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Monday, February 27, 2017

Brokers report “high velocity” market, but with hope for homebuyers

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 broker and chairman of the board at Northwest MLS. “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 one broker.

MLS director agreed, 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,” he said, 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 a broker.

“List it and they will come” is the new mantra as new listings come on the market, commented a broker. Despite having more sales than new listings over the past few months, He 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,” one 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 a broker.

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.

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 one. 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.

He 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, he 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.

Thursday, January 19, 2017

Inventory shortages persist, but Northwest MLS brokers notch record-setting sales totaling $40.3 billion during 2016

KIRKLAND, Washington. (Jan. 19, 2017) – Members of Northwest Multiple Listing Service reported 95,500 closed sales during 2016, outgaining the prior year’s volume of 88,331 transactions for an increase of more than 8.1 percent. Inventory was at record lows for much of the year.

Measured by dollars, last year’s sales of single family homes and condominiums were valued at more than $40.3 billion. Compared to 2015, that dollar volume represents a gain of nearly 18.2 percent.
The sales activity reflects the work of 25,888 brokers across 23 counties in the member-owned Northwest MLS.

Last year’s completed sales included 81,872 single family homes (about 86 percent of the total) and 13,628 condominiums. Of these sales, about 11.3 percent were newly built residences.

The area-wide median price for last year’s sales of single family homes and condominiums (combined) was $337,500, a gain of 8.9 percent from the year-ago figure of $310,000. A comparison by county shows median sales prices ranged from $102,500 in Ferry County to $489,000 in King County. With one exception (Ferry) all counties had year-over-year price gains.

Year-over-year prices for single family homes (excluding condominiums) increased 8.7 percent system-wide, rising from $320,000 in 2015 to last year’s median price of $347,950. Condo prices jumped 12.6 percent from the 2015 figure of $254,900 to last year’s median selling price of $287,000.

Only about 7 percent of the sales were for homes priced under $150,000. About one-third of the sales were in the $300,000 - $500,000 range, with the largest share (34 percent) selling for $150,000-$300,000.
Inventory shortages challenged brokers and buyers throughout 2016. Member-brokers logged 121,468 pending sales (mutually accepted offers) during 2016, while adding 113,305 new listings to inventory. Brokers said depleted inventory often led to competitive bidding and multiple offers for homes in the most desirable areas.

During 2016, the average area-wide supply, as measured by months of inventory, averaged only 1.86 months, down from the previous year’s figure of 2.4 months. King County had the lowest level, averaging only 1.1 months of supply. In general, industry analysts 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 2016. Northwest MLS members reported 3,251 sales of single family homes priced at $1 million or more, up more than 21 percent from the 2015 total of 2,676 “luxury” sales. Condos priced at $1 million and up accounted for another 339 sales. A total of 1,711 condos sold for $500,000 or more, outgaining 2015’s total of 1,459 half-million dollar-plus sales (up 21.4 percent).

The highest-priced single family home that sold during 2016 by a member of Northwest MLS was a property on Mercer Island that commanded more than $9.75 million. Topping the chart of high-priced condominiums was one at Escala in downtown Seattle high-rise that sold for $8 million.

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

 About 45 percent of last year’s single family home sales had three bedrooms, while the vast majority of condos (nearly 76 percent) had two bedrooms or fewer.

 The median price for a 3-bedroom home that sold in 2016 was $311,000, about 9.8 percent higher than the previous year’s figure of $283,250. A comparison by county shows the median price for a 3-bedroom home ranges from $120,000 in Ferry County to $485,000 in King County.

 Of the condo sales, about six of every 10 (61.7 percent) were located in King County, primarily in Seattle or on the Eastside. That ratio matched the figure for 2015.

 For the new construction component involving Northwest MLS brokers, newly built condos fetched higher prices than single family homes, just like 2015. Last year’s sales included 9,416 newly built single family homes that sold for a median price of $455,000 (up 11.8 percent from 2015), and 1,375 condos that sold for a median price of $552,900 (up 22.9 percent from 2015).

 A comparison of 2016 and 2015 median prices of single family homes shows all but one county reported year-over-year gains. Going back to 2007, most counties have rebounded.

 Prices vary widely among school districts. Homes that sold last year in 13 districts reported median prices of more than a half-million dollars, topped by Mercer Island at more than $1.3 million.

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 nearly 26,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Tuesday, January 17, 2017

Mortgage Rate Update

5 Stats to Watch as Home Sales Rise

Existing-home sales were on the rise last month, led by a surge in the Northeast and modest gains in the South, the National Association of REALTORS® reported Wednesday.
Existing-home sales – completed transactions that encompass single-family homes, townhomes, condos, and co-ops – ticked up 0.7 percent in November, reaching a seasonally adjusted annual rate of 5.61 million. The gain was enough to propel existing-home sales to the highest level since February 2007. Further, sales are 15.4 percent higher than a year ago.

Housing has posted a strong three-month stretch to close out the year, says Lawrence Yun, NAR’s chief economist.
“The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” Yun says. “Furthermore, it’s no coincidence that home shoppers in the Northeast – where price growth has been tame all year – had the most success last month.” 
Here’s a closer look at five stats that put the housing data from November in context.
1. Home prices: The median existing-home price for all housing types in November was $234,900, up 6.8 percent from a year ago ($220,000).
2. Days on the market: Forty-two percent of homes sold in November were on the market for less than a month. On average, properties stayed on the market for 43 days in November, which is down from 54 days a year ago. Short sales lingered on the market the longest at a median of 110 days in November. Foreclosures sold in 55 days and non-distressed homes took 41 days to sell, NAR’s data shows.
3. All-cash sales: All-cash sales comprised 21 percent of transactions in November, which is down from 27 percent a year ago. Individual investors account for the biggest bulk of cash sales and purchased 12 percent of homes in November, down from 16 percent a year ago.
4. Distressed sales: Foreclosures and short sales increased to 6 percent in November, but that's still down from 9 percent a year ago. In November, four percent of sales were foreclosures and 2 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value in November, while short sales were discounted 16 percent.
5. Inventories: By the end of November, total housing inventories fell 8 percent to 1.85 million existing homes available for sale. Inventories are now 9.3 percent lower than a year ago. Unsold inventory is at a four-month supply at the current sales pace.
“Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017,” says Yun. “Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”
Regional Breakdown
Northeast: existing-home sales rose 8 percent to an annual rate of 810,000. Sales are now 15.7 percent above a year ago. Median price: $263,000, which is 3.3 percent higher than a year ago.

Midwest: existing-home sales dropped 2.2 percent to an annual rate of 1.33 million in November. Sales are still 18.8 percent above a year ago. Median price: $180,300, up 6.5 percent from a year ago.

South: existing-home sales increased 1.4 percent to an annual rate of 2.22 million, and are 11.6 percent higher than a year ago. Median price: $206,900, up 9.2 percent from a year ago.
West: existing-home sales dropped 1.6 percent to an annual rate of 1.25 million in November. Sales are 19 percent higher than a year ago. Median price: $345,400, up 8.5 percent from a year ago.