Northwest MLS brokers encouraged by declining mortgage rates with some saying pent-up demand is triggering multiple offers

Pending sales around Washington state reached the highest level since October and surged nearly 44% from December, according to the January report from Northwest Multiple Listing Service. Last month’s 5,776 mutually accepted offers were down about 9% from a year ago, but brokers seemed encouraged by the “favorable spike.” Prices on last month’s closed sales edged up slightly, at 0.41%, compared with twelve months ago. The area-wide median price on January’s 3,264 completed transactions $557,250; a year ago, when there were 5,085 closed sales, it was $555,000. Nine of the 26 counties in the report had year-over-year price bumps. “We are seeing multiple offers once again,” stated John Deely, VP of operations at Coldwell Banker Bain. “It’s not like it was at the peak of the market, but buyers are out there and competing for properties,” he added. The selection of properties, based on the number of total active listings in the MLS database, improved significantly from a year ago, rising from 3,092 listings to 8,220 at month end. That total, which includes 7,179 single family homes and 1,041 condominiums, was down about 13.2% from December’s selection. Brokers added 4,925 new listings to the MLS database in January, about 1,000 fewer than the same month a year ago. Last month’s additions outgained December when 2,980 properties were added, as well as November, when 4,890 listings were added. “While residential inventory is popping above six months in a few of our reporting counties, which is at the upper edge of a balanced market, our most populated counties – King, Pierce and Snohomish – are still sitting at one to two months of inventory, which is indicative of a seller’s market,” Deely commented. The January report from Northwest MLS shows Adams, Columbia, Grays Harbor, Okanogan and San Juan counties each had more than six months of inventory. Ten counties had less than three months of supply. “We saw a favorable spike of intensity in the market in January,” reported L. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “With fewer new resale homes coming onto the market, there’s a shortage/low level of unsold inventory, especially in the more affordable and mid-price ranges where approximately 80% of sales activity takes place.” Broker Dean Rebhuhn, owner of Village Homes and Properties, believes “the spring real estate market is here early. A combination of pent-up buyer demand, attractive prices and low inventory in King, Pierce and Snohomish counties are driving sales.” He pointed to “reasonable interest rates” and new properties coming on the market daily as factors for the creation of what he called the “new normal market.” On Thursday, Freddie Mac (the Federal Home Loan Mortgage Home Loan Mortgage Corporation) reported the U.S. weekly average for a 30-year fixed-rate mortgage was 6.09%, down about a full point from November when it peaked at just over 7%. According to its research, this one percentage point rate reduction can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, the median home price in the U.S. George Ratiu, manager of economic research at Realtor.com, said the recent decline in rates means for today’s buyer of a median priced home, the down payment amount is lower than it would have been last summer. “While interest rates have tempered a bit, many buyers are moving forward to purchase with an intent to refinance once rates come down more,” stated Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott’s North Kitsap office. Last month’s median price for homes that sold in Kitsap County was $487,000, well below the median price in both King County ($723,000) and Snohomish County ($645,000). Prices in Kitsap are down from both a year ago and December, but inventory is tight with slightly more than two months of supply. Wilson described the market in Kitsap as “similar to a well-planted bed of tulips. You know it is there but will not see any real color until March or April.” He believes many sellers are waiting until later in the year to sell, but noted buyers who must buy are currently out in numbers. “We are seeing good traffic at our open houses and new, correctly priced listings are receiving multiple offers.”    NAR Chief Economist Lawrence Yun suggested the “recent low point in home sales activity is likely over.” Commenting on pending sales for December, he stated, “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.” Although brokers and buyers welcome the declining rates and improving inventory, several obstacles still face first-time home buyers. Based on his observations, Rebhuhn said the biggest challenge for first timers involves assembling the down payment. “Buyers are using savings, gifts and loans from family, and borrowing from investment and retirement accounts,” according to Rebhuhn. Deely also noted challenges exist in the condo market. “The condo market in our most populated counties is quite a bit different and not recovering as quickly,” Deely said, adding, “However, it is still active and the sales that are taking place are keeping the condo market in balance.” Northwest MLS statistics for January show there were 757 pending sales of condos, about 24% fewer than the same month a year ago. Last month’s volume was the highest since October when brokers reported 823 pending sales. Condo prices system-wide were down about 2.5% from a year ago, declining from $435,000 to $424,000. Only four counties (Kitsap, Pacific, Skagit and Thurston) reported year-over-year price increases for last month’s condo sales.    Yun believes the “new normal” for mortgage rates will likely be in the 5.5% to 6.5% range, adding, “Job gains will steadily become important in driving local home-sales markets.” Last week, the U.S. Labor Department defied expectations by reporting the addition of 517,000 jobs on a seasonally adjusted basis, the largest increase since July. The unemployment rate fell to 3.4%, the lowest level since 1968. Washington’s Employment Security Department reported a statewide unemployment rate of 4.2% for December. (January figures are not yet published.) In that report, the U.S. unemployment rate was 3.5%. ESD’s county snapshot shows unemployment rates range from 2.8% in King County to 11% in Ferry County. About Northwest Multiple Listing Service As the leading resource for the region’s residential real estate industry, NWMLS provides valuable products and services, superior member support, and the most trusted, current listing data and industry information for real estate professionals. NWMLS is a member-owned, not-for-profit organization with more than 2,500 member offices and 32,000 real estate brokers throughout Washington state. With extensive knowledge of the region, NWMLS operates 20 service centers and serves 26 counties, providing dedicated support to its members and fostering a robust, cooperative brokerage environment. nwmls.com.

