Market turnaround? King County home prices take biggest one-month jump ever

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King County home prices had dropped $116,000 since last spring, falling to a two-year low in January.

But in February, home prices bounced back as the median sale rose by $45,000 from the month prior, according to new data released Wednesday. It was the first time in eight months that prices actually went up, on a month-over-month basis.

And it was no small increase, either: In dollar terms, it’s the biggest one-month jump since records have been kept.

One month of data does not necessarily guarantee a new trend. But there’s evidence the market could be picking up speed as buyers start slowly coming out of the woodwork: Sales increased 1 percent on a year-over-year basis, a small amount but nevertheless the first increase since April 2018, back when Seattle was still the hottest market in the country. Brokers and buyers are reporting more traffic in open houses and the slow return of bidding wars.

And while prices usually grow in February coming out of the winter doldrums, this year’s bump was triple the average increase from the previous five years. It’s an ominous sign for buyers, given that prices almost always rise the most in spring, which is just around the corner.

King County’s median single-family house sold for $655,000 in February, up 7.4 percent from a month prior but still comfortably below record highs reached last spring, according to the Northwest Multiple Listing Service.

“Everything has picked back up,” said Grant Burton, a Seattle-based Redfin agent. He’s working on two buyer offers right now, and has four pending sales — all featuring bidding wars, which had all-but disappeared in the second half of last year.

“When we noticed the cool-down last spring, buyers were fatigued, they were burnt out on the crazy market and not having enough time to do their due diligence,” Burton said. But then things went in the opposite direction — homes sitting unsold longer, prices being negotiated down — for long enough that buyers have started to feel comfortable enough to come back.

“It helps that there’s more inventory, and having more time (to decide on a house) has been a little bit easier for buyers to digest. And I think maybe people were trying to take advantage of not as many buyers to compete with,” he said.

The market isn’t back to red-hot by any means. On a year-over-year basis, prices rose a bit less than 1 percent. And the number of homes sitting unsold still doubled in that span. Brokers say instead of bidding wars with 10 buyers driving up prices way above the list price — which was common for years — now there might be two or three bidders on sought-after homes, willing to go slightly above list price.

 

 

In Seattle, the median home price hit $730,000, up from $711,000 the previous month but still down from a year ago.

The biggest gains came in Southeast King County, where prices grew from $450,000 to $473,000 in the last month – led by gains of $100,000 in Renton.

But the turnaround hasn’t started on the Eastside. There, prices fell to $900,000 — down from a month ago and a year prior.

Also helping nudge buyers back into the market: mortgage interest rates, which had grown last fall, have fallen back down in the last few months.

Despite a shift in single-family home values, condo prices continue to fall — down 8.4 percent from a year ago across King County, the biggest decline in seven years. The median condo across the county sold for $380,000, down from a record high of $466,000 last spring. The number of condos sitting unsold more than tripled in the past year while sales continued to decline.

The cool-down also continues in Snohomish County, where the cost of the median single-family house fell 2.1 percent from a year prior — the county’s first annual drop since 2012. The median Snohomish house sold for $475,000, down from last spring’s peak of $511,000.

Pierce and Kitsap counties, which have been mostly immune from the recent slowdown as buyers seek out cheaper alternatives, continue to see prices grow.

In Pierce, the median house sold for $355,000 — up 9.2 percent in the past year, and matching the record highs reached last spring. In Kitsap, prices grew 3.7 percent, to $341,000.

~Mike Rosenberg, The Seattle Times

Newest data predicts return to balance for Northwest housing market

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The latest data and estimates from a handful of Northwest Multiple Listing Service real estate professionals paint a picture of a much friendlier housing market for buyers in 2019.

As 2018 rolled to a close, the housing market in the Northwest saw a noted increase in eager sellers.

“Buyers in December were reaping the benefits of market-weary sellers who were willing to give up part of their bloated home equity to make a deal and move on,” said John Deely, principal managing broker at Coldwell Banker Bain, in the NMLS report.

That was confirmed by members across the NMLS, including Windermere Real Estate President OB Jacobi.

“The year ended with more of a splutter than a bang as home price growth continued to slow in December,” he noted.

That was rounded by a median closing price for houses of just $639,000 in King County, down from the 2018 high for the county of $726,275 back in May.

Ultimately, according to Jacobi, this is “bringing us closer to a more balanced market,” predicting slowed growth for home prices through 2019 (around 5.5 percent he estimates).

The reasoning for this drop can be found in a variety of factors, including unsustainable home price growth, rising interest rates, and a drop in consumer confidence.

