KIRKLAND, Wash. (Dec. 6, 2010) – Northwest Multiple Listing Service members recorded a few pleasant surprises last month. Pending sales during November outgained the same month a year ago, marking the first year-over-year increase since April, when the tax credits expired.
Also noted as encouraging were an upswing in relocation sales, shrinkage in the number of new listings added to inventory, and a year-to-date volume of closed sales that is outpacing 2009.
Northwest MLS director OB Jacobi described last month’s gain in the number of transactions written as “surprising.” “That’s surprising, since November is typically one of the slowest sales months of the year, and this year we essentially lost a week to poor weather conditions.” Jacobi, the general manager at Windermere Real Estate Company, also reported increased activity at open houses last month.
Jacobi suggested the increase in sales was due in part to an uptick in interest rates that motivated some buyers to move forward, combined with a desire for people to be in their new homes before the holidays.
Members of NWMLS, which covers 21 counties in Washington, reported 4,987 pending sales of single family homes and condominiums during November. That volume of mutually accepted offers was up about 2 percent from twelve months ago, when brokers logged 4,888 pending sales.
In the four-county Puget Sound region, pending sales rose more than 2.8 percent, from 3,829 a year ago to last month’s total of 3,938. That’s the highest November volume since 2006.
“We're seeing an upswing in relocation sales after a long lull, which indicates a positive sign in terms of local hiring,” Jacobi remarked, adding, “Employers traditionally want new hires in place by the first of the year, so sales are happening now.”
House-hunters have ample choices in most price ranges, with inventory currently priced from $15,000 for a manufactured home in Shelton (Mason County) to a $28.8 million home on Mercer Island.
Inventory is up slightly (1.6 percent) from twelve months ago, but fewer new listings were added during November compared to a year ago. At month end, NWMLS tallied 36,835 active listings of single family homes and condominiums in its database, which compares to the year-ago total of 36,266 listings.
Members reported 6,340 new listings during November, about 6.8 percent fewer than a year ago when they added 6,801 residential properties. Last month’s additions included 5,401 single family homes and 939 condominiums.
The shrinkage in new listings coming onto the market is lowering the month’s supply of inventory in those areas, noted J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Area-wide, there is about a 7.3 month supply at the current sales pace. King County has about a 5.7 month supply. The National Association of Realtors (NAR) reported a 10.5 month supply at the end of October. (A market with a supply of approximately six months is considered balanced, favoring neither buyers nor sellers.)
With inventory plentiful, brokers say buyers are taking their time before making any decisions.
“Move-up buyers are moving into the market,” Jacobi said, but noted, “They know value and have the luxury of time. Buyers are willing to wait for the right home at the right price, and then they jump on it. A few years ago, the hares were driving the market. Now it's the tortoises. Today's buyer's motto seems to be: Slow and steady wins the race.”
Commenting on move-up buyers, Lennox Scott noted an increase in home sales last month in the mid-price ranges in both Seattle and the Eastside.
Prices on sales that closed last month dipped below year-ago totals. The median price area-wide for November’s closed sales of single family homes and condominiums was $250,000, down about 5.7 percent from the year-ago figure of $265,000.
In King County, prices edged up slightly, from $337,000 to $340,000. Clallam, Grant, Jefferson, Okanogan, San Juan, Skagit and Whatcom counties also reported year-over-year price gains.
Condominium prices continue to slump. The median price for last month’s closed sales was $204,500, down more than 11 percent from twelve months ago when the median price was $229,950.
Through eleven months, the volume of closed sales for 2010 is slightly ahead of 2009 (up 1.2 percent).
Tight credit continues to worry brokers, despite favorable affordability conditions.
“Everyone is wondering how long interest rates are going to remain low, but that's impossible to predict with certainty,” observed Lennox Scott. “At the moment at least, they're at near-historic lows, but every one percent increase in interest rates reduces buying power by 10 percent. And this can have a significant impact on a person's ability to buy a home,” he stated.
NAR’s chief economist, Lawrence Yun, expects the recent sales pattern to continue. In remarks accompanying NAR’s latest report on the housing market, he described it as experiencing an uneven recovery. The temporary foreclosure stoppage in some states is likely to have held back a number of completed sales, he noted. “Still,” he said, “Sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels.”
Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington.