Northwest Multiple Listing Service Press Release

August activity described as both “robust” and “stagnant”
Latest Press Release on August, 2017

September 6, 2017
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KIRKLAND, Washington (Sept. 6, 2017) – As smoke and ash blanketed parts of Washington state, one real estate broker noted, “Even in a fire there are some cooler spots, and seasonally, the housing market is in a cooler spot.”

The latest numbers from Northwest Multiple Listing Service show there are both cooler spots and hot spots, with the demand for housing and prices showing few signs of being extinguished.

“For August, we experienced a more robust market than anticipated,” remarked Diedre Hanes, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. “Compared to years past, we’ve seen very limited slowdown,” she added.

Pending sales area-wide during August totaled 11,867 transactions, barely exceeding the number of new listings (11,781) added during the month. At month end, there were 15,987 total active listings in the MLS database, a shrinkage of 12.8 percent from a year ago.

Sparse inventory is a likely factor in the flat pending sales, with year-over-year pending sales for all areas down .09 percent (11,867 versus 11,878). Of the 23 counties in the Northwest MLS report, 15 had fewer mutually accepted offers last month compared to twelve months ago. Last month’s total was up slightly from July’s figure of 11,800.

Credit the flurry of back-to-school activities and end-of summer vacations for sidetracking some sellers and buyers. “Typically, the last two weeks or so of August cool a bit and the market picks up again full steam once school resumes,” said Northwest MLS director Frank Wilson.

Wilson, the branch managing broker at John L. Scott in Poulsbo, described activity as a “fast-paced seller’s market,” but said the “stagnant pool” is beginning to grow as sellers realize they can’t overprice their homes, “even in this market.” With football season getting underway he expects open house schedules to adjust around Seahawks game times, with Saturdays becoming the preferred showing day.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, also commented on seasonal patterns. “This past summer market seems to have followed previous years’ seasonal conditions. While inventory remained low, there was some change of pace from the winter-spring market,” he stated.

O’Leyar said savvy buyers took advantage of slightly longer market times, affording them the opportunity for reasonable contingencies. “Although we saw multiple offers, they were down somewhat, and several offer review dates came and went with no offers by those deadlines.”

Changing seasons will likely mean a drop-off in listing activity, agreed J. Lennox Scott, who was upbeat on summer sales. “It’s been our best summer ever for sales activity with June, July and August clocking in a record number of transactions,” said Scott, the chairman and CEO of John L. Scott. He credits strong job growth and attractive interest rates (“the lowest they’ve been since last November”) with propelling sales.

“It’s still a frenzy market in the more affordable and mid-price ranges,” he said, while also noting the luxury segment continues to outpace last year’s market “in a huge way.”

System-wide, 3,727 single family homes have sold for more than a million dollars during the first eight months of the year, surpassing last year’s total of 2,456 such sales during the same time frame – a jump of nearly 52 percent.

With further drops in inventory likely during the fourth quarter, Scott and others expect sales will continue at a quick clip.

“As we head into fall, September and October will see new listing inventory drop by about 20 percent from the summer months, so the next two months will be the best opportunity for selection and availability for buyers to purchase a home,” Scott suggests. “Starting in November, the number of new listings will drop by another 30 percent over the winter,” he added.

“We continue to see low inventory drive the story in the Puget Sound region,” observed Mike Grady, president and COO of Coldwell Banker Bain. Thirteen of the 23 counties in the MLS report had double-digit declines in inventory compared to a year ago.

Area-wide, including single family homes and condominiums, the 1.55 months of supply for August slipped from both July (at 1.62 months), and from the year-ago number of around 1.9 months. King County continued to have the tightest inventory, at 0.93 months.

Commenting on rising prices – up 8.3 percent across the MLS service area – Grady said, “Of course, that old law of supply and demand has its natural effect.” The trend is consistent throughout the MLS service area, he noted, adding, “With King County prices escalating at such a fast rate (up 17 percent), the ripple effect will continue to push prices throughout the area, first in neighboring counties, then throughout the region.”

“Kitsap continues to see its share of multiple offers,” Wilson reported, adding, “The effects of this seller’s market can be seen in the 13 percent price increase from a year ago. Also, with more attention coming to Kitsap due to the new fast ferry system there is no reason for prices to temper any time soon.” He believes challenges for “pent up sellers” will persist “as they have no place to move once they sell their home.”

“Nobody likes this market, – not sellers, not buyers, not real estate brokers,” proclaimed Northwest MLS director Dick Beeson. The reasons vary, he explained. “Sellers aren’t necessarily happy because they think they could be leaving money on the table. Buyers think they’re paying too much. And brokers think sales are more complex and fraught with peril than previously, making them harder to close.”

Beeson, the principal managing broker at RE/MAX Professionals in Gig Harbor, believes Seattle and surrounding areas are “forever changed” by this market. “The change isn’t going to be painless. Housing scarcity and increasing prices are sore spots.” Whether price increases will subside is anyone’s guess, he added.

Prices aren’t the only worry, suggested Haines. She said low appraisals occur on about one of every three sales. “The low appraisal number remains consistent at $25,000-to-$30,000 below sales price when it occurs. It makes one wonder why – coincidence or something else?” she stated.

Haines noted multiple offers are continuing, but added a note of caution to sellers: “Overpriced listings are not getting showings or offers. Buyers are well educated and well informed, which definitely eases fears of a developing bubble.”

