Summary
- Median Home Prices Continue to Rise: The median price on last month’s sales across the 26 counties throughout the Pacific Northwest Region rose about 5.1% from a year ago. Of course, these prices vary based on specific counties and neighborhoods.
- Inventory Has Nearly Doubled: The inventory of single-family homes (excluding condominiums) nearly doubled from a year ago. Currently, there are approximately two months of inventory across the region, an improvement from one year ago when there were only about three weeks of supply, but still well below the four-to-six months of inventory real estate analysts use as a measure of a balanced market.
- Pending Sales Declined: Pending sales (mutually accepted offers) of single-family homes and condos declined from a year ago, shrinking from 11,318 to 7,764 (a drop of more than 31%). Last month’s pendings also fell from the August figure of 9,552 (down 18.7%).
- We’re Moving to a More Balanced Market: While we continue to move toward a more balanced market, inflation and rising interest rates continue to challenge buyers with purchasing affordable homes. Don’t expect interest rates to return to the rates we’ve experienced the past few years. Settle in for a more ‘normal’ housing market and higher interest rates.
- Correct Pricing is Key: Pricing needs to be hyper-local based on what’s happening in the seller’s local market right now. Keep in mind, prices will most likely not continue to rise in the short-term and may likely go down slightly throughout the coming year.
Details
Brokers say home buyers “finally get some relief” with return to “more traditional market.”
The report on September activity shows active listings are nearly doubled from a year ago, pending sales declined more than 31%, but prices in most counties are still rising.
NWMLS brokers reported 7,504 closed sales during September, down 27% from a year ago when they notched 10,289 completed transactions.
The median price on last month’s sales across the 26 counties in the report rose about 5.1% from a year ago, increasing from $570,000 to $599,000. Prices are down slightly from the August median of $600,000 and from the year’s peak of $660,000 that was reported in May.
For the 26 counties in the MLS report there were 15,008 active listings at the end of September. That’s a jump of more than 93% from the year-ago total of 7,757 active listings. It is also a slight improvement (2.2%) from August when there were 14,683 active listings across the NWMLS market.
Measured by months of supply, there are only two months of inventory, an improvement from one year ago when there were only about three weeks (0.75 months) of supply, but still well below the four-to-six months of inventory real estate analysts use as a measure of a balanced market. King County has 2.02 months of supply, but the other counties in the Puget Sound region have less than that. There is 1.61 months of supply in Kitsap County, 1.63 months in Snohomish County, and 1.84 months in Pierce County.
Last month’s uptick in inventory included 9,422 new listings brokers added during September. Compared to the same month a year ago, that volume of new listings dropped 17%. Compared to August, new listings dipped about 5%.
The inventory of single-family homes (excluding condominiums) nearly doubled from a year ago, jumping from 6,679 to 13,266 (up 98.6%). Condo listings jumped about 62% from the year-ago figure of 1,078 to 1,742.
Pending sales (mutually accepted offers) of single family homes and condos declined from a year ago, shrinking from 11,318 to 7,764, a drop of more than 31%. Last month’s pendings also fell from the August figure of 9,552 (down 18.7%).
Pending sales of single-family homes, which accounted for nearly 88% of last month’s pendings, dropped around 31%, while condo sales slipped nearly 35%.
A comparison of counties in the MLS report shows wide variation in year-over-year price (YOY) changes. Prices dropped in six counties (Clallam, Columbia, Lewis, Okanogan, Pacific and San Juan), while five counties registered double-digit increases (Adams, Douglas, Ferry, Skagit, and Walla Walla). The remaining 15 counties had single-digit YOY price gains.
In Kirkland, which Money magazine just ranked third-best place to live in the U.S., the median price of a single family home that sold during September was $1,355,000. That marked a jump of about 8.6% from the year-ago sales price of $1,247,500.
Area-wide, the median price on last month’s single-family homes (excluding condos) rose 4.75%, from $589,000 to $617,000. King County, where the median price on last month’s single family home sales was $875,000, had the most expensive homes. Within King County, single-family homes on the Eastside fetched the highest price last month at $1.2 million. Homes in the southwest segment of the county sold for about half that amount ($590,000), but they had the highest YOY increase when comparing the six sub-areas tracked by the MLS. Countywide, single-family home prices increased nearly 6%.
Condo prices surged 9.2% from a year ago, rising from $435,000 to $475,000.
Gardner pointed out home prices “remain positive compared to a year ago,” adding, “I don’t expect that to change through the end of 2022.” By spring, however, he believes “it’s likely that year-over-year prices will start to trend negative. That said, I firmly believe that this will only be a short period of correction, so homeowners in the Puget Sound area shouldn’t be too concerned, especially given that 64% of them are sitting on over 50% of home equity.”
Uncertainty about the direction of mortgage rates is prompting buyer hesitancy, according to some market watchers.
Rebhuhn agreed, saying motivated sellers are reducing prices to attract showings as increasing mortgage rates are reducing purchasing power.
Allison Schrager, a Bloomberg Opinion columnist who covers economics, recently commented about buyers “sitting on the sidelines until rates or prices or both decline.” She faults the Fed’s interference, writing “don’t count on rates falling to those pandemic lows. They were the result of extraordinary market manipulation from the Fed,” suggesting there will be a “hangover from the very low rates in 2020 and 2021.”
On a brighter note, The Conference Board said its Consumer Confidence Index® increased in September for the second consecutive month. Acknowledging recession risks “nonetheless persist,” Lynn Franco, senior director of economic indicators at The Conference Board, stated, “Concerns about inflation dissipated further in September – prompted largely by declining prices at the gas pump. . .”
Commenting on inflation, veteran broker Rebhuhn said, “Smart purchasers understand home ownership is a good hedge against inflation.”
To better navigate the ever changing real estate market conditions, it’s even more important for you to work with a professional real estate advisor. Whether buying, selling, or investing in real estate, be sure to utilize the talent and expertise of our trusted real estate team, The Goelzer Home Team.
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Data
*Information and statistics compiled and reported by the Northwest Multiple Listing Service.
