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, noted that last month’s pending sales in
King, Snohomish, Pierce and Kitsap Counties were the best-ever for the month of 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 home buyers 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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

REGIONAL ECONOMIC OVERVIEW

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).

Year-over-year comparisons show pending sales increased nearly 3%, closed sales dropped about 12.3%
and prices increased 5.7%.

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.

“No wonder the number of closed sales is down – there’s hardly anything to buy,” proclaimed Beeson.

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.

KIRKLAND, Washington (May 6, 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 high density properties in Seattle and elsewhere, on more space and less density. It makes social distancing
easier!”

Young expects the trend of households moving to outer counties will likely accelerate in the coming
weeks. “Older households in Seattle and other urban centers will be attracted to lower density areas
because 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 home builders “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.”

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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist, Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

A MESSAGE FROM MATTHEW GARDNER

Needless to say, any discussion about the U.S. economy, state economy, or housing markets in the first quarter of this year is almost meaningless given events surrounding the COVID-19 virus.

Although you will see below data regarding housing activity in the region, many markets came close to halting transactions in March and many remain in some level of paralysis. As such, drawing conclusions from the data is almost a futile effort. I would say, though, it is my belief that the national and state housing markets were in good shape before the virus hit and will be in good shape again, once we come out on the other side. In a similar fashion, I anticipate the national and regional economies will start to thaw, and that many of the jobs lost will return with relative speed. Of course, all of these statements are wholly dependent on the country seeing a peak in new infections in the relatively near future. I stand by my contention that the housing market will survive the current economic crisis and it is likely we will resume a more normalized pattern of home sales in the second half of the year.

HOME SALES

• There were 13,378 home sales during the first quarter of 2020, a drop of only 0.2% from the same period in 2019, but 27% lower than in the final quarter of 2019.
• The number of homes for sale was 32% lower than a year ago and was also 32% lower than in the fourth quarter of 2019.
• When compared to the first quarter of 2019 sales rose in eight counties and dropped in seven. The greatest growth was in Cowlitz and Lewis counties. The largest declines were in Island and Snohomish counties.
• Pending sales — a good gauge of future closings — rose 0.7% compared to the final quarter of 2019. We can be assured that closed sales in the second quarter of this year will be lower due to COVID-19.

HOME PRICES

• Home-price growth in Western Washington rose compared to a year ago, with average prices up 8.7%. The average sale price in Western Washington was $524,392, and prices were 0.4% higher than in the fourth quarter of 2019.
• Home prices were higher in every county except San Juan, which is prone to significant swings in average sale prices because of its size.
• When compared to the same period a year ago, price growth was strongest in Clallam County, where home prices were up 21.7%. Double-digit price increases were also seen in Kitsap, Skagit, Mason, Thurston, and Snohomish counties.
• Affordability issues remain and, even given the current uncertain environment, I believe it is highly unlikely we will see any form of downward price pressures once the region reopens.

DAYS ON MARKET

• The average number of days it took to sell a home in the first quarter of this year dropped seven days compared to the first quarter of 2019.
• Pierce County was the tightest market in Western Washington, with homes taking an average of only 29 days to sell. All but two counties — San Juan and Clallam — saw the length of time it took to sell a home drop compared to the same period a year ago.
• Across the entire region, it took an average of 54 days to sell a home in the first quarter of the year — up 8 days compared to the fourth quarter of 2019.
• Market time remains below the long-term average across the region. This is likely to change, albeit temporarily, in the second quarter due to COVID-19.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Given the current economic environment, I have decided to freeze the needle in place until we see a restart in the economy. Once we have resumed “normal” economic activity, there will be a period of adjustment with regard to housing. Therefore, it is appropriate to wait until later in the year to offer my opinions about any quantitative impact the pandemic will have on the housing market.

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

KIRKLAND, Washington (April 6, 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.

Note to editors: On March 17, in accordance with an emergency declaration by Gov. Inslee limiting the size of public gatherings, Northwest MLS announced it was temporarily disabling the public and broker open house features in the MLS system. Following modifications made on March 28, brokers were urged to restrict in-person engagements and advised that limited personal interactions to show properties when necessary were permitted by appointment only with no more than two people, including the broker. Additionally, those two persons must strictly follow CDC (Centers for Disease Control and Prevention) social distancing guidelines. NWMLS provides ongoing updates to its members that emphasize balancing housing needs with the industry’s paramount concerns for the safety of the public and preventing the spread of the virus.

“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-over- year 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.

Northwest MLS representatives were generally upbeat about the adjustments being made and the prospects for recovering as brokers navigate through the crisis, although one broker noted the high-end market has been affected in a negative way.

“Some lenders pulled back from the market and more so in the upper end price range jumbo market,” Deely reported. “One lender pulled funding on fully approved jumbo loans only days from closing, leaving buyers unable to perform,” he explained, adding, “The luxury market has had a distinct drop in showing traffic as compared to other price ranges.” He also said the use of virtual showings and web site viewings “are experiencing record traffic as potential buyers utilize today’s advanced, remote viewing tools.”

“The good news is that it’s a great time now for both buyers and sellers,” said Grady. “Buyers have access to extremely low interest rates and those sellers in the market are motivated,” he explained. “For sellers, the continued low inventory and expected slowing of new listings over the next few weeks means their homes can be seen now like never before.”

Lennox Scott agreed. “With social distancing guidelines in place, buyers and sellers can take advantage of historically low interest rates in the mid-threes. With inventory shortages in many price ranges, the focus remains on each new listing. Though our business practices have adjusted, we’re seeing sales activity starting to pick back up.”

“The Puget Sound was in a strong position when COVID-19 hit and will be set to flourish again once this situation has passed,” suggested Gardner, adding, “Mortgage rates have been making some unusual moves over the past few weeks and are highly likely to retest historic lows in the next few months.”

“Real estate professionals across all markets have stepped to the plate providing resources to their clients and the public at large in a time when there is so much noise and misinformation,” noted Leach.

Veteran broker Gary O’Leyar said he has not seen anything comparable to what is currently taking place during his 45 years in real estate, but he noted there is a historical precedent. “During the Great Depression, real estate values only fluctuated by about 7% while the stock market crashed,” stated O’Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties.

“The Stay Home, Stay Healthy order truly underscores some of the most positive, basic core values and benefits of our region’s real estate,” O’Leyar believes. “Homemade”, “Home Sweet Home”,” Home is Where the Heart Is” and “There’s No Place Like Home” are just a few visceral perks as well, he suggested. “Although the stock market has certainly created and affected great wealth, real estate investment provides tangible value with shelter, comfort and places to conduct our business enterprises. The inherent benefits and qualities of real estate ensure long range value and provide tangible proof of its place in our economy as an alternative gold standard.”

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.

December’s volume of active listings included 3,777 new listings added during the month, but during the same timeframe, 5,943 sellers accepted offers on their properties. That number of pending sales was up about 4.7% from twelve months ago.

Brokers said December is typically a slow month for home sales with holidays and historically cold, wet weather, but several MLS representatives commented on last month’s surge in activity:

• “December 2019 proved to be better in just about every single category than December of 2018 – this notwithstanding weather that was not as mild as 2018, and weather typically has an impact on sales.”-Mike Grady, president and COO of Coldwell Banker Bain.
• “Historically low interest rates and strong job growth continue to drive the Puget Sound housing market, which is already sizzling as we begin the new decade. In the more affordable and mid-price ranges, many areas are seeing frenzied sales activity with multiple offers on most properties.”-J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.
• “Home sales continued to be strong through December, fueled by low interest rates and new job creation. Hot spot locations continue to experience multiple offers on properly priced inventory.”-Dean Rebhuhn, owner of Village Homes and Properties in Woodinville.
• “December was one of the most active in recent years with an unusual number of ready, willing, and able buyers in the Seattle market. These buyers were competing for little inventory as the year ended.”-John Deely, principal managing broker, Coldwell Banker Bain.
• “December was a bit of an anomaly in the King County real estate market. Although appreciation has slowed considerably from the 14% or so annual appreciation increases that we experienced during the market frenzy years, inventory continues to get tighter. We experienced very high demand for housing.” – Gary O’Leyar, designated broker/owner, Berkshire Hathaway HomeServices Signature Properties in Seattle.

Northwest MLS member-brokers recorded 7,093 completed transactions during December, a gain of more than 11% from the 6,374 closed sales of the same month a year ago. Prices on last month’s closed sales of single family homes and condos rose 8.75% from a year ago. For the MLS market overall the price was $435,000 versus the year-ago figure of $400,000.

For the four-county Puget Sound region (encompassing King, Kitsap, Pierce and Snohomish counties), the median sales price for December’s closed sales was $495,000, up 10% from the year-ago figure of $449,950.

In King County, which had the highest volume of sales and the highest prices, the median sales price for last month’s closed sales was $615,000. That was an increase of about 3% from a year ago. Prices in King County peaked in May at $645,000.

Deely, a member of the NWMLS board of directors, reported “unusually brisk activity” in the luxury market as the year wound down, with several multimillion-dollar sales coming in all cash with less than two-week closings. Another noticeable trend he cited was foreign buyers and sellers anxious to complete buy-sell transactions before year end. “If this is any indication of the 2020 market, then we will be moving more towards the blistering market of 2017, swinging away from the more balanced market of 2019,” he proclaimed.

Some brokers expect the pressure on prices to ease during the first quarter of the year as inventory improves.

“We will see increased new inventory in the 1st quarter of 2020 resulting in a better selection of homes,” declared Rebhuhn, who added, “Buyers should be ready to supply sellers with prequalification letters including satisfaction of major underwriting elements.”

Scott said some relief should be on the way as the weather warms up and sellers choose to put their home on the market, but he also cautioned it’s possible the trend of fewer resale listings than usual will continue on the Eastside. He described the Eastside housing market as “particularly hot,” adding, “It shows no sign of slowing down anytime soon with recent job growth announcements and an extreme shortage of unsold inventory priced up to $1 million.”

Brokers in several counties outside of King County also commented on inventory shortages and the velocity of sales.

Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, said Kitsap, Mason, Pierce and Jefferson counties continue to have constrained inventory, and “the market remains very competitive in all price categories.” NWMLS figures show December’s inventory in those four counties declined more than 35% from the selection of a year ago, while prices jumped 10.4%. Collectively, there is less than a month’s supply (0.94 months) in these South Sound counties.

Leach also noted rentals are very tight with new apartments rented as soon as they are finished. Builders are “chasing the market with most of their inventory being sold before they are finished,” added Leach, a member of the Northwest MLS board of directors.

Wilson, whose office is also in Kitsap County, said more and more of their buyers do not work in Kitsap, adding areas connected to the ferry system are seeing more and more commuters purchase homes “because we are still more affordable than King County with a much higher quality of life.” He also said, “The unheard story out there is the one of many sellers who would like to sell their home but cannot find a home to buy in Kitsap.”

Young said December’s double-digit price increases in several counties reflect the long-term trend of increased interest along the I-5 corridor.

Looking ahead, brokers expect brisk activity.

Grady said, “With inventory below one month in King County, we can only surmise that 2020 will show a return to rising home prices as a result of the lack of inventory and continued robust job market. While buyers will continue to benefit from low interest rates, there are simply not enough homes for sale. These predictors indicate that the first quarter of 2020 will be active.”

Beeson, also a member of the NWMLS board of directors, underscored the fact that new construction falls further behind the need each year. “We continuously see multiple offer situations in the median or lower prices ranges. Price creep in Pierce County continues to be above 8% year-over-year for the past three years.”

“Clients often ask for our ‘crystal ball’ projection regarding the direction the real estate market is heading,” stated O’Leyar. He tells them “Follow the employment numbers,” citing State Employment Security Department reports showing the unemployment rate in King County for November 2019 was 2.3%, the lowest rate for any month measured since January 2016 and the highest employment rate since November 2017.

“The only sound reason for waiting to buy real estate in the Greater Seattle market now would be finding the suitable home versus anticipating the market to get any less challenging for buyers in the near future,” O’Leyar remarked.

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.

Northwest MLS director John Deely also commented on last month’s pace of activity. “Motivated buyers jumped into the market to capitalize on motivated sellers with both groups looking to complete their real estate goals by year’s end,” he reported. “The upper end market saw an influx of cash buyers looking to grab trophy properties, notably buyers and investors from California looking to diversify their real estate holdings,” added Deely, principal managing broker at Coldwell Banker Bain’s Lake Union Office in Seattle.

Brokers reported 11,366 total active listings at month end, down more than 28 percent from twelve months ago when there were 15,830 active listings. November’s selection was down about 21 percent from October.

“The housing market is virtually sold out in the more affordable and mid-price ranges where 75 percent of sales activity occurs in each market area,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. With December typically marking a low point for new listings coming on the market, and the lower level of unsold inventory, Scott said “the pressure is on despite the winter chill.” This pressure is sending prices higher in the more affordable and mid-price ranges, according to Scott, who does not expect any easing until spring when new listings begin to increase.

James Young, director of the Washington Center for Real Estate Research, commented on price rebounds in Pierce County. “Some parts of this county only recently reached price levels higher than 2007. Now they are rapidly catching up with other areas. It continues to be one of the hottest markets in the U.S.”

“While much of the U.S. has seen declines in pending sales, not so in Puget Sound,” declared Dick Beeson, a member of the Northwest MLS board of directors. He points to the year-over-year gain in pending sales in the tri-county area (up more than 9%) and the sharp drop in active listings (down more than 34%), describing it as a perfect storm. “Sellers won’t come on the market because they think they can get more in the future or they have nowhere to go, and buyers, who have tried to avoid bidding wars, often mistakenly think they can sit back and pick and choose, looking for bargains.”

Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor, said the news for buyers is, if there’s a bargain out there, others will find it too, and they’ll be competing once again. He said some sellers also have unrealistic expectations if they think they need not do improvements before selling. “The news to sellers is buyers are looking for move-in-ready homes. They don’t want to ‘fix it up’ after they move in.”

Commenting on strong activity in Kitsap and Mason counties, Young said it represents a trend toward value and expansion of the “Puget Sound Economic Zone,” rather than a focus solely on Seattle. He also suggested in-migration of people who are cashing out of expensive markets to retire is also at play in these two counties plus Clallam County. “In these relatively good value markets, people trading down are beating out first-time buyers.”

November’s listing and sales numbers continue to illustrate that buyers are driving to affordability for their home purchases, according to Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. “Buyers are going north, south and east to find homes that fit their budgets and lifestyles,” he remarked.

Rebhuhn said in addition to strong sales activity in Snohomish and Pierce counties, Kittitas County continues to experience strong home sales. Pending sales jumped nearly 17% from a year ago as buyers sought affordable prices. Last month’s closed sales in Kittitas County had a median price of $335,000, about 55% of the price in King County ($612,000).

Buyers can also find good values to the west, in Kitsap County, reported Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale and a Northwest MLS director. Like elsewhere, inventory in Kitsap County is tight, with active listings down nearly 29% from a year ago. Both pending sales and closed sales rose slightly, while median prices for single family homes and condos (combined) surged more than 15%, from $330,000 to $380,916.

“Overall, real estate sales remain strong and robust in Kitsap County, with well-priced inventory selling in less than seven days in the price ranges of $350,000 or less,” remarked Leach. “Very favorable interest rates are inspiring renters and first-time homebuyers to enter the marketplace during the winter months, thus buoying sales,” he added. He also noted permits for new single family homes, apartments, and townhomes are on the rise countywide, while condo activity is dormant.

Leach said the military continues to have a strong and growing presence in Kitsap County, which he described as “a great place to grow a family or retire.” Another expected boost to its economy and real estate segment will be the early 2020 opening of Harrison Hospital in Silverdale, and its 2,000 employees.

The latest NWMLS report shows considerable variation in activity among counties and sub-markets. Twelve of the 23 counties in the report had year-over-year drops in the volume of closed sales, but only three counties reported declines in median sales prices. Price changes ranged from a drop of nearly 8% in Pacific County to a gain of 17.4% in Clallam County.

Similarly, the condo segment, accounting for about 13 percent of last month’s activity, had mixed results. Inventory remained tight, with 19.8 fewer new listings added during November than the same month a year ago. The number of total active listings slipped more than 23% compared to a year ago.

Both pending sales and closed sales of condos improved on a year ago. Last month, MLS members reported 1,027 pending sales for a gain of nearly 8.8% from a year ago. Closed sales increased 8.3%, from 806 transactions to 873. Prices were up nearly 4.5%, rising from $335,000 a year ago to $350,000 for November’s completed transactions.

NWMLS brokers tended to shrug off this year’s seasonal slowdown, while cautioning procrastinators.

“As we head into the winter months we’re seeing the normal tapering off of demand, but there are still plenty of buyers in the market so I don’t expect things to slow down too much,” remarked OB Jacobi, president of Windermere Real Estate. “Looking forward, home prices will likely end the year higher than last year, but not by much. Price growth should pick up some steam again in 2020 thanks to low interest rates and continued demand for homes,” he added.

If mortgage rates stay below 4%, while prices rise and inventory remains tight, Grady says “We could see a real estate market in 2020 that is even stronger than 2019 with homes prices increasing again, perhaps even 7% or more.”  That’s good news for sellers, he stated, adding, “Buyers should think about taking advantage of these record-setting low interest rates now.”

Leach agrees. “Now is the time to buy or refinance while interest rates remain at all-time lows. Well valued and priced inventory will sell rapidly across the holidays and into the winter season.”

“How can buyers not take advantage of the lowest interest rate environment in decades?” wondered Dick Beeson, adding, “The psychological highs and lows surrounding buying or selling a home today are tremendous. Both buyers and sellers need solid advice from a professional who can filter the noise and help them make intelligent, informed decisions.”

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.”

Dean Rebhuhn, owner of Village Homes and Properties in Woodinville, said market hot spots are drawing multiple offers, fueled by the combination of moderating (or lowered) prices and strong job creation. He also noted first-time home buyers are taking advantage of many low down payment loan programs, such as state bonds, HomeReady mortgages by Fannie Mae, and other assistance from FHA, VA, and USDA (US Department of Agriculture). “More flexible underwriting guidelines are also allowing first-time home buyers a better opportunity to buy,” according to Rebhuhn.

Another company leader expects strong price hikes. “As we enter the last two months of the year, we see a pressure cooker developing in the more affordable and mid-price ranges, and we predict strong price appreciation in 2020,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

With the transition to the winter market, Scott anticipates a “clean-up” of unsold inventory when listings expire and some sellers take their homes off the market over the holidays, with plans to reposition them in the spring. “Each year during the November through February time period, we see the fewest new listings come on the market, resulting in the lowest point of unsold listings occurring after the first of the year,” he explained.

With the backdrop of “extremely strong job growth and interest rates in the threes,” Scott says the extra backlog of buyers will enter the market after the holidays, but new listings won’t show up in larger numbers until March. “Therefore, we predict healthy price appreciation after the first of the year.”

A similar scenario exists in Kitsap County where YOY inventory is down nearly 27%, and broker Frank Wilson believes “come January there will be even fewer homes on the market.” Both pending and closed sales are up in Kitsap County compared to last year, prompting Wilson, the branch managing broker and regional manager at John L. Scott Real Estate in Poulsbo, to suggest, “An end to the housing shortage is nowhere in sight.”

With fewer homes on the market and rising sales prices (up 12.6%) in Kitsap County, but a seasonal shrinkage of buyers, Wilson says sellers are asking if it’s a good time to put their home on the market. “The answer would be yes,” he stated, adding, “There are fewer active listings competing for your home, and active buyers at this time of year are serious.”

Wilson also cited strong traffic at open houses for new listings, multiple offers, and homes selling at list price with few or no seller concessions as further indicators of today’s market. Cash and conventional financing are the leading methods of purchase, he noted.

Northwest MLS figures show sales prices continue to be wide ranging, not only when comparing counties in the report, but also within many counties.

In King County, for example, the median price on last month’s 2,757 completed transactions was $605,000, down about 1.4% from a year ago – one of only two counties where YOY prices slipped. (Clark County reported a drop of 2.75%.) Within King County, where Northwest MLS tracks 30 sub-areas, median sales prices ranged from $371,000 (in Des Moines/Redondo Beach) to $1,892,500 (in Bellevue west of I-405).

Year-over-year price changes ranged from a drop of nearly 20% (in Vashon) to a jump of more than 21% (in Bellevue west of I-405).

Beeson said the South Sound market is experiencing sticker shock, citing an analysis published earlier this year by Redfin showing Tacoma outgained other metro areas across the nation with the fastest percentage of home equity increases since 2012. That surge may be moderating, as prices from a year ago are up more than 8.7%. Based on October figures, the median price is Pierce County, at $360,000, is more affordable than any of the nearby counties of Kitsap ($385,000), Snohomish ($475,000), and King ($605,000).

Northwest MLS members tallied 8,335 closed sales last month, improving on both the previous month (up 4.7%) and same month a year ago (up 4.1%). Through 10 months, closed sales are lagging 2018 totals by 1,140 units (-1.4%).

The area-wide median price on October’s completed transactions was $420,000, matching September and surpassing the year-ago price by nearly 7.7%.

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%.

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.

KIRKLAND, Washington (August 5, 2019) – 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 fast through the winter of 2019 and into 2020. Now is the time to buy, sell, move up or move down, but be realistic 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 Moody’s.

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.

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.

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 Northwest MLS inventory at the end of May underscores Scott’s point. It shows only 13.8 percent of the listings of single family homes 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).

Condos:

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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

ECONOMIC OVERVIEW

Washington State employment slowed to an annual growth rate of 1.7% — a level not seen since 2012 — and continues a trend of slowing that started in the summer of 2018. I was a little surprised to see such a significant drop in employment growth, but it may be due to the state re-benchmarking their data (which they do annually). As such, I am not overly concerned about the lower-than-expected numbers but will be watching to see if this trend continues as we move through the spring months. The state unemployment rate was 4.5%, marginally below the 4.6% level a year ago.

My latest economic forecast suggests that statewide job growth in 2019 will be positive but is expected to slow. We should see an additional 84,000 new jobs, which would be a year-over-year increase of 2.2%.

HOME SALES

• There were 13,292 home sales during the first quarter of 2019. Year-over-year, sales were down 12.3% and were 23.4% lower than the fourth quarter of 2018.​
• It is quite likely that part of the slowdown can be attributed to the very poor weather in February. That said, anecdotal information from our brokers suggests that March was a very active month and I expect to see sales rise again through the spring selling season. Notably, pending home sales were only off by 3.5% from the first quarter of 2018.​
• All counties contained in this report saw sales drop when compared to a year ago. The greatest drops were in the relatively small counties of San Juan, Clallam, Island, and Kitsap.​
• The decline in interest rates during the first two months of the quarter nudged many home buyers off the fence. I believe this will cause a significant bump in sales activity in the second quarter numbers.

HOME PRICES

• In combination with the factors discussed earlier, the 40% increase in listings has caused home price growth to taper to a year-over-year increase of 3.3%.
• Home prices were higher in every county except Clallam. While the growth of pr
  ices is slowing, the strong local economy, combined with lower interest rates, will cause home prices to continue rising through 2019.
• When compared to the same period a year ago, price growth was strongest in San Juan County, where home prices were up 36.4%. Only one other county experienced a double-digit price increase.
• As I have said for quite some time now, there must always be a relationship between incomes and home prices, and many areas around Western Washington are testing this ceiling. That said, the region’s economy continues to perform well and incomes are rising, which, in concert with low interest rates, will allow prices to continue to rise but at a significantly slower pace.

DAYS ON MARKET

• The average number of days it took to sell a home matched the same quarter of 2018.
• Pierce County was the tightest market in Western Washington, with homes taking an average of 40 days to sell. There were seven counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in seven counties and one was unchanged.
• Across the entire region, it took an average of 61 days to sell a home in the first quarter of 2019. This matches the level seen a year ago but is up by 10 days when compared to the fourth quarter of 2018.
• In the last two Gardner Reports, I suggested that we should be prepared for days-on-market to increase, and that is now occurring. Given projected increases in inventory, this trend will continue, but this is typical of a regional market that is moving back toward balance.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am again moving the needle toward buyers as price growth moderates and listing inventory continues to rise.

I do not see any clouds on the horizon that suggest we will see a downturn in sales activity in 2019. That said, this will be the year we move closer to balance. Buyers who were sidelined by the significant increase in listings in the second half of 2018 are starting to get off the fence as mortgage rates drop. I foresee a buoyant spring market ahead.

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.

Northwest MLS members report 6,750 completed transactions during March, a drop of about 8.3 percent from a year ago, and likely a result of February’s heavy snows that resulted in hazardous roads and kept many people housebound for several days.

“Although closed sales were down in March, we believe February’s snowy weather slowed the closing of pending transactions,” suggested Mike Grady, president and COO of Coldwell Banker Bain. “Most notably in determining the strength of our market is the ratio of new listings and pending sales, which were close, resulting in less than two months of inventory in many areas. We expect the market to continue these trends as we head into what is always the busiest time of the year.”

Scott also expects momentum to continue. “Looking ahead, more new listings are on the way, and the more affordable and mid-price ranges will see strong price appreciation this year – just not at last year’s extreme levels,” he commented.

Deely said one change from past markets is the trend of buyers who are unwilling to participate in properties with an offer review date. “This has the notable effect of fewer competing offers and an increase in properties going past their offer review date without a sale.”

Condo activity remains mostly unremarkable, although inventory is improving. Brokers added 1,487 new listings to the selection last month and reported 1,387 pending sales. Inventory at month end stood at 1,610 active listings, up more than 85 percent from a year ago. That still leaves months of supply below two months in many areas, including King (1.95 months of supply), Snohomish (1.1 months), Pierce (0.83 months), and Kitsap (1.67 months).

MLS members reported 932 closed sales of condominiums during March with a median price of $367,150, about the same as the year-ago price of $365,000. In King County, the median sales price for condos was $434,000, a drop of almost 7 percent from twelve months ago.

KIRKLAND, Washington (March 6, 2019) – Seattle’s snowiest month in 50 years had an obvious chilling effect on February’s housing activity, agreed officials with Northwest Multiple Listing Service. Statistics for last month show pending sales dropped nearly 14 percent compared to the same month a year ago.

“The winter weather brought the market to a halt,” stated John Deely, principal managing broker at Coldwell Banker Bain. He said last month’s series of snowstorms and frigid temperatures had a negative impact on the typical momentum that builds at the beginning of the year.

“Showing activity dropped more than 41 percent the week of the heaviest snow, and weekend keybox activity was down 80 percent,” Deely reported. “The end of the month picked up as cabin fever weary buyers unleashed themselves on the burgeoning inventory,” he added.

Despite the weather disruptions, brokers added 6,247 new listings to inventory during the month, 1,037 fewer than a year ago. At month end, Northwest MLS members reported 11,275 total active listings, a robust 42.3 percent jump from twelve months ago. Thirteen of the 23 counties served by the MLS reported year-over-year increases in inventory.

Dean Rebhuhn, owner of Village Homes and Properties, described February listings and sales as “very good,” pointing to low interest rates, new jobs, and lifestyle changes as market drivers. “New sales continue to absorb new listings,” he noted.

Northwest MLS figures show about 2.2 months of inventory system-wide, with four counties (Kitsap, Pierce, Snohomish, and Thurston having less than two months of supply. King County was slightly above two months (2.09).

“Snowmageddon notwithstanding, we saw nearly as many homes go pending (6,878) as came on the market (6,247) in February,” noted Mike Grady, president and COO of Coldwell Banker AaBain. “In Snohomish and Pierce counties, the activity was even more impressive for this time of year, with our offices pointing to an uptick in the market.”

It seemed determined buyers were undeterred by nearly inaccessible neighborhoods, based on examples Grady cited.

“A Ballard listing priced at $635,000 went on the market on a Friday and drew a whopping 132 groups previewing it that weekend, yielding 14 offers by Monday. The home sold for 22 percent above listing price,” Grady said. “In Kirkland, we heard about five new listings over $1 million coming on the market during Snowmageddon week two, and all were sold that same week,” prompting him to declare he continues to be bullish on a continued strong market for 2019.

As February temperatures plunged, prices in most counties started heating up, rising from a year ago as well as when compared to January.

Area-wide median prices for the 5,145 sales of single family homes and condos that closed last month were up 5.7 percent from a year ago, rising from $385,000 to $407,000. Compared to January, prices increased 6.6 percent. Single family home prices increased 7.44 percent, while condo prices were nearly flat (up about 1.3 percent).

In King County, brokers reported a price gain of nearly 2.4 percent from a year ago. The median selling price jumped $14,000 from a year ago, from $590,000 to $604,000. The comparison to January shows a price increase of 6.9 percent.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate commented on the return of the multiple-offer market. “While the snow in February created a short distraction, the housing market is back on hot as we head into spring,” he remarked, reporting “Dedicated buyers braved the snow. The market is on track for a strong spring.”

