Real estate brokers expect no holiday breather as sales stay strong and supplies remain low

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 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, 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 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. “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 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 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.

Home sales and prices still climbing around Puget Sound, but brokers expect slowdown

KIRKLAND, Washington (Nov. 4, 2016) – Home sales around Western Washington outgained new listings again in October, fueling competition for scarce inventory and pushing prices higher. Some seasonal slowdown is still expected – and the Nov. 8 elections may be in play as well, according to brokers at Northwest Multiple Listing Service who commented on last month’s activity.

MLS members reported 9,950 pending sales during October, but they added only 7,591 new listings, the lowest number since January. A year-over-year comparison of pending sales shows there were 633 more mutually accepted offers last month than twelve months ago for a gain of 6.8 percent.

Closed sales improved even more, rising from the year-ago total of 7,769 completed transactions to last month’s volume of 8,554 (up 10.1 percent).

“While the stock market remains somewhat skittish regarding the upcoming presidential election, this feeling clearly has not transferred to the housing market, unfortunately for buyers who were hoping to have more homes to choose from this fall, listings in October fell to levels we haven’t seen since the 1990s – and at this point, we probably won’t see any sizable increase in inventory until the spring at the earliest,” he added.

Active listings dropped more than 13 percent compared to a year ago, with further shrinkage expected. At month end there were 15,690 single family homes and condominiums offered for sale in the MLS system, which encompasses 23 counties. That’s 2,378 fewer than the year-ago total of 18,068, and 2,446 fewer than September. All but two counties (Clallam and Ferry) reported year-over-year decreases in inventory.

 Overall, there was only 1.8 months of supply. King County had slightly more than one month (1.1), with several areas within that county reporting less than a month’s supply. In Snohomish County, where inventory plunged more than 20 percent from a year ago, there was with 1.3 months.

“The further we move into November, the more we’ll start feeling the typical seasonal drop when new listings coming on the market decline by 50 percent on a monthly basis compared to spring and summer months,” suggested J. Lennox. Buyers are still out there, he emphasized. “We’re heading into winter with a repeat of last year’s conditions: low inventory, a backlog of buyers, and historically low interest rates.” On the heels of the “best October on record” Scott predicts “a strong winter market where the inventory remains tight throughout the season.”

Not surprisingly given the large MLS territory, which includes both rural and urban areas, activity is stronger in some sub-markets than others. Prices also reflect a wide spectrum. Of the four counties comprising the Puget Sound region (King, Kitsap, Pierce and Snohomish), only Kitsap had an uptick in new listings compared to a year ago, but that county’s robust pending sales (up 20.7 percent) helped deplete its total inventory versus twelve months ago (down about 7 percent).

“The market in Kitsap is still very active,” according to Frank Wilson in Poulsbo. He noted Kitsap typically lags the Seattle market by 6-to-9 months.

Wilson expects a slowing in Kitsap County, at which time the upward pressure on pricing will begin to ease. “For now, the median price is up almost 13 percent from a year ago,” added Wilson, a board member at Northwest MLS.

In South Sound, prices rose at a more moderate rate, around 9.6 percent in Pierce County and just over 6.8 percent in Thurston County. “Homes priced under $400,000 are looked at hard by buyers on ‘day one’ and often draw multiple offers,” said Northwest MLS director Dick Beeson in Tacoma. Above that figure, things slow down markedly, he noted, adding that’s true in other areas, but the starting numbers and wait times might vary.

Beeson also cautioned sellers to be realistic in pricing, even in the current imbalanced market when sellers may have the upper hand. “Price cures all ills. No amount of marketing a property will cure the ill caused by too high a price,” said the veteran broker, citing data on expired listings that eventually came back on the market but oftentimes sold at a reduced price.

System-wide, prices for single family homes and condos (combined) rose nearly 8.2 percent from a year ago, increasing from $318,000 to $344,000. In the four-county Puget Sound region, King County claimed the largest increase and the highest prices. Year-over-year prices jumped 14.5 percent, from $432,750 to $495,500.

Single family home prices (excluding condos) increased 9.2 percent from a year ago; in King County the gain was nearly 14.6 percent, climbing from $480,000 to $550,000. That countywide median price is higher than September (which was $538,000) but lower than the year-to-date peak of $573,522 in June.

Condo prices increased $20,000 from a year ago (more than 7.3 percent), climbing from $265,500 to $285,000. The median price on closed sales of condos in King County was $320,000, about 10 percent higher than a year ago. Inventory area-wide fell more than 21 percent, leaving only 1.1 months of supply.

While prices continue to appreciate, Wilson said the “appraisal situation” is tempering activity. “We’ve spent the last 20 years improving the closing process, making it faster and more efficient. With the reduced number of appraisers in the marketplace now, we are seeing 2-to-4 weeks being adding to closing times, and costs doubling or tripling.”

Along with appraisal delays and seasonal adjustments, another industry leader mentioned reports indicating real estate markets nationwide are experiencing an “election cycle slowdown” due to the uncertainty surrounding next week’s elections. “People may be taking a ‘wait and see’ approach before buying or selling,” said Mike Grady.  However, he added, “We believe that regardless of who wins, there will be no major impact on the Puget Sound region’s economy.”

Grady cited solid local economic indicators and the Federal Reserve’s decision on Wednesday to hold off on increasing interest rates as signals for a good time for home buyers and sellers to make a move. “It actually could be a great window of opportunity,” he stated.

MLS director George Moorhead also commented on jitters associated with Election Day. “We are hearing concerns from buyers relocating from other countries and how policies may change job security,” he stated.

On an encouraging note for buyers, Moorhead said there has been more flexibility involving new construction incentives and upgrades, notably among larger national builders wanting to close out inventory. He believes it’s been at least 18 months since such offers were available to buyers.

“New construction projects are still going forward and are only hampered by the lack of available land for larger development sites,” reported Moorhead.  Both national and mid-sized local builders are completing smaller 4-to-6 lot plats, even though they prefer plats of at least 12 lots, according to Moorhead.

Asked about activity from foreign investors who might be shifting attention from British Columbia to markets in Washington because of tax hikes and other measures being imposed there, and recent reports of plunging sales, brokers with Northwest MLS had varied reactions:

 Moorhead said they’re seeing an increase in foreign money, but it’s more in the commercial arena. He also noted they are a hearing of foreign buyers looking not just in Puget Sound, but also in California, Texas and other states.

 Gary O’Leyar described it as “a great example of what happens when you impose a restriction (excessive taxes or restraints) onto a free market. Although the circumstances are not exactly the same, rent control in a free trade market could have similar detrimental results.”

 Grady’s response was: “It’s not at all surprising that pending sales in Vancouver (B.C.) dropped comparing month-to-month, after the huge surge that happened in the final month before the new fees commenced.”

 Beeson was upbeat. “This move [by the British Columbia government] to put an additional tax burden on foreign investors should bring smiles to Washington brokers, particularly in the Greater Seattle and Eastside markets. It's only a matter of time until these investors find a welcome mat out just a few miles south of Vancouver and property prices worth writing home about.”

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.

Puget Sound area home sales, prices still strong as backlog of buyers compete for scarce inventory

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 compete 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 one local broker “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, 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 dropped 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 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 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.” He 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. 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. Both long-time homeowners and new homebuyers are feeling the impact of rising prices and interest rates.

One consequence 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, he 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 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 the month to outgain the year-ago total of 6,284 by more than 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.

Note:Northwest MLS will publish a comprehensive summary of 2015 activity on Jan. 21.

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

Housing market slowdown expected, but prices in most areas are still rising

Scarce inventory, new rules for mortgage closings and affordability concerns will likely slow home sales around Western Washington during the remaining months of 2015 and into early 2016, according to spokespersons from Northwest Multiple Listing Service.

