family homes and condominiums that sold last month was $500,000, up 19% from the same period a year ago, according to the MLS summary, which encompasses 23 counties, mostly in Western and Central Washington. Beeson, the managing broker at REMAX Northwest in Tacoma-Gig Harbor, said he has never seen so many buyers needing to write multiple offers before securing a home. “Interest rates are incredibly low.
Inventory is incredibly low. And anxiety is incredibly high among buyers,” he remarked.
“Sellers are struggling, too,” Beeson said. “They worry they’re leaving money on the table by accepting an offer within days of their property coming on the market,” he remarked, adding, “But brokers know that in this market, if a seller doesn’t receive an offer within a short time after the property is listed, the home is most likely overpriced.” NWMLS members added 10,428 new listings to the supply during the month, improving on the year-ago total of 8,394 for a gain of 24%. In keeping with the pattern of previous months, October’s 11,039 pending sales surpassed the number of new listings. “Yet again, the four-county area of King, Snohomish, Pierce, and Kitsap counties broke the record for the month of October for the number of homes going under contract,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. The MLS reported 7,934 pending sales for the four-county region. A comparison of October pending sales dating to 2002 shows the previous high of 7,740 occurred in 2017.
Matthew Gardner, chief economist at Windermere Real Estate, said his biggest concern continues to be the ongoing lack of homes for sale in the Central Puget Sound area. “Keep in mind that a four month supply of homes for sale is a sign of a balanced housing market, but in 14 counties, including the King/Pierce/Snohomish region, there is currently less than one month of supply. This is what is allowing home prices to escalate at double digit rates.” Whether Boeing’s recent announcement of significant layoffs will affect the housing market is being watched by industry experts.
“I’ve been watching the Snohomish County housing market closely but, as I predicted last month, there has not been any negative fallout so far,” Gardner stated. “In fact,” he continued, “compared to a year ago the number of homes for sale is down and home prices are still rising.”
Gardner said he maintains his position that “any additional inventory that may come to market will likely be absorbed swiftly as we continue to see buyers moving from the more expensive King County market to the relative affordability that Snohomish County offers.” According to the latest MLS report, the median priced single family home (excluding condos) that sold in Snohomish County last month was about $165,000 (about 28.5%) less than the figure for King County ($579,972 vs. $745,000). Area-wide the median price for last month’s sales of single family homes (excluding condos) was $515,000, a 20.2% jump from a year ago. For single family homes and condos combined, prices rose by double digits in 21 of the 23 counties in the MLS market area. The highest median prices for homes and condos that sold last month were in San Juan County at $705,000 and in King County at $685,000. Those two counties also had the highest median prices for single family homes (excluding condos). In San Juan County the price was $753,250, while in King County it was $745,000.
Scott noted the luxury market in the Puget Sound region also had record-breaking sales for the month. Last month, NWMLS brokers notched 1,004 sales priced at $1 million or more in the tri-county area of King, Kitsap and Snohomish. That volume easily surpassed the previous high of 553 luxury sales in 2019. “Supply and demand continue to drive the real estate market,” observed Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville. Record low interest rates have increased purchasing power with mortgage programs such as FHA 3.5% down payments, he noted. Also, he added, “The availability of funds has allowed record refinancing for purchasing second homes and investment properties.” With home prices increasing, which Rebhuhn believes indicates strong jobs and lifestyle demand, he said it raises questions about whether our market is underpriced. “Highly likely,” he suggested. Brokers in Kitsap County reported a “huge pent-up demand.” Frank Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, said, “The lack of listings and the extremely low interest rates are two of a growing number of reasons why buyers are looking in our area.” He said they’re beginning to see flight from larger cities as more and more jobs can be done remotely.
Wilson also reported strong traffic at open houses since the Governor announced in early October that limited open houses would be permitted in all counties with strict adherence to occupancy restrictions and other safety guidelines. “Now that we can hold homes open again, we are seeing anywhere from five to 20 small groups coming through, with showings often resulting in multiple offers,” Wilson stated, adding, “It is good to see both brokers and buyers working together plus the stringent use of masks, social distancing, hand sanitizer and other tools to ensure safe and healthy showings.” Broker/owner Frank Leach at RE/MAX Platinum Services in Silverdale said Kitsap County continues to enjoy brisk activity, “but not without the frustration of having historically low inventory. Although new listings are on the rise, they are being stripped from the market at a stunning pace. Buyers are bidding up properties as demand stays steady and inventory continues to dwindle.” He attributes part of the surge to buyers east of Kitsap County coming into the market. Northwest MLS data show Kitsap has only about two weeks of supply (0.57), with inventory plummeting more than 41% from a year ago. Mike Grady, president and COO at Coldwell Banker Bain, said October reflected a continuation of the summer market well into autumn and puts sellers in a great position. “We’re seeing buyers snapping homes up almost as fast as they’re listed,” he commented, adding, “With interest rates remaining at record lows and employment in major tech industries very strong, this is a good indication that we may well skip the usual slowing in the winter market altogether.”
Rebhuhn said the coming holiday season may present more opportunities for buyers, with less competition for new listings. However, given the current sparse inventory and keen competition, broker Frank Leach, a member of the NWMLS board of directors, emphasized buyers must be prepared when entering the marketplace “with funds and financials at the ready.” Condo shoppers are less pressured in some parts of the market. System-wide, inventory is up about 5.4% compared to twelve months ago, aided in part by the addition of 1,589 new listings during the month – a
healthy 37.6% YOY improvement. At month end there was about 1.5 months of supply. Pending sales of condos jumped nearly 35%, while area-wide closings nearly doubled from a year ago,
rising from 950 transactions to 1,414. Prices were up slightly more than 14%. The overall median price on last month’s sales was $395,000. In King County, which accounted for nearly six of every 10 sales (58.7%), the median price was $459,970, which reflects a 19.5% increase from this time a year ago.
Inventory Shortage-Bidding Wars & Rising Prices
KIRKLAND, Washington (October 7, 2020) – Northwest Multiple Listing Service brokers completed 10,175 sales transactions during September – the highest monthly volume since June 2018 when MLS members reported 10,072 closed sales. September’s closings also marked a jump of nearly 28% from the same month a year ago, according to the latest statistical summary from the MLS.
“I believe this significant increase speaks to sellers becoming much more confident and buyers competing more effectively, most likely due to low interest rates,” remarked Mike Grady, president and COO at Coldwell Banker Bain. “It’s as if we just completed our typical ‘spring’ market,” he added.
The new report from Northwest MLS showed a sharp year-over-year (YOY) drop in inventory (down 43% from a year ago), a robust increase (23%) in pending sales (mutually accepted offers), and a sizeable surge (19%) in prices for single family homes and condos combined. Northwest MLS serves 23 counties, mostly in Western and Central Washington.
Whether last week’s announcement from Boeing to consolidate to a single 787 production location in South Carolina resulting in the loss of about 900 Puget Sound jobs will dampen home sales is unclear.
“It’s too soon to make any solid predictions about how Boeing’s announcement will affect the Snohomish County housing market, but I am watching it closely,” stated Matthew Gardner, chief economist at Windermere. “We could see an increase in the number of homes for sale as workers either leave the area or decide to sell to access the equity they have in their homes. If this does happen, the increased supply will likely be absorbed by buyers who currently have a limited number of homes to choose from and counter any downward pressure on prices.”
Grady believes any impacts will be counteracted “given recent expansion announcements by Facebook, Amazon, and Microsoft to either purchase, build or renovate major office buildings in the region.
” Impacts of the coronavirus pandemic on the housing market are prevalent, according to several Northwest MLS representatives who commented on last month’s activity.
“COVID-19 has made many reflect on what their home means to them,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “As a result, many people are looking to create that ideal place to call home. We are seeing a rotation of home ownership, whether that means refinancing, remodeling, or moving.”
“With the trend toward employers allowing (and in some cases, requiring) employees to work remotely, we have seen a very noteworthy increase of sales in the more affordable suburban cities,” stated Gary O’Leyar, owner and designated broker at Berkshire Hathaway HomeServices Signature Properties.
“I consistently hear examples of COVID-related housing movement from our agents, such as a willingness to live further out, plans to move to the Pacific Northwest due to the ability to work remotely, a desire for a yard, home office, vacation property, etc.” said Robb Wasser, branch manager at Windermere Real Estate/East, adding, “But I do wonder if I’m noticing these instances because I’m on the lookout for them.”
James Young, director of the Washington Center for Real Estate Research at the University of Washington, also commented on shifting desires. “People working from home, especially those with kids being schooled at home, seek both space and value. Those who already have a home have little incentive to leave.” He described the current scenario of “too much demand and limited supply” coupled with low interest rates as “the perfect price storm.”
Supply continues to be inadequate to meet demand.
Brokers added 11,210 new listings to inventory during September, a healthy increase from a year ago when they added 9,435 for a YOY gain of 18.1%. Compared to August, the volume declined by 733 listings (down about 6%). At the end of September, the supply totaled 9,099 active listings, well-below the year-ago selection 15,982 listings (down 43%), and the lowest level since February. Measured by months of supply, there is less than one month of supply (0.89) system wide. In the Puget
Sound region, only King County notched more than a month’s supply, but if condos are excluded there is only 0.85 months of supply. Mason, Thurston and Snohomish counties had the tightest inventory, with only about two weeks of supply.
Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville, attributes the “very active market” to record low interest rates, jobs, and lifestyle choices. “We see a desire for homes with large yards or with acreage. Prepared purchasers are bringing strong offers to sellers, at or over asking prices with few, if any, contingencies,” he stated.
“In most areas, we are virtually sold out in the more affordable, mid-price and upper end segments of the market,” stated Scott, adding, “We’re also seeing a record-setting number of luxury properties going under contract across King, Pierce, and Kitsap counties.”
Statistics compiled by Northwest MLS for these three counties show there were 883 closed sales of single family homes and condos last month in the “luxury” segment based on selling prices of $1 million and above. A year ago, there were 429 sales in this category.
“With the region’s supply plummeting by over 43% compared to a year ago and month’s supply below one, double-digit house price growth should come as no surprise,” remarked Gardner.
The median price for homes and condos that sold last month across the Northwest MLS market area was $499,950, a hefty 19% jump from the year-ago figure of $420,000. San Juan County had the highest median price at $850,000, followed by King County at $698,230.
For single family homes only (excluding condos), last month’s median price system wide was $519,864. In King County, the median price for single family homes was $753,600. Within King County, where NWMLS tracks 30 sub-areas, six of these areas had median prices over $1 million; five of those areas were on the Eastside.
One of the few counties that did not have double-digit price increases from a year ago was Kitsap. Prices there were up almost 8.9%.
Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, described Kitsap County as a “hotspot” for both first-time homebuyers and high-end buyers. “The phenomenal affordability factor in Kitsap bodes well for first-time buyers and those looking to downsize or upsize.” The median price for last month’s sales in Kitsap County was $418,000, according to the MLS report. That was $280,230 less than the price in King County.
Leach has noticed significant movement in the million-dollar-plus segment and said many rentals are now going on the market as investors look to move into new investments or change platforms.
Considering depleted inventory (down nearly 44% from a year ago) and vigorous demand, Leach said buyers need to “step up with their best foot forward to compete in the multi-offer environment or deal with the frustration of being outbid. Those without a pre-approval letter are not even going to get on the playing field.” He reported a resurgence of offer escalation clauses, adding, “The Kitsap market is exceptionally hot on anything below $375,000.”
“Kitsap County, like all regions, is going into year-end with an extreme deficit of listing inventory,” said Frank Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. “With 507 new listings come to market and 564 go to pending status, our deficit is deepening.”
Wilson also reported a backlog of buyers. “Our brokers are working with buyers who have made offers on 10 or 12 homes only to lose out to cash buyers or buyers who were willing to pay significantly more than the list price and waive all conditions, including an inspection.” He said brokers are bracing for an influx of buyers from King County where some residents have concerns about living in the Seattle area. Wilson believes “more buyers in the hunt for homes in Kitsap will only intensify competition and inflate prices.”
O’Leyar believes Seattle continues to be a desirable destination. “Despite the numerous negative news stories about Seattle and anecdotes of an exodus out of the city, it is still a city where more people are moving into versus out of.” MLS figures indicate YOY closed sales of homes and condos in Seattle jumped from 750 sales in September 2019 to last month’s total of 1,189 (up 59%).
Notably, the Seattle map areas tracked by Northwest MLS showed a modest 8.4% gain in active listings compared to a year ago, fueled by the addition of 527 listings of condos. That’s up from the year-ago total of 308. The median price for last month’s closed sales in Seattle (including single family homes and condos) rose 11%, from $684,500 to $760,000.
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20
local service centers.
Virtual tours proving popular among Northwest MLS brokers and their clients
KIRKLAND, Washington (September 1, 2020) – Conducting business virtually “has been quite a shift for us,” admitted Frank Leach, a director at Northwest Multiple Listing Service. Now, he added, “I don’t see it reverting to what we had done in the past. Even our broker tours are now done virtually.” Although “shelter in place” directives, bans on group gatherings, office closures, and other mandates prompted by the coronavirus pandemic were disruptive to the housing market when first implemented, Northwest MLS data and members indicate home sellers, buyers, and real estate brokers have pivoted to various forms of virtual tools and are routinely using software and apps to manage tours and transactions.
“ShowingTime has been a huge success. Utilization of tools within it continues to multiply as more and more agents realize the flexibility of the system,” reported Leach, broker/owner of RE/MAX Platinum Services in Silverdale. (ShowingTime, an online home showing scheduling and management tool, is used by more than 250 multiple listing organizations in the U.S. and Canada.) Northwest MLS records show impressive year-over-year surges in the number of showing appointments. In June 2019 member-brokers logged 20,998 appointments. For the same month this year the volume increased eightfold, to 168,546. Similar jumps occurred in July when ShowingTime appointments increased from 20,246 a year ago to last month’s total of 189,832.
Before scheduling an onsite tour of a listing, house-hunters can preview properties and neighborhoods from the comfort of their homes, phones, or mobile devices. In May, NWMLS enabled listing brokers to input up to three links for touring choices on each of their listings, including options such as 3-D tours, recordings of video walk-through tours of the home, or photo reels. On June 1, only about 2% of listings with virtual tours had two or more links, according to Northwest MLS statistics. By July 27, more than 12% of the listings (including active, contingent and pending)featured two or more touring options.
Leach said the response to adding multiple options “has been incredible from both brokers and consumers. Our clients are finding they can cover a lot of ground by using virtual tours and Live Stream Open Houses. The Live Stream Open House option enables agents to set up chats with prospective buyers and interact with them live on various platforms.”
Matterport videos and imagery are well received, Leach stated, in part because they allow visitors to walk through a house and see more details, such as floor-to-ceiling and fully immersive 3D floor plan views.
“The viewer can fully control their experience of the home and its surroundings,” Leach continued, adding, “Many folks from the east side of Puget Sound preview properties using Matterport videos before traveling to Kitsap County and booking an in-person tour.” House hunters can tour properties anytime, from almost anywhere, and with an assortment of devices. “It’s like holding a 24-hour open house,” remarked one broker
House hunters can tour properties anytime, from almost anywhere, and with an assortment of devices. “It’s like holding a 24-hour open house,” remarked one broker.
Member-brokers at NWMLS can also showcase their listings at specific times using the Live Stream Open House option. Viewers can interact with the listing broker in real time while adhering to social distancing guidelines. No driving required! Live streaming is also used by affiliated services such as home stagers and inspectors who can exchange information with the listing broker and provide feedback before the broker holds open houses for the public or other brokers. Renee Vanous, a luxury marketing specialist and founder of The Vanous Group at Windermere Real Estate/East in Bellevue, said she and her team use both Live Stream Open Houses and live virtual tours on her listings and other “unique listings.” In addition to generating “great feedback,” she believes these guided tours give her team an edge over brokers who don’t do them.
Vanous’ team produces video tours for all their listings. Facebook and Instagram are among tools they use to attract viewers. The videos have proven to be a successful tool, even though Vanous readily admits the quality is not perfect. “Some people have said that’s why they like it. It is authentic and true to who we are,” she stated. Virtual tours are increasingly popular with NWMLS members. That previewing option is offered on more than 10,000 listings in the MLS database (including active, contingent, and pending listings).
RAREnorthwest, a group of women at Windermere that works as a team, has embraced virtual open houses for their listings. Team member Trish Englund said they use Facebook Live to stream their videos. “Our video tours, Facetime and YouTube channel are a hit
The Milkovich Team at John L. Scott adopted virtual open houses on Facebook Live at the beginning of the COVID-19 shutdown. They use Facebook Live to promote open houses, then boost their posts afterward to targeted audiences, and send the link of the recording using BombBomb (a video email marketing platform) to their database. “We may even coach the seller to use the video on their own social media platforms,” added Kristine Milkovich. Unlike traditional open houses, virtual open houses are accessible to thousands of viewers – more than could possibly tour a traditional open house, explained Lisa Milkovich. Additionally, she noted clear messaging about the property comes from the listing broker “and it can be shared and distributed in anumber of different ways.”
Opportunities abound for home buyers and sellers, but brokers say “don’t delay”
KIRKLAND, Washington (August 6, 2020) – Brokers added the largest monthly number of new listings during July since May 2019, but pent-up demand from homebuyers meant inventory remained tight, according to Northwest Multiple Listing Service (NWMLS) representatives who commented on the latest housing activity report.
The Northwest MLS report for July, which covers 23 counties in Washington state, shows brokers added 12,514 new listings during July, up from the year-ago total of 11,193 for a gain of 11.8%. Pending sales jumped nearly 14%, while inventory remained well below year-ago levels (down about 39%). Measured by months of inventory, the system-wide supply slipped to about a month (1.04 months).
MLS member-brokers reported 9,840 closed sales during July, up slightly more than 3% from a year ago and the highest volume since June 2018 when they notched 10,072 completed transactions. Overall prices on those sales, which include single family homes and condominiums, jumped 12.8% from twelve months ago, rising from $429,900 to $484,995. Prices on single family homes (excluding condos) surged 13.6% (to $499,950), while year-over-year (YOY) condo prices rose about 8.6% (to $380,000).
“Opportunities abound for both buyers and sellers if they’re willing to act quickly,” said Mike Grady, president and COO of Coldwell Banker Bain in Bellevue. Interest rates at historical lows means those who are looking to purchase their first or even their second home can get much more for their money, he explained. He mentioned a broker in their Kirkland office reported her first-time homebuyer client obtained a 30-year, fixed-rate FHA secured loan “at an incredible rate of 2.25%!”.
Conversely, Grady acknowledged, depleted inventory means “We are seeing multiple offers in just about every market and at every price point.” He estimates there is only about 24 days of inventory in the major population centers in King, Kitsap, Pierce, and Snohomish counties.
“We’ve seen an uptick in the number of listings in King and Snohomish counties, but it’s still well below what we need to meet the volume of buyers right now,” emphasized Matthew Gardner, chief economist at Windermere Real Estate.
NWMLS director John Deely characterized the market as being in “high gear” during July, with pent-up demand and the need for housing outweighing fears of the coronavirus. “Although new listings of single family homes in King County jumped more than 24% from a year ago, the total available inventory dropped to a 10-year low for the month,” he remarked. “Single family listings priced at or below market are receiving multiple offers with one recent Seattle listing attracting 40 offers,” reported Deely, the principal managing broker at Coldwell Bank Bain in Seattle.
“I see a lot of people who I think would otherwise be content to stay in their homes now rushing to get their homes on the market. Likewise, for buyers – particularly first-timers. It’s the fear of missing out,” stated Mike Larson, president/designated broker at ALLEN Realtors and a director at NWMLS.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said last month’s sales volume was his company’s best-ever for July. “Sellers benefit from the highest median home prices, while buyers are taking advantage of the lowest interest rates on record. The combination of the huge backlog of homebuyers and being virtually sold out of inventory makes it feel like it’s a multiple-offer everything,” he exclaimed, saying, “This is a historic moment in residential real estate.”
An unprecedented eight counties in the NWMLS report had less than one month’s supply of homes and condominiums for sale at the end of July. They included Clark, Cowlitz, Island, Kitsap, Mason, Pierce, Snohomish, and Thurston.
“Kitsap County continues to be attractive to East Puget Sound buyers as well as stay-at-home professionals,” said Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale. Residents are now enjoying the speedy open-access fiber-optic connections that Kitsap PUD started installing years ago, initially to serve rural areas that lacked broadband access, according to Leach. “High speed internet access has become a definite selling point for many homes and building sites,” stated Leach, who also serves as a director at NWMLS.
Leach noted July’s 527 pending sales of single family homes in Kitsap County outgained new listings (508), contributing to a 37% YOY deficit in active listings (382 last month versus 606 a year ago). “As market demand continues, the median value jumped 11.7% from a year ago.” MLS figures show the median price on that county’s single family home sales rose from $383,500 to $428,193. “Buyers are frustrated with the low inventory but elated to see interest rates continuing to drop. We are seeing offers coming in well over the list price, but this may not last long as inventory continues to inch up.”
“Suburban lifestyle continues to draw buyers,” agreed Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. “July sales suggest homes may be underpriced. With record low interest rates under 3%, buyers have increased purchasing power, but with low inventory prices continue to increase,” he observed.
Economist Gardner suggested the double-digit home price growth in Pierce County “might point to the theory that there’s a COVID-induced flight from more urban markets,” adding, “This also supports my forecast that home prices in Pierce County in 2020 will rise a significant 10.6% compared to 2019.”
Grady suggested the median price increases of around 20% or more in counties outside of the metro job centers, including Cowlitz, Grays Harbor, Lewis, and Okanogan “show that remote work practices are having an effect, and people can now move to more rural areas and work from home.”
James Young, director at the Washington Center for Real Estate Research, also commented on increased activity in areas outside of King County. “Outer areas continue to outperform. There not only appears to be a continued move to value in areas outside the Seattle region, there also appears to be a move outside the main cities.”
“Everyone is buying now,” Young remarked. “With the virus and increased home working, people are able to move to suburbs and outer areas in search of value and lower population density,” he added, pointing to dwindling supply in several outlying areas. “Demand will continue to far outstrip supply for a quite a while,” he predicts, adding, “When you can work from home, why pay a premium to be close to the office?”
Median prices area-wide rose 12.8% from a year ago, with only two counties (Jefferson and Pacific) reporting small declines. Fourteen of the 23 counties in the report had double-digit price increases. Gardner predicts 2020 home prices will rise by 5.4% in King County and 5.8% in Snohomish County compared to 2019 due to the continued shortage of homes for sale and market demand.
King County continues to have the highest median price for homes and condos at $670,000 (up 7.2% from a year ago), but a look at that county’s 29 map areas covered in the report shows price changes ranging from an increase of 21.6% in North Seattle to a 17.4% decrease in the Bellevue area west of I405.
Commenting on prices, Deely said properties with aggressive (over-market) pricing “are sitting idle as the current pool of savvy buyers waits for price reductions or for properly priced, new listings.”
“July was great month,” Grady concluded. “The trend we’re seeing foretells stronger results going forward for the next three months, especially in the context of the slowdown we experienced in April and May.”
Scott agreed but expects robust activity to continue for a longer period. “We anticipate the market will remain this way until at least April 2021. At that time, we believe normal seasonal patterns will emerge.”
Leach reported builders are frustrated at not having the inventory to meet current demand and “tradespeople are strained to meet the construction needs.” He also noted more and more buyers are making buying decisions based on virtual tours and cautioned buyers, “If you see something that piques your interest, don’t delay!”
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers.
Robust activity amid low interest rates, tight inventory, changing lifestyles
KIRKLAND, Washington (July 6, 2020) – Historically low interest rates and lifestyle changes are fueling housing activity around Washington state, according to Dean Rebhuhn, president of Village Homes and Properties in Woodinville. Commenting on just-released June statistics from Northwest Multiple Listing Service, he and other brokers say multiple offers are common “especially in the median price range.”
Brokers in the 23 counties that are part of Northwest MLS point to a shortage of homes as a key factor in the bidding wars. At the end of June, there was only 1.16 months of supply system-wide, which is the second lowest level in the past decade. (The lowest mark, at 1.12 months, was in December 2017.)
Not surprisingly, the supply/demand imbalance is causing prices to ratchet up. Median prices for last month’s 8,312 closed sales of single family homes and condos increased nearly 5.7% compared to a year ago, rising from $440,000 to $465,000. A comparison to May shows an increase of more than 3.3%.
In the four-county central Puget Sound area, year-over-year prices rose even more. Of these counties, King County had the smallest increase at nearly 5.9% (rising from $637,675 to $675,000). Pierce County prices jumped nearly 8.2%, from $372,500 to $403,000. Prices were up nearly 6.7% in Snohomish County and more than 7.7% in Kitsap County.
“Multiple offers are back with a vengeance as buyers are handicapped by having only about half the inventory of a year ago,” noted Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor. “The refrain, ‘Sorry to tell you, but the seller has accepted another offer,’ is heard with regularity,” he stated, adding, “If a buyer finds a home they like, it’s likely 20 other people will be vying for it, and the battle is on.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noticed a major increase in sales activity intensity, which measures the percentage of homes that sell within the first 30 days of going on the market. “It’s almost as if the cupboards were bare in the more affordable to mid-price ranges where the majority of sales take place,” he remarked.
“What a difference a month makes,” exclaimed Matthew Gardner, chief economist at Windermere Real Estate. “What is abundantly clear is that the COVID-19 induced slowing in housing activity that we saw in May was not enough to freeze the Seattle housing market for very long,” he added.
Gardner described the month-over-month gains in pending sales, closed sales, and prices as “very significant” and indicators of a housing market that is “very robust.”
The new report from Northwest MLS shows last month’s volume of pending sales surged 15% from May (increasing from 10,389 to 11,916); closed sales jumped more than 39% (from 5,957 to 8,312), and month-over-month prices rose more than 3.3% (from $449,850 to $465,000).
James Young, director of the Washington Center for Real Estate Research, noted the shortage of inventory is resulting in higher prices and rising demand “in places that are more rural and popular with older people trading down.” He named Jefferson County (Port Townsend), Kittitas County (Suncadia), and Chelan County (Wenatchee and Chelan) as examples. NWMLS figures show all three areas had some of the steepest price gains coupled with rapidly shrinking supply.
“Extraordinarily low month’s supply indicates that prices may have more room to move in areas popular with people trading down or seeking more space but still close to Seattle,” suggested Young. “Mason County and Thurston County come to mind, but interestingly, several Central Washington counties had strong year-over-year price growth including Kittitas (30%), Chelan (22%) and Grant (9.4%).”
Young also noted the pre-pandemic migration patterns to outer suburbs or more rural areas appear to have accelerated now that lockdowns have eased.
Some MLS representatives who commented on June’s numbers were encouraged by listing activity. NWMLS members added 10,709 new listings last month, lagging a year ago when brokers added 11,977 new listings, but improving on May’s total by 838 listings (up 3.5%). “In many areas we are seeing new listings making a comeback, which is a welcomed sight for buyers encountering stiff competition,” stated Scott. “As the economy continues to open up at a steady pace, we anticipate more sellers will choose to list their homes,” he added.
Gardner called the number of homes for sale “perilously low,” but said, “The month-over-month jump in new listings was encouraging but it did not help overall inventory levels as they all sold too quickly!” The MLS report shows pending sales totaled 11,916 to outgain the 10,709 new listings. At month end, there were 9,670 active listings in the MLS database, well below a year ago when the selection included 16,680 homes and condos for a drop of 42%. June’s total also declined from May when there were 10,357 active listings.
Mike Grady, president and COO of Coldwell Banker Bain, said agents are reporting a lot of interest in outlying areas such as Bellingham, Bainbridge Island, Eastern Washington, Bend, Oregon and other destinations with recreational amenities that appeal to buyers who are able to work from home or take early retirement. As inventory diminishes in those areas, Grady is hoping this trend may open up additional inventory in the Puget Sound region. Grady also commented on the industry’s increased use of technology during “stay-at-home” directives. “Virtual transactions are becoming more common,” he stated, citing the experience of a broker at their
Issaquah office. She recently handled two transactions 100% virtually with the buyers purchasing their homes without ever personally stepping inside, according to Grady.
Rebhuhn also reported rising interest in moving to suburban neighborhoods and to Central and Eastern Washington. “The reasons are more space, lower prices, and lower taxes. They have found they can accomplish most of their work and business from home.”
“If we were not amid a pandemic and the restrictions on showings and public open houses, it seems like just another summer real estate market,” said Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties in Seattle. “We continue to see price appreciation over last year as well as the all too common shortages of inventory. Buyers are wisely taking advantage of record low interest rates. Potential sellers might take note: If you have given any thought about selling, this may well be a particularly good time to do so!”
In a recent report, Housing Wire, a news portal for mortgage and housing professionals, indicated last week’s average rate for a 30-year fixed mortgage, at 3.07%, was the lowest in a Freddie Mac data series that goes back to 1971. Its Housing Recovery Index shows Seattle is among markets showing the greatest recovery.
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers.
You Can’t Keep A Hot Market Down
KIRKLAND, Washington (June, 2020) – “The market has proved to be very resilient,” remarked Northwest Multiple Listing Service director Mike Larson upon reviewing the statistical report for May. “Buyers in Pierce County stepped on the gas last month after a brief, but significant, tap of the brakes in April,” added Larson, the president and designated broker at ALLEN Realtors in Lakewood.
Despite the economic downturn and disruptions stemming from the coronavirus pandemic, Northwest MLS member-brokers reported impressive improvement from April to May on some key indicators. The volume of new listings, including single family homes and condominiums, rose 29.2% and pending sales jumped more than 44% systemwide. Not surprisingly, year-over-year comparisons showed sharp declines. The number of new listings fell nearly 33%, total active listings plummeted nearly 36%, pending sales declined 13.5%, and closed sales dropped about 35%. Prices remained in positive territory, rising about 2.3% from a year ago.
“The resiliency of the market is amazing,” remarked Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. “I didn’t think I would miss open houses until they could not happen,” he said, referring to limitations on in-person interactions. “The pandemic may be causing buyers to move farther out, wanting to get some space and a useable yard.” Amenities such as parks and trails are also important in current homebuying decisions, he added. Brokers and homebuyers alike seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic. “The local real estate market is hot, but it looks different than it traditionally does,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “The constraint on available inventory makes it feel like we’re running out of homes to sell.”
Brokers added 9,871 new listings to the MLS database during May, which compares to 14,689 for the same period a year ago. At month-end the selection included 10,357 active listings; that volume was 5,766 fewer than the year ago total of 16,133. Stated another way, at the end of May there was 1.74 months of supply across the 23 counties served by Northwest MLS. Inventory levels ranged from 1.1 months of supply in Thurston County to more than 8 months in San Juan County. Within the four-county Puget Sound region, supply ranged from 1.2 months in Pierce County to 1.74 months in King County. Scott said buyers are “eagerly waiting for each home to come on the market with increased focus on homes in the more affordable and mid-price ranges.”
“Anything under $1 million is selling quickly, and most new listings coming to market are going pending in just a few days,” stated Mike Grady, president and COO at Coldwell Banker Bain. Multiple offers seem to be in play on homes in median price ranges. “We don’t think we’ll see a balancing of the market in the short term until more sellers decide to list their homes and until new construction accelerates to meet demand.” He noted activity was showing steady improvement in each passing week and month. “The stories I hear continue to be filled with improving outlooks and activity so we’re cautiously optimistic about what summer will bring.” Larson agreed, saying “Multiple offers and waived inspections are common as we head into the prime selling season. Underwriting requirements have tightened a bit, but rates are still very low.”
Commenting on Gov. Jay Inslee’s “Stay Home, Stay Healthy” order in effect since March and the more recent “Safe Start Proclamation,” Northwest MLS director John Deely said the challenge was met with new processes and tools to help comply with social distancing and other protocols. “Brokers jumped in with both feet to produce and use a new live streamed open house feature released by the MLS in late April,” added Deely, the principal managing broker at Coldwell Banker Bain in Seattle. “Buyers could also use virtual tours to view homes, recorded virtual tours, videos, 3-D tours, drone photos and interactive floor plans,” he added.
Appointments to show properties under the limitations of a broker and one or two others (depending on the county where the property is located) “were booked solid from dawn to dusk in many areas,” according to Deely. “Multiple offers and a competitive environment prevailed through the month of May. We found many sellers accelerated their plans to sell upon hearing the forecast for an extended “stay home” order. Many buyers were impacted by layoffs or furlough and had to put their home purchase plans on hold for now.”
The NWMLS report shows 10,389 pending sales during May, improving on April’s total of 7,207 (up44%), but down about 13.5% from the year-ago total of 12,006. NWMLS director Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, said sales are brisk in the $350,000 and below range, and sales of $1 million and up are gaining. “The tempo of the market seems to be very hot, with buyers trying to take advantage of lower interest rates, and both lenders and real estate agents scrambling to meet demand.” Leach believes this is “likely one of the best markets we have ever seen both in interest rates and affordability. People who are betting there will be a bubble burst are going to miss the market.”NWMLS members completed 5,957 transactions during May, a slight improvement from April’s total of 5,866.
The median price on last month’s closed sales was $449,950 across the NWMLS coverage area. That compares to the year-ago figure of $440,000 an increase of about 2.3%. Five of the 23 counties in the report had year-over-year price drops: Ferry (-30%), King (-2.8%), Kittitas (-2.95%), Pacific (-12.8%), and San Juan (-17.8%). The biggest increases were in Okanogan County (30.3%) and Grays Harbor County (15.7%). “I don’t think anyone should be surprised that home prices in King County took a ‘breather’ in May,” said Matthew Gardner, chief economist at Windermere Real Estate. “Clearly COVID-19 was the cause for this drop, but I’m confident this is a temporary situation that will be reversed as King County starts to reopen, and fresher inventory comes to market.” The robust increase in listings between April and May combined with pervasively low mortgage rates “tells me prices will resume their upward trend in the coming months,” he added.
Leach said when Kitsap County moved into Phase 2 of the governor’s reopening plan, the Kitsap Department of Community Development processed over 400 permits, which he believes “is just the tip of the iceberg as builders rush to meet consumer demand. Builders are now seeing folks who commuted to work looking to purchase homes with an extra den or office as they anticipate the “work from home” aspect is here to stay.” Grady also commented on the slight price drop in King County, saying he believes it’s a reflection of reduced activity in the luxury home market ($2+ million), which disproportionately impacts over price averages. “This may be a reflection of a ‘wait and see’ attitude or just the uncertain times we’re in.”
Market “Hit But Not Knocked Out”
KIRKLAND, Washington (May, 2020) – Residential real estate activity around Western Washington reflected expected declines during April with the impact of the coronavirus pandemic taking its toll. A new report from Northwest Multiple Listing Service shows year-over-year (YOY) drops system-wide in new listings, pending sales and closed sales, but prices increased nearly 6.4%.
“With the first full month of post-COVID-19 data in hand, it’s clear the Puget Sound housing market has been hit but not knocked out,” stated Windermere Chief Economist Matthew Gardener. “The normally active spring market is significantly slower than normal due to COVID-19, but it has not come to a halt,” he observed, adding, “In my opinion, it is responding to the current circumstances exactly as expected.”
Some industry veterans expected more severe declines. “As we look at the numbers for April, typically one of the most active months in regard to new listings, the impact of COVID-19 on the real estate market is now clear, although I personally thought it could have been worse,” remarked Mike Grady, president and COO at Coldwell Banker Bain.
The Northwest MLS report for April shows area-wide inventory fell nearly 21% from a year ago, dropping from 12,955 listings to 10,282. A comparison of the 23 counties in the report shows only four counties with YOY increases (Jefferson at 0.9%, Whatcom at nearly 6%, Douglas at 13.8% and Lewis at
17.7%), while three counties had shrinkages of around 30% or more (King at -29.6%, Clallam at -32.9% and Island at -39.2%).
The volume of new listings added during April was off 34.7% compared to the same month a year ago. Brokers added 7,641 new listings last month, down from both March when 10,291 new listings were added, and April 2019 when brokers added 11,697 new listings.
Despite the slower activity, the months of supply improved only slightly, rising from the March figure of 1.4 months to 1.75 months of inventory at the end of April.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, described the market as “virtually sold out everywhere locally in the more affordable and mid-price ranges.” Commenting on the local market, he said, “We are seeing buyer demand coming forward. With historically low interest rates, the local market needs additional listings to meet pent-up demand from the backlog of buyers,” he stated.
“We continue to see a shortage of inventory, along with multiple offers on newly listed homes, and we still have a backlog of buyers who line up (virtually) to view new listings,” reported Frank Wilson, branch managing broker at Kitsap regional manager at John L. Scott Real Estate. “With exceptionally low interest rates, there is no change in sight,” he suggested.
Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, reported seeing “only a slight increase in average market time for some listings,” along with “instances of multiple offers.” Acknowledging it was anyone’s guess as to how the March 25 “Stay Home, Stay Healthy” orders would play out, he suggested the Greater Seattle real estate market “continued to show its fundamental strength in April.”
In comparing April to March in the tri-county area (King, Pierce and Snohomish counties), economist Gardner noted the total number of active listings rose (up 14,8%), but new listings dropped (down 25.5%), which he said suggests sellers may be waiting until the shelter-in-place order is over. In the same area, home prices were essentially flat, which Gardner said, “This tells me that sellers are having realistic expectations about value and buyers, hoping for deep discounts, are not finding them.”
Wilson agreed, reporting, “We have had quite a few buyers who have come into the market thinking this is a good time to make lower offers on houses, but that is just not the case in Kitsap County.” Northwest MLS figures show the median price for homes and condos that sold last month in Kitsap County rose more than 13% from a year ago, from $349,500 to $395,178.
Another broker in Kitsap County, Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, attributed part of that area’s 35% drop in pending sales to COVID-19 restrictions affecting showings. Nevertheless, his analysis showed more than half the sales in Kitsap County were over the asking price. “The market continues to be very competitive,” he stated.
Eight other counties, like Kitsap, reported double-digit jumps in median sales prices compared to a year ago, while four counties had declines.
In King County, prices rose 4% from a year ago, from $625,000 to $650,000. Snohomish County prices were up nearly 6% and Pierce County joined Kitsap with a double-digit gain; prices there increased from $355,000 to $397,750 for a 12% gain.
System-wide, prices were up about 6.4%, rising from the year-ago figure of $424,950 to last month’s figure of $452,030. Year-to-date prices are up nearly 9.3% compared to twelve months ago.
“With peripheral areas still showing price increases higher than the Seattle area core, April’s figures highlight the trend of migration to outer suburban areas, along freeway corridors,” suggested James Young, director at the Washington Center for Real Estate Research (WCRER). He also believes the
figures illustrate “a continued preference for lower density areas given the likely persistence of distancing measures in the future. The virus has refocused many potential buyers, especially for those owning highdensity properties in Seattle and elsewhere, on more space and less density. It makes social distancing
Young expects the trend of households moving to outer counties will likely accelerate in the comingweeks. “Older households in Seattle and other urban centers will be attracted to lower density areasbecause it is easier to maintain social distance while possibly gaining more space at a lower price point.
As long as older householders in urban areas are able to sell, other counties will continue to see increased
prices,” he stated.
Changes in lending practices could influence activity according to some market watchers, including Young. “The biggest factors in mortgage markets are first-time buyers, who may not qualify under new criteria, and jumbo markets,” he remarked.
Broker Dean Rebhuhn, owner at Village Homes and Properties, also commented on shifts in financing. “When the pandemic struck, fear came to play with sales under contract. Buyers became concerned, banks became concerned, appraisers became concerned,” according to Rebhuhn. Some buyers terminated their transactions, in some cases even forfeiting deposits. Nationwide lenders tightened their polices, he noted adding, “Jumbo loans became much harder to obtain, as did home equity loans and refinances.”
Rebhuhn said noticeable changes occurred in mid-April. “New lenders saw opportunities in the marketplace and filled the space left by the national lenders. Sellers and buyers became more active,” he reported, adding, “It is amazing how resilient the real estate market has become in the face of the new normal.”
Other representatives from Northwest MLS echoed comments by Rebhuhn. “Buyers are relying more and more on technology and tools to allow for virtual open houses and viewings. Social distancing, face masks, showings by appointment only and only two people in a home at a time with one of them being the broker are the new norm,” stated Wilson. Like WCRER’s Young, he said he could imagine homeowners wanting to change their living conditions to accommodate for more room or more outdoor space. “This could well cause a shift in what buyers are looking for in the future.”
Leach also reported, “Buyers in Kitsap County are very active on the internet and are checking out properties the minute they go on the market,” with corresponding surges in activity at title companies and by lenders. “Virtual tours are getting a lot of attention.” He said homebuilders “are ready to go full steam ahead.”
Grady also observed upticks in activity and optimism. In tracking their company numbers since March 29, he said they’ve averaged about a 10% increase in production (new listings, new transactions, and closed sales) in each subsequent week. He expects activity will continue to increase throughout May and June, which he says, “speaks to a market that is slowly adjusting to new ways of operating.”
“Optimism is rising,” Grady reported. “We have seen a drastic increase in views of virtual tours.” He also believes consumers are gaining confidence around safety measures for touring homes and as brokers become more adept at hosting live stream open houses. “Buyers are utilizing virtual technology, electronic signatures, and remote online notary processes for closing. All in all, we’re getting through this together,” he proclaimed, adding, “We are truly fortunate to live in a region that has navigated this crisis as adeptly as possible.”
March shows initial disruptions from Coronavirus pandemic
KIRKLAND, Washington (April 2020) – Like many sectors of the economy, residential real estate is experiencing disruption and uncertainty just when the vigorous spring market was ramping up. Not surprisingly, the March activity report from Northwest Multiple Listing Service, which covers 23 counties across Washington state, was mixed as guidelines affecting how brokers conduct business evolved.
Housing activity around Western Washington in March showed the volume of new listings added during the month surpassed February’s total, as did both pending and closed sales. Year-over-year prices increased. However, commenting on the latest report, Northwest MLS brokers emphasized the numbers do not yet reflect the impact the coronavirus pandemic is having on local real estate. “We expect that all numbers will decline in April and May as a direct result of the governor’s “Stay Home” order that became effective on March 26,” stated Mike Grady, president and COO at Coldwell Banker Bain. He also expects April and May will be “bridge months” before the market returns to a “more normal” activity level, “assuming we all abide by Governor Jay Inslee’s directives.”
Windermere Chief Economist Matthew Gardner described the numbers for March as “essentially irrelevant given the fact that the economy went into freefall during the month.” He also noted that for a period, real estate was not considered to be an essential service, which he said “suggests that April’s numbers will also not be an accurate representation of the market.”“The local real estate market experienced a bit of turbulence in late March as the coronavirus crisis evolved,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Following statewide orders, the market virtually paused for a few days, but began picking up after real estate guidelines were adjusted to support social distancing,” he remarked.
“As our real estate industry has adapted to the evolving waves rippling from the COVID-19 pandemic, the response from the agents in my office has been to go slow,” stated NWMLS board chairman Robb Wasser, branch manager at Windermere Real Estate/East in Bellevue. “While we have been given the latitude necessary to help clients in pending transactions get to the finish line, the recent revision from the Governor’s Office allowing agents to show homes has been met with significant caution and care within my office,” he added.
“The ability to transact business at all has been facilitated and allowed with tight restrictions and major concerns,” stated Dick Beeson, managing broker at RE/MAX Northwest Realtors in Gig Harbor. “Like Interstate 5, if there’s an accident ahead, you creep along as you pass by it. The market is not totally stopped, but around half the business is on hold. And we’re creeping along right now.” Despite limitations, Northwest MLS brokers added 10,291 new listings to the database during March, outgaining February by 2,505 listings (up 31.2%) and nearly matching the year-ago number (10,516). At the end of March, there were 9,418 active listings in the NWMLS database, a drop of nearly 22% from twelve months ago, but a gain of 23% from February. Area-wide, there was 1.4 months of supply, but it ranged from less than a month in both Snohomish and Thurston counties to more than nine months in San Juan County.
“I am enthused by the strong number of new listings and new sales,” stated Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. “With low interest rates and more technology jobs, residential housing inventory will remain low and demand high,” he added. He also noted a statement by an economist at a major bank who expects demand for single family homes will remain high “as buyers will not want to be jammed together.” Pending sales (mutually accepted offers) slowed during March, dropping about 13.5% from a year ago. Brokers reported 8,880 pending sales during the month, which compares to 10,261 for the same month a year ago. Compared to February, pendings rose by 525 transactions.
“Many buyers and sellers’ real estate needs continued despite coronavirus concerns,” reported NWMLS director John Deely. He said pressure from the short supply of listings dropped off as the “Stay Home, Stay Healthy” order was implemented, but buyers who previewed and pre-inspected properties before the order made offers in a climate of less competition. “Buyers found an opportunity to insert more standard and normal conditions in their offers, reminiscent of a slower, balanced market,” stated Deely, principal managing broker at Coldwell Banker Bain in Seattle. “Covid-19 has put a new wrinkle in the Northwest real estate food chain. That wrinkle has produced fewer pending sales and fewer homes coming on the market, and that means buyers are taking more time to make decisions in this new environment,” said Beeson. “It also means sellers, for the first time in a long time, don’t have instantaneous offers and must exercise patience, too.”
Contrary to some areas, activity in Kitsap County has been quite brisk, according to Frank Leach, broker/owner of RE/MAX Platinum Services in Silverdale. Brokers added 516 new listings during March for an increase of 10.7% from a year ago. Compared to February, new listing activity surged 52.7%. “Inventory has increased over the past few weeks,” reported Leach, a member of the NWMLS board of directors. With 1.3 months of supply, there’s a “very competitive market in all price ranges,” he added. Leach is optimistic about how Kitsap County will fare as the COVID-19 crisis continues. “Kitsap’s unemployment rate remains relatively low with many businesses looking for employees. While we anticipate unemployment claims to spike, Kitsap will likely be on the lower end of the scale compared to most counties due to its diversity of jobs and the large government sector that works and resides here.”
Kitsap County’s number of closed sales fell 2.8% during March, one of 10 counties to report year-overyear drops. Within the Puget Sound region, only King County reported a gain; closed sales there were up about 7% from a year ago, with condo closings surging more than 20%. System-wide, closings were nearly even with a year ago (6,735 versus 6,750), a reflection of strong activity at the start of the year. Median prices on last month’s completed transactions rose 10.3% from a year ago, increasing from $415,950 to $458,900. Only two counties (San Juan and Ferry) reported year-over-year price drops.
NWMLS brokers report brisk activity, noting “too early to tell” if Coronavirus will soften sales
KIRKLAND, Washington (March 5, 2020) – “We’re entering prime time for the real estate market, and more listings are on the way,” stated industry veteran J. Lennox Scott, as he reviewed the latest statistical report from Northwest Multiple Listing Service. MLS figures for February show year-over-year (YOY) gains in new listings, pending sales, closed sales, and prices. Scott, the chairman and CEO of John L. Scott Real Estate, expects a bump-up in inventory during March and April, but said, “We remain virtually sold out in many areas in the more affordable and mid-price ranges.”
Northwest MLS representatives who commented on last month’s activity reported little impact so far from the coronavirus (COVID-19) threat.
“It’s still too early to tell if the broadening effects of the coronavirus will sideline buyers,” said Matthew Gardner, chief economist at Windermere Real Estate. “What we do know is that news of the virus led equity markets sharply lower and this caused mortgage rates to drop significantly. Therefore, the question is whether buyers will put their search on hold until the virus has abated, or if they will decide to move forward so they don’t miss out on near historic low mortgage rates,” he added.
David Maider, broker/owner at Windermere Real Estate/M2 in Everett, agreed with Gardner. “It remains to be seen if the coronavirus scare will have any impact at all on the local real estate market other than to lower interest rates,” he stated.
“While the news is full of COVID-19, the stock market correction, and an unexpected interest rate cut that didn’t impress Wall Street, the Puget Sound region’s real estate market continues to stand strong,” stated Mike Grady, president and COO at Coldwell Banker Bain in Bellevue. “Our agents aren’t yet seeing any impact on open house attendance due to the COVID-19 outbreak. We continue to be bullish on the Puget Sound economy and real estate market.”
“I haven’t noticed any decrease in open house activity or in sellers being reluctant to have buyers view their home,” reported NWMLS director Mike Larson, the designated broker at ALLEN Realtors in Lakewood. “Short term, the coronavirus outbreak has resulted in investors turning to the bond market, which means lower interest rates and more buying power. Long-term, this virus could start to wear on overall consumer confidence, which is never good for real estate markets.”
Home buyers in Western Washington “hit the ground running” in January
KIRKLAND, Washington (February 6, 2020) – “All indicators point to a vigorous spring market, suggested broker Dean Rebhuhn when reviewing just-released statistics from Northwest Multiple Listing Service. The report covering 23 counties shows pending sales outgained new listings, record-low inventory that’s down 33% from a year ago, and double-digit price increases.
Matthew Gardner, chief economist at Windermere Real Estate (the largest regional real estate company in the Western U.S.), noted home buyers did not take very much time off during the holidays. “They hit the ground running as soon as the new year kicked off.” (Windermere has 140 offices in the NWMLS market area.)
Rebhuhn, the owner of Village Homes and Properties in Woodinville, said new jobs, low interest rates, and lifestyle changes continue to drive the market. “Hot spot markets are experiencing multiple offers,” he reported.
Northwest MLS brokers added 6,517 new listings during January, a year-over-year decline of more than 8%. Pending sales (mutually accepted offers) topped new listing activity by 871 units. Brokers reported 7,388 pending sales last month, a 2.3% decline from the same month a year ago.
“So now we have a three month trend where we’re seeing pending transactions exceeding new listings added in all major counties in the Puget Sound region,” observed Mike Grady, president and COO of Coldwell Banker Bain. “Inventory continues to decline slowly to barely more than a month’s on hand. Our brokers are reporting it ‘feels like 2017,’ with multiple offers returning and review dates (where sellers identify a date to review all offers) being added to the mix because of the number of offers they are receiving,” he added.
At the end of January, the MLS database totaled only 7,791 active listings of single family homes and condos, well-below the year-ago figure of 11,687 (down 33.3%). A check of records dating to 2005 shows the selection is at a new low level, shrinking below the previous low of 7,921 reported for February 2018. In fact, for the 15 year span from 2005-2019 (180 months), inventory has dipped below 10,000 listings during only eight of those months.
Eager Home Buyers Were Plentiful in December But Choices Were Meager
KIRKLAND, Washington (January 6, 2020) – “The buyers are out there and are showing up at open houses and making multiple offers on new listings,” was how one industry leader summarized December’s housing activity involving members of the Northwest Multiple Listing Service.
Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, also said the severe shortage of inventory – “much lower than in years past” – will lead to continued buyer frustration and escalating home values. He noted one of his colleagues added a new listing the day after Christmas and it quickly drew 11 offers.
Newly-released figures from Northwest MLS show inventory at the end of December was down 31% from the same month a year ago, with only 8,469 active listings compared to the year-ago total of 12,275. The figures include single family homes and condominiums across the 23 counties in the MLS service area.
Last month marked the sixth straight month of declining inventory, noted James Young, director of the Washington Center for Real Estate Research. MLS figures show inventory peaked in June when the database had 16,680 active listings ? about twice as many as December.
Inventory for single family homes and condos (combined) was down by more than 30% in seven counties: Thurston (-54%), Pierce (-38.9%), King (-38.8%), Snohomish (-35.6%), Mason (-32%), Kitsap (-30.6%), and Skagit (-30.5%). System-wide there is only about 1.2 months of supply.
The inventory of single family homes (excluding condos) is especially tight in several counties, notably Thurston (-54%), King (-41.4%), Pierce (-40%), Snohomish (-36.1%), and Kitsap (-34.3%).
Robb Wasser, branch manager at Windermere Real Estate/East and NWMLS director, noted the sharp drop in King County marked the first time since March 2018 that the supply of homes dropped below one month. “Looking all the way back to 2012 when home values first began recovering, King County has only logged six months with supply levels lower than where we currently stand,” he remarked.
“This market is unlike any market I’ve seen in the South Sound over the past 40 years. Too many buyers chasing too few properties,” remarked Dick Beeson, principal managing broker at RE/MAX Northwest in Gig Harbor
“November Surprise” brings “plenty of buyers,” uptick in home sales, prices
KIRKLAND, Washington (December 5, 2019) – Brokers with Northwest Multiple Listing Service reported “plenty of buyers” competing for sparse inventory during November, which ended with a 7% year-over-year increase in pending sales. The volume of mutually accepted offers rose even more (9.2%) in the tri-county Puget Sound region consisting of King, Pierce and Snohomish counties, with Snohomish leading that list with a jump of about 12%.
Median sales prices also jumped compared to both a year ago and to October. For November’s 7,216 closed sales (which were up 5.5% from a year ago), the area-wide sales price was $434,900, a gain of about 10% from the same month a year ago. Compared to October, last month’s price on sales of single family homes and condos (combined) jumped 3.5%.
King County’s median price of $612,000 led all other counties, but prices there edged up just over a percentage point compared to a year ago.
“Just when I thought we had started a ‘new normal’ that equalized things a bit for buyers, we’ve had a ‘November Surprise,'” said Mike Grady, president and COO of Coldwell Banker Bain. “Perhaps it’s an aberration, but perhaps not,” he suggested.
November’s 7% increase in pending sales was the highest year-over-year gain for November since 2016. In 2017, the YOY figure was a modest 1.6%, while last year’s comparison showed a drop of more than 10%
Brokers could not replenish inventory to keep pace with demand.
“New listings added to inventory retreated nearly 15%,” Grady noted. MLS members added 5,437 new listings system-wide, far fewer than a year ago when they added 6,399 residential properties to the MLS market area that covers 23 counties. The imbalance between new listings and pending sales resulted in supply falling to 1.58 months, the lowest system-wide level since last December.
“Pending sales, along with other indices I watch, including the number of surrendered out-of-state driver’s licenses, construction crane activity, and the 11 million square feet of office space under construction that is already 90% leased, bolsters the idea we may be seeing our region’s economy strengthening – and we weren’t in a lull,” proclaimed Grady.
Sparse supply spurring more competition among motivated home buyers in Western Washington
KIRKLAND, Washington (November 7, 2019) – “People are moving here, home prices will continue to increase, inventory shortages will occur. That’s our future,” remarked Dick Beeson, principal managing broker at RE/MAX Northwest in Gig Harbor, upon viewing the October statistics from Northwest Multiple Listing Service.
Active listings of homes and condos totaled 14,379, the lowest level since April. Compared to a year ago, last month’s selection declined more than 21% and was down 10% from September, according to the new report from Northwest MLS. The year-over-year and month-to-month volume of new listings also declined last month. On a positive note, MLS figures show system-wide gains in October’s pending sales (up nearly 5.6%), closed sales (up 4.1%) and prices (up nearly 7.7%) compared to a year ago.
Beeson, a member of the Northwest MLS board of directors, and other MLS leaders also commented on inventory shortages, which some refer to as the “new normal.” The sustained, lower levels of supply “drive some buyers crazy as they keep expecting to gain the upper hand,” Beeson reported, adding, “It’s not going to happen any time soon. The market has settled into a circadian rhythm of sorts.”
MLS figures for its 23-county service area show 1.73 months of supply overall. Ten counties, mostly in the Puget Sound area, have less than two months of supply of single family homes and condominiums, whereas 4-to-6 months is a level industry-watchers use as a gauge of a balanced market.
“With only 1.63 months of supply of single family homes (excluding condos), King County’s available listing inventory is notably below the national average of four months, as reported by the National Association of Realtors,” stated Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties in Seattle. The MLS report shows inventory as measured by months of supply was below King County’s figure in six counties.
Condo inventory is only slightly better, at just over two months of inventory, although that could improve with several highrise projects in Seattle and Bellevue in the pipeline. “We are still amid a very robust real estate market,” O’Leyar proclaimed.
Northwest MLS records show the last time the supply of homes and condos exceeded three months was February 2015, when there was just over 3.5 months of supply.
Compared to the same month a year ago, October’s supply of active listings declined by double-digits in 18 of the 23 counties in the NWMLS report. Thurston County had the sharpest decline (down 35.5%), followed by Pierce (down 28.7%) and Kitsap (down nearly 27%).
Despite the slim selection, demand was strong as the volume of pending sales (9,517) outgained the number of new listings added during October (8,394). Nine counties reported double-digit jumps in pending sales compared to 12 months ago.
“The most recent data certainly appears to bolster the idea of a ‘new normal,’ as we see the same trends continuing,” stated Mike Grady, president and COO of Coldwell Banker Bain. “Inventory is staying between 1.7 and 2.3 months and median sales prices are stabilizing” in many areas, he noted, adding, “Couple this with continuing positive economic news locally — including a positive forecast for job creation, interest rates at all-time lows, and several new condo projects in the pipeline (instead of apartments) given the legislature’s change this year in the construction defects laws – all these point to a new definition of a ‘balanced market’ of only two months of inventory instead of 4-to-6 months.”
OB Jacobi, president of Windermere Real Estate, also commented on the meager supply. “‘Tis the season for the number of homes for sale to start dropping, and we don’t expect to see a significant influx of new inventory until spring. That said, there are still plenty of buyers out there, so this drop in listings will lead to increased competition and will likely cause home price growth to increase modestly through the end of the year.”
NWMLS Brokers Say Transition to Fall Creating Opportunities for Buyers
KIRKLAND, Washington (October 7, 2019) – Northwest Multiple Listing Service brokers reported year-over-year gains in pending sales, closed sales and prices, but its report summarizing September activity also showed an 18% drop in inventory compared to a year ago.
“The transition into the fall housing market creates opportunities for homebuyers,” suggested J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Although there are fewer listings than what buyers find during peak summer months, there is also less competition” for the available inventory, he added.
While the intensity of sales activity is typically lower for new listings in the fall and winter, Scott noted “It appears we are headed toward a more intense winter market than last year.” He said he expects the number of unsold listings will continue to decrease once the winter “clean-up” of inventory begins.
At the end of September, MLS brokers reported 15,982 total active listings, down more than 18% from the same month a year ago when the selection totaled 19,526 listings. Only three of the 23 counties served by Northwest MLS – Clark, San Juan and Whatcom – had year-over-year gains in inventory, while 18 counties had double-digit drops. Thurston County reported the sharpest shrinkage, at nearly 35%.
“September’s housing market was a bit of a roller coaster, up in certain areas and down in others,” commented OB Jacobi, president of Windermere Real Estate.. Within the four-county Puget Sound region, Pierce County prices rose more than 10% thanks to high demand and low inventory, he noted. “Buyers continue to be drawn to the area thanks to more affordable housing costs, but this influx is also driving up prices,” he remarked.
MLS data show the median price for last month’s home sales in Pierce County ($379,950) was $213,800 less than the median price in King County ($593,750). A comparison of single family prices (excluding condos) reveals a $275,500 difference between the two counties.
“In King County, prices were down nearly 2.7% while pending sales rose nearly 10%. This tells us there is no shortage of buyers in the Greater Seattle area,” stated Jacobi. He also said home prices normally start to taper off this time of year, “so this isn’t a major cause for concern.” Within King County, prices rose in four of the six sub-markets; only Seattle (down 3.2%) and Vashon (down almost 28%) reported drops.
The median price for single family homes and condos that sold last month in King County was $593,750, down from the year-ago figure of $610,000 and the first time it dipped below $600,000 since January. Three other counties, Okanogan, Pacific, and Clallam, also reported year-over-year price drops. Joining Pierce County with double-digit price increases from a year ago were eight other counties.
System-wide, prices were up 5%, rising from $400,000 a year ago to $420,000. The volume of closed sales increased about 4.4% from a year ago (7,962 versus 7,630).
“Home prices have stabilized, creating good opportunities for purchasers,” said Dean Rebhuhn, the owner of Village Homes and Properties in Woodinville. He expects prices to stay stable through the fall and winter markets.
“Continuing to drive the market are new jobs, lifestyle changes, and very low interest rates,” Rebhuhn remarked, adding, “FHA mortgages with 3.5% down payments are very popular with first-time homebuyers.”
The latest report from Northwest MLS shows pending sales were up about 9.8% from a year ago, with mutually accepted offers rising from 8,913 to 9,785. In the four-county Puget Sound region, Snohomish reported the largest gain at 18.3%, followed by Kitsap at nearly 11.9%, King at 9.8%, and Pierce at 5.4%.
Brokers were unable to replenish inventory to match demand as the volume of pending sales (9,785) outpaced new listings (9,435).
“Things were a bit different in September, but at this point it’s difficult to know if it’s an aberration or an actual trend,” stated Coldwell Banker Bain president and COO Mike Grady, pointing to “far fewer” new listings that were added last month compared to a year ago. Area-wide, Northwest MLS brokers added 9,435 new listings last month, a decline of 1,023 from the year-ago total (down nearly 9.8%).
“It’s still a seller’s market, and for more than a year we’ve seen only 1-to-2 months of inventory, so I’m starting to think we may be looking at a ‘new normal’ in relation to what a balanced market looks like,” commented Grady.. “With the international economy and trade issues continuing to be erratic, and interest rates staying low, these pressures will almost certainly be an influence, yet there’s no clear answer to how all of this will play out,” he added.
MLS figures show 2.01 months of inventory system-wide, with 12 of the counties reporting less than 2.5 months of supply. Real estate experts tend to use 4-to-6 months of inventory as an indicator of a balanced market.
Northwest MLS director Frank Leach, broker/owner of RE/MAX Platinum Services in Silverdale, said Kitsap County continues to have constrained inventory (down almost 25% from a year ago), with values stabilizing or increasing slightly. Homes priced around $350,000 and under sell quickly, while “inventory in upper ranges is taking a little longer to get traction and move to a sale,” according to Leach.
MLS figures show the median price of homes and condos that sold in Kitsap County last month was $384,000, up nearly 8.2% from the year-ago figure of $355,000.
Leach noted condominium inventory in Kitsap County rose more than 27% from a year ago, but the selection of single family homes dropped by the same percentage. He said several multifamily projects in the county have been submitted or approved, and those homes are expected to be absorbed in the market as soon as they’re available.
“Prices along the I-5 corridor between the Puget Sound and Portland once again outperformed as buyers seek value for money and job growth has expanded in the entire region,” observed James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington.
If millennials want to own houses, Young said the logical first step in the housing ladder is increasingly outside of King and Snohomish counties “and further afield along the I-5 corridor.” With interest rates near historic lows and employment levels at historic highs, first-time homebuyers are acting while they can to get on the housing ladder, “even though that may mean long commutes,” Young stated.
The September report from Northwest MLS shows single family activity outperforming condos. Year-over-year pending sales of single family homes jumped 11%, while condo sales were flat. Prices on last month’s closed sales of single family homes rose more than 5.5%, but condo prices declined by 1.2%.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,400 member offices includes more than 30,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Home buyers seeking affordability are expanding search outside Greater Seattle job centers
KIRKLAND, Washington (September 9, 2019) – Depleted inventory continues to frustrate would-be buyers in Western Washington. Many of these potential homeowners are expanding their search beyond the major job centers in King County, according to market watchers who commented on the latest statistics from Northwest Multiple Listing Service.
The MLS report summarizing August activity shows less than two months of supply system-wide, and only about 1.6 months of supply in the four-county Puget Sound region. The sparse selection is pushing up prices. For last month’s sales of single family homes and condos across the 23 counties served by Northwest MLS, prices rose nearly 6.2% compared to a year ago.
“Areas immediately outside the Puget Sound region and along the I-5 corridor continue to see double-digit house price growth,” noted James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington. He attributes the increase to high demand in these areas “due to first-time homebuyers who struggle to afford housing in King and Snohomish counties as well as from existing homeowners cashing out of Seattle and King County.”
“While August is always a slower time for listings and sales, what is really surprising this year is the decrease in new listings taken, while pending sales increased,” observed Mike Grady, president and COO of Coldwell Banker Bain.
A comparison of year-over-year statistics for August shows the volume of new listings dropped nearly 13% system-wide and 18.5% in King County. Last month’s total number of new listings (10,488) declined 6.3% from July’s volume (11,193).
Brokers reported 10,602 pending sales (mutually accepted offers) during August for a 4.9% increase from a year ago. Pending sales rose nearly 6.6% in the Puget Sound region, led by Snohomish County with a gain of 15.8%. Six counties had double-digit gains while an equal number had declines.
Grady noted June and July were also lackluster this year with regard to listings “when typically they are both still fairly active coming off spring. The pending sales numbers indicate that buyers are indeed out there and willing to purchase, but there are simply not enough homes,” he commented, adding, “Everything that is listed is getting sold and fairly quickly.”
The volume of total active listings is down more than 10% from a year ago, with only four of the 23 counties in the report showing a year-over-year increase (Chelan, Grays Harbor, San Juan and Whatcom). Fourteen counties had double-digit drops. At month end there were 16,697 active listings in the MLS database, down from the year-ago total of 18,580.
MLS figures show only seven counties have more than three months of supply, with four-to-six months generally considered the volume needed for a balanced market.
Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, also commented on depleted inventory, but expects improvement. “As we head into the fall market our listing inventory continues to lag last year’s numbers, but we should see a bump in activity now that kids are back to school and vacations are over.” He noted the supply crunch has led to rising values, with median prices for last month’s sales in Kitsap County surging 14.2% from twelve months ago.
Multiple offers are still commonplace with many buyers walking away disappointed, according to Wilson. “Traffic is strong at open houses and our average market time is still very low for correctly priced homes,” he added.
“The August numbers offered a few interesting nuggets,” stated OB Jacobi, president of Windermere Real Estate. “The Seattle area housing market is still coming off the ‘sugar high’ that we saw last summer, but homes sales and prices are stabilizing, which is reassuring to both buyers and sellers.”
Jacobi also noted buyers are drawn to areas outside King County in search of affordability. “Pierce County is now experiencing what King County did 24 months ago where a surplus of buyers and lack of supply are pushing up home prices. Snohomish County also saw a big bump with a massive 16% increase in pending sales year-over-year. This tells us the secret is clearly out that housing in the counties to the north and south of Seattle is more affordable.”
The median price for the single family homes and condos that sold last month in King County was $615,000, slightly higher than the year-ago figure of $610,000. In Snohomish County, last month’s median sales price was $470,000, up about 1.8% from the year-ago price of $461,832. The Pierce County price of $369,000 is $246,000 lower than King County. It’s up 6.1% from a year ago.
For all counties combined, prices are up nearly 6.2%, rising from the year-ago figure of $405,000 to last month’s figure of $429,925. Compared to January’s area-wide median price of $381,900, prices are up nearly 12.6%. Brokers reported 9,392 closed transactions during August, a slight 1.12% improvement over the same month a year ago.
Prices for single family homes (excluding condos) rose 6% from a year ago, while condo prices ticked up by only about 2%.
Brokers expect favorable conditions for both buyers and sellers in the coming months.
“As we enter the fall housing market, both interest rates and job growth in Puget Sound are extremely positive,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Saying these are both key indicators of a strong housing market, Scott noted September and October are “historically the best for selection and availability out of the next six months,” adding, “With kids back in school and summer vacations over, homeowners who wish to sell their house before the winter season will look to put their home on the market soon. Similarly, buyers can take advantage of the market timing and low interest rates in the next two months to come.”
“Low interest rates, strong job creation, and lifestyle changes continue to attract buyers to the market,” said Dean Rebhuhn, the owner of Village Homes and Properties in Woodinville. He also reported the move-up market is very active, while acknowledging challenges for first-time home buyers. “A challenge for them is assembling the down payment,” he explained. “We are seeing FHA and VA financing being used for low and zero down mortgages. Also, family assistance is a big help.” He expects “very good activity” during September and October.
With brokers anticipating solid activity in the next few months, Wilson offered advice for both sellers and buyers. Sellers need to make sure their home goes on the open market in order to be exposed to as many buyers as possible, he emphasized. “To do anything else may be leaving money on the table.”
For buyers, Wilson stressed “getting all your ducks in a row. Meet with a lender for pre-approval before looking for homes, be clear as to what you can live with or without in your next home, and if at all possible, use cash or a conventional loan,” which he explained are more appealing to sellers in multiple-offer situations.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,300 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Northwest MLS brokers report mixed activity during July, as volume of closed sales reaches 12-month high
July provided mixed messages on housing activity, noted one industry veteran when commenting on the latest report from Northwest Multiple Listing Service. The newly released MLS figures show last month’s closed sales reached a 12-month high. Member-brokers also reported the number of new listings (11,193) nearly matched pending sales (11,139).
A closer look at new listing activity shows last month’s total was down from both the previous month (-6.7%) and the same month a year ago (-8.2%). The total number of active listings of single family homes and condos, at 16,787, was about the same as June’s inventory (16,680) and the selection of a year ago (16,773 listings). A comparison of the 23 counties in the Northwest MLS report shows about half the counties have more inventory than a year ago, and half have less.
System-wide there is 1.76 months of inventory, with King, Kitsap, Mason, Pierce, Snohomish and Whatcom counties all reporting less than two months of supply.
Pending sales declined slightly from June (11,139 versus 11,573) but showed a 1.6 % gain on the year-ago total of 10,965 mutually accepted offers.
Closed sales were up from both the previous month and the same month a year ago. Northwest MLS brokers tallied 9,540 closed sales last month – the highest volume since June 2018 when they reported 10,072 completed transactions.
Year-over-year (YOY) prices rose nearly 3.6%, but declined about 2.9% from June. The area-wide median price for July’s completed transactions was $429,900; a year ago it was $415,000. Eighteen of the 23 counties in the latest report showed year-over-year price appreciation.
The median price of a single family home (excluding condos) that sold last month was $440,000, up 3.5% from twelve months ago. Only four counties reported year-over-year price drops, including King County where prices were down 2.7%. Condo prices also sagged compared to a year ago, but by less than one percent. The area-wide median price for condo sales that closed during July was $350,000.
MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle, described King County’s residential market as “balanced on a fulcrum between growth, stagnation, and decline.” New listings of single family homes (excluding condos) in King County dropped year-over-year and when compared to last month, he noted. Total active listings and pending sales both improved from a year ago, but slipped from June’s totals.
King County’s median sales price for single family homes and condos was down slightly (-0.64%); for single family homes only (excluding condos), the median price dropped 2.7%. “Increased listing inventory from prior months put pressure on pricing,” Deely suggested.
“Lower prices brought out the buyers, causing July sales activity to end with a bang,” exclaimed Dean Rebhuhn, the owner of Village Homes and Properties in Woodinville. Continuing low interest rates are also propelling activity, he suggested.
“Buyers are seeing increased selection at good prices. Well-priced homes continue to sell quickly in market hot spots, often resulting in multiple offers,” Rebhuhn reported, noting several parts of South King County are hot spots. He expects brisk activity through September.
“The lazy days of summer do not apply to home sales,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Each summer, the highest numbers of homes go under contract per month. However it may feel slower because the greatest numbers of new listings also come on the market. This creates disbursed buyer energy,” he stated. Looking ahead, he expects “strong numbers” due to “interest rates in the upper threes, strong local job growth and sunny weather.”
“Kitsap County continues to be a draw for those looking for affordability and economy,” stated Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale. Inventory is tight and new construction continues to be strong countywide as builders work to keep up with demand, he reported, adding, “Building permits for both single family and multi-family housing units are at a 10-year high.” Builders’
inventory is selling very rapidly, he noted.
Leach, a member of the Northwest MLS board of directors, described condominium sales as “very healthy,” as inventory improves. Year-over-year condo sales in Kitsap County surged nearly 39%, with prices jumping nearly 21%. Additionally, Kitsap is growing its rental market, notably on Bainbridge Island and Winslow, according to Leach.
“With interest rates holding at below 4% we anticipate the market will be running very strong and fastthrough the winter of 2019 and into 2020. Now is the time to buy, sell, move up or move down, but berealistic about where the values are,” Leach said, adding the “bulk of well priced homes are selling in less than 30 days.”
“Coastal counties and counties surrounding the Puget Sound (outside of Seattle) continue to see strong price increases,” remarked James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington. “There seems to be a lot of out-of-state interest in these markets given changes in tax laws that make Washington a relatively good place to retire, especially
compared to California.”
Commenting on YOY price increases in three counties — Jefferson (up 26.4%), Mason (up 19.3%), and Pacific (up 20.1%) – Young said there is “massive interest from out of state buyers and Seattle residents looking to trade down.”
Young believes the rising number of condominium listings in King County (up 39% YOY) “point to increased regulatory uncertainty in Seattle surrounding rental properties and the possible outcome of upcoming elections. Many are calculating that it is better to sell while the market is strong rather than take a chance on new ordinances that threaten their investment returns,” he stated.
Also somewhat concerning to some industry experts is the market’s “muted” response to cheaper mortgages compared to previous periods when rates fell.
An analyst with Moody’s (a credit ratings and financial services company) observed the sharp drop in mortgage rates has not provided “much of a lift” in sales in many parts of the country. “In general what we’ve had is just not enough lower-priced homes and sort of a vicious cycle where that limited supply has continued pushing prices up,” explained Jody Shenn, who covers the housing and mortgage industry for
Nonetheless, in an interview with The New York Times, Shenn stated, “It’s not that the decline in interest rates doesn’t matter at all.” The drop since late 2018 to 3.75% has knocked about $160 off a monthly mortgage payment on a $286,000 home – the median price of existing single family homes in June, according to the National Association of Realtors, she explained.
Analysts have acknowledged applications to buy homes and refinance mortgages seem to be rebounding somewhat since last year’s slump, while noting it is possible the drop in mortgage rates might simply need more time to influence activity.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,300 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Buyers Getting “Some Relief” as Key Indicators Point to Strong Summer for Housing Market
KIRKLAND, Washington (July 8, 2019) – Inventory, pending sales and prices all increased during June compared to a year ago, according to the latest report from Northwest Multiple Listing Service. The same report, which covers 23 counties in Washington state, shows year-over-year drops area-wide in both the volume of new listings and closed sales.
“Clearly we now see that the market is moderating – that is we’re definitely moving from a ‘hyper-market’ to one where a correction is underway compared to last year,” remarked Mike Grady, president and COO of Coldwell Banker Bain. “While it’s the best time to buy that we’ve seen in some time, and buyers are getting some relief, it is still a seller’s market,” he added, noting some buyers are experiencing multiple offer situations, or considering inspection waivers, or are even forced to consider markets outside King County for affordability.
Three Northwest MLS directors from Pierce and Kitsap counties suggest their counties are attracting some of the frustrated buyers from King County.
“The darling of the Puget Sound real estate market is Tacoma/Pierce County,” stated Dick Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig Harbor, pointing to low inventory and appreciating values. “The secret is out about Pierce County,” agreed Mike Larson, the president at ALLEN Realtors in Lakewood. “You can buy twice the house for about half the price. You just have to be willing to deal with the traffic if you work north or south of here,” he proclaimed.
“The Kitsap market continues to be robust and is maintaining its velocity in sales,” added Frank C. Leach, broker/owner at RE/MAX Platinum Services in Silverdale. He believes Kitsap County will continue to be strong given its economic foundation together with its affordability factor and quick access to Seattle, but noted it is constrained by available inventory (currently at 1.4 months of supply).
MLS figures show the median price for single family homes and condos that sold last month in King County was $637,675. In Pierce County it was $372,500, about 58 percent of the King County price, and in Kitsap County it was $387,000, about 60 percent of the sales price in King County.
System-wide prices increased more than 3.5 percent from a year ago, from $425,000 to $440,000, although four counties registered declines, including Douglas, Ferry, Jefferson, and King. June’s median price was unchanged from May.
At midyear, the overall median price was $424,517, which compares to $405,000 for the first six months of 2018, an increase of 4.82 percent.
“As long as interest rates stay low and people seek value outside of King and Snohomish counties, house prices should continue their upward momentum,” stated James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington.
House hunters had a broader selection to consider as inventory at month end totaled 16,800 active listings, about 9.5 percent larger than at the same time a year ago. Brokers added 11,977 new listings during the month, a drop from both a year ago when they added, 13,153 new listings, and from May, when they added 14,689 new listings.
About half the counties reported gains in inventory, led by King County where the selection grew nearly 32 percent from a year ago.
“June listing inventory in King County exceeded the levels posted for this month over the past six years,” said John Deely, principal managing broker at Coldwell Banker Bain. “Currently, we are approaching 2012 listing inventory levels,” he noted.
Northwest MLS figures for King County show there were 5,931 active listings at the end June, the highest for that month since 2012 when the selection totaled 6,500 listings.
“Every summer, we see the highest level of new listings and homes going under contract. After the surge of new listings in May, areas close to the job centers saw listings return to the normal seasonal pattern in June,” commented J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.
The Northwest MLS report indicates there is 1.76 months of inventory area-wide (matching May), with eight counties having less than two months of supply.
OB Jacobi, president of Windermere Real Estate, commented on a “considerable rise” in the number of listings priced above $1.5 million in King County. “This could be because of the changes to the Washington State Real Estate Excise Tax (REET) that take effect in 2020, which will significantly impact the tax burden of sellers whose homes sell for more than $1.5 million. I suspect we’ll see even more owners of higher priced homes trying to sell in the coming months in order to avoid the hike in taxes they’ll have to pay starting next January,” he stated.
The new tax measure changes the REET rate from a flat 1.28 percent of the selling price to a graduated rate for real property sales, with exceptions for timberland and agricultural land.
Commenting on the latest report from Northwest MLS, WCRER’s Young said “The perfect storm of low interest rates and falling inventory continues along the I-5 corridor, with double-digit house price increases also continuing.”
Beeson says the “new normal” inventory levels of 2-to-3 months of supply, rather than the traditional 4-to-6 months, makes Puget Sound different than most of the rest of the nation. In Puget Sound, homes sell twice as quickly as a traditional ‘normal’ market,” he stated, but acknowledged, “It feels kinda like things have slowed down. Folks are taking deeper breaths.”
Several brokers commented that buyers are becoming more deliberate in their searches and offers.
“Market savvy buyers are taking advantage of premium location and value pricing due to increased inventory. Price reductions are more commonplace as sellers align their expectations with today’s market,” according to Deely. He said demand remains strong, but “buyers are methodical in their search, and taking more time to jump into an offer.” Also, he noted there have been fewer multiple offers and fewer all-cash buyers in the mix when a listing has several buyers lined up to compete.
Buyers are more “tuned-in” than ever before, Beeson remarked, adding, “Buyers today have educated themselves on the vagaries of the home buying process and are better prepared to meet sellers on firmer ground. They are attentive, vigilant, and discerning toward the marketplace, knowing what they want in a home – and they are willing to wait longer to get it.”
Leach concurred. “Buyers are being very careful about what they buy and at what price,” he stated.
Commenting on King County’s numbers for new listings and new pending sales, Dean Rebhuhn said multiple offers are still occurring in the median price range, noting the 1.9 percent dip in year-over-year prices. “Buyers are seeing higher home availability while taking advantage of low interest rates.” Rebhuhn, the owner of Village Homes and Properties in Woodinville, believes those factors, coupled with summer weather and job creation will “continue to create a very active market for buyers and sellers.”
Scott also expects a “quick-action market” for many buyers when new listings come on the market, especially with interest rates in the upper threes. Looking to the months ahead, Scott anticipates strong sales activity close to job centers, while the surrounding area will experience intense, “frenzy-level sales activity” in the more affordable to mid-price ranges.
Larson believes “the big three” – interest rates, the economy, and consumer confidence – all point to a strong summer for the housing market, while contrasting King and Pierce counties. “For years, King County has been a bit like a top fuel dragster – high performing, thrilling, but maybe a bit temperamental. It got the headlines and values skyrocketed, but now it’s experiencing a bit of a hangover. Pierce County’s market is more like a diesel truck – steady, consistent, and less prone to dramatic market changes.”
Larson also offered advice for passive and first-time house hunters. “Every buyer, particularly at the entry level, needs to understand they can’t simply dip their toe in the water when competing for a home. They need to do a belly flop. They need to put their best foot forward right out of the gate.” He also urged buyers to work with a Realtor who understands the market and who can guide them through the process.
Several representatives from Northwest MLS also suggested sellers need to learn the “new normal” as Beeson calls it. “If you overprice your home or fail to get it in good condition for selling, it will cost you time and money in the end, he stated, adding, “Seller’s can’t afford to be tuned out to what the market is saying.”
For sellers in Kitsap County, broker Frank Wilson says pricing is becoming more important. “Our county is starting to feel some of the changes King County has experienced. List price has to more accurately reflect what the home will sell for in today’s market,” explained Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. Although Wilson reported multiple offer situations and good traffic at open houses, he emphasized sellers “can no longer chance shooting for the moon, pricewise, or they risk getting stuck on the launch pad.”
Condo activity was mixed during June with year-over-year declines in the number of new listings added to inventory, as well as in the volume of pending and closed sales. Total inventory grew more than 41 percent, although at month-end there was only about 1.9 months of supply. Prices overall were nearly unchanged from a year ago. The median price for June’s sales was $367,000, up about a percentage point from a year ago when the median price was $363,500.
Home Buyers Are “Better Off,” But Market is Heating Up
KIRKLAND, Washington (June 6, 2019) – The housing market in western Washington may not be as hot as it was last spring, but it is heating up, suggested one industry leader in commenting on the latest statistics from Northwest Multiple Listing Service.
Matt Deasy, president of Windermere Real Estate/East, Inc. said his analysis of single family home sales in King County reveals 7 out of 10 properties that sold during May had 15 or fewer days on the market. He also noted more than half the listings (55 percent) in the county sold for at or above list price, the highest ratio since July 2018.
Northwest MLS figures show last month’s 12,006 pending sales across its 23 county service area nearly matched the year-ago total of 12,168 mutually accepted offers. Nine counties notched increases.
Two other indicators of activity – the volume of new listings, and the number of closed sales – both showed slight gains from a year ago. MLS member brokers added 14,689 new listings to inventory during May, up 165 units from twelve months ago. Year-over-year (YOY) closed sales rose about 1.6 percent (from 9,011 in May 2018 to last month’s total of 9,153).
Several representatives of Northwest Multiple Listing Service commented on increasing activity:
“The housing market definitely got busier in May with brokers reporting an uptick in showings, open house traffic, and offers.”- OB Jacobi, Windermere Real Estate Co.
“We are swinging into our summer market at a little faster clip than last year, and have a few more houses for buyers to choose from.”- Frank Wilson, John L. Scott, Inc.
“The spring real estate market remains very good for both buyers and sellers.”- Dean Rebhuhn, Village Homes and Properties.
“Buyers rejoiced at lower interest rates in May.”- J. Lennox Scott, John L. Scott, Inc.
In addition to favorable financing, Scott said, “Increased inventory and continued job growth built on April’s momentum, translating to strong results in May.” While inventory has increased in many areas, Scott noted there are still severe shortages of listings in some price ranges.
Inventory improved 24.5 percent from a year ago, with brokers adding 14,689 new listings to outpace the 12,006 pending sales. The MLS report for May shows 16,133 active listings at month end, up from the year-ago total of 12,956. King County recorded the largest gain in total inventory, at more than 62 percent, but supply remained below 2 months in that and several other counties.
System-wide there was 1.76 months of supply at the end of May, well below the 4-to-6 months that experts say indicate a balanced market. “While our inventory has grown a little, we’re still well within the definition of a seller’s market,” said Frank Wilson, a broker in Kitsap County where there is only 1.46 months of supply.
An analysis of NWMLS inventory at the end of May underscores Scott’s point. It shows only 13.8 percent of the listings of single family homes in King County have asking prices under $600,000. That compares to 25.6 percent in Snohomish County, 31.2 percent in Pierce County and 35.3 percent in Kitsap County.
Comparing May’s prices by housing types and geographic areas shows wide variation. Prices for single family homes (up 5.2 percent) outperformed condos (up nearly 1.4 percent). System-wide, sales of single family homes and condos that closed during May increased nearly 4.8 percent YOY, and rose more than 3.5 percent from April. A county-by-county comparison shows price changes ranged from a year-over-year drop of more than 20 percent (in Okanogan County) to a jump of more than 52 percent (in Pacific County).
Single family homes:
Home prices for single family homes (excluding condominiums) are up 5.2 percent system-wide, rising from the year ago figure of $429,500 to last month’s figure of $451,800.
King County prices for single family homes show a 3.6 percent decline from a year ago, but are at the highest level since June when the median price was $715,000. Snohomish nearly matched last June’s figure of $510,000, the highest for the year. A review of figures for the past five years shows both Kitsap and Pierce counties reached new highs (at $385,000 and $370,000, respectively) for last month’s median prices for sales of single family homes.
Three other counties (in addition to King) reported year-over-year drops in median prices on single family homes, led by Okanogan County where selling prices plunged more than 20 percent. Also reporting declines were San Juan County (-0.51 percent) and Snohomish County (-0.01 percent).
Condo prices also rose, but at a smaller rate, as inventory continued to build (up nearly 65 percent). Area-wide prices increased about 1.4 percent from a year ago. Pierce County prices surged 18 percent, while condo prices in King County were mostly flat (up 0.7 percent). Only six counties reported year-over-year price declines.
Prices overall (single family homes and condominiums):
Prices overall, including single family homes and condos are up $20,000 (nearly 4.8 percent) from a year ago, increasing from $420,000 to $440,000. In King County, the median sales price was $645,000, down less than a percent (-0.77) from a year ago. Snohomish County also reported a fractional drop, declining from $478,615 to $476,025 (down 0.54 percent).
“Home prices in the Seattle metro area are still lower than they were a year ago, but only marginally,” remarked Jacobi, but added, “Thanks to the pretty significant drop in interest rates last month, we can expect to see home prices trending higher through the end of the year, but at a far more moderate pace than the last several years.”
Rebhuhn agreed, crediting lower interest rates, lower median prices, and new jobs as driving factors in South King County, Pierce County and Tacoma. “We look for a very active summer market,” he remarked.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, also attributed strong activity along the I-5 corridor and outer urban centers to low interest rates. Also noteworthy, he suggested, was Douglas County where YOY prices surged more than 24 percent. “Cowlitz, Thurston, and Lewis counties continue to outperform,” he added.
Young said interest rates could drop further as 10-year yields continue to fall. “Given the search for value among those sellers trading down along with first-time buyers in all urban areas across the state, prices should continue to rise throughout the peak season,” he stated.
“The data for May extends the same phenomenon we’ve been part of for nearly five years,” said Mike Grady, president and COO of Coldwell Banker Bain. “Recall that just one year ago the headlines were asking, ‘Has the hot market ended?’ as inventory increased from 3-to-5 days to 1.8 months between May and August. Now, one year later, while we see many more listings are available, accepted offers are keeping pace and inventory remains relatively stable at 1.7-to-2 months.”
“A balanced market should have about a 6-month supply,” explained WCRER’s Young, noting the national month’s supply figure is at about 4 months. “Except for a few small counties, every county in the NWMLS area has a month’s supply of 4 or less. Except for Skagit County, with 2.2 months of supply, every county along the I-5 corridor has less than 2 months.”
Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, emphasized “the numbers are all relative, relative to a ‘normal’ market which we are not in.” Noting the current inventory of 644 homes and condos is higher than last year when there were 519 active listings at this time, “it is half of what might be considered a balanced market here in Kitsap County.”
What people read about the Puget Sound market “is not reflective of our micro market” Wilson continued, noting one “huge difference” is the amount of vacant land that is available. “We have seen a bump in vacant land listings,” he reported, adding, “For those looking to build a home, there are a lot of opportunities in this area, though be prepared for a lengthy process to get a home plan approved and built here in Kitsap.”
“We’re in the midst of the four best months in the year for buyer activity,” Scott emphasized. “I recommend sellers ensure their home’s appearance, marketing strategy and broker associate relationship are all in tip-top shape,” he added.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Northwest MLS Housing Report for April Signals Good News for Home Buyers
KIRKLAND, Washington (May 6, 2019) – Housing activity during April signaled good news for buyers in Western Washington as inventory continued to grow, the rate of price increases was slowing in many areas (and even decreasing in a few counties), and mortgage rates remained low.
Northwest Multiple Listing Service statistics for last month show a 28.5 percent overall increase in active listings compared to the same month a year ago, a 5.8 percent gain in pending sales, and a 2.4 percent rise in median prices for sales of single family homes and condos that closed during April. The volume of closings dipped slightly (down 1.9 percent).
“Listings were popping up like April flowers and the bloom has produced a vibrant and healthy market,” exclaimed MLS director John Deely, principal managing broker at Coldwell Banker Bain. “With an increased supply of listing inventory, low interest rates, and a positive economic climate, buyers are confident that this is a good time to buy,” he reported, while noting a larger number of buyers are opting out of competing with other buyers.
“This year’s buyers and sellers are approaching the market with more caution and a focus on an analytical, versus emotional approach that has ruled the last several years,” Deely said.
Northwest MLS members added 11,697 new listings to inventory during April for a year-over-year gain of nearly 3.8 percent. During the same period, brokers reported 11,188 pending sales (509 fewer than the number of new listings), resulting in net gains in the number of active listings in many counties, but changes in inventory were wide ranging across the 23 counties the MLS serves.
Seven counties had double-digit growth in inventory from a year ago, led by King County (up 78.5 percent) and Snohomish County (up nearly 57 percent). The number of active listings declined in 10 counties, with Jefferson County reporting the biggest drop at 24.8 percent. System-wide inventory at the end of April totaled 12,955 active listings, which represents a 7.8 gain from March.
“The spring market has arrived, bringing new listings and sales,” stated Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. Sellers who have prepared their homes for sale are experiencing brisk activity, and buyers are finding more opportunities to purchase, thanks to low mortgage rates and increased inventory, according to Rebhuhn.
“As we head into the prime buying and selling season, we’re seeing better news for buyers in King County, with statistics showing there’s a bit more time to look and make a decision,” said Mike Grady, president and COO of Coldwell Banker Bain. Pointing to the 78 percent increase in total active listings in King County and the 57 percent jump in inventory in Snohomish County, he described the year-over-year gains as “impressive,” but noted there is still less than two months of inventory in many areas. “Buyers now have three-to-four weeks instead of three-to-four days to make a decision, so it’s still quite a ways from a balanced market,” he emphasized.
Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, echoed Grady. “Despite the increase in inventory over last year at this time in King County, we are seeing a very robust spring market laced with multiple offers in many instances,” he stated.
Eight counties had double-digit increases in pending sales versus a year ago. In the four-county Puget Sound region, only King County had a double-digit gain, with a 15.1 percent jump in mutually accepted offers. Pierce County, with a 6.6 percent decrease, was one of seven counties reporting drops in pending sales. Even with mixed sales activity, supply remains tight.
Northwest MLS figures show both King County and its 23-county system have around 1.7 months of supply. “That is still slim compared to the National Association of Realtors’ data showing a national average of 3.9 months of inventory,” remarked O’Leyar.
“We just experienced a strong spring market and are now heading into the pre-summer phase of the housing cycle where more inventory but also more buyer competition is commonplace,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He expects momentum will continue “in line with positive job growth, lower interest rates and a strong U.S. economy,” but believes price appreciation will start to level out heading into summer. “All eyes will be on each new listing this summer, a welcome sight for home buyers encountering multiple-offer situations in the more affordable and mid-price ranges,” Scott added.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, said low mortgage rates (averaging 4.4% for a 30-year fixed) are enabling buyers in outlying areas along the I-5 corridor to purchase in areas with cheaper prices, notably Skagit, Cowlitz and Whatcom counties.
“There are two key demographic trends driving prices along with mortgage interest rates,” Young said. “Older householders trading down are competing with first-time buyers along this corridor seeking value.” He used the example of an empty-nester Seattle homeowner deciding to trade down. “If I sell in Seattle to trade down, then I will have significant amounts of cash available from selling my existing home to be able to move to Mount Vernon or Cle Elum with cash left over.” First time buyers may look at the same relatively low priced areas as a place to raise a family. “With these two groups competing for value, this is a perfect storm for house price growth, particularly in regional markets,” Young believes.
Areas adjacent to King County had mixed results.
