May 2021 Housing Update for the Puget Sound

The Goelzer Home Team
The Goelzer Home Team
Published on May 25, 2021

Summary

  • Despite more homes coming on the market, demand continues to outstrip supply, keeping inventory depleted. Although things may be starting to change…
  • Area-wide, NWMLS figures show there are 0.64 months of inventory, with even less supply (0.57 months) in the four-county Puget Sound region (King, Snohomish, Pierce, and Kitsap). Condo supply remains tight at 0.88 months (down 27% from a year ago).
  • Kitsap County remains super hot. Year-over-year prices rose 22.7%, with the median price on last month’s sales, at $485,000, significantly lower than King County where it was $750,000.
  • Interest rates remain low, bouncing around 3%. If you’re not looking to sell anytime soon, refinancing could be a great win!
  • While the market is still hot for sellers, we are seeing additional days on market for properties priced too high. Buyers… now may be the time to catch a break on an overpriced home.
  • Reminder for sellers… be cautious of off-market sales (e.g., selling to your neighbor, friend, or someone offering cash for a quick sale), as you will most likely lose significant equity you’ve earned. Hire a professional. The commission you will pay to hire a professional will be minimal compared to the potential lost equity homeowners are giving away.

Details

Some good news for home buyers! Sizeable increases in new listings (inventory) compared to a year ago and reports of moderating prices.

Northwest MLS figures, which cover 26 counties, illustrate that point. At month end, April’s active listings stood at 5,616, yet during the month, member-brokers added 12,043 new listings of homes and condos. There was a jump of more than 57% from the same month a year ago when the pandemic shutdown began. Compared to March, the volume of new listings rose 14%, and even compared to two years ago (April 2019), new listings were up about 3%.

April’s month-end inventory of 5,616 listings was a year-over-year (YOY) drop of 45%; a year ago, there were 10,282 active listings in the MLS database.

Pending sales continue to surge, keeping inventory depleted. Brokers reported 10,583 pending sales during April, up nearly 47% from a year ago when they logged 7,207 mutually accepted offers. Last month’s pending sales dipped slightly (2.58%) from March.

NWMLS figures show active listings increased by 1,463 properties (up 35.2%) which may have had a softening effect on the average listing price.

Even with some improvement in listings, the MLS report shows only nine counties have more than one month’s supply of inventory. Areawide, there is only 0.64 months of inventory, with even less supply (0.57 months) in the four-county Puget Sound region. Many analysts consider a balanced market to be in the four-to-six-month range.

With supplies depleted, prices continue to climb. Brokers reported 8,791 closed sales of single family homes and condos during April, nearly 50% higher than the year-ago total of 5,866 completed transactions. Year-over-year prices on closed sales surged 25%, from $452,030 to $565,000. Nearly every county had double-digit gains.

Prices on single family homes rose about 26.5%, while condo prices increased by a more modest 12%.

“As long as housing supply remains constrained and interest rates remain low, we could see these price trends continuing well into the summer,” said James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects continued price increases along the I-5 and I-90 corridors and noted peripheral areas are continuing to outperform as people seek value in a low interest rate environment.

The volume of new listings (including single family homes and condos) in Kitsap County increased 47.4% from a year ago and nearly 17% from March, but total active inventory was down 47% from a year ago, resulting in about two weeks of supply (0.57 months).

Year-over-year prices rose 22.7% in Kitsap County, with the median price on last month’s sales, at $485,000, significantly lower than King County where it was $750,000.

Although bidding wars are common, some brokers are reporting things may be starting to moderate related to pricing.

The latest Northwest MLS report indicates condominiums may be an option for some house-hunters. A check of the MLS database shows 1,127 current condo listings with prices on these offerings ranging from $75,000 for a listing on a golf course in Adams County to $13.5 million for a penthouse on First Hill in Seattle.

Condo supply remains tight at 0.88 months (down 27% from a year ago), with prices up 12% areawide. In King County, where nearly three-fourths of current inventory is situated, year-over-year prices increased about 7%.

“It is interesting to note a continued decline in King County’s condominium inventory – down from nearly 1.6 months of supply in January — perhaps marking a return to the urban markets with increased vaccinations,” suggested Young. The MLS report for April shows pending sales of condos for the map areas encompassing Seattle spiked nearly 184% from a year ago, from 135 units to 383.

CoreLogic research shows condos are increasingly popular with millennials with 47% of all condo mortgage applications submitted by millennials in 2019.

Research by the National Association of Home Builders (NAHB) indicates improving perceptions about the availability of homes among some buyers, and especially among millennials, the largest share of home buyers. In its latest Housing Trends Report, NAHB reported the share of millennial buyers who expect housing availability to ease up in the months ahead rose decisively between the first quarters of 2020 and 2021, from 26% to 42%.

In a housing market like the one we are experiencing now, be sure to leverage the expertise of a trusted real estate team.

Let us know how we can help you achieve your real estate Wants, Needs, and Dreams!

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

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