Summary
- Price Appreciation Slowing Down: Due to existing home prices and increasing interest rates, price appreciation will most likely slow down from the 20+% year-over-year increases we’ve observed to the more realistic high single-digits. Last month, prices for single-family homes (excluding condos) increased nearly 17.5% (year-over-year) with King County being one of only three counties where the single-family price change was under 10%.
- Demand For Homes Continues to Outpace Supply: While this is consistent across the nation, it’s even more prominent in the Pacific Northwest due to the ongoing hiring/growth from multiple tech companies. At the end of the month, there were less than two weeks of supply (0.40 months) across the region. Inventory was even more sparse in seven counties, with Snohomish at 0.20 months, Clark (0.26), King (0.27), Island (0.29), Pierce (0.32), Thurston (0.31), and Kitsap (0.38).
- Interest Rates Are Increasing: Low interest rates are still available but based on the recent news from the Federal Reserve, interest rates will be increasing multiple times throughout 2022. If you’re looking to buy in 2022, be sure to check in with your lender or mortgage broker to understand any impact on your borrowing limits.
- Contingent Sales Are Possible: While not every seller will accept an offer that is contingent on the sale of a buyer’s home, some sellers will. We are starting to see contingent offers being accepted, so why not give it a shot?
- Thinking of Selling: If you are thinking of selling, it’s a great time. With low inventory across the entire region, demand for homes remains high. Clean and move-in-ready homes are still attracting top dollar. Let us know if you need help getting your home ready for sale.
- Buyers Need to Stay Competitive: While buyers are starting to feel a little relief from multiple escalating offers, they still need to stay diligent and aggressive with their offers. Pre-approval from your lender or mortgage broker is a MUST. Keeping your offer with minimal contingencies is a bonus. Just know that there are a lot of options to help make your offer attractive so be sure to ask your real estate broker the best approach for you and the home you are making your offer on.
Details
Severe shortages of inventory, record-low temperatures, and snow restrained December housing activity around Washington state beyond expected seasonal slowdowns, according to a new report from Northwest Multiple Listing Service.
Summary statistics from the MLS show the volume of new listings added area-wide dropped 12.3% during December compared with the same month a year earlier. Year-over-year inventory, pending sales, and closed sales all fell by double digits. Only prices rose – up 17.4% overall for homes and condominiums that sold across the 26 counties in the report.
The median price for last month’s closed sales was $572,900, up from twelve months ago when it was $488,000. Prices for single-family homes (excluding condos) surged nearly 17.5%, from $502,247 to $590,000. King County was one of only three counties where the single-family price change was under 10%; prices there rose from $740,000 to $810,000. A dozen counties had price jumps of 20% or more.
Condo prices jumped 17.6%, from $370,000 to $435,000. San Juan County reported the highest median price for last month’s condo sales ($642,500), followed by Snohomish County ($500,000).
Northwest MLS brokers reported 8,017 closed sales last month, a drop of nearly 1,000 transactions from the year-ago total of 9,008. Eleven counties had double-digit declines, including King (down 16.3%) and Snohomish (down 17.6%). October was the only other month during 2021 when year-over-year sales fell.
Despite hurdles (including pandemic-related), Northwest MLS brokers tallied 107,354 closed sales during 2021, an increase of 12.1% from the previous year when they notched 95,760 closings.
Even though the number of pending sales, at 5,850 overall, declined more than 15% from a year ago, they far outstripped the number of new listings (4,617), contributing to the meager month-end inventory. In fact, a search of NWMLS records going back a decade indicates the 3,240 active listings of homes and condos area-wide is the first time the selection has dipped below 4,000 listings. A year ago, buyers could choose from 4,739 active listings while in November there were 4,621 properties in the MLS database.
Stated another way, there were less than two weeks of supply (0.40) at month-end. Inventory was even more sparse in seven counties, with Snohomish having the most acute shortage at 0.20 months. Other counties that fell below 0.40 months were Clark (0.26), King (0.27), Island (0.29), Pierce (0.32), Thurston (0.31), and Kitsap (0.38).
Economist Gardner predicts single-family home prices will rise by “high single digits” in King County, and by more than 10% in Snohomish and Pierce counties.
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.
