April 2022 Housing Market Update for the Puget Sound

The Goelzer Home Team
Published on April 22, 2022

Summary

  • Little Immediate Impact Due To Rising Interest Rates: With rates climbing at the quickest pace in nearly 30 years, you would expect an abrupt slowdown  to home sales. Not so. There are still buyers well qualified, wanting and needing homes. While interest rates have taken some buyers out of the market for the short term, there’s still not enough inventory to satisfy the existing need.
  • Price Appreciation Continues… Consider Just The Past Two Years: Northwest MLS figures show prices in the four-county region (King, Kitsap, Pierce and Snohomish) have surged 38.5% higher since March 2020. During the same time period, median prices have risen from nearly $520,000 to nearly $720,000. This appreciation should slow a bit due to increasing interest rates and additional inventory coming online. It just might take some time.
  • More Homes Are On The Way: Sellers are actively preparing their homes for sale. Expect more homes to become available as we move through spring in the Pacific Northwest. For example, during March, brokers added 11,197 new listings of single-family homes and condominiums to inventory, up from the year-ago total of 10,562. That’s good news for buyers!
  • If You’re A Buyer, Hang In There: Interest rates will be moving around throughout the year. If you feel like you’re out of the market due to your financial situation, take this time to save and improve your credit score. You’ll then be ready when your future home comes available on the market.

Details

Rising mortgage rates are not yet slowing home sales in most areas across Washington state, according to several brokers who commented on the latest statistical report from Northwest Multiple Listing Service. The report showed a 7.4% year-over-year drop in pending sales, but brokers suggested the decline is likely a reflection of limited supply.

Freddie Mac reported the average rate for a 30-year loan rose to 4.56% last week, with rates climbing at the quickest pace in almost three decades.

Northwest MLS brokers reported 10,059 pending sales (mutually accepted offers) during March across 26 counties. That’s down from the year-ago figure of 10,863, but compared to February, the volume of pending sales jumped nearly 31%.

Well-paying jobs and lifestyle needs are driving the market, with some buyers using investments, 401K funds, and family assistance. Prices in Grays Harbor County surged nearly 25% from a year ago, rising from $280,000 to $349,950. That’s about $489,000 less than the median price in King County.

The latest MLS report shows brokers added 11,197 new listings of single family homes and condominiums to inventory during March, up from the year-ago total of 10,562. Last month’s total is up from February’s figure of 7,920 for a gain of more than 41%. It also marked the highest volume of new listings added during a month since September 2021 when members added 11,373 listings.

James Young, director of the Washington Center for Real Estate Research at the University of Washington, noted improvements in inventory in “many of the markets along the I-5 corridor.” His analysis of active listings show robust growth since January in several counties, including Snohomish (up nearly 54%), Lewis (up 47%), Thurston (up 42%), Pierce (up nearly 40%), and Skagit (up 32%).

Nevertheless, with pending sales (10,059) nearly matching new listings, inventory remained limited system wide. The MLS report shows only 0.58 months of supply, with King, Pierce, Snohomish, and Thurston counties all having less than two weeks of supply. The supply squeeze is contributing to competition among hopeful homeowners and rising prices.

For last month’s 7,989 completed transactions, the area-wide median price was $638,000, up about 16.4% from a year ago and up 9% from February.

Of the 26 counties in the report, only one county (Ferry) reported a year-over-year price drop, and only three counties had single-digit increases; all others had double-digit gains from a year ago.

Northwest MLS figures show prices in the four-county region (King, Kitsap, Pierce and Snohomish) have surged nearly $200,000 (38.5%) since March 2020, jumping from a median price of nearly $520,000 to nearly $720,000.

Recent census reports indicate people are moving out of King County. Increasing pressure on surrounding counties. MLS figures show there is slightly more than a half-month of supply (0.56 months of inventory) in Kitsap County. The median price on last month’s sales of single family homes in Kitsap County rose 19.7% from a year ago, from $450,000 to $538,500. Year-over-year condo prices shot up nearly 54%, from $297,500 to $457,000.

Commenting on an “unexpected 4.1% decline” in U.S. pending home sales, Lawrence Yun, chief economist at the National Association of REALTORS®, suggested the dip was mainly due to the low number of homes for sales, adding, “It is still an extremely competitive market, but fast-changing conditions regarding affordability ahead.”

It’s a little wild out there…Whether buying, selling, or investing, be sure to utilize the talent and expertise of our trusted real estate team, The Goelzer Home Team. Let us know how we can help you achieve your real estate Wants, Needs, and Dreams!

Data

*Information and statistics compiled and reported by the Northwest Multiple Listing Service.

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