“Between January and February, home prices in the tri-county King/Snohomish/Pierce area rose significantly, ending the month-over-month declines that started last May,” remarked OB Jacobi, president of Windermere Real Estate. He called the increase “pretty unexpected and likely a result of the drop in interest rates we saw in December.” Jacobi believes it’s too early to know if this is the start of a trend, but added “It might suggest that the slowing in prices that began last summer has come to an end.”

James Young, director of the Washington Center for Real Estate Research at the University of Washington, said last month’s weather made it difficult to comment on activity, but detected some patterns on prices. “Similar to previous months, prices are moving upwards the most consistently in exurban areas along the I-5 corridor. Look for prices outside the major urban areas to continue rising as the weather improves and the main selling season arrives.”

Areas outside the main Puget Sound urban regions continue to perform well, Young suggested, in part because older households continue to cash out of more expensive markets and move to the outskirts of the cities to areas that still offer good amenities for retirement and lifestyle.

Prices appear to have bottomed out to around year-ago levels, agreed Matt Deasy. Discussions with buyers who are back in the market suggest they believe prices are no longer going down and some feel like interest rates are on sale. House-hunters also seem to be encouraged by the growing selection, he remarked.

Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott’s Poulsbo office, said the market there has slowed considerably compared to last year when the spring market perked up before the more typical March and April timeframe.

“The reality is we still have low inventory, homes are going under contract faster than they are coming on the market, we are still seeing strong traffic at open houses, and we are still seeing multiple offers on correctly priced homes that are new on the market.” Wilson commented. “Waterfront homes are still at a premium on the Kitsap mainland,” he continued. “As we continue into the spring market, I think we’ll see a bump in buyers who are enjoying the continued low interest rates, although some may still be frustrated with the limited choices.”

Low and stable interest rates are particularly important to those closing larger mortgage loans, Young pointed out. “Buyers also appear to be responding to stable interest rates over the past couple of months, particularly in the higher priced areas of the region,” he commented, noting interest rates for jumbo mortgages (balances over $484,350) decreased to 4.40% from December’s rate of 4.59%.

As the pace of activity picks up, Scott emphasized the importance of buyer preparation to ensure they can secure the home of their choice. “We recommend working with a qualified broker, becoming fully underwritten by a lender, and signing up for text notifications for new listings to find success this spring.”

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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent. 

ECONOMIC OVERVIEW

The Washington State economy continues to add jobs at an above-average rate, though the pace of growth is starting to slow as the business cycle matures. Over the past 12 months, the state added 96,600 new jobs, representing an annual growth rate of 2.9% — well above the national rate of 1.7%. Private sector employment gains continue to be quite strong, increasing at an annual rate of 3.6%. Public sector employment was down 0.3%. The strongest growth sectors were Real Estate Brokerage and Leasing (+11.4%), Employment Services (+10.3%), and Residential Construction (+10.2%). During fourth quarter, the state’s unemployment rate was 4.3%, down from 4.7% a year ago.  

My latest economic forecast suggests that statewide job growth in 2019 will still be positive but is expected to slow. We should see an additional 83,480 new jobs, which would be a year-over-year increase of 2.4%.

HOME SALES ACTIVITY

• There were 17,353 home sales during the fourth quarter of 2018. Year-over-year sales growth started to slow in the third quarter and this trend continued through the end of the year. Sales were down 16% compared to the fourth quarter of 2017.​
• The slowdown in home sales was mainly a function of increasing listing activity, which was up 38.8% compared to the fourth quarter of 2017 (continuing a trend that started earlier in the year). Almost all of the increases in listings were in King and Snohomish Counties. There were more modest increases in Pierce, Thurston, Kitsap, Skagit, and Island Counties. Listing activity was down across the balance of the region.
• Only two counties—Mason and Lewis—saw sales rise compared to the fourth quarter of 2017, with the balance of the region seeing lower levels of sales activity.​
• We saw the traditional drop in listings in the fourth quarter compared to the third quarter, but I fully anticipate that we will see another jump in listings when the spring market hits. The big question will be to what degree listings will rise.

HOME PRICES

• With greater choice, home price growth in Western Washington continued to slow in fourth quarter, with a year-over-year increase of 5% to $486,667. Notably, prices were down 3.3% compared to the
  third quarter of 2018. 
                                                                               
• Home prices, although higher than a year ago, continue to slow. As mentioned earlier, we have seen
  significant increases in inventory and this will slow down price gains. I maintain my belief that this is
  a good thing, as the pace at which home prices were rising was unsustainable.
• When compared to the same period a year ago, price growth was strongest in Skagit County, where
  home prices were up 13.7%. Three other counties experienced double-digit price increases.
• Price growth has been moderating for the past two quarters and I believe that we have reached a price
  ceiling in many markets. I would not be surprised to see further drops in prices across the region in the
  first half of 2019, but they should start to resume their upward trend in the second half of the year.

DAYS ON MARKET

• The average number of days it took to sell a home dropped three days compared to the same quarter of 2017.
• Thurston County joined King County as the tightest markets in Western Washington, with homes taking an average of 35 days to sell. There were eight counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in five counties and was unchanged in two.
• Across the entire region, it took an average of 51 days to sell a home in the fourth quarter of 2018. This is down from 54 days in the fourth quarter of 2017 but up by 12 days when compared to the third quarter of 2018.
• I suggested in the third quarter Gardner Report that we should be prepared for days on market to increase, and that has proven to be accurate. I expect this trend will continue, but this is typical of a regional market that is moving back to becoming balanced.​

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am continuing to move the needle toward buyers as price growth moderates and listing inventory continues to rise.

2019 will be the year that we get closer to having a more balanced housing market. Buyer and seller psychology will continue to be significant factors as home sellers remain optimistic about the value of their home, while buyers feel significantly less pressure to buy. Look for the first half of 2019 to be fairly slow as buyers sit on the sidelines waiting for price stability, but then I do expect to see a more buoyant second half of the year.

KIRKLAND, Washington. (Jan. 17, 2019) – Members of Northwest Multiple Listing Service reported 92,555 closed sales during 2018, fewer than the previous year, but the dollar volumes surpassed 2017 by nearly $688 million for a small gain of 1.4 percent.

Measured by dollars, last year’s sales of single family homes and condominiums were valued at almost $47.2 billion across the 23 counties served by the member-owned Northwest MLS.

The sales activity reflects the work of more than approximately 31,700 brokers in more than 2,300 member offices.

Of last year’s 92,555 completed sales, 80,232 were single family homes (86.7 percent of the total) and 12,323 were condos (13.3 percent). About 12 percent of these sales were newly built residences.

The area-wide median price for last year’s sales of single family homes and condominiums (combined) was $402,000, a gain of more than 8.6 percent from the year-ago figure of $370,000.  A comparison by county shows median sales prices ranged from $154,000 in Ferry County to $620,000 in King County.

Year-over-year prices for single family homes (excluding condominiums) increased about 7.9 percent system-wide, rising from $380,000 in 2017 to last year’s median price of $410,000. Condo prices jumped 11.4 percent from the 2017 figure of $316,000 to last year’s median selling price of $352,000.

Inventory shortages persisted throughout 2018, even though brokers added more new listings (117,177 versus 114,297) last year compared to 2017. Member-brokers reported 112,267 pending sales (mutually accepted offers) during 2018, a year-over-year drop of nearly 7 percent compared to 2017.

Last year, the area-wide supply, as measured by months of inventory, averaged 1.77 months, a slight improvement on the 2017 figure of 1.48 months. Among the counties in the MLS service area, Snohomish had the lowest level, averaging just under1.4 months. In general, industry analysts use a 4-to-6 month range as an indicator of a balanced market, favoring neither buyers nor sellers.

Sales of high-end homes outgained 2017 by 6.5 percent, with homes selling for more than $1 million rising from 5,727 in 2017 to last year’s total of 6,101; of these 61 residences commanded $5 million or more. The highest priced home in the 2018 sales report, located in Medina, sold for $26,750,000.  Sales of luxury condos surged nearly 28 percent. A total of 3,332 condos sold for $500,000 or more, and 412 of these fetched $1 million or more. The three most expensive condos were in Kirkland, topped by one at Water’s Edge that sold for $6.1 million.

Among other highlights in its annual compilation of statistics, Northwest Multiple Listing Service reported:

• About 45 percent of last year’s home sales had three bedrooms; of the condo component nearly 72 percent had two or fewer bedrooms.
• The median price for a 3-bedroom home ranged from $163,500 in Ferry County to $610,000 in King County. 
• Of the condo sales, 55 percent were located in King County. 
• For the new construction component involving Northwest MLS brokers, newly built condos continued to fetch higher prices than single family homes, just like 2016 and 2017. Last year’s sales included 10,076 newly built single family homes that sold for a median price of $544,950 and 974 condos that sold for a median price of $634,950. New homes in King County commanded the highest prices: $824,925 for single family homes and $835,000 for condos (although San Juan County reported a single sale of a newly built condo, with a price of $1.6 million). 
• Prices vary widely among school districts. Single family homes that sold in the Mercer Island district had a median price of $1.7 million, the highest among all districts.

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.

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.

Median prices by county (single family homes only)

The Kitsap County market is also different than Seattle, according to Frank Wilson, Kitsap regional manager and a branch managing broker at John L. Scott Real Estate in Poulsbo.

“Kitsap still has a good deal of pent-up demand, although our listing inventory is beginning to grow,” he stated. Even with a gain in the number of active listings of nearly 16 percent compared with a year ago, the current supply of 624 homes and condos is well below the 1,400 to 1,600 listings that typifies a “normal” market, according to Wilson.

“We still only have about 1.8 months of supply, we continue to see good traffic at our open houses and multiple offers on newly listed homes, and a correctly priced home will still sell in less than 30 days,” reported Wilson, a member of the Northwest MLS board of directors.

Another MLS director, John Deely, said recent increases in listings have led to changes in the Seattle market. “Most notably, buyers are taking more time and not feeling rushed to make quick decisions,” he stated. “Most of the contingencies allowing buyers to perform their due diligence, including financing and inspection, have returned to the purchase and sale agreements,” explained Deely, the principal managing broker at Coldwell Banker Bain.

Deely reported multiple offers on properly priced properties still occur but the escalating prices driven by multiple offers and cash buyers paying crazy “got to have it prices” are giving way to a “more normal and sane market.”

Northwest MLS representatives expect the tilt toward a more balanced market to continue:

•  “I expect this trend (to a more balance market) to continue into 2019, which will cause appreciation to slow somewhat, while giving buyers more options,” stated Jacobi. “This does not mean the real estate sky is falling, rather it’s a much-needed shift towards a more sustainable, balanced market,” he emphasized.

• J. Lennox Scott, chairman and CEO at John L. Scott Real Estate, expects slightly higher unsold inventory between now and February “for the first time in years, instead of a market that’s virtually sold out.” Describing 2018 as a “transition year” from an extreme frenzy market to a “strong” housing market, he predicts the holiday backlog of buyers will start searching in January. “We will experience a strong/surge housing market in the spring, which will taper off to a strong market for the remainder of 2019.”

• Wilson forecasts a sellers’ market to start off 2019, and perhaps into the first part of the year. He suggests more areas of Kitsap County, such as Port Orchard, will experience positive effects of the new fast ferry, continuing what is already occurring in Port Orchard and Kingston.

• Moorhead said builders will still bank on continued job growth “even though huge concessions are being offered for completed homes as the yearend nears.” He predicts rising interest rates will have a modest impact on buyers entering or re-entering the market.

The Mortgage Banker Association, Freddie Mac and Realtor.com all expect mortgage interest rates to rise soon to a range of 4.8 percent to 5.1 percent.

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, 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.

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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent. 

ECONOMIC OVERVIEW

Washington State continues to be one of the fastest growing states in the nation and there is little to suggest that there will be any marked slowdown in the foreseeable future. Over the past year, the state has added 105,900 new jobs, representing an annual growth rate of 3.2%. This remains well above the national rate of 1.65%. Private sector employment gains continue to be robust, increasing at an annual rate of 3.7%. The strongest growth sectors were Construction (+7.4%), Information (+6.2%), and Professional & Business Services (+6.1%). The state’s unemployment rate was 4.5%, down from 4.8% a year ago.            

All year I’ve been predicting that Washington State’s annual job growth would outperform the nation as a whole, and we now know with certainty that this is going to be the case. Furthermore, I am now able to predict that statewide job growth in 2019 will be equally strong, with an expected increase of 2.6%.

HOME SALES ACTIVITY

• There were 22,310 home sales during the third quarter of 2018. This is a significant drop of 12.7% compared to the third quarter of 2017.
   
• The number of homes for sale last quarter was up 14.5% compared to the third quarter of 2017, continuing a trend that started earlier in the year. However, the increase in listings was only in Seattle’s tri-county area (King, Pierce, and Snohomish Counties) while listing activity was down across the balance of the region.
   
• Only two counties had a year-over-year increase in home sales, while the rest of Western Washington saw sales decrease.
   
• The region has reached an inflection point. With the increase in the number of homes for sale, buyers now have more choices and time to make​ a decision about what home to buy.

HOME PRICES

• As inventory levels start to rise, some of the heat has been taken off the market, which caused home prices in the Western Washington region to go up by a relatively modest 6.2% over last year to $503,039. Notably, prices are down by 4.4% when compared to the second quarter of this year.
   
• Home prices, although higher than a year ago, continue to slow due to the significant increase in the number of homes for sale. This, in my opinion, is a very good thing.​​
   
• When compared to the same period a year ago, price growth was strongest in Lewis County, where home prices were up 15.3%. Six other counties experienced double-digit price increases.​
   
• Slowing price growth was inevitable; we simply could not sustain the increases we’ve experienced in recent years. Lower rates of appreciation will continue until wage growth catches up.

DAYS ON MARKET

• The average number of days it took to sell a home dropped by four days compared to the same quarter of 2017.​
• Across the entire region, it took an average of 39 days to sell a home in the third quarter of this year. This is down from 43 days in the third quarter of 2017 and down 2 days when compared to the second quarter of 2018.​
• King County continues to be the tightest market in Western Washington, with homes taking an average of only 19 days to sell. Every county in the region other than Skagit and King — which both saw the time on the market rise by 2 days — saw the length of time it took to sell a home drop when compared to the same period a year ago.​​
• More choice in the market would normally suggest that the length of time it takes to sell a home should rise, but the data has yet to show that. That said, compared to last quarter, we are seeing some marked increases in days on market in several counties, which will be reflected in future reports.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I started to move the needle toward buyers last quarter and have moved it even further this quarter. Price growth continues to slow, but more significant is the rise in listings, which I expect to continue as we move toward the quieter winter period.           

I believe that psychology will start to play a part in the housing market going forward. It has been more than 15 years since we’ve experienced a “balanced” market, so many home buyers and sellers have a hard time remembering what one looks like. Concerns over price drops are overrated and the length of time it’s taking to sell a home is simply trending back to where it used to be in the early 2000s.

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.

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.

KIRKLAND, Washington (August 6, 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 largest volume since September 2016. System-wide there is 1.8 months of supply, the highest level since October 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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent.

ECONOMIC OVERVIEW

The Washington State economy added 83,900 new jobs over the past 12 months, representing an annual growth rate of 2.5%. This is a slowdown from the last quarter, but employment growth remains well above the national rate of 1.6%. Employment gains continue to be robust in the private sector, which was up by 2.8%. The public sector (government) grew by a more modest 1.1%.

The strongest growth sectors were Retail Trade and Construction, which both rose by 4.8%. Significant growth was also seen in the Education & Health Services and Information sectors, which rose by 3.9% and 3.4%, respectively.

The State’s unemployment rate was 4.7%, down from 4.8% a year ago. Washington State will continue adding jobs for the balance of the year and I anticipate total job growth for 2018 will be around 80,000, representing a total employment growth rate of 2.4%.

HOME SALES ACTIVITY

• There were 23,209 home sales during the second quarter of 2018. This is a drop of 2.3% compared to the same period a year ago
• Clallam County saw sales rise the fastest relative to the same period a year ago, with an increase of 12.6%. Jefferson County also saw significant gains in sales at 11.1%.
• The number of homes for sale last quarter was down by a nominal 0.3% when compared to the second quarter of 2017, but up by 66% when compared to the first quarter of this year. Much has been mentioned regarding the growth in listings, but it was not region-wide. King County saw a massive 31.7% increase in inventory, though all but three of the other counties covered in this report saw the number of listings drop compared to a year ago.
• The takeaway from this data is that while some counties are seeing growth in listings — which will translate into sales down the road — the market is still out of balance.

HOME PRICES

• As inventory is still fairly scarce, growth in home prices continues to trend well above the long-term average. Prices in Western Washington rose 12.2% over last year to $526,398.
• Home prices continue to trend higher across Western Washington, but the pace of growth has started to slow. This should please would-be buyers. The spring market came late but inventory growth in the expensive King County market will give buyers more choices and likely lead to a slowing down of price growth as bidding wars continue to taper.
• When compared to the same period a year ago, price growth was strongest in Mason County, which was up 17.4%. Eleven other counties experienced double-digit price growth.
• Mortgage rates, which had been rising significantly since the start of the year, have leveled off over the past month. I believe rising rates are likely the reason that inventory levels are rising, as would-be sellers believe that this could be the right time to cash out. That said, the slowing in rate increases has led buyers to believe that rates will not jump soon, which gives them a little more breathing room. I do not expect to see any possible slowdown in demand until mortgage rates breach the 5% mark.

DAYS ON MARKET

• The average number of days it took to sell a home dropped by seven days compared to the same quarter of 2017.
• King County continues to be the tightest market in Western Washington, with homes taking an average of only 13 days to sell. Every county in the region other than Clallam saw the length of time it took to sell a home drop when compared to the same period a year ago.
• Across the entire region, it took an average of 41 days to sell a home in the second quarter of this year. This is down from 48 days in the second quarter of 2017 and down by 20 days when compared to the first quarter of 2018.
• Across the entire region, it took an average of 41 days to sell a home in the second quarter of this year. This is down from 48 days in the second quarter of 2017 and down by 20 days when compared to the first quarter of 2018.

CONCLUSIONS

This speedometer reflects the state of the region’s
real estate market using housing inventory, price
gains, home sales, interest rates, and larger economic factors. For the second quarter of 2018, I have moved the needle very slightly towards buyers, but it remains firmly a seller’s market. This shift is a function of price growth tapering very slightly, as well as the expectation that we should see more homes come on the market as we move through the balance of the year.

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. Jefferson County inventory dropped 32.2 percent year-over-year while prices surged 29.8 percent. The supply in Clallam County shrunk nearly 30 percent, with prices jumping 10.4 percent.

Twenty of the 23 counties covered by the Northwest MLS report had double-digit increases in median sales prices. Grant, Kitsap, and Skagit counties were the exceptions, each with gains under 6 percent.

Of the 29 map areas the MLS tracks within King County, six areas, including Queen Anne/Magnolia and most sub-areas of the Eastside, reported median prices topping $1 million for sales of single family homes and condos that closed during June.

Despite the overall gains, buyers might be cheered by one notable figure: The median sales price of a single family home (excluding condos) in King County fell from May, at $726,275, to June, a $715,000, for a drop of nearly 1.6 percent. That May-to-June decline hasn’t happened since pre-recession, noted MLS director Wasser, owner/broker at Prospera Real Estate in Seattle.

“While home prices are still trending above average rates, the pace is moderately slowing as the housing market becomes less frenetic,” Jacobi stated, adding, “We have a ways to go before we approach anything close to a balanced market, but we’re certainly trending in the right direction.”

The softening was evident in the four-county Puget Sound region where pending sales (mutually accepted offers) were down nearly 11 percent from a year ago. Last month’s 8,052 mutually accepted offers in King, Kitsap, Pierce and Snohomish counties was the lowest total for June since 2014.

Wasser agreed. “It’s still a seller’s market out there, but I’m seeing signs of a more balanced market on the horizon,” he stated.

While year-over-year prices rose in all counties, compared to May they were flat in some areas, including King County where the median price of $650,000 was unchanged. The overall median of $425,000 for June’s closed sales was only $5,000 higher than the previous month.

Buyers who want to live in King County still face hefty prices for existing inventory. Deely said his analysis of active listings of single family homes revealed more than a third of the choices for single family homes has asking prices of more than $1 million. And, he added, there are fewer than 80 listings (only about 2 percent) are priced below the US national median sales price of $313,000.

Escalating prices and depleted inventory in desired neighborhoods are top concerns Moorhead hears from buyers, but “they have another challenge on the list: rising interest rates.” The hikes — with more expected — are pushing buyers into a lower price point, or forcing them to come up with a larger down payment, he added.

Grady also commented on rising mortgage rates, resulting in some buyers being priced out of mortgage qualification. He also suggested the slowdown in pending sales has an international angle. “There have been slightly fewer sales to international buyers as China continues to make taking cash out of China more difficult,” he stated.

Home builders continue to be challenged. Wilson noted builders are “struggling to ramp up production to meet demand” with local regulations and processes being inhibitors.

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 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

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:

• “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;
• “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.
• “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.
• “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.

HOME SALES ACTIVITY

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.

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 the total 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 rearview 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.”

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 (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:

“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.

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.

ECONOMIC OVERVIEW

The Washington State economy added 104,600 new jobs over the past 12 months. This impressive growth rate of 3.1% is well above the national rate of 1.4%. Interestingly, the slowdown we saw through most of the second half of the year reversed in the fall, and we actually saw more robust employment growth.

Growth continues to be broad-based, with expansion in all major job sectors other than aerospace due to a slowdown at Boeing.

With job creation, the state unemployment rate stands at 4.5%, essentially indicating that the state is close to full employment. Additionally, all counties contained within this report show unemployment rates below where they were a year ago.

I expect continued economic expansion in Washington State in 2018; however, we are likely to see a modest slowdown, which is to be expected at this stage in the business cycle.

HOME SALES ACTIVITY

• There were 22,325 home sales during the final quarter of 2017. This is an increase of 3.7% over the same period in 2016.
• Jefferson County saw sales rise the fastest relative to fourth quarter of 2016, with an impressive increase of 22.8%. Six other counties saw double-digit gains in sales. A lack of listings impacted King and Skagit Counties, where sales fell.
• Housing inventory was down by 16.2% when compared to the fourth quarter of 2016, and down by 17.3% from last quarter. This isn’t terribly surprising since we typically see a slowdown as we enter the winter months. Pending home sales rose by 4.1% over the third quarter of 2017, suggesting that closings in the first quarter of 2018 should be robust.
• The takeaway from this data is that listings remain at very low levels and, unfortunately, I don’t expect to see substantial increases in 2018. The region is likely to remain somewhat starved for inventory for the foreseeable future.

HOME PRICES

• Because of low inventory in the fall of 2017, price growth was well above long-term averages across Western Washington. Year-over-year, average prices rose 12% to $466,726.
• Economic vitality in the region is leading to a demand for housing that far exceeds supply. Given the relative lack of newly constructed homes—something that is unlikely to change any time soon—there will continue to be pressure on the resale market. This means home prices will rise at above-average rates in 2018.
• Compared to the same period a year ago, price growth was most pronounced in Lewis County, where home prices were 18.8% higher than a year ago. Eleven additional counties experienced double-digit price growth as well.
• Mortgage rates in the fourth quarter rose very modestly, but remained below the four percent barrier. Although I anticipate rates will rise in 2018, the pace will be modest. My current forecast predicts an average 30-year rate of 4.4% in 2018—still remarkably low when compared to historic averages.

DAYS ON MARKET

• The average number of days it took to sell a home in the fourth quarter dropped by eight days, compared to the same quarter of 2016.
• King County continues to be the tightest market in Western Washington, with homes taking an average of 21 days to sell. Every county in the region saw the length of time it took to sell a home either drop or remain static relative to the same period a year ago.
•  Last quarter, it took an average of 50 days to sell a home. This is down from 58 days in the fourth quarter of 2016, but up by 7 days from the third quarter of 2017.
• As mentioned earlier in this report, I expect inventory levels to rise modestly, which should lead to an increase in the average time it takes to sell a house. That said, with homes selling in less than two months on average, the market is nowhere near balanced.

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the fourth quarter of 2017, I have left the needle at the same point as third quarter. Price growth remains robust even as sales activity slowed. 2018 is setting itself up to be another very good year for housing.

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.

KIRKLAND, Washington (December 6, 2017) – “Normal seasonal slowdowns” are reported by some real estate leaders with Northwest Multiple Listing Service, but other brokers say this holiday season is still drawing crowds at open houses along with competitive bidding in some neighborhoods.

Both inventory and pending sales dipped to their lowest levels since April, while prices still increased by double-digits in most of the 23 counties served by Northwest MLS.

MLS members reported 8,304 pending sales of single family homes and condos, a slight (1.6 percent) gain over the year-ago figure of 8,173. Last month’s mutually accepted offers surpassed the number of new listings (6,098) by 2,206 properties to keep supply tight.

“Until we see a balanced rate of 4-to-5 months of supply, instead of hovering around one month, we’re not likely to see much change,” remarked George Moorhead, designated broker at Bentley Properties. “However,” he added, “since we have seen these low inventory levels since 2013, maybe this is going to be the new normal.”

Moorhead, a member of the Northwest MLS board of directors, also said this time of year is actually one of the best times to find a home. “There is less competition and sellers who list their homes at this time are usually motivated to make their move. Some of the best pricing can be attained from December through early February,” he indicated.

Buyers seem to be undeterred by winter weather, holiday festivities or other seasonal or – for the most part — political distractions.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, said December “may well provide an unexpected holiday reprieve for our local, weary real estate shoppers. Combined with the seasonal pace change and real estate industry pundits’ consternation over the effect of the federal income tax bill working its way through Congress, buyers could be getting some relief.” He urged potential sellers to take note as “This could be the signal they’ve been waiting for as a good time to sell before the pending tax laws that affect real estate ownership take effect.”

For those who are both prepared and patient, OB Jacobi, president of Windermere Real Estate, said the holidays can actually be a great time to buy “because there is usually less competition and sellers are motivated to close out the year with a sale.”

More than 8,000 sellers found November to be a good time complete sales. Closed sales rose about 2.5 percent year-over-year, from 7,872 transactions to 8,068. Sales of single family homes (excluding condos) rose about 3.3 percent, but the volume of condos fell about 2.6 percent, likely due to limited selection.  

“Open houses this past weekend drew strong traffic,” reported Northwest MLS chairman John Deely, principal managing broker at Coldwell Banker Bain. He said more than a hundred groups toured a condo in the Lake Union area.

“The Seattle market is inundated with technology workers, both newly relocated and those that have been renting and are ready to set down roots,” Deely noted, adding “Investors both large and small are stepping up their purchasing, signaling strong confidence in the Greater Seattle area.”

Strong demand is not confined to Seattle.

“The velocity of market means that every time a new listing is added all eyes focus like a laser beam to see what just happened,” said Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. “If a worthy property comes on the market, buyers know it instantly as the information is streamed through every device known to man. Buyers step up and buy, quickly and efficiently.”  

Brokers are noticing the buyers include growing numbers of millennials.

“Millennial buyers continue to enter the market but the extremely low inventory is hampering their success rate in finding and securing a purchase,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood.

Haines said November activity started slow, but definitely picked up later in the month. “Earlier this year I feared signs that a bubble was building, but I no longer see that happening,” she stated.

“While we continued to experience more of the same in November related to a lack of inventory, we are seeing more homes sold year-to-date,” observed Mike Grady, president and COO of Coldwell Banker Bain.   He noted the number of new listings in King County for November increased more than 7 percent compared to last year.

Area-wide, the volume of new listings added during November rose nearly 5.6 percent (from 5,776 to 6,098) compared to the same month a year ago.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, described sales activity for new listings as “extremely strong.” Despite lower overall volumes of new listings and sales, Scott said the majority of new listings are selling within their first 30 days on the market. He calculated November’s pending sales of single family homes outgained new listings by nearly 41 percent.

Despite improvements in new listings, brisk sales kept inventory well below year-ago levels. “King County is still experiencing double-digit reductions in inventory compared to this same time last year, but the shortage is even more pronounced in some outlying counties,” Grady noted, commenting “We’re not just talking about the main commuter counties.”

Significant decreases in inventory are found in Thurston (down 31 percent), Mason (down more than 26 percent), and Cowlitz (down more than 39 percent) counties. MLS figures show inventory is down more than 24 percent in Snohomish County and nearly 29 percent in Kitsap County. Across the 23 counties, it’s down about 15.9 percent.

Measured by months of supply, there is about 1.4 months of inventory overall. In King County, supply has dwindled to 0.79 months, and only slightly better, at 0.89 months, in Snohomish County.

Home values continue to escalate across the region. The system-wide median price of $379,000 was up 10.8 percent from a year ago, with 15 counties reporting even sharper gains.

