Northwest Multiple Listing Service Press Release

Northwest MLS report shows “typical August,” and return to more “normalized conditions”

Latest Press Release – August Statistical Data

KIRKLAND, Washington (September 8, 2022) – Reports that we are entering a “bear market” are highly exaggerated, suggests an economist who tracks real estate activity when commenting on the latest statistics from Northwest Multiple Listing Service (NWMLS). A director with the multiple listing service said the latest data may just reflect a typical August, noting activity tends to be slow as summer ends.

“Many may not remember August is usually a slow month because we were in a full-on sprint the last two years no matter which month it was. This may just be an adjustment back to normal,” said Jason Wall, designated broker and owner at Lake & Company Real Estate and a member of the Northwest MLS board of directors.

In a report summarizing August activity, Northwest MLS figures showed a continued buildup of inventory – nearly double the selection of a year ago and more than three times the offerings at the end of the first quarter.

Brokers added 9,914 new listings to inventory during August, a drop from both July’s total of 11,805 and the year-ago total (11,437). At month end there were 14,683 active listings of single family homes and condominiums across the 26 counties in the NWMLS report.

Fewer sales were reported than a year ago, but both pending sales (mutually accepted offers) and closed sales improved on July’s figures.

Northwest MLS members reported 9,552 pending sales, a drop of nearly 22% from the year-ago total of 12,238 pendings. Every county except Columbia experienced a decline in pending sales. Activity picked up from July when there were 8,775 pending sales, a gain of nearly 8.9%.

Similarly, the volume of closed sales fell from a year ago. MLS members recorded 7,998 completed transactions, improving 4.6% from July’s total of 7,645. But last month’s closings were down about 24% from the same month a year ago when members notched 10,571 closed sales.

“Last month’s housing numbers certainly are eye-opening,” stated Windermere Chief Economist Matthew Gardner. 

“However,” he continued, “I believe they are simply indicating the market is trending back to the more normalized conditions that we were seeing before the pandemic.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, commented on the local housing market’s resilience. “The resilience is clear as a steady cadence of homes going under contract continues. In the more affordable and mid-price ranges, demand remains strong as buyers look to get settled before fall.”

 

Broker Dean Rebhuhn, owner at Village Homes and Properties, commented on inflation and pent-up buyer demand. “Buyers are realizing homeownership is a good hedge against inflation,” he remarked. “The market took a slight pause as mortgage rates increased from historic lows. Then, as sellers came to the market with realistic pricing, and price reductions on existing inventory occurred, pent up buyer demand took effect and buyers found homes they could afford.”

Rebhuhn also noted last month’s sales showed home values continue to appreciate.

The median price on sales of single family homes and condos that closed during August was $600,000, up more than 3.6% from a year ago, but down slightly from July when the area-wide price was $625,000.

For single family homes, year-over-year (YOY) prices rose about 4.2%, from $600,000 to $625,000. Homes in San Juan County registered the steepest jump, climbing from $800,000 to $995,000 (up nearly 24.4%).

A comparison of the four counties in the Puget Sound region shows year-over-year medianprices for single family homes increased from 5.9% in King County to 9.2% in Kitsap County.

Within the six sub-areas on the report for King County, North King County notched the largest YOY gain on single family home prices at 11.5%, followed by the map areas within Seattle (5.9%), Southwest King County (4.1%), the Eastside (about 3.9%), and Southeast King County (nearly 3%). Prices fell 11.3% on Vashon compared to a year ago.

Condo prices system-wide rose 3.3% from twelve months ago. Across all counties, the median price rose from $435,625 to $450,000. In King County, where nearly 60% of condo sales occurred, the median price increased 5.9%, from $458,000 to $485,000.

A check of the sales price to list price ratio shows an area-wide ratio of 99.3%. In three counties – Pierce, Thurston and Douglas – sellers received slightly more than their asking price. In ten other counties, the ratio was between 99.1% and 99.9%.

Economist Gardner expects prices will soften. “Home sales increased month-over-month, but the rise in listings is causing prices to soften,” he remarked, adding, “I predict prices will drop further as we move into the fall, but reports that we are entering a “bear market’ are highly exaggerated. The market is simply reverting to its long-term average as it moves away from the artificial conditions caused by the pandemic.”

Commenting on the uptick in inventory, Gardner said, “Even though inventory in the King, Pierce and Snohomish counties region almost doubled from a year ago, the number of homes for sale is still 14% lower than in August of 2019.”