The outlook for the year ahead continues to look positive for home-buyers, who may find that acting quickly might serve them best.

“Buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,” advised Dick Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.

Among the buyers in the market will be plenty of first-timers, as more millennials get married, have children, and build their respective households.

“Although many of them will face significant obstacles to buying due to student debt, lack of down payments, and Seattle’s high-priced housing, this group is likely to buy more homes in 2019 than any other demographic,” Jacobi predicted.

That being so, pushing out to more remote areas outside of Seattle’s expensive market is starting to drive up prices everywhere. The NMLS’s report noted that demand in those outlying markets has driven up prices in counties like Cowlitz, Lewis, and Thurston 12.4 percent over the last year.

Meanwhile in King County, condo listings have quadrupled in the last 12 months, as buyers look for alternatives to pricier houses.

All this remains consistent with a prediction from Redfin at the end of the 2018, where they expected “demand to cool the most” in 2019 for a handful of major markets across the country, including Seattle, Portland, and San Francisco among others.

~My Northwest Staff

Seattle area’s topsy-turvy home market ends 2018 with Eastside prices falling over the year

01072019_Bellevue_151741-768x494Home prices on the Eastside have now dropped on a year-over-year basis. In Seattle, the median house is nearly $100,000 cheaper than last spring. And across King County, the number of condos available for buyers has more than quadrupled in the past year.

The cool-down in the local housing market continued in December, ending a topsy-turvy year for real estate, according to new figures released Monday by the Northwest Multiple Listing Service.

King County’s median single-family home price ticked up just 0.6 percent in December from a year before, and condo costs rose at the same rate — the smallest annual gain since early 2012, when the market was bottoming out.

It’s a huge shift from the prior six years, where the average year-over-year increase was 12 percent, adding as much as $100,000 to the median home in a single year.

On the Eastside, prices fell 3.1 percent from a year before, the first time prices declined on a year-over-year basis since 2012. In the city of Seattle, prices ticked up just 1.9 percent from a year prior, amounting to a slight decrease on an inflation-adjusted basis.

Compared with the record highs reached last spring, prices are down $91,000 in Seattle, to a new median of $739,000, and they’ve fallen $69,000 on the Eastside, to $909,000. Most remarkably, in the last seven months prices have declined more than $170,000 in Queen Anne/Magnolia, the central Seattle area that includes Capitol Hill, and in East Bellevue.

Screen Shot 2019-01-17 at 11.38.21 AMBuyers who once had to make decisions on home purchases in a matter of days now have weeks or months to ponder their options and negotiate, because there are so many more homes to choose from.

The number of single-family homes for sale across the county in December jumped 148 percent from a year prior, the fourth straight month of record-breaking gains in inventory. Condo inventory skyrocketed 314 percent.

There were actually fewer people putting their homes up for sale than this time last year, but buyers continue to disappear from the market, with sales decreasing 19 percent.

It’s standard now for buyers to put contingencies that, for example, allow them to negotiate the price down if an inspection turns up anything broken. Previously, bidding wars were so heated that buyers had to sign away all their rights to win a home.

It’s been an up-and-down year for real estate here. When 2018 began, prices soared nearly 20 percent in January from the year prior, the most in the country. Those double-digit gains, which were the norm for years, continued through May, before an abrupt shift in the market.

Three other areas have lost more than $110,000 since the spring: Ballard/Greenlake, Shoreline-Richmond Beach and Redmond-Carnation. And in the condo-only market of downtown Seattle, prices decreased about 10 percent in the past year.

On the other end, prices soared 42 percent in Mercer Island over the past year (although there aren’t many sales there this time of year, so volatility is high), and were up 18 percent in Renton-Benson Hill and 10 percent in Kirkland-Bridle Trails.

We’re getting into the slow time of year for the housing market, but this year’s changes have been more significant. In the prior five years, prices rose an average of $3,600 from November to December across King County; this time they declined nearly $5,000.

Most people in the real-estate industry expect the market to stay cool for the next couple of months, since the short, rainy days make this a notoriously slow time for people looking for homes, regardless of how the market is doing. Brokers surveyed by the Northwest Multiple Listing Service expect things to pick back up in the normally frenzied spring market, but few are predicting a return to double-digit price gains.

“The last six to nine months have been a good reality check for buyers, that things can change, and I would be pretty surprised to see the spring market in 2019 bring a lot of [price] escalations and multiple-offer scenarios,” Culbert said.

Prices countywide have now fallen 12 percent since their spring peak, which, outside of the Great Recession housing bust, is the biggest seven-month decline since 2000.

