It appears new homes are on many wish lists this holiday season. Serious buyers are out there looking at homes, and buying. With interest rates currently below 4% for 30 year fixed rate mortgages, buyers realize that now is the time to make their home purchases. Low inventory is still a hurdle for buyers, however. Sellers should take note— it may be well worth their efforts to continue to have their homes on the market, even with the holidays approaching. Per OB Jacobi, president of Windermere Real Estate,”If sellers are willing to keep their homes on the market through the holiday season, the numbers appear to be in their favor.” Well priced, quality homes are in high demand in our region, especially with the influx of people relocating for their jobs and the allure of our region to international buyers. In addition, the 2015 economic outlook for Western Washington appears to be quite favorable, which may afford more 1st time home buyers and move-up buyers to enter the housing market within the next year.
Below are excerpts of the December press release. To read the whole press release, please click here.
Buyer interest remains high and many good values exist for those whose holiday wish list includes a new home, according to brokers with Northwest Multiple Listing Service. A new report from the MLS summarizing November activity shows year-over-year gains in pending sales, closed sales and median prices.
The report encompasses 21 counties, mostly in Western Washington.
“During the holidays we usually see a drop in home buyers, but this year they’re remaining engaged later than usual. Both showings and offers are still going strong,” reported OB Jacobi, president of Windermere Real Estate. He said recent purchasers include people relocating to Seattle as well as international buyers “who aren’t showing any signs of slowing.”
Attractive financing is luring both first-time and move-up buyers.
Northwest MLS figures show pending sales (mutually accepted offers) for November jumped nearly 3 percent from twelve months ago, rising from 6,624 pendings to 6,821. For the four Puget Sound region counties (King, Kitsap, Pierce and Snohomish) the total of 5,220 pending sales marked the highest level for November since 2006 when these counties reported 5,292 sales.
[It’s] noted the number of new listings added in [Kitsap] county year-to-date (4,963) is nearly equal to the number of listings that have gone under contract (4,864).
The median price for homes and condos that sold during November in the Northwest MLS service area was $289,000. That reflects an increase of more than 6.6 percent from the year-ago sales price of $271,061. Ten counties experienced double-digit gains, while two had price drops compared to the same month a year ago.
In King County, prices rose 5.2 percent, from $379,202 to $399,000. Nearby counties had sharper increases, led by Kitsap at nearly 11.4 percent. In Pierce County, prices jumped 10.7 percent while in Snohomish County the year-over-year gain was nearly 9 percent.
Compared to October, the overall median price for last month’s sales fell by $1,000, although a county-by-county comparison shows a mix of slight gains and declines.
Brokers seemed upbeat as the year winds down, pointing to good open house traffic, the reentry of small, local builders, and job growth as factors that should bode well for home sales.
With brisk activity, supply is tight in many areas served by Northwest MLS. Half the counties have less than six months of supply. Area-wide, there is slightly more than 3.5 months of supply, but in King County it’s about two months; Snohomish has about 2.8 months of supply.
Many industry experts consider six months of supply to be an indicator of a balanced market. As supply dips below that threshold, competition intensifies, and prices are more likely to rise.
Not surprisingly, brokers reported a falloff in the volume of new listings added to inventory from October to November, in part because some sellers opt to focus on holidays rather than home showings.
MLS members added 5,521 new listings last month, which compares to 8,102 during October. November’s figure also trailed the year-ago total of 5,853. As the month ended, buyers still had a choice of 20,864 active listings system-wide, down 5.4 percent from a year ago.
Although some sellers postpone listing their homes during the holidays, brokers say there are advantages that might be overlooked. Open houses tend to attract more serious and motivated buyers is one benefit they mentioned.
[It’s been] acknowledged the lower seasonally adjusted inventory will cause some buyers to wait until spring. [But] analysis shows more than half the active residential properties in the tri-county (King, Pierce Snohomish) area are vacant. …there may be fewer buyers [in December], but those who are out looking are highly motivated, with many wanting to buy before year end. Inventory shortages are a challenge … in part because of the distressed component. …[it is estimated] about a third of the new inventory is simply not quality or almost unsalable due to poor condition or their status as auction listings and short sales. Sites that estimate value may be fun to use and a good starting point, but they can’t replace the role of an experienced professional who knows the neighborhood, the condition of the property and nearby homes, and is able to compare the competition in determining an asking price. Considering many prospective (competing) buyers are busy with other activities and active sellers are committed to selling,…there’s less competition for limited, good inventory, making now a great opportunity for would-be homeowners.
“If sellers are willing to keep their homes on the market through the holiday season, the numbers appear to be in their favor,” Jacobi noted… In addition to reasons already cited, [it’s] noted decorated homes may look “picture book perfect.”
Looking ahead, the MLS spokespersons expect market recovery momentum will continue into 2015.
Citing rosy economic outlooks for the region, [it’s] expect[ed] there will be more first-time buyers and an increase in move-up buyers in the coming year. [It’s] suggested increased buyer activity means sellers should be making their plans and getting last-minute home improvements done for 2015. …interest rates [may] remain mostly flat, but [may experience] gradual rises in the latter part of 2015.
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 23 counties in Washington state. (Note to editors: Data for Chelan and Douglas counties will be added to future reports. For now, activity for those counties is reflected in the line for “Other” areas.)