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.