The latest statistics from the MLS show a double-digit drop in inventory, a double-digit jump in closed sales, and a near double-digit increase in prices from a year ago, prompting one industry leader to say the trends aren’t sustainable. “We simply can’t sustain double-digit increases in sales when inventory levels continue to drop every month,” “We’re on the cusp of a housing market slowdown,” he predicts. Northwest MLS director Darin Stenvers also expects a slowdown, pointing to new rules for mortgage closings and rising interest rates as culprits.

“With the introduction of the new TRID1 banking and closing disclosure requirements we will see longer closing timeframes for the foreseeable future. This will lead to a slowdown in closings and thus may slow the market until early or mid-2016,” explained Stenvers. Layoffs and the possibility of higher interest rates result in unpredictability for both buyers and sellers, he suggested.

Despite an expected slowdown, closed sales through the first nine months of this year are running 16.6 percent ahead of the same period a year ago, with median prices up 9.2 percent.

The MLS report for September shows pending sales continue to outnumber new listings, resulting in inventory declines in most of the 23 counties in its service area. That imbalance leads to rising prices.

Northwest MLS members reported 9,574 pending sales (mutually accepted offers) in September for a 7.9 percent increase from the year-ago figure of 8,875. Compared to August, pending sales fell 9.7 percent.

Closed sales jumped 17.5 percent, with year-over-year sales rising from 7,020 finished transactions to 8,245. Twenty of the 23 counties reported double-digit gains from a year ago.

Prices showed more variation. Area-wide, the median price on last month’s closed sales of single family homes and condos was $312,000. That’s up nearly 9.5 percent from the year-ago figure of $285,000, but down slightly from August.

Compared to the system-wide gain, prices rose at more modest rates in three of the four counties in the Puget Sound region, with Pierce County being the exception. Year-over-year prices there jumped 11 percent. Prices in Kitsap County were up only 4 percent from a year ago; in King County the gain was about 4.8 percent and in Snohomish County it was about 7.5 percent.

Single family home prices across the 23 counties in the MLS report rose nearly 7.6 percent from a year ago, from $297,500 to $320,000. Single family homes in King County commanded the highest median price at $490,250, up 6.6 percent from the year-ago figure of $460,000, but down from June’s high of $500,000.

The condo market remained hot with both sales and prices up by double digits. Members reported 1,183 closed sales during September for a gain of nearly 30 percent from a year ago. Prices on last month’s sales jumped 13 percent, from $230,000 to $260,000.

“We’re coming off one of the hottest summer housing markets on record, and the second-best September on record for sales activity in the four-county area,” said one industry leader. He attributes part of the surge to an interest rates drop in May, and the anticipation of rates increasing in the near future.

Dwindling inventory continues to be a drag on activity, but some brokers believe new construction activity is encouraging. Stenvers said new housing starts could help boost inventory in many markets during the coming months.

For now, new listings are drawing “quick action” when they come on the market, adding, “We are virtually sold out of inventory.”

MLS members added 8,772 new listings during September, down slightly from the year ago total of 8,878. At month end, there were 19,724 active listings in the database, down 23.3 percent from the same time a year ago when inventory totaled 25,717 properties.

“We’re selling everything before buyers can turn around,” commented Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma and a member of the Northwest MLS board of directors. Figures showing the ratio of listings to sales, known as months of supply, tend to support his belief.

For September, the MLS reported 2.39 months of supply system-wide, about the same as the figure for August. The shortages were most acute in King County, with about 1.4 months of supply, and Snohomish County, with about 1.9 months of supply. Industry experts use a range of four-to-six months as an indicator of a balanced market.

“The frenzied market on the Seattle side is taking a toll on Kitsap home prices,” said MLS chairman Frank Wilson, the branch managing broker at John L. Scott in Poulsbo. Prices there rose 4 percent from a year ago. He reported good traffic at open houses in Kitsap County, quick acting buyers when a new listing appears, many multiple offer situations, and an increase in investor interest.

“Since new listings coming to market usually slow during the fourth quarter, we are looking at a severe shortage of inventory heading in to the spring market of 2016,” Wilson remarked. Like others on the MLS board, he said serious buyers need to be prepared to take immediate action when they find a home they like.