In King County the median price for single family homes and condos combined jumped 15.6 percent, from $497,254 to $575,000. For single family homes (excluding condos), the median price was $630,750, up nearly 14.7 percent from last year. Condo prices surged 17.1 percent, due to a combination of depleted inventory (down 28 percent from a year ago) and higher prices for new condos. (In King County, the condo component classified as new construction that sold during November had a median price of $873,490.)

Commenting on prices, Haines emphasized wide variations are found when comparing median sales price within most counties. In Snohomish County, for example, the median price for homes and condos that sold in Mill Creek was $590,000, while in Darrington it was $191,475. Similarly, in King County, the median price for Bellevue homes and condos was $875,000; in Tukwila the sales price was $321,194. Brokers tend to concur prices may moderate in the coming year.

“Can we as an industry sustain this 10-to-15 percent increase in prices again in 2018? I don’t think so, but I don’t know,” remarked Beeson, adding, “I only know that when sellers decide to get serious and sell their home by finally setting the right price or finally improving the condition of their property to justify their price magic happens. Houses sell, people move, lives change forever.”

“Prices are expected to see some much needed slowdown in 2018 which will help bring more balance to the market,” stated Jacobi, who also believes a housing bubble is unlikely. “Rising home prices on their own don’t lead to a bubble; a number of other factors have to come into play.”

Moorhead agreed, saying he expects 2018 “will be less glamorous with 6-to-8 percent appreciation, or even a slight flattening of the market for 8-to-12 months.” Commenting on modest gains in income, at around 2.5 percent, he remarked “No wonder buyers in the market are so frustrated and willing to make significant concessions to secure their next home. It’s like chasing a train where you just cannot catch up and only the fastest can get on.”

Brokers tended to agree some of the provisions in the widely anticipated tax reform have “the potential to negatively affect home values nationwide.” Haines said a drop in sales is expected if the proposed bill as it stands is passed.

Notwithstanding the uncertainty around tax reform, Scott remains confident: “Market conditions are set for another robust market in the year 2018,” he stated.

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.

KIRKLAND, Washington (November 6, 2017) – Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.

Pending sales rose nearly 8 percent from a year ago, closed sales were up 5.2 percent, and prices jumped about 8.2 percent, with 14 counties reporting double-digit gains. Even the number of new listings improved on the year-ago total.

Northwest MLS figures for the 23 counties it serves show members added 8,466 new listings to inventory during October, outgaining the year-ago total of 7,575 by 11.8 percent. Buyers outnumbered new listings, with 10,586 of them having their offers accepted. That number of pending sales was up nearly 8 percent from the same month a year ago.

“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.

“The market in Thurston County has never been better for sellers, and they’re getting the message,” Anderson remarked. His analysis revealed a 10-year high for sellers coming to market during October. “These savvy sellers are not waiting until spring to sell. They are taking advantage of today’s great market and making their move now,” he reported.

Buyers may find themselves in a quandary as the year winds down as they contemplate limited supply, possible upticks in interest rates and tax reform. Last week’s announcement of a provision in a GOP tax proposal to cap the mortgage interest deduction is concerning to buyers, brokers and builders.

“Imagine if the proposed plan to cap the mortgage interest deduction at $500,000 is approved in a market that is starved for homes and where the median price [for a single family home in King County] is now $630,000,” said O B Jacobi, president of Windermere Real Estate. “Homeowners may be less likely to sell because they would be giving up their grandfathered tax credit on their current home. That’s fewer homes for sale in a market where we really need them,” he stated, adding, “There could also be a flood of new buyers trying to purchase before the plan is passed, adding to the already hyper-competitive market conditions.”

The president of the National Association of REALTORS® also weighed in, saying details are currently under review, but stated, “Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, and from a cursory examination this legislation appears to do just that.”

Northwest MLS data show 66 percent of single family homes sold so far this year (Jan. – Oct.) in King County had selling prices of $500,000 or higher.

The median sales price system-wide for October was $373,000, up more than 8.1 percent from twelve months ago when it was $344,900. All counties in the four-county Puget Sound region notched double-digit gains.

For single family homes (excluding condos), the median sales price for last month’s completed transactions was $381,000. Within King County prices are considerably higher. In Seattle, year-over-year prices jumped 17.6 percent, from $625,000 to $735,000. On the Eastside, the median price for a single family home rose 10 percent from a year ago, increasing from $768,000 to $845,000. Nevertheless, high prices did not seem to deter many house-hunters.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region.”

Northwest MLS brokers reported 7,740 pending sales in the four-county region (King, Snohomish, Pierce and Kitsap), bettering the year ago mark of 7,487 mutually accepted offers. System-wide, pending sales increased from the year-ago total of 9,805 to last month’s total of 10,586 (up 7.97 percent).

“With a large buyer pool for each new listing, we saw a higher percentage of new listings sell within the first 30 days of coming on the market,” Scott reported, while also noting the seasonal change in housing market dynamics. “As we enter the winter market, the number of new listings being added will be in short supply from now through February,” he explained.

Compared to spring months, Scott expects volumes in the next few months will be at 30-to-50 percent of spring totals. “The stage is set once again for a frenzy housing market after the first of the year in the price ranges where there is a shortage of active listings for sale.”

Frank Wilson, branch managing broker at John L. Scott’s Poulsbo office, also commented on supply, noting in Kitsap County, the number of active listings is down nearly 24 percent from a year ago. “What this means to Kitsap County buyers is that everything is compressed: with lower inventory and higher prices the pressure continues to build for those buyers who need to find a home.”

Inventory remains low in many counties in the Northwest MLS system. Overall, there is only 1.5 months of supply of single family homes and condos combined. In King County, it’s less than one month. Industry analysts say four to six months typically indicates a balanced (or “normal”) market.

Most brokers agree inventory will not grow over the next few months. “Sellers who bring their homes on the market over the next three months will have a lot of interest because of the pent-up demand of buyers who are going to have fewer houses to consider,” suggested Wilson.

“Homebuyers in our area are at a real disadvantage right now,” commented Wilson, a member of the Northwest MLS board of directors. “They have to be pre-underwritten with their lenders, put forward a conventional or better offer, put down substantial earnest money, and hope that multiple offers do not escalate the price out of their affordability zone.” He fears “more and more buyers will be sidelined.”

Brokers in Snohomish County are detecting some tapering of activity.

“Buyers are no longer being as aggressive with concessions on homes when making offers and they are unwilling to compete for a home where sellers are being too aggressive with a list price,” commented George Moorhead, designated broker and owner at Bentley Properties. He also noted buyers who have been on the sidelines are now more active as they see a slowdown “and an opportunity to finally own a home without the multiple offer competition.”

Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood, believes the usual seasonal slowdown is apparent “a bit earlier than usual.” She reported multiple offers are continuing but listings in Snohomish County are experiencing longer market times, fewer above-list price offers, and a noticeable increase in price reductions. “All of this puts an emphasis on how important correct, accurate pricing has become.”

Mike Grady, president and COO of Coldwell Banker Bain, suggested statistics for October “at first blush suggest the lack of listings of single family homes and condos in the region is self-correcting.” As an example, he notes new listings in the tri-county region (King, Snohomish and Pierce) increased 11 percent from a year ago, while year-over-year sales rose only 6 percent. “That implies the shrinking inventory of homes for sale experienced over the past couple of year may be evening out.”

Looking at year-to-date figures tells a different story, according to Grady. His analysis of the three counties shows a 20 percent reduction in active listings. Factoring in strong sales yields a statistic known as months of inventory, which is under two months in the four counties comprising the Puget Sound region.

“The story continues to be in the ‘commuter’ counties, which are experiencing the biggest shrinkage from a year ago,” said Grady. “This reduction of supply will continue to put pressure on rising prices. Bottom line: investment in a home continues to be bullish with no change in sight.”

Northwest MLS board member Robert Wasser said while it may be a difficult time to be a buyer and a positive time to be a seller, the best strategy “regardless of market conditions is to calculate the pros and cons involved and make informed choices.” Wasser, the owner/broker at Prospera Real Estate in Seattle, recommends working with a real estate professional who, among other topics “is equipped to discuss market conditions, financing considerations, historic trends, and buying and selling strategies.”

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.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW

The Washington State economy added 79,600 new jobs over the past 12 months—an impressive growth rate of 2.4%, and well above the national growth rate of 1.2%. However, as we anticipated in last quarter’s report, we continue to see a modest slowdown in the growth rate as the state grows closer to full employment. Growth has been broad-based, with expansion in all major job sectors other than Aerospace (a function of a slowdown at Boeing). Given the current rate of expansion, I am raising my employment forecast and now predict that Washington will add 81,000 new jobs in 2017.

Given the robust job market, it is unsurprising that the state unemployment rate continues to fall. The current unemployment rate in Washington State is 4.6% and we are essentially at full employment. Additionally, all counties contained within this report reported either a drop or stability in their unemployment rate from a year ago. I maintain my belief that the Washington State economy will continue to outperform the U.S. as a whole. Given such a strong expansion, we should also expect solid income growth across Western Washington.

HOME SALES ACTIVITY

• There were 25,312 home sales during the third quarter of 2017. This is an increase of 3.6% over the same period in 2016.
   
• Clallam County maintains its number one position for sales growth over the past 12 months. Only four other counties saw double-digit gains in sales. This demonstrates continuing issues with the low supply of listings. There were modest declines in sales activity in six counties.
   
• The market remains remarkably tight with listing inventory down by 14.2% when compared to the third quarter of 2016. But inventory is up a significant 32% compared to the second quarter of this year. Pending sales rose by 5.2% over the same quarter a year ago, which suggests that closings in Q4 will still be robust.
   
• The key takeaway from this data is that inventory is still very low, and the situation is unlikely to improve through the balance of the year.
  

HOME PRICES

• Given tight supply levels, it is unsurprising to see very solid price growth across the Western Washington counties. Year-over-year, average prices rose 12.3% to $474,184. This is 0.9% higher than seen in the second quarter of this year.
   
• With demand far exceeding supply, price growth in Western Washington continues to trend well above the long-term average. As I do not expect to see the new home market expand at any significant pace, there will be continued pressure on the resale market, which will cause home prices to continue to rise at above-average rates.
   
• When compared to the same period a year ago, price growth was most pronounced in Grays Harbor County where sale prices were 20.1% higher than the third quarter of 2016. Nine additional counties experienced double-digit price growth.
   
• Mortgage rates in the quarter continue to test the lows of 2017, and this is unlikely to change in the near-term. This will allow home prices to escalate further but I expect we will see rates start to rise fairly modestly in 2018, which could slow price growth.
  

  DAYS ON MARKET

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  • The average number of days it took to sell a home in the quarter dropped by eight days when compared to the same quarter of 2016.
     
  • King County continues to be the tightest market, with homes taking an average of 17 days to sell. Every county except San Juan saw the days on market drop from the same period a year ago.
     
  • This quarter, it took an average of 43 days to sell a home. This is down from the 51 days it took in the second quarter of 2016 and down by 8 days from the second quarter of this year.
     
  • At some point, inventory will start to grow and this will lead to an increase in the average time it takes to sell a house. However, I do not expect that to happen at any time soon. So we remain in a seller’s market.
    

    CONCLUSIONS

    ---

     

    This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the third quarter of 2017, I have left the needle at the same point as the second quarter. Though price growth remains robust, sales activity has slowed very slightly and listings jumped relative to the second quarter. That said, the market is very strong and buyers will continue to find significant competition for accurately priced and well-located homes.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

KIRKLAND, Washington (October 5, 2017) – “October will be the best month for selection and availability until late February,” proclaimed J. Lennox Scott when commenting on the latest statistics from Northwest Multiple Listing Service.

MLS figures for September show inventory reached 1.7 months of supply at the end of the month, matching the year-to-date high in February. That level is still well below the 4-to-6 months of supply that many industry analysts use as an indicator of a balanced market.

Scott said buyer intensity for new listings is higher today than a year ago. “We continue to have very strong buyer demand as the typical seasonal slowdown begins for new listings.” Other industry leaders agreed seasonal adjustments are underway.

Member-brokers in the 23 counties served by Northwest MLS added 10,120 new listings to inventory during September, slightly more than the number reported for the same month a year ago (10,029). At the end of the month there were 15,888 listings of single family homes and condos in the MLS database, a drop of 12.4 percent from a year ago when buyers could choose from 18,136 listings.

“The pressure cooker for the housing market continues as the typical seasonal market comes into play for new listings coming on the market,” stated Scott, the chairman and CEO of John L. Scott. He noted new listings during September and October typically shrink 30 percent – and even more during the winter months – when compared to spring and summer months.

Brokers say strong job growth statewide is fueling demand for housing. Washington has added around 83,000 new jobs from August 2016 through August 2017 (not seasonally adjusted), according to the state Employment Security Department.

Like some other months this year, pending sales last month surpassed the number of new listings, putting pressure on prices. Year-over-year median prices for homes and condos surged 12 percent.

Brokers reported 10,348 mutually accepted offers system-wide last month, about the same number as a year ago (10,370), but last month’s total was the fewest pending sales since February (8,209). For the four- county Puget Sound region, members notched 7,441 pending sales. That’s the third best September for this area in the past 18 years, topped only by last year’s total of 7,729 and the total for August 2005 when 7,561 pending sales occurred.

Buyers may be emerging on news of slightly improving supply. “For only the second time this year the available inventory was over the one-month mark in King County,” said John Deely. “A notable number of new listings went past their offer review date, and more listings had price reductions.”

Deely, the principal managing broker at Coldwell Banker Bain, also observed a decrease in the overall number of buyers participating in multiple offer situations. “During spring and summer it was common to see numerous offers on individual listings. Now, it’s more common to see a few in multiple offer situations,” Deely remarked. “This change is a predictable seasonal adjustment as buyers and sellers enjoy the warm weather.” Nevertheless, Deely said the market “has the feel of a slightly slower pace.”

MLS director George Moorhead also commented on seasonality. “The seasonal summer market was felt stronger this year than what we have experienced in the last three years. Market indicators are showing we are plateauing into a healthier balanced market.”

Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor, described the market as “a wonderful adventure,” saying the scarce inventory “is like a dog at the door in winter. It refuses to go away till it’s fed. More houses for sale, please.” For Northwest home buyers, though, Beeson expects that won’t happen anytime soon.

“The entire region is off the charts,” remarked Mike Grady, president and COO of Coldwell Banker Bain, referencing the latest numbers from the Case-Shiller home price index. It shows Seattle area home prices have spiked 13.5 percent in the past year, well above second place Portland with its 7.6 percent average and more than twice the national average of 5.9 percent.

Northwest MLS figures show area-wide median prices are up more than 12 percent from a year ago, rising from $340,000 to $381,000. September’s figure is slightly lower than the peak reached in July when the median price across all counties was $385,000.

A snapshot of the luxury segment of homes priced at $1 million-plus further illustrates the strength of the Greater Seattle market:

Excluding condos, the system-wide median price for September’s single family sales was $390,000. A look at the 23 counties in the report shows a wide range of median prices, from the lowest of $124,000 in Ferry County to the highest, at $625,000, in King County.

September’s median price for single family homes and condos in King County, at $565,000, reflects a jump of more than 14 percent from a year ago, but it is a $20,000 decline from August (down about 3.5 percent).

“While prices for single family homes and condos were up more than 14 percent annually in King County, it’s hard to ignore the $20,000 price drop between August and September,” said OB Jacobi, president of Windermere Real Estate. “But if you look at the historic data more closely, it shows that prices have also dropped between August and September in five of the past six years, which points to a seasonal pattern rather than a long-term trend that we need to be concerned about.”

Statistics are helpful for some uses, but may not always tell a complete story, cautioned one broker.

“In Snohomish County, we saw increases in the luxury (higher end) segment during the summer months, which of course raised both the median and average sales prices,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. “Now we’re seeing a decrease in those types of sales with more affordable homes becoming more dominant.”

Haines also noted some reports encompass large geographic areas, such as Seattle, Everett, Tacoma and Bellevue. “When you drill down and localize the data, the picture may look quite different,” she explained.

In Snohomish County, for example, Northwest MLS tracks statistics for six sub-areas within that county. Last month’s median price for countywide sales of single family homes and condos was $430,000, but it ranged from $352,000 in the northwest segment of the county to $606,250 in the southeast portion. Year-over-year price changes ranged from an increase of just over 6 percent to more than 19 percent.

Noting King, Pierce and Snohomish counties all reported year-over-year price hikes of more than 14 percent, Grady said “This leap to new heights is based on high demand and low supply.” He noted neighboring counties are feeling the pinch, with several of them reporting double-digit drops in supply.

“All indications are that sales price increases in these neighboring counties are likely to accelerate at an even faster rate,” suggested Grady. In some of these counties, the median selling price is about half the price in King County. Faced with limited inventory and skyrocketing prices, some buyers are forced to broaden their search to these neighboring counties, Grady commented, adding he expects market forces will continue to fuel appreciation in housing into 2018 and beyond.

Moorhead, the designated broker and owner at Bentley Properties, said some renters who have been holding off are now becoming more active in hopes of taking advantage of longer market times and homes new to the market not receiving expected offers within the offer review date.

Despite some signs of a slowing market Moorhead said many renters remain frustrated, pointing to the $125,000 hike in King County’s median price in just two years. “Some renters say it’s like chasing a snowball down a hill that just keeps out of reach and continues to get larger and larger,” he remarked.

Builders are also frustrated, according to Moorhead. “We are hearing complaints and requests from builders to expand Growth Management Area guidelines. The massive shortage of developable land makes it more difficult to create affordable housing,” he explained, adding, “It’s becoming commonplace for new construction prices in Seattle and the Eastside to top a million dollars.”

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.

KIRKLAND, Washington (Sept. 6, 2017) – As smoke and ash blanketed parts of Washington state, one real estate broker noted, “Even in a fire there are some cooler spots, and seasonally, the housing market is in a cooler spot.”

The latest numbers from Northwest Multiple Listing Service show there are both cooler spots and hot spots, with the demand for housing and prices showing few signs of being extinguished.

“For August, we experienced a more robust market than anticipated,” remarked Diedre Hanes, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. “Compared to years past, we’ve seen very limited slowdown,” she added.

Pending sales area-wide during August totaled 11,867 transactions, barely exceeding the number of new listings (11,781) added during the month. At month end, there were 15,987 total active listings in the MLS database, a shrinkage of 12.8 percent from a year ago.

Sparse inventory is a likely factor in the flat pending sales, with year-over-year pending sales for all areas down .09 percent (11,867 versus 11,878). Of the 23 counties in the Northwest MLS report, 15 had fewer mutually accepted offers last month compared to twelve months ago. Last month’s total was up slightly from July’s figure of 11,800.

Credit the flurry of back-to-school activities and end-of summer vacations for sidetracking some sellers and buyers. “Typically, the last two weeks or so of August cool a bit and the market picks up again full steam once school resumes,” said Northwest MLS director Frank Wilson.

Wilson, the branch managing broker at John L. Scott in Poulsbo, described activity as a “fast-paced seller’s market,” but said the “stagnant pool” is beginning to grow as sellers realize they can’t overprice their homes, “even in this market.” With football season getting underway he expects open house schedules to adjust around Seahawks game times, with Saturdays becoming the preferred showing day.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, also commented on seasonal patterns. “This past summer market seems to have followed previous years’ seasonal conditions. While inventory remained low, there was some change of pace from the winter-spring market,” he stated.

O’Leyar said savvy buyers took advantage of slightly longer market times, affording them the opportunity for reasonable contingencies. “Although we saw multiple offers, they were down somewhat, and several offer review dates came and went with no offers by those deadlines.”

Changing seasons will likely mean a drop-off in listing activity, agreed J. Lennox Scott, who was upbeat on summer sales. “It’s been our best summer ever for sales activity with June, July and August clocking in a record number of transactions,” said Scott, the chairman and CEO of John L. Scott. He credits strong job growth and attractive interest rates (“the lowest they’ve been since last November”) with propelling sales.

“It’s still a frenzy market in the more affordable and mid-price ranges,” he said, while also noting the luxury segment continues to outpace last year’s market “in a huge way.”

System-wide, 3,727 single family homes have sold for more than a million dollars during the first eight months of the year, surpassing last year’s total of 2,456 such sales during the same time frame – a jump of nearly 52 percent.

With further drops in inventory likely during the fourth quarter, Scott and others expect sales will continue at a quick clip.

“As we head into fall, September and October will see new listing inventory drop by about 20 percent from the summer months, so the next two months will be the best opportunity for selection and availability for buyers to purchase a home,” Scott suggests. “Starting in November, the number of new listings will drop by another 30 percent over the winter,” he added.

“We continue to see low inventory drive the story in the Puget Sound region,” observed Mike Grady, president and COO of Coldwell Banker Bain. Thirteen of the 23 counties in the MLS report had double-digit declines in inventory compared to a year ago.

Area-wide, including single family homes and condominiums, the 1.55 months of supply for August slipped from both July (at 1.62 months), and from the year-ago number of around 1.9 months. King County continued to have the tightest inventory, at 0.93 months.

Commenting on rising prices – up 8.3 percent across the MLS service area – Grady said, “Of course, that old law of supply and demand has its natural effect.” The trend is consistent throughout the MLS service area, he noted, adding, “With King County prices escalating at such a fast rate (up 17 percent), the ripple effect will continue to push prices throughout the area, first in neighboring counties, then throughout the region.”

“Kitsap continues to see its share of multiple offers,” Wilson reported, adding, “The effects of this seller’s market can be seen in the 13 percent price increase from a year ago. Also, with more attention coming to Kitsap due to the new fast ferry system there is no reason for prices to temper any time soon.”  He believes challenges for “pent up sellers” will persist “as they have no place to move once they sell their home.”

“Nobody likes this market, – not sellers, not buyers, not real estate brokers,” proclaimed Northwest MLS director Dick Beeson. The reasons vary, he explained. “Sellers aren’t necessarily happy because they think they could be leaving money on the table. Buyers think they’re paying too much. And brokers think sales are more complex and fraught with peril than previously, making them harder to close.”

Beeson, the principal managing broker at RE/MAX Professionals in Gig Harbor, believes Seattle and surrounding areas are “forever changed” by this market. “The change isn’t going to be painless. Housing scarcity and increasing prices are sore spots.” Whether price increases will subside is anyone’s guess, he added.

Prices aren’t the only worry, suggested Haines. She said low appraisals occur on about one of every three sales. “The low appraisal number remains consistent at $25,000-to-$30,000 below sales price when it occurs. It makes one wonder why – coincidence or something else?” she stated.

Haines noted multiple offers are continuing, but added a note of caution to sellers: “Overpriced listings are not getting showings or offers. Buyers are well educated and well informed, which definitely eases fears of a developing bubble.”

Condos offered little relief for anxious buyers. Inventory dropped nearly 25 percent from twelve months ago, but pending sales somehow managed to outgain year-ago totals (up nearly 2.9 percent). At the end of August, there was less than a month’s supply of condos for sale across all areas served by Northwest MLS. King County’s supply was slightly better than two weeks. Prices rose 6.7 percent overall, and were up 11.3 percent in King County, 12.6 percent in Snohomish County and 14.5 percent in Pierce County. This tri-county area accounted for nearly nine of every 10 sales.

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.

KIRKLAND, Washington (Aug. 7, 2017) – New figures from Northwest Multiple Listing Service indicate home sales and prices, like July’s temperatures, sizzled. Prices area-wide rose slightly more than 9 percent from a year ago, but several counties near job centers saw larger price increases, including King County where the median price jumped 18.6 percent.

The latest report confirmed what most buyers and brokers know: inventory shortages persist even though MLS members added slightly more new listings last month than the same period a year ago.

“We should be entering the summer doldrums, but I don’t see that happening,” reported Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. “Inventory remains low, but prices and demand continue to increase, prompting murmurs of a looming bubble,” she commented, adding, “Some say yes, and just as many are saying no” when asked about the likelihood of a bubble.

In some areas, inventory is showing some signs of growth, Haines noted, but it’s still “way below what would be considered anywhere near normal. Frankly, I am not even sure anymore exactly what normal is – perhaps the current low inventory status is the new normal.”

Northwest MLS members added 12,300 new listings during July, a meager 122 more than the same month a year ago, but well below June’s total of 13,658 new listings.

At month end, there were 15,749 total active listings, down 13.9 percent from the year-ago total of 18,287. Measured by months of supply, there was only about six weeks (1.6 months) in the MLS system overall, which encompasses 23 counties. Twelve months ago it was closer to two months of supply (1.93 months).

King County continued to have the skinniest supply at only one month, but in many parts of Seattle and the Eastside the supply slipped below a month. Four to six months is typically considered a normal, or balanced, market according to many industry analysts.

George Moorhead, designated broker at Bentley Properties and a director with Northwest MLS, said the already-low inventory is being further squeezed when homeowners who move up are choosing to rent their current home instead of listing it.

Condo inventory is especially depleted, with only 1,330 total active listings area-wide. That’s down more than 21.5 percent from a year ago. Condos currently make up only 8.4 percent of the selection in the MLS database. (In 2015, condos accounted for 16 percent of residential sales.) Both King and Snohomish counties have only about three weeks of supply.

Despite sparse inventory, demand remains strong in most areas, with both pending and closed sales outgaining the volumes of a year ago. However, some brokers are detecting a slowdown, which they attribute to various factors from tight inventory and spiraling prices to the hot summer season.

Area-wide there were 11,800 pending sales during July, up 1.3 percent from a year ago when members logged 11,645 pending sales. King County, where inventory dropped nearly 20 percent, was one of nine counties that experienced a decline in year-over-year sales; mutually accepted offers in King County slipped about 7.4 percent.

“Even the fast-paced market could not stop buyers’ desire to get out and enjoy the warm, sunny weather that arrived in July,” said Northwest MLS chairman John Deely. “An increasing number of properties have gone without offers on the published offer review date, and many have had no offers within the typical one week review date,” he stated. “Many properties have seen offers trickle in, after the review date has come and gone, with offer prices at or over the list price,” added Deely, the principal managing broker at Coldwell Banker Bain Seattle. He also noted brokers are seeing a decrease of the percentage of list price to sale price ratio “as sellers’ pricing pushes the pricing boundaries to new heights.”

The median price on last month’s 9,707 closed sales was $382,000, up more than 9.1 percent from twelve months ago when it was $350,000.

Homes in King County continued to command the highest prices. The median price for homes and condos that sold in King County during July was $599,000, up 18.6 percent from a year ago when it was $505,000. For single family homes (excluding condos) in King County, the median price jumped at the same rate, rising from $555,000 to $658,000.

The leap in prices may have some people crying “housing bubble,” said OB Jacobi, president of Windermere Real Estate. “I still feel confident we’re not headed in that direction. Bubbles result from irresponsible lending practices, but buyers in King County have high credit scores and higher than average down payments. This area also has a high percentage of homeowners who are ‘equity rich’ which means their home is worth more than twice what they owe. For a housing bubble to occur we would expect to see far lower equity, down payments and credit quality.”

Buyers in some price ranges may be cheered by observations from some industry leaders.

“We’re seeing an increase in inventory in the mid- and upper price ranges and that is creating great selection and breathing room for some of the backlog of buyers,” said J. Lennox Scott, chairman and CEO of John L. Scott.

Nevertheless, Scott said it continues to be a seller’s market. It’s still the norm for homes in areas near job centers to sell quickly with multiple offers, he noted. “Sales activity remains at a frenzy pace in the more affordable mid-price ranges in the four-county Puget Sound area.”

“We’re definitely seeing a redefinition of what luxury means in this market,” Scott commented. His analysis revealed one-third of pending home sales in the Seattle Metro area last month drew offers of $1 million or higher. On the Eastside, he found it’s even greater, at 39 percent. Those numbers invariably draw comparison to San Francisco, he acknowledged, but said like the Bay Area, “our housing market remains strong, with solid job growth, low unemployment, and amazing interest rates leading the way.”

Deely also mentioned the luxury market, saying it is experiencing a resurgence as affluent buyers watch their stock portfolios hit new highs, coupled with the effects of other positive economic news.

Moorhead also commented on the quality of the area’s homebuyers and the diverse employment pool, factors he believes will help insulate local markets from any massive real estate fallout. Nonetheless, he believes a market correction, marked by a leveling of prices and inventory, is likely. “That will balance our market into a healthier and sustainable condition,” he stated.

More worrisome to Moorhead are some emerging practices to make it easier to purchase a home. Such practices “could lead us to the same potential catastrophic end we saw in 2007. Allowing significantly lower credit scores and higher debt ratios will only create higher default rates, which hurt everyone,” he stated.

Several brokers commented on shifts, both subtle and more pronounced, in buyer profiles and behavior.

“Foreign investment buyers are not declining in our Snohomish County market, contrary to some news reports,” Haines reported. “And yes, we are seeing more millennial buyers entering the market.”

Deely said the number of successful cash buyers has decreased, with financed buyers offering higher prices. “More low down payment buyers are winning the sale and we are also seeing an uptick in successful contingent sales among buyers who have a home to sell getting into a contract and then selling their properties.”