“Listing activity in Snohomish County rose modestly in April but the rate of growth has slowed,” said NWMLS director David Maider. MLS figures show brokers added 30 more new listings than a year ago (1,746 versus 1,716), with total inventory up 56.8 percent. Pending sales rose 6.9 percent and prices were flat (up 0.84 percent).
Maider, the owner/broker at Windermere Real Estate M2 in Everett, described the jump in pending sales as “significant” and an indicator that there is clearly demand in the market. “We expect that mortgage rates will not move significantly as we move toward summer and that well-positioned and well-priced homes will still see significant interest from potential buyers,” he commented.
Another MLS director, Dick Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig Harbor (in Pierce County), acknowledged the slowing rate of price increases in the Puget Sound region, commenting, “But the direction remains the same: higher prices.” He believes buyer demand and scarce inventory mean buyers need to “be ready to rumble,” since conditions don’t favor “faint-hearted buyers.” For sellers, he advised, “Don’t be stupid, increases can’t go on forever. Get a fair price and move on.”
Home prices for last month’s completed sales of single family homes and condos rose 2.4 percent area-wide compared to a year ago, with eight counties reporting double-digit gains. Mason County had the biggest jump, at 24.9 percent, followed by San Juan (up 23.5 percent), Kittitas (up 20.5 percent) and Skagit (up 18.7 percent). Six counties reported year-over-year decreases: Clallam, Clark, Ferry, Island, Jefferson, and King.
Condo prices dipped 3.2 percent as inventory improved (up 75 percent). Pending sales rose 3 percent.
“Interestingly, condominium prices in King County continue to fall as the number of properties on the market continues to climb rapidly,” remarked Young. MLS figures show prices in King County dropped about 9.6 percent and inventory surged nearly 122 percent compared to twelve months ago.
“Anecdotally, this corresponds with possible regulatory and tax uncertainty signaled for private landlords in Seattle ahead of local government elections. Given this situation and significant supply in the multifamily sector coming online, many smaller landlords may be selling to lock in capital value growth and exit the rental market ahead of the November election,” Young suggested.
Some developers of new condo projects are reporting strong activity. First Light, a 459-unit development to be built at 3rd and Virginia in downtown Seattle, has announced more than half the units in the 48-floor tower have been reserved prior to groundbreaking.
Looking ahead, Grady believes, “We are very slowly trending away from a complete seller’s market,” citing single-digit increases in sales prices, “instead of double-digit increases we saw in 2018,” and the lack of inventory. “We believe these two considerations will now move sellers who have been waiting to sell in order to take advantage of equity gains to finally take action.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Housing Market Rebounds From February Freeze
KIRKLAND, Washington (April 5, 2019) – Both pending sales and new listing activity around Western Washington surged during March as buyers, sellers, and brokers emerged from February’s record snowfall.
Brokers added 10,516 new listings of single family homes and condos to the Northwest Multiple Listing Service inventory last month, the highest monthly volume since August 2018. Compared to the same month a year ago, new listings across the 23 counties in the report were down slightly (79 fewer units).
MLS members also reported 10,261 pending sales during the same timeframe, the highest number of mutually accepted offers since July, and nearly matching the year-ago total of 10,311.
“After the housing adjustment in 2018, this year’s spring market is back to frenzied in the more affordable and mid-price ranges,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Noting March is the start of the prime-time selling season, he expects this year “will be no exception.” He also commented on improved affordability from last fall’s price adjustments in the close-in job centers of Seattle and the Eastside. “This improved affordability, along with lower interest rates and very strong job growth, all point us in the right direction for red-hot acceleration again this year,” Scott stated.
Year-over-year prices area-wide were up 3.5 percent, rising from $401,761 to $415,950, with most counties reporting gains. King County was an exception. Prices there were flat (down 0.4 percent), slipping from the year-ago median of $625,000 to last month’s figure of $622,500, but rising from February’s price of $604,000.
Compared to February, prices rose 2.2 percent system-wide. The four-county Puget Sound region had larger month-to-month increases, led by Kitsap County, up 5.9 percent from February. Prices in Snohomish County jumped nearly 5.5 percent, while King County’s median prices rose more than 3 percent when comparing February to March.
Commenting on the uptick in new listings and new sales, broker Dean Rebhuhn pointed to lower mortgage interest rates and a growing selection of properties as drivers of activity. “Well-priced properties are selling. Buyers who are getting fully underwritten loan commitments are winning the prize – the home,” stated Rebhuhn, the owner of Village Homes and Properties in Woodinville.
At month end, there were 12,017 active listings of single family homes and condos in the Northwest MLS database. That represents an increase of more than 36 percent from a year ago when there were only 8,825 active listings. Inventory more than doubled in King County compared to a year ago, rising from 2,060 active listings to 4,263 at the end of March. Nine counties reported less inventory than 12 months ago.
Even with improving inventory, there is less than two months of supply overall and in seven counties, including Pierce (1.2 months), Snohomish (1.3 months), Kitsap (1.4 months) and King (nearly 1.9 months).
“March signaled the beginning of the annual rise in King County residential listing inventory, and this year’s active listings are building on a higher base of listings than previous years,” observed John Deely, principal managing broker at Coldwell Banker Bain in Seattle. He also noted pending sales (10,261 during March) kept pace with new listings (10,516) to slow the buildup of inventory.
“Many buyers found the increased inventory meant more choices and less competition in many market areas,” said Deely, a member of the Northwest MLS board of directors. “In core Seattle markets, new listings that are competitively priced are seeing multiple and contingency-stripped offers,” he added.
OB Jacobi, president of Windermere Real Estate, described March as an “eventful month for real estate,” as the snow finally melted and interest rates dropped, “nudging buyers off the fence and back into the market. The result was a spike in pending sales between February and March (up more than 49 percent), and a pop in price growth in several counties, suggesting we are entering an active spring market.”
Another MLS director, Meredith Hansen, attributed the downturn in last month’s closed sales to inclement weather. Tight inventory makes spring an excellent time for sellers to put their homes on the market, she suggested. “Buyers have more selection, good interest rates, and a less frenzied market to make solid decisions. Overall, I’d say it’s a win-win for both sides,” remarked Hansen, the owner/designated broker at Keller Williams Greater Seattle.
Brokers from Kitsap and South Sound markets are reporting strong activity, with pending sales outgaining new listings, and heavy traffic at open houses.
“In Kitsap County, the buyers have arrived to the market faster than sellers,” reported Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott’s Poulsbo office. “Low interest rates are giving buyers a break in house payments, which allows them to buy a little more house. Buyers have received the message about the spring market, but sellers are still waiting in the wings,” he commented.
Broker Dick Beeson said the South Sound market is somewhat of an anomaly, as prices continue to rise despite growing inventory. “Multiple offers are less frequent in this market, and, unlike 6-to-12 months ago, sellers are now agreeing to do repairs and pay buyer’s closing costs,” according to Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig Harbor. “Some type of negotiation is once again prevalent in almost every sale,” he added.
Beeson said in certain higher price ranges buyers and sellers have “almost equal footing.” He suggested it could become a buyer’s market in South Sound “when the Seattle/King County market flattens out even more and can provide homes at affordable prices so those who don’t work in high tech can afford them.”
“Areas outside of King County and along the I-5 corridor outperform as people continue to look for value outside the main urban centers,” observed James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects the spring price growth will be “solid” as long as demand remains.
“The market is highly interest rate sensitive, and this is reflected in current price trends in the region,” Young stated. “Given interest rates are now 70 basis points lower than their peak in November last year (and back down near historic lows), house prices could rise by 8.4 percent and people could keep the same mortgage repayments. This means someone who could have purchased a $450,000 house six months ago can now purchase a house costing $487,800 and keep the same monthly repayment, an 8.2 percent increase,” he explained.
Homebuyers Resuming Search Amid Improving Inventory, Attractive Terms
KIRKLAND, Washington (February 7, 2019) – Homebuyers around Washington state are making their way back to the market, hoping to take advantage of improving inventory, attractive interest rates, and more approachable sellers, according to officials with Northwest Multiple Listing Service.
Northwest MLS statistics for January show year-over-year improvement in the volume of new listings and total inventory, along with moderating selling prices. Although fewer pending sales (mutually accepted offers) were reported than a year ago (down about 3.3 percent), January was the smallest year-over-year decline since May 2018 when the drop was about 2.7 percent.
Commenting on the MLS statistics summarizing last month’s activity, broker Gary O’Leyar said January’s post-holiday real estate activity doesn’t normally pick up until later in the month, but this year the uptick began early. “January started as a bit of a surprise. Open house activity was very robust, and we saw multiple offers in numerous instances again,” reported O’Leyar, the owner of Berkshire Hathaway HomeServices Signature Properties in Seattle.
Brokers tallied 7,564 pending sales during January, a decline from a year-ago when they recorded 7,820 transactions.
Seven counties had increases in pending sales of single family homes and condos compared with 12 months ago, including King (up nearly 7.5 percent) and Snohomish (up 3.8 percent).
James Young, director of the Washington Center for Real Estate Research at the University of Washington, commented on pending sales. The mixed results, including “healthy growth” in King and Snohomish counties, “corresponds well to upward movement in mortgage applications late in December, a leading indicator for the month to follow,” he noted, adding, “One should expect to see increased sales activity in the coming months throughout the region if mortgage applications continue to stabilize or increase.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said buyers “came out of the woodwork” after the holidays, eager to take advantage of better housing conditions. “Areas close to the job centers are seeing improved affordability from spring 2018,” he said, attributing it to lower interest rates, strong job growth, and adjusted pricing.
Scott said buyers are also attracted by expanded inventory resulting from the addition of new listings and a higher number of unsold inventory, although he noted “inventory levels are still considered a shortage.”
Prospective buyers who sat out the second half of 2018 or were pushed to the sidelines during last year’s heated market are finding better buying conditions, agreed Robb Wasser, branch manager at Windermere Real Estate/East. “Interest rates are near a nine month low and buyers have a stronger platform for negotiating, which have helped drive a 9 percent increase in pending sales of single family homes in King County,” Wasser stated.
MLS members added 7,090 new listings of single family homes and condos during January, up from the year-ago figure of 6,805 and nearly doubling December’s total of 3,631. At month end there were 11,687 active listings in the database, up more than 45 percent from the year-ago total of 8,037. Listing inventory more than doubled in both King and Snohomish counties.
Sixteen counties, including all four in the Puget Sound region, reported more inventory than a year ago. Even with sizable gains, supply is still tight at 2.4 months system-wide. (In general, four to six months typically indicates a balanced market.)
“The rise in inventory is largely due to investors who are selling because they believe the market has peaked and they want to unload their properties before interest rates rise too far,” said OB Jacobi, president of Windermere Real Estate.
“New listing inventory in King County is bringing more homebuyers to the market. We are enjoying increased open house traffic, including during the Super Bowl weekend,” remarked Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. He also commented on the early arrival of the spring market, crediting jobs and immigration as factors. “Properly priced homes are selling!” he exclaimed.
Mike Grady, president and COO of Coldwell Banker Bain, expects activity to pick up heading into spring, as is customary. “I have absolutely no concerns about 2019 being a strong year, with prices rising 4-to-6 percent and units up 10-to-12 percent. There is no reason for sellers not to move on with their lives and list their homes,” he remarked.
Northwest MLS figures show an area-wide price gain of just over 5 percent on January’s 4,865 closed sales of single family homes and condos. Only six of the 23 counties in the report had year-over-year price drops. Among them was King County where prices slipped about one percentage point, from $571,250 to $565,000.
Prices on single family homes (excluding condos) rose 5.4 percent from the same month a year ago. In the four-county Puget Sound region, prices increased in Kitsap, Pierce and Snohomish counties, but decreased about 2.9 percent in King County, dropping from $628,388 to $610,000. Prices for single family homes in Kitsap County, where there is only about 1.7 months of supply, surged nearly 14.7 percent when compared to a year ago.
“The minor decline in King County home prices in January doesn’t mean the housing market is tanking; it’s primarily because of the significant increase in the number of homes for sale,” suggested Jacobi. “We may see prices take minor dips periodically in the coming year, but for the most part they are expected to continue rising, just at a far more modest rate than in recent years,” he added.
“Median prices on closed sales continue to remain stable in January with continued strong upward growth in outlying counties,” stated Young. “Pierce, Kitsap, and Thurston counties outpaced King and Snohomish counties in price growth, consistent with the past few months. This trend indicates that many first-time buyers and middle-income families are continuing to look to the outer regions of the area for value. Strong price growth in Lewis and Whatcom counties also support this general trend of outward migration along the I-5 corridor,” he added.
Mike Larson, president/designated broker at ALLEN Realtors in Lakewood (Pierce County) concurred, describing the slowdown in activity during the second half of 2018 as a “much-needed correction.” Sellers in King and Snohomish counties “got caught up in the craziness so many buyers turned to Pierce County for their affordability solution,” something he expects will continue this year.
Condo prices rose slightly, about 1.6 percent, as inventory more than doubled from a year ago. The median price for the 645 condos that closed last month area-wide was $325,000. In King County, where more than half the sales occurred, the median price was $383,500, up slightly from the year-ago figure of $380,000.
Several brokers expressed optimism for a busy spring.
“Buyers are signaling a more aggressive spring market with an uptick in search activity and high application rates with mortgage companies,” said George Moorhead, designated broker at Bentley Properties. He also noted would-be owners are commenting on having more options to consider and “are feeling the real estate market is less volatile.” He also reported sellers are similarly encouraged by having more options, “and not having to race around with the fear of making a housing mistake.”
“We’ve clearly been in a transitioning market, but given the ongoing demand for real estate in the Greater Seattle area, we may have adjusted to a ‘new market reality’ wherein inventory is up and prices have re-aligned, but there is still strong demand for housing. I would expect to see a robust regional real estate market going forward into spring,” stated O’Leyar.
The director of the Washington Center for Real Estate Research was more guarded in his expectations. “Increasing inventory and moderate price growth in urban counties (and growth in outer regions of the Puget Sound) point to several problems relating to how potential homebuyers see things moving forward,” said James Young. He referenced figures from the National Association of Homebuilders National Trends Report indicating a shrinking pool of buyers.
“The picture for first-time buyer affordability in the longer term for the region is not bright for potential homeowners unless changes in the housing supply framework throughout the area are addressed soon.”
Larson also expressed concerns around affordability, “particularly for entry-level buyers as well as move-down buyers who also want to sell. The middle rungs on the housing ladder are slowly disappearing,” he remarked. Options like condos could help fill that void, he suggested, but believes they won’t be built “until the state legislature reforms the condo liability laws.”
Affordability is a “crucial issue” for 72 percent of millennial renters, according to a survey by Apartment List.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
“Good Values and Receptive Sellers”
KIRKLAND, Washington (January 7, 2019) – December brought few surprises for real estate brokers in Western Washington with holidays, fluctuating interest rates, and volatility in consumer confidence contributing to slower activity. Several leaders from Northwest Multiple Listing Service described 2018 as a transition year for residential real estate.
New data from the MLS show inventory in its 23-county market area dipped below two months of supply for the first time since July. A year-over-year comparison of the number of new listings, pending sales, and closed sales show drops overall, while prices rose from the same month a year ago.
Member-brokers added 3,631 new listings of single family homes and condominiums during December (10.4 percent fewer than a year ago), boosting total active listings to 12,275, up from the year-ago volume of 8,553. Pending sales were down about 8.4 percent from twelve months ago (5,677 versus 6,198), and the volume of closed sales dropped nearly 16.6 percent (6,374 versus 7,642).
For 2018, members of Northwest MLS reported completing 92,555 transactions, which compares with 99,345 closed sales during 2017 for a drop of about 6.8 percent. The median price on last year’s closed sales of single family homes and condominiums combined was $402,000, up $32,000 (8.64 percent) from 2017.
Commenting on inventory, declines in closed sales and the drop in month’s supply, MLS director Dick Beeson said, “There’s lots of speculation as to the reasons why. One thing for sure: this situation can make for a deliciously deceptive market for either buyers or sellers.” The veteran Realtor said buyers who are paying attention will find very good values and receptive sellers.
“Timing the interest rate market is beyond the capability of most everyone. Therefore, buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,” advised Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.
Brokers said many of last month’s buyers took advantage of the shifting market.
“Buyers in December were reaping the benefits of market-weary sellers who were willing to give up part of their bloated home equity to make a deal and move on,” reported John Deely, principal managing broker at Coldwell Banker Bain.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, noted last month was a very different December from a year ago. “While active listings are up significantly (43.5 percent) from a year ago, interest rates have also gone up by over 80 basis points, meaning the typical mortgage repayment has increased by about 10 percent for those looking to buy. That limits spending power and stops buyers from bidding up for the house they want rather than the house they can afford.”
The 12,275 active listings in the MLS database at year end was down from November when inventory totaled 15,830 properties, and down from 2018’s peak of 19,526 listings at the end of September. Measured another way, there was 1.93 months of supply at the end of December, with four-to-six months typically considered to be a balanced market. A year ago there was only 1.12 months of supply. On a percentage basis, year-over-year inventory has climbed each month since May.
Five counties had less than two months of supply at year end, with Kitsap having the scarcest selection at only 1.48 months of supply. Other counties reporting less than two months of supply were Pierce (1.52), Snohomish (1.53), Thurston (1.58), and King (1.71). Brokers note some of the December shrinkage is seasonal since some sellers take their home off the market during the holidays.
Condo inventory surged, notably in King County which now has more than four times the number of condo listings than 12 months ago.
“We’re continuing to see a balancing of the market, yet it is still seller-leaning, driven by our region’s continued job formation and a lack of inventory,” observed Mike Grady, president and COO of Coldwell Banker Bain. “For all the talk of doom and gloom in real estate” he said his calculations show home values have increased at four times the rate of inflation since December 2014 when the “hot market” began.
Grady pointed to the gap between December’s closed sales (6,374) and the volume of new listings (3,631) to replenish supply. He expects more growth in inventory this year, “but still not to the level of a truly balanced market of five or so months of supply.” Grady also anticipates prices increases, “although not at the rate they have been. So, still a great time for both buyers and sellers to enter the market.”
Other industry leaders also described the market in terms of a transition or recovery.
Lennox Scott, chairman and CEO of John L. Scott Real Estate, said a favorable market is returning for home buyers in Seattle and the Eastside. “Improved affordability, with both lower interest rates and adjusted lower housing prices from the spring of 2018 will lead the way,” he stated, adding “Although unsold inventory of homes for sale is still considered a shortage, the larger number of unsold homes, combined with new listings, will moderate the price increases in the year ahead.”
“Last year was a recovery year,” said George Moorhead, who believes 2019 will mirror it in several ways. “Balancing inventory, moderate appreciation of home values, tempered buyer demand with rising interest rates and reduced tax incentives” are among his expectations. “Buyer affordability in 2019 will be based on perception of good value and mortgage interest rates,” suggested Moorhead, the designated broker and owner of Bentley Properties. “The looming feeling of a hard-hitting recession keeps many would-be homeowners on the sidelines, thinking ‘It is better to watch and wait’ even though economic factors point towards a continued healthy, yet moderate market.”
John Deely called 2018 “the transition year for the traditional Pacific Northwest 10-year market cycle.” The swing from a sellers’ market to a more balanced market was evident by the second quarter of 2018 as the absorption of new and standing inventory slowed due to a decrease in pending sales explained Deely, a member of the Northwest MLS board of directors.
Three factors contributed to the change, according to Deely. He listed accelerated and unsustainable home price growth, rising interest rates, and waning consumer confidence and sentiment as those factors, noting “The market is mimicking the strong recession recovery cycles of 2012 to 2014.”
“The year ended with more of a splutter than a bang as home price growth continued to slow in December,” stated OB Jacobi, president of Windermere Real Estate. “But it’s important to keep things in perspective,” he emphasized, saying 2018 was a very good year for Seattle-area home sales. “The shift we’re experiencing is only bringing us closer to a more balanced market. My crystal ball tells me this trend will continue in the coming year with home prices rising, but at a slower rate of around 5.5 percent.”
Young, from the Center for Real Estate Research, commented on activity moving away from core urban areas to outlying regions where prices are cheaper. Demand is pushing prices higher and shortening market time in several counties, he stated, naming Cowlitz, Lewis and Thurston, which all experienced year-over-year price gains of at least 12.4 percent.
“Regardless of what the news is saying about the Seattle market, at the end of the day, the Kitsap median home price is significantly lower than a home in King County,” said Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. Northwest MLS data show the median price for homes and condos that sold last month in Kitsap County was $343,000, while in King County it was 74 percent higher ($597,000).
“This will be what keeps our inventory low due to the improved mobility between Colman Dock and Kingston, Bremerton, and eventually Port Orchard,” Wilson remarked. He noted the early success of the fast ferry on the Kingston run is leading to talks about adding more boats.
Wilson said Kitsap brokers report good traffic at open houses and multiple offers on correctly priced homes. “We’ve also seen prices of homes in the north end go up, as well as an increase in new construction in the area,” added Wilson, who is also a director at NWMLS.
Beeson also commented on the importance of pricing. “Sellers who recognize a market shift has occurred will price their homes accordingly and sell in a reasonable amount of time, 30 days or less – not one day.”
Young said buyers are very aware of the changing housing finance environment and are still active in the marketplace even if they are not as aggressive as they have been in the past. Mortgage applications are declining due to short-term uncertainty, he said, even though 30-year fixed rate mortgage interest rates are continuing to fall.
Moorhead echoed that thought. “Buyers are being much more methodical about their purchase with some taking as long as eight months before making their final decision,” he reported.
Jacobi believes 2019 will bring the continued resurgence of first-time buyers, especially millennials as they form new households, get married, and have children. “Although many of them will face significant obstacles to buying due to student debt, lack of down payments, and Seattle’s high-priced housing, this group is likely to buy more homes in 2019 than any other demographic,” Jacobi predicts.
Wilson characterized the seasonally slower December/early January period as “the calm before the storm,” noting the spring market usually brings a surge of buyers that surpass the increase in listings.
Home buyers have “window of opportunity” with shift to more balanced market
KIRKLAND, Washington (December 6, 2018) – With more plentiful inventory, recently announced increases in lending limits, and moderating prices, prospective home buyers are finding more options around Western Washington, according to industry experts from Northwest Multiple Listing Service.
“Moderating interest rates over the past few weeks could provide a window of opportunity for buyers this month, even if the Fed is widely expected to raise them again in December,” said Mike Grady, president and COO of Coldwell Banker Bain.
“We are continuing to see a balancing of the market,” Grady stated, citing moderating prices and increasing inventory as contributing factors in comments about the latest figures from Northwest Multiple Listing Service.
House hunters have a much bigger selection than a year ago. Northwest MLS figures for the 23 counties in its report show the year-over-year volume of inventory rose from 11,193 homes and condos to 15,830. The increase in active listings represents a gain of more than 41 percent. Members added 6,399 new listings to inventory last month, up from 6,098 for the same month a year ago.
King County registered the biggest gains, with active inventory surging 135 percent from a year ago. The number of single family homes more than doubled from a year ago, rising from 1,879 to 4,020, while the condo selection more than tripled, jumping from 355 active listings twelve months ago to last month’s total of 1,221. Eight counties reported fewer listings than a year ago.
