Market Update

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,” said Ken Anderson, president/designated broker at Coldwell Banker Evergreen Olympic Realty in Tumwater. Buyers have come off the sidelines, the former MLS director commented, adding “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,” quipped MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo.  He said the brisk activity is posing challenges for buyers. “They will probably make several offers before one is accepted and they just need to expect to be competing with others,” he cautioned.

Northwest MLS broker-members added more new 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.

John Deely, principal managing broker at Coldwell Banker Bain, also commented on the imbalanced market. “The early spring weather has brought a bumper crop of buyers to a market experiencing a drought of listings.” The MLS director said activity in Seattle continues to move “at the fastest pace in memory.”  It is not uncommon for weekend open houses to draw upwards of 100 group visits and bidding competitions, he reported. “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.

A comparison of the four-county Puget Sound region shows single family homes in King County had the highest median price at $429,900 (up 6 percent from a year ago), followed by Snohomish County where February’s completed transactions commanded a median price of $330,00 for a year-over-year gain of nearly 4.8 percent. Kitsap’s median price was $238,903; in Pierce it was $233,000.

Condo prices increased 6.7 percent year-over-year, from $215,500 to $230,000. The total number of sales increased 6.7 percent.

“February was a very robust month,” observed Gary O’Leyar, a past chairman of the Northwest MLS board. “If there is any real estate market slowdown, we’re not seeing it,” he said, suggesting doubters look at King County’s Eastside corridor for new or newer high end homes in the $900,000-plus price range.

Northwest MLS figures show 68 homes sold for $900,000-plus in its Eastside segment during the first two months of 2015, outgaining the same period a year ago when brokers sold 36 such homes. “Be prepared to get in line to get into the new home pipeline,” O’Leyar advised.

The market for waterfront homes also appears to be gaining momentum.

“This is the year for waterfront homes in Kitsap,” reported Frank Wilson, noting they have been the last to recover price wise. “Values for waterfront homes were pretty flat in 2014 and they should start appreciating in 2015,” he said. “In the future, buyers will say ‘I wish I would have bought a waterfront home back when they were affordable.’ Today they are affordable.”

“Undeniably, our unusual spring-like weather has not only fueled and jump started an early allergy season, but the market as well,” suggested Diedre Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County. Characterizing the market as “exceedingly active,” she noted garden shops, home improvement stores, furniture stores and other retailers that sell home-related items are also experiencing high levels of activity.

Dick Beeson, the principal managing broker at RE/MAX Professionals in Tacoma and a member of the Northwest MLS board of directors, believes the market is adjusting to scarce inventory and the abundance in the buyer population in the form of multiple offers and frustrated buyers and sellers. “But buyers will not be dissuaded,” he believes, in part because they anticipate hikes in interest rates. “Sellers are frustrated because they can’t find replacement homes. Some won’t list their homes because of fear of not finding a suitable replacement,” Beeson believes. “This cycle will work its way out as spring brings more inventory, hopefully, and sellers give in and say they trust there will be a home for them somewhere,” Beeson stated.

Like Beeson, brokers around the Northwest MLS service area are clamoring for listings:

  • “Hopefully, more potential sellers will seize this market window of opportunity as a good time to sell before the regional real estate market does finally start to level out and take a breath; which it will eventually.”  — Gary O’Leyar, Berkshire Hathaway HomeService Signature Properties.
  • “We desperately need inventory. Potential sellers of all shapes, sizes, price ranges and locations should be contacting their brokers and jumping off the proverbial fence.”  — Diedre Haines, Coldwell Banker Bain.
  • “Sellers haven’t experienced a market this favorable since those frothy days (of 10 years ago). With home prices now consistently on the rise, savvy sellers looking to trade up know this is the time to make that move.”  — Ken Anderson, Coldwell Banker Evergreen Olympic Realty.

“The housing market is on fire,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.  “Due to the backlog of buyers and shortage of homes available for sale, we are experiencing multiple offers on nearly every new listing. This is creating price appreciation where 90-plus percentage of the sales activity is taking place.”

Statistical summary follows.

 

 

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