Mike Grady, president and COO of Coldwell Banker Bain, said buyers who make offers on homes subject to inspection, financing or other conditions “are increasingly pressing forward and closing, ignoring the escape clauses that caused sales to fail in year past. This trend is a bit more dramatic in the region comprising King, Snohomish and Pierce counties.”

Commenting on the supply of listings, Grady said historic lows are resulting “in galloping appreciation, exhibited most dramatically in King County.” He believes it is “certain to spread to neighboring counties” with tight inventory. “Don’t be surprised if these shrinking inventories pump appreciation up to double digits,” he suggested, mentioning Kitsap, Pierce, Skagit and Thurston counties.

Although the shrinking inventory trend continues, Grady noted year-to-date figures are telling. “While pending sales are 3.2 percent lower than a year ago, closed sales for the first seven months are up 1.8 percent, meaning sales that are written are 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 26,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW

The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.

Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.

I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.

HOME SALES ACTIVITY

• There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
• Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
• The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
• The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.

HOME PRICES

• Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
• Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
• When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
• The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.

DAYS ON MARKET

• The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
• King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
• Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
• Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.

 
CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement. Inventory is short and buyers are plentiful. Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year. Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.

ABOUT MATTHEW GARDNER

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.

KIRKLAND, Washington (July 6, 2017) – For frustrated house hunters, there’s hope: the volume of new listings added to inventory during June (13,658) was the highest total for any single month since May 2008 (14,176 new listings), according to the latest statistics from Northwest Multiple Listing Service.

“This time of year we see more new listings coming on the market than pending sales, and June didn’t disappoint,” stated J. Lennox Scott, chairman and CEO of John L. Scott.

Noting the pace of sales is slowing and the number of multiple offers is moderating, broker Gary O’Leyar suggested a summer breather is under way (as anticipated), which could yield “the season for a successful purchase” for weary shoppers. O’Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, said this mid-summer real estate market “seems to be following a fairly typical seasonal cycle” even though inventory is significantly lower than a year ago.

Northwest MLS director George Moorhead also commented on the “typical summer slowdown,” but said it is more noticeable in outlying areas. “The hot core areas are still quite active as buyers vie for a new home.” He also detected a slight increase in the time it is taking to market a home, and reported some cooling off in the luxury market, saying prices may be reaching a plateau.

For many brokers, rising prices are an ongoing concern, with one industry leader describing the ever-increasing prices as “startling.”

While the number of new listings was up about 7 percent year-over-year, total inventory lagged. Brokers reported 14,482 active listings of single family homes and condos at the end of June, which is down 14 percent from twelve months ago when would-be buyers could choose from 16,838 listings. Compared to the previous month, however, inventory jumped up 16 percent (12,481 vs. 14,482).

System-wide there was just over 1.4 months of inventory, but the supply varied across the 23 counties in the MLS market area. King County continued to have the tightest inventory, with less than a month of supply (0.84). Six other counties reported less than two months of supply (Cowlitz, Douglas, Kitsap, Pierce, Snohomish, and Thurston). In general, four-to-six months is considered to be a balanced market.

“Inventory continues to go lower as prices continue to climb in Kitsap County, leaving us with about 1.5 months of supply and home prices that are up more than 12 percent from a year ago,” said MLS director Frank Wilson, branch managing broker at John L. Scott in Poulsbo.

“Unlike a normal market for buyers, today’s market is not about the current inventory, rather it’s about inventory that is coming on the market,” Wilson commented. “The real story is the increased number of homes that will become available next month, and the month after.” He recommends buyers work out a success strategy with their real estate professional before even looking at their first house.

The increase in the number of new listings coupled with fewer offers for each property means more choices and a little breathing room for the backlog of buyers who have been waiting to buy a home, Scott believes. “For sellers, the market remains at a frenzy level of new listings selling in the first 30 days,” he said.

MLS brokers reported 12,397 pending sales (mutually accepted offers) during June for a gain of nearly 3.4 percent from a year ago. Compared to May, the volume of pending sales dropped slightly. Nine counties reported year-over-year decreases in the number of pending sales, with inventory shortages a likely contributing factor since most of these counties show double-digit declines in the number of active listings.

In the four-county region encompassing King, Kitsap, Pierce and Snohomish counties, MLS members notched a record-setting 9,042 pending sales, beating the previous high for the month of June that was reached in 2005. Figures show May also beat the record for that month.

“Strong job growth, price appreciation, and low interest rates continue to fuel the Puget Sound housing market,” stated Scott.

Seattle’s growing population is another likely factor. Recent U.S. Census Bureau data shows Seattle is gaining about 1,100 residents per week, an “astounding” figure, said MLS director Diedre Haines.

“June slowed a bit, probably due to it being summer – but I do not anticipate much of a slowdown this year,” remarked Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain.

“In Snohomish County we are once again experiencing low appraisals,” she said, adding, “I’m not sure why this is happening, especially with regard to new construction.” Haines said new product is selling before it’s out of the ground, with many of these new homes not even hitting the market.

Northwest MLS director Scott Comey also commented on the brisk activity in Snohomish County.

“In Snohomish County, we have been seeing a lot more tech-type workers buying homes,” according to Comey, the owner/designated broker at RE/MAX Elite. “Many of my agents have clients from Microsoft, Amazon, and Google to name a few, where just a couple of years ago we rarely saw them up this way.” To get bigger bang for the buck, Comey said prospective purchasers are being pushed further north, or further south, driving up values in both Snohomish and Pierce counties. “Coupled with Boeing and other local employers doing very well, it is keeping the inventory levels under a month.”

“With interest rates still very low, we are hopeful that those who want to move up into a larger home, aren’t deterred too much,” Comey stated. Although “contingent” offers are a struggle in today’s market, he said many buyers are finding alternative methods to making the move, like bridge loans.

Reflecting strong second-quarter activity, closed sales for June topped the 10,000 mark, a first for Northwest MLS member brokers. Last month’s total of 10,094 closed sales area-wide was up almost 3 percent from the year-ago total of 9,805 closings. Year-to-date sales for the first half of 2017 are up 4.7 percent compared to the first six months of 2016.

Prices for single family homes and condos combined surged 10 percent in June compared to a year ago, rising from $350,000 to $385,000. For the four-county Puget Sound region, year-over-year prices are up about 11.4 percent. In King County, the median price of a single family home (excluding condos) jumped 13.9 percent, from $573,522 to $653,000.

Despite their upward trajectory, prices still matter, according to Northwest MLS director Dick Beeson, who cautioned sellers to “be wary” about unrealistic pricing. He reviewed more than 800 listings offered for sale in King, Pierce and Snohomish counties since January 1 that went off market as expired listings, “mainly because they were over-priced,” he suggested.

“The month-to-month price changes are startling,” remarked Mike Grady, president and COO of Coldwell Banker Bain. “Eventually we will outpace the first-time homebuyer’s ability to qualify for a mortgage and that will slow the market down somewhat,” he stated, adding, “That said, we believe the biggest challenge is that there is literally no active housing for those age 55+ being developed in the Puget Sound area. Without quality condominium development that provides a place for baby boomers wanting to downsize, they don’t move, thus blocking the next big-home buyer from moving up which in turn stops the domino effect downstream.”

“The market sizzles while sellers fiddle,” quipped Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Noting 80-to-90 percent of sellers in the Central Puget Sound counties are accepting offers on their homes within 30 days of listing and marketing it, he acknowledged, “There is no end to the pain buyers are experiencing as they search for a home.”

On a more encouraging note Beeson urged buyers to not give up. “Diligence and prior planning are necessary to win the day. Buyers must be pre-underwritten for a loan, not just pre-approved. They must act decisively, not weakly or slowly. They must keep their composure and perseverance as they lose out on offers before finally winning.”

MLS director George Moorhead agreed. “It is not uncommon to have buyers present offers on eight or more homes before being successful; they also become more aggressive in terms of their offers.” The conversations these buyers have with their brokers also take on an entirely different level of negotiating tactics and swift decisions, according to Moorhead, the designated broker at Bentley Properties.

Buyers continue to suffer from fatigue, reported Haines. “The difference this year is that it seems buyers are more determined and not giving up. Rates have increased a bit, but this doesn’t seem to be a negative for them.” And, she added, “We still struggle with the issue of them waiving their protective rights despite our counsel not to.” Haines said sellers are starting to become adamant that they do not want multiple buyers conducting pre-inspections, but commented, “This is a trend I personally hope continues.”

Wilson also offered advice to buyers. “They need to be clear as to what they will accept, or not. Get pre-underwritten by their lender, be ready for a fast tracked inspection, strong earnest money, strong financing and amount down and put forward the most streamlined offer their situation will allow.”

Commenting on the latest MLS statistics, Grady said the numbers “tell the continuing story of a very tight market created by the situation of a region where far more jobs are being created than new housing units — whether they are apartments, condos or single-family homes. This pattern won’t change until developers can out-build net new job creation, especially in the greater Puget Sound area.”

Condos, once the path to ownership for first-time buyers, offer sparse options. Inventory is down 24 percent from a year ago. Condos currently only account for about 8 percent of all active listings, and there is less than a month’s supply.

Condo prices, while more affordable than many single family homes, continue to trend upward. The median sales price for last month’s closed sales of condos was $328,675, an increase of nearly 9.6 percent from a year ago.

Based on his analysis of MLS data, Moorhead noted condos have appreciated in the double digits for the last three years as they play catch-up to single family homes sales. “Condos are typically the next best option for first time buyers who cannot keep up with a surge in pricing from single family homes; however, even condos are being priced out of reach for many new buyers.”

The market frenzy prompts questions about a housing bubble.

“We are often asked about how long this will market last,” said Wilson. His reply? “Jobs in Seattle are still getting stronger, the economy is not yet at full strength, incomes are starting to rise, loan interest rates are low, money is relatively easy to borrow, gas prices are low, the stock market is doing well and the public’s attitude seems to be good. This could last a few years.”

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.

KIRKLAND, Washington (June 6, 2017) – Would-be buyers who have been shut out of the real estate market should test the “real estate waters” during the summer months suggests one industry leader.

“Summer might provide some competitive relief for weary buyers,” said Gary O’Leyar, owner of Berkshire Hathaway HomeServices Signature Properties, pointing to some of the newly-released statistics from Northwest Multiple Listing Service as indicators.

Noting that the trend of multiple offers is still prevalent in the Seattle market, O’Leyar stressed that’s not always the case in areas outside the immediate Seattle area. In fact, he added, the market may “cool off” a bit during summer months as weary buyers find vacations and recreational pursuits more alluring than being in competitive bidding situations.

Ken Anderson, president/owner of Coldwell Banker Evergreen in, agrees. “No one is talking about the large number of new listings coming to the market,” he notes. “New listings are at a seven-year high, and fifth highest all-time in our South Sound market,” according to his analysis.

Northwest MLS brokers added 13,497 new listings during May, improving on the previous month by 2,849 listings for a gain of nearly 27 percent. Compared to a year ago, the volume of new listings increased about 10 percent. Total active inventory is down from a year ago, but about 6.8 percent better than April.

The latest statistics show inventory system-wide is still squeezed (down 17.9 percent), pending sales rose slightly (up 2.7 percent), and sales prices are still rising (up 11.2 percent) compared to a year ago.

“The pace of the real estate market in Kitsap is heating up as summer rolls in. Buyers who work in King County but don’t want to drive north, east or south are now looking west for a housing solution,” said Northwest MLS director Frank Wilson, branch managing broker at John L. Scott in Poulsbo. “The new ferry system is helping usher in this new thinking of ‘west is where to find a house,” he stated.

Last month’s pending sales in Kitsap County rose 8.4 percent from a year ago, which compares to a 2.6 percent decline in King County. The median price on homes and condos that sold in Kitsap County last month was $307,250 (up 7.8 percent from a year ago). In King County, the median price rose 15.5 percent from a year ago, and, at $560,000, was 82 percent higher than the median price in Kitsap County.

Despite murmurs of the possibility of relief for disenchanted house hunters, May was a hotbed of activity. Brokers notched 9,188 pending sales (mutually accepted offers) in the four-county region, the highest ever reported for the region. Overall, members reported 12,607 pending sales, up 2.7 percent from a year ago.

“May was a Grand Slam month for housing activity,” exclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “We finally saw new inventory come on the market in May, and although we had a slight delay in the timing, the spring Puget Sound housing market is in full swing and as intense and frenzied as it has ever been. New inventory outpaced pending sales. This translated into more opportunities for buyers, but with such a quick action market, they still had to act fast to win a home. We’re seeing explosive sales, severe inventory shortages, intense competition, and multiple offer situations.”

Despite rising prices, brokers say competition is still intense in many of the 23 counties in the Northwest MLS area, and especially so near job centers. Consequently, some would-be buyers are waiving contingencies, a practice that draws varying opinions from MLS spokespersons:

“In this competitive market, buyers are frequently waiving many of the traditional contingencies, though each home can be different. Often times, sellers have had their homes pre-inspected and make those inspection reports available to buyers prior to a published offer review date. Other times, buyers are able to keep all of their traditional contingencies intact, though with less frequency in the most competitive areas.”
~ Robert Wasser, Prospera Real Estate

“The number of buyers waiving contingencies is definitely increasing, as many of them have found themselves on the losing end of at least one competitive offer situation. What may have felt uncomfortable for buyers when they started their home search has now become a necessity.” 
~ OB Jacobi, Windermere Real Estate

“Buyers, despite the warnings, continue to waive protective rights. Many are also offering non-refundable money to sellers for mutual acceptance. This is ill-advised!”
~ Diedre Haines, Coldwell Banker Bain

Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor, offered a reminder of the phrase, “all real estate is local.” Statistics show buyers in King County more often waive inspections to secure first place in ongoing bidding wars than in the other tri-county areas, offering figures from his analysis. “This means more buyers in King County are more willing to forego having an inspection on the home (a protection for both parties), even against the advice of every prominent real estate attorney in the state,” stated Beeson, a member of the Northwest MLS board of directors.

Measured by months of supply, King County has the smallest, at about three weeks (0.76 months) of all the counties in the MLS report. At the end of May, there were 2,149 active listings of single family homes (vs. 2,696 a year ago) and 421 condos (vs. 636 a year ago) in King County.

Despite a year-over-year decline of nearly 23 percent in the number of active listings in King County, the volume of closed sales rose about 4.4 percent. Prices on sales within the county (including single family homes and condos) spiked 15.5 percent from a year ago, rising from $485,000 to $560,000. Thirteen counties reported double-digit increases, including King County, up nearly 15.5 percent.

System-wide, there is 1.37 months of supply (slipping from April’s figure of 1.47). That’s well below the 4-to-6 month figure often used to describe a balanced market. The overall median selling price was $378,044. That’s up 11.2 percent from the year-ago figure of $339,950. The number of closed sales rose 5.6 percent from a year ago, increasing from 8,630 overall to 9,112.

The combination of strong demand and limited supply continues to fuel competition and multiple offers in many areas, according to MLS brokers.

“We still have multiple offers but the high end market is slowing down somewhat,” observed Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain. “Those listings are now on market about three weeks before offers come in. Just a few short weeks ago this was not the case. They are on market a week or two before we get showings. They’re still receiving multiple offers, but only two or three as opposed to five or six. The low end (up to $500,000) is still selling rapidly with many offers,” she explained, adding, “We are seeing younger buyers entering into the fray and investors, both foreign and domestic, with cash offers still out there in abundance.”

“Thurston County has never been better for sellers, with absorption rates at record lows, but buyers have some good news too,” noted Anderson. “The challenge today isn’t lack of choice, it is the swift pace of sales. Homes priced right are selling in near-record time. Today’s successful buyers are prepared to act quickly and decisively when the right home comes to market. That means a lot of smart prep work before the active home search. Every buyer’s road to success in this market starts with working with a professional, full-time Realtor.”

Commenting on the market, both currently and going forward, Jacobi said, “Every year there is a seasonal pressure release when we get past Memorial Day and the historically tight spring market. People begin going on summer vacations which takes some buyers out of the process. We are also seeing the number of homes for sale tick up ever so slightly which could prove positive for buyers. That being said, the demand in the Puget Sound area is very high and the months of inventory continues to trend down, so I expect competition for homes to remain pretty fierce in the coming months.”

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.

KIRKLAND, Washington (May 4, 2017) – “Frustrating” is how brokers are summarizing the mood of buyers, brokers – and industry professionals – during the current housing market frenzy. New statistics from Northwest Multiple Listing Service show declines in inventory and sales, while prices continue their upward trajectory, but those numbers only tell part of the story.

“The real estate market is going absolutely gangbusters,” remarked OB Jacobi, president of Windermere Real Estate. “The remarkably low number of homes for sale can be blamed for the drop in sales,” he emphasized, adding, “The uptick in interest rates at the end of last year has clearly done nothing to slow things down.”

Inventory fell nearly 25 percent from the volume of active listings being offered a year ago. At the end of April, MLS brokers reported 10,679 homes and condos for sale across a 23-county area, which compares to the year-ago selection of 14,235 listings.

Viewed another way, there is only about 1.5 months of supply (about six weeks), which compares to twelve months ago when supply totaled about 1.85 months. (In general, four-to-six months is considered a balanced market.) There has not been more than two months of supply since September 2016.

MLS members continue to struggle to keep pace with demand. Brokers added 10,648 new listings to their database last month, down from 11,939 during April 2016, and they reported 10,514 pending sales. That total was down 893 transactions for a drop of year-over-year drop of 7.8 percent.

The near-match in new listings and pending sales meant little change in the number of total active listings, although inventory edged up slightly from March, growing from 9,774 listings to 10,679.

“Without a doubt this is the most frustrating market for both buyers and sellers that we’ve experienced in 24 years of business,” stated George Moorhead, designated broker at Bentley Properties. He said the frustration of low inventory is prompting sellers who haven’t been able to find their next home to look into undertaking major remodels instead of moving, thereby putting even more pressure on buyers who are struggling to find a home. Although buyers are being aggressive, Moorhead believes offer prices are starting to plateau. “Educated buyers cannot justify many of the home prices,” he reported.

Prices area-wide shot up 10.4 percent from a year ago, from $325,990 to $360,000. The four-county Puget Sound region, which accounted for more than 77 percent of last month’s 7,276 closed sales, reported a price hike of nearly 14.7 percent, led by Snohomish County at 16.7 percent. In Snohomish County, the median price for single family homes and condos (combined) eclipsed the $400,000 mark, climbing to $416,668.

Homes and condos that sold last month in King County fetched a median price of $550,000, up about 15.8 percent from a year ago. For a single-family home (excluding condos) the median price was $625,000. That’s $85,000 more than the year-ago figure, and $25,050 more than the previous month.

Year-over-year condo prices increased more than 12 percent, rising from $285,000 to $320,000. King County prices jumped for $323,500 to $370,000, a gain of nearly 14.4 percent. There is less than a month’s supply of condos in the MLS database.

Escalating prices in King County are prompting house-hunters to head north, noted Diedre Haines, principal managing broker–South Snohomish County for Coldwell Banker Bain. She reported a sharp increase in the number of multiple offers from around 15 per listing at the beginning of the year to just under 20 in the past month. Frustration levels among buyers are on the rise, she said, adding “prices are beginning to increase at unhealthy levels. My fears of a newly developing bubble have not diminished.”

The pressure is across county borders and across the price spectrum. “Market mayhem is wreaking havoc for homebuyers,” suggested J. Lennox Scott, chairman and CEO of John L. Scott. The inventory shortage is fueling the market and prompting shifts in seller behavior, according to Scott, who described the market as “intense as ever with 80 percent of homes in King County selling within 30 days of being listed.”

Scott points to more listings and sales in the luxury price ranges and fewer listings and sales in the more affordable range as triggering the run-up in median home prices.

Scott also detects changes in seller conduct. In a “normal year” real estate cycle, owners who wanted to sell and move during the summer would typically need at least three months but today, “because of our extremely quick, frenzy market, sellers know they have the power to wait,” he explained. “There aren’t homes for them to transition to,” he commented. He also noted sellers are also in the enviable position of being able to ask for concessions such as rent-backs and longer closing times so they can design their own exit strategy from their current home.

“Everything is down except prices,” declared Mike Grady, president and COO of Coldwell Banker Bain. Although the pending sales for the first four months of 2017 are lower than the same period a year ago (down about 8.5 percent), new listings are off even more (down 24.3 percent). “That combination is shrinking the available inventory at an unprecedented pace,” he remarked. The shrinkage is not an anomaly, he emphasized. “It has a stranglehold on new sales. Additionally, this low supply and high demand continues to put upward pressure on prices,” he said.

“Entry level homes are getting harder to find, making life difficult and very competitive for first-time home buyers,” reported Dick Beeson. Commenting on the plunging supply during the past few years he said “No wonder brokers are getting calls from selling brokers an hour after the property is entered in the Northwest MLS system asking, ‘any offers yet?'”

In commenting on the April data, some Northwest MLS brokers expressed both concern and advice: “Once again, I feel the need and obligation to warn buyers that in most cases it is not a good idea to waive protective legal rights to get an offer accepted,” stated Haines. “The same warning goes to sellers: buyers waiving these rights are potentially severely jeopardizing a seller’s after-closing protections. A recent trend by buyers in making their earnest money nonrefundable at mutual acceptance is not advisable,” she emphasized.

Northwest MLS chairman John Deely echoed some of the same concerns. He described the Seattle market as “a tale of overconfident sellers meeting desperate buyers.” Sorting out multiple offers to find the best buyer is very complicated, he explained. “The negotiation strategies include both new and proven techniques. Buyers looking to edge out the competition are being asked to, or are, waiving contingencies intended to protect both parties,” stated Deely, the principal managing broker at Coldwell Banker Bain in Seattle.

“Many negotiations include hidden financing contingencies as buyers risk their earnest money to compete with true cash buyers, and some buyers are agreeing to pay the difference between the appraised value and the sales price. Sellers are pushing the upper boundaries of value and competing buyers are driving prices beyond the reasonable appraised value.”

Competition is also keen in the new construction segment. Moorhead reported builders are releasing only a few homes at a time, drawing offers with escalations that are driving prices even higher. Then the next set of homes is offered with prices set at or near the price that was accepted in the prior increment. “We have seen one floor plan go up in price more than $25,000 on each limited release – and buyers have to wait a year before the home is completed. In Bothell areas it was rare to see a million dollar home sale; now, with the limited inventory and high demand we are seeing more homes in this price range and even plats starting at $1 million.”

Beeson hopes programs that encourage entry-level priced development will emerge to ease the situation and help accommodate demand “as more millennials come out of the basements of their parents’ homes.” More entrepreneurship and creative ideas on architecture and lifestyle living at affordable prices are needed, he stressed, while conceding, “The end game for the rest of 2017 is clear: more scarcity, more angst by buyers, more reluctance to sell among sellers because they can’t find their next home.”

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.

KIRKLAND, Washington (April 6, 2017) – Northwest Multiple Listing Service brokers expected an uptick in the number of new listings during March, and that expectation was met with a significant gain – up more than 50 percent from February. Members added 10,321 new listings last month, but they also reported an even greater number of pending sales (10,447), leaving inventory near historic lows.

“Although we’re seeing better news for buyers related to increases in new listings during the past three months, we’re continuing to sell inventory at a faster rate,” stated Mike Grady, president and COO of Coldwell Banker Bain. “This lack of supply continues to put an upward pressure on home prices. We’re in for yet another frenzied spring,” he believes.

Total active inventory across the 23 counties in the Northwest MLS service area remained below 10,000 for a second straight month. The selection of active listings rose to 9,774 for a 7.5 percent improvement on February’s volume, but compared to a year ago inventory plummeted nearly 23 percent.

“It’s a straight up crazy, frenzy market in King and Snohomish counties,” said J. Lennox Scott, chairman and CEO of John L. Scott. About 75 percent of homes are selling within the first 30 days, according to his analysis.

The lack of supply continues to put upward pressure on home prices. The median price on last month’s sales of single family homes and condos was $355,000, up 10.9 percent from the year-ago figure of $320,000.

For single family homes only (excluding condos), year-over-year prices jumped 11.5 percent, from $327,300 to $365,000. The median price for a single family home that sold in King County was $599,950, up 12.9 percent from a year ago. Adjacent counties also saw double-digit increases in selling prices for single family homes.

Pierce County prices increased 11.3 percent, from $265,000 to $295,000, while the year-over-year gain in Snohomish County was nearly 10.4 percent, rising from $385,000 to $425,000.

“There is much good news for Snohomish County,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain. Low unemployment, plenty of available jobs, and forecasts that are optimistic for our economy are among the positives she noted, while adding words of caution. “This doesn’t mean sellers can just slap a price they like on their listing and expect it to fly off the shelf. We certainly don’t need or want [overpriced] inventory that just sits there, gets stale and becomes stigmatized. Agents need to be diligent with pricing and sellers need to be realistic,” she emphasized, noting today’s buyers are well informed and more sophisticated than in past markets.

“As the first quarter ends, the South Sound market continues to bubble along,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Steep drops in inventory coupled with rising volumes of closed sales are resulting in double digit increases in prices in both Pierce County, where prices rose more than 11 percent, and Thurston County, where prices surged nearly 15.4 percent.

“It’s hard to imagine what the market would be like if two things were different – more inventory giving more buyers opportunities to purchase, and if the miserable weather we’ve been having had been slightly better making house hunting and home selling a bit more fun,” remarked Beeson.

The scenario is similar in Kitsap County, although at more moderate rates: total inventory is down about 3.4 percent from 12 months ago, and prices rose by a similar rate (up 3 percent).

“The full blooming of the spring market in Kitsap is being tempered by the tight inventory of available homes,” said Frank Wilson, the branch managing broker at John L. Scott in Poulsbo. He also noted brokers in Kitsap County continue to see “strong traffic at open houses, multiple offers on new listings, and buyers becoming accustomed to (though not happy about) the use of escalation clauses, with marginal buyers being pushed closer to their affordability margins.”

Area-wide, there is 1.3 months of inventory, with both King and Snohomish counties reporting less than a month’s supply.

Brokers say the shortages are constricting sales. Pending sales (mutually accepted offers) are down 4.2 percent from a year ago. Brokers report 10,447 pending sales during March, down from the year-ago total of 10,900, but up from February’s volume of 8,247.

“March sales activity is lower than a year ago due to the fact we are virtually sold out,” explained Scott. He also said the lack of inventory is feeding the buyer frenzy for each new listing in the more affordable and mid-price ranges.

The luxury market remains strong. For the first three months of 2017, the number of homes that sold and closed at prices of $1 million or more is up 60.5 percent compared to the same period a year ago (926 such sales this year versus 577 for first quarter of 2016).

Northwest MLS chairman John Deely, principal managing broker at Coldwell Banker Bain, said bids over the listing price are commonplace. “We are seeing more multiple offers than ever on new listings, and all cash offers are dominating the winning bids.” He also noted some brokers are reporting a contrast from a year ago with regard to escalation closes. “Last year they were advising a buyer to bid 10 percent above the list price, this year they’re advising 20 percent over in certain Seattle neighborhoods.”

Low appraisals are still occurring, according to Northwest MLS officials.

“We are seeing more low appraisals on financed offers as buyers push the sales price up to new heights for the respective neighborhoods,” Deely stated, adding, “Many financed offers contain provisions where buyers will pay the difference between the appraised value and the sales price in the event of a low appraisal,” he explained. He also said some buyers are waiving other protective conditions such as inspections and title and neighborhood reviews to gain an advantage over competing buyers.

Despite the hurdles, more people are getting into homes, Deely noted. Northwest MLS figures show year-to-date closed sales are up nearly 10 percent compared to first quarter 2016.

“Some, including me, are seeing signs of a developing bubble,” said Haines. She said most new construction in Snohomish County is being sold before foundations are even poured. “Builders are trying to keep up with the demand, but it isn’t or doesn’t seem to be possible in the near future. Buyers are starting to move into panic mode and doing unadvisable things just to get their offers accepted.”

Haines said problems with low appraisals have “dissipated for now,” adding, “We’re seeing a definite resurgence of 1031 exchange offers. Sellers are accepting contingent offers with confidence and no fear the contingent home won’t sell.” She also reported “Folks from the city and south of our county line are once again migrating north creating yet another logjam.”

Scott expects “seller gridlock” to abate this summer for sellers who are waiting to put their home on the market. “As more inventory comes on the market it will be just as easy for them to purchase their next home as it is to sell their current one.”

Wilson said the Kitsap County market is “struggling to find its new trend. We are being buffeted by the winds or rising interest rates, shortages of inventory, increasing prices and the effects of new or improved ferry service in various parts of our county. We are seeing increased interest in Port Orchard, Bremerton and Kingston by both investors and Seattle commuters.”

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.

If you have contemplated selling, this is the year you have been waiting for to cash in on the market! The perfect circumstances await Sellers in 2017.

The Northwest MLS just reported record low inventory in the Puget Sound.
In February 2017, the MLS recorded its lowest level of inventory ever.  This gives seller’s a significant edge. Read more here.

59 million Buyers are expected to enter the market this year.
One in four Americans are considering buying a home this year. If this statistic proves to be true, that means that 59 million people will be looking to enter the housing market in 2017. Read more here.

American’s are coming to Washington State.
According to United Van Lines. Washington State is among the top 10 destinations for migrating Americans. Read more here

Why waiting much longer may not be in your best interest…

Low interest rates will not last much longer.
We have already seen rates rise this year, with more increases likely on the horizon for 2017. Rising interest rates will affect affordability, since most people buy on the monthly payment, not the price. Rising rates could significantly impact Buyers looking to purchase their first home or those looking to move up. Read more here.

Pent-Up Seller Demand has increased dramatically.
Many people are not in the home that is best for the current circumstances. Rising equity levels will allow these sellers to enter the market more freely in the future, creating more competition. Read more here.

If you would like to discuss the market and whether it is the right time for your move, feel free to contact me.

Some Highlights:

• For the 5th year in a row, the Northeast saw a concentration of “High Outbound” activity.
• For the first time ever, South Dakota held the top spot for “High Inbound” states.
• Much of America’s outbound activity can be attributed to Boomers relocating to warmer climates after retiring.

KIRKLAND (March 6, 2017) – Home buyers are in a spring mood, but sellers are still hibernating, suggested one broker while commenting about the latest statistics from Northwest Multiple Listing Service. Figures for February and feedback from brokers indicate record-low inventory is spurring multiple offers, rising prices, fewer sales, and frustrated house-hunters.

Year over-year pending sales (mutually accepted offers) declined for the first time since March 2016, falling 8.9 percent. Eight counties, including King and Snohomish, reported double-digit drops in pending sales as the volume of new listings couldn’t keep pace with demand.

During the past three months, brokers have added 17,572 new listings to inventory, down only 5.7 percent when compared to the same three-month period of a year ago. During the latest December-to-February timeframe, MLS members reported 22,393 pending sales, far outpacing the number of new listings.

“Our robust market has created extreme conditions, and we’re seeing frenzy hot activity on each new listing coming on the market,” reported J. Lennox Scott, chairman and CEO of John L. Scott. “We’re also experiencing some of the lowest inventory levels on record,” he noted.

In fact, a check of Northwest MLS records dating to 2004 shows no other month when the number of active listings dipped below the 10,000 mark – until last month.

At the end of February, there were 9,091 active listings in the Northwest MLS system, which encompasses 23 counties. That represents a drop of nearly 25 percent from the year-ago total of 12,107.

“Home sellers and buyers are complaining equally about the current market’s low inventory,” remarked MLS director George Moorhead, designated broker at Bentley Properties. “Sellers are frustrated when they cannot find another home to match their current needs, or when a home goes off market so fast that the option of a contingent sale is not even considered,” he stated.

Buyers have been grumbling about the market for the past two years, Moorhead said. “That mood has escalated into a panic as other buyers up the ante – at times to a level that even causes real estate professionals to shake their heads,” he remarked.

Brokers believe seasonality is a factor, with several saying they are expecting an uptick in listings.

“For buyers, hope springs eternal, but the sellers are still hibernating,” suggested John Deely, the principal managing broker at Coldwell Banker Bain. “We’ve been experiencing continued high buyer demand as the spring market takes off early but sellers are on a more traditional schedule as listings slowly ramp up,” he reported, adding, “Sellers that have come to market ahead of the traditional spring market are reaping the benefits of less competition [from others who are selling] and a highly competitive buyer pool.”

Deely said anecdotal information indicates many sellers are preparing their properties for the more traditional listing time around May.

That expectation was echoed by fellow MLS director Frank Wilson, the branch managing broker at John L. Scott in Poulsbo, and by Lennox Scott.

Scott expects inventory to start rising in March, but he also anticipates the number of buyers will increase too. “It will continue to be a competitive market in the more affordable and mid-price ranges,” he predicts.

“The spring market in Kitsap is a little like waiting for the tulips to begin coming up. We have the buyer demand but the inventory has not started springing up yet,” commented Wilson. “Open houses have a lot of traffic and we are seeing multiple offers on new listings that are priced correctly.”

Wilson noted Kitsap County is seeing an increase in investor type buyers as they anticipate the impact of the new fast ferry system, now in the beginning stages of roll-out. “Access directly to Seattle on a fast foot ferry will have a large impact on Kingston, Bremerton, and Port Orchard, while hopefully reducing the pressure on the Bainbridge Island terminal,” he stated.

“What many don’t realize is that while a lack of inventory might help a seller get more for their home, it has a downside,” according to Wilson. “It can cause potential sellers not to list, appraisals to come in low, buyers to lose out to multiple offers, VA and FHA buyers to take second chair to cash or conventional loans, and a general frustration from lack of choice. A balanced market is always preferable to this unbalanced state of things,” he remarked.

Scott agreed, saying, “Some potential sellers are currently parked in a gridlock position because they are afraid to put their home on the market for fear they either won’t find a home, or they will find themselves in a multiple offer situation. This has stalled the migration pattern of sellers who would normally be putting their homes on the market.”

Moorhead suggested one tactic for buyers, given the historic low levels of inventory, is to start looking below the price point they’ve been considering. “Getting into a home and then moving up in 3-to-5 years is becoming a more common theme as most buyers cannot secure the home they wish to be in long-term. This is a definite shift in mindset since the average homeowner typically lives in a home 7-to-10 years.”

Brokers expect little relief in rising prices.

“Home sellers are benefitting from the perfect storm of market conditions, but as the ongoing low inventory levels and precipitous drop in pending sales indicate, there simply are not enough homes to meet the demand of buyers. All of this is pushing up home prices faster than anywhere else in the country and will continue to do so if we don’t see more homes come on the market this spring,” said OB Jacobi, president of Windermere Real Estate.

“With less than a two month supply of inventory, we will continue to see price escalation,” stated Wilson, who noted prices on closed sales of single family homes and condos in Kitsap County, where his office is situated, are up 10 percent from a year ago. That county has about 1.4 months of supply, third lowest among the 23 counties in the MLS database.

Both King and Snohomish County had less than one month of supply. Area-wide there was about 1.7 months of supply. (In general, four-to-six months of supply is considered balanced.)

Year-over-year prices are up nearly 8.9 percent area-wide, with 13 counties reporting double-digit gains. The median price for last month’s 5,374 closed sales of single family homes and condos (combined) was $335,000. Closed sales volumes rose nearly 6.9 percent from a year ago.

In King County — one of only four counties where the volume of closed sales fell from a year ago – prices jumped 14.1 percent, climbing from $439,950 to $502,000. Despite the drop, King County’s year-to-date total of 3,803 closed sales is running 7.3 percent ahead of the first two months of 2016. System-wide, the number of completed transactions for January and February is up 12.3 percent. Deely believes those figures indicate the “fast pace, high velocity market” will continue to grow in 2017.

For single family homes (excluding condos), the median selling price in King County was $560,000. That’s a gain of more than 8.7 percent from the year-ago figure of $514,975.

Snohomish County prices spiked more than 18.2 percent, rising from $327,500 to $387,250. For single family homes only, prices in that county increased 14.9 percent, from $359,000 to $412,500.

“At this point it appears that those seeking to stay in ‘commuter counties’ that surround the job hub of King County have the best opportunity to do so in Pierce County,” suggested Mike Grady, president and COO of Coldwell Banker Bain. “However,” he noted, “inventories in Pierce County are shrinking at a high rate as well (down nearly 24 percent), suggesting that demand is pushing southward to Tacoma/Pierce County. That will likely cause sales prices to spike in the future, so this opportunity may not last long.”

The median price on last month’s sales in Pierce County rose to $274,950 from $249,250 for a gain of 10.3 percent. That’s about 55 percent of the price in King County ($502,000), Grady noted. Single family home prices (excluding condos) in Pierce County ($280,000) were half the price in King County ($560,000).

Area-wide prices on last month’s completed transactions for condo sales rose 6.2 percent from a year ago, increasing from $275,000 to $292,000. King County condo prices increased 5.1 percent to $340,500.

Condo inventory plunged 33.2 percent, most notably in King County where brokers reported a sharp drop, at 41.5 percent. At month end there were only 759 condos listed for sale, down from the year-ago total of 1,136 units.

Sparse inventory of condos system-wide likely contributed to a 14.8 percent decline in pending sales. Brokers reported 1,063 pending sales of condos during February while adding 915 new listings. A year ago, members logged 1,247 pending sales and added 1,099 new listings to condo inventory.

Asked about recent news reports of immigrants backing out of home purchases in reaction to the President’s immigration policies, brokers had mixed comments.

“While we’re hearing from our brokers about buyer uncertainty related to those holding H-1B work visas (for temporary employees) and those who are undocumented residents, we don’t at this point see a significant effect on the market. Until we have clarity around the Trump Administration’s executive orders on immigration, it’s impossible to know what effect they may have,” said Grady.

Moorhead said there is a “distinct ripple being felt,” but added, “We do anticipate many buyers with the H-1B visa to start cooling their interest until clarity is given to how this new policy will shake out.”

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

KIRKLAND, Washington (Feb. 6, 2017) – Western Washington’s “high velocity” market continued during January with the number of pending sales (7,745) outgaining the number of new listings (6,507), according to new figures from Northwest Multiple Listing Service.

“Properties are moving through the market at an unusually fast pace,” remarked John Deely, chairman of the board at Northwest MLS and the principal managing broker at Coldwell Banker Bain. “Although we have a high number of new listings, they are moving into a pending or sold status within the typical 30-day reporting period. This phenomenon causes a low active listing count,” he added.

Brokers added 6,507 new listings to inventory last month (163 fewer than during the same period a year ago), while year-over-year pending sales jumped by 492 transactions for a gain of about 6.8 percent. New listing volume was the highest monthly total since October when members added 7,591 properties.

At month-end, there were 9,752 active listings in the MLS service area, which encompasses 23 counties. That total was 2,605 fewer than the year-ago volume of 12,357, a decline of 21 percent. Only three counties (Ferry, Jefferson and Kitsap) reported improvements in the number of active listings compared to the same month last year.

Measured by months of inventory, the selection is at historic lows in many counties. At month end, there was just under 1.7 months of supply system-wide, which compares to the year-ago figure of about 2.5 months of supply. Both King and Snohomish counties have less than one month of supply.

“If home buyers were hoping that January would start to bring more balance to the housing market, they’re going to be sorely disappointed. The number of homes for sale remains at record lows, and the growth in pending sales tells us that sellers are still firmly in the driver’s seat,” said OB Jacobi, president of Windermere Real Estate.

MLS director George Moorhead echoed Jacobi, pointing to five years ago when buyers could choose from 5,378 listings of single family homes in King County versus last month’s selection of 1,569 listings. “The real question is whether there will be relief in the near future, and the unfortunate answer is no,” said Moorhead, the designated broker at Bentley Properties, citing the combination of new jobs, a shortage of new homes, and a reluctance of sellers to list their home for fear of not being able to find their next one.

Commenting on “typical seasonal and beginning of the year adjustments,” one company president said he is encouraged by new listing activity. “There is no indication that the annualized trend of shrinking active inventory will reverse itself anytime soon, but we’re seeing momentary bubbles of increased inventory for buyers currently in the market” noted Mike Grady, president and COO of Coldwell Banker Bain.

“List it and they will come” is the new mantra as new listings come on the market, commented J. Lennox Scott, chairman and CEO of John L. Scott. Despite having more sales than new listings over the past few months, Scott said there is hope for homebuyers. “As the days start getting longer the future will look brighter for the backlog of buyers waiting to find a home.” Describing February as the bridge month between winter and spring markets, Scott expects to start seeing an increase in the number of new listings.

“Buyers who are properly positioned to make quick decisions, and who have the proper negotiation tactics and guidance are finding success in this high velocity market,” Deely reported.

Not surprisingly given the imbalance in supply and demand, prices continue to rise. Last month’s median price for the 5,874 completed sales of single family homes and condominiums was $327,175, up 9 percent from the year ago figure of $300,000. There were 889 more closed sales in January than for the same month a year ago for a 17.8 percent increase.

Single family home prices (excluding condos) increased 9 percent, rising from $309,950 to $338,000. The median price for single family homes that sold in King County last month was $525,000, up more than 6.9 percent from the year-ago sales price of $490,970. Several outlying counties reported double-digit gains.

“The softening of single family home prices in King County over the last few months, combined with the relatively large price increase in Snohomish County (8.2 percent) suggests buyers are migrating north in order to find more affordable housing,” said Jacobi.

Brokers in Pierce and Kitsap counties also reported price hikes larger than King County’s. The median price of a single family home in Pierce County jumped nearly 11.6 percent from a year ago while the year-over-year price in Kitsap was up 9.4 percent.

Condo prices rose 5.5 percent in January compared to a year ago, increasing from $255,750 to $289,900. King County condo prices surged more than 9.8 percent, from $282,250 to $310,000.

“For buyers, it is a good news/bad news scenario in Kitsap County,” reported MLS director Frank Wilson. “More houses came on the market last month than a year ago, but pending sales surpassed that number to keep the market tight. Brokers navigated these challenges and buyers endured, “but the tightness will likely be magnified during 2017,” said Wilson, the branch managing broker at John L. Scott in Poulsbo.

Wilson said open house traffic has “started off with a bang” as more buyers have decided now is the time to buy, believing that prices will only continue to rise .” He expects escalation clauses, multiple offer situations and backup offers to “be the norm during the first quarter. The hierarchy of purchasers: cash, conventional loan, VA loan, and FHA financing will continue to be the pecking order,” he stated.

“We’re seeing the frenzy change to a fanatical desire to own a home as buyers scramble to beat increasing interest rates,” reported Moorhead. He expects the Feds to increase rates two more times between now and April, “and that will only increase buyers’ aggressive tactics to secure a home,” he suggested.

Moorhead also noted sellers are able to “get away with putting homes on the market in conditions that historically would be rejected by buyers.” Now, however, Moorhead said buyers are willing to turn a blind eye to repairs and future maintenance.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

KIRKLAND, Washington (Jan. 5, 2017) – Like many other months of 2016, December was frustrating for buyers across Washington state as they encountered depleted inventory and rising prices. Post-election hikes in interest rates – with more on the horizon — added to would-be homeowners’ worries.

Northwest Multiple Listing Service statistics for December show year-over-year drops in new listings, but gains in pending sales, closed sales and prices. Pending sales (mutually accepted offers) in the four-county Puget Sound region reached their highest level since 2005.

“The data just keep telling the same story – low inventory and increasing prices,” remarked Mike Grady, president and COO of Coldwell Banker Bain. “As one of our brokers put it, ‘Sellers received an awesome Christmas gift in December, but buyers, only a lump of coal.'”

Brokers added 4,217 new listings to the inventory during December to bring the supply up to 10,571 listings. The volume of new listings surpassed the year-ago figure of 4,041, but supply still fell, dropping to only 1.4 months for the Northwest MLS market area covering 23 counties. Both King and Snohomish counties reported less than a month of inventory.

Robert Wasser, owner/broker at Prospera Real Estate in Seattle, said his analysis of the MLS data indicates the supply of single family homes for sale in King County just hit a post-recession low. “The only other time supply fell below one month was around this same time a year ago,” noted Wasser, a member of the Northwest MLS board of directors.

At month end, MLS figures show inventory (10,571 listings) was nearly 15.6 percent below year-ago levels (12,522 listings), with about 90 percent of the selection being single family homes.

Seventeen of the 23 counties in the MLS report had double-digit drops in active listings at the end of last month compared to December 2015.

Northwest MLS members reported 6,401 pending sales during December, up from 5,970 for the same month a year ago for a year-over-year gain of 7.2 percent.

“The housing market remains frenzy hot on a seasonal basis,” exclaimed J. Lennox Scott. Noting sales activity was substantially higher than the number of new listings, he said such conditions “continue to foster a competitive market where homebuyers are just waiting for the next new listing to come on the market.”

Commenting on strong sales in the Central Puget Sound region, Scott noted King County recorded the biggest year-over-year jump in pending sales of single family homes, surging nearly 11.3 percent, well ahead of Kitsap (up 4.5 percent), Pierce (up 4 percent) and Snohomish (up 3.2 percent).

“Buyers pursued homes aggressively all through November and December with little to no slowdown amid fears of rising interest rates and worsening inventory levels,” said MLS director George Moorhead. “Inventory levels have dropped to their lowest level, which makes buyer frenzy even more intense as prices approach double-digit appreciation,” he added. Moorhead, the designated broker at Bentley Properties, calculates buyers have lost $37,000 in buying power due to interest rate increases. He likens the situation to having two cars, “one going forward, and one going in reverse. The gap is widening too fast for some buyers.”

Closed sales also finished on a strong note with brokers reporting 7,575 completed transactions during December. That’s up more than 6.8 percent from a year ago when members notched 7,091 closed sales.

Prices area-wide also continued trending upward, rising nearly 9.2 percent from a year ago. The overall median price for single family homes and condominiums that sold during December was $343,950; a year ago it was $315,000.

King County prices jumped 12.2 percent, from $450,000 in December 2015 to $505,000 for last month’s sales. For single family homes (excluding condominiums) the median price for December’s sales was $550,000, unchanged from October and November. Prices peaked this year in King County in June, reaching $573,522.

Condo sales slowed compared to a year ago, due at least in part to a sharp drop in inventory (down more than 19 percent). Pending sales were essentially flat (up 0.73 percent). Closed sales for December slipped nearly 6 percent, while prices on last month’s completed sales of condos rose 9.8 percent. The median price on last month’s closed sales of condos was $280,000. Condo prices in King County jumped more than 12 percent, from $279,975 a year ago to last month’s sales price of $314,000.

“Looking ahead to 2017, the Seattle market will continue to perform well, even with the expected interest rate increase,” stated OB Jacobi, president of Windermere Real Estate. The regional economy is in full stride, he noted, adding, “This will continue to create increased demand for housing across the board. Price growth should start to cool a little as inventory levels rise modestly, but overall, 2017 should be another banner year for the housing market.”

Consumers should expect prices to continue edging upward, suggested Moorhead. “NAR indicates we are 70,000 units short of meeting the housing needs in the Puget Sound area. Builders are just flat out running out of urban land to work with,” he said. Moorhead believes rising costs for construction labor are the driving force for price increases. Builder confidence continues to grow, reaching its highest levels since 2005, he noted, but added, “Naturally, some trepidation is heard as some feel this level of growth in the market is completely unsustainable.”

Grady believes the pattern of low inventory and increasing prices will continue. “We believe it is a predictor for what to expect throughout 2017,” he commented. “There’s simply not enough new construction to fill the needs of new employees being hired both locally and new to the state. The key is employment,” Grady continued, saying “There’s no reason to think that a new administration will cause employment to slow down; rather, it’s more likely we’ll see it increase in the Puget Sound region so we’re off to another strong start in 2017,” he stated.

Scott, the chairman and CEO of John L. Scott, expects a higher number of new listings will start to show up in mid-February – “just in time for the spring housing market rush.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

KIRKLAND, Washington (Dec. 5, 2016) – Pending sales of homes hit an all-time high for the month of November according to the latest statistics from Northwest Multiple Listing Service. The report covering 23 counties around Washington state also shows the number of new listings added during the month plunged to the lowest level in 11 months, prompting MLS leaders to predict a busy winter for residential real estate as buyers compete for the smallest inventory since March.

“Last year’s holiday season ended up being the best time to sell a home around King County as sellers took the winter months off, but buyers remained persistent. The supply of homes for sale hit a post-recession low, and so far, this year is mirroring last winter’s trends,” remarked Northwest MLS director Robert Wasser, owner/broker at Prospera Real Estate in Seattle.

Figures for November show a 13.2 percent drop in inventory of single family homes and condominiums, a 9.4 percent gain in pending sales, a 31.3 percent spike in closed sales, and an 11 percent increase in prices compared to the same month a year ago.

At month-end, there was only 1.69 months of supply system-wide, believed to be a new low. For the 4-county Puget Sound region there is only 1.22 months of supply, with King County having the lowest level at under a month (0.96).

Pending sales (mutually accepted offers) totaled 8,217, and eclipsed the number of new listings (5,779) by 2,438 units. That imbalance depleted total inventory, dropping the number of active listings to 13,303, down 13.2 percent from a year ago.

“November’s pending sales for the four-county area of King, Snohomish, Pierce and Kitsap were the highest since 2005. There were 44 percent more pendings than new listings,” noted J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, who described market activity as a mini power surge. “Every time interest rates increase 0.5 percent we see these surges because buyers become anxious about increasing rates – but on a historical basis rates are still amazing,” he remarked.

John Deely, vice chairman of the Northwest MLS board, said the Seattle residential real estate market is not taking time off for an end-of-year breather. “The seemingly inexhaustible supply of ready, willing and able buyers continues to purchase available inventory. This imbalance in supply and demand continues to fuel multiple offers and drive prices upward,” said Deely, the principal managing broker at Coldwell Banker Bain in Seattle. Well-paying jobs in the tech sector are fueling demand, with “the increase in equity and tick up in interest rates enticing more sellers to the market.”

George Moorhead, another member of the MLS board, echoed those sentiments. “We have seen the market pick up significant speed since the mild slowing during the summer months.” He cited NAR reports that the Puget Sound area is 73,180 units short of demand, calling it a staggering number.

“Like the last two years we expect strong sales to continue through December, then taper off in January, only to pick back up mid-February with another flurry of aggressive buyers,” Moorhead continued. He also believes an uptick in interest rates will driver buyers into the market even harder, with inventory likely to plunge even lower.

The median price on last month’s closed sales of single family homes and condominiums area-wide was $342,000, up 11 percent from the year-ago figure of $308,000. August was the only other month this year with year-over-year double-digit appreciation for prices area-wide.

Thirteen counties in the Northwest MLS service area reported double-digit price increases last month compared to 12 months ago. Prices in King, Pierce and Snohomish counties jumped between 14.4 and 15.3 percent, but the largest spikes were in Okanogan (up 41.4 percent) and Jefferson (up 39.5 percent) counties. Last month’s overall median price for single family homes and condos that sold was down about 2 percent from this year’s high of $350,000 for sales that closed in June, July and August.

Prices for single family homes (excluding condos) rose 10.9 percent from a year ago to $350,500. King County reported the highest median price for single family homes at $550,000 (up 10 percent year-over-year).

Condo prices reflected more modest price hikes, perhaps a reflection of depleted inventory (down 18 percent) that is dragging down sales. Pending sales fell nearly 1.9 percent from a year ago. Last month’s median selling price area-wide was $280,000, about 5.7 percent higher than a year ago. In King County, which accounted for more than six of every 10 condo sales, year-over-year prices jumped more than $30,000 — from $298,500 to $328,844 (up about 10.2 percent).

“Seattle continues to defy all forecasts and now has the distinction of being the hottest market with the fastest-rising prices in the nation,” said Mike Grady, commenting the latest home price index from S&P Case-Shiller. “We believe the market will continue to be extremely active through the winter and beyond, although the Fed’s expected interest rate hike may affect this somewhat and provide some relief to buyers.”

Even with the much-anticipated increase in interest rates, Grady said he does not expect much leveling off of home prices or activity. Expectations of an easing of mortgage underwriting stringencies by the new Administration will result in additional buyers entering the market, which Grady believes “will add fuel to the fire. We anticipate being very busy through 2017.”

Other brokers agreed.

“Overall, the market continues to be frenzy hot on a seasonality basis, as we’re seeing the same positive momentum in the Puget Sound real estate market as last year,” stated Scott, adding, “We’ll be entering 2017 with an extremely severe inventory shortage that is going to lead us into a huge price appreciation boost after the first of the year.”

“Looking ahead to 2017, the Seattle market will continue to perform well, even with the expected interest rate increase,” stated OB Jacobi, president of Windermere Real Estate. “The regional economy is in full stride and this will continue to create increased demand for housing across the board,” he added. He also said he expects price growth to cool somewhat as inventory levels rise modestly, but he believes “2017 should be another banner year for the housing market.”

“This market engenders confidence and high expectations by sellers as they continue to command center stage,” remarked Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma.

“Inventory levels were supposed to increase by this time of year, yet stubbornly, would-be sellers remain on the sidelines, so buyers will continue to struggle to find a home and compete with other buyers through most, if not all of 2017,” added Beeson, a member of the MLS board of directors.

Beeson also commented on the “hottest market” label from Case-Shiller. “It sounds like an enviable position, but it brings its own set of problems and issues,” he noted. Lengthy times to obtain appraisals due to the limited number of appraisers, low appraisals, buyers being forced to pay cash for the difference between appraised value and the sales price, sellers refusing to make repairs on their property, lenders requiring repairs to be done prior to closing, and multiple offers were among concerns he listed.

Industry-watchers say conditions are ripe for sustained activity through the holidays, citing historically low interest rates, motivated sellers, fewer players (less competition), faster closings (fewer transactions to process) and the appeal of year-end tax deductions are motivators.

Gary O’Leyar, broker/owner of Berkshire Hathaway HomeServices Signature Properties, described the current market as “one of the most extreme I’ve seen in 42 years of working in the Greater Seattle area.” Although there may be a public perception that brokers are “having a heyday” he said it’s actually one of the hardest markets he and fellow brokers have encountered. One listing may generate multiple offers, but at the end of the day there is only one sale. “Along with buyers who are so tested by this market are the brokers who partner with them to work through this rugged gauntlet to secure a successful sale,” he noted.

Beeson also commented on the current market challenges, saying “even in a hot market sellers and buyers need the guidance of an experienced broker to navigate the waters.” For sellers, he said, finding a buyer is like the tip of an iceberg – it’s easily seen. “However,” he explained, “helping a buyer find the right home and winning in a multiple-offer situation, helping sellers choose the right offer, helping both parties close the sale are all under the surface and require a knowledgeable, experienced broker to avoid crashing against a failed sale.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW
Annual employment growth in Washington State slowed somewhat in the third quarter of this year, but still remains well above the long-term average. Additionally, the jobs that are being created are primarily quality, high-paying positions, which is important for the health of our economy. Unemployment in the state remains at levels that are somewhat higher than I would like to see, but this continues to be impacted by a growing labor force and modestly slowing job growth. I still expect to see the rate drop a little further as we move through the final quarter of the year.

HOME SALES ACTIVITY

• There were 24,277 home sales during the third quarter of 2016—up by an impressive 7.9% from the same period in 2015, and 6.8% above the total number of sales seen in the second quarter of this year.
• Skagit County saw sales grow at the fastest rate over the past 12 months, with transactions up by 25.6%. There were also impressive increases in home sales in Thurston, San Juan, Pierce, and Grays Harbor Counties. Sales fell slightly in Jefferson and Kittitas Counties.
• Overall listing activity remains low with the total number of homes for sale at the end of the quarter 11.2% below that seen a year ago. That said, I’m happy to report that listings have been slowly trending higher in 2016.
• I’ve been thinking about how sales can continue to rise while inventory remains so low. I believe this is due to an uptick in first-time buyers. These buyers have no home to sell, so they don’t add to the number of listings; however, they do cause sales to increase when they buy. This is a good trend to see!

HOME PRICES

• As demand continues to exceed supply, we are continuing to see upward pressure on home prices. In the third quarter, average prices rose by a substantial 10.2% and are 3.2% higher than seen in the second quarter of this year.
• The current rate at which homes are appreciating cannot continue, and I anticipate that we will see a “cooling” start to take place in 2017.
• When compared to the third quarter of 2015, price growth was most pronounced in Lewis County. In total, there were nine counties where annual price growth exceeded 10% and prices were higher across the entire region when compared to a year ago.
• Although supply levels are slowly starting to creep higher, we are still solidly in a seller’s market. Rising inventory levels should start to do a better job of meeting demand next year, which when combined with modestly higher mortgage interest rates, will see the region move closer toward becoming a balanced market.

DAYS ON MARKET

• The average number of days it took to sell a home dropped by twenty-two days when compared to the third quarter of 2015.
• All the counties that comprise this report saw the length of time it took to sell a home drop.
• In the third quarter of 2016, it took an average of 52 days to sell a home. This is down from the 74 days it took in the third quarter of 2015, and down from the 67 days it took in the second quarter of this year.
• King and Snohomish Counties remain the only two markets where it took less than a month to sell a home. Even though King County saw days on market rise slightly from 18 to 20, it remains the hottest market in the region.

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economics factors. For the third quarter of 2016, I am moving the needle very slightly toward the buyers. This is entirely due to the recent increase in inventory levels that I believe will continue through the rest of the year.

That said, the region remains steadfastly a seller’s market.