“Months of inventory is still slim compared to historical norms,” Grady emphasized. Using this metric, both King County and the Northwest MLS market area overall have 2.3 months of supply. While supply is improving, it’s still well below the 4-to-6 month level industry analysts use as a gauge of a balanced market.
The surge in supply is not yet reflected in sales during this typically slower holiday season. Pending sales for November were down 10.4 percent from a year ago. Thirteen of the 23 counties in the report registered drops in pending sales versus a year ago. Compared with October, mutually accepted offers fell 17.5 percent. That was less than the falloff in 2017, when the volume of pending sales from October to November shrunk by 21.5 percent.
Closed sales declined about 15.3 percent from twelve months ago, with 13 counties reporting double-digit drops. Year-over-year prices still rose (up 4.2 percent overall). Ten counties had double-digit appreciation in their median sales price for single family homes and condos (combined).
Condo activity was also mixed. The number of active listings more than doubled area-wide, and more than tripled in King County. Pending and closed sales were weaker than a year ago. Prices rose slightly (1.5 percent), from $330,000 to $335,000. The median price in King County, which accounted for 55 percent of last month’s closings, rose 5.2 percent, from $384,990 a year ago to $405,000.
“This massive increase in the number of homes for sale in King County last month means we are officially on our way back to a more balanced market,” remarked OB Jacobi, president of Windermere Real Estate. “This is good news for buyers who just a year ago were in fierce competitions for very limited inventory,” he added.
“Buyers who were forced to look at outlying areas in Pierce or Snohomish counties are now coming back to core communities in King County,” reported George Moorhead, designated broker and owner of Bentley Properties. He said many such buyers are aggressively looking for their next home during the November to January timeframe, knowing they may be able to get concessions that were unavailable the past two years and also that “sellers tend to be more negotiable.”
“This resurgence seems to be gaining momentum,” Moorhead noted, dismissing reports of “our real estate market teetering on a collapse.” Such reports “could not be further from the truth,” he stated.
Moorhead also called the bump up in lending limits for certain types of loans, announced in late November, as long overdue and “great news for buyers of homes in the most popular communities.”
Loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019 are increasing for both conforming and jumbo loans. The Federal Housing Financing Agency [FHFA] announced the loan limit will rise from $453,100 to $484,350; the new ceiling for jumbo loans in high cost areas — including King, Snohomish, and Pierce counties – will be $726,525.
Northwest MLS director Dick Beeson said the combination of stabilizing factors, including more inventory and only slightly increased interest rates, coupled with “more receptive and savvy sellers” are resulting in a “more reasoned approach to buying and selling.” As inventory grows, he believes price increases will be “slower and smaller.”
Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor, suggested South Sound buyers should get ready for steady, sustained price increases, pointing to the wide gap between King County’s median price for a single family home and Pierce County’s.
A comparison of median prices for single family homes in the tri-county region illustrates his point. Since January, the median price in King County is up about 2.5 percent. In Snohomish County, it has climbed about 4.4 percent. But in Pierce County, the median price of a single family home has jumped more than 10 percent since January.
Slower Market Means Homebuyers Have “Newfound Ability to Negotiate”
KIRKLAND, Washington (November 6, 2018) – Seven months of steadily rising housing inventory reversed course in October when Northwest Multiple Listing Service brokers added the fewest new listings since February, according to a new report. MLS members believe the onset of wintry weather and transition to the holiday season are factors, but suggested the slower pace also signals improving conditions for house-hunters.
“After months of inventory growth that more than quadrupled the number of homes buyers have to choose from, things got back on a seasonal track with new listings and total supply falling in October,” said Robert Wasser, a director with Northwest MLS, when comparing those metrics with September.
“Buyers are catching on to their newfound ability to negotiate. For the first time since 2012, closed sales system-wide rose from September to October,” noted Wasser, a branch manager with Windermere Real Estate in Bellevue.
Northwest MLS members added 8,865 new listings to inventory last month in the 23 counties it encompasses, down from September’s volume of 10,458, but up 4.7 percent from the year-ago total of 8,466 new listings. Compared to September, last month’s number of total active listings shrunk nearly 6.7 percent, but year-over-year inventory rose 33.2 percent, from 13,680 to 18,223 offerings.
Brokers generally welcomed the bump-up in inventory.
Real estate veteran Mike Grady, the president and COO of Coldwell Banker Bain, commented on the current “win-win” conditions. “We’re entering that time of year when historically the market slows a bit as we head into the holidays. Buyers continue to see an improving market compared to last year with the inventory increasingly to 2.4 months of supply in King County, compared to the year-ago figure of less than a month (0.98),” he stated.
Area-wide there is nearly 2.3 months of inventory, slipping from more than 2.5 months in September, and improving on the year-ago figure of about 1.5 months of supply.
The year-over-year gains in supply, while notable, are still “way off from a balanced market that provides five to six months of inventory,” Grady remarked, adding, “Contrary to recent media reports, the sky is not falling,” he emphasized, pointing to rising prices and strong jobs reports as factors for a positive outlook. (The State Employment Security Department reported Washington gained 4,500 jobs in September.)
“Home prices in King County are up nearly 8.6 percent year over year, so we’re still experiencing significant appreciation,” Grady stated. Given continued reports of hiring by companies in the Puget Sound region and recent increases in inventory, he expects homebuyers will continue entering the market, adding, “And sellers can still expect to get good prices — all this without the frenzy. A win-win,” he proclaimed.
Northwest MLS figures for October show median prices system-wide for homes and condos are up about 4.6 percent from a year ago, rising from $373,000 to $390,000. King County prices jumped from $565,000 to $613,509 for a gain of about 8.6 percent. All but four of the 23 counties in the report experienced price increases from a year ago.
Condo prices are up 7.8 percent from a year ago. In King County, which accounted for more than half of last month’s condo sales, prices rose 5.8 percent, from $378,000 to $400,000. Median prices in King County peaked so far this year (at $466,500) in the spring when sales closed at several newly built condos in downtown Seattle and Bellevue. The median price on newly built condos that have sold in King County so far in 2018 is $830,287.
Both pending sales (mutually accepted offers) and closed sales dipped by double-digits during October. MLS members reported 9,015 pending sales, down 14.8 percent from the year-ago total of 10,586, but up slightly from the previous month’s figure of 8,913.
The volume of closed sales declined nearly 11 percent area-wide, although eight counties reported double-digit year-over-year increases. For the four-county Puget Sound region, the number of completed transactions fell 15.3 percent from a year ago, but rose 5.2 percent compared with September.
Commenting on the latest MLS statistics, J. Lennox Scott noted “unsold inventory levels are higher than we’ve seen in the past three years,” adding, “We’ve gone from being virtually sold out in many areas close to the job centers to healthier inventory levels.” Instead of an “extreme shortage,” there is now just a “shortage level” of unsold inventory in the more affordable and mid-price ranges, according to Scott, the chairman and CEO of John L. Scott.
Scott believes the current market provides opportunities for those looking to move before the New Year, even with a home-to-sell contingency. “It’s okay to buy and sell within same-market timing, although it remains crucial for those looking to purchase a home to be buyer-ready for the best chance to get their chosen property,” he advised.
“The increase in standing listing inventory brought more choices to buyers and the meteoric price increases of the spring market have slowed,” stated MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle. “Sellers responded by capturing available buyers with competitive pricing or by quickly adjusting pricing,” he reported.
Many sellers are feeling the change, Deely noted. “Longer market times upset their expectations of a quick sale,” he explained. Also, he said, brokers are reporting some sellers’ pricing remains flexible “even after a price reduction as buyers take advantage of a seller’s desire to beat the competition.” He also noted that despite downward trending prices, year-over-year pricing is up.
Brokerage owner George Moorhead of Bentley Properties has noticed a “significant uptick in buyer activity during the past three weeks,” calling it typical for this time of year. “Buyers are more than testing the waters as they see better pricing, less competition, and have a desire to secure their next home for the holidays.”
In response to persistent questions about a possible housing bubble, Moorhead said the clear answer is “Absolutely not.” As buyers, sellers and even brokers adjust to a more balanced and healthy market, “there will be some feeling of the unknown,” he believes.
“When you look at the big picture, inventory is still below what we call a balanced market, the economy is performing above average, and home appreciation is still increasing.” Moorhead stated. Even more important is that homes that are priced correctly are still selling quickly, “under 15 days” he remarked.
Northwest MLS director Dick Beeson also commented on the changing market in the South Sound region, although it is at a less pronounced level than the Greater Seattle area.
Unlike King County where the volume of active listings more than doubled from a year ago, the Pierce-Thurston counties area had modest inventory gains in the 9-to-12 percent range, noted Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Year-over-year pending sales are off 12.3 percent while prices rose about 8.3 percent.
“When choices are more abundant, buyers become more discerning, and they make better choices on the homes they select,” Beeson observed, while offering advice to sellers. “Some sellers need to become more discerning with their asking price. That’s the pathway to being sold.”
Recent rises in interest rates are of some concern, according to some industry leaders.
“The rise in interest rates has some sellers and buyers concerned as it erodes the affordability of our already price sensitive market,” stated Deely.
Moorhead reported buyers have expressed little concern, but are more worried about home prices and future values over the next 3-to-5 years. With a diminishing pool of buyers as the year winds down, builders are ramping up incentives, according to Moorhead. He said mortgage interest rate buydowns are among the incentives, along with custom upgrades and payment of closing costs.
Lawrence Yun, chief economist at the National Association of Realtors, expressed concern about inventory and interest rates. “The insufficient supply of low to-mid-priced homes in metro markets with strong job growth continues to drive up prices and push prospective buyers out of the market,” he said in a NAR report on third quarter activity.
“As mortgage rates continue to rise, reaching the decade’s highest rates this quarter, an increase in the supply of affordable homes has become even more important to help temper price growth across the country,” Yun commented.
Balance “finally returning” to housing market as buyers welcome more choices, moderating prices
KIRKLAND, Washington (October 4, 2018) – Housing inventory continued to improve during September while the pace of sales slowed in many counties served by Northwest Multiple Listing Service. “Balance is finally returning to the market, and with it, slowing home price growth,” stated OB Jacobi, president of Windermere Real Estate.
A new report from Northwest MLS shows double-digit increases in inventory in several of the 23 counties it serves, led by a 78 percent year-over-year gain in King County. Despite improving selection in the central Puget Sound region, a dozen counties reported drops in the number of active listings compared to last year.
System-wide, the month ended with 2.56 months of supply of single family homes and condos, well below the 4-to-6 months analysts use as an indicator of a balanced market between sellers and buyers. The current level is the highest since February 2015 when member-brokers reported 3.56 months of inventory. In King County, supply exceeded two months for the first time since January 2015.
Condo inventory remains sparse, with only 0.34 months of supply area wide, despite improving inventory (up nearly 70 percent from a year ago). The shortage is expected to ease as construction progresses on several recently-announced high-rise projects.
Brokers added 10,458 new listings of single family homes and condos to the MLS database during September, slightly more than the year-ago figure of 10,120. At month end, buyers could choose from 19,526 listings, a 22.9 percent improvement from twelve months ago when selection totaled 15,888 listings.
Commenting on the wider selection, Mike Grady said buyers “are at long last now seeing properties that stay on the market longer.” Listings that are priced appropriately, “and not based on the feverish market we saw just a few months ago are still selling quickly, and home prices are still showing 8 percent appreciation year-over-year – more than double the rate of inflation,” added Grady, the president and COO of Coldwell Banker Bain.
With improving inventory, some brokers suggest the market may be showing signs of pausing, if not softening. A market shift may be under way, but they believe activity will stay strong.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, encouraged would-be buyers to “put extra focus on October,” which he described as the last great month for new listings until March 2019. “Over the winter, new monthly resale listings will lower by approximately 50 percent compared to summer months.” He also noted interest rates, currently in the upper 4 percent, are projected to rise in the coming months.
“This is a more traditional yearly market cycle taking the place of the unusually overheated real estate market of the past several years,” said John Deely, principal managing broker at Coldwell Banker Bain.
“Given there doesn’t appear to be an end in sight related to the region’s job growth, with employees moving here and not enough units being built to accommodate them, we believe this market normalization will continue,” stated Grady. (For every six new jobs created in the Seattle/Tacoma/Bellevue region, there was only one single-family permit issued, according to data from the National Association of REALTORS®.)
Northwest MLS director Robert Wasser reported the recent re-balancing of the market “has led to fewer listings with offer review dates and pre-inspections,” which he said is a positive for buyers hoping to retain their contingencies. His analysis of MLS statistics indicated the median marketing time in King County has risen to 14 days. Also, prices for closed sales are at 100 percent of their list price for a third straight month.
“In the South Sound the market has shifted into neutral and is idling at the moment,” commented Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Noting inventory has improved in both Pierce and Thurston counties “but nowhere near what King County has experienced,” Beeson said buyers can see more homes available for sale for the first time in three years. “Buyers are taking deep breaths as they survey this new territory.”
Beeson thinks the “new normal” at two-plus months of inventory is “healthy and long anticipated.” He also believes the steep curve of ever-increasing prices and scarcity of properties has crested.
Ken Anderson, another Realtor in South Puget Sound, noted the bigger selection for buyers is good timing with interest rates on the rise. “We are finding buyers eager to get into homes this fall to take advantage of the still incredibly low borrowing rates.” Sellers need to be mindful of softening sales, he suggested, adding “they’ll have to keep a sharp eye on this trend and have a pricing strategy to match.”
Anderson, the president/owner and designated broker at Coldwell Banker Evergreen in Olympia, said sales remain robust, describing last month as the “second best September on record for closed sales.” Even though pending sales “softened a bit” he said they remain high by historical standards and says “we remain solidly in a seller’s market” but are trending toward balance. “This is welcomed as prices here have risen much faster than our market’s long-term trend line.”
Pending sales (mutually accepted offers) were down nearly 14 percent area-wide, with about half the counties in the MLS report showing double-digit declines. Members notched 8,913 pending sales last month, a slippage of 1,435 sales when compared to the same month a year ago.
Closed sales also reflected slower activity. Members reported 7,630 completed transactions during September, down 18.6 percent from the year-ago volume of 9,371. Through nine months, this year’s closings are down 4.4 percent compared to 2017.
Prices across the 23 counties in the Northwest MLS report are up about 5 percent from a year ago, with ten counties reporting double-digit gains. The median price for last month’s completed sales of single family homes and condos system-wide was $400,000, up from the year-ago median price of $381,000. Last month’s price was down $15,000 (-3.6 percent) from August and $25,000 (-5.9 percent) from the year’s peak (so far), which occurred in June when the median price was $425,000.
For the four-county Puget Sound region, the median price for September’s completed transactions was $455,000, up about 5.8 percent from a year ago.
Despite slower sales, Northwest MLS spokespeople remain upbeat.
“The housing market close to the job centers has gone from a historic extreme-frenzy market in the spring down a few levels of hotness to a strong level of pending sales activity for new listings,” said Scott.
“Rising interest rates and slowing home prices are affecting the psychology of the region’s housing market, and causing some to speculate that we’re heading towards another housing crash, but that’s definitely not the case,” commented Jacobi. Noting it’s been more than 15 years since this area experienced a “normal” market, Jacobi suggested “people have just forgotten what it looks like. As long as the local economy remains strong, there’s little cause for concern about the shift we’re experiencing.”
He believes “there’s little cause for concern about the shift we’re experiencing,” so long as the local economy remains strong.
Improving supply helps slow escalating home prices in Western Washington
KIRKLAND, Washington (September 7, 2018) – House-hunters in Western Washington can choose from the largest supply of homes in three years, and they are facing fewer bidding wars, according to officials from Northwest Multiple Listing Service.
New statistics from the MLS show prices appear to be moderating (up about 6.7 percent overall), but brokers say they are not bracing for a bubble, or even anticipating a quick shift to a buyers’ market.
“There have been incremental increases in listing inventory the past few months,” noted Gary O’Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, but, he added, “By no means have inventory levels reached a point that is deemed to be a balanced market.”
Area-wide, the number of active listings of single family homes and condos (combined) rose 16.2 percent, but 16 counties reported year-over-year drops in inventory; of those, nine had double-digit decreases from twelve months ago. At month end there were 18,580 active listings, the highest level since September 2015 when buyers could choose from 19,724 listings. Compared to July, inventory was up nearly 11 percent.
The latest numbers from Northwest MLS show wide-ranging changes in the volume of active listings when comparing the 23 counties in the report. In Clark County, inventory doubled from a year ago to lead the list based on percentage gains. King County was runner-up with a 74.3 percent increase, rising from 3,329 active listings a year ago to 5,803 at the end of August.
System-wide there is about two months of supply, but less than that in the four-county Puget Sound region – well below the “balanced market” range of four-to-six months.
Supply was replenished in part by the addition of 11,994 new listings during the month, up slightly from the year-ago total of 11,781.
A slower pace of sales also contributed to the boost in supply. Brokers reported 10,109 mutually accepted offers last month, a drop of 14.8 percent from a year ago when they tallied 11,867 pending sales.
“The Puget Sound residential housing market remains positive, though the market has transitioned from a frenzied state to one of strong sales activity,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “We are seeing stability in the affordable and mid-price ranges in all market areas,” he said, citing “one of the best job growth markets in the nation” and favorable interest rates as contributing factors.
George Moorhead, designated broker at Bentley Properties, commented on buyers “still sitting on the sidelines despite clear indicators.” He believes, “This is the best time in three years to be aggressive in the marketplace” given rising inventory, a significant increase in the number of cancelled and expired listings, and more incentives being offered by builders. “We are now seeing price reductions in new home communities as builders try to move inventory of completed homes,” he noted.
With expanding inventories “buyers are definitely taking more time to make a purchase,” stated Mike Grady, president and COO of Coldwell Banker Bain. “This creates a declining curve in pending transactions compared to last year,” he explained. MLS figures show last month’s pending sales in the four-county region were the fewest during August since 2012.
In the four-county Puget Sound region, pending sales were down more than 20 percent, ranging from a 12 percent decline in Pierce County to a drop of more than 23 percent in King County. Referring to King County’s sparse, 1.9 months of supply, Grady emphasized it’s “still a seller-oriented market” with prices continuing to rise at a faster clip than the rate of inflation and the historical 10-year average sales price increase of 3-to 3.5 percent annually.
Unlike most counties, Thurston County nearly matched year-ago levels for both pending and closed sales. “Last month was the second best ever for closed sales in our area,” noted Ken Anderson, president/owner of Coldwell Banker Evergreen in Olympia. He attributes the achievement to the area’s relative affordability. “We continue to present the most affordable options when compared to the other major counties along I-5,” Anderson stated, adding “Demand is very high.”
With more homes on the market in the tri-county area, growth of home prices has slowed, noted OB Jacobi, president of Windermere Real Estate. “Buyers are under less pressure to bid on any home that comes on the market,” he remarked. “Despite what some of the headlines may read, this is no cause for panic; in fact, it’s good news because it’s an indication that we are moving closer to a more balanced market,” he suggested.
The median sales price on the 9,288 completed sales of single family homes and condos during August was $405,000, up nearly 6.9 percent from the year-ago figure of $379,000. All but one county reported price gains, including a dozen counties with double-digit increases; the exception (San Juan County) had only a small 1.7 percent decrease.
For single family homes, the median sales price was $415,000 overall, a 6.4 percent year-over-year increase. Single family homes in King County continue to command the highest price at $669,000, up 2.9 percent from the year-ago price of $650,000, but down from May when a countywide median price of $726,275 was reached, the highest so far this year.
Condo prices also rose by 8.1 percent area wide and 11.3 percent in King County. That segment also experienced a slowdown in sales, with closed transactions off by about 15 percent. Inventory shows signs of improving, with active listings jumping nearly 58 percent, but there was still only about 1.7 months of supply at the end of August.
“The real estate sky isn’t falling,” said Dick Beeson, who acknowledged the “huge increase in inventory the past few months speaks volumes about the anxiety levels sellers have as they try to get all they can before the market crashes, which it won’t. The Northwest still has the best economy in America,” Beeson emphasized.
Why the run-up in listings?, Beeson asked rhetorically. Sellers have read about exorbitant prices and the need for inventory, he explained, adding “I guess we should have schooled them a bit about a phasing in process and not to bunch up at the listing house door.” The velocity of the market is still strong, with well priced and conditioned homes still selling in a matter of days or a few weeks, Beeson stated. “Only now there are just 3-to-5 offers, not 50.”
Several brokers commented on the importance of realistic pricing. “You can’t underprice a home in today’s market, but you can overprice it,” Beeson stated.
Northwest MLS director John Deely agreed. “Sellers should be careful to avoid overpricing as savvy buyers are wary of properties pushing the upper end of the market. Properly priced properties will still see heavy activity in this market. Sellers of homes that linger on the market are reducing their prices to spur activity.”
Deely also said many buyers are coming back into the market but being more cautious by presenting offers with standard contingencies such as inspection and financing provisions.
“Homes that are priced and presented right are still garnering multiple offers, but unlike the past few years, buyers aren’t having to waive protections with their offers,” Scott said.
“Pricing is becoming increasingly important,” Grady emphasized. According to his analysis, recent listings are averaging 22 cumulative days on the market, while other properties listed prior to August are now averaging almost 50 days of marketing time. “This points to pricing and how sellers may have overpriced their homes in the spring and early summer and now have to adjust their asking price.”
Affordability is an ongoing concern, particularly for first-time buyers wanting to live near job centers. In King County, for example, nearly 60 percent of the current inventory of homes and condos has an asking price of $750,000 or higher. Despite that challenge, brokers are upbeat about what Scott describes as a more “normal pace” with buyers having greater selection and availability.
“Even with some doom and gloom about sales being down in many counties, inventory doubling in some areas, and appreciation holding at around 8 percent for the year, our market is still very healthy and recovering from the depleted inventory of the past three years,” remarked Moorhead.
Homebuyers Encouraged, “But Still On Edge,” While Sellers Face Reality Check
KIRKLAND Washington (August, 2018) – “Home sellers throughout the Seattle region are experiencing a reality check and the days of multiple offers are days of the past,” was how one director with Northwest Multiple Listing Service summarized the market upon reviewing the statistical report for July.
New figures from Northwest MLS show year-over-year improvement in inventory (up 6.5 percent), but modest drops on both pending sales (down slightly more than 7 percent) and closed sales (down 3.4 percent). Despite those drops, prices rose 8.64 percent across the MLS service area that spans 23 counties. Several industry leaders commented on the steadily improving supply. The number of active listings system-wide totaled 16,773 at the end of July, the highest level since September 2016.
“In Seattle and King County supply is at the highest level since first quarter 2015, which has me thinking about the longevity of seller luxuries like offer review dates, pre-inspections, and escalation clauses,” remarked Robert Wasser, owner of Prospera Real Estate and an officer of the Northwest MLS board of directors. “People are taking notice of the evolving real estate landscape. Even my mom tells me she’s noticing more for sale signs!”
“There continues to be better news for buyers,” agreed Mike Grady, president and COO of Coldwell Banker Bain. He noted the inventory in King County has doubled since March from 0.8 months to 1.5 months of supply, but added “While this is significant, we are still well below a balanced market of 4-to-5 months of inventory.”
