KIRKLAND, Wash. (Aug. 6, 2012) – Brokers around western Washington reported brisk activity during July with home buyers scrambling to take advantage of attractive financing while encountering shrinking inventory and, in some areas, rising prices.
One broker remarked now is the "best buying opportunity," she has witnessed in nearly 20 years.
Pending sales jumped more than 17 percent from a year ago, according to new figures from Northwest Multiple Listing Service. Nineteen of the 21 counties in its service area reported double-digit increases in the volume of mutually accepted offers.
Prices are also rising in many areas. The median sales price for single family homes and condominiums (combined) that closed area-wide last month was $254,900, up more than 7 percent from the year ago figure of $237,975. Three counties, Clallam, San Juan and Snohomish, reported double-digit gains.
July’s closed sales outgained year ago volumes by 918 transactions. Last month, brokers completed sales for 6,098 buyers and sellers for a year-over-year increase of 17.7 percent. That total marked the second time this year that closings topped the 6,000 mark, a volume that was last attained in September 2007 when brokers tallied 6,262 closed sales.
Single family homes that sold last month had a median selling price of $269,900, up more than 10 percent from the year-ago figure of $245,000. San Juan County led the price surge with a gain of 21.3 percent, followed by Snohomish County at 13.5 percent. In King County, which accounted for 40 percent of the single family sales, prices were up 7.2 percent.
For condominiums, closed sales soared 26.5 percent, but prices were mostly flat. The median price on last month’s completed transactions was $179,331, down slightly from the year-ago figure of $180,000.
Northwest MLS statistics show the number of pending sales of single family homes and condos (8,416) nearly matched the number new listings (8,632). Pending sales outpaced new listings in Clark, King, Pierce and Snohomish counties, resulting in inventory shortages and bidding wars in some price ranges.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said strong summer sales and low inventory in the Puget Sound region are resulting in price increases and multiple offer situations. Prospective purchasers need to be "buyer-ready to get a home in today’s market," he emphasized, noting that pre-approval on a loan and becoming very familiar with market conditions can be beneficial.
The selection, including the combined inventory of single family homes and condominiums, totaled 26,747 listings at month end. That volume represents a decline of 28.6 percent from a year ago, when MLS brokers reported 37,465 active listings. Snohomish County experienced the sharpest decline, with inventory at about half the year-ago levels (2,277 total active listings at month end versus a total of 4,546 at end of July 2011).
"Counter to the historic yearly pattern of increasing inventory from January to late summer, this year we have seen inventory levels shrink month over month," observed Joe Spencer, area director for the Northwest Region of Keller Williams. "This pattern of shrinking inventory, historically low interest rates and higher consumer confidence clearly signals that the market is on the rebound," he added.
A check of the Northwest MLS database indicates the current selection of homes with asking prices under $300,000 is very limited in parts of King County, notably within Seattle and on the Eastside. Only about one of every five single family homes (21.5 percent) in Seattle is listed at $300,000 or less, while on the Eastside only about seven percent of the single family homes are priced under $300,000.
Northwest MLS directors in Kitsap and Pierce counties also reported robust activity.
In Kitsap County, pending sales surged 31 percent. "Kitsap continues to see multiple offer situations as our average market time drops," said Frank Wilson, who noted the supply has dipped below four months. By only a small number, the volume of new listings (451) outgained the number of homes that went under contract (402). "This naturally leads to shortages in some price ranges," stated Wilson, the branch managing broker at John L. Scott’s Poulsbo office.
Wilson also commented on price increases and new construction activity, comparing Kitsap to other counties in the MLS market area. "Unlike some counties, we have a good representation of new construction in the $200,000 price range in both Silverdale and Poulsbo." He also spoke favorably of Kitsap County’s moderate changes in prices compared to other markets that tend to experience sharper declines or increases. "Our modest but positive 1.46 percent increase in median price will serve our area well over the long haul."
In Pierce County, there is a competitive seller’s market in the first-time home buyer price range, yet prices have not yet noticeably increased, according to Bobbie Chipman, principal managing broker at the John L. Scott office in Puyallup. Anchoring prices is the significant number of short sales which she noted is reportedly as high as 50 percent in some areas.
"The good news for buyers is that the median price in Pierce County is down almost 2.6 percent," Chipman said. She believes the current scenario offers buyers "the best buying opportunity seen in nearly 20 years."
On the flip side, lower inventory is good news for sellers, Chipman suggests. "Those who price their homes properly and have great market exposure are almost guaranteed a sale," she explained.
In general, the Northwest MLS directors are optimistic about the rebounding housing market.
"Simple economics is at play, with an imbalance in supply and demand that is positively influencing both valuations and the ability for banks to efficiently dispose of the remaining distressed property inventory. All of this bodes well for a sustainable housing recovery," said Spencer.
Wilson is somewhat more guarded for the short-term, saying he expects interest rates to remain low through fall elections. "Kitsap County is in the middle of its annual market flow. Typically in August you will see buyers take a breath as they squeeze in the last trip or vacation of the summer," Wilson explained, adding, "We often see open house attendance drop off a bit and activity slow the first part of September. Once school starts, the market again picks up until late in November."
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.
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