October 2021 Housing Update for the Puget Sound

The Goelzer Home Team
Published on October 18, 2021

Summary

Inventory Remains Low, But Slowly Increasing: With approximately 0.75 months of inventory throughout the Puget Region (a slight increase over last month), available homes for sale remain low, putting continued pressure on buyers regarding selection and pricing. 

Fewer Bidding Wars & More Negotiations: While prices continue to increase in parts of the region, the rate of increase is definitely slowing, resulting in fewer multiple offer situations (this is highly dependent on the specific neighborhood). We are also seeing more buyer/seller negotiations throughout the inspection process… a hint toward moving away from a purely seller’s market.

Condo Sales are Up: After a year plus, buyers are targeting condo ownership as they search for housing closer to urban work centers that are more affordable. Last month in King County the median selling price of a single-family home was $825,600, while for condos it was $466,501.

Interest Rates Continue to be Exceptional: Ongoing low interest rates continue to help buyers, but uncertainty exists in how long the federal government will support these existing interest rates. If you are not going to sell anytime soon, this would be a great opportunity to refinance.

When Selling, “Price It Right” and Make It “Move-In-Ready”: Buyers are still willing to pay top dollar for homes, but are definitely being more selective and expect “Move-In-Ready” homes that are updated, clean, and defect-free.

Details

September’s housing market remained “very active” to “frenzied” around Washington state with brokers reporting year-over-year (YOY) gains in new listings, closed sales, and prices. Brokers with Northwest Multiple Listing Service also detected growing stability in the condominium market.

A new report from Northwest MLS shows brokers added slightly more new listings last month (11,373) than a year ago (11,210). That volume, which includes single-family homes and condominiums, nearly matched the total for August (11,437), and barely outgained the number of pending sales (11,318) for the 26 counties in the report. Compared to the same month a year ago, pending sales slipped about 6% (11,318 versus 12,053). 

Market Snapshot Infographic

Low inventory continues to pose challenges for buyers. At month end, Northwest MLS members reported 7,757 total active listings system-wide. That marked a slight improvement from August when there were 7,425 active listings, but it was a drop of nearly 14.8% from twelve months ago. As of the end of September, there were about three weeks of supply (0.75 months), slightly better than August (0.70 months), but less than the same month a year ago (0.89 months). There has not been more than one month of supply since July 2020 when it reached 1.04 months.

Market Snapshot Infographic

Figures for single-family homes only (excluding condominiums) were more encouraging. Inventory declined only about 4% from a year ago. Seventeen counties reported YOY gains, with two others unchanged from year-ago levels. King County, one of the exceptions, had the sharpest decline in inventory for single-family homes. The selection of single-family homes plummeted from the year-ago volume of 2,420 to 1,634 (down 32.5%). For all counties in the report, the months of supply for the single-family component was the same as the figure for single-family homes and condos combined (0.75, or about three weeks).

Market Snapshot Infographic

“While one could expect months of supply to increase around the end of the summer, shortage of supply still remains a significant issue, indicating demand still exists in many submarkets,” observed James Young, director of the Washington Center for Real Estate Research at the University of Washington.

Young contrasted strong price increases in nearly every “outer suburban” county along I-5 plus Kittitas County with prices in King County. He noted nearly all of the outlying counties posted YOY increases at or above 15%, while King County experienced only a single-digit gain of 6.7%. Prices in Kittitas County, where destinations like Suncadia and Ellensburg are within a two-hour drive to Seattle, surged more than 26% from a year ago. “With decreases in active listings in King and Snohomish counties, price pressure may increase in urban areas of the region as people return to the city for work,” suggested Young.

One option for those wanting to live near urban job centers in anticipation of workplace reopenings may be condos. Condo inventory, however, is sparse, with the selection at about half the year-ago levels (1,078 active listings at month end versus the year-ago supply of 2,129 listings). In King County, Northwest MLS figures for September show a 20% jump in the number of condos that closed during September compared to a year ago; within the Seattle map areas, closed sales were up more than 34%. (King County currently accounts for about 70% of condo inventory and 60% of condo closed sales.) Condo prices rose more than 8% countywide, with the Southwest and Southeast and North King areas of the county registering the strongest gains at more than 13.5% in all three sub-areas.

Market Snapshot Infographic

Condo prices in nearby counties outgained the rate in King County, as did prices system-wide, which rose 15.7% from a year ago. Kitsap prices spiked 28.5%, Snohomish prices were up 17.8% and Pierce County condo prices jumped about 16.7%.

According to NWMLS data, a single-family home that sold in King County last month had a median selling price of $825,600, while for condos it was $466,501.

Area-wide, the median sales price for last month’s 10,289 closed sales was $570,000. That volume was about the same as a year ago when members notched 10,175 completed transactions. In the past twelve months, the median sales price increased $70,050 (up 14%). A comparison of counties shows wide variation in sales prices, ranging from $209,950 in Ferry County to $846,500 in San Juan County.

Market Snapshot Infographic

While the housing market remains competitive in the Puget Sound Region, there is some relief with increasing inventory, stabilizing prices, and ongoing low interest rates.

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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