Summer doldrums for home sales "not happening" around Western Washington
Latest Press Release
August 7, 2017
KIRKLAND, Washington (Aug. 7, 2017) - New figures from Northwest Multiple Listing Service indicate home sales and prices, like July's temperatures, sizzled. Prices area-wide rose slightly more than 9 percent from a year ago, but several counties near job centers saw larger price increases, including King County where the median price jumped 18.6 percent.
The latest report confirmed what most buyers and brokers know: inventory shortages persist even though MLS members added slightly more new listings last month than the same period a year ago.
"We should be entering the summer doldrums, but I don't see that happening," reported Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. "Inventory remains low, but prices and demand continue to increase, prompting murmurs of a looming bubble," she commented, adding, "Some say yes, and just as many are saying no" when asked about the likelihood of a bubble.
Northwest MLS members added 12,300 new listings during July, a meager 122 more than the same month a year ago, but well below June's total of 13,658 new listings.
At month end, there were 15,749 total active listings, down 13.9 percent from the year-ago total of 18,287. Measured by months of supply, there was only about six weeks (1.6 months) in the MLS system overall, which encompasses 23 counties. Twelve months ago it was closer to two months of supply (1.93 months).
King County continued to have the skinniest supply at only one month, but in many parts of Seattle and the Eastside the supply slipped below a month. Four to six months is typically considered a normal, or balanced, market according to many industry analysts.
Condo inventory is especially depleted, with only 1,330 total active listings area-wide. That's down more than 21.5 percent from a year ago. Condos currently make up only 8.4 percent of the selection in the MLS database. (In 2015, condos accounted for 16 percent of residential sales.) Both King and Snohomish counties have only about three weeks of supply.
Despite sparse inventory, demand remains strong in most areas, with both pending and closed sales outgaining the volumes of a year ago. However, some brokers are detecting a slowdown, which they attribute to various factors from tight inventory and spiraling prices to the hot summer season.
Area-wide there were 11,800 pending sales during July, up 1.3 percent from a year ago when members logged 11,645 pending sales. King County, where inventory dropped nearly 20 percent, was one of nine counties that experienced a decline in year-over-year sales; mutually accepted offers in King County slipped about 7.4 percent.
"Even the fast-paced market could not stop buyers' desire to get out and enjoy the warm, sunny weather that arrived in July," said Northwest MLS chairman John Deely. "An increasing number of properties have gone without offers on the published offer review date, and many have had no offers within the typical one week review date," he stated. "Many properties have seen offers trickle in, after the review date has come and gone, with offer prices at or over the list price," added Deely, the principal managing broker at Coldwell Banker Bain Seattle. He also noted brokers are seeing a decrease of the percentage of list price to sale price ratio "as sellers' pricing pushes the pricing boundaries to new heights."
The median price on last month's 9,707 closed sales was $382,000, up more than 9.1 percent from twelve months ago when it was $350,000.
Homes in King County continued to command the highest prices. The median price for homes and condos that sold in King County during July was $599,000, up 18.6 percent from a year ago when it was $505,000. For single family homes (excluding condos) in King County, the median price jumped at the same rate, rising from $555,000 to $658,000.
The leap in prices may have some people crying "housing bubble," said OB Jacobi, president of Windermere Real Estate. "I still feel confident we're not headed in that direction. Bubbles result from irresponsible lending practices, but buyers in King County have high credit scores and higher than average down payments. This area also has a high percentage of homeowners who are 'equity rich' which means their home is worth more than twice what they owe. For a housing bubble to occur we would expect to see far lower equity, down payments and credit quality."
Buyers in some price ranges may be cheered by observations from some industry leaders.
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 state.