Wall and Scott also commented on the jump in inventory.

Scott expects only two more months this year will have an increased selection of new resale listings coming on the market. “Once winter hits, new resale listings will become scarcer until activity ticks up to a higher level in March 2023,” he stated.

Wall also believes inventory will grow, saying, “I expect we will see even more inventory as we move out of the summer and into fall. Sellers will need to be more realistic about pricing and follow the advice of their broker regarding preparation of the home and positioning in the market. Buyers will have more inventory to look at and the longer market times may give buyers some leverage that they have not had in the past few years.”

John Deely, executive vice president of operations at Coldwell Banker Bain, also anticipates a more balanced market. “With continued building of inventory and fluctuating yet rising interest rates in July, we were on a trend toward a more balanced market. This seems to have cooled slightly as active inventory dropped from July to August. And, with less than two months’ inventory, we are still very much in a seller’s market.”

Commenting on prices, Deely reports increased competitiveness. “With the increase in median price slowing down to single digit percentages for the last two months, we are also seeing some competitiveness in pricing. Sellers are closely watching the market and pricing competitively to get their property sold. The increase in market time reflected in the months of inventory is due to sellers who are not pricing accurately, so their homes are sitting on the market longer.”

Despite the surge in inventory, the Northwest MLS report shows there is only 1.84 months of supply – and that’s down from July’s figure of 2.01 months. Only six counties had more than three months of supply: Adams, Ferry, Lewis, Okanogan, Pacific, and San Juan. Most industry analysts consider four to six months of inventory to be a balanced market.

“Buyers have taken a beating the last few years,” said Wall. “A move to a more balanced market will likely encourage buyers that stopped looking to rethink the idea and return. Even if interest rates are higher the continued rise in rent expense still makes owning a home an attractive idea.”

Lawrence Yun, chief economist at the National Association of Realtors®, believes “we may be at or close to the bottom in contract signings” for the current housing cycle. He noted housing affordability plummeted to its lowest level since 1989, in part due to rising mortgage rates and prices, but he expects annual price appreciation to moderate “to the typical rate of 5% by the end of this year and into 2023.”

Continuing the optimistic outlook, Yun stated, “With mortgage rates expected to stabilize near 6% alongside steady job creation, home sales should start to rise by early next year.”

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,500 member firm offices and 32,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 26 counties, and it operates 21 local service centers.

 

 

Brokers, home buyers welcome growing inventory and market returning to “some sense of normalcy”

KIRKLAND, Washington (July 6, 2022) – Housing statistics from Northwest Multiple Listing Service for June show signs of a shifting market, creating opportunities for some buyers. Compared to a year ago, Northwest MLS (NWMLS) brokers reported a healthy jump in inventory, double-digit drops in both pending and closed sales, and the smallest year-over-year (YOY) increase in prices since June 2020.

“What the changes mean in general terms, are more houses on the market, longer market times, stabilizing home prices, fewer showings and open house visitors, fewer offers at one time, and more price 

adjustments,” said Frank Wilson, Kitsap regional manager at John L. Scott Real Estate.

“It’s nice to see a more balanced market for buyers,” remarked Dean Rebhuhn, owner at Village Homes and Properties in Woodinville, pointing to the increase in new listings, more price reductions, and still favorable mortgage rates as factors that are creating opportunities for buyers. “The return of financing and inspection contingencies are now the norm,” he reported.

Northwest MLS brokers added 14,223 new listings of single family homes and condos to inventory during June, up from both May, when they added 13,075 homes system-wide, and a year ago, when they added 13,111 properties to the database. Last month’s total was the highest volume of new listings since May 2019 when brokers tallied 14,689 new listings.

 

At the end of June there were 13,405 active listings of single family homes and condominiums in the Northwest MLS database, which includes 26 of the state’s 39 counties. That’s more than double the inventory of a year ago (6,358 listings), and the best selection since October 2019 when buyers could choose from 14,379 listings.

Both pending sales (mutually accepted offers) and closed sales declined from a year ago. MLS members reported 8,937 pending sales during June, down 27.5% from the year-ago total of 12,328, and down 3.8% from May.

Closed sales also fell from a year earlier (down about 17.2%), but last month’s total of 9,047 completed transactions nearly matched May’s volume of 9,096.

