Northwest MLS Releases Market Statistics for May 2007

Hot off the press!

Northwest MLS Releases Market Statistics for May 2007
Posted by: Tony Meier – Eastside Realtor 

Western Washington Housing Market Continues Trend

of Expanding Inventory, Fewer Sales, Rising Prices

KIRKLAND, Wash. (June 6, 2007) – Fewer home sales, more choices and higher prices were the themes again in May, according to new statistics from Northwest Multiple Listing Service. 

Figures show three key indicators — pending sales, active listings and selling prices — for last month’s activity followed the pattern of recent months.  The report covers 19 counties, mostly in Western Washington. 

Pending sales (offers made and accepted, but not yet closed) fell about 9.9 percent compared to twelve months ago, with wide variation across the MLS service area.  King County, which accounted for about 40 percent of the pending sales volume, lagged year-ago totals by 7.5 percent. Three counties, Okanogan, Pacific and Skagit, improved on May 2006 activity.  Thirteen counties reported double-digit drops in pending sales of single family homes and condominiums (combined). 

In the four-county Puget Sound region (King, Snohomish, Pierce and Kitsap counties), brokers reported 7,311 pending sales during May.  That was 1,100 fewer transactions than the same month a year ago (a 13 percent decline), but the largest volume since August 2006.

Inventory continued to grow. Member brokers added 16,888 new listings of single family homes and condominiums to the inventory during May.  At month end, buyers could choose from 42,514 active listings, a 53.7 percent larger selection than a year ago when there were 27,660 listings area-wide.

Despite the slower pace of sales, prices are still rising.  Area-wide, the median selling price for last month’s closed sales rose nearly 10 percent (9.95 percent) from a year ago. The sales price for May’s 8,590 completed transactions (including single family homes and condominiums) was $332,600, which compares to the year-ago figure of $302,500.

For single family homes only (excluding condominiums), the median sales price was $350,258, up 9.8 percent from the year-ago figure of $319,000.  In King County, the median price for a single family home that sold and closed last month was $469,000, up more than $41,000 (9.6 percent) from twelve months ago when the median selling price was $427,950.

Condo sales dipped last month as well.  Brokers reported 99 fewer pending sales compared with the same month a year ago for a 5.5 percent decline.  In King County, where about two-thirds of the pending sales occurred, the volume nearly matched year-ago numbers.  Brokers notched 20 fewer pending sales for a 1.8 percent decline from twelve months ago.

Prices for condominiums continue to jump at a fast clip.  For last month’s closed sales, the median selling price system-wide was $270,000, up 18.4 percent from a year ago.  In King County, the median price for last month’s closed sales of condos increased 17.6 percent, rising from $246,500 a year ago to $289,950.

"Bargain deals are few and far between," observed NWMLS director Kathy Estey, the managing broker at John L. Scott’s Bellevue Downtown office.  "In spite of growing inventory, prices are still increasing and homes that are priced right are selling very quickly," she commented, adding, "Insulting a seller with a ridiculous offer is not necessarily a winning negotiation strategy."

Procrastinating may be counter-productive as well, according to some brokers.

Buyers who take their time to decide may be "surprised and sorrowful when they lose their favorite property because they waited a day too long to make an offer and someone else sneaks in before them," reports Northwest MLS director Dick Beeson, broker/owner of Windermere Real Estate/Commencement Associates in Tacoma.

Beeson said sellers with unrealistic expectations are changing their approach, too.  Those who expect last year’s rapidly escalating prices are realizing that simply isn’t happening in 2007, he noted.  More sellers understand the importance of getting their properties market ready before listing them, Beeson remarked.

In a season of growing competition, sellers need to have strategies in place to market their home and attract other agents with serious, qualified buyers, Estey emphasized.  "More than ever, sellers need to hire full-time, knowledgeable trusted advisors – not just someone who can dump the listing into the MLS system."

Buyers are being conservative in not selling their homes first, Estey reported, "for fear of not having one to move into, yet they don’t have alternative financing arranged – in other words they want to buy contingent." 

Although this is still not really a contingent buyers’ market, Estey said the likelihood of getting bumped is high so sellers should be prepared to consider contingent offers.  "With building inventory they may not get other non-contingent buyers in to see their home," she explained. Carefully structured contingent sales may be a viable option after the home has been fully exposed to the market for a few weeks without a sale, she suggests.

Estey also reported seeing a "great deal of activity on million-dollar plus properties."  Northwest MLS figures show a 28.5 increase in the number of closed sales of million-dollar plus properties in King County for the first five months of this year compared to same period a year ago.   From January-May 2006, brokers reported 568 closings of single family homes and condominiums priced at one million dollars or more.  Through the first five months this year, there have been 730 completed transactions in that price category.

Brokers are not seeing much local fallout from the recent shake-up of the subprime mortgage market, although they acknowledge prospective borrowers in the "least creditworthy" category may have more difficulty finding favorable terms. Bankrate.com estimates about 15 percent of mortgage borrowers are in the subprime category and may be subject to stricter standards in the form of higher minimum credit scores, lower maximum loan amounts and requirements for bigger down payments.

NWMLS director Pat Grimm, president of Windermere Western Washington Services Company, said he still hears of occasional success stories about "exotic" loans.  He mentioned clients who had purchased a condo in Kirkland’s Totem Lake area 30 months ago on a zero down loan.  "They had to bring only $50 to the closing table," he recalls, adding, "Now, they’re ready to sell and move up – with more than $125,000 in equity in that same condo."

Northwest Multiple Listing Service, based in Kirkland, is the largest full-service MLS in the Northwest. The MLS is owned by its member brokers and currently encompasses nearly 2,100 companies with more than 26,000 sales associates. Together, they serve 19 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state.

Statistical Summary by Counties: Market Activity Summary for May 2007

4-county Puget Sound Region Pending Sales (SFH + Condo combined)

(totals include King, Snohomish, Pierce & Kitsap counties)

Tony Meier
Redmond Realtor
EastsideHomesBlog.com
EastsideHomes.com
Seattle’s Eastside Real Estate Resource
tony@staging.eastsidehomes.com