“In preparation, buyers need to meet with a lender, find an inspector, check with their insurance agent, and get their financial house in order so they can move aggressively,” Wilson advised.

Scott said house-hunters who procrastinate may be disappointed. “If you’re looking for a home this winter, the number of listings coming on the market each month will drop approximately 50 percent every 30 days compared to spring and summer months,” he predicts.

Brokers say opportunities still exist for buyers who have missed out on homes during multiple offer situations.

Some buyers who are weary of bidding wars are looking in areas where multiple offers are less common, said MLS director George Moorhead. Also, buyers who consider homes that have been on the market more than 120 days are negotiating much better terms without the competition of other buyers,” he reported.

Scott also recommended alternatives for frustrated buyers. “There are still opportunities to take advantage of low interest rates by taking a second look at homes that have been on the market for more than a month. If you don’t mind doing some fix up, you can negotiate the price and avoid multiple offer scenarios,” he stated.

Beeson suggested inventory shortages could be eased if expired listings are re-listed. Not every home sells once it’s listed, he noted. His analysis shows more than 2,600 listings have expired in the tri-county area so far this year. “These are sellers who need coaching on pricing,” he believes.

Even though they’ll face longer commutes, Moorhead said buyers who are feeling squeezed by the lack of inventory are extending their search areas farther than before in hopes of finding a home at an affordable price. These buyers hope to sell the home in the outlying area within five years and purchase another home closer in. “This calculated move hasn’t really been a conversation in the past. If buyers have a home to sell in order to purchase, they should consider selling, then prepare to live in temporary housing while looking for the right home to purchase,” they suggested.

Buyers without a home to sell may be better positioned to have their offer accepted, believes Chipman, a member of the Northwest MLS board of directors. “These buyers should look at both active status listings and contingent listings to expand their choices,” she explained.

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.

Early Spring Brings Bumper Crop of Homebuyers Who Face Inventory Drought

 

 

 

Favorable weather and restored confidence are propelling home buying activity around Western Washington to the highest level in nearly a decade, according to Northwest Multiple Listing Service sources. The pent-up demand being unleashed has rocketed pending sales back to the levels of our record year in 2006. At the same time, homes for sale are near a 10-year low.

Northwest MLS figures show pending sales system-wide surged 18.7 percent in February compared to the same month a year ago, rising from 7,247 mutually accepted offers to 8,599. Twenty of the 23 counties in the service area reported double-digit increases in pending sales.

Those numbers might be even higher given the ample supply of buyers, but inventory is far from ample.

Listings are flying off the shelf faster than allergy medicine in this early spring market.  They will probably make several offers before one is accepted and they just need to expect to be competing with others.

Northwest MLS broker-members added more news listings to the database during February than 12 months ago (7,852 last month versus 7,234), but the higher sales volume kept inventory levels well below year-ago totals. The MLS reported 16,946 total active listings at month end. That compares to a total of 19,273 for the same month a year ago for a drop of about 12 percent.

The early spring weather has brought a bumper crop of buyers to a market experiencing a drought of listings.  In Seattle, *NOT THE THURSTON COUNTY MARKET*, it is not uncommon for weekend open houses to draw upwards of 100 group visits and bidding competitions.  Multiple offers rule the day, with many bids at 20 percent over well-priced properties around Greater Seattle.

For the 4,761 sales of single family homes and condominiums that closed during February, the median price was $280,000. That reflects a gain of about 6.5 percent from the year-ago sales price of $263,000. The volume of closed sales jumped about 13.5 percent from a year ago. Brokers reported 4,761 closed sales last month, which compares to 4,196 for the same month a year ago.

For single family homes, which accounted for 86 percent of all sales, the median price system-wide jumped about 7.4 percent, rising from $270,000 to $289,925.

Spring market “not waiting for tulips” but limited inventory frustrates homebuyers

New figures from NWMLS show year-over-year increases in pending sales, closed sales, and prices, while inventory fell by double digits.  Many brokers are city inventory levels have never been this low, in the last 20+ years.  The number of active listings in the NWMLS dropped 11% in the past year.  We saw sales at a higher pace this superbowl season, as compared to last years.

In today’s market, we often see multiple offer situations.  How can a buyer prepare to enter this market?  They must be “buyer ready” so they can react quickly.  Not only should a buyer have a firm pre-approval before they begin there search, they should have an honest and real conversation with their agent about expectations – not only of the agent, the market, as well as themselves.

Despite tight inventory, Northwest MLS brokers complete more than 77,000 sales valued at nearly $28 billing during 2014

Members of Northwest Multiple Listing Service reported 77,276 closed sales during 2014 to outgain the prior year’s volume by 1,759 transactions for a 2.3 percent increase. Measured by dollars, last year’s sales of single family homes and condominiums were valued at nearly $28 billion. Compared to 2013, that dollar volume represents a 9.4 percent gain. The sales activity reflects the work of more than 22,000 brokers across 21 counties in the member-owned Northwest MLS.

Last year’s completed sales included 66,716 single family homes (about 86 percent of the total) and 10,560 condominiums. The total units and dollar volume are the best since 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 $285,000, improving on the previous year’s figure of $270,000 (up nearly 5.6 percent). Prices for single family homes (excluding condominiums) rose about 5 percent from 2013, increasing from $281,000 to $295,000. Condo prices jumped 11.4 percent, rising from the 2013 figure of $202,000 to last year’s median selling price of $225,000.

Home buyers who shopped during 2014 often had lots of company – and competition. Brokers notched more than 102,000 pending sales (mutually accepted offers) during 2014, while adding 107,722 new listings to inventory. Brokers said depleted inventory led to bidding wars for homes in the most desirable areas, and led to disappointment for indecisive or unprepared bidders.

During 2014, the average area-wide supply, as measured by months of inventory, fell below 3.5 months. King County had the lowest level, averaging only 1.9 months of supply. Industry insiders tend to use a 4-to-6 month range as an indicator of a balanced market, favoring neither buyers nor sellers.

Further evidence of a housing recovery is reflected in high-end sales. Northwest MLS members reported 2,069 sales of single family homes priced at $1 million or more, up nearly 28 percent from the 2013 total of 1,621 “luxury” sales. Condos priced at $1 million and up accounted for another 152 sales. A total of 878 condos commanded sales prices of $500,000 or more, up 20 percent from the figure for 2013.

The highest-priced single family home that sold during 2014 by a member of Northwest MLS was a property in the Town of Hunts Point that commanded $9.1 million. Topping the chart of high-priced condominiums was one in a downtown Seattle high-rise that sold for $6.1 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.
• The median price for a 3-bedroom home that sold in 2014 was $250,000, about 5 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 $143,500 in Pacific County to $410,000 in San Juan County.
• More than three-fourths (75.2 percent) of condos that sold had two or fewer bedrooms.
• Of the condo sales, about six of every 10 (61.9 percent) were located in King County, primarily in Seattle or on the Eastside.

Brokers say home buyers are back, but they’re choosy

Home buyers are back, and they’re savvy and selective, according to officials who commented on the latest statistics from Northwest Multiple Listing Service. For sellers, that means pricing a home correctly at the start is vital.

The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices. Northwest MLS members reported 8,643 pending sales last month, which is up nearly 6.9 percent from twelve months ago when members reported 8,086 mutually accepted offers. Most of the increases are from sales of single family homes, which rose more than 7.8 percent while condo activity was flat with less than a 1 percent rise in sales.

Home sales stay strong, but prices approaching “affordability ceiling” for some buyers

Pending sales of homes around Western Washington surged more than 13 percent in September compared to a year ago, and listing activity picked up slightly, fueling both broker optimism and words of advice for sellers.

Along with increases in the number of mutually accepted offers, the latest report from Northwest Multiple Listing Service shows year-over-year gains in the number of closed sales (up 4.6 percent) and prices (up 2.5 percent). Inventory for its service area, which encompasses 21 counties in Western and Central Washington, declined slightly (just under 1.2 percent).

We expect the Greater Puget Sound real estate market will maintain a “healthy glow” in 2015 so long as there is no radical increase in interest rates.

Northwest MLS members reported 8,875 pending sales during September to outpace the year-ago total of 7,839 pendings. The volume tapered off about 5 percent from the August figure of 9,342 mutually accepted offers. All but one of the 21 counties served by the MLS reported year-over-year increases.

The number of closed sales for September also rose, climbing from 6,711 a year ago to 7,020 for a 4.6 percent increase. Prices on those sales were up 2.5 percent.

The median price on last month’s closed sales of single family homes and condominiums was $285,000, which compares to the year-ago figure of $278,000.

Housing activity in Western Washington ranges from “red hot” to “slowly healing”

Brokers report some skittishness among both buyers and sellers, but the latest statistics from Northwest Multiple Listing Service indicate the housing market is continuing to rebound. Both the number of pending sales and the number of new listings added to inventory during April reached their highest levels in 11 months.

Closed sales of single family homes and condominiums were slightly below the year-ago volume, while the median sales price rose slightly (up about 1.9 percent).

“The residential market is red hot,” where multiple offers are the “norm” for new listings, with about two-thirds of homes near job centers selling in the first 30 days. That’s about twice the normal rate.

 

4761 Brech Street $365,000

I listed and sold this home in less than 2 weeks

Many areas outside the Greater Seattle job centers also show signs of positive activity, but at a more moderate pace. “The real estate market continues to show positive signs both locally and nationally,” stated John Deely, one of the directors of Northwest MLS.

MLS members reported 9,590 pending sales of single family homes and condominiums during April, about even with the same period a year ago when brokers tallied 9,600 mutually accepted offers. Last month’s total marks the highest level since May 2013 when the MLS reported 10,045 pending sales across its 21-county area.

Improving inventory is helping to boost sales, but MLS officials say the number of distressed sales in some areas, and shortages of the “right kinds” of inventory persist, are causing some drag on activity. Some brokers also expressed concern about the sluggish pace of new construction.

Members added 11,043 new listings to inventory during April, about 700 more than a year ago for a 6.7 percent gain. At month end, there were 21,390 listings system-wide, up nearly 7.9 percent from twelve months ago when active listings totaled 19,826.

“A lot of potential sellers who would like to move up are reluctant to list due to uncertainty that there will be something on the market they would want or be able to purchase,” said Northwest MLS director Diedre Haines. Changes in the new construction segment are also affecting activity, she suggested.

Other brokers had similar comments about current inventory.

“We are still desperate for inventory in spite of statistics indicating we have more listings,” commented MLS director Kathy Estey. Inventory is being held back because potential sellers fear they will sell their home and not find one to move into, said Estey, the managing broker at John L. Scott in Bellevue.

South Puget Sound seeing impact of distressed properties

Distressed properties are still influencing activity and prices in the South Sound, reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. According to his analysis of Northwest MLS data, about 30 percent of April’s sales in both Pierce and Thurston counties were distressed properties, either bank owned or short sales. He noted this appears to be more than twice the ratio in King County.

Buyers are indecisive, Beeson noted, explaining, “They can’t decide if they like a bigger selection or not, especially if much of the inventory is not in the greatest physical condition, which describes many distressed properties.”

Despite the relatively high proportion of distressed properties in Pierce and Thurston counties, multiple offers are occurring on “right priced, right conditioned” listings, remarked Beeson.

Commenting on the minor price drop (down 0.15 percent) compared to a year ago, Beeson believes it is due to the high number of bank owned properties and short sales that were in the mix. He indicated his analysis revealed a median price of $240,000 for non-distressed single family homes, or about 30 percent higher than the distressed component. The gaps in King County, with a smaller proportion of distressed sales, were not as pronounced.

Broker says Western Washington housing market “definitely in full recovery mode”

 

 KIRKLAND, Wash. (Feb. 5, 2014) – Home sales during January may not have been as super as the Seahawks’ performances, but brokers cite several reasons for optimism during 2014. “We are finally going to be looking at the ‘housing crisis’ in the rear view mirror,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “In 2014 we are definitely in full recovery mode,” he added.

 

Following the usual pause during the holidays, activity picked up during January when members of Northwest Multiple Listing Service reported 7,044 pending sales, about even with the same month a year ago, and a jump of nearly 35 percent from December’s total of 5,224 mutually accepted offers.

Inventory, while improving, continues to be a source of worry.

“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014,” Gain added, emphasizing there is pent up demand and “a very active market is anticipated once the number of listings increases.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate agreed. “Available inventory remains tight with shortages or low inventory where 90 percent or more of the sales activity is taking place,” he remarked.

Members added 7,342 new listings to inventory during January, improving on the year-ago total of 7,096. With those additions, the selection increased to 19,195 active listings across the 21 counties served by Northwest MLS. That’s up 6.6 percent from the same period a year ago when there were 18,008 listings.

Thirteen counties have more listings than a year ago, but eight counties are reporting declines in total inventory. “We are literally starving for inventory. We need more homes to sell, especially in the most desirable neighborhoods,” Gain stated.

Area-wide there is about 4.5 months of inventory, an amount at the low end of the 4-to-6 month range most analysts deem to be a balanced market. At this time a year ago, there was about 4.2 months of inventory. The tightest supplies are found in King County (less than 2.5 months) and Snohomish County (3.5 months).

Note to editors/reporters: Effective with January 2014 reports, Northwest Multiple Listing Service is calculating months of inventory using closed sales, rather than pending sales. While there is rationale for using either method (as well as a 12-month rolling average favored by some analysts), the MLS is switching to closed sales to facilitate comparisons with NAR and some other groups. Figures above for 2013 are also calculated using closed sales.)

One of the counties with fewer listings is Kitsap, where there is about 5.2 months of supply, down from the year-ago figure of 6.6 months.

Northwest MLS director Frank Wilson, the branch managing broker at John L. Scott in Poulsbo, described overall activity in that market as healthy. “Homes are still coming on the market and buyers are still buying them,” he commented, but noted they are starting to see a bit of stratification on prices.

“Homes that are overpriced are sitting on the market a while, but homes that are priced correctly for today’s market may receive multiple offers,” Wilson explained. Countywide prices are down about 9.4 percent from a year ago. His analysis indicates prices on waterfront listings are lagging, and MLS data indicate prices on condos (a small segment of sales) dropped by double digits compared to a year ago.

Overpriced homes are also a concern in Snohomish County. “Even though we have a nearly 40 percent increase in inventory compared to a year ago, many listings are overpriced, and buyers are not interested in making offers on those properties,” reported Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain.

“We are not yet fully recovered from the recession and sellers need to be realistic in expectations of the value of their homes,” said Haines, a member of the Northwest MLS board of directors.

The most desirable listings in Snohomish County are still receiving multiple offers, Haines noted, while acknowledging activity is “not as frenzied as a year ago,” due in part to lingering doubts about the future of Boeing and other factors. She said new developments are drawing strong interest and traffic. “In some locations reservation agreements are being taken for homes not yet built with many of these developments already getting close to selling out,” she reported.

Home prices area-wide increased nearly 6.6 percent from a year ago, but dipped from December. The median price for last month’s closed sales of single family homes and condominiums was $255,055, rising from the year-ago figure of $239,300. ). In King County, where nearly one of every four closings occurred, the median sales price was $364,875. That represents an increase of 15.8 percent from the year-ago price of $315,000.

Single family prices (excluding condos) increased from $249,200 to $264,995 (up more than 6.3 percent).

Condo prices surged 14.8 percent, from $169,000 a year ago to $194,000 for last month’s sales.

“Years 2012 and 2013 were fantastic recovery years,” said Scott. “We have now experienced two years of positive price appreciation after the five years of market correction,” he added.

MLS director George Moorhead said recent fluctuations in interest rates and upticks in online activity are noteworthy. “We have all seen interest rates go up and down, but I have not seen such an immediate response from buyers,” he remarked. Moorhead, the branch manager at Bentley Properties in Bothell, also reported a 30 percent increase in online activity in the past few weeks.

Gain expects the rebound to be fueled in part by “repeat move-up buyers” and first-time purchasers. “The first time buyer will return to the marketplace in 2014. With the economy improving they will finally be able to move out of their parents’ homes and when comparing renting verses buying, many will choose homeownership,” he stated.

Brokers point to recent reports of the state’s unemployment rate dropping to 6.6 percent, the lowest in five years, as a positive thrust for home sales, but also cited factors that could hamper activity.

“There are always issues surrounding real estate that erode confidence in the market,” Wilson commented, citing uncertainty on flood insurance. “Until Congress takes action to continue the flood insurance subsidy, people buying in flood-prone areas may suffer sticker shock when they see the premium for coverage,” he believes.

Among other factors brokers mentioned as threats to activity are:  

·        “The volatility of the roller coaster stock market, the new financing and appraisal rules imposed by Dodd/Frank, and fatigue being felt by many buyers who were unsuccessful in purchasing last year.” (Diedre Haines)

·        Rising interest rates and tighter lending requirements. Short sales are waning as buyers encounter long timelines and uncertainties. (George Moorhead)

Mike Grady, president and COO of Coldwell Banker Bain, expects activity to continue picking up until May. “Inventory levels are pretty much the same as they were a year ago. Now we’ll have to wait and see if the sellers come out,” he remarked.

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 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

“Stage is set for another good year” in real estate with year-end gains in inventory, sales, prices

KIRKLAND, Wash. (Jan. 6, 2014) – Brokers with Northwest Multiple Listing Service ended 2013 with the best year-over-year improvement in inventory (up 8.4 percent) and a similar gain in closed sales to buoy confidence heading into the new year. December’s pending sales slipped slightly (down about 1.7 percent) compared to the same month a year ago.

“Positive job growth and the continuation of favorable low interest rates are setting the stage for another good year in real estate,” said J. Lennox Scott.

Friday’s narrow approval of Boeing’s contract proposal for Machinists union members bodes well for members of Northwest Multiple Listing Service and the real estate industry.

Reacting to the vote, MLS board member John Deely said, “The robust and diverse economy of the Pacific Northwest is solidified by Boeing’s continued presence in the Seattle area.” Deely, the principal managing broker at Coldwell Banker Bain in Seattle, said the vote helps secure the region’s position as “the aerospace epicenter of the world with top-notch manufacturing jobs that support the industry.”

Boeing workers and others hoping to buy a home have a bigger selection of homes to consider than house-hunters who were looking twelve months ago – especially in Snohomish County, where the number of active listings is up 43.6 percent.

Northwest MLS members added 4,333 new listings during December, improving on the same period a year ago by 476 listings for a gain of 12.3 percent.   At month end, there were 19,214 active listings in the MLS database, improving on the year-ago supply by 1,496 listings for a gain of 8.4 percent. In Snohomish County, which had the largest jump in supply (43.6 percent), the selection of condos nearly doubled from a year ago, increasing from 172 to 342 listings.

We sold this Lacey Washington home in less than 15 days in the month of December, a normally quiet market for real estate but robust this year.

Pending sales activity during December was mixed around the 21 counties in the MLS service area, with 11 counties showing increases in mutually accepted offers and the other 10 having fewer pending sales than the same month a year ago.  An imbalance between supply and demand could be crimping sales in some areas. As we head into 2014, we will be starting the year with a shortage or low inventory.

Brokers notched 5,710 closed sales last month, improving on the previous year by 443 transactions for a gain of 8.4 percent. During 2013, Northwest MLS members tallied 75,517 closed sales system-wide. That total outgains the previous year’s volume of 64,624 closings for an increase of nearly 16.9 percent.

 “The luxury market will continue to see an increase in sales activity and home values in 2014,” Deely proclaimed. “This market will be driven by pent up demand and by the owners of trophy properties who are confident that values have returned to acceptable levels,” he added.

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 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.