“While there was a decrease in closed and pending sales in June, there is no reason to panic as we continue to move toward a more balanced market,” said John Deely, executive vice president of operations at Coldwell Banker Bain. “Having the standing active inventory rise above the closed and pending categories in June means we are finally building inventory, which is healthy for the marketplace. It slows down the steep price appreciation we have been seeing and provides a bit more time for buyers to look at more properties.”

The latest MLS report shows area-wide prices rose about 10.4%, from a median price of $589,000 to $650,000. On a percentage basis, that is the smallest year-over-year (YOY) gain since June 2020 when prices rose around 5.7%.

Seven counties had YOY price hikes of 19% or more for last month’s sales of single family homes and condos: Douglas, Ferry, Jefferson, Kitsap, Lewis, Mason, and Whatcom.

San Juan County had the highest median price last month, at $940,000, for it 25 sales of single family homes and condos.

King County had the second highest sales price last month, coming in at $851,000. That represents a 9.1% increase from a year ago, but a slight decline (3.4%) from May’s figure of $880,000. Median prices topped $1 million for both Vashon and the Eastside map areas, as well as for areas encompassing North Seattle and Lake Forest Park.

Prices of single family homes (excluding condos) system-wide rose about 10.5% from a year ago. Condo prices increased by a similar amount (10.2%).

Commenting on prices, Deely acknowledged they’re “leveling out,” but commented, “We are still not a buyer’s market by far.” He believes some of the slowdown in pending and closed sales is simply part of a seasonal cycle this region experiences in June and July once school is out and people begin to travel. “In fact, travel is hitting peak numbers this summer as the world continues to open,” he stated.

Wilson also commented on the changing market, noting the uptick in months of supply. It reached nearly six weeks (1.48 months) by the end of June. “While we have seen an increase in market time to almost a month and a half, there is a long way to go for the market to reach a neutral level which is typically found between four and six months of inventory,” he stated.

Commenting on the Kitsap market, where there is about 1.3 months of supply, Wilson said it is “nowhere close to flipping to a buyer’s market,” adding, “Often change is good for one group but bad for another. In this case the change is good for buyers but does not really hurt sellers. Sellers who correctly price their home in today’s market are still able to get top of market prices. Buyers have more choices and may see a little bit of flexibility on price and terms from the seller.”

Northwest MLS director Meredith Hansen echoed those remarks. “With higher interest rates and more inventory, we are seeing sellers becoming more flexible in what terms they will accept,” reported Hansen, the founder/operating principal at Keller Williams Greater Seattle. “It is an excellent time for buyers who were discouraged in the past frenzied market to step back in and find a home,” she suggested, adding, “Buyers are not waiving financing and inspections like they were prior to this market shift.”

 

Lennox Scott, chairman and CEO of John L. Scott Real Estate, also commented on the “intensity adjustment” in the Puget Sound market, while noting sales activity remains strong. “Everything is coming together for buyers in the market, with increased selection of available listings and fewer multiple-offer situations to navigate. A strong contingent of buyers is taking note of new listings and poised to put an offer on the right home, in the right condition, at the right price.”

Expecting “much will be made of the numbers that showed a significant increase in active listings” during June, Windermere chief economist Matthew Gardner said it’s important to keep things in perspective.

“The pandemic heavily influenced the housing market with inventory levels essentially drying up in 2020/2021,” Gardner stated. In analyzing June’s data, he noted single family home listings in the tri-county area of King, Pierce, and Snohomish counties rose more than 144% compared to a year ago. “This still represents the fourth lowest number of listings in any June for this region since 1999.”

Gardner believes the market is trending back to some sense of normalcy. “The increase in listings has started to slow the rabid pace of price gains that we have experienced. This is a good thing, not a cause for concern,” he emphasized.

Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, concurred with some of Gardner’s observations. “Kitsap County continues to see a robust market. Inventory is up 110% from a year ago,” he exclaimed, pointing to the MLS report showing active listings soared from 288 to 606 listings. He expects the increasing supply in Kitsap County will help provide a more balanced market. Leach also noted both pending and closed sales slipped year over year, but prices surged more than 19%.

“Kitsap is in a building boom and builders are racing to meet demand,” according to Leach. Open houses have resumed, but traffic “was off” at the end of June, which he suggested may be due to inclement weather and graduations. Leach also noted rents are rising across the county, pushing first-time buyers into the market. “Increasing interest rates are of some concern and buy-downs on interest rates are being used widely,” he reported.