King County’s number of active listings surged nearly 48 percent from a year ago, rising from 3,465 active listings to 5,116. Snohomish County also had double-digit increases, up nearly 15.8 percent, but 15 counties reported less inventory than twelve months ago.
“It has been a long time coming, but we finally have some solidly good news for buyers in the Puget Sound area,” commented OB Jacobi, president of Windermere Real Estate. He noted the number of single family homes (excluding condos) for sale in King, Pierce and Snohomish counties in July was up 10.4 percent compared to June and up 20.5 percent year-over-year. “The increase in listings is clearly having a calming effect on prices while also giving buyers in the region somewhat of a reprieve from the frantic market of months past,” added Jacobi.
In his comments about sellers experiencing a reality check, broker Keith Bruce suggested Seattle is experiencing a self-corrective shift in the market. “Many sellers are reaching for their dictionaries to understand the words ‘price reduction’ and ‘increased market time.'”
“Sellers need to put away their dictionaries, take a collective deep breath and enjoy the ride. Listing brokers need to be as honest as possible with sellers and not promise multiple offers or huge price escalations,” suggested Bruce, adding “We are still a seller’s market. Much more inventory is needed to meet the overall demand for quality homes in Seattle.”
“Seller gridlock has loosened close to the job centers,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “While we are experiencing record sales activity for the higher end and luxury markets in year 2018, a record number of new listings is coming on the market in these price ranges. This has resulted in more opportunities for home buyers and lower premium pricing from the spring market.”
Northwest MLS data shows a 32.5 percent increase in the number of homes that sold for $2 million or more so far this year compared to the first seven months of 2017 (up from 477 to 632 closings of homes and condos in this price segment).
George Moorhead, designated broker at Bentley Properties, is noticing an increase in the number of price reductions for actively listed homes as inventory increases, “even in the hotspots in Seattle and the Eastside. We are seeing a continued shift from move-up and luxury home buyers to more first-time buyers, which is consistent with the flattening trends we are seeing in today’s market.”
MLS director John Deely said the change in the market “is more accentuated this year by the historically low inventory that we have been experiencing over the past several years. What now seems like a meteoric increase in inventory is in part caused by the many potential sellers who have been on the sidelines that are now coming to the market,” added Deely, the principal managing broker at Coldwell Banker Bain’s Lake Union office.
MLS statistics show pending sales declined from 11,800 a year ago to last month’s total of 10,965 for a drop of about 7.1 percent. New listings eclipsed pending sales by a margin of 1,233 units, easing some of the pressure on inventory.
“Even with an improving buyers’ market, our agents are telling us that buyers seem to have taken a bit of a break: instead of 20 buyers looking at new homes on day one, there were only 10 is the comment we’re hearing,” noted Grady. “While we may be lifting the pedal from the metal, we remain very much in the left lane, exceeding the posted speed limit by a significant amount,” he remarked.
Scott agreed, saying “For homes priced below a million dollars, the sales intensity for new listings has come off the extreme frenzy in the spring to just frenzy.”
Closed sales slipped about 3.4 percent from a year ago, declining from 9,707 completed transactions to 9,379. Nevertheless, the median selling price increased $33,000 (about 8.6 percent) from a year ago, although three counties experienced declines. The median price on last month’s completed sales of single family homes and condominiums was $415,000. Compared to June, the median price dropped $10,000.
Prices for single family homes only (excluding condos) rose about 8.4 percent, with a dozen counties reporting double-digit gains. Condo prices increased about 10.2 percent. In King County where more than half the condo sales occurred, price jumped about 12 percent from a year ago.
“It’s not such a crazy, go-go market, but it’s still a great time to be a seller,” stated Northwest MLS director Mike Larson, president of Allen Realtors in Lakewood. “The expectation of multiple offers and the ability of sellers to simply dismiss inspection repair requests is behind us,” he believes. “Sellers need to understand that and find a listing broker who also understands that,” he emphasized, adding, “The days of doing a market analysis and then pushing the envelope on the list price an extra 5 percent are gone. Ultimately, I think that’s healthy for the market,” Larson commented.
Considerable variation exists among the counties, whether measured by listings, sales or prices.
“The real estate market has cooled a bit in Kitsap County with pending sales off 10 percent in July compared to a year ago,” reported Frank Wilson, Kitsap regional manager and branch managing broker for John L. Scott Real Estate in Poulsbo.
“Yes, the Kitsap market has slowed a bit but it’s still hot due to the persistent shortage of inventory, which is down nearly 21 percent from last year. When 575 new listings come on the market and 596 listings go pending, you know inventory is not building,” explained Larson, a board member at Northwest MLS.
Wilson also reported strong open house traffic as “pent-up buyer demand rallies the pool of buyers for each new listing.” When a broker arrived for the open house he had scheduled for a new listing, six cars were waiting. “By the time the open house concluded, more than 30 people had toured it. Eight offers were made and it sold for more than list price,” he commented.
In Pierce County, inventory dropped around 3.4 percent, and brokers reported more pending sales (2,012) than new listings (1,990). Year-over-year prices in that county were up nearly 14 percent.
“Pierce County has, for a handful of years, been the affordability solution for buyers who would otherwise buy in King County. I think the craziness of the King County market has magnified that fact even more. Buyers are willing to spend two or three hours in their cars each day if it means buying twice as much house,” reported Larson.
Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor echoed Larson. “The market in South Sound is bolstered by the reality that our houses are cheaper. That fact alone keeps our inventory, our number of pending sales, and our number of closings similar to last year even though we’ve faced higher interest rates.”
Beeson said multiple offers continue to follow homes that are well priced at or below our median price level. “If a property stays on the market more than 14 days, you know you’ve got a price problem. It’s that simple.”
Buyers are still on edge according to Beeson. “They know they will be competing with other buyers at some level – whether on price, shorter inspection times, larger earnest money deposits or fewer repairs being done by sellers. For buyers, it’s better than before, but before was just insanity. Buyers are still insecure about prices, financing and competition.”
Moorhead described the market as still “quite strong,” but projects a continued flattening of activity, due in part to looming concern that mortgage rates will rise again this quarter. “Some buyers have thrown in the towel and have chosen to lease for the next year to save for a larger down payment.”
Most brokers believe activity will remain strong.
The volume of pending sales “at or above post-recession highs is an indicator of a healthy volume of sales still moving through the market. We are seeing investors, speculators and builders reacting to the market change by bringing excess inventory to market,” said Deely.
“Getting back to a balanced market creates a healthier and more sustainable market,” Moorhead stated. He believes there has not been a better time in the last three years for a buyer to enter this market with more options and less competition.
Scott agreed, stating “for home buyers the next three months will be the best time for selection and availability of new listings until March 2019.”
Grady and Moorhead were more cautious.
“An 8.64 percent increase in median sales price compared to last year is still much greater than inflation,” Grady noted. “In the long term this is only sustainable in a growing employment market like we have in this region. Consider that through May more than 30,000 net new jobs have been created in just the Seattle-Bellevue area.”
Moorhead detected new construction starts have “slowed proportionately with sales,” saying builders are now offering large incentives to attract buyers.
Larson noted a shift in investors in rentals. “Our firm’s inventory of rentals has decreased about 15 percent over the past few years, from around 350 to under 300. Many of those owners bought rentals in the last boom market, and then weathered the storm when the market crashed. They finally have equity again and want to get out, which isn’t surprising.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state
Brokers seeing “simple economic recipe for a softening housing market”
KIRKLAND, Washington (July 5, 2018) – Home buyers around many parts of Washington state had more choices and less competition during June, prompting some industry leaders to comment on “a feeling of change in the market.” “Inventory is up and demand has dropped,” reported Robert Wasser, an officer with the board of directors at Northwest Multiple Listing Service. That combination is “a pretty simple economic recipe for a softening market,” he added in commenting on the latest MLS statistics. Figures for June show a 5.2 percent improvement in the number of active listings system-wide, coupled with drops in the volume of pending sales (down 8.4 percent) and closed sales (down .07 percent) compared with a year ago. Despite the shift of some indicators favoring buyers, prices area-wide continued to rise, increasing more than 10 percent from twelve months ago. “There was a feeling of change in the market this June and the numbers supported that feeling,” remarked John Deely, principal managing broker at Coldwell Banker Bain. He noted many brokers also reported an increase in properties going past their offer review date, more price reductions, and an increase in reverse prospecting (a tool that allows the listing broker to view a list of brokers with potential buyers for that listing). “We’re also experiencing a decrease in multiple offers and the number of buyers participating in multiple offers,” added Deely. Northwest MLS brokers added 13,153 new listings to inventory during June, a drop from both a year ago when they added 13,658, and from May when 14,524 new listings were added.
With new listings outgaining sales, total inventory as measured by active listings and months of supply improved. At month end, Northwest MLS reported 15,234 active listings and 1.5 months of supply. Inventory of single family homes and condos reached its highest level since October. The supply of active listings in King County surged 47 percent from a year ago, boosting the months of supply to just under 1.3 months –the highest level since September 2016 when there was 1.37 months of supply. “Although still a quick response market, with more new listings coming on the market during the summer months, we experienced dispersed buyer energy due to the greater availability and selection,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He estimates sales activity is off 15-to-20 percent for each new listing’s first 30 days on the market. “Now through October will be the best time of year for homebuyers,” he remarked. “Sellers are becoming more active in the market as they sense buyers pulling back,” suggested George Moorhead, designated broker and owner at Bentley Properties. Improving supply, a marked increase in expired or cancelled listings, and market times almost doubling are factors he mentioned when describing the market as “more than just lackluster” with summer showing no sign of improvement.
Windermere president OB Jacobi also saw the second straight month with a “pretty significant rise in the number of homes for sale across the Western Washington region” as encouraging. “This is great news for home buyers because not only does it mean more selection, but also less competition.” Commenting on the steady improvement of supply with more choices for buyers, Mike Grady emphasized “We still remain far below a balanced market of 3-to-5 months of inventory.” The imbalance is reflected by rising prices, up more than 10 percent in King County and nearly 15.5 percent in Snohomish County, he noted. “As long as we are creating 100,000-plus net new jobs annually in the Pacific Northwest and building fewer than 30,000 new single family homes, these trends will continue,” suggested Grady, the president and COO of Coldwell Banker Bain. Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo said the market there has slowed “but not to the degree that Seattle has. There are fewer listings coming on the market, to a large degree because potential sellers cannot find a home to buy.” MLS figures show inventory in Kitsap County is down more than 20 percent from a year ago and pending sales declined 5 percent. Wilson said some potential sellers are opting to stay in their current house and remodel citing rising prices and limited selection as reasons for their decision. “This market is reaching westward to Jefferson and Clallam counties,” Wilson reported, noting Port Ludlow, Port Townsend and Port Angeles are all feeling a bump in value and shrinking inventory.
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Improving inventory creating long-awaited opportunities for buyers.
KIRKLAND, Washington (June 5, 2018) – Member-brokers of Northwest Multiple Listing Service added 14,524 new listings during May, the first time that volume topped 14,000 since May 2008.
“With eyes peeled for potential shifts in a market that’s felt like ‘more of the same,’ the recent uptick in new listings hitting the market catches my eye — the most new listings in more than a decade,” commented Robert Wasser, owner/broker at Prospera Real Estate in Seattle and an officer with Northwest MLS.
Total active listings snapped a streak of 44 months of negative numbers during May when the year-over-year comparison showed an increase of 3.8 percent. That uptick marked the first time members of Northwest Multiple Listing Service reported a gain for that statistic since August 2014. King County has more than a month’s supply for the first time since September 2017, and only the third time since October 2016. For the MLS area overall, there is 1.44 months of supply. Only four counties of the 23 counties served by Northwest MLS reported having more than four months of supply, the minimum level most industry experts use as a gauge of a balanced market.
Brokers welcomed the figures showing healthy gains in inventory, but some say they are keeping a watchful eye on rising prices and interest rates, as well as on buyer profiles, including retiring boomers.
New figures from the MLS show slight drops in both pending and closed sales, a likely consequence of persistent inventory shortages. Brokers also cite the market imbalance as a factor in rising prices: compared to a year ago, the median sales price for transactions of single family homes and condos that closed area-wide during May was $420,000, a jump of nearly 11 percent from the year ago price of $378,475. “What we are experiencing is actually a good thing as inventory leans toward a more balanced market,” remarked George Moorhead, designated broker at Bentley Properties. He also reported a shift from move-up and luxury home buyers to more first-time buyers with “a more level playing field between buyers and sellers.”Moorhead said there “never was a spring market this year” like what was experienced in the past four years. He points to rising interest rates, lack of inventory, increased home prices, frustration with presenting multiple offers without success, requirements for larger down payments, and an increase in the cost of living as reasons. Unlike recent past years, “buyers will definitely be able to capitalize on a softer summer market this year,” according to Moorhead, who noted expired listings are on the rise.
Last month’s number of new listings was a significant gain from April when members added 11,271 new listings, a gain of nearly 29 percent.
“It’s the best time of the year for potential home buyers,” proclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “At this time of year we always see the highest number of new listings come on the market on a monthly basis,” he explained, adding, “More new listings creates more opportunity for home buyers.” Even with the improving inventory, today’s market “still takes instant response as sales activity remains at a frenzy level for these new listings,” Scott emphasized. “The good news for home buyers in King County is that compared to last month, there were almost 1,000 more homes for sale,” noted OB Jacobi, president of Windermere Real Estate. “Hopefully,” he added, “this is the beginning of a trend in which we will continue to see inventory levels improve. On the flip side, home prices in the county are up 16 percent year-over-year, which, when combined with rising interest rates, is forcing some buyers to expand their search to Pierce and Snohomish counties so they can find something they can afford to buy.” Sellers in the 23 counties served by Northwest MLS accepted offers from 12,168 buyers during May, slightly below the number from twelve months ago when pending sales totaled 12,511 (a decline of 2.7 percent). Thirteen counties reported decreases in mutually accepted offers compared to the same month a year ago, with four of them (Cowlitz, Kittitas, Okanogan, and Skagit) tallying double-digit drops.
Closed sales fell slightly, from 9,106 a year ago to 9,011, a drop of just over one percent. Ten counties reported fewer closed sales during May when compared to a year ago. A comparison to April’s completed transactions shows an increase of 1,285 transactions for a gain of 16.6 percent. Mike Grady, president and COO of Coldwell Banker Bain, said the significant increase in inventory means a slightly easier time for buyers to locate and purchase homes “for the time being.” He said the broader selection enables more buyers to purchase homes regardless of escalating prices, slightly higher interest rates, and fewer cash sales involving Chinese nationals. Grady attributes the dip in Chinese activity to that country’s policies making it more difficult for people to take their cash out of China. “While there is slightly more inventory available, the market time for most listings is less than a month, and multiple-offer situations occur daily even though there may only be five offers instead of 10 or more,” stated Grady. Brokers say the continuing bidding wars are helping push prices up. Fifteen counties had double-digit price hikes for single family homes and condos (combined) from a year ago. In the four-county Puget Sound region, Snohomish County has the smallest year-over-year price gain at just under 14 percent, while Kitsap County claimed the largest jump in the region at nearly 17.2 percent.
In King County, the median sales price on all homes rose just over 16 percent, from $560,000 to $650,000. The median price for a single family home rose 14.64 percent, from $633,500 to $726,275. The condo market showed signs of improvement with inventory growing by nearly 21.4 percent, boosted by the addition of 1,803 new listings during May (up 11.3 percent from a year ago). Even so, there is less than a month’s supply system-wide. Brokers reported slightly fewer pending sales and closed sales of condos. Year-over-year prices for condos system-wide rose nearly17.5 percent, from $315,000 to $370,000. In King County, which accounted for 55 percent of last month’s condo sales, the median price of a condo that sold was $427,000, a $53,000 increase from a year ago.
For the luxury market close to job centers, Scott noted sales continue to be extremely strong, especially up to the $5 million price point, which he attributes in part to the year-over-year increase in luxury listings. Northwest MLS figures show sales of homes and condos priced at $1 million-plus are up nearly 27 percent from a year ago, rising from 557 sales in May 2017 to last month’s total of 706. As an aside, Grady suggested the recently enacted head tax in Seattle and retiring boomers will be worth watching. If jobs move from Seattle to the Eastside, workers may relocate as well, he speculates. Commenting on the inclination of more homeowners who are willing to list and sell at this time, he is hearing of more boomers and friends planning to move to states where housing costs less. “One good friend decided Seattle was too expensive to live in his retirement, so they’re selling their 1,400 sq. ft. $600,000 home in Lynnwood and retiring in North Carolina where they purchased a 3,000 sq. ft. home for $300,000,” he said adding, “It may be something to watch as our boomer population retires.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 28,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
KIRKLAND, Washington (May 7, 2018) – Home buyers may be cheered by an uptick in inventory, but the improving supply is unlikely to reverse rising prices, suggest industry leaders from Northwest Multiple Listing Service.
Commenting on just-released figures for April, which showed the highest level of active listings since August, OB Jacobi, president of Windermere Real Estate said, “For the first time in a long time we had good news for buyers.” Noting supply is still lower than year-ago levels (down 5.6 percent), it jumped 14 percent from March, which Jacobi said “is a pretty significant increase even for this time of year.”
Northwest MLS brokers added 11,271 new listings to inventory during April, a gain of 6.3 percent when compared to March, and up nearly 5.9 percent versus a year ago. April’s pending sales (mutually accepted offers) totaled 10,574, improving on the same month a year ago and the previous month. At month end, the active listings selection included 10,079 single family homes and condos, eclipsing the total of 8,825 listings at the end of March. The condo segment grew 10.9 percent from March. Of the 23 counties in the Northwest MLS service area, only six of them reported year-over-year gains in inventory compared to a year ago. King County was the only one in the Puget Sound region to notch a gain, up 13.6 percent from a year ago.
Commenting on the uptick, Mike Grady, president and COO, Coldwell Banker Bain, remarked “We are still WAY below a balanced market of five months of inventory, and this is even with interest rates ticking slightly upward.” Area-wide there is 1.3 months of supply, with 4-to-6 months used as a gauge of a balanced market. Three counties – King, Kitsap, and Snohomish — reported less than a month of supply. The condo component remains very tight with slightly more than three weeks (0.87 months) of supply. Prices are still climbing at double-digit rates in most counties. Year-over-year prices for single family homes and condos combined jumped about 15.3 percent overall, from $360,000 to $415,000. Within the four-county Puget Sound region, King County notched the biggest gain at nearly 18.2 percent. Prices there rose $100,000 from a year ago, from $550,000 to $650,000. “There’s little reason to think we’ll be seeing a change in this frantic market anytime soon,” commented Grady, citing double-digit appreciation in many of the most populous counties, expansion plans by Alaska Airlines and Amazon, and other positive economic news as reasons for that expectation.
“Huge jumps in home prices to the north of us are pushing a lot of people to our county, which is among the most affordable on the Puget Sound,” commented Thurston County broker Ken Anderson.
MLS figures show a median price of $300,000 for homes and condos that sold in Thurston County last month, slightly less than Pierce County ($337,950), and significantly lower than both Snohomish County ($475,000) and King County ($650,000). Despite the cost differential favoring Thurston County, Anderson, the president and owner of Coldwell Banker Evergreen Olympic Realty in Tumwater, said sellers are seeing price gains “they didn’t think possible just a couple of years ago.” Prices in that county are up more than 7.5 percent from twelve months ago. He also reported new construction is not keeping up with the population growth. “That alone will ensure prices will continue to rise in the near to intermediate term,” he commented, adding, “Buyers are seeing the trends and jumping into the market before prices and interest rates climb even higher.” George Moorhead, designated broker at Bentley Properties, said while prices are still increasing, both inventory and the number of expired listings are also rising. He noted the steady climb in King County’s inventory of single family homes, with April rising more than 25 percent from March. Expired listings surged 86 percent from March, which Moorhead said is another example of some flattening in the market.
Moorhead also believes rising interest rates are having a “moderate impact” with buyers, forcing some to look at homes in lower price points. Buyers still want a good home in a good area, he reported, but some are reconsidering just how much they want to pay, saying they don’t want to be “house payment poor.” Northwest MLS director Frank Wilson is also detecting some shifts in behavior by both buyers and sellers as the market changes. “As King County buyers spill into Kitsap, they realize they have to be more strategic in their offers, and sellers are paying more attention to the details of an offer, and not always taking the first offer presented,” stated Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. Wilson said multiple offers (often higher than the list price) are becoming more common on new listings in Kitsap County. When that occurs, he said buyers are being asked to make up the difference should the appraisal not match the increased offer price.
Meanwhile, sellers are beginning to realize the amount offered over list price may not be bankable unless buyers are willing to make up the difference. Consequently, Wilson said they are being more discretionary with the offers they consider. Local, proactive lenders, increased earnest money, preferring verifiable cash offers or conventional over VA or FHA, higher down payments, shorter closing times, and setting some future date when they will review all offers are examples he cited. Wilson noted Kitsap was one of a half-dozen counties in the MLS report where last month’s pending sales surpassed the number of new listings. “This means the listing deficit is deepening,” he remarked. J. Lennox Scott, chairman and CEO of John L. Scott, joined the chorus of brokers who believe better times are ahead for home buyers. “Eventually, higher interest rates will moderate the rapid home price appreciation,” he stated, but added, “We have not yet arrived at that tipping point.” He expects the Seattle metro area to probably tie and maybe break the 20-month home price appreciation record for the Case-Shiller index. (The latest S&P CoreLogic Case-Shiller Home Price Indices, released late last month for February, shows Seattle’s 12.7 percent increase led the list of 20 cities it compares.) Commenting on April’s report showing more new listings than pending sales area-wide, Scott said that pattern is consistent with the annual housing cycle. “New listings will continue to spike, providing slight relief for the backlog of home buyers.”
Scott also expects the market for homes in the more affordable and mid-price ranges to remain at a frenzied pace into the summer of 2019. “For luxury listings in the $1-to-$2 million range and close to job centers, the market remains extremely competitive,” he predicts. The competitive market is exposing several misconceptions held by buyers and sellers, according to Wilson, who has worked in the industry since 1990. He listed several including:
1) “It’s all about the price.” Wilson says it’s more about the possibility of a successful closing, using the example of an all-cash offer that is 30 percent above list price that doesn’t close, versus a solid, verifiable conventional offer at 5 percent above list price that actually closes;
2) “Seller has to take the highest offer” is another myth Wilson listed, explaining a seller can accept any of the offers that are presented.
Similarly, “if multiple offers are made, the seller has to take or work with the first one first,” is also untrue. A seller can address any of the offers in any order.
3) “Cash is always king.” Wilson emphasized if the cash is not verifiable to the seller’s satisfaction, a conventional offer may actually have a better chance of success.
4) “Pre-approval with a lender is the same as pre-underwritten,” is another misbelief. The farther down the path a loan application can go, the more likely it is to be approved
Buying or selling a home can involve nearly two dozen people, Wilson noted, while encouraging buyers and sellers to work with a broker who is well-versed in the process and able to coordinate all the participants to assure a successful closing.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 28,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Housing Market Back to “Pressure Cooker Situation” But Brokers Remind Sellers “Pricing Is Still Important”
KIRKLAND, Washington (April 5, 2018) – Job growth and a recent run-up in mortgage rates has created an “extremely intense market for each new listing,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate in commenting on the latest statistics from Northwest Multiple Listing Service.
