Puget Sound Housing Update for July 2020

The Goelzer Home Team
The Goelzer Home Team
Published on July 28, 2020

The Summary

  • Inventory levels are at the second-lowest level in the past decade at only 1.16 months system wide. If you are thinking of moving, now may be a great time to sell.  If not, refinancing may be the way to go. Either way, let us know how we can help.
  • With reduced inventory levels, median home prices have continued to rise 5.7% overall compared to a year ago. King County is up by nearly 5.9% and Pierce County up nearly 8.2% from this same time last year.
  • Average Days-on-Market fell from 8 days in June 2019 to 7 days in June 2020. Some homes are still receiving multiple offers.
  • Some help to home buyers has been the availability of low interest rate loans. While the rates continue to stay around 3%, not all loan programs are available to all applicants, with many programs now including increased credit scores to qualify. Talk to your lender, as the rates and terms are changing daily.

The Details

Brokers in the 23 counties that are part of Northwest MLS point to a shortage of homes as a key factor in the bidding wars. At the end of June, there was only 1.16 months of supply system-wide, which is the second lowest level in the past decade. (The lowest mark, at 1.12 months, was in December 2017.) Not surprisingly, the supply/demand imbalance is causing prices to ratchet up. 

Median prices for last month’s 8,312 closed sales of single family homes and condos increased nearly 5.7% compared to a year ago, rising from $440,000 to $465,000. A comparison to May shows an increase of more than 3.3%. In the four-county central Puget Sound area, year-over-year prices rose even more. Of these counties, King County had the smallest increase at nearly 5.9% (rising from $637,675 to $675,000). Pierce County prices jumped nearly 8.2%, from $372,500 to $403,000. Prices were up nearly 6.7% in Snohomish County and more than 7.7% in Kitsap County. 

While COVID-19 cooled real estate activity for a few months, it was only temporary.  The month-over-month gains in pending sales, closed sales, and prices are significant and indicators of a strong housing market.

The new report from Northwest MLS shows last month’s volume of pending sales surged 15% from May (increasing from 10,389 to 11,916); closed sales jumped more than 39% (from 5,957 to 8,312), and month-over-month prices rose more than 3.3% (from $449,850 to $465,000). Year-over-year comparisons show pending sales increased nearly 3%, closed sales dropped about 12.3% and prices increased 5.7%. 

James Young, director of the Washington Center for Real Estate Research, noted the shortage of inventory is resulting in higher prices and rising demand “in places that are more rural and popular with older people trading down.” He named Jefferson County (Port Townsend), Kittitas County (Suncadia), and Chelan County (Wenatchee and Chelan) as examples. NWMLS figures show all three areas had some of the steepest price gains coupled with rapidly shrinking supply. “Extraordinarily low month’s supply indicates that prices may have more room to move in areas popular with people trading down or seeking more space but still close to Seattle,” suggested Young. “Mason County and Thurston County come to mind, but interestingly, several Central Washington counties had strong year-over-year price growth including Kittitas (30%), Chelan (22%) and Grant (9.4%).” Young also noted the pre-pandemic migration patterns to outer suburbs or more rural areas appear to have accelerated now that lockdowns have eased. 

NWMLS members added 10,709 new listings last month, lagging a year ago when brokers added 11,977 new listings, but improving on May’s total by 838 listings (up 3.5%). The MLS report shows pending sales totaled 11,916 to outgain the 10,709 new listings. At month end, there were 9,670 active listings in the MLS database, well below a year ago when the selection included 16,680 homes and condos for a drop of 42%. June’s total also declined from May when there were 10,357 active listings. 

In a recent report, Housing Wire, a news portal for mortgage and housing professionals, indicated last week’s average rate for a 30-year fixed mortgage, at 3.07%, was the lowest in a Freddie Mac data series that goes back to 1971. Its Housing Recovery Index shows Seattle is among markets showing the greatest recovery. 

We continue to see more and more virtual transactions, with video conferencing via zoom, home showings over FaceTime, virtual tours taking the place of physical walk-throughs and increased digital signings of documents. When meeting with our clients in person, we are adhering to all appointment and showing regulations; these vary based on the recovery phase each particular county is currently in.  Wearing a face mask is required for all in-person showings and appointments. 

And that’s the latest house market update.

We wish you and your family the best!

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

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