Inventory remains the challenge – less than two weeks of inventory in King, Snohomish, and Pierce counties. As we enter the summer months in the Pacific Northwest, more resale homes will be coming on the market. Hold the faith.
Most homes are going for over list price – In the 4-county Puget Sound region (King, Snohomish, Pierce, and Kitsap), homes sold for on average 108.6% of list price.
First-time buyers are struggling – first-time home buyers have had a hard time taking advantage of low interest rates unless they leave the city…and they need to look quite a ways out.
The condo market is warming up – King County (Seattle) condo prices are increasing as demand increases from last year’s lows, with prices up 9.3% YoY.
Some hope – we’re seeing a few examples where homes are staying on the market a bit longer and price reductions are resurfacing…not a lot, but it’s a sign that sellers are starting to price too high and/or supply is getting closer to demand.
May was a month of record-setting highs and lows for some key housing market indicators tracked by Northwest Multiple Listing Service.
Months of inventory of homes and condominiums fell to just over two weeks (0.59 months) system-wide, which encompasses 26 of Washington’s 39 counties. Only March 2021 and December 2020 have been lower when both months ended with only 0.53 months of supply.
Year-over-year price increases measured by percentages appeared to hit a new high with the median price on last month’s 9,374 closed sales soaring 30% from a year ago.
A check of Northwest MLS data shows prices on the 8,011 single family home sales (excluding condos) that closed last month sold for 107.3% of the asking price. In the 4-county Puget Sound region (King, Snohomish, Pierce, and Kitsap), the figure was 108.6%, while in King County it was 109.5%.
“Everything is about breaking records this past year with record-breaking housing prices, record-breaking low inventory, and record-breaking consumer savings rates during the pandemic,” remarked Meredith Hansen, owner/designated broker at Keller Williams Greater Seattle. “All this equals a very strong, chaotic market that may not slow down for the next year,” added Hansen, who is also a member of the NWMLS board of directors.
Brokers added 11,922 new listings of single-family homes and condos during May, slightly fewer than April’s total of 12,043. Compared to a year ago, as brokers, sellers, and buyers were adjusting to pandemic related restrictions on the real estate industry, the volume of new listings rose 20.8%.
Pending sales edged above the volume of new listings, with brokers reporting 11,969 mutually accepted offers. That number also outgained the year-ago total of 10,389 (a gain of 15.2%) and was the highest number since September when MLS members logged 12,053 pending sales.
High demand kept supply depleted. At month end, there were 5,533 active listings in the NWMLS database, nearly half the inventory of a year ago when buyers could choose from 10,357 listings.
In Kitsap County, MLS figures show there is only 0.62 months of supply (about 19 days) with most homes selling at 108% above asking price. Closed sales jumped nearly 42% from a year ago. Prices on last month’s closed sales of single-family homes and condos (combined) in Kitsap County increased from $395,600 to $486,944 for a gain of more than 23%.
James Young, director of the Washington Center for Real Estate at the University of Washington, commented on the challenges facing first-time buyers. “Residential month’s supply (excluding condos) has continued to decline with less than two weeks of inventory in King, Snohomish, and Pierce counties, and slightly more than two weeks in the region. These are amazingly low levels of inventory,” he noted.
“Coupled with continued low interest rates and eased borrowing criteria, rapidly rising prices reflect huge supply imbalances. Given these imbalances, first-time buyers have had almost no chance to take advantage of low interest rates unless they leave the city. Unfortunately for them, continued supply constraints along the I-5 corridor mean they are increasingly being left out of the market for the whole region. Only a decrease in demand will moderate house price trends,” Young stated.
The NWMLS report for May shows condo inventory is down nearly 36% from a year ago as pending sales (1,613) outgained new listings (1,607). At month-end, the condo selection totaled 1,093 listings, with about three weeks of supply (0.80). Young noted the condo supply in King County is dwindling. There was about a month’s supply at the end of May, down from 1.67 (about 50 days) in January.
Pending sales of condos in King County surged 62.4% from a year ago. In Seattle, last month’s pending sales shot up 83.7%, while area-wide, they rose 37.2%.
Closed sales of condos system-wide more than doubled from a year ago, from 658 to 1,363 (up more than 107%). Prices on last month’s sales increased 21.7% from last year, with the largest gains outside of King County. Within King County, which accounted for 799 of the total sales volume (58.6%), year-over-year prices rose 9.3%, from $420,000 to $459,000.
As crazy and challenging as the current housing market is, be sure to leverage the expertise of a trusted real estate team, The Goelzer Home Team.
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