13): Prices “spiking” as home buyers compete for scarce inventory

Posted on April 4, 2013 by Lisa Lewis

The Northwest Multiple Listing Service sent out their monthly press release on April 4th 2013. Below are details from the release, including a 4-County Puget Sound Region Pending Sales Table for March 2013. To read the press release in its entirety, click here.

Brokers added 9,332 new listings to the Northwest Multiple Listing Service database during March, but pending sales topped that number to further crimp inventory and trigger competitive bidding among buyers who are flocking to open houses.

Northwest MLS figures show year-over-year prices jumped 14.9 percent for the 21 counties in its service area. The median price for last month’s closed sales of single family homes and condominiums (combined) was $258,500, rising from $225,000 for the same month a year ago. Twelve counties reported double-digit gains, led by Ferry (up 70.9 percent), San Juan (up 47.3 percent), and Island (up 36.1 percent).

Prices for single family homes increased 14.3 percent, while the median sales price for condos, which accounted for about 12 percent of sales, surged 19.6 percent. Two-thirds of last month’s condo sales were in King County; prices there leaped 28.6 percent, increasing from $175,000 to $225,000. The price of a single family home that sold in King County jumped from $330,000 to $392,000 (up 18.8 percent).

Brokers reported 5,745 closed sales last month for a 13.9 percent increase from the previous year when they tallied 5,044 completed transactions.

“The market continues to be incredibly competitive with at least one in four buyers paying cash,” noted MLS director OB Jacobi. “For those not paying cash, the average down payment is between 20 percent and 50 percent,” he added.

Jacobi, the president of Windermere Real Estate Company in Seattle also reported the vast majority of home sales right now have multiple offers, and “it’s no longer restricted to the urban markets — the outlying areas are now experiencing the same thing.”

Brokers say even distressed sellers are receiving multiple offers for their homes.

“As one of my brokers told me, when you have 12 offers on a short sale, it pushes the price of the home up to market value. This is clearly reflected in the appreciation we continue to see in prices across the board,” Jacobi stated.

Inventory is depleted area-wide, with only 18,500 active listings in the MLS system at month end. That total is down by almost 6,400 listings year-over-year for a 25.7 percent drop. Counties with the largest declines include Clark (down 46 percent), Snohomish (down 43.8 percent) and King (down 42.4 percent).

System-wide, there is less than a two-month supply of homes, with the tightest selection in Snohomish (0.93 months), King (1.03 months), Clark (1.81 months) and Pierce (1.68 months) counties. In general, analysts consider four-to-six months of supply to be normal.

Pending sales are mirroring the shifts in market conditions. Volume area-wide was up only 3.9 percent from a year ago, rising from 9,126 mutually accepted offers to 9,482.

Five counties – Ferry, Grays Harbor, Island, King, and Snohomish — reported fewer pending sales than a year ago, likely a consequence of the limited selection.

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. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

December 2011 Stats Are Out

Posted on January 11, 2012 by Julie

The most notable aspect of the December 2011 stats is the continued trend toward high pending sales volume despite the softening of sales prices. Listing inventory is down markedly compared to inventory levels for the past three years in the month of December. With interest rates below 4% buyer interest has remained very strong and multiple offers are not unheard of–albeit at much more modest prices than in years past. Having been burned once, buyers are cautious of overpaying and are negotiating for a fail-safe price.

2011-12 Summary

2011-12 Mercer Island

2011-12 Eastside

2011-12 Seattle Metro

2011-12 King County

October is Mixed Bag for the Island

Posted on November 14, 2011 by Julie

October’s stats contain the good, the bad and the ugly!

The good: inventory is down 58% from the same time last year, the Average Sale Price is higher, $/sq ft is higher, and the absorption rate is holding steady.

The bad: Pending sales are down 20% from a year ago, the gap between original list price and sale price is larger (83% as compared to 88%) and the # of months inventory on the market has grown to 10.3 months.

The ugly; Closed sales totaled out at a meager 11 as compared to 26 in October 2010.

September Real Estate Statistics

Posted on October 14, 2011 by Julie

September turned out to be another solid month for real estate on Mercer Island and in the surrounding communities–continuing the trend for 2011.

Summer Bodes Well for Residential Real Estate

Posted on August 26, 2011 by Julie

Mercer Island, Seattle, the Eastside and King County all posted strong gains in number of units sold over those of the prior year. In fact, residential sales met, or in most cases, far exceeded the volume of any July over the last four years.