ABOUT MATTHEW GARDNER
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

KIRKLAND, Washington (Oct. 5, 2016) – It’s still a seller’s market, but some leaders from Northwest Multiple Listing Service think the imbalance may be easing in some areas, pointing to a slower pace of sales and moderating prices. Others aren’t convinced, citing mixed indicators.

Northwest MLS statistics summarizing September activity show year-over-year gains in the volumes of new listings (up 14.5%), pending sales (up 9.3%), closed sales (up 9.5%), and prices (up nearly 9%). Inventory for single family homes and condominiums across the 23 counties in the report dropped about 8 percent from a year ago.

Commenting on September’s activity, Northwest MLS director George Moorhead reported “rumblings on both sides of the fence” by buyers and sellers. “Buyers are getting antsy to make a move before interest rates rise and they’re looking harder at homes that have been on the market longer than 30 days.”

Sellers are considering remodeling instead of buying as they cannot find a suitable new home, according to Moorhead, the designated broker at Bentley Properties. He noted builders also face challenges in their searches for new development sites near metro areas.

MLS members continue to scramble to replenish inventory. Compared to a year ago, they added 1,275 more new listings during September, ending the month with 10,047 total new listings. Like most months this year, however, September’s pending sales of single family homes and condos exceeded the number of new listings. Brokers reported 10,463 pending sales (mutually accepted offers) last month for a 9.3 percent improvement over a year ago.

September’s new listings marked the lowest monthly total since February – but it may be an expected seasonal slowdown.

“We have one month until November when new listings coming on the market drop by 50 percent on a monthly basis compared to spring and summer months,” explained J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. With the decrease typically lasting until the end of February, Scott said for selection, “the best opportunity for homebuyers to find a home will be in the next 30 days.”

The current selection includes 18,136 active listings, down about 8 percent from the year-ago inventory. Only two counties – King and Clallam – reported year-over-year gains in inventory during September.

Area-wide supply, as measured by months of inventory, improved slightly from August, rising from about 1.9 months to 2 months. Supply remained below two months in King, Snohomish and Pierce counties.

Demand for homes around Puget Sound remains strong, with the market showing “no marked change throughout the summer months,” remarked MLS director Dick Beeson, the principal managing broker at RE/MAX Professionals in Tacoma. Well-priced, well-conditioned homes continue to command attention and draw offers in record time, he noted.

September was “an interesting month for a few different reasons,” noted OB Jacobi, president of Windermere Real Estate. Among factors he cited were the modest increase in the number of new listings in the tri-county region (King, Pierce, and Snohomish) and the slowing pace of sales and prices. “The good news is that all of this points towards a market that is slowly beginning to rebalance itself.”

“The increase in listings is pretty unusual given that the number of listings usually declines between August and September,” Jacobi commented, adding, “Considering how desperate we are for inventory, I hope this trend continues as we head further into the fall months.”

MLS director Frank Wilson believes Kitsap County is moving into the fall cycle, evidenced in part by slowdowns in listings and sales when compared to mid-year activity. He also reported fewer people at open houses and fewer multiple offer situations. “We are still heavily weighted to a seller’s market, but a small shift might be telling – we’re seeing more price reductions than in the recent past,” said Wilson, the branch managing broker and Kitsap District manager for John L. Scott Real Estate in Poulsbo.

Sparse inventory in many close-in neighborhoods, a shortage of appraisers, and the likelihood of an interest rate hike before year-end are sources of concern, according to some MLS spokespersons.

“We continue to see a seller’s market expansion in peripheral counties, with absorption remaining high and prices continuing their relentless increases,” said Mike Grady, president and COO at Coldwell Banker Bain. Additionally, he cited reports on healthy job creation and single-family building permits, and increases in investments in the local market by foreign buyers. “We don’t expect things to moderate significantly any time soon,” he remarked.

A shortage of real estate appraisers is concerning to Grady and other MLS officials. “We are hearing concerns from brokers that closing times are increasing because appraisals are more difficult to get completed in a timely manner given the frenzied pace of activity,” Grady stated, adding, how rush fees can also slow down the process for those not paying a premium for expedited service.

“With the current shortage of appraisers and the lengthened time and increased costs it takes to get an appraisal, this market is even more challenging,” said Wilson. “We’ve gone from reductions in closing time over the past 20 years to now lengthening the process because of changes to our industry and the requirements to be an appraiser.”

Beeson agreed, saying “Appraisals continue to plague brokers and sellers.” The number of certified appraisers statewide has diminished by half from 5,000 to around 2,500 since Dodd/Frank regulations took effect. Longer appraisal time isn’t the only challenge, he noted. “Appraisers are struggling to establish values based on the continued rise in sales prices. Many buyers are faced with the prospect of paying above appraised values if they want to secure a home,” according to Beeson, who noted this difference must be paid in cash so the mortgage amount doesn’t exceed the valuation.

Median sales prices system-wide jumped nearly 9 percent from a year ago, from $312,000 to $340,000. Compared to August, prices dropped by $10,000.

“It is normal for median home prices to fluctuate the second half of the year,” stated Lennox Scott. He noted the median home price for single family homes that sold in King County dropped from $550,000 in August to $538,000 for September. Compared to 12 months ago, the countywide median rose 9.7 percent for single family homes and 16.4 percent for condos.

Condo prices area-wide rose 17.3 percent from a year ago, escalating from $260,000 to $305,000. Supplies are tight, with only 1.3 months of inventory. In King County, where last month’s median sales price was $355,000, there is only one month of supply. Similarly, Snohomish County has only a month of inventory; year-over-year prices there rose nearly 9.8 percent.

“We have had many conversations with sellers who wonder if they have missed the market as inventory levels slowly rise and the Feds signaling a desire to raise interest rates in December,” remarked Moorhead.

“The looming prospect of higher interest rates is fueling buyer interest and prompting many buyers to take the plunge now rather than wait for a reset in prices,” reported Beeson. “Knowledgeable brokers coach buyers that a 1% change in interest rates equates to a $200-plus increase in monthly payments on a $400,000 home and more than $160 a month on a $275,000 home. That means property values would have to decrease by over 12% to balance the increase in payment due to higher interest rates. That’s not happening anytime soon,” he stated.

In a recent report on actions consumers can take in anticipation of rising interest rates, Bankrate, an aggregator of financial rate information, suggested “considering your home first.” On a $200,000 mortgage, half of one percentage point of interest means a difference of $20,000 or more over 30 years. “If you are on the fence about buying or refinancing, now is the time to act,” the author of the Bankrate report wrote.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

There are some industry pundits claiming that residential home values have risen too quickly and that current levels are on the verge of another housing bubble. It is easy to see how this thinking has taken form if we look at a graph of home prices from 2000 to today.

The graph definitely looks like a rollercoaster ride. And, as prices begin to reach 2006 levels again, it “seems logical” that the next part of the ride would be downhill. However, this graph includes the anomaly of the price bubble and the correction (the housing crash).

What if the bubble & bust didn’t occur?

Let’s assume that instead of the rise and fall in home prices that we saw last decade, we just had normal historic appreciation from 2000 to today. According to the 100+ experts that are surveyed for the Home Price Expectation Survey, normal annual appreciation for residential single family homes from 1987 to 1999 was 3.6%.

Starting with the median home price in 2000, we added 3.6% to it each year since then. Here is that graph intermixed with the above graph.

What this shows us is that, had the bubble and crash not occurred and instead we just had normal annual appreciation over this period, prices would actually be greater than they are today.

Bottom Line

There is no reason for alarm as prices seem to be right in line with where they should be.

School is back in session, the holidays are right around the corner, you might not think that now is the best time to sell your house. But with inventory below historic numbers and demand still strong, you could be missing out on a great opportunity for your family.

Here are five reasons why you should consider selling your house this fall: 

1. Demand Is Strong

The latest Realtors’ Confidence Index from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now!

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

According to NAR’s latest Existing Home Sales Report, the supply of homes for sale is still under the 6-month supply that is needed for a normal housing market at 4.7-months.

This means, in most areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market this fall.

Also, as builders regain confidence in the market, new construction of single-family homes is projected to continue to increase over the next two years, reaching historic levels by 2017. Last month’s new home sales numbers show that many buyers who have not been able to find their dream home within the existing inventory have turned to new construction to fulfill their needs.

The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

Fannie Mae announced that they anticipate an acceleration in home sales that will surpass 2007’s pace. As the market heats up, banks will be inundated with loan inquiries causing closing-time lines to lengthen. Selling now will make the process quicker & simpler. 

4. There Will Never Be a Better Time to Move Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 5.3% over the next year, according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.

According to Freddie Mac’s latest report, you can also lock-in your 30-year housing expense with an interest rate around 3.46% right now. Interest rates are projected to increase moderately over the next 12 months. Even a small increase in rate will have a big impact on your housing cost.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire. 

That is what is truly important.

KIRKLAND, Washington (Sept. 7, 2016) – Home sales in Western Washington continued to outpace year-ago activity, but member-brokers at Northwest Multiple Listing Service say persistent inventory shortages are constraining activity.

Despite a sparse selection in many areas, an expected summer slowdown, and “appraisal conundrums,” Northwest MLS members notched 11,898 pending sales during August, eclipsing the same month a year ago by 1,295 transactions for a 12.2 percent gain. There were 8,628 pending sales in the four-county Puget Sound region — the best August for mutually accepted offers since 2005 when members tallied 8,874 sales.

Brokers added 11,411 new listings to the Northwest MLS database during August, but they presented offers for even more buyers (11,898) to keep inventory below two months of supply. At month-end, there were 18,336 active listings in the MLS system, a decrease of 11.6 percent from a year ago, resulting in only 1.9 months of supply. (Four to six months is generally considered to be a “neutral” or balanced market for buyers and sellers.)

“The market remains just as intense as July,” observed J. Lennox Scott, chairman and CEO at John L. Scott, Inc. “The best opportunity for homebuyers to find a home will be in the next 60 days,” he suggested, explaining the number of new listings coming on the market is likely to drop by 50 percent each month between November and February. “We expect a repeat of conditions from last winter when every available home that came on the market in areas with a shortage of inventory received quick action.”

“Buyers in the Seattle area are plentiful in all price ranges, but the entry-level housing demand continues to be the highest,” reported John Deely, principal managing broker at Coldwell Banker Bain. As an example, he said a recent open house for a condo listing in the South Lake Union area drew more than 100 visitors in a single day. Tech workers continue to dominate the primary buyer demographic, he said, adding that a significant number of their parents are relocating here to purchase properties close to their children.

Buyers in most of the 23 counties served by Northwest MLS can expect to pay more than they would have twelve months ago, with most areas showing double-digit year-over-year price increases. System-wide, the median price for last month’s 9,767 closed sales of single family homes and condominiums was $350,000, up more than 11 percent from the year-ago figure of $315,000.

In King County, the median price on 3,656 sales that closed during August was just under $500,000. That’s up nearly 11 percent from the year ago figure of $450,700, but slightly lower than July’s median sales price of $505,000. Prices on single family homes (excluding condos) that closed in King County jumped 10 percent year-over-year, rising from $499,950 to $550,000.

Condo prices area-wide surged nearly 16 percent from a year ago, rising from $258,750 to $299,950. King County has the highest median sales price at $335,000, which is a 12 percent jump from a year ago. That county also has the most meager supply of condos, with only 28 days or so (0.91 months).

“We expect median prices to continue to increase, and likely at an accelerated pace through the fall,” said Mike Grady, president and COO at Coldwell Banker Bain. He attributes the anticipated increase to shrinking inventories.

Grady, a past chairman of the MLS board, also noted that the price gap between homes in King County versus Pierce and Kitsap counties is narrowing. Both counties experienced higher percentage price gains than King County, while Snohomish County trailed. There is a difference of $250,550 in the price of a single family home in Kitsap County versus King County, and a gap of $265,000 when comparing Pierce County prices with those in King County, according to the latest MLS statistics. Snohomish County’s prices are $150,000 lower than King County’s. “It’s possible demand is shifting to the lower prices of Pierce County where commuting times into King County are similar [to Snohomish County’s],” he remarked.

Northwest MLS director Dick Beeson, of Pierce County, also commented on prices, noting steady gains. “For the first eight months of 2016, South Sound real estate has had quite a ride.” MLS figures show last month’s median price for single family homes and condos that sold in Pierce County, at $283,225, is up 18 percent since January. “These increases occurred despite the headwinds of continued inventory shortages,” said Beeson, the principal managing broker at RE/MAX Professionals.

Beeson reported 2007 sales prices have once again been achieved in South Sound, adding “It took nine years of slugging our way back, but we’re here. Sellers who bought in 2007 have finally stretched their necks above water.”

Even though South Sound brokers have averaged monthly double-digit increases in new listings in an attempt to satisfy the buyer pool, Beeson noted strong pending sales in that region have resulted in less than two months of supply. Continued inventory shortages, strong consumer confidence, solid job creation and good salaries are factors he cited for the robust activity. “It’s a good time to buy real estate and wait,” he suggested.

Multiple offers are still in play, according to brokers George Moorhead and Diedre Haines.

“Well-priced homes are seeing multiple offers,” reported Moorhead, a member of the Northwest MLS board of directors and the designated broker at Bentley Properties in Bothell. Unlike earlier in the year, he said sellers who have held off listing their homes are seeing buyers less willing to push up prices. Moorhead also said some buyers are expressing concerns over possible interest rate hikes. “Some buyers who indicated they would hold off until spring are now moving into the market just to beat the interest rate increases,” he stated.

Haines, principal managing broker, South Snohomish County for Coldwell Banker Bain, described the market as being in the “midst of the summer slowdown – but not as slow as usual.” Healthy appreciation rates and low interest rates are sustaining activity, according to the veteran broker. She anticipates a post-Labor Day uptick, but said the forthcoming election is causing “confusion, distraction and frustration” with potential negative impacts for the fourth quarter.

Along with low inventory resulting in multiple offers on some listings, Haines said brokers continue to struggle with low appraisals. “Given the current market demand these low appraisals are extremely hard to understand and accept,” she remarked, adding, “The delays are creating closing date extensions and added stress for buyers, sellers and lenders — and in some cases, failed sales. These issues are hurting the overall market,” suggested Haines, a past chairman of the MLS board.

Deely said some sellers are pushing the price of their properties to the upper end of the value range. “We are seeing more properties go past their offer review dates, and the resulting price reductions on overpriced properties chase the market down.” He said most sellers understand that today’s buyers are more cautious of properties that don’t draw offers in the first two weeks so they make quick adjustments to spur offers.

MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. in Poulsbo, noted August is typically “front-end loaded” as it slows the last two weeks when families prepare for back to school and getting in an end-of-summer trip. Wilson, the immediate past chair of NWMLS, also suggests buyers can expect more open houses on Saturdays now that football season is under way and attention shifts to “Seahawks Sundays.”

Washington and other states in the West are maintaining sales momentum, unlike other regions in the country. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country” in July, stated Lawrence Yun, chief economist at the National Association of Realtors®.

Commenting on NAR’s statistics for the month of July, Yun said Realtors are reporting diminished buyer traffic because of the scarcity of affordable homes on the market. “The lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historic lows.”

In NAR’s latest market report, the group’s president, Tom Salomone, a broker from Florida, said in addition to affordability concerns, appraisal complications are appearing more frequently as the reason why a contract signing experienced a delayed settlement. NAR figures indicate appraisal-related contract issues were the root cause of more than one-fourth of contract delays in the past three months.

Looking ahead, Beeson believes “more of the same is on the way,” adding, “Buyers are fortunate to have low interest rates” and replenished inventory. OB Jacobi, president of Windermere Real Estate, said even though the market continues to favor sellers, there are signs it is slowly starting to shift. “We’re still a far cry from a balanced market, but the overall direction is positive.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

KIRKLAND, Washington (Aug.4, 2016) – Home prices are still rising but the supply of homes is improving, prompting brokers to suggest some relief is in sight for would-be buyers. “We might actually be starting to move very slowly back toward a more balanced market,” said OB Jacobi, president of Windermere Real Estate, in commenting on July’s figures from Northwest Multiple Listing Service.

The MLS report summarizing last month’s activity shows active listings (including single family homes and condominiums) are at the highest level since September 2015 and the volume of new listings added to inventory topped the 12,000 marked for the third consecutive month.

With inventory shortages apparently easing in some areas, once-sidelined and frustrated house-hunters may be resuming their search, based on the latest statistics. Pending sales for the 23-county service area rose nearly 4 percent compared to a year ago, setting a new high for volume during July.

Member brokers reported 11,657 pending sales system-wide last month, a slight drop from June when they notched 11,995 mutually accepted offers. Despite that dip, the four-county Puget Sound region had its best-ever volume of pending sales for July (8,545), eclipsing last year’s record number (8,248).

“We are experiencing a record breaking market,” exclaimed J. Lennox Scott, chairman and CEO of John L. Scott, Inc. “Last month was the best July in history in the Puget Sound real estate market. We’re in a frenzy hot market with a large backlog of buyers.” He credits improving inventory with spurring sales. “That additional inventory gave us the boost to not only be able to claim an all-time, best ever July, but to also position the last three months as the best in history for [pending] sales activity in the Puget Sound region.”

Some brokers, including MLS director Frank Wilson, expect the robust activity will slow in August as families focus on vacations and back-to-school preparations.

Brokers added 12,178 new listings to the selection during July, which compares to 11,198 additions during the same month a year ago for an improvement of nearly 8.8 percent. At month end, there were 18,287 active listings for sale versus the year-ago figure of 21,069. That represents a year-over-year drop of “only” 13.2 percent; it’s been hovering in the minus-20 ranges for most months since spring 2015.

King, Snohomish and Pierce counties still have less than two months of supply, with double-digit increases in prices compared to a year ago, prompting some buyers to expand their search to outlying areas.

“Buyers are feeling the squeeze every day, and now, outlying areas are seeing multiple offers like the major cities have been experiencing the last two years,” noted Northwest MLS director George Moorhead.

Buyers are using driving apps with their searches to determine whether or not to consider a home and its proximity to their workplace, according to Moorhead, the designated broker at Bentley Properties.

“Our difficulty with limited inventory and multiple offers continues in Snohomish County,” reported Diedre Haines, a past chairman of the Northwest MLS board. “The biggest problem right now is a resurgence of low appraisals – often between $30,000 and $35,000 below the agreed upon price.”

Also concerning to Haines is a tendency to forgo due diligence during competitive bidding situations, something she says she sees nearly every day. “In my opinion, sellers and buyers should not consider offers with waived financing, inspection, investigations, etc. as good offers,” she stated, adding, “They should be mindful of our state’s ‘buyer beware’ protections and allow buyers the time and ability to perform their due diligence.”

Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County, said the appraisal problem is plaguing all market areas of the county, and involves different appraisers.

“This is indeed a strange situation, especially when taking into consideration that most sellers are cautious in their decision to not take the highest offer – even in multiple offer scenarios,” Haines remarked. She is also troubled by appraisers’ current practice of using comparable properties that are only with one-half mile of the subject property, rather than the historically typical 2-to-3-mile radius, resulting in a “not good comp” that sometimes leads to failed sales.

One notable exception to the existence of low appraisals is new construction, according to Haines. “It continues to return to our marketplace at a slow but steady pace.”

“Our brokers in Seattle proper, and now more broadly in King County, say sales are slowing down. With the increase in inventory, there may finally be some relief for home buyers,” suggested Mike Grady, president and COO at Coldwell Banker Bain. However, he added, “Prices continue to rise at impressive rates in many areas.”

Grady also mentioned the “ripple effect” is continuing, with Seattle’s experience of shrinking inventory and rising prices occurring in surrounding areas.

The median price for last month’s 9,466 closed sales of single family homes and condos (combined) was $350,000. That reflects a jump of 9.6 percent from a year ago when it was $319,250. Within the 23 counties in the report, the median price ranged from $57,950 in Ferry County to $505,000 in King County.

A comparison of prices by counties shows San Juan County topping the chart. The median price on last month’s sales (including single family homes and condos) was $507,500, a jump of nearly 21 percent from a year ago. That edged out King County where the median sales price of $505,000 was up 15 percent from twelve months ago when it was $439,000, but down slightly from June’s figure of $510,000.

For single family homes (excluding condos), the area-wide median selling price was $358,150, a 9.2 percent gain from a year. King County had the highest median price for single family homes at $555,000. That’s a 14.4 percent year-over-year increase.

Condo prices for July surged 17.3 percent from a year ago, from $260,000 to $305,000. Inventory shortages persist, with less than 1.3 months of supply area wide, and less than a month (0.90) in King County.

Commenting on the market in Kitsap County, where his office is based, MLS director Wilson said there’s a significant backlog of buyers. Multiple offers on new listings and steady traffic at open houses are continuing, he added.

Scarce inventory and end-of-summer priorities will likely create “a bit of a pause” in the market, predicts Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo. He expects vacations and back-to-school shopping will divert some prospective buyers and sellers, but come mid-September “the market will take off again until Thanksgiving.”

Elaborating on his comment about a possible shift to a more balanced market, Jacobi said King County “really sticks out for me” when looking at the entire region. Single family home inventory levels match those of a year ago, yet home sales have slowed year-over-year. “Price growth also appears to be slowing from the rapid growth that we’ve become used to in recent months.”

Brokers who commented on the latest MLS report dismissed murmurs of a housing bubble.

Wilson emphasized this market is not like it was in 2005-2007 when it was driven by speculation and loans to people who could not afford them. He believes the market’s future holds two certainties: “Home prices are heading up and interest rates are soon to follow.” Wilson also described this market as “need driven based on an improving job market in King County as well as simple supply and demand.” Remember, he added, “normal markets have adjustments . . . ours will come in a couple of years.”

“An imminent bubble is not likely,” said Moorhead. “Even though we cannot predict the future, if interest rates remain low and inventory levels remain at historic lows, a bubble is unlikely,” he said.

Scott expects current market conditions will continue at least into the summer of 2017. “The best opportunity for homebuyers to find a home will be in the next three months,” he suggested, noting new listings coming on the market historically taper off in November. “Because of the current increase in inventory, now may be a great time for buyers who were discouraged from entering the market to rethink their decision,” 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 nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

The Consumer Price Index (CPI) was released by the Labor Department last week. An analysis by Market Watch revealed the cost of rent was 3.8% higher than a year ago for the second straight month in June. That’s the strongest yearly price gain since 2007.

This coincides with a report released earlier this month in which AxioMetrics announced that rents are continuing to increase in 2016. The report revealed:

• There was a 3.7% increase in effective rents in the second quarter of 2016 as compared to the same period last year.
• That the effective rent growth this quarter compared to last quarter was 2.3%.
• Annual effective rent growth was positive in 49 of the top 50 markets, based on number of units. Only Houston was negative, at -1.4%, as the fallout from energy-industry job losses and excess construction continues

Here is a graph to illustrate the rate of increase over the last several years:

Bottom Line

With rents continuing to rise and mortgage interest rates still at historic lows, let’s meet up today to determine if you could turn your monthly rental cost into a home of your own.

KIRKLAND, Washington (June 6, 2016) – Just as expected, the month of May had an uptick in new listings (12,272), but just as many buyers (12,275) made offers on homes during the month to keep inventory depleted, according to the latest figures from Northwest Multiple Listing Service.

“Inventory is being squeezed from all directions,” reported Frank Wilson, branch managing broker at John L. Scott in Poulsbo. He said the pool of house-hunters includes young first-time buyers, renters whose rents are escalating, buyers who are returning to the market after recovering from a foreclosure or short sale, investors, and baby boomers who are purchasing for their retirement needs. Additionally, in Kitsap County where his office is located, there are military families who are transferring to a base there and want to buy.

By month end, member brokers reported 15,198 active listings in the Northwest MLS database. That’s down more than 22 percent from a year ago when buyers could choose from an inventory of 19,515 listings across the 23 counties served by the listing service.

“The May housing market was not just hot, it was frenzy hot,” commented J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Brokers are working like bees in a hive as the housing market creates a buzz of sales activity in the Seattle-Central Puget Sound area.”  By his analysis, 80 percent of the homes coming on the market in King and Snohomish counties are selling within the first 30 days. “Many sell within the first week,” Scott reported, adding, “A healthy/normal market would have 30 percent selling in the first 30 days.”

MLS figures show there is only 1.76 months of supply system-wide. In both King and Snohomish counties, there is barely more than one month of supply – well below the 4-to-6 months that many experts use as an indicator of a balanced market.

“With less than two months of inventory, every new listing seems to draw multiple offers,” Wilson remarked. He also said homeowners who want to move up in this same market know they face a conundrum: “If we sell today, will we be able to buy tomorrow?”

Buyers are becoming more and more aggressive with offers and pricing, and that concerns some brokers, said Northwest MLS director George Moorhead. As the gap between pricing and value widens, some would-be buyers may overextend themselves. Also, appraisers are struggling with a lack of comparable sales versus multiple offers that escalate well beyond the listing price, said Moorhead, the designated broker at Bentley Properties. Since lenders base loans on appraised values, buyers will likely need to make up the shortfall.

Even though brokers say paltry inventory is limiting sales, the year-over-year volume of pending sales rose more than 7.4 percent last month. Members reported 12,275 mutually accepted offers, up from the year-ago total of 11,425. MLS data going back to 2004 shows that one-month total is the highest on record.

Prices also rose. The median price area-wide for last month’s 8,630 closed sales of single family homes and condominiums (combined) was $339,950. That’s up more than 7.2 percent from twelve months ago when purchasers paid $317,000 for the median-priced home. Ten counties reported double-digit price hikes.

In King County, the median price jumped more than 11.7 percent, from $434,000 to $485,000. Prices on single family homes surged nearly 16.5 percent, rising from $480,942 to $560,000. Condo prices were up 9 percent, but finding one proved challenging as inventory dropped 29 percent in King County.

Former MLS board member Ken Anderson, the president/owner of Coldwell Banker Evergreen Olympic Realty in Olympia, said last month set records for both pending and closed sales. “Low inventory coupled with the huge number of buyers has our market moving at a record pace,” according to his calculations. “Well-priced homes are selling in an average of just 12 days – a full month faster than the peak of the market in 2006,” he commented.

Brokers offer various suggestions to prospective buyers as they vie for scarce inventory:

• “The best advice I can offer to potential first-time buyers is to think outside the box” said Gary O’Leyar, a past chairman of the Northwest MLS board. He encourages buyers to consider purchasing a “stepping stone” property. Since the close-in neighborhoods in Seattle and Bellevue hold little opportunity for first-time buyers, their best option is to look further out, he suggests. “Consider future growth, such as in areas near light rail or other transit services, and areas that have good public schools,” said O’Leyar, the owner and designated broker at Berkshire Hathaway Home Services Signature Properties in Seattle. “Waiting on the sidelines to buy will likely lead to increasing rental costs, so why not make a real estate investment purchase and have some hedge against future inflation,” he added.
• “Relationships are paramount in this market,” said Lennox Scott. “If you’re looking for a home, make sure your broker knows your story and can convey it in a compelling way.”
• “Buyers must carefully study the market so they can make decisive but smart offers when new listings arrive on the market,” emphasized Anderson. “With the robust activity, success for buyers means making an offer that stands above the competition.” He also urges buyers to not forgo important protections like home inspection contingencies.

Wilson and other brokers do not see an easing in the inventory crunch “for some time to come.” Even if the Fed raises interest rates, he believes shortages will persist because of the backlog of buyers.

Moorhead noted new home construction is also seeing prices soar as many of the defunct projects from 2008 to 2012 are being completed and built out. “Finding land for new home plats is forcing more teardowns and pushing builders/developers farther out where services are not as prevalent. He said first-time buyers tend to be hardest hit since they’re priced out of many close-in areas and must look at commute times of 45 minutes or more.

“There’s good news for luxury homebuyers,” Scott suggests. It’s prime time to showcase such properties, he explains, and “this is the season when more luxury inventory hits the market. The good selection in King County is easing the pressure for homebuyers in the luxury ($1 million and above) market. A search of the MLS database shows there are currently more than 900 listings in King County with asking prices of $1 million or more.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state

KIRKLAND, Washington (May 5, 2016) – Northwest Multiple Listing Service reported strong gains in the volume of new listings its members added during April (up 13.6 percent from March), but inventory remained well below the supply needed for a more balanced market. MLS leaders say the lopsided market is prompting some anxious buyers to take ill-advised risks.

Prices showed some signs of moderating with a 5.5 percent year-over-year increase across the MLS 23-county market area. That’s the lowest YOY gain since December 2014 when it was 5.45 percent.

In its latest statistics with summaries of April activity, the MLS reported 11,407 pending sales during the month, about the same as a year ago when brokers reported 11,384 mutually accepted offers.

For the four-county Puget Sound region, pending sales totaled 8,332, making last month the third strongest April in the past 16 years. Compared with prior Aprils, last month’s volume was surpassed only in 2015 and 2005.

“Our market is near historically low levels of absorption. This has things weighted in sellers’ favor,” remarked Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty and a former Northwest MLS director. “Successful buyers are working closely with their brokers to study the market, choose great lenders, and make smart choices in composing compelling but not careless offers,” he added.