There are several reasons for the fall: Interest rates, though on the decline recently, are up over the past year. Rents have stabilized over the past year, adding less pressure to buy now. Foreign buyer interest has dropped off significantly. And prices have gone so high that they have shrunk the buyer pool, leaving only high-income earners able to compete on most homes.

 “Buyers in December were reaping the benefits of market-weary sellers who were willing to give up part of their bloated home equity to make a deal and move on,” John Deely, principal managing broker at Coldwell Banker Bain in Seattle, said in a statement.

Snohomish County is starting to follow King County’s lead. Inventory in Snohomish has also more than doubled in the past year while prices are up 4.5 percent, the smallest increase in two and a half years. The median house sold for $470,000, down from the record high of $511,000 in the spring.

The same shift still hasn’t really made its way to the rest of the Puget Sound region, however. Prices rose 7.5 percent in Kitsap County and 9.2 percent in Pierce County from a year prior, with a median price of $344,000 in both places. Both counties saw modest 13 to 19 percent growth in inventory.

~Mike Rosenburg, Seattle Times

Seattle home sellers are lowering list prices faster than anywhere else

Earlier this week the news was that the average Seattle-area homebuyer has been successfully able to negotiate a deal at below list price for the first time in four years.

But that’s only half the story: In a lot of cases, sellers are now doing the work for buyers by lowering the list price themselves.

At the start of the spring, when the local market was still on fire, just 5 percent of all homes on the market in the metro area had a reduced listing price, according to Zillow.

Now, 22 percent of all listings are being pitched at a reduced price, the most since Zillow began tracking the data in 2010.

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Nowhere else in the country has seen a change that dramatic.

On average,  sellers cutting their list price here have reduced it by 3 percent, the same as the national average. In the city of Seattle and the Eastside, that translates to a cut of about $25,000 to $30,000.

It’s a double advantage for buyers: Not only are list prices dropping, but the average buyer is then able to knock the price down further in negotiations, a reversal from recent years in which bidding wars designed to escalate list prices were the norm.

That’s another area where Seattle stands out on the national stage.

In the city of Seattle, homes now go for 0.6 percent below list price on average, after selling for 4.1 percent above list price a year ago. That 4.7 percentage-point shift is the biggest in the nation among the 50 biggest cities, according to data from Redfin.

However, the fact remains that Seattle has some of the most expensive real estate in the country, and the changes in recent months haven’t put much of a dent in that. Five years ago, the median house in Seattle cost $461,000. It peaked this spring at $830,000 — an 80 percent rise over five years.

~Mike Rosenberg, Seattle Times

 

Home prices have finally hit a wall on the West Coast

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Home sellers have had it easy over the last few years. Housing demand has risen along with the improving economy, and home builders have struggled to build at a pace that keeps up with that demand. The result was a shortage of housing inventory that allowed sellers to sit back and let buyers bid up the price of their home.

But data from the last two months suggests that the housing market is entering a new stage, especially on the West Coast, where home prices have risen beyond most people’s capacity to pay. Instead of bidding wars, houses are sitting on the market longer, and price cuts are becoming more common. Buyers are starting to regain the upper hand.

“If we’re right, nationally, we’ve already entered the early stages of a buyer’s market,” writes Rick Palacios Jr. director of research at John Burns Real Estate Consulting. “Should supply levels cross above five months we’ll be watching for flat [or] possibly declining resale prices in some markets, especially where affordability is already very stretched.”

Housing supply constraints have been a primary factor in driving prices up, but there are signs this is changing. Data from the National Association of Realtors shows that “months of supply”—a leading indicator of housing supply that divides the number of active listings by the pace of sales—has ticked up year-over-year in the last few months after years of declines.

But real estate experts often say there’s no such thing as a national housing market—new homes for sale in New York, for example, don’t mean anything for people who live in San Francisco—and the spikes in supply are most pronounced on the West Coast.

Some of the biggest jumps are in markets that have been red hot over the last 5 years, namely the San Francisco Bay Area, Seattle, and Denver. Active real estate listings in September were up by a whopping 113 percent year-over-year in San Jose, 81 percent in Denver, 47 percent in Seattle, 33 percent in San Francisco, 34 percent in San Diego, and 12 percent in Los Angeles.

But the trend isn’t limited to the largest markets, as smaller cities across California, Colorado, Washington, and Oregon have seen jumps as well. Of the 30 markets that showed the highest spikes in active listings in September, 19 are in those four states.

