February 2022 Housing Update for the Puget Sound

The Goelzer Home Team
Published on February 15, 2022

Summary

  • Demand For Homes Continues: Last month’s pending sales outgained new listings to further shrink inventory. Broker-members added 5,927 new listings during January, and at the same time reported 6,350 pending sales.
  • Price Appreciation Is Slowing Down: Along the I-5 and I-90 corridors outside of the Seattle area, strong double-digit price increases are ongoing. We are seeing price appreciation slowing from the 20+% year-over-year increases we’ve observed to the more realistic high single-digits.
  • Be Your Own Landlord: Despite the lack of inventory and rising interest rates, buying is more-often-than-not better than renting, and rental rates aren’t going down anytime soon (or ever).
  • To Sellers Trying To Time The Market: Good luck…It’s tough to do. Make your decision based on what’s best for you, your family, and what best supports your goals. If you want to discuss options and see what you can really sell your home for, let us know.

Details

A frigid first week of January, surges in coronavirus cases, and depleted inventory were among factors brokers from Northwest Multiple Listing Service cited for last month’s slower than year-ago sales.

In newly released statistics for January, the MLS reported 6,350 pending sales of single family homes and condominiums during January, about 1,000 fewer the same month a year ago for a drop of 14%. The year-over-year (YOY) number of closed sales also fell, dropping from 5,896 completed transactions to 5,085 for a decline of nearly 13.8%).

Broker-members added 5,927 new listings during January, nearly 1,000 fewer than the same month a year ago, but an improvement on December’s volume of 4,617. Only five counties reported YOY gains in new listings.

Last month’s pending sales outgained new listings to further shrink inventory. At month end the selection included a meager 3,092 active listings, down more than 30% from a year ago. There is about 2.5 weeks of supply (0.61 months) across the 26 counties served by Northwest MLS.

King County had the steepest drop in active listings, shrinking nearly 59% from a year ago, followed by Jefferson County, down 40%, and Snohomish County, down more than 35%.

A comparison of counties in the listing service report shows only about half of them have more than one month of supply, and these areas tend to be in more rural areas. King, Pierce, and Snohomish counties all have less than two weeks of supply. Kitsap County is slightly better with 0.58 months.

“Strong activity along the I-5 and I-90 corridors outside of the Seattle area continues with strong double-digit price increases being recorded,” noted James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects strong demand and a search for value outside of Seattle will continue to push up values.

Last month’s prices were up over 14.8% from a year ago, climbing from $483,250 to $555,000. Five counties reported price gains of 30% or more, led by Okanogan at 46.3%. Other counties with price increases of at least 30% were Chelan, Kittitas, Pacific, and San Juan.

Condominium prices surged nearly 21% area-wide, rising from $359,950 to $435,000, while the number of new listings, active listings, pending sales and closed sales all declined from the same month last year.

Young said the combined price trend and activity levels suggest suburban growth should continue for a while longer as households seek lower costs and a more home-based lifestyle.

Kitsap County was one of the few areas with YOY gains in new listings (up 22.3%) and only single-digit changes in active listings (-6.4%), pending sales (+8.4%) and closed sales (-2.14%). However, like nearly all the counties in the MLS report, prices jumped by double digits (up 20.8%).

Despite the slow start in sales and persistent shortages of inventory, the MLS brokers expect robust activity during 2022.

Also commenting on the outlook for 2022 was economist Gardner. “One of the biggest questions for 2022 is how the market will be further impacted by the work-from-home paradigm given that many companies have postponed their long-term WFH plans. This is likely holding back sellers during a time when we desperately need additional inventory, as well as buyers who are concerned about rising mortgage rates.”

Gardner said he expects more sellers will list their homes and more buyers will start their searches once they know how often they need to commute to work, and this may lead to a busier spring market than expected.

Whether buying, selling, or investing, be sure to leverage the experience 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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