MLS figures for March show a surge in both new listings and pending sales compared to February as the spring market heats up. Compared to a month ago, pending sales climbed more than 29 percent (from 7,980 in February to 10,311 in March), while the volume of new listings jumped more than 45 percent from February to March.
“What used to be a quick action market for buyers is now, once again, an instant response market, and this has been the case since the first of the year,” remarked Scott, adding “This is especially true in the more affordable and mid-price ranges in all markets, and also pertains to luxury properties close to the job centers.”
Whether defined as $1 million or more or $2 million-plus, Northwest MLS figures confirm sales of luxury homes are surging. A comparison of first quarters show the year-over-year volume of sales of homes priced at $2 million or more is up 30 percent. Members reported 136 such sales during first quarter 2017; this year, the number is 177. For homes priced at $1 million or more, sales rose from 941 during first quarter last year to 1,204 this year, a gain of nearly 28 percent.
Prices overall are up about 13.2 percent from a year ago, and even more so in the four-county Puget Sound region. Among these four counties, Kitsap had the largest year-over-year increase at 19 percent, but King County homes are still the priciest. The median price for last month’s sales of single family homes and condos combined in King County is $625,000, up 17.9 percent from a year ago. For single family homes, excluding condos, the median price for last month’s sales was $689,950.
Year-over-year prices are up more than 18 percent in Pierce County and about 14.3 percent in Snohomish County.
Commenting on rising prices, veteran broker Mike Grady said “The market continues to trend hot” with no apparent end in sight. The slight rise in mortgage interest rates since January 1 could mean “some minor impact on non-cash first-time homebuyers,” he suggested, adding, “Only time will tell.” Grady, the president and COO of Coldwell Banker Bain, said his company’s tracking and analysis based on average prices (instead of median prices) shows that “along the I-5 corridor, our average sales price is tracking slightly higher than what the NWMLS median sales prices show.”
Northwest MLS member brokers continue to scramble to replenish supply. They added 10,595 new listings during March, slightly more than a year ago when they added 10,321 properties to the selection. Last month’s additions marked a big gain from February when 7,284 new listings were added.
As has been the pattern, pending sales nearly equaled the number of new listings. Brokers reported 10,311 pending sales last month, a slight drop from the year-ago figure of 10,415. Tight inventory may be to blame as the number of total active listings stood at 8,825 at month end, down nearly 9.7 percent from the year-ago total of 9,772. Fourteen of the 23 counties in the Northwest MLS market area reported drops in pending sales.
“We have returned to an extremely intense market for each new listing due to extremely strong job growth and eager buyers who want to purchase before interest rates go higher,” Scott reported. “The housing market is back to a pressure cooker situation and we are witnessing high levels of sales activity intensity for each new listing coming on the market,” he commented.
Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, commented on the frustration many would-be homebuyers are experiencing. “I think this last quarter especially, many buyers are feeling like they brought a knife to a gunfight, there’s been so much competition to buy a home.”
The tri-county area comprised of King, Snohomish and Pierce counties added essentially the same number of new listings during first quarter 2018 as the same period a year ago, Beeson noted, while the actual number of sales dropped slightly. “Why? Because there are too few properties for sale and rental rates are through the roof. People are desperate to find a home,” he stated. He likened the situation to Nordstrom not being able to keep their clothing racks filled because customers storm the store each day buying everything that’s available.
Housing inventory remains well below “normal” ranges based on a level of 4-to-6 months of supply used as an indicator of a balanced market. Area-wide, Northwest MLS figures show there is about 1.2 months of supply, with four counties reporting less than a month’s supply. Snohomish has the sparsest selection at 0.67 months, followed by King (0.83 months), Kitsap (0.95 months), and Pierce (0.99 months).
“Despite the low inventory and sellers’ market, proper pricing is still important,” emphasized John Deely, principal managing broker at Coldwell Banker Bain in Seattle.
“In March we saw more listings where sellers pushed the price envelope causing the property to go past their offer review date with no offers in hand,” Deely reported. “It is not uncommon for buyers to consider a property on the market over 10 days as having something wrong with it,” he added.
Nevertheless, Deely said many buyers are returning from taking a break during the winter after having lost out on several attempts to win in the multiple offer competition. “Throwing caution to the wind, these seasoned veterans of the multiple offer bidding wars are pulling out all the stops (contingencies) to win.”
Rising interest rates and keen competition are motivating some buyers to make compromises, according to George Moorhead, designated broker at Bentley Properties.
“I was asked recently why some communities are seeing a higher sales volume then last year,” Moorhead stated. “I explained this was simple logic with buyers in that instead of competing at their maximum price point in closer in communities and losing out on the perfect home, they compete in a lesser priced area where they can be more aggressive on the better homes in those areas. They may compromise on schools, public services, and commute times, but the opportunity of ownership increases significantly. The second key reason is that 30-year mortgage interest rates have increased .5% since the beginning of the year which erodes home affordability and pushes some buyers out of market places.”
Commenting on the uptick in interest rates, the president of a mortgage firm who trains brokers around the country recently noted, “While $100 a month might not sound like too much, it might adjust a client’s debt-to-loan ratio, which could push the size of a house they can afford down by $40,000 or $50,000.”
Moorhead dismissed “chatter about a looming real estate bubble” based on prices and what used to be the norm. “The key is to understand the normal cyclical pattern of our real estate market. A healthy market has corrections and booms with a mix of flattening cycles,” he stated, noting “Markets without these healthy cycles have catastrophic events much like we experienced in 2007 to 2011.”
Instead of competing in today’s market, some current owners are opting to remodel. “We are getting more and more requests for quality contractors for current homeowners looking to make updates to their home, instead of trying to move up to a better home or community,” Moorhead said. “Just in the last 30 days we know of 12 homeowners starting home improvements in the $100,000 and up range, more out of sheer frustration that they cannot find or secure a move-up home to purchase. What this means on the larger scale is a continued lack of inventory coming on the market to feed the voracious appetite of the buyers in our marketplace.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 28,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Statistical Summary By Counties
Market Activity Summary and 4-County Puget Sound Region Pending Sales (PDF)
Courtesy of NWMLS
Home buyers, sellers feel “looming pressure” but Western Washington market stays strong
KIRKLAND, Washington (March 6, 2018) – Interest rates are creeping up, inventory is still squeezed, and some feared revised tax laws would have a chilling effect on home sales, but Northwest Multiple Listing Service leaders say the local market remains competitive. “It seemed like there would have been a chilling effect on the real estate market at the start of 2018 with the newly revised tax laws limiting mortgage interest deductions,” suggested Gary O’Leyar, designated broker and owner at Berkshire Hathaway HomeServices Signature Properties. “Not only did the revisions not have a chilling effect, if anything, the local market has been even hotter and more competitive than last year at this time,” he added in commenting on new MLS numbers summarizing February activity.
Northwest MLS figures for last month show a slight year-over-year decrease (about 2.8 percent) in overall pending sales, a likely consequence of inventory being down nearly 12.9 percent. Other key indicators of the market – new listings, closed sales, and selling prices – all showed gains in February compared to 12 months ago.
The just-released report from Northwest MLS shows 7,980 pending sales last month, down from the year-ago volume of 8,209 mutually accepted offers for single family homes and condos. Thirteen of the 23 counties in the report had more pending sales than at this time last year. Closed sales outgained last year’s volume, 5,548 to 5,358, for an increase of nearly 3.6 percent. Median prices on those sales surged almost 14.8 percent area-wide, rising from the year ago figure of $335,515 to last month’s price of $385,000. Among the four Puget Sound area counties, Snohomish had the largest year-over-year price increase at 18.8 percent. Its countywide median price for February’s sales spiked to $460,000 from $387,250, but that is $130,000 below the $590,000 median price for transactions that closed in King County last month.
For single family homes (excluding condos), prices rose 13.7 percent overall, from $343,000 to $390,000. Within King County, the median price was $649,950, with three areas (Mercer Island, Bellevue west of I-405, and Kirkland-Bridle Trails) reporting median prices of more than $1 million for single family homes. “As was the case the last two years, home values spiked in February, thanks to a cyclical low point in supply,” commented Robert Wasser, owner/broker at Prospera Real Estate. Prices are now back around the peak levels of last summer, and cyclically speaking, are headed for additional increases until summer arrives,” commented Wasser, a board member at Northwest MLS.
Brokers added 7,284 new listings of single family homes and condos during February, an improvement of nearly 6.4 percent from a year ago when they added 6,848 new listings. Like many months during 2017, last month’s pending sales (7,980) outgained new listings (7,284), keeping inventory depleted in many areas.
There is about 1.4 months of supply area-wide, but both King and Snohomish counties have less than a month’s supply. For condos, there is only 0.88 months of supply – and even less than that in King, Snohomish, and Kitsap counties. Many brokers expect inventory levels to improve. “The arrival of daylight savings triggers a burst in new listings,” proclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “More listings lead
to more sales. In real estate, it’s all about the new listing,” he stated. Scott expects the boost in home price appreciation during the winter market when inventory is reduced will moderate. “Over the second half of the year, as more listings come on the market, home price appreciation tends to flatten out,” he explained while noting small upticks in mortgage interest rates. Such increases have led to slightly higher mortgage payments, Scott said, “but they have not put a damper on the market.” New construction could also help ease some of the pressure, suggests Mike Grady, president and COO at Coldwell Banker Bain.
“Even though Commerce Department data show purchases of newly built single-family homes nationwide fell 7.8 percent in January after dropping 7.6 percent in December, and purchases have declined for four of the past six months, we are not seeing that trend in the Northwest.”Inventory is improving in some areas, Grady noted, adding, “The hyper job market in the Pacific Northwest continues to outpace almost every metro area in the nation, and thus our housing market is booming; for now, there is no end in sight.
”Ken Anderson, president/owner and designated broker at Coldwell Banker Evergreen in Olympia, noted some buyers are frustrated with what appears to be lack of choice. “The reality is, we have an 8-year high in the number of homes coming to market in Thurston County,” he stated. His analysis of MLS data show thetotal number of new listings added in that county in the first two months of this year is at the highest level since 2010.
“The challenge is that the number of buyers is near record highs, too,” said Anderson. Given this competition, he believes “The right plan, including help from a skilled broker, can help buyers find success in this fast-paced market.” “Many buyers and sellers feel looming pressure, and with a mix of doom and elation, both are preparing for a flurry of activity,” reported George Moorhead, designated broker at Bentley Properties. “We have not seen the typical aggressive spring market yet,” he added, noting “Buyers are coming to the harsh reality that high home prices are here to stay” and they need to consider smaller homes or longer than hoped-for drive times. Moorhead also noted 30-year mortgage rates climbed slightly for the seventh consecutive weekly increase, but he said these small increases “are not yet creating too much of a stir.” Conversations with buyers are “more around the cost of commuting and time away from home versus floor plan and home size.” For some wage earners in the Seattle area, “Kitsap looks very affordable,” said Northwest MLS board member Frank Wilson.
“Kitsap’s real estate market continues at a flurry pace with homes going off the market almost as fast as they come on. Available inventory in our county is down 32 percent compared to a year ago, which continues to put upward pressure on prices and buyer’s nerves,” stated Wilson, the branch managing broker at John L. Scott Real Estate in Poulsbo. As commuters flock to the more affordable side of the sound, “affordability gets further and further in the rear view mirror for many,” Wilson lamented. MLS statistics for February show year-over-year prices in Kitsap County jumped more than 15.7 percent, with single family home prices up 17.5 percent. Compared to January, last month’s prices for homes and condos in that county rose another $25,000 (8.3 percent).
“Kingston, Bremerton, and Port Orchard markets are surfing in the wake of the new foot ferry service with attention being paid to those from the east side of Puget Sound seeking affordability to the west,” Wilson reported. In fact, he added, “It is becoming more common in Kitsap to see all cash offers, no inspection contingency, and sellers that are reviewing all offers on a future date.” Similar practices are occurring elsewhere. Commenting on the competitive market in many parts of the Northwest MLS service area, O’Leyar reported instances of “buyers making offers with zero contingencies and having the seller fill in the sales price!”
“History tells us that the real estate market is cyclical,” acknowledged O’Leyar, who also mentioned the Federal Reserve chairman hinting at further rate increases and possible impacts on the pace of appreciation and the availability of listings. “Hopefully,” he suggested, “Any changes in interest rates will have a moderating effect, easing the extremely difficult times some buyers are having in purchasing real estate in the Greater Seattle/Puget Sound market.”
Home buyers still competing for sparse inventory in Western Washington, driving up prices – especially for sought-after condominiums
KIRKLAND, Washington (February 5, 2018) – “The Seattle area real estate market hasn’t skipped a beat with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of inventory.
Deely, the principal managing broker at Coldwell Banker Bain in Seattle and a board member at Northwest MLS, noted a shift in the ratio of pending sales to new listings in King County.
Member brokers added 6,805 new listings of single family homes and condominiums to the system-wide database last month for a gain of about 4.6 percent from a year ago. During the same period, they reported 7,820 pending sales. In King County, the number of new listings outgained pending sales for the first time since September:
|King County (SFH+Condos)||Jan-18||Dec-17||Nov-17||Oct-17||Sep-17|
“Sellers that have put their properties on the market early this year have less competition and are seeing multiple offers. Open houses are experiencing heavy traffic with hundreds of potential buyers attending,” reported Deely.
For the MLS overall, last month’s 7,820 pending sales marked a slight increase compared to January 2017 when members reported 7,724 mutually accepted offers, a gain in of 1.24 percent. Not all areas reported increases. Of 23 counties served by Northwest MLS, eight counties, including three in the Puget Sound region (King, Kitsap and Snohomish), reported fewer pending sales than a year ago. In King County, where acute inventory shortages exist in many neighborhoods, pending sales dropped 7.5 percent and closings dropped 18.5 percent.
“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB Jacobi, the president of Windermere Real Estate.
With January’s additions, the number of total active listings at month end stood at 8,037 homes and condos, down nearly 17.6 percent from a year ago when the selection totaled 9,750 listings. Measured by months of supply, there was only about 1.5 months overall, well below the 4-to-6 month level many industry experts use as a gauge of a balanced market.
Condo inventory is especially tight in Snohomish County (0.8 months of supply) and King County (0.92 months). System-wide there is under a month’s supply (0.93 months). For the four-county Puget Sound region, there were only 427 active condo listings at month end, down almost 31 percent from a year ago.
Despite the sparse selection, brokers expect inventory to improve.
“I actually believe 2018 will bring us moderately more listings, which should help offset the growing demand that continues to result from the area’s strong economy,” remarked Jacobi.
“The month of March can’t come soon enough for home buyers,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “In March, the number of new listings will bump up substantially from the low number of new listings typical for winter months. Better selection will start in March as we enter the spring housing season,” Scott predicts.
In the meantime, Scott reported “a multiple-offer everything, virtually sold out market” in all price ranges close to job centers and in the more affordable and mid-price ranges in surrounding counties. “Sellers are receiving premium pricing and home buyers are pouncing on each new listing,” he added.
George Moorhead, designated broker at Bentley Properties, agreed. “January still saw aggressive buyers as they jockeyed for homes in some of the hottest areas in Seattle and the Eastside,” he commented.
Prices continue to rise in all but a few counties, even as the volume of closed sales fell about 9.3 percent. For January’s 5,325 closed sales, the median price was $363,500, a jump of about 11 percent from the year-ago figure of $327,500. Twelve counties reported double-digit spikes.
Within the four-county Puget Sound region, King County had the largest year-over-year gain. Prices for homes and condos combined shot up 20.3 percent in that county, rising from $475,000 to $571,250. Pierce County reported a jump of 15 percent, followed by Snohomish County at about 12.2 percent and Kitsap County at nearly 3.5 percent.
The depleted supply of condos meant premium prices. Area-wide the median price for last month’s completed transactions rose nearly 18.6 percent, from $269,900 to $320,000. Snohomish County’s condo prices surged nearly 25.5 percent, followed by King County at nearly 22.6 percent.
Some brokers expect the hefty price gains to ease.
“As interest rates rise, the rate of price increases will slow down,” predicts Northwest MLS director Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Despite this expectation, he believes sparse supply and the area’s appeal both nationally and internationally will mean ongoing competition and multiple offer situations.
“What it costs to rent small spaces astounds me,” he remarked citing recent reports that put Tacoma and Olympia on lists of top cities for increased rents during 2017. “Investors, because rents are high, compete daily with home buyers, and they often win the deal in the lower priced homes. Because they are buying all cash, they consistently beat out buyers who have to get loans.”
Builders are trying to respond to the pent-up demand, according to Moorhead. Seattle and the Eastside are seeing a growing number of infill homes in the core areas, some on lots as small as 3,000 square feet, he said. Builders are doing smaller releases and setting offer review dates, and then determine price ranges for the next phase.
“What used to be an affordable way to build homes has now become more mainstream for both smaller and larger builders,” Moorhead stated, adding, “Historically, infill homes did not get the same return as homes built in large community plats, but now they’re realizing similar price points.”
The luxury market is also off to a quick start in 2018. “Close to job centers, the luxury market is gaining positive momentum due to the wealth effect of the stock market, the strength of the U.S. economy, and homebuyers from the Pacific Rim, especially China,” noted Lennox Scott.
Northwest MLS figures show sales of homes selling for $2 million or more are far outpacing year-ago activity. Last month, member-brokers reported selling 55 residences at this price threshold. That’s up 66 percent from the same month a year ago when brokers sold 33 such homes.
Statistical Summary By Counties
Market Activity Summary and 4-County Puget Sound Region Pending Sales (PDF)
Courtesy of NWMLS
KIRKLAND, Washington (January 5, 2018) – The year 2017 may be in the books and for many members of Northwest Multiple Listing Service it was a memorable one with December’s activity being no exception. Brokers reported historic lows for inventory and year-over-year price gains in most areas.
“I’ve never seen inventory this low in Kitsap County in 27 years,” remarked Northwest MLS director Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo. That county’s number of active listings last month plunged nearly 40 percent from year-ago levels.
At month end, there were only 397 active listings in Kitsap County (down from the year-ago total of 659), a level Wilson described as “exceptionally low,” even accounting for seasonal factors. “A normal inventory in Kitsap County used to be 1,500 to 1,700, but we have not seen this number of active listings in several years,” he lamented (Northwest MLS data show the last time inventory topped 1,500 in that county was in July 2014 when there were 1,503 listings at month end).
For the MLS area overall, inventory shrunk 19 percent, from 10,569 active listings at the end of 2016 to last month’s figure of 8,553. That’s the smallest selection for any month in the past decade. For the fourth time this year, monthly inventory dipped below the 10,000 mark, a level not reached at any other time during the 10-year comparison.
Despite the paltry supply, last month’s sales remained remarkably strong, with closings up slightly (0.88 percent) from a year ago. Northwest MLS members reported 7,642 closed sales, about the same volume as a year ago when completed transactions totaled 7,575.
Year-over-year pending sales of single family homes and condos (combined) fell about 3 percent, from 6,390 to 6,198, but far outgained the number of new listings added to inventory (4,053).
“December, which has historically been a slower month, picked up momentum and never let up,” reported George Moorhead, designated broker at Bentley Properties. Unlike October through November, which he described as slower than what had been seen the past three years, “December drew aggressive buyers, some motivated by expectations of a flattening market, with others trying to beat anticipated interest rate hikes.” Purchasers were from all buying demographics, noted Moorhead, a member of the Northwest MLS board of directors.
Several MLS leaders commented on the consequences of depleted inventory, including OB Jacobi, president of Windermere Real Estate.
“While pending sales are down double digits in King County, it’s not because there are fewer people buying, it’s because there is far less to buy,” according to Jacobi. “That’s why home prices tell the true story of this market and the huge discrepancy between supply and demand. As long as this imbalance remains, prices will continue to see steep increases, just as they did in December and throughout 2017.”
Northwest MLS statistics show prices rose 11.4 percent system-wide for the 7,642 completed sales of homes and condos. Thirteen of the 23 counties in the report had double-digit price hikes from a year ago. Two counties reported price drops: Chelan (-11.2 percent) and Douglas (-6.5 percent).
Within the Puget Sound region, King County registered the sharpest escalations at nearly 16 percent. Year-over-year prices jumped from $505,000 to $585,000. For single family homes in King County, the hike was similar (about 15.5 percent), rising from $550,000 to $635,000 at year end.
Condo prices surged 28 percent in King County over the past twelve months, from $315,000 to $402,000. During the same year-over-year period, active listings fell from 346 units to 206 (down more than 40 percent), leaving only about 10 days of supply (0.35 months of inventory).
System-wide, there is a little more than a month’s supply (1.12 months) of homes and condos, with the shortages most pronounced in the four-county Puget Sound region. Three of those counties – King, Kitsap and Snohomish – have less than a months supply; Pierce County is somewhat better off with 1.1 months.
“While all year we’ve been bemoaning lack of inventory and escalating prices, the statistics show 2017 was a banner year in many respects for real estate in the Puget Sound region and throughout the Northwest,” stated Mike Grady, president and COO of Coldwell Banker Bain. He cited year-over-year gains in both prices and values, commenting “As a result of this strong market, homeowners are experiencing bountiful gains in property values.”
Brokers expect momentum to continue despite uncertainty about interest rates and taxes.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate believes the Central Puget Sound housing market will remain one of the strongest in the nation. “It will be another happy new year for real estate activity.” As the new year unfolds, he expects buyers “will emerge from winter holiday hibernation in big numbers” in part thanks to the Seahawks. “Without the Seahawks in the football playoffs, the 2018 housing market will be more intense earlier in January rather than heating up after the Super Bowl,” Scott remarked.
Scott also anticipates a “frenzied, multiple-offer market” in the more affordable and mid-price ranges, as well as “good-to-strong” sales activity in the luxury market close to the job centers. Positive job growth and attractive interest rates will propel activity, he suggests, adding “In the more affordable and mid-price ranges, the impact of the new federal tax policy is minimal.”
Wilson also believes the new tax code will not have an immediate impact on home sales in Kitsap County. “The majority of our purchasers are buying for lifestyle reasons such as a new job, transfer of job or duty station, or household size expanding or contracting.” He suggests 2018 “will look a lot like 2017” but everything will be amplified due to the extreme shortage of active listings.
Grady concurred. “As we look forward to 2018 we continue to believe this is a great time to buy real estate. We see only positive returns for homeowners and real estate investors this year and likely for several years to come.”
Moorhead anticipates aggressive buyer activity through May, but expects some short-term flattening thereafter with single-digit appreciation in the range of 5-to-7 percent. Builders still have memories of 2008, but with moderate activity and price increases likely to be sustained, “they are cautiously optimistic.”
Luxury buyers seem to be undeterred by the change in the mortgage interest deduction, Moorhead noted (the bill lowered the cap from $1 million to $750,000 for primary residences). He said they polled their top 30 luxury home buyers regarding the change. The most common responses were “disappointment at losing a great tax planning deduction,” Moorhead reported, but added, “Those surveyed said it would not change the style of home or price point for the homes they are looking to purchase.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 26,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
Statistical Summary By Counties
Market Activity Summary and 4-County Puget Sound Region Pending Sales (PDF)
Courtesy of NWMLS