Area-wide, members added 11,939 new listings to the MLS database during April, a modest improvement from a year ago when they logged in 11,495 homes and condos. With last month’s additions, total inventory at the end of April included 14,235 active listings, a sharp drop (down 21.5 percent) from twelve months ago when the selection included 18,132 residences.

J. Lennox Scott, chairman and CEO of John L. Scott, Inc. described April as “another grand slam month for housing,” adding, “The market is more intense than a year ago. We are still seeing 80 percent of the homes coming on the market sell within the first 30 days.”

Scott said “virtually all new listings are selling, many with multiple offers in all the market areas in King, Snohomish, Pierce and Kitsap counties in the price ranges where 90 percent of the sales activity is happening.” Heavy open house traffic and multiple offer situations are keeping brokers extremely busy, he added.

“Low inventory and low interest rates are still putting upward pressure on prices, but hopefully last month’s bump in new listings is the start of a longer term trend, and will lead us towards a more balanced market,” said OB Jacobi, president of Windermere Real Estate. Saying the number of homes for sale is still well below where it needs to be, he expressed happiness “that the long awaited spring market finally sprung.”

Across the 23-county market area, there is 1.85 months of supply, a slight improvement from March when there was 1.79 months of supply, but down from the year-ago level of 2.36 months of supply. King County continues to have the scarcest inventory, with only about 1.1 months of supply.

“It’s this lack of inventory (both new construction and resale) that’s causing prices to escalate so quickly,” agreed Mike Grady, president and COO of Coldwell Banker Bain. He notes almost all multi-family developments in past few years are apartments, rather than condominiums, which he believes is due to construction defect litigation. “Multi-family developers are now making the business decision not to create condominiums and thus avoid such litigation,” he stated, while suggesting a need for legislative reform.

Commenting on low inventory and high demand, Grady remarked, “We must ask when will apartment projects that were (or are being built) to condominium standards be converted to condos?”

Brokers say the shrinking supply of condos is likely contributing to fewer sales and escalating prices. Inventory is down nearly 28 percent from a year ago, pending sales fell 5.8 percent, and prices for condos jumped 14 percent, rising from $250,000 to $285,000. In King County, where more than 62 percent of the sales occurred and supply is at 0.86 months, year-over-year prices surged nearly 19 percent, rising from $272,000 to $323,500.

For single family homes only (excluding condos), inventory dropped about 21 percent, pending sales were about even with twelve months ago (up 1.2 percent), and year-over-year prices rose about 4.7 percent, from $320,000 to $335,000. King County’s single family home prices shot up 12.5 percent, to $540,000.

Brokers believe the frenzied market is altering some buyers’ behavior – and not all of it is prudent, they suggest.

Anderson, a former MLS director whose office is in Olympia, said “buyers are back in a big way.” In choosing to buy now, they’re showing a good deal of confidence, he believes.

Diedre Haines, a former chairman of the Northwest MLS board of directors, reports there are growing signs “of buyers’ fatigue, and game-playing at its finest.” Pre-inspections are being conducted as the “new normal,” and/or buyers are waiving many of their rights with regard to inspections, title reviews, neighborhood reviews, and financing contingences, according to Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County.

“In my opinion, this is risky behavior for both buyers and sellers,” Haines commented, adding, “Buyers need to perform their due diligence investigations, and sellers should be cautioned about the wisdom, or lack thereof, in thinking these waivers strengthen the offer, are good for them, or that they create a ‘no hassle’ quick-close transaction.” She urged parties to a transaction to think through the potential consequences of taking such risks.

“Buyers are severely limited in the negotiating process and are paying prices for properties they wouldn’t have a few years ago,” said Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. He likened the market to a fine violin that’s playing the tune of sellers.

Beeson, one of the current directors of Northwest MLS, noted the number of bank-owned properties sold in King County dropped from a high of almost 14 percent of all homes sold in 2011 to under 3 percent so far this year. His analysis also indicates the percentage of all-cash sales has remained fairly constant — near 15 percent — during the same period.

“Buyers are being forced to make large down payments or pay all cash at the same or higher rates than previously because of tighter loan requirements and seller requirements that buyers pay the difference between the appraised value of a home and the purchase price.” He said this is becoming an expectation in King County and has filtered its way south into Pierce and Thurston counties.

Director George Moorhead said both buyers and sellers are feeling the pinch with a lack of inventory. This is “increasing the level of concessions on offers regardless of the warnings given by brokers,” he reported. He also noted an increasing number of cash offers are occurring as buyers turn to family members for short-term loans and assistance with down payments.

“Sellers are still holding off as they too cannot find the home to upgrade or downsize. Even though many sellers are willing to sell, then rent until the right home comes up, many are still wary they would be buying in a bubble and fear the loss of value,” stated Moorhead, the designated broker at Bentley Properties in Bothell.

MLS vice chairman John Deely pointed to “tech transplants from California where urban housing is much more expensive” as fueling bidding wars. “Even though this relocating buyer is sometimes paying 20 to 30 percent over list price in our market, the size, quality and location are superior to what they owned or could have bought in the California market. These buyers are bringing cash . . .and cash offers still dominate the successful winners in the multiple offer competition,” stated Deely, principal managing broker at Coldwell Banker Bain in Seattle.

Deely also expressed concern around buyer concessions. “Buyers are forgoing the protective investigations of properties and waiving the escape-type contingencies to strengthen their offers, he noted. “Waiving financing is of particular risk when combined with bidding wars as we have seen an increase in low appraisals.”

Looking ahead, Anderson said given the lack of new home construction and the huge pent-up demand, the seller’s market will likely continue for some time. “This means prices will rise higher than normal – which means today’s buyers will be happy they purchased when they did.”

Pricing is more important than ever, Deely emphasized. “Some sellers are missing the mark as they aggressively price their properties and they end up languishing on the market. Sellers with above average time on the market are cause for concern – and in most cases will ensure an offer at less than list price.”

Scott agreed. “We will continue to see price appreciation and a shortage of supply through the summer. To win a home, buyers need to have all the bases covered.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

KIRKLAND, Washington (April 4, 2016) – Traffic isn’t the only thing that is gridlocked around many Puget Sound communities. “We’re experiencing gridlock in the Puget Sound housing market,” suggested J. Lennox Scott in reaction to the latest statistics from Northwest Multiple Listing Service.

MLS figures show pending sales across the 23 counties it serves dropped about 4.5 percent in March compared to the same period a year ago. Inventory fell sharply – down more than 25 percent. Brokers say that imbalance helped spur a 9.4 percent escalation in prices area-wide, with 12 counties reporting double-digit increases.

One MLS spokesperson wondered if spring “has sprung in the wrong direction.” Noting inventory usually grows at this time of the year, yet it is shrinking, broker Frank Wilson said “I feel like we planted our tulips upside down in Kitsap — as if the spring housing market has sprung in the wrong direction. Instead of growing up, things are growing downwards.”

“The housing pool is getting smaller, resulting in a market that is extremely hard on people who are looking to find a place to live in Kitsap,” remarked Wilson, the branch managing broker at John L. Scott’s Poulsbo office. He suggested the only homes that aren’t selling “are truly overpriced or have some other challenging condition.”

Kitsap County is one of six counties with less than two months of supply. Area-wide, Northwest MLS figures show only 1.8 months of supply, well below the “balanced” range of four-to-six months.

“We are virtually sold out of inventory and there’s a pipeline of stalled buyers,” commented Scott, the chairman and CEO of John L. Scott, Inc.

During March, brokers reported 10,900 pending sales, about 500 fewer mutually accepted offers than a year ago for a drop of nearly 4.5 percent. For the four-county Puget Sound region, pending sales were down about 6 percent.

The year-to-date drop in pending sales versus first quarter 2015 is a reflection of tight inventory, according to MLS members. “It’s not for any other reason except there aren’t enough homes coming on the market to satisfy pent-up buyer demand,” stated Scott. He also points to listing shortages for the steady escalation of home prices.

To illustrate his point, Scott cited figures for the single family component. In King County, pending sales for March declined nearly 11 percent, while prices spiked 20.7 percent. Pending sales of condos (excluding single family homes) were about the same as a year ago in King County, but year-over-year prices jumped 15 percent.

MLS members added 10,511 new listings to inventory during March, about the same as a year ago when they added 10,505 single family homes and condos to the offerings. At month end, there were 12,653 total active listings in the Northwest MLS system. That represents a drop of 25.6 percent from the year-ago total of 17,007 active listings.

“In today’s market sellers want to find their next home before they list their current home, but because of the severe inventory shortage it’s hard to win in a multiple offer situation,” Scott explained. He said some sellers are hesitant to put their home on the market because they fear it would sell instantly and they might not win their next home. “It’s a Catch 22 situation,” he explained.

Wilson said the stalemate is especially frustrating for homeowners who are finally above water and have equity in the homes. “They now want to buy, but can’t find a home to purchase so they can’t sell.”

Kitsap County’s large military population also faces hurdles, according to Wilson. This group, which includes active duty military, retirees and veterans, would like to use their VA benefits, but in multiple offer situations, VA is a third choice behind cash and conventional. “We’re asking these buyers if there’s any way they can qualify for a conventional loan as one means to make their offer more attractive to sellers.”

Wilson also believes the diverse pool of buyers is larger than it has ever been, fueling the frenzy among would-be owners. He said these potential purchasers include first time buyers, renters seeking to own (because rents are so high), investors, move-up and move-down buyers (who were held back by the last market), relocating families, and offshore buyers.

Buyers are finding themselves in the company of another buyer “waiting in the wings” as back-up buyers, thereby creating an environment where the “first place” buyer is reticent to ask for repairs in response to inspection discoveries, reported Bobbie Petrone Chipman, a member of the Northwest MLS board of directors. “The existence of back-up buyers often shifts leverage to sellers when negotiating property improvements,” noted Chipman, principal managing broker at John L. Scott in Puyallup.

“The market continues at a breakneck pace,” reported Diedre Haines, principal managing broker-South Snohomish County for Coldwell Banker Bain. She’s seeing more multiple offers – “as many as 20-plus per listing” — as buyers vie for scarce inventory. Cash buyers are in abundance, she also noted.

While some express concern about a housing bubble as prices continue to escalate, she said she is not yet worried about a bubble in Snohomish County. Areas in north and northwest Snohomish County and some pockets in the southern part of the county still have homes not yet out of the underwater status – “close, but not quite there,” according to Haines.

An uptick in new construction around Snohomish County is expected to continue, Haines stated. “This would certainly help stabilize the market so appreciation can return to more ‘healthy’ escalation or normal levels,” she suggested.

MLS director George Moorhead agreed the hottest areas continue to draw multiple offers and offers over asking prices, but he said many buyers are unwilling to overpay. “Home pricing is critiqued at a much higher level now with all the information available to buyers,” he reported. “The conversations we have with buyers today are totally different than in years past. We’re discussing pricing in greater detail, along with school ratings, neighborhood trends, and future values,” he said.

Mike Grady, president and COO of Coldwell Banker Bain, noted closed sales outside of King County are outpacing year-ago levels. “This is most likely a reflection of the lack of affordability within King County and indicates that buyers are increasingly looking to other counties for their home purchases,” he remarked.

The median selling price on homes and condos that closed last month was $320,000, up 9.4 percent from twelve months ago when it was $292,500. Compared to February, prices rose nearly 4 percent. In King County, year-over-year prices for March jumped 11.5 percent, from $411,200 to $458,450.

For single family homes (excluding condos), prices area-wide are up 8.7 percent from a year ago. In King County, prices soared 20.7 percent compared to year ago, jumping from $440,250 to $531,250.

Condo prices shot up nearly 14.6 percent from a year ago. For the 1,075 sales that closed last month, the median price was $275,000. That compares to the year-ago sales price of $240,000.

MLS members reported 7,075 closed sales of single family homes and condos during March for a gain of 4.5 percent from the year-ago volume of 6,769. First quarter figures for King County show the number of completed transactions is trailing 2015 slightly (6,114 versus 6,148), but the total for the other 22 counties in the MLS report shows a year-over-year increase of 11.4 percent.

“It will be interesting to see if the announced job cuts at Boeing and JBLM (Joint Base Lewis-McChord) will affect home sales in Snohomish and Pierce counties in particular,” wondered Grady.

Moorhead reports hearing almost daily conversations around two topics: the possibility of rising interest rates and a near-term real estate correction. “These concerns are expressed by first-time buyers to luxury home buyers.” He also reports hearing comments on recent loan programs with zero down or no income qualification loans akin to programs blamed for the 2007 crash. “It is refreshing to hear such comments as it shows people in the market, both buyers and sellers are more in tune with trends” and, he suggests, more poised to make better financial decisions.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

KIRKLAND, Washington (February 4, 2016) – Depleted inventory is contributing to “overwhelming” traffic at open houses, shifts in strategies for both buyers and sellers, and escalating prices, according to officials with the Northwest Multiple Listing Service.

Dick Beeson, a former chairman of the MLS board, said the lack of inventory in almost every county is, “without question, a 2016 game changer.” He described traffic at open houses as sometimes simply overwhelming. “There haven’t been any battle royals on the premises, but it could happen any day now,” quipped Beeson, the principal managing broker at RE/MAX Professionals in Tacoma.

The latest figures show a drop of nearly 28 percent in the number of active listings in the MLS database compared to a year ago. Members added 6,670 new listings during the month across 23 counties in the MLS service area. That’s down nearly 4.6 percent from twelve months ago. At month end, members reported 12,357 active listings, which compares to 17,082 at the end of January 2015.

Measured another way, there is just under 2.5 months of inventory which compares to 3.8 months the MLS reported for January 2015. Supply was especially tight in King County, at 1.4 months of inventory, and Snohomish County, with just under 1.6 months.

Condo inventory (excluding single family homes) fell sharply, from 1,793 active listings a year ago to last month’s total of 1,145 at month end, a plunge of 36 percent. In King County, the inventory of condos dropped 42 percent.

For the area overall, there is just 1.7 months of condo inventory, with Snohomish County reporting the tightest supply (1.1 months) followed by King County (1.2 months).

The inventory shortage took a toll on last month’s sales. The number of pending sales (mutually accepted offers) fell about 5.3 percent area-wide during January, although half the counties in the report tallied increases compared to a year ago. The 5.3 percent drop marked the first negative change in year-over-year comparisons since April 2014.

Member brokers reported 7,253 pending sales last month, down from 7,658 for the same month a year ago. Despite January’s downturn, industry leaders remain upbeat.

“Only three other Januarys since 2000 had more homes go under contract in the four-county region area of King, Snohomish, Pierce and Kitsap counties,” noted Mike Grady, president and COO of Coldwell Banker Bain. “This, in the face of stock market scares, shows the viability of real estate as the better investment for both homeowners and investors,” he suggested.

Commenting on last month’s activity in King County, MLS director Joe Deasy said sales are down nearly 15 percent compared to last January because inventory is down more than 31 percent. “Demand is still really strong based on multiple offers and high-volume open house traffic,” added Deasy, the co-general manager of Windermere Real Estate/East.

Other industry leaders agreed. “We’re selling virtually all new listings, many with multiple offers in all the market areas of King, Snohomish, Pierce and Kitsap counties in the price range where 90 percent of the sales activity is happening,” said J. Lennox Scott, chairman and CEO of John L. Scott.

Scott also said his analysis of the number of homes selling in the first 30 days is double what a normal, healthy market would look like.

“The Greater Seattle area housing market remains out of equilibrium,” stated OB Jacobi, president of Windermere Real Estate. He said sales will continue to suffer at the current pace of transactions without adding new inventory. “At the same time, prices will continue to appreciate and could outperform our expectations if inventory levels and mortgage rates remain at current levels.”

MLS director Frank Wilson said the Kitsap County market is “taking off again right out of the gate,” adding, “We are seeing an increase in open house activity as well as more multiple offer situations.”

Wilson said Kitsap County, where there is only 2.4 months of inventory, is “deep into a seller’s market.” He expects the market will become more unbalanced throughout the first half of 2016. “First-time home buyers are probably being hit the hardest in this type of market,” observed Wilson, the branch managing broker at John L. Scott’s Poulsbo office. In general, he said financial resources are thin for this segment, their confidence is low, and the types of loans they use are often not as favorable.

A strong fourth quarter in 2015 is reflected in January’s closed sales of single family homes and condos (combined), which rose 11.6 percent from a year ago. Members reported 4,985 completed transactions; a year ago, they tallied 4,467 closings. The year-over-year median price on these sales increased 7.5 percent, rising from $279,000 to $300,000. Ten counties reported double-digit gains.

Single family home prices (excluding condos) jumped 7.6 percent from a year ago for the area overall. For the four-county Puget Sound region, the median price for a single family home rose 12 percent, from $325,000 a year ago to last month’s figure of $363,975. Snohomish County reported the largest increase at 16.6 percent. A comparison of prices by county shows King County tops the chart with a median sales price of $490,970, up 11.2 percent from a year ago.

Condo prices spiked 16.3 percent from a year ago, rising from $219,900 to $255,750.

Rapidly rising prices and low inventory are worrisome, according to some brokers.

“A true conundrum exists,” said George Moorhead, designated broker at Bentley Properties. “For sellers there is no better time in history, but the concern we hear is there’s no place to move.” He said since most sellers are looking to move up to larger homes, the ripple effect is “more like a tidal wave as it rolls back to the first-time buyers in the market who are quickly getting priced out of the possibility of purchasing a home.”

Moorhead, a member of the Northwest MLS board of directors, reported doing a recent search of homes for sale in Bellevue with asking prices between $500,000 and $800,000. That search yielded only about a dozen properties in the database, a result he described as “staggering” and well below the norm.

Despite such challenges and complaints by buyers, Moorhead said buyers are still presenting offers that are very aggressive.

The increasingly competitive market is prompting hesitation among some would-be sellers, reported Bobbie Chipman, principal managing broker at John L. Scott in Puyallup. She said potential sellers are expressing reluctance to list their existing home prior to finding a home to move into due to limited inventory.

“A strong strategy is for sellers to list their home, sell and close, and move into temporary housing,” suggested Chipman, one of the MLS directors. “This approach allows offers to be written that are not conditioned upon their sale closing, and it strengthens their position as a buyer,” she explained.

Echoing the notion of being flexible, Frank Wilson said a seller’s decision to accept an offer does not come down to sales price alone. “Type of loan, lender, closing time, amount of earnest money, and other concessions like closing costs and offer price all play into a seller’s decision,” he stated. “On top of that, a seller can choose any offer for any reason, even a lower price offer if other variables are favorable. Escalation clauses, back-up offers and finding funds or a bridge loan are all tools that buyers will need to employ to be successful in today’s market.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

KIRKLAND, Wash. (Jan. 21, 2016) – Members of Northwest Multiple Listing Service reported 88,331 closed sales during 2015, outgaining the prior year’s volume of 77,276 transactions for a 14.3 percent increase.

Measured by dollars, last year’s sales of single family homes and condominiums were valued at more than $34 billion. Compared to 2014, that dollar volume represents a gain of nearly 23 percent.

The sales activity reflects the work of 23,800 brokers across 23 counties in the member-owned Northwest MLS.
Last year’s completed sales included 75,975 single family homes (about 86 percent of the total) and 12,356 condominiums. The total units and dollar volume surpassed the previous highs during 2007 when members registered 82,197 sales valued at $32.3 billion.

The area-wide median price for last year’s sales of single family homes and condominiums was $310,000, improving on the previous year’s figure of $285,000 (up nearly 8.8 percent). A comparison by county shows median sales prices ranged from $123,000 in Ferry County to $432,000 in King County.
Year-over-year prices for single family homes (excluding condominiums) increased almost 8.5 percent system-wide, rising from $295,000 in 2014 to last year’s median price of $320,000. Condo prices jumped 13.3 percent, from the 2014 figure of $225,000 to last year’s median selling price of $254,900.

Brokers scrambled to replenish inventory throughout 2015. They reported more than 116,000 pending sales (mutually accepted offers) during 2015, while adding 107,578 new listings to inventory. Brokers said depleted inventory often led to bidding wars for homes in the most desirable areas.

During 2015, the average area-wide supply, as measured by months of inventory, fell to 2.4 month, down from the previous year’s figure of 3.5 months. King County had the lowest level, averaging only 1.3 months of supply. Industry analysts tend to use a 4-to-6 month range as an indicator of a balanced market, favoring neither buyers nor sellers.

High-end sales also surged during 2015. Northwest MLS members reported 2,676 sales of single family homes priced at $1 million or more, up more than 29 percent from the 2014 total of 2,069 “luxury” sales. Condos priced at $1 million and up accounted for another 237 sales. A total of 1,459 condos commanded sales prices of $500,000, far outgaining 2014’s total of 878 half-million dollar-plus sales (up 66 percent).

The highest-priced single family home that sold during 2015 by a member of Northwest MLS was a property on Mercer Island that commanded $13.8 million. Topping the chart of high-priced condominiums was one in a downtown Seattle high-rise that sold for more than $3.1 million.

Among other highlights in its annual compilation of statistics, Northwest Multiple Listing Service reported:

 About 46 percent of last year’s single family home sales had three bedrooms, while the vast majority of condos (73 percent) had two bedrooms or fewer.

 The median price for a 3-bedroom home that sold in 2015 was $283,250, about 7.9 percent higher than the previous year’s figure of $262,500. A comparison by county shows the median price for this size home ranged from $139,000 in Ferry County to $452,500 in San Juan County.

 Of the condo sales, about six of every 10 (61.9 percent) were located in King County, primarily in Seattle or on the Eastside. That ratio matched the figure for 2014.

 For the new construction component involving Northwest MLS brokers, newly built condos fetched higher prices than single family homes. Last year’s sales included 8,548 newly built single family homes that sold for a median price of $425,000, and 1,018 condos that sold for a median price of $449,950.

 A comparison of 2015 and 2014 median prices of single family homes shows all but one county reported year-over-year gains, but most have not yet outgained the peaks reached in 2007.

 Prices vary widely among school districts. Homes that sold last year in nine districts reported median prices of more than a half-million dollars, topped by Mercer Island at $1.2 million.

In addition to the comprehensive statistical summary for its members, Northwest MLS also reported enhancements to several services it provides to brokers. Among 2015 highlights in its year-end report to the brokers were major upgrades to various features of its database system and mobile applications. The MLS also announced plans to provide a new online scheduling and management tool in early 2016.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

The National Economic Forecast

1.The U.S. will continue to expand with real GDP growth of 2.3% in 2016.

Although a positive number, the forecasted rate of growth suggests that we will be modestly underperforming in 2016.  On a positive note, oil prices are likely to remain well below long-term averages, which puts more money into consumers’ pockets in terms of disposable incomes.  However, I believe that consumers are likely to continue to save rather than spend which will constrain growth.  That said, there is certainly no recession on the horizon – at least not yet – and a strong dollar will act as a bit of an anchor.

2.Employment will continue to expand but the rate of growth will slow. Look for an increase of 1.6% in 2016.

We are rapidly approaching full employment (generally considered to be when the unemployment rate drops below 5 percent).  As such, growth in employment has to be driven more by population growth rather than a return to employment. 2015 saw an average of around 210,000 jobs created per month and I believe that this is likely to slow to an average monthly gain of 190,000 new jobs.

3.The U.S. unemployment rate will continue to drop and end 2016 at 4.8%.

As mentioned above, we are heading toward full employment and, as such, the national unemployment rate cannot trend much lower.  That said, the less acknowledged U-6 rate (which includes those working part-time and those marginally attached to the workforce) will remain elevated at around 8%, signifying that there is still some slack in the economy and room for the rate to drop a little further.

4.Inflation will remain in check with the Consumer Price Index at 1.9%.

The Federal Reserve has begun the long-awaited tightening of monetary policy and we will likely see the Fed Funds Rate continue to move higher over the next two years. Inflation has yet to respond to the low unemployment rate, but it will.

The core rate of inflation should remain in check and the overall rate could stay below long-term averages as a function of stubbornly low energy costs. Should we see a shift in OPEC’s position relative to oil supply, the overall rate of inflation could rise more rapidly.  Oil prices, therefore, will remain in focus during 2016.

The National Housing Market Forecast

5.Mortgage rates will rise, but we will still end 2016 with the average 30-year fixed rate below 5%.

I am taking the Fed at its word when it says that monetary tightening in 2016 will be gradual and heavily data dependent. Accordingly, I expect only a modest uptick in long-term rates in 2016. Furthermore, as long as the Federal Reserve continues to reinvest the dividends that it is receiving from their bond holdings – which is highly likely – the yield on the key 10-year treasury will remain low and hold mortgage rates in check. This is only likely to change after the general election, therefore suggesting that rates will remain very attractive relative to their long-term averages.

6.Credit Quality – which had been remarkably stringent – will relax a little.

Access to credit, specifically mortgage instruments, has not been easy for many would-be homebuyers but that is set to change.  I believe that we will see some improvement, specifically for borrowers with “near-prime” credit. This will be of some assistance to first-time buyers; however, credit quality will still be higher than it needs to be.

7.Existing home sales will rise modestly to an annual rate of 5.53 million units with existing home prices up by 4.7%.

I anticipate that we will see some improvement in overall transactional velocities in 2016, but unfortunately, demand will still exceed supply. Prices will continue to rise, but at a more constrained pace than seen over the past few years. This will be a function of modestly rising interest rates as well as slightly improving levels of inventory. I anticipate that we will see more listings come online as more households return to positions of positive equity in their homes.

8.New home sales will jump and be one of the biggest stories for 2016.  Look for a 23% increase in sales and prices rising by 3.4%.

I believe that builders will start to build to the entry-level buyer, filling a huge void.  Additionally, I see the total number of new home starts increase quite dramatically in 2016 as banks start to ease lending and builders start to believe that the downward trend in homeownership has come to an end.  This will help to absorb some of the pent-up demand currently in the market.

9.Foreclosures will continue to trend down to “pre-bubble” averages.

Any story regarding foreclosures will be a non-story as the rate will continue to trend down toward historic averages. However, we will see the occasional uptick as banks work their way through their existing inventory of foreclosed homes. Move along.  There’s nothing to see here.

10.The Millennials will start to enter the market.

There are several substantial reasons to expect an increase in Millennial buyers. Firstly, early Millennials are getting older and starting to settle down, and even with modestly higher mortgage rates, rents are likely to continue to trend upward, and this will pull many into homeownership.

Secondly, more favorable mortgage insurance premiums, additional supply from downsizing boomers, and growing confidence in the housing market will lead to palpable growth in demand from this important – and substantial – demographic.

To conclude, it appears to me that 2016 will be a year of few surprises – at least until the general election! Because it is an election year, I do not expect to see any significant governmental moves that would have major impacts on the U.S. economy or the housing market.

Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K. 

KIRKLAND, Washington (January 6, 2016) – Home prices have “clearly recovered” in King County and a few other areas served by Northwest Multiple Listing Service. Many member-brokers say prices are likely to keep rising as a backlog of buyers competes for depleted inventory.

Those were among reactions from brokers upon reviewing the December statistics from the MLS. The latest report shows the year ended on a mostly positive note with pending sales, closed sales and prices all showing year-over-year increases. Not surprisingly, listing activity dropped, in part because some sellers are balking at listing their home for fear of not finding a replacement.

Selling prices for single family homes and condominiums that sold across the Northwest MLS 23-county service area surged 8.6 percent from a year ago, rising from $290,000 to $315,000. The price of a single family home (excluding condos) that sold in King County during December jumped nearly 15.5 percent, from $440,000 to $508,000, prompting OB Jacobi, president of Windermere Real Estate to comment, “If December told us one thing, it’s that home prices have clearly recovered in King County. Last month the median price for single family homes broke the pre-recession record of $481,000 that was set in July 2007.”

Another industry leader, J. Lennox Scott, chairman and CEO of John L. Scott, noted the 9.2 percent drop in King County’s pending sales during December, saying “The only reason pending sales dropped in King County was due to a lack of inventory.” MLS figures show active listings in King County were down 39 percent (about 1,400 fewer properties) from 12 months ago.

Area-wide, inventory was off 29 percent from a year ago, plunging from 17,659 active listings to 12,522. That total includes 4,041 new listings the MLS brokers added during December, which was down from 4,367 the members added during the same month a year ago.

Inventory levels fell well below the threshold many industry experts use to gauge a balanced market.

Area-wide there was just under 1.8 months of supply, with four-to-six months generally considered to be a “balanced” level. In King County, inventory dropped to less than one month (0.84). It was slightly better in the adjacent counties, with Snohomish at 1.13 months and Pierce at 1.76 months. Kitsap County also reported less than two months of supply. Only five of the 23 counties in the MLS report had more than six months of supply.