“Both rising mortgage rates and home prices hurt affordability for many buyers,” stated Nadia Evangelou, senior economist and director of forecast at the National Association of Realtors, in an interview with a reporter for MarketWatch Picks. With affordability concerns and persistent inventory shortages, she said more people are renting, but rents are rising sharply.

“For institutional buyers, rising rents translate to larger profits,” Evangelou explained, adding, “However, a larger market presence of institutional buyers increases market competition for first-time home buyers. Research has shown that institutional investors may be taking a significant portion of homes that would otherwise be sold to first-time and lower-income buyers.”

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,600 member firm offices and 33,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 26 counties, and it operates 21 local service centers.

 

Western Washington housing market “more balanced, and not so crazy – and that’s a good thing”

Latest Press Release – May Statistical Data

KIRKLAND, Washington (June 6, 2022) – “Home sellers really need to re-think their expectations,” suggested Mike Larson, a member of the board of directors at Northwest Multiple Listing Service (NWMLS) when commenting on statistics summarizing May activity. The new report showed a significant increase in active listings compared to a year ago, a slowdown in sales, and pri

ces still rising.

Larson, the managing broker at Compass in Tacoma, said the days of “multiple offers and waived inspections, at least in Pierce County, are behind us.” He described the market as “more balanced and not so crazy, and that’s a good thing. Buyers are getting a little relief – not much, but a little as we’re slowly easing back into the kind of market we had pre-COVID.”

NWMLS members added 13,075 new listings to inventory during May, up 9.7% from a year earlier and the highest monthly number since June 2021.

At the end of May, buyers could choose from 8,798 active listings system-wide, up a whopping 59% from a year ago when there were only 5,533 properties in the database. That is the largest selection since September 2020 when there were 9,099 single family homes and condominiums offered for sale across the 26 counties served by Northwest MLS.

Two counties more than doubled their number of active listings from a year ago. The selection in Snohomish County jumped from 500 to 1,182 listings (up 136.4%). Douglas County had a similar increase, rising 134.5%. Also nearly doubling their inventory from a year ago were Cowlitz, Island, and Walla Walla counties.

“The significant increase in the number of homes for sale has some speculating that the market is about to implode, but that is very unlikely,” stated Matthew Gardner, chief economist at Windermere Real Estate. “What’s more likely to occur is that the additional supply will lead us toward a more balanced market, which after years of such lopsided conditions, is much needed,” he added.

Even with the healthy uptick in inventory, there is still less than one month of supply area-wide (0.97 months). Twenty of the 26 counties in the report are showing more than a month of supply, with the tightest inventory (0.85 months or less) in the four-county Puget Sound region.

Both pending sales (mutually accepted offers) and closed sales during May were down from a year ago, but up from the previous month.

Pending sales declined about 11.7% from twelve months ago but increased 8.2% compared with April. Members reported 10,563 pending sales of homes and condos last month, up from April’s figure of 9,760, but down from the year-ago total of 11,969.

Gardner believes the April-to-May increase indicates rising mortgage rates are not yet negatively impacting the housing market. “The additional supply of homes for sale is giving buyers more choices, which is something they haven’t had in several years,” he remarked.

Closed sales dipped slightly from a year ago (down about 3%) but rose 9% from April. Members completed 9,096 sales last month, which was 278 fewer than a year ago. May’s total outgained April by 752 transactions.

Buyers can expect to pay more for homes and condos, although the increases may be moderating. Last month’s system-wide median price of $660,000 was up 12.8% from the year-ago figure of $585,000. Comparing percentages, that was the smallest YOY increase since December 2020 when it was 12.2%.

“In May, we saw a slowdown in the steep price increases we have witnessed so far this year,” observed John Deely, executive vice president of operations at Coldwell Banker Bain. He noted prices for single family home sales (excluding condos) in King County jumped from $775,000 in January to a whopping $995,000 in April, a change of $220,000 in only four months (a jump of 28.4%). Prices for single family homes in King County were nearly unchanged from April ($995,000) to May ($998,888).

“Rising interest rates coupled with inflation are causing buyers that rely on conventional mortgages to reconsider the affordability, and possibly take a break or look in areas that are less costly,” Deely commented. “We seem to be heading from an extreme seller’s market toward a more balanced market with increasing inventory.”

