Home Buyers Still Competing for Sparse Inventory in Western Washington, Driving Up Prices – Especially for Sought-After Condominiums

“The Seattle area real estate market hasn’t skipped a beat with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of inventory.

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“Sellers that have put their properties on the market early this year have less competition and are seeing multiple offers. Open houses are experiencing heavy traffic with hundreds of potential buyers attending,” reported Deely.

Of 23 counties served by Northwest MLS, eight counties, including three in the Puget Sound region (King, Kitsap and Snohomish), reported fewer pending sales than a year ago. In King County, where acute inventory shortages exist in many neighborhoods, pending sales dropped 7.5 percent and closings dropped 18.5 percent.

“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB Jacobi, the president of Windermere Real Estate. The number of total active listings at month end stood at 8,037 homes and condos, down nearly 17.6 percent from a year ago. Measured by months of supply, there was only about 1.5 months overall, well below the 4-to-6 month level many industry experts use as a gauge of a balanced market.

Condo inventory is especially tight in Snohomish County (0.8 months of supply) and King County (0.92 months). System-wide there is under a month’s supply (0.93 months). For the four-county Puget Sound region, there were only 427 active condo listings at month end, down almost 31 percent from a year ago.

Despite the sparse selection, brokers expect inventory to improve.

“I actually believe 2018 will bring us moderately more listings, which should help offset the growing demand that continues to result from the area’s strong economy,” remarked Jacobi.

“The month of March can’t come soon enough for home buyers,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “In March, the number of new listings will bump up substantially from the low number of new listings typical for winter months. Better selection will start in March as we enter the spring housing season,” Scott predicts.

In the meantime, Scott reported “a multiple-offer everything, virtually sold out market” in all price ranges close to job centers and in the more affordable and mid-price ranges in surrounding counties. “Sellers are receiving premium pricing and home buyers are pouncing on each new listing,” he added.

Prices continue to rise in all but a few counties, even as the volume of closed sales fell about 9.3 percent. For January’s 5,325 closed sales, the median price was $363,500, a jump of about 11 percent from the year-ago figure of $327,500. Twelve counties reported double-digit spikes.

Within the four-county Puget Sound region, King County had the largest year-over-year gain. Prices for homes and condos combined shot up 20.3 percent in that county, rising from $475,000 to $571,250. Pierce County reported a jump of 15 percent, followed by Snohomish County at about 12.2 percent and Kitsap County at nearly 3.5 percent.

The depleted supply of condos meant premium prices. Area-wide the median price for last month’s completed transactions rose nearly 18.6 percent, from $269,900 to $320,000. Snohomish County’s condo prices surged nearly 25.5 percent, followed by King County at nearly 22.6 percent.

Some brokers expect the hefty price gains to ease.

“As interest rates rise, the rate of price increases will slow down,” predicts Northwest MLS director Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Despite this expectation, he believes sparse supply and the area’s appeal both nationally and internationally will mean ongoing competition and multiple offer situations.

 

The luxury market is also off to a quick start in 2018. “Close to job centers, the luxury market is gaining positive momentum due to the wealth effect of the stock market, the strength of the U.S. economy, and homebuyers from the Pacific Rim, especially China,” noted Lennox Scott.

Northwest MLS figures show sales of homes selling for $2 million or more are far outpacing year-ago activity. Last month, member-brokers reported selling 55 residences at this price threshold. That’s up 66 percent from the same month a year ago when brokers sold 33 such homes.


~Northwest Multiple Listing Service

Can Seattle’s Real Estate Market Keep Up This Growth?

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If Seattle’s real estate market is going to slow down over the next year, will it be a burst or a dribble?

That’s the question on a lot of analysts minds. According to the latest S&P Corelogic Case-Shiller home price index, Seattle has lead the nation in home price increases for  14 months in a row.

The only relief buyers seem to get is a holiday slowdown, and even that is fairly short-lived: Adjusted for seasonal changes, prices grew 0.6 percent from the month prior, according to Case-Shiller, and the Northwest Multiple Listing Service report found that while both inventory and pending sales dipped to their lowest levels since April, prices still increased by double-digits in most of the 23 counties NWMLS serves.

While many brokers see the market growing at more than double the rate of the national average and think the boom is unsustainable in the next year, the question now is mostly whether Seattle will go out with a bang or just start to rise more gradually.

According to the NWMLS report, many brokers are seeing signs that Seattle is not a bubbling market.
“Prices are expected to see some much needed slowdown in 2018 which will help bring more balance to the market,” OB Jacobi, president of Windermere Real Estate, said. “Rising home prices on their own don’t lead to a bubble; a number of other factors have to come into play.”

But can Seattleites be expecting another 12.67 percent growth over last year? Probably not, is what most brokers hope, but so far there’s not much indication that Seattle is slowing down in the first part of 2018.
As one put it to the NWMLS, 2018 could be “less glamorous with 6-to-8 percent appreciation, or even a slight flattening of the market for 8-to-12 months.” But J. Lennox Scott, chairman and CEO of John L Scott Real Estate, “market conditions are set for another robust market in the year of 2018.”

~Zosha Millman, Seattle PI

Snohomish County home prices reach new high — again

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EVERETT — Housing prices continue to climb in Snohomish County reaching never-seen-before heights.

Median prices for houses and condos reached $430,000 for July, up from $385,000 for the same month a year ago, according to the Northwest Multiple Listing Services.

That’s an 11.7 percent increase year-over-year. It’s also a $10,000 increase on the same numbers in June, when the median price was $420,000.

“We should be entering the summer doldrums, but I don’t see that happening,” Diedre Haines, principal managing broker-south Snohomish County at Coldwell Banker Bain in Lynnwood, said in a statement.

The median price for closed sales for all homes surpassed $400,000 for the first time this year in April. Prices have been rising steadily ever since.

Last month, a news story in the Orange County Register in Anaheim, California, reported that Snohomish County trailed only King County in the nation for the shortest amount of time a home was on the market. The report citing numbers from Realtor.com said that houses sold in 20 days. Houses in King County sold in 19 days. Arapahoe County east of Denver came in third at 23 days.

Home prices vary greatly with location, with homes in south Snohomish County costing far more than homes in the north.

Almost all of the county saw double-digit price increases year-over-year. The biggest jump was for the Multiple Listing Service area along the U.S. 2 corridor. There, housing prices rose to $433,000, up from $322,475 a year ago, or a 34.3 percent increase.

The only listing service area that did not see a double-digit increase was the one around Edmonds and Mountlake Terrace in south Snohomish County. There, prices reached $470,000, up from $444,000 a year ago, or an increase of just under 6 percent.

The median prices for houses alone is $453,000 for all of the county. The median prices for condos is $323,475, according to the numbers released Monday.

One of the reasons for the climbing prices is a lack of inventory. Only 1,759 Snohomish County homes were on the market for July. That’s down 10.7 percent from the same month a year ago when there were 1,969 homes.

“Inventory remains low, but prices and demand continue to increase, prompting murmurs of a looming bubble,” Haines said, adding, “Some say yes, and just as many are saying no” when asked about the likelihood of a bubble.

In some areas, inventory is showing some signs of growth, Haines noted, but it’s still “way below what would be considered anywhere near normal. Frankly, I am not even sure anymore exactly what normal is — perhaps the current low inventory status is the new normal.”

~Jim Davis, Everett Herald Net