- Inventory in the King, Snohomish and Pierce counties region grew over 14% from February.
- March had “good sales activity on well-priced homes.
- Pending sales jumped more than 14.5% from February,
- Prices overall were down about 7.5% from a year ago.
- All signs point toward a rather unusual market through the end of 2023.
- Lowering prices, lowering interest rates, and longer days on the market signal some of the unpredictability of the current market.
KIRKLAND, Washington (April 6, 2023) – Real estate brokers around Washington state say the market is moving in a positive direction with the spring market “finally showing up in March.”
Newly-released statistics from Northwest Multiple Listing Service show declines in some key metrics for March compared to 12 months ago, but steady gains when compared to February and January.
“From February to March, key indicators, including new and active listings, pending sales and closed sales are trending upward,” noted John Deely, executive vice president of operations at Coldwell Banker Bain. Areawide prices have also increased since January, up nearly 5.9%.
Brokers added 7,904 new listings during March across the 26 counties in the Northwest MLS report. That total is down nearly 30% from a year ago, but up more than 51% from February, when brokers added 5,231 new listings of single-family homes and condominiums.
Said Deely, “Despite the year-over-year (YOY) comparisons showing declines, the year-to-date trends indicate the market is moving in a positive direction, towards a healthy market, albeit at a lower velocity than last year.”
“With interest rates dropping and less competition overall, people who have been sitting on the sidelines are jumping back into the market,” reported Deely.
“Buyers are out in droves right now looking for reasonably priced homes,” according to Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale. “Open house activity is up and we continue to see multiple offers on well-priced homes, with seller concessions starting to wane,” he stated.
NWMLS figures show prices in Kitsap County are up 4.7% since January. “The market is hitting an equilibrium,” he suggested. He also reported an increase in contingent sales where sellers must sell in order to buy their next home.
The combination of newly added listings and slower pace of sales contributed to a buildup of inventory during March, but supplies are still limited in many areas.
At the end of March, there were 8,007 active listings in the MLS database, up more than 73% from a year ago and up about 10.7% from February’s selection. Even with those gains, the supply, measured by months of inventory, was 1.38 months (less than six weeks), well below the four-to-six month level that industry experts say indicates a balanced market.
Three counties – Pierce, Snohomish and Thurston – all had less than one month of supply.
“We are experiencing a frenzied spring housing market,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Although fewer new listings are coming on the market and fewer overall transactions, the market is following a typical seasonal pattern,” he added, noting he expects to see increases in new listings over the coming months. “The luxury market is seeing strong buyer activity,” Scott also reported.
Windermere Chief Economist Matthew Gardner also commented on the uptick in activity. “The spring housing market, which usually kicks off in February, finally showed up in March when new listings increased by significant numbers, month over month.”
“While total inventory in the King, Snohomish and Pierce counties region grew over 14% from February, the number of homes for sale in this tri-county area was down 40% when compared to March 2019 (pre-pandemic),” Gardner observed.
Commenting on prices, Gardner said, “Despite the growing number of available homes for sale, sellers in King County are holding firm, with listing prices increasing by over 5% compared to February. In Snohomish County, listing prices were up just shy of 5%, and they were flat in Pierce County.”
Dean Rebhuhn, owner of Village Homes and Properties in Woodinville, said March had “good sales activity on well-priced homes.” He believes interest rates are not the deciding factor in purchases. It’s prices, he suggests, proclaiming, “The spring real estate market is good!”
Pending sales jumped more than 14.5% from February, rising from 6,230 mutually accepted offers to last month’s systemwide total of 7,136. Compared to a year ago, pending sales are down 29%, with higher interest rates believed to be a factor in the slower pace.
Rebhuhn said they are seeing purchasers use bridge loans and home equity loans to secure financing. He also commented on the influx of buyers from Oregon, Texas, and Utah, drawn by jobs in technology, health care and manufacturing (Boeing). “Even with some tech firms trimming their workforce, other employers are hiring in high demand areas.”
“All signs point toward a rather unusual market through the end of 2023,” reported Dick Beeson, managing broker at RE/MAX Northwest in Tacoma/Gig Harbor. “Lowering prices, lowering interest rates, and longer days on the market signal some of the unpredictability of the current market.”
Beeson said buyers want to buy now because they see modest reductions in prices and rates. “Sellers want to sell now before prices fall even further and there’s less competition,” he stated, adding, “There’s a paradox not seen in prior markets where low inventory generally brings higher prices.”
Prices overall were down about 7.5% from a year ago, dropping from $638,000 to $590,000, with considerable variation across the 26 counties in the NWMLS report:
- Year-over-year prices increased in eight counties (Clallam, Clark, Columbia, Cowlitz, Ferry, Jefferson, Kittitas, and Walla Walla).
- Four counties had price drops of less than 2% (Adams, Mason, Skagit and Thurston).
- Four counties had double-digit drops in prices compared to a year ago (Douglas, Grant, Okanogan, and Snohomish).
Brokers reported 5,817 closed sales last month, a drop of about 27% from the year ago total (7,989). Compared to February, closed sales jumped more than 36.6%.
Commenting on the year-over-year decline in prices, Gardner said he expects the pace at which prices are declining will increase for the next few months, but added, “When we breach the peak price of 2022, the pace should slow again. We will likely return to positive year-over-year price growth by the end of the year.”
Leach said fluctuating interest rates are causing some would-be homebuyers to wonder “if we’ll ever see rates as low as they were – unlikely!” He noted in the early ‘80s rates went from 9% to over 18%, “and we continued to see sales. This economy is not stopping as a result of 6%-to-7% interest rates. Nor is the increase in equity for those who own homes.”
“We may see more creative financing,” Leach said, adding, “We already see a lot of loan programs that all but disappeared now reappearing in this market.”
Sam Khater, Freddie Mac’s chief economist, said economic uncertainty continues to bring mortgage rates down. In a March 30 news release, Freddie Mac reported the 30-year fixed-rate mortgage (FRM) averaged 6.32%, down from the prior week when it was 6.42%. A year ago, the 30-year FRM averaged 4.67%.
“Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers,” Khater said.
Chief economist Danielle Hale at Realtor.com agreed. “Amid fewer new choices on the market and still rising home prices, home shoppers have shown they are very rate sensitive, only jumping back in the market when rates dip, and so what happens with rates this spring will likely play a strong role in determining whether the housing market bumps along or picks up speed this year.”
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