J. Lennox Scott also commented on market adjustments. “Unsold inventory is ticking upward locally as more new listings hit the market. This gives buyers an increased selection of desirable properties to choose from as they hunt for their new home,” said Scott, the chairman and CEO of John L. Scott Real Estate.

“Though there is still a steady backlog of buyers in the market, the increase in inventory means each home will receive fewer offers and may not go pending the first weekend,” Scott remarked, adding, “Seasonal home price flattening is also in play, which means premium pricing is off for most properties.”

NWMLS figures show last month’s sales fetched 105.7% of the asking price, down from April when it was 107.7% and March when it was 108.2%.

Scott also noted luxury sales activity has held steady due to strong buyer demand in the Puget Sound area. He attributes this to “a backlog of buyers along with factors like job growth and our thriving local economy.”

MLS figures show there were 95 sales of properties priced at $2 million or more in January. That number rose to 136 in February, 325 in March, 389 in April and 353 in May.

Frank Wilson, Kitsap regional manager at John L. Scott Real Estate, is detecting “light breezes of change” in that county. “Homes are staying on the market a few days longer. We are still receiving multiple offers, but not as many.” He also noted inventory is slowly growing. MLS figures show supply in Kitsap County is up nearly 39% from a year ago.

“Finally, some balance in the market for homebuyers,” exclaimed Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. “Last month provided more buying opportunities due to increasing number of new listings and more flexible sellers willing to work with buyers on finance and inspection contingencies,” he remarked, but also reported, “Price reductions are on the increase from sellers as overpriced properties are languishing on the market.”

“Things have changed,” agreed Dick Beeson, managing broker at RE/MAX Northwest Realtors in Gig Harbor. “Sellers who expect to get more than their asking price are unhappy if they receive offers only slightly above their list price. Sellers are now more often required to consider offers contingent upon financing, inspections, or the sale of the buyer’s home. Things that were normal in purchase contracts just two years ago are making their return,” he stated.

Beeson expects inventory will continue to grow as more sellers realize now is the time to sell. “Otherwise, their home’s appreciation simply becomes unrealized phantom equity, especially if prices fail to continue their dizzying upward spiral.” And, he suggested, “That day is drawing near.”

Despite some conditions tilting to favor buyers, Beeson said some buyers have given up hope, choosing to sit on the sidelines waiting for a more “normal” or falling market. “Those days are a mirage.”

Reflecting on his 40 years in the business, Beeson wondered, “Who would ever imagine increases of nearly 65% in inventory in Pierce County and nearly 36% in Pierce and King County would only produce less than a month’s supply of homes for sale? Imagine prices escalating at 15% or more a year, yet the number of closed sales is falling. Imagine buyers looking at the increased inventory, increased prices and still experiencing serious competition with a plethora of other buyers for most homes. That’s the world of today in Western Washington!”

Would-be owners of condominiums will find limited choices with inventory down more than 9% from a year ago. Prices are up nearly 15%, rising from $435,000 to $500,000.

“The only constant is change,” said Gary O’Leyar, another broker with decades of experience. “Although we have been through a long run-up in the market, history tells us that the real estate market never remains static. There is a definite shift in buyers’ patterns,” according to O’Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties in Seattle.

O’Leyar also noted there are many “micro markets” within each county. Within King County, for example, Northwest MLS tracks data for 30 map areas. Last month’s median sales prices ranged from $565,400 in the area encompassing Dash Point and Federal Way to nearly $2.6 million on Mercer Island. Also notable is area 720 where Shoreline and Lake Forest Park are located. That area had a year-over-year price bump of 52.4%, with the median price surpassing $1 million for the first time, according to MLS records. In nine of the 30 map areas in King County, median prices exceeded $1 million last month.

O’Leyar acknowledged “outside influences beyond our local control” are factors contributing to market changes. He cited interest rates and the price of gasoline among them.

There are local dynamics that also impact activity, O’Leyar emphasized. “Employment is a significant barometer,” he suggested. “King County enjoys an extremely low unemployment rate, recently at about 2% which is notably below the state and national rates around 4.1% and 3.6%, respectively. When clients ask for market forecast opinions, my consistent ‘go to’ reply has been “Watch the employment numbers along with population numbers of people entering or exiting the market. It’s basic supply and demand.”

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,500 member firm offices and 32,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 26 counties, and it operates 21 local service centers.