KIRKLAND, Wash. (Nov. 5, 2012) – Last month’s housing inventory around western Washington fell to its lowest level since February 2006, according to statistics from Northwest Multiple Listing Service. The MLS report covering 21 counties also shows year-over-year prices on closed sales area-wide increased by double-digits for the first time since March 2007.
Brokers reported 6,000 closed sales of single family homes and condominiums last month, outperforming the year-ago volume by 1,236 transaction for an increase of nearly 26 percent. Last month’s activity in the areas served by Northwest MLS marked a rebound from September when members reported 5,535 completed transaction.
Prices on October’s sales were up 10.4 percent compared to twelve months ago. The median price for last month’s closed sales of single family homes and condominiums (combined) was $251,625; a year ago the figure was $228,000. The last time the multiple listing service reported an area-wide double digit hike in prices was March 2007 (up 11.3 percent).
Prices for single family homes, which accounted for more than 86 percent of October’s sales, rose more than 11 percent, while prices for condominiums jumped 16.6 percent.
The shortage of inventory is helping propel prices. J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, commented on the correlation of sharply reduced inventory and rising prices. "The rise in prices is derived from seasonally strong sales activity in a shortage of inventory market," he remarked.
Scott’s analysis shows 95 percent of all sales in King County were for homes priced under $1 million.
A similar pattern exists in Snohomish County, where inventory is down 51.6 percent compared to a year ago. He found that 95 percent of sales there were for homes priced under $500,000. In Pierce County, his breakdown shows about 89 percent of homes sold for under $350,000.
Northwest MLS members added 6,979 listings to inventory during October, the fewest since January. The additions included 6,108 single family homes and 871 condominiums. With those new listings, the selection at month end totaled 23,115 homes and condos. That’s down about 30 percent from the year-ago total of 33,094 listings.
Pending sales outpaced brokers’ ability to replenish inventory. Northwest MLS reported 8,312 pending sales during the month, a 22 percent increase from the year-ago total of 6,187 pendings. Last month’s number of mutually accepted offers also surpassed September’s total by 818 transactions.
The brisk sales activity is creating imbalanced markets in some Northwest MLS counties. Area-wide there is less than a three month supply of homes based on the pace of pending sales when matched with inventory. (Many industry experts consider 5-to-6 months as the indicator of a balanced market.)