While unit sales have risen dramatically, sales prices continue to be badgered by local short sales, foreclosures and bank-owned properties, many of which are coming to market in reasonably good condition. We continue to see signs that our market is in the early stages of recovery and are reminded that we are faring much better than most markets across the country. We expect to enjoy a robust Fall market across the Northwest this year.

May a Robust Month for the Island

Posted on July 5, 2011 by Julie

Pending sales continue to be a driving force in the market with May sales on the island up 77.4% over those of a year ago. The market has become much more balanced with many more sellers coming to market and selling within a very reasonable market time. Buyers are seizing the opportunity to gain from both bottom of the market home prices and very low interest rates. Statistically speaking, prices have remained steady. However, some pockets of homes and neighborhoods have seen price increases due to demand.

April Shapes Up to be a Solid Month

Posted on May 10, 2011 by Julie

April turned out to be a remarkable real estate month for Mercer Island. The Island performed much better than the Eastside, Seattle or King County as a whole. For the month of April, active inventory was at its lowest and pending sales at their highest in any of the last 4 years. Average $ per sq.ft., a stable market indicator, was $392/sq ft–up from a low of $289/sq ft in 2010. The months of inventory for sale (4.6) and the absorption rate (30.2) were are their best levels in the past four years. Only time will tell if this is a lasting trend, but certainly it was a fabulous month for Island sales–even considering that we no longer have a home buyer tax stimulus credit as has existed for the last few years.

March Sales Activity is Strong!

Posted on April 18, 2011 by Julie

The attached report should brighten your day just a little! I did a four year history this time to show just how much our market has changed. Nice to see that all market areas are on par with or better than 1 year ago on almost every level. That is quite a feat considering the percentage of sales spurred by the housing stimulus tax credit a year ago.

The Absorption Rate based on pending sales, one of the leading indicators of the overall health of our market, is up across all markets. This is real, non-stimulus created growth!!!

February Posts Nice Volume Gains!

Posted on March 11, 2011 by Julie

February shaped up to be a spectacular month for pending sales volume! High pending sales coupled with lower active inventory resulted in marked improvements of the Months of Inventory and the Absorption Rate ratios. With pending sales double that of February 2010, the numbers clearly reflect the buzz we have been feeling and seeing in the marketplace.

February’s numbers do show lower sales prices, however, when one factors out the bank owned and short sale properties, sales prices have remained very stable. As the activity we are seeing on non-distressed properties continues to increase we will likely see the average sales prices increase somewhat to more truly reflect the mainstream marketplace.

Solid Market Activity for January 2011

Posted on February 10, 2011 by Julie

January shaped up to be a decent month…even compared to pending sales from a year ago when we had the advantage of the home buyer stimulus tax credit! Overall, Mercer Island and the Eastside performed much better than either Seattle or King County—potentially reflecting a trend toward growing demand in the moderate and higher price ranges.

Here is a quick summary of the highlights:

ACTIVE LISTINGS: The number or homes for sale was lower on Mercer Island (-16.9%) and the Eastside (-10.2%) but up in Seattle (+7.4%) and King County (+1.5%).

PENDING SALES: Mercer Island’s pending sales were up 25%; the Eastside was up 5%; Seattle was down 5%; and King County was about the same as a year ago.

CLOSED SALES: Seasonally low and typically reflecting homes that went under contract in November and December, once again Mercer Island and the Eastside were up; and Seattle and King County were down.

AVERAGE $/SQ FT: All areas saw a decline in the Average $/Sq Ft reflecting lower closed average and median sales prices for the month.

SOLD/ORIGINAL LIST PRICE DIFFERECE (%): All areas saw a slight decline in the Sold/Original List Price ratio (Note: Mercer Island had too few sales closed in January to make this a meaningful #)

SALES PRICES: With the exception of Mercer Island, all areas saw lower average and median sales prices. Mercer Island’s # were skewed by a small handful of transactions.

MONTHS OF INVENTORY (Based on Closed Sales): Favorable movement with lower months of inventory Mercer Island was seen on Mercer Island and the Eastside. King County was near even and Seattle was up somewhat.

ABSORPTION RATE (Based on Pended Sales): Aside from firsthand knowledge from the trenches, this is the most accurate measure of the market. It reflects the ratio of pending sales to active listings. The higher the percentage the stronger the buyer market. Seattle showed the highest rate of absorption (24.2%); followed by Mercer Island (22.7%); King County (19.8%) and the Eastside (19.5%).