While the number of active listings has risen, home sales have fallen dramatically across the U.S., as inventory woes and affordability constraints continue to drag down the market as a whole. But as with supply spikes, home sales are falling by double digits in some markets on the West Coast. In September, home sales were down 24 percent year-over-year in Seattle, 16 percent in San Jose, 16 percent in Los Angeles, and 13 percent in San Diego.

The combination of more homes on the market but fewer sales means that despite surging demand for housing, homes are sitting on the market. And given the affordability crisis sweeping across America, especially on the West Coast, this points to only one thing: Home prices have outpaced wages in these markets and people simply can’t afford to buy.

In Southern California, the year-over-year rate of home price appreciation—meaning the rate at which home prices are going up—began to decline in the spring and has continued to do so into the fall. Northern California was a little later to respond, but San Jose and San Francisco registered their first year-over-year declines in September.

 

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Another wild card in this dynamic is rising interest rates, which are once again approaching 5 percent. Rising rates were cited as a possible cause of last week’s stock market selloff, and the housing market is particularly sensitive it. When interest rates rise, monthly mortgage payments go up.

For markets where home prices have already hit their ceiling, rising rates will likely cause home prices to drop just because something will have to give for people to be able to buy a home. Unfortunately for home buyers, the price drop won’t result in lower payments, just that they will pay less on the principal of their mortgage and more on interest.

Regardless of where rates go, though, home prices on the West Coast markets where supply is up and sales are lagging appear to have nowhere to go but down.

~Jeff Andrews, Curbed

How Much it Costs to Buy a House in the Hottest Housing Markets of 2018

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Most areas of the country are in a seller’s market, meaning there’s not enough inventory for all the interested homebuyers. About half of all the homes in the country are worth as much or more than they were in April 2007 — the height of America’s housing boom.

This is all good news if you’re planning to sell your home. It’s less good news if you’re trying to find one. But as with most things when it comes to buying a house, like what kind of hidden fees you can expect during the process, where you live matters. Certain areas of the country are exploding in popularity, which is driving up the cost of homes.

Ahead, check out how much it costs to buy a home in the hottest real estate markets of 2018 according to Zillow’s latest housing report.  Hottest Housing Markets

Key indicators for Western Washington housing still rising, but brokers detect slowdown and uncertainty

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Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.

Pending sales rose nearly 8 percent from a year ago, closed sales were up 5.2 percent, and prices jumped about 8.2 percent, with 14 counties reporting double-digit gains. Even the number of new listings improved on the year-ago total.

Northwest MLS figures for the 23 counties it serves show members added 8,466 new listings to inventory during October, outgaining the year-ago total of 7,575 by 11.8 percent. Buyers outnumbered new listings, with 10,586 of them having their offers accepted. That number of pending sales was up nearly 8 percent from the same month a year ago.

“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.

“The market in Thurston County has never been better for sellers, and they’re getting the message,” Anderson remarked. His analysis revealed a 10-year high for sellers coming to market during October. “These savvy sellers are not waiting until spring to sell. They are taking advantage of today’s great market and making their move now,” he reported.

Buyers may find themselves in a quandary as the year winds down as they contemplate limited supply, possible upticks in interest rates and tax reform. Last week’s announcement of a provision in a GOP tax proposal to cap the mortgage interest deduction is concerning to buyers, brokers and builders.

“Imagine if the proposed plan to cap the mortgage interest deduction at $500,000 is approved in a market that is starved for homes and where the median price [for a single family home in King County] is now $630,000,” said O B Jacobi, president of Windermere Real Estate. “Homeowners may be less likely to sell because they would be giving up their grandfathered tax credit on their current home. That’s fewer homes for sale in a market where we really need them,” he stated, adding, “There could also be a flood of new buyers trying to purchase before the plan is passed, adding to the already hyper-competitive market conditions.”

Northwest MLS data show 66 percent of single family homes sold so far this year (Jan. – Oct.) in King County had selling prices of $500,000 or higher.

Within King County prices are considerably higher. In Seattle, year-over-year prices jumped 17.6 percent, from $625,000 to $735,000. On the Eastside, the median price for a single family home rose 10 percent from a year ago, increasing from $768,000 to $845,000. Nevertheless, high prices did not seem to deter many house-hunters.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region. With a large buyer pool for each new listing, we saw a higher percentage of new listings sell within the first 30 days of coming on the market,” Scott reported, while also noting the seasonal change in housing market dynamics. “As we enter the winter market, the number of new listings being added will be in short supply from now through February,” he explained.

Inventory remains low in many counties in the Northwest MLS system. Overall, there is only 1.5 months of supply of single family homes and condos combined. In King County, it’s less than one month. Industry analysts say four to six months typically indicates a balanced (or “normal”) market.

Most brokers agree inventory will not grow over the next few months. “Sellers who bring their homes on the market over the next three months will have a lot of interest because of the pent-up demand of buyers who are going to have fewer houses to consider,” suggested Wilson.

“Homebuyers in our area are at a real disadvantage right now,” commented Wilson, a member of the Northwest MLS board of directors. “They have to be pre-underwritten with their lenders, put forward a conventional or better offer, put down substantial earnest money, and hope that multiple offers do not escalate the price out of their affordability zone.” He fears “more and more buyers will be sidelined.”

 

~Northwest Multiple Listing Service

 

 

 

King County home prices grow $100,000 in a year for first time; West Bellevue jumps 41 percent

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The median King County home price has grown more than $100,000 in just a year.

Following up on a record-breaking spring, the county’s real-estate market had its hottest month of July since such monthly records began in 2000, with prices rising 18.6 percent from a year ago.

The new median price is $658,000, or $103,000 more than last July, according to monthly data released Monday by the Northwest Multiple Listing Service.

Just a down payment on the median house costs about $20,000 more than a year ago. So first-time buyers who didn’t save up that much in the past year are further from buying a house today than they were a year ago.

 

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George Moorhead of Bentley Properties in Bothell said his office is working with 60 first-time homebuyers right now — and it’s been a struggle to find something for any of them.

“First-time homebuyers are really feeling the pinch. Some of them have been looking for a home for almost two years,” Moorhead said. “They have to keep going further and further out just to find something that’s worthwhile. It’s just slim pickings out there.”

Trade-up buyers are dealing with a similar crunch. One-third of homes across the region sold for at least $1 million this past month, according to John L. Scott Real Estate.

“Anything between $900,000 and $1.3 million, you’ll still find yourself in a multiple-offer situation — six to 10 offers,” said Lori Holden Scott, a John L. Scott broker who deals with pricier homes.

While prices have been going up for so long that increases might seem inevitable, this month’s surge is actually a bit unusual.

 

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Median prices in Seattle ($749,000) and the Eastside ($860,000) did dip slightly from June’s record highs. Both were still up about 15 percent from a year prior.

West Bellevue had the county’s biggest price jump — up 41 percent from a year ago, to a new median price of $2.3 million, the priciest region in the county. Areas that saw prices zoom up more than 20 percent in the past year include West Seattle, Sodo/Beacon Hill, Central Seattle/Capitol Hill, Shoreline, East Bellevue and Redmond.

Countywide, the annual price increase in July was the largest ever in terms of absolute numbers. But the 18.6 percent growth was a bit slower than in some previous months.

“I don’t think anything is slowing down,” said Laurie Way, a managing broker at Coldwell Banker Bain in Seattle.

Both Moorhead and Way think the market has to cool a bit eventually; it’s just unclear how long that will take.

The very-long-running trend of declining inventory continues, as fewer people put homes up for sale while those properties that do hit the market get snatched up in about a week, on average.

And Moorhead said more repeat buyers are choosing to rent out their old homes, banking on getting steady rental income while knowing they could sell the home later — perhaps at an even higher price. He said his last four homebuyers all rented out their old homes.

The number of homes for sale across King County dropped 18 percent from a year ago and is at the lowest point on record for this time of year. Sales were down slightly, as well.

One bright spot for buyers: Condos across the county cost a median 5.7 percent more than a year ago, the second-slowest growth in the past two years.

 

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Downtown Seattle, where condos are the only homebuying option, actually saw prices drop a tick from a year ago. Enumclaw was the only place where single-family-home prices decreased.

Elsewhere, Snohomish County surged to a record median price of $453,000, growing 11.9 percent from a year ago.

Both Pierce and Kitsap counties dipped a bit compared with last month’s record prices, but they still were up significantly from a year ago. Pierce’s median price is $312,000, up 9.6 percent from a year ago, while Kitsap reached $322,000, an extra 11 percent from this past year.

~Mike Rosenberg, Seattle Times

Another Record Month for the East Side Market

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It was another month of record-setting home prices in June as the area yet again took the prize for the hottest real estate market in the country. In a bright spot for buyers, the number of new listings added in June was the highest total for any single month since May 2008. While inventory is still low, the pace of sales is slowing and the number of multiple offers are down, suggesting that we may soon see a slight reprieve from the last year of rapid-fire growth.

For the full report see: East Side Market Review