With an increase of qualified buyers pre-approved for mortgages and so ready to make a home purchase, April was smoking hot in the Western Washington housing market. Pending sales for our region were up 18.7% year-over-year during April. Mutually accepted offers within the Northwest Multiple Listing Service (NWMLS) topped out at over 11,000. In the 4-county Puget Sound Region, pending sales breached the 8,000 mark for only the second time in 16 years! NWMLS closed sales in April experienced a 24.3 % increase. Wow!!!
“We are still very clearly in the midst of a seller’s market and unless we see a significant increase in listings, it will remain that way for the foreseeable future,” OB Jacobi, president of Windermere Real Estate
The ‘more inventory’ mantra still stands firm in Western Washington. “We’re in desperate need of inventory so I hope to see an increase in listings as we move further into the late spring/early summer,” stated OB Jacobi, president of Windermere Real Estate. Within our own office, Windermere Mercer Island, we are definitely witnessing how quickly well priced, market ready homes are reaching mutual acceptance. As prices continue to pop up due to buyer demand mixed with our low inventory condition, savvy buyers are starting to let go of their “dream home” mentality and purchasing properties that fit their housing needs and offer potential of growing equity to go toward their future homes. Our historically low fixed rate mortgages are an opportunity buyers do not want to miss out on. May’s press release touched on the discussion of another housing bubble potentially emerging within our housing market. It appears housing bubble theories may not have much merit, however, since our region is not overburdened with new construction like it was in our previous housing bubble, and the buyers making home purchases today are truly qualified to buy a home due to tighter parameters they have to meet to obtain a mortgage.
Below are excerpts of May press release from the NWMLS. To read the press release in its entirety, please click here.
Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.
Buyer confidence and buyer ability to purchase are fueling activity, [now that the previously constrained demand is finally moving forward.] MLS members reported an 18.7 percent year-over-year increase in pending sales, with the volume of mutually accepted offers rising from 9,590 transactions to 11,384. For the four-county Puget Sound region members logged 8,671 pending sales to top the 8,000 mark for only the second time in the past 16 years.
Closed sales and prices also accelerated, according to Northwest MLS statistics. Across the 23 counties covered by the report there were 7,696 closed sales. That total represents a 24.3 percent increase from the year-ago volume of 6,190 closings. Within the four county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, “That is super amazing.”
“We are still very clearly in the midst of a seller’s market and unless we see a significant increase in listings, it will remain that way for the foreseeable future,” remarked OB Jacobi, president of Windermere Real Estate. Jacobi and other brokers reiterated the dire need for listings.
Members added 11,495 new listings to inventory during April, but brisk sales kept supply tight and well below the level of a year ago. At the end of April, the MLS reported 18,132 listings of single family homes and condominiums in its database, a drop of more than 15 percent from the year-ago total of 21,390.
Compared to March, inventory at the end of April improved by 6.6 percent, but pending sales jumped 13.7 percent from the previous month.
“We’re in desperate need of inventory so I hope to see an increase in listings as we move further into the late spring/early summer,” stated Jacobi.
Northwest MLS figures show less than 2.4 months of supply at the end of April, down from the March figure of 2.5 months and down from a year ago when there was about 3.5 months of supply. Inventory is especially tight in King County, with 1.3 months of supply, and Snohomish County, with about 1.5 months. Many industry analysts use a range of four-to-six months as an indicator of a balanced market.
Prices on last month’s closed sales were up 12.4 percent. The median price for April’s sales of single family homes and condos was $309,000, which compares to the year-ago price of $275,000. For single family homes only (excluding condos), the median price rose from $287,500 to $320,000 for a gain of 11.3 percent. Condo prices jumped nearly 13.8 percent system-wide.
In King County, where homes fetch the highest prices, the median price of last month’s sales of single family homes was $480,000. That reflects a gain of 11.5 percent from the year ago price of $430,500. King County condo prices increased about 8.8 percent from a year ago, rising from $250,000 to $272,000.
[Homes that come to market in good condition and priced right are moving quickly due to the current inventory situation] … buyers [can’t be] “playing games” with sellers. [ Buyers may need to purchase a home for building equity toward their dream home. It’s advised to not wait for your dream home and then have to settle at a higher price in a year.]
Brokers do not appear to be worried about a housing bubble.
“Some are talking about the potential for another housing bubble given the lack of homes for sale and the bullishness of buyers in bidding up properties,” acknowledged Jacobi. “For now,” he said, “I believe there are sufficient safeguards in place to keep this from happening.” [Two factors differentiate today’s market. First, there is not the surplus of new construction that was present during our last housing bubble. Second, buyers are actually qualifying for today’s mortgages. Our current housing market is set on a more stable foundation.]
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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.