NWMLS February Press Release: Spring market “not waiting for tulips” but limited inventory frustrates homebuyers

NWMLS press release photo Even though Punxsutawney Phil predicted 6 more weeks of winter on Groundhog Day, here in Western Washington our housing market is showing signs of spring-like movement. The statistics from January sales activity show year-over-year gains in pending sales, closed sales and price increases. However low inventory is still dogging our region. Our pending sales bypassed the new listings during January by almost 670 properties. The Northwest Multiple Listing Service (NWMLS) reports that the months of supply in Western Washington has dipped below 4 months; King County is hovering around a 2 month supply. Four to six months supply of home inventory is considered a more balanced market. OB Jacobi, president of Windermere Real Estate, stated, “The Seattle housing market is going gangbusters, but we’re still starving for inventory. If open house traffic is any indication, there are LOTS of buyers out there looking for homes, so my message to would-be sellers is: If you’re on the fence, it’s time to jump off. The market conditions are so much in your favor right now.” Yet, the exact reason why our market is so hot in many neighborhoods– low inventory— may be the cause of sellers holding off listing their homes. There is a definite concern being voiced by potential sellers that they may not have a place to move to once they sell. For those sellers who want to sell quickly and have their homes market ready, now is the time to list. There is a pool of eager, qualified buyers who want to take advantage of the incredible fixed rate mortgages currently available. And this pool will only get bigger as those people who experienced a short-sale or foreclosure during the recession become eligible again to make a home purchase. If you are thinking of selling your home, please take some time to meet with a real estate broker to examine your options.

Below are excerpts from the NWMLS February press release. To read the whole press release, please click here.

Home sales this super bowl season outpaced a year ago as sidelined buyers emerged to compete for limited inventory, according to brokers who commented on January activity.

New figures from Northwest Multiple Listing Service show year-over-year increases in pending sales, closed sales, and prices, while inventory fell by double digits.
The number of active listings of single family homes and condominiums fell from the year-ago figure of 19,195 to 17,082 at the end of January, a decline of 11 percent. Twelve of the 23 counties in the MLS system reported double-digit drops. For the four-county Puget Sound region, the selection was down 12 percent.

When measured by months of supply (the ratio of sales to listings), Northwest MLS figures show it has dipped below four months. In King County, there is only about two months of supply. In general, brokers say four to six months is considered to be healthy balance between supply and demand.

Blame brisk sales, as the number of pending sales, at 7,658, surpassed the number of new listings, which totaled 6,989. A comparison of figures for the four-county region for the past 15 years indicate January’s pending sales exceeded any of the prior years (see chart).

Closed sales increased more than 3.7 percent compared to a year ago, rising from 4,306 completed transactions area-wide to last month’s total of 4,467.
…[and] multiple offers of most new listings are common. …Buyers need to be “buyer ready” so they can react quickly. Brokers recommend getting preapproved for a mortgage, which can give potential buyers an edge in a fast-moving market.

Home prices for single family homes and condos are also tracking ahead of the year-ago pace. The median price on last month’s closed sales was $279,000 system-wide, up about 9.4 percent from the year-ago price of $255,055. King County reported the highest median price at $390,000, up 6.9 percent from twelve months ago.
For the 3,880 single family home sales that closed last month, the median price was $288,000, about 8.7 percent higher than a year ago when the price was $264,995. Scott said a 4 percent increase is the historical norm.

Condo prices spiked more than 13 percent, rising from $194,000 area-wide to $219,900. In King County, which accounted for nearly six of every 10 condo sales, prices rose 6 percent, from $225,000 to $238,500.

… inventory shortages [may be] due in part to hesitant sellers. [Sellers may be holding off because they are concerned they will not find a new home to buy. Or they purchased between 2005 and 2007 and may still be underwater in their mortgage.] Sellers who were foreclosed or completed a short sale during the Great Recession are becoming eligible to purchase a home again…[It’s also noted that] new loan programs, revised loan programs, and a general easing of guidelines for buyers with making home buying more attainable. [Those sidelines buyers who were not eligible to get a home loan because of a past short sale or foreclosure have reached the point that their] two year to three year waiting period is up and they are looking again…

… the spring market is not waiting for the tulips this year – [ spring is here and there is an increase of open house traffic as more buyers are out previewing the limited inventory in our local housing market.] … brokers in Kitsap County are starting to hear murmurs of the second home market. In Snohomish County, where closed sales jumped 11.5 percent from a year ago and prices surged more than 17 percent…[there are buyers in all price ranges looking and anxious to purchase a home.] …credit[ed to] low interest rates, strong employment and economic conditions and [reasonable] appreciation with spurring activity. Despite all the favorable indicators, pending sales in Snohomish County rose only 3.5 percent compared to a year ago…[due to low inventory.]

“The Seattle housing market is going gangbusters, but we’re still starving for inventory,” said OB Jacobi, president of Windermere Real Estate. “If open house traffic is any indication, there are LOTS of buyers out there looking for homes, so my message to would-be sellers is: If you’re on the fence, it’s time to jump off. The market conditions are so much in your favor right now.”

NWMLS 4 counties pending sales_Jan 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.

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