Summary
- Lack of available homes for sale, low interest rates, and high buyer demand continue to fuel a healthy real estate market.
- Throughout the Puget Sound Region there is now only approximately 2-weeks of inventory available for sale (recall that a balanced market is about 4-6 months of homes listed for sale).
- Despite the holiday season, sales continued at a higher pace than previous years (likely due to lack of travel due to COVID).
- If buyers want to land their dream home, they will need to be pre-approved (or better, underwritten), conduct pre-inspections where possible, increase earnest money deposits (this goes toward the buyer’s overall purchase), and shorten or waive contingencies usually included (i.e., financing, inspection, low appraisals, etc.).
- The trend continues with buyers moving their searches further away from more dense population centers (e.g., Seattle).
- Overall prices increased nearly 12.2% year-over-year.
- Our 2021 real estate outlook looks to be picking up where 2020 ended… competitive.
Details
“Insatiable buyer demand” is keeping inventory scarce as house hunters try to outmaneuver and outbid each other, according to reports from Northwest Multiple Listing Service (NWMLS). Its statistical summary for December showed strong activity throughout the holiday season with double-digit increases in new listings, pending sales, closed sales, and prices.
Northwest MLS brokers added 5,260 new listings to inventory during December, a hefty 39.3% increase over the same month a year ago. Last month’s additions fell short of meeting demand as members reported 6,883 pending sales (mutually accepted offers). That number surpassed the year-ago volume by 940 transactions for an increase of 15.8%.
“As more people are working from home, they are also purchasing properties further afield from Seattle,” observed James Young, director of the Washington Center for Real Estate Research at the University of Washington. He singled out Chelan, Clallam, Grays Harbor, Kittitas, and Mason as counties that had year-over-year price growth of 20% or more. The MLS report also shows Pacific and Whatcom counties with 20% or higher price gains.
At month end, there were 4,732 total active listings system-wide in the MLS database, which encompasses 25 counties. That’s down 44% from a year ago when the selection included 8,469 listings. Measured by months of inventory, there is only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market.
“With just over a two-week supply of homes on the market, last month maintained the extraordinary market we have seen all year,” commented Young. “For demand and supply to remain this out of balance for this time of year is incredible,” he added.
Home prices continue to rise. For the 9,008 sales of single-family homes and condos that closed last month, prices jumped nearly 12.2% from a year ago, increasing from $435,000 to $488,000. Only three counties (Ferry, Okanogan, and San Juan) reported year-over-year price drops, while nearly all other counties had double-digit gains, according to the NWMLS report.
Single family homes accounted for most of the price escalation. For the 7,848 closed sales of this property type, prices increased nearly 12.9%. YOY prices on the 1,160 closed sales of condos rose about 1.8%.
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*Information and statistics compiled and reported by the Northwest Multiple Listing Service.
