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Holiday Shopping Crowds – In The Local Housing Market!

KIRKLAND, Washington (December 6, 2017) – “Normal seasonal slowdowns” are reported by some
real estate leaders with Northwest Multiple Listing Service, but other brokers say this holiday season is
still drawing crowds at open houses along with competitive bidding in some neighborhoods.

  • Accepted Deals Outpace New Listing Again
  • Inventory Levels Continue To Tighten
  • Home Values Continue to Escalate “Up 10.8%”

Both inventory and pending sales dipped to their lowest levels since April, while prices still increased by
double-digits in most of the 23 counties served by Northwest MLS.

MLS members reported 8,304 pending sales of single family homes and condos, a slight (1.6 percent)
gain over the year-ago figure of 8,173. Last month’s mutually accepted offers surpassed the number of
new listings (6,098) by 2,206 properties to keep supply tight.

“Until we see a balanced rate of 4-to-5 months of supply, instead of hovering around one month, we’re
not likely to see much change,” remarked George Moorhead, designated broker at Bentley Properties.
“However,” he added, “since we have seen these low inventory levels since 2013, maybe this is going to
be the new normal.”

Moorhead, a member of the Northwest MLS board of directors, also said this time of year is actually one
of the best times to find a home. “There is less competition and sellers who list their homes at this time
are usually motivated to make their move. Some of the best pricing can be attained from December
through early February,” he indicated.

Buyers seem to be undeterred by winter weather, holiday festivities or other seasonal or – for the most
part -- political distractions.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, said
December “may well provide an unexpected holiday reprieve for our local, weary real estate shoppers.
Combined with the seasonal pace change and real estate industry pundits’ consternation over the effect of
the federal income tax bill working its way through Congress, buyers could be getting some relief.” He
urged potential sellers to take note as “This could be the signal they’ve been waiting for as a good time to
sell before the pending tax laws that affect real estate ownership take effect.”

For those who are both prepared and patient, OB Jacobi, president of Windermere Real Estate, said the
holidays can actually be a great time to buy “because there is usually less competition and sellers are
motivated to close out the year with a sale.”

More than 8,000 sellers found November to be a good time complete sales. Closed sales rose about 2.5
percent year-over-year, from 7,872 transactions to 8,068. Sales of single family homes (excluding
condos) rose about 3.3 percent, but the volume of condos fell about 2.6 percent, likely due to limited

“Open houses this past weekend drew strong traffic,” reported Northwest MLS chairman John Deely,
principal managing broker at Coldwell Banker Bain. He said more than a hundred groups toured a condo
in the Lake Union area.

“The Seattle market is inundated with technology workers, both newly relocated and those that have been
renting and are ready to set down roots,” Deely noted, adding “Investors both large and small are stepping
up their purchasing, signaling strong confidence in the Greater Seattle area.”

Strong demand is not confined to Seattle.

“The velocity of market means that every time a new listing is added all eyes focus like a laser beam to
see what just happened,” said Dick Beeson, principal managing broker at RE/MAX Professionals in Gig
Harbor. “If a worthy property comes on the market, buyers know it instantly as the information is
streamed through every device known to man. Buyers step up and buy, quickly and efficiently.”
Brokers are noticing the buyers include growing numbers of millennials.

“Millennial buyers continue to enter the market but the extremely low inventory is hampering their
success rate in finding and securing a purchase,” said Diedre Haines, principal managing broker-South
Snohomish County at Coldwell Banker Bain in Lynnwood.

Haines said November activity started slow, but definitely picked up later in the month. “Earlier this year
I feared signs that a bubble was building, but I no longer see that happening,” she stated.

"While we continued to experience more of the same in November related to a lack of inventory, we are
seeing more homes sold year-to-date,” observed Mike Grady, president and COO of Coldwell Banker
Bain. He noted the number of new listings in King County for November increased more than 7 percent
compared to last year.

Area-wide, the volume of new listings added during November rose nearly 5.6 percent (from 5,776 to
6,098) compared to the same month a year ago.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, described sales activity for new listings
as “extremely strong.” Despite lower overall volumes of new listings and sales, Scott said the majority of
new listings are selling within their first 30 days on the market. He calculated November’s pending sales
of single family homes outgained new listings by nearly 41 percent.

Despite improvements in new listings, brisk sales kept inventory well below year-ago levels. “King
County is still experiencing double-digit reductions in inventory compared to this same time last year, but
the shortage is even more pronounced in some outlying counties,” Grady noted, commenting “We’re not
just talking about the main commuter counties.”

Significant decreases in inventory are found in Thurston (down 31 percent), Mason (down more than 26
percent), and Cowlitz (down more than 39 percent) counties. MLS figures show inventory is down more
than 24 percent in Snohomish County and nearly 29 percent in Kitsap County. Across the 23 counties, it’s
down about 15.9 percent.

Measured by months of supply, there is about 1.4 months of inventory overall. In King County, supply has
dwindled to 0.79 months, and only slightly better, at 0.89 months, in Snohomish County.
Home values continue to escalate across the region. The system-wide median price of $379,000 was up
10.8 percent from a year ago, with 15 counties reporting even sharper gains.

In King County the median price for single family homes and condos combined jumped 15.6 percent,
from $497,254 to $575,000. For single family homes (excluding condos), the median price was $630,750,
up nearly 14.7 percent from last year. Condo prices surged 17.1 percent, due to a combination of depleted
inventory (down 28 percent from a year ago) and higher prices for new condos. (In King County, the
condo component classified as new construction that sold during November had a median price of

Commenting on prices, Haines emphasized wide variations are found when comparing median sales price
within most counties. In Snohomish County, for example, the median price for homes and condos that
sold in Mill Creek was $590,000, while in Darrington it was $191,475. Similarly, in King County, the
median price for Bellevue homes and condos was $875,000; in Tukwila the sales price was $321,194.
Brokers tend to concur prices may moderate in the coming year.

“Can we as an industry sustain this 10-to-15 percent increase in prices again in 2018? I don’t think so, but
I don’t know,” remarked Beeson, adding, “I only know that when sellers decide to get serious and sell
their home by finally setting the right price or finally improving the condition of their property to justify
their price magic happens. Houses sell, people move, lives change forever.”

“Prices are expected to see some much needed slowdown in 2018 which will help bring more balance to
the market,” stated Jacobi, who also believes a housing bubble is unlikely. “Rising home prices on their
own don’t lead to a bubble; a number of other factors have to come into play.”

Moorhead agreed, saying he expects 2018 “will be less glamorous with 6-to-8 percent appreciation, or
even a slight flattening of the market for 8-to-12 months.” Commenting on modest gains in income, at
around 2.5 percent, he remarked “No wonder buyers in the market are so frustrated and willing to make
significant concessions to secure their next home. It’s like chasing a train where you just cannot catch up
and only the fastest can get on.”

Brokers tended to agree some of the provisions in the widely anticipated tax reform have “the potential to
negatively affect home values nationwide.” Haines said a drop in sales is expected if the proposed bill as
it stands is passed.

Notwithstanding the uncertainty around tax reform, Scott remains confident: “Market conditions are set
for another robust market in the year 2018,” he stated.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service
MLS in the Northwest. Its membership of more than 2,200 member offices includes more than 26,000
real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the

“Information and statistics derived from Northwest Multiple Listing Service.”

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