According to the Northwest Multiple Listing Service (NWMLS) November press release, last month the 4-county Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties experienced the highest volume of pending sales for an October in a decade. Low inventory is still a major issue with our housing market, however. For 19 of the 23 counties in the NWMLS service area the number of pending sales outpaced the number of new listings during October.
Closed sales dipped below 8,000 homes for the first time since April 2015, and is attributed to our low inventory woes. “Given the severe shortage of homes for sale, I’m not surprised to see that both pending and closed sales slowed down last month,” said OB Jacobi, president of Windermere Real Estate. The months of supply for the whole NWMLS is 2.33 months, well below the target of 4-6 months supply. King and Snohomish counties are both below 2 months’ worth of supply.
The growth in home prices in the great Seattle area is getting national press. Closed sales area-wide saw a year-over-year increase of 9.7%. Our healthy economic conditions and influx of relocating employees is a huge factor in making our single family home market so blazing hot! Without more inventory to sell, however, there is a whole segment of eager buyers that are missing out on home ownership and sellers missing out on potentially quick sales of their homes.
Below are experts of the November press release put out by the NWMLS. To read it in its entirity, please click here.
With holidays approaching, real estate brokers usually expect a slowdown as buyers and sellers shift their attention elsewhere. “This year is different,” say some industry leaders.
Newly released MLS figures for October show pending sales are up 7.8 percent from a year ago, rising from 8,643 transactions to 9,317. Nearly half the counties in its service area reported double-digit gains in the number of mutually accepted offers. For the four-county Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties, Northwest MLS members tallied 6,977 pending sales, the highest October volume in a decade.
For 19 of the 23 counties in the latest MLS report the number of pending sales surpassed the number of new listings added to inventory. System-wide there were 8,094 new listings that came on the market during October, about the same as 12 months ago when members added 8,102 listings. With those additions (the fewest monthly total since February) inventory at the end of the month stood at 18,068 listings, well below the year-ago total of 23,501 for a 23.1 percent year-over-year drop.
Closed sales rose 7 percent from a year ago, increasing from 7,257 to 7,769. Last month’s total slipped below 8,000 closings for the first time since April, with some brokers citing inadequate inventory as a factor.
“Given the severe shortage of homes for sale, I’m not surprised to see that both pending and closed sales slowed down last month,” said OB Jacobi, president of Windermere Real Estate.The MLS reported 2.33 months of supply area-wide, well below the 4-to-6 months figure many in the industry say indicates a balanced market. The months of supply figure has not been above three months since February when the figure was 3.56.
Both King and Snohomish counties had less than two months of supply. The most acute shortages are in King County with only 1.29 months of supply; Snohomish has 1.91 months of supply.
… the gap between supply and demand [ is not sustainable and will promote a market where buyers pay over market value for a home. Multiple offers are being seen more often outside of Seattle and Bellevue neighborhoods, where they have been most typical. Buyers are looking farther out for a suitable home they can afford. They are sacrificing distance to work and city amenities for a quality home and good schools.]
Open houses for new listings draw decent traffic…[while] homes that have been on the market for more than 60 days have little traffic unless they have had a price reduction. [There is a segment of sellers who chose to price their home too high for their area, due to the press about how hot our local real estate is. Unfortunately their homes have languished on the market.]
… Seattle area’s home price gains are outpacing the nation’s, earning the city No. 1 ranking on a recently released list of the hottest single-family housing markets in the U.S… strong demand, rising prices, low interest rates and the area’s healthy economic conditions [are credited] as reasons for the strength.
2016 [is expected ] to be “another fantastic year for sales activity.” Noting home sales activity is historically lower during this time of year, [it’s] believe(d) activity this winter will be “red hot” in price ranges where inventory is low. [It’s] believe(d) continued low interest rates and job growth will ratchet up demand as spring approaches.
Despite general optimism among Northwest MLS leaders, some pullback is anticipated.
Jacobi, who last month commented on the market being on the cusp of a slowdown, faults scarce inventory. “I expect this trend (of slower pending and closed sales) will likely continue through the end of the year due to the lack of available inventory for buyers.” Jacobi also said appreciation may start to slow over the winter months, adding, “but overall the housing market continues to benefit from our thriving local economy.”
[There is frustration within the multiple offer situation, and getting transactions to closing can be a struggle.] …failed sales [are attributed] to several factors including low appraisals, financing issues, and an increase in sellers and buyers not being able to come to terms on inspections.
Prices on last month’s closed sales jumped nearly 9.7 percent from a year ago. Area-wide the median price for sales of single family homes and condos that closed during October was $318,000. That compares to a price of $290,000 for the same month a year ago.
For single family homes (excluding condos), year-over-year prices increased nearly 8.4 percent, rising from $299,950 to $325,000. In King County, the median price for a single family home was $480,000, rising 7.3 percent from the year-ago figure of $447,250, but dropping from September’s median price of $490,250.
The MLS reported strong sales in the condo segment, with both the volume and prices rising by double digits. Area-wide, closed sales rose 13.2 percent, from 990 units to 1,121. Prices surged 16.2 percent, jumping from $228,500 a year ago to last month’s median price of $265,500.
Condo inventory is also depleted with the number of active listings down nearly 26 percent from a year ago. MLS figures show only about 1.6 months of inventory area-wide; in King County there is less than 1.2 months of supply.
Looking ahead, [it’s] expect(ed) the area’s housing market will continue on a “gradual upward trend” into 2016. [Rising rent prices will be a motivating factor in bringing more renters into the housing market. And as we move into 2016 both housing prices and interest rates may increase, which could lead to some buyers continuing to feel the pressure and stress of multiple offer situations.]
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.