Condos offered little relief for anxious buyers. Inventory dropped nearly 25 percent from twelve months ago, but pending sales somehow managed to outgain year-ago totals (up nearly 2.9 percent). At the end of August, there was less than a month’s supply of condos for sale across all areas served by Northwest MLS. King County’s supply was slightly better than two weeks. Prices rose 6.7 percent overall, and were up 11.3 percent in King County, 12.6 percent in Snohomish County and 14.5 percent in Pierce County. This tri-county area accounted for nearly nine of every 10 sales.

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.

Northwest Multiple Listing Service Press Release on July

The Northwest Multiple Listing Service sends out a press release on the current trends in the real estate market once a month based on statistics from the previous month. As they have a large database of active, pending and sold listings, they are easily able to publish statistical information. To substantiate the data, they also interview brokers from around the Puget Sound area which gives a more personal side to the market.

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NWMLS brokers report 50 percent spike in new listings

Brisk sales prompt predictions of “frenzied spring”

April 6, 2017

KIRKLAND, Washington (April 6, 2017) – Northwest Multiple Listing Service brokers expected an uptick in the number of new listings during March, and that expectation was met with a significant gain – up more than 50 percent from February. Members added 10,321 new listings last month, but they also reported an even greater number of pending sales (10,447), leaving inventory near historic lows.

“Although we’re seeing better news for buyers related to increases in new listings during the past three months, we’re continuing to sell inventory at a faster rate,” stated Mike Grady, president and COO of Coldwell Banker Bain. “This lack of supply continues to put an upward pressure on home prices. We’re in for yet another frenzied spring,” he believes.

Total active inventory across the 23 counties in the Northwest MLS service area remained below 10,000 for a second straight month. The selection of active listings rose to 9,774 for a 7.5 percent improvement on February’s volume, but compared to a year ago inventory plummeted nearly 23 percent.

“It’s a straight up crazy, frenzy market in King and Snohomish counties,” said J. Lennox Scott, chairman and CEO of John L. Scott. About 75 percent of homes are selling within the first 30 days, according to his analysis.

The lack of supply continues to put upward pressure on home prices. The median price on last month’s sales of single family homes and condos was $355,000, up 10.9 percent from the year-ago figure of $320,000.

For single family homes only (excluding condos), year-over-year prices jumped 11.5 percent, from $327,300 to $365,000. The median price for a single family home that sold in King County was $599,950, up 12.9 percent from a year ago. Adjacent counties also saw double-digit increases in selling prices for single family homes.

Pierce County prices increased 11.3 percent, from $265,000 to $295,000, while the year-over-year gain in Snohomish County was nearly 10.4 percent, rising from $385,000 to $425,000.

“There is much good news for Snohomish County,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain. Low unemployment, plenty of available jobs, and forecasts that are optimistic for our economy are among the positives she noted, while adding words of caution. “This doesn’t mean sellers can just slap a price they like on their listing and expect it to fly off the shelf. We certainly don’t need or want [overpriced] inventory that just sits there, gets stale and becomes stigmatized. Agents need to be diligent with pricing and sellers need to be realistic,” she emphasized, noting today’s buyers are well informed and more sophisticated than in past markets.

“As the first quarter ends, the South Sound market continues to bubble along,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor. Steep drops in inventory coupled with rising volumes of closed sales are resulting in double digit increases in prices in both Pierce County, where prices rose more than 11 percent, and Thurston County, where prices surged nearly 15.4 percent.

“It’s hard to imagine what the market would be like if two things were different – more inventory giving more buyers opportunities to purchase, and if the miserable weather we’ve been having had been slightly better making house hunting and home selling a bit more fun,” remarked Beeson.

The scenario is similar in Kitsap County, although at more moderate rates: total inventory is down about 3.4 percent from 12 months ago, and prices rose by a similar rate (up 3 percent).

“The full blooming of the spring market in Kitsap is being tempered by the tight inventory of available homes,” said Frank Wilson, the branch managing broker at John L. Scott in Poulsbo. He also noted brokers in Kitsap County continue to see “strong traffic at open houses, multiple offers on new listings, and buyers becoming accustomed to (though not happy about) the use of escalation clauses, with marginal buyers being pushed closer to their affordability margins.”

Area-wide, there is 1.3 months of inventory, with both King and Snohomish counties reporting less than a month’s supply.

Brokers say the shortages are constricting sales. Pending sales (mutually accepted offers) are down 4.2 percent from a year ago. Brokers report 10,447 pending sales during March, down from the year-ago total of 10,900, but up from February’s volume of 8,247.

“March sales activity is lower than a year ago due to the fact we are virtually sold out,” explained Scott. He also said the lack of inventory is feeding the buyer frenzy for each new listing in the more affordable and mid-price ranges.

The luxury market remains strong. For the first three months of 2017, the number of homes that sold and closed at prices of $1 million or more is up 60.5 percent compared to the same period a year ago (926 such sales this year versus 577 for first quarter of 2016).

Northwest MLS chairman John Deely, principal managing broker at Coldwell Banker Bain, said bids over the listing price are commonplace. “We are seeing more multiple offers than ever on new listings, and all cash offers are dominating the winning bids.” He also noted some brokers are reporting a contrast from a year ago with regard to escalation closes. “Last year they were advising a buyer to bid 10 percent above the list price, this year they’re advising 20 percent over in certain Seattle neighborhoods.”

Low appraisals are still occurring, according to Northwest MLS officials.

“We are seeing more low appraisals on financed offers as buyers push the sales price up to new heights for the respective neighborhoods,” Deely stated, adding, “Many financed offers contain provisions where buyers will pay the difference between the appraised value and the sales price in the event of a low appraisal,” he explained. He also said some buyers are waiving other protective conditions such as inspections and title and neighborhood reviews to gain an advantage over competing buyers.

Despite the hurdles, more people are getting into homes, