Home sales, prices still rising in Western Washington despite lean inventory and increasing mortgage rates

Rising interest rates, rising prices and rising consumer confidence are creating a "positive cyclone of home sales activity," according to members of the Northwest Multiple Listing Service. A robust job market around the Greater Seattle area is also spurring sales.

Member-brokers reported 9,565 pending sales during July for an increase of more than 13.6 percent from a year ago – the highest year-over-year gain since January. Last month’s mutually accepted offers across 21 counties also marked a slight improvement on June’s total of 9,484 pending sales.

Northwest MLS director John Deely said multiple offers are being reported in all price ranges "with properly priced new listings, and we’re still seeing a surprising number of all cash buyers." He also noted many transactions are conditioned on the closing of a pending sale as move-up sellers enter the market to buy a new property.

The number of closed sales and the prices on those transactions both rose by double digits compared to a year ago. Members recorded 7,772 completed transactions area-wide to outgain the year-ago volume by 27.5 percent. The median price of those closed sales, which included single family homes and condominiums, was $282,363. That’s up 10.8 percent from the year-ago figure of $254,900.

"We experienced a mini power surge of sales activity that was touched off by a sudden raise of interest rates during the month of May," observed J. Lennox Scott. Scott attributes part of the surging activity to buyers who rushed forward to purchase a home before rates climb higher. He also reported more sellers are listing their homes "due to the realization that the next home they purchase will be at a higher interest rate." As these sellers become buyers, they’re contributing to the "positive cyclone of sales activity," Scott stated.

MLS members added 10,860 new listings to inventory during July to boost the system-wide selection to 25,272 active listings. That is only about 5.5 percent fewer listings than a year ago when inventory stood at 26,747 active listings.

Despite improving inventory overall, supplies remained low, particularly around job centers. Area-wide there is about 2.6 months of supply, which indicates a seller’s market. (In a normal market, a healthy supply level favoring neither buyers nor sellers is around 6 months, according to industry analysts.)

Three counties have less than three months of supply. At the current pace of sales in King County, it would take just 1.5 months to sell the current supply. In Snohomish there is only 1.6 months of supply and in Thurston County the existing supply would be exhausted in about 2.9 months.

Deely said some sellers are testing the waters with aggressive pricing, but they are experiencing longer market times.
MLS director Frank Wilson, representing Kitsap County where there is 3.3 months of supply, expects the seller’s market will continue for at least the next few months. He noted 16 percent more homes in Kitsap County went under contract than the same month a year ago, crediting some of that uptick to the sense of urgency that buyers are feeling because of recent jumps in interest rates.

The average fixed rate on a 30-year mortgage was 4.37 percent last week, up from January’s rate of 3.41, according to Freddie Mac.

Buyers should be aware of interest rates now and lock in a rate. "There is nothing more disappointing than having your offer accepted on a home, then have an interest rate jump disqualify you from the purchase," he remarked, adding, "If you want to gamble go to Las Vegas; if you want to buy a home lock the rate."

Brokers believe robust private sector job growth should have a positive impact on sales momentum. "Builders will have to keep up with the influx of families moving to the area for employment in order to sustain our growing need for housing," remarked Mike Grady.

Although some economists expect weaker U.S. economic growth for the remaining months of 2013 and moderating home price increases, brokers say investors are active participants in the local housing market.

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.

Thurston County Stats

New listings: 486

# Total Active: 1,268

# Pending Sales: 441

# Closings: 340

Avg. Price: $240,469

Median Price: $228,500

Month's Supply: 2.88

Source: NWMLS KIRKLAND, Wash. (August 7, 2013)  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.

  

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8 Ways To Protect Yourself From Summer Sun

Summer is fun in the sun, but not with a sunburn. In addition to the discomfort, overexposure to the sun can lead to premature aging of the skin and skin cancer, including melanoma. As you can see above, I'm ALWAYS in a hat when out in the sun, whether I'm in Washington or Hawaii.  Here are some suggestions to protect yourself:

1. Watch the clock. The sun's damaging UV rays are strongest from 10 a.m. to 4 p.m. daylight savings time in the continental U.S. Use extra protection.

2. Use sunscreen with SPF 15 or higher.

Make sure it offers both UVA and UVB protection.

3. Check that your sunscreen is fresh. Note the expiration date – sunscreen lasts no more than three years, less if it's been exposed to high temperatures on the beach or in a closed car.

4. Reapply sunscreen frequently. Put on more when you're out beyond two hours, after a swim, or if you've been sweating. 

5. Wear clothing. No one likes extra clothes in the summer, but they do shield the skin from the sun. Loose, long-sleeved shirts and long pants made of tightly woven fabric work best. T-shirts have an SPF under 15, wet t-shirts even less, so still use sunscreen.

6. Cover your head. A hat with a brim all around is best. Tightly woven fabrics like canvas are better than straw hats with holes. With baseball caps, protect your ears and neck with sunscreen or clothing.

7. Wear sunglasses. Most sold in the U.S. block both UVA and UVB rays, but check to make sure. Look for styles that wrap around and protect the tender skin near your eyes.

8. Seek out shade. You can really reduce the risk of skin damage by getting under an umbrella, tree, or other shelter, especially midday. But still put on sunscreen or protective clothing.

 

7 Retirement Planning Tips No Matter What Your Age

Preparing for retirement is important, whether it's a few years or decades away. Instead of pensions, many employers now offer 401(k) or other defined contribution plans. That means you are the one responsible for saving for your retirement. But don't worry. It's never too late to start – or too early! Here are some retirement tips, no matter what your age.

1.      Adopt a savings mindset. Look at putting retirement money away as paying yourself first. Decide how much to contribute each paycheck, and then have your employer direct deposit the amount into your retirement account. Experts suggest 8% to 10% of your income. Come up with the number by making a budget for all your expenses and other savings, and then deduct this from your net income.

2.     Sign up for your employer's 401(k) or 403(b) plan. Contributions are tax-free to certain limits. Employers often match your contribution, so put in enough to qualify. Seek professional advice in choosing investment options.

3.      Set up an Individual Retirement Account (IRA). If your employer doesn't have a 401(k) or 403(b) plan, open an IRA or a Roth IRA, or a SEP IRA if you're self-employed. There are different requirements and limits for how much you can contribute tax-free. Consult a tax professional for details about any investments with tax implications.

4.     Take advantage of bigger benefits as you get older. Once you reach 50, federal regulations let you contribute more into tax-advantaged retirement accounts to let you "catch up." Seek professional advice on this, but most experts recommend putting in the maximum allowed. 

5.      Start an emergency fund. This is for emergency expenses, such as major home or vehicle repairs, or to help pay the bills between jobs. You don't want to touch your retirement account because you could lose tax benefits or pay withdrawal penalties. Try to set aside 3 to 6 months of living expenses.

6.     Save as much as you can. In addition to retirement and emergency accounts, cut expenses where you can and put money into a savings account you can draw on when you're no longer working. 

7.     Pay off credit card debt. Set up a pay-off plan now, so you won't have to use your retirement money. Once it's paid off, keep making those payments – into your savings account!