Single Fam. Homes + Condos	New Listings	Total Active Listings	# Pending Sales	# Closed Sales	Avg. Closed Price	Median Closed Price	This mo. Inventory	Same mo., yr ago
King	1,753	2,262	1,820	1,003	$891,282	$723,000	2.26	0.49
Snohomish	719	875	886	513	$725,988	$645,000	1.71	0.33
Pierce	784	1,210	1,082	568	$560,661	$509,997	2.13	0.47
Kitsap	270	424	323	197	$571,833	$487,000	2.15	0.58
Mason	69	151	91	53	$376,519	$360,000	2.85	0.75
Skagit	104	204	124	73	$503,862	$480,000	2.79	0.88
Grays Harbor	95	298	96	48	$347,966	$304,002	6.21	1.62
Lewis	67	183	109	58	$412,159	$390,000	3.16	1.02
Cowlitz	77	173	110	53	$392,143	$362,500	3.26	0.71
Grant	81	199	51	45	$321,662	$312,390	4.42	1.51
Thurston	246	390	330	171	$497,483	$474,500	2.28	0.38
San Juan	9	70	13	11	$2,202,032	$810,000	6.36	2.10
Island	94	173	123	68	$497,081	$449,000	2.54	0.46
Kittitas	48	148	48	25	$610,396	$399,988	5.92	0.68
Jefferson	26	76	17	16	$517,448	$497,500	4.75	1.29
Okanogan	20	110	27	18	$479,339	$330,000	6.11	2.16
Whatcom	190	420	193	124	$630,744	$560,000	3.39	0.77
Clark	42	94	56	42	$562,058	$532,500	2.24	0.57
Pacific	28	106	28	28	$344,779	$330,000	3.79	1.43
Ferry	1	16	2	3	$219,667	$229,000	5.33	5.75
Clallam	50	123	59	43	$402,146	$379,000	2.86	0.94
Chelan	39	157	39	30	$571,027	$517,450	5.23	1.60
Douglas	23	64	32	19	$518,716	$460,000	3.37	1.33
Adams	8	46	9	7	$309,060	$275,000	6.57	2.33
Walla Walla	33	89	49	18	$371,944	$331,000	4.94	1.07
Columbia	6	23	8	3	$253,333	$265,000	7.67	2.67
Others	43	136	51	27	$415,716	$349,990	5.04	1.57
Total	4,925	8,220	5,776	3,264	$668,692	$557,250	2.52	0.61

4-county Puget Sound Region Pending Sales (SFH + Condo combined) (totals include King, Snohomish, Pierce & Kitsap counties)

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2004	4521	6284	8073	7910	7888	8186	7583	7464	6984	6761	6228	5195
2005	5426	6833	8801	8420	8610	8896	8207	8784	7561	7157	6188	4837
2006	5275	6032	8174	7651	8411	8094	7121	7692	6216	6403	5292	4346
2007	4869	6239	7192	6974	7311	6876	6371	5580	4153	4447	3896	2975
2008	3291	4167	4520	4624	4526	4765	4580	4584	4445	3346	2841	2432
2009	3250	3407	4262	5372	5498	5963	5551	5764	5825	5702	3829	3440
2010	4381	5211	6821	7368	4058	4239	4306	4520	4350	4376	3938	3474
2011	4272	4767	6049	5732	5963	5868	5657	5944	5299	5384	4814	4197
2012	4921	6069	7386	7015	7295	6733	6489	6341	5871	6453	5188	4181
2013	5548	6095	7400	7462	7743	7374	7264	6916	5951	6222	5083	3957
2014	5406	5587	7099	7325	8055	7546	7169	6959	6661	6469	5220	4410
2015	5791	6541	8648	8671	8620	8608	8248	7792	7179	6977	5703	4475
2016	5420	6703	8130	8332	9153	8869	8545	8628	7729	7487	6115	4727
2017	5710	6024	7592	7621	9188	9042	8514	8637	7441	7740	6094	4460
2018	5484	5725	7373	7565	8742	8052	7612	6893	6235	6367	5328	4037
2019	5472	4910	7588	8090	8597	8231	7773	7345	6896	6797	5788	4183
2020	5352	6078	6477	5066	7297	8335	8817	9179	8606	7934	6122	4851
2021	5216	5600	8002	7716	8674	8824	8049	8586	7880	7405	6022	3943
2022	4405	5560	7312	6908	7482	6031	5934	6581	5208	4410	3521	2778
2023	4111