“The lack of inventory makes buyers twitch when a new listing hits the market,” observed Dick Beeson, a member of the Northwest MLS board of directors. “These buyers and their brokers are ready, willing and able to pounce on well-priced, well-located properties,” added Beeson, the principal managing broker at RE/MAX Professionals in Tacoma. These prepared buyers helped propel last month’s 15 percent increase in pending sales in Pierce County compared to a year ago.

Pending sales system-wide, which totaled 5,970 during December, clearly outpaced the brokers’ ability to replenish inventory. The sales volume was up 3 percent from a year ago when members reported 5,794 mutually accepted offers. Measured another way, last month’s pending sales outnumbered new listings by a wide margin – a differential of 1,929 units.

“With the backlog of buyers waiting in the wings, any new inventory that comes on the market will be snapped up immediately,” predicts Northwest MLS director Frank Wilson. He expects 2016 may be “very stressful” for some buyers, citing low inventory, increasing prices, rising interest rates, plus a growing pipeline of qualified buyers as sources of house-hunter anxiety.

Other factors could also come into play to squeeze inventory, according to Wilson. They include buyers whose credit has been repaired after foreclosures or short sales, investors who see real estate as an alternative to the stock market, escalating rents that prompt renters to consider home ownership, and buyers from outside the U.S.

Wilson, the branch managing broker at John L. Scott’s Poulsbo office, said the limited selection means “buyers are going to find themselves settling on a house because they need one instead of leisurely shopping for the home of their dreams.”

Lennox Scott also foresees a fast-paced, “intense” market, with prices escalating in areas where inventory is low. “The lack of inventory near job centers persists,” he remarked. Buyers come out in big numbers beginning January 1, he noted, but new listings come later, typically toward the end of February.

“The low inventory in the Seattle area market will send many first-time homebuyers looking at suburbs and put additional pressure on multifamily properties,” said John Deely, principal managing broker at Coldwell Banker Bain in Seattle. He points to the formation of new households due to the strong job market as a factor in the imbalanced market. “Our economy is being charged by a multi-faceted job base and this is driving employment to new all-time highs,” he observed.

Deely, a director with Northwest MLS, said both long-time homeowners and new homebuyers are feeling the impact of rising prices and interest rates.

One consequence Deely noted is decreased buying power. “For buyers, every 1 percentage point increase in interest rates decreases buying power by about 10 percent,” he explained. He believes the diminished power coupled with rising prices will push buyers who are on the fence to make their move. “The same two factors will also motivate long-time homeowners to jump into the market as they looking to maximize their profit and find suitable replacement properties,” he remarked.

Gary O’Leyar, a former chairman of the Northwest MLS board, also commented on interest rates. “There’s been a lot of buzz about the recent increase in rates. It has been nearly 10 years since the Fed raised its benchmark rate. Many current homeowners and would-be homeowners may not have been born, and/or may not recall the days when long-term mortgage rates were 10 percent or higher.”

Some brokers say rising prices are more worrisome than upticks in interest rates.

Noting differences in the tri-county area where pending sales declined by 9.2 percent in King County but increased by double digits in both Snohomish and Pierce counties, Jacobi thinks price hikes in King County are “clearly pricing many buyers out and into the adjacent areas.”

MLS figures show wide differences in prices within the four counties in Central Puget Sound region. Pierce County had the lowest median price for December’s sales at $249,950, while King County had the highest at $450,000. Homes and condos that sold in Kitsap County last month had a median price of $266,500; in Snohomish County the median sales price was $335,500.

The median price on December’s sales increased 8.6 percent area-wide compared to a year ago. Ten counties reported double-digit gains; four counties had year-over-year decreases in median sales prices.

Condo prices increased about 6.7 percent, from $239,000 to $255,000. In King County, which accounted for about 55 percent of the sales, the median sales price was $279,975. That’s up about 7.7 percent from a year ago.

Despite rising prices in most areas, closed sales ended the year on a strong note. Brokers reported 7,091 closings during December, outgaining the total of 6,284 for the same month a year ago (an increase of 12.8 percent). For the year, Northwest MLS members logged 88,831 closed sales, up from 2014’s total of 77,276 for a 14.3 percent gain.

Commenting on prices, Beeson said, “Although prices have risen year over year throughout the NWMLS region, it has not been a phenomenal rise as seen in the mid-2000s.”

Beeson also dismissed speculation of a housing bubble – unless “lenders get greedy again.”

“The housing bubble created in 2005-2008 does not appear evident at this time,” Beeson stated, adding, “Today’s buyers are generally very well qualified and they are using real money as down payments — their own money. They are not relying on creating a second mortgage as their down payment, thereby disguising the fact that they had no real money of their own for a down payment.” Beeson remains wary of some lenders, however. “Watch out for lenders if they begin allowing buyers with lower credit scores to qualify to buy homes as interest rates tick up. Those days are to be feared.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

KIRKLAND, Washington (December 4, 2015) – Inventory remains “critically low,” but there are fewer house-hunters in the hunt during this holiday season so motivated sellers and buyers are seeing success, according to brokers with Northwest Multiple Listing Service. Its just-released statistics for November show year-over-year gains in pending sales, closed sales, and prices, but a steep decline in inventory.

“The housing market continues to be red-hot on a seasonal basis, but this winter will be even more intense given the dangerously low inventory,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Compared to a year ago, MLS figures show drops in the number of new listings added to inventory during November (down 4.6 percent) as well in the total number of active listings at month-end (down 26.5 percent).

Twenty-one of the 23 counties served by Northwest MLS reported double-digit declines in their volume of active listings last month compared to the same time period a year ago. For the overall area, there were 15,327 active listings, which compares to the year-ago total of 20,864. Of these totals, 5,268 were new listings added during the month; a year ago, members added 5,521 listings to the selection.

“Buyers are pleasantly surprised to have less competition right now. Many are taking advantage of this by searching diligently for a home,” commented Dick Beeson, the principal managing broker at RE/MAX Professionals in Tacoma. “Sellers who stay in the market during the holidays are often rewarded by less competition as well, thus making their efforts profitable,” added Beeson, a Northwest MLS board member.

MLS members reported 7,511 pending sales during November for a 10 percent increase from a year ago when they notched 6,821 mutually accepted offers. Condo activity was brisk with pending sales jumping more than 21 percent from a year ago. Single family home sales rose about 8.5 percent.

“The rumblings of frustration have evolved to utter exasperation among buyers as inventory levels continue to drop,” reported MLS director George Moorhead, the designated broker at Bentley Properties. Despite their frustration, he said buyers are knowledgeable and “tuned into” the market, with some even factoring in the cost of breaking a lease as part of the cost of purchasing a home in this real estate climate.

Broker Ken Anderson also commented on the tight supply. “Our market is approaching record low absorption rates. We haven’t seen inventory this low in more than a decade,” stated Anderson, the president/owner and designated broker at Coldwell Banker Evergreen Olympic Realty in Olympia.

Anderson said buyers have remained active all year. “Every month this year our market has improved for sellers. It is really a uniquely good time,” he observed.

Scott agreed, noting “there is more pressure on new listings than we had last winter.” A higher percentage of homes is selling within the first 30 days, according to his analysis. “This is setting the stage for a frenzy market in the spring of 2016. Even if interest rates go up slightly, buyer demand and low inventory will push prices up,” he believes.

Commenting on figures showing only nine of the 23 counties served by Northwest MLS have more than six months of supply (a figure some use to indicate a balanced market), MLS director Darin Stenvers said “that trend is not likely to change anytime soon.”

Stenvers, the managing broker at John L. Scott’s Bellingham office, said it is also unlikely “that even a small upward movement in interest rates alone will change our housing market’s future. We expect many buyers will be staying in their homes much longer than in the past,” he stated, “and this is contributing to the shortage of new listings.”

Acute shortages are in evident King and Snohomish counties, both with less than two months of supply.

“The low market inventory continues to be the stress factor for buyer and brokers,” said Kathy Estey, the branch managing broker at John L. Scott, Inc. in Bellevue. She reported multiple offers are continuing on homes that are in top condition and priced competitively. But, she emphasized, “over aggression in pricing is always detrimental to sellers.”

“The Snohomish County market continues to be extremely active,” said David Maider, designated broker/owner at Windermere Real Estate M2 in Everett and a member of the MLS board of directors. “With interest rates maintaining historically low levels and no indication that more property is headed for the market, we expect prices to increase in the first quarter of 2016. Multiple offers are happening on well priced and prepared properties, but not at the frequency that was occurring this past spring and summer,” he reported.

Mike Grady, president/COO of Coldwell Banker Bain | Seal, agreed. “Sales prices and rents will continue to increase next year, making ours a tight market for home buyers.” Commenting on the anticipated hike in interest rates, Grady said he isn’t expecting an increase to slow sales locally. “Adding nearly 65,000 new households to the greater Puget Sound region in the past 12 months reflects not only a great job market but also a growing demand for housing. We expect sales and median home values will continue to rise in 2016.”

Even as prices rise, until supply improves, sellers will remain firmly in the driver’s seat of an “insanely competitive housing market,” commented OB Jacobi, president of Windermere Real Estate.

“I’m still very concerned with the lack of inventory in the Seattle housing market,” Jacobi stated, adding, “Even with the drop in inventory we normally see this time of year, the current levels are critically low. Looking at the data as far back as 1999, we’ve never seen a lack of homes for sale to this degree.”

MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle, said the combination of low listing inventory, the seasonal slowdown, and pent-up demand is fueling multiple offers on properties in all price ranges. “Ballard, Queen Anne and Beacon Hill are single family hot spots, with Capitol Hill and Belltown/Downtown leading the condo sales activity,” he reported.

Northwest MLS data show extremely low supplies of both single family homes and condos in the map areas closest to the major job centers. Not surprisingly, prices in most of those areas are escalating.

Prices on homes and condos that closed last month rose nearly 6.6 percent from a year ago, from $289,000 to $308,000. For single family homes, the increase was about 5.7 percent, from $299,000 to $316,000, with seven counties reporting double-digit gains.

In King County, the median price for home sales that closed during November was $499,950, a jump of 13.6 percent from the year-ago figure of $440,000.

Condo prices surged 17.8 percent, rising from $225,000 to $265,000.

Prices can vary widely within counties. For example, within King County, where the MLS tracks 29 map areas, median prices for homes and condos that sold last month ranged a low of $235,000 in the Dash Point/Federal Way area to more than $1 million on Mercer Island.

“Given that the median home price of a single family home in King County is just shy of a half-million dollars, we can assume buyers are choosing to buy further away from Seattle and Bellevue in areas where homes are substantially cheaper,” remarked Jacobi. MLS figures reveal wide variation from county-to county. While the median selling price on last month’s sales in King County was $499,950, it was $350,000 in Snohomish County and even less in both Kitsap ($259,000) and Pierce ($249,900) counties.

Pricing is still as important as ever, cautioned Moorhead, who said in today’s market a home will not sell for less than market value. “Sellers still have to be careful as buyers clearly show their knowledge, which is obvious when a home has been on the market longer than 30 days.”

Commenting on the market in Kitsap County, MLS director Frank Wilson noted prices there are up 15 percent since January, with the median price on single family homes rising from $225,000 (in January) to $259,000 for last month’s sales.

“We are seeing the typical seasonal cycle, including a slight slowdown in open house traffic as we moved toward Thanksgiving,” Wilson reported. He expects a pick-up in activity the week before Christmas and then an earlier than usual spring market – perhaps starting in mid-January.

“As our spring market blooms this year, it will be earlier. Buyers will find fewer choices and what is available will be at a higher price,” Wilson predicts. “Sellers still need to make sure their homes are priced correctly and that it looks good, smells good and feels good – the basics have not changed,” he emphasized.

For now, Wilson said sellers who have their home on the market can expect “condensed traffic,” which he likened to a “good soup broth with every sip full of flavor. Every buyer who looks at a home is serious. They have fewer choices, so sellers will likely see greater success than during other times of the year.”

MLS members reported modest increases in the number of completed transactions from a year ago, 5,999 versus 5,872 for a 2.2 percent gain. Anderson attributes this to a timing factor due to the last day of the month following on a Monday. “We had a huge block of closings on November 30th, but those won’t be reflected until the December numbers.”

Other brokers also commented on seasonal factors.

“With people going to and from work in the dark, the weekends get busier for brokers. The time for showing a property is compressed,” commented Beeson. But, he added, “smart brokers keep working through the winter months knowing that a fool fails to plant a crop in season, and when harvest comes they look but find nothing.”

“Many sellers feel spring or summer are better times to sell, but statistics show December to be an excellent time for sellers to market their homes because there is less competition, rates continue to be favorable and holiday decorations add to the staging of a home,” commented Estey, who also serves as a board member at Northwest MLS.

Buyers may also benefit from slower activity, Estey added. “In the last few weeks we have seen some homes within 20 miles of city centers of Bellevue and Seattle come on the market and not sell immediately. Some buyers have actually been able to negotiate a little with these sellers,” she noted.

Wilson also mentioned the impact of the new TRID rules (a set of documents required during the mortgage process). “Buyers, sellers and brokers need to be patient at the end of the transaction as lenders comply with the new laws. Gone are the days of last minute changes to the terms of the agreement,” he stated.

Deely said the new TRID rules seem to be catching some lenders and closing service providers off guard while they adjust their operations and systems to deal with the new regulations.

Brokers who commented on the latest MLS report tended to express optimism for 2016.

“There are still countless more buyers who are waiting for the right home to come on the market. Savvy sellers will look to market their homes earlier in 2016,” suggested Anderson.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Here are the latest market charts from the MLS.
Click on each image below for a larger version.

Active Listings vs. Sold Listings

Number of Pending Listings

Median Sales Price

For more information our the Seattle and Eastside Real Estate Market contact Tony Meier here:

KIRKLAND, Washington (November 5, 2015) – With holidays approaching, real estate brokers usually expect a slowdown as buyers and sellers shift their attention elsewhere. “This year is different,” say some industry leaders.

“Today we have one of the best markets we’ve ever seen for sellers,” observed Ken Anderson, managing broker and owner at Coldwell Banker Evergreen in Olympia. “Buyers are still surging to the market and inventory is low. It’s a very good time to sell. Owners who are eager to make the next move don’t have to wait six months or until spring to act,” added Anderson, a former board member at Northwest Multiple Listing Service.

Newly released MLS figures for October show pending sales are up 7.8 percent from a year ago, rising from 8,643 transactions to 9,317. Nearly half the counties in its service area reported double-digit gains in the number of mutually accepted offers. For the four-county Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties, Northwest MLS members tallied 6,977 pending sales, the highest October volume in a decade.

For 19 of the 23 counties in the latest MLS report the number of pending sales surpassed the number of new listings added to inventory. System-wide there were 8,094 new listings that came on the market during October, about the same as 12 months ago when members added 8,102 listings. With those additions (the fewest monthly total since February) inventory at the end of the month stood at 18,068 listings, well below the year-ago total of 23,501 for a 23.1 percent year-over-year drop.

Closed sales rose 7 percent from a year ago, increasing from 7,257 to 7,769. Last month’s total slipped below 8,000 closings for the first time since April, with some brokers citing inadequate inventory as a factor.

“Given the severe shortage of homes for sale, I’m not surprised to see that both pending and closed sales slowed down last month,” said OB Jacobi, president of Windermere Real Estate.

Broker Mike Gain agreed. “If we just had more homes to sell the number of closed units would have increased even more during October,” he stated. “Selling more homes at a faster rate than we are replenishing supply shows just how good the local real estate market really is,” remarked Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate.

The MLS reported 2.33 months of supply area-wide, well below the 4-to-6 months figure many in the industry say indicates a balanced market. The months of supply figure has not been above three months since February when the figure was 3.56.

Both King and Snohomish counties had less than two months of supply. The most acute shortages are in King County with only 1.29 months of supply; Snohomish has 1.91 months of supply.

Commenting on the gap between supply and demand, MLS director George Moorhead said, “This is not sustainable and will create a market condition where buyers will overpay for a home.” Moorhead, the designated broker at Bentley Properties, also commented on bidding wars. “Multiple offers are now being seen in outlying areas as buyers look farther out just to find a home that is a perfect fit while sacrificing distance to work and services.” Good schools remain the highest sought-after criteria, he added.

Even with inventory shortages in some areas, strong open house traffic is expected for the coming weekend, thanks to the bye on the Seattle Seahawks schedule, suggested MLS director Frank Wilson. “A weekend without a Hawks game is good news for real estate brokers and sellers who hold open houses on Sundays, commented Wilson, the branch managing broker at John L. Scott, Inc. in Poulsbo.
Open houses for new listings draw decent traffic, Wilson reported, adding. “New listings get picked through pretty quickly, and homes that are correctly priced are selling within days, with multiple offers.” He also said homes that have been on the market for more than 60 days have little traffic unless they have had a price reduction. “Some sellers are tending to overprice their homes due to all the hype.”

Gain noted the Seattle area’s home price gains are outpacing the nation’s, earning the city No. 1 ranking on a recently released list of the hottest single-family housing markets in the U.S. He credits strong demand, rising prices, low interest rates and the area’s healthy economic conditions as reasons for the strength.

“We will experience a hot housing market over the winter months,” predicts J. Lennox Scott, chairman and CEO of John L. Scott, who also expects 2016 to be “another fantastic year for sales activity.” Noting home sales activity is historically lower during this time of year, Scott believes activity this winter will be “red hot” in price ranges where inventory is low. He believes continued low interest rates and job growth will ratchet up demand as spring approaches.

Despite general optimism among Northwest MLS leaders, some pullback is anticipated.

Jacobi, who last month commented on the market being on the cusp of a slowdown, faults scarce inventory. “I expect this trend (of slower pending and closed sales) will likely continue through the end of the year due to the lack of available inventory for buyers.” Jacobi also said appreciation may start to slow over the winter months, adding, “but overall the housing market continues to benefit from our thriving local economy.”

Diedre Haines, principal managing broker-South Snohomish County for Coldwell Banker Bain, said they are noticing some slowdown, but “not as much as we’ve seen historically.”

“There remains a lot of frustration with multiple offers and getting transactions to actually make it to closing,” reported Haines, a past chairman of the Northwest MLS board. She attributes failed sales to several factors including low appraisals, financing issues, and an increase in sellers and buyers not being able to come to terms on inspections.

Prices on last month’s closed sales jumped nearly 9.7 percent from a year ago. Area-wide the median price for sales of single family homes and condos that closed during October was $318,000. That compares to a price of $290,000 for the same month a year ago.

For single family homes (excluding condos), year-over-year prices increased nearly 8.4 percent, rising from $299,950 to $325,000. In King County, the median price for a single family home was $480,000, rising 7.3 percent from the year-ago figure of $447,250, but dropping from September’s median price of $490,250.

“Appreciation for most of Snohomish County has continued, but not exorbitantly,” noted Haines. Prices in that county are up more than 5.8 percent from a year ago. “Modest gains in value are in reality much better for the market than the rapid gains we’ve seen in the past. For us, this means no sign of a growing bubble.”

The MLS reported strong sales in the condo segment, with both the volume and prices rising by double digits. Area-wide, closed sales rose 13.2 percent, from 990 units to 1,121. Prices surged 16.2 percent, jumping from $228,500 a year ago to last month’s median price of $265,500.

Condo inventory is also depleted with the number of active listings down nearly 26 percent from a year ago. MLS figures show only about 1.6 months of inventory area-wide; in King County there is less than 1.2 months of supply.

Looking ahead, Gain and many of his colleagues expect the area’s housing market will continue on a “gradual upward trend” into 2016. “As rents continue to rise, it makes buying a home more affordable than renting in many cases. It also insures that the monthly payment will remain the same as rents continue to escalate,” he stated, adding “Buying a home today is simply a smart decision for most who have the ability and resources to do so.”

Wilson said low inventory in areas like Kitsap County where his office is based will pose challenges. Inventory in that county is down nearly 30 percent from a year ago, while prices climbed more than 5.7 percent. “Some buyers are feeling beat up having to put in multiple offers or offer more than they are comfortable with,” he reported. Nevertheless, “buyers realize as we move into 2016 both prices and interest rates are likely to move upward,” he noted, adding, “We are anticipating a difficult spring market. The numbers are lining up for double-digit price increases in the first half of 2016.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

A recent study by Edelman Berland revealed that of homeowners who are contemplating selling their house in the near future 33% plan to scale down. Let’s look at a few reasons why that would make sense to many Americans.

In a recent blog post, Dave Ramsey, the financial guru, discussed the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:

1. A smaller home means less space, but it also means less time, stress and money spent on upkeep
2. Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
3. Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.

Realtor.com also addressed downsizing in a recent article. They suggest you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of their questions followed by their answers (in italics) and some additional information that could help.

Q: What kind of lifestyle do I want after I downsize?

A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.”

Comments: Many homeowners are taking the profit from the sale of their current home and splitting it to put down payments on a smaller home in their current location and a vacation/retirement home where they plan to live when they retire.

This allows them to lock in the home price and mortgage interest rate at today’s values. This makes sense financially as both home prices and interest rates are projected to rise.

Q: Have I built up enough equity in my current home to make a profit?

A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”

Comments: A recent study by Fannie Mae revealed that only 37% of Americans believe they have significant equity (> 20%) in their current home. In actually, 69% have greater than 20% equity. That equity could enable you to build a life you have always dreamt about.

Bottom Line

If you are debating downsizing your home and want to evaluate the options you currently have, let’s get together to talk about the process.

CoreLogic recently released their 2015 2^nd Quarter Equity Report which revealed that 759,000 properties had regained equity in the last quarter. That means that 91% of all mortgaged properties(approximately 45.9 million) are now in a positive equity position. Anand Nallathambi, president and CEO of CoreLogic, reported:

“For much of the country, the negative equity epidemic is lifting. The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.”

Obviously, this is great news for the financial situation of many homeowners.

But, do they realize their equity position has changed?

A recent study by Fannie Mae suggests that many homeowners are unaware that their equity position has changed…in some cases dramatically. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, only 9% of homes are in that position.

The study also revealed that, though 69% of homes had “significant equity” (greater than 20%), only 37% of Americans realize it.

This means that 32% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

Every homeowner should be aware of the true equity in their house and also realize the opportunities that go along with it. If you are unsure of the savings you currently have built up in your home, let’s get together and discuss your current situation. You may be surprised.

The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.

Only those homes priced under $100,000 showed a decline (-7.7%). The decline in this price range points to the lower inventory of distressed properties available for sale and speaks to the strength of the market.

Every other category showed a minimum increase of at least 5.6%, with sales in the $250,000- $500,000 range up 16.9%!

Here is the breakdown:

What does that mean to you if you are selling?

Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.

Here are the latest market charts from the MLS.
Click on each image below for a larger version.

Active Listings vs. Sold Listings

Number of Pending Listings

Median Sales Price

For more information our the Seattle and Eastside Real Estate Market contact Tony Meier here:
[contact-form-7 id=”1448″ title=”Contact form 1″]

Here are the latest market charts from the MLS.
Click on each image below for a larger version.

Active Listings vs. Sold Listings

Number of Pending Listings

Median Sales Price

For more information our the Seattle and Eastside Real Estate Market contact Tony Meier here:
[contact-form-7 id=”1448″ title=”Contact form 1″]

KIRKLAND, Washington (July 6, 2015) – Temperatures around Western Washington were not the only thing sizzling during June. Northwest Multiple Listing Service members reported 11,453 pending sales last month, the highest volume since August 2005 when members notched 11,546 mutually accepted offers. Last month also marked the fourth consecutive month of 11,000-plus pending transactions.

MLS members credit first-time buyers, an influx of relocating workers, and escalating rents for part of the surge.

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.

Brokers added 11,581 new listings to inventory during June, about the same number as a year ago (11,541), but pending sales outgained the same month last year by nearly 16 percent, depleting the selection. At the end of June, the number of active listings across the 23 counties in the MLS report totaled 20,333. That compares to 25,342 for the same month a year ago for a drop of 19.8 percent.

OB Jacobi, president of Windermere Real Estate noted some improvement in inventory over the past three months. “I’m happy to see the total number of homes listed has grown by nearly 20 percent since March. That’s still down compared to last year, and well below historic averages, but we are trending in the right direction,” he remarked.

Most counties in the MLS service area reported double-digit drops in inventory compared to a year ago. In King County, the number of active listings is down almost 24 percent compared to a year ago, while in Kitsap County the volume plummeted nearly 35 percent.

The imbalance between listings and sales means shrinking “months of supply,” an indicator of sales velocity. Industry experts use a figure of four-to-six months of supply as one gauge of a balanced market. For the Northwest MLS market overall, only 2.2 months of inventory existed at the end of June. In King County it was down to less than 1.2 months. Snohomish County had about 1.7 months of supply at month end. Both Pierce and Kitsap counties reported about 2.2 months of inventory.

“Kitsap house sales are hotter than a firecracker,” observed MLS director Frank Wilson, the branch managing broker and Kitsap district manager at John L. Scott Inc. in Poulsbo. “Despite heat, vacations and holidays the market has not slowed. We continue to see good open house traffic, low market times and multiple offer situations,” he stated.

Multiple offers are common throughout the Central Puget Sound region.

“We see many multiple offers on properties,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, who described sales activity as “phenomenal.” For first-time buyers, the competitive bidding can be daunting, which he suggested underscores the importance of relying on experienced brokers. Anxious buyers have a sense of urgency as prices rise, he noted. “They need a great real estate broker to help guide them through multiple offer situations,” added Beeson, a member of the Northwest MLS board of directors.

Rising prices are prompting some house-hunters to broaden their search beyond primary job centers.

“More and more buyers are starting to chase the market northward as prices increase in King County, especially around Seattle,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynwood. “Open house activity, despite buyers’ fatigue and slight increases in interest rates, remains robust,” added Haines, a past chairman of the MLS board.

Median prices continue to trend upward, according to Northwest MLS figures.

The area-wide median price for last month’s 9,163 closed sales of single family homes and condos was $321,500. That’s up 7.4 percent from a year ago, when the median price was $299,335 and up 1.4 percent from May’s figure of $317,000. Since January, prices are up 13.6 percent.

In King County, the median price for sales that were completed during June was $450,000. That compares to a price of $410,000 for the same month last year for a year-over-year increase of nearly 9.8 percent. Compared to May, prices in King County are up about 3.7 percent.

For single family homes only (excluding condos) in King County, the median selling price for sales that closed during May was $500,000, an increase of 10.3 percent from the year-ago figure of $453,500.

Rising prices are prompting some worries about affordability. Broker Dick Beeson believes the growth rate in jobs and the “sheer numbers of people flowing into the state make this market appear to be sustainable for the long term,” despite some uncertainty around reaching the upper limit in pricing and the likelihood of rising interest rates.

Referring to a list compiled by Forbes magazine that rank the Seattle-Bellevue-Everett area as an “overpriced area,” MLS director Moorhead suggested it’s a matter of value. “An experienced real estate broker will be invaluable in navigating through the buying and selling process” and understanding value as inventory levels balance out and interest rates increase.

Appraisals are also concerning to some. Low appraisals are a big challenge, according to Beeson. Other MLS brokers agreed. “We are beginning to see a resurgence of low appraisals, most are small gaps between sale price and appraised value adding to frustration for both buyers and sellers,” reported Diedre Haines. “Kitsap is also beginning to see a higher incidence of low appraisals,” said MLS director Frank Wilson.

Several brokers were surprised the record-setting temperatures in June didn’t deter activity.

“The hot weather has not cooled the market,” exclaimed Kathy Estey, branch managing broker at John L. Scott, Inc. in Bellevue. “Buyers still struggle with multiple offers and escalating prices. It seems the excellent opportunity for employment, the beautiful Northwest climate, recreational opportunities and the low interest rates are continuing to fuel demand. It is an excellent time for those who own a home and want to move up to do so,” she added.

J. Lennox Scott, chairman and CEO of John L. Scott said “We are experiencing a heat wave of sales generated by home buyers wanting to buy today and lock in low interest rates.”

Gary O’Leyar, the broker/owner at Berkshire Hathaway HomeServices Signature Properties also commented on the weather’s impact on activity while offering advice to sellers and buyers. “It’s been my observation that when the thermometer goes up, the market cools down a bit. Hint to buyers: while the waters and beaches are full, there are sellers wanting to sell. This season could be an opportunity in disguise for buyers who have been frustrated by the recent overheated market,” added O’Leyar, a past chairman of the Northwest MLS board.

Rising rents are another contributor to brisk sales. “The cost of renting versus buying is another force that is fueling strong sales gains,” explained Mike Gain. “In most cases buying a home costs significantly less than renting and the good news is the monthly payment will remain the same as rents continue to rise. Numerous renters are entering the home buying market. Many who are renting today think they can’t afford a home. They need to think again and get pre-qualified for a loan to see just what they can afford.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Home buyers are in “full sprint” mode while sellers are stalling, according to brokers from Northwest Multiple Listing Service. As a result, MLS members are juggling severe inventory shortages and multiple offers in many Seattle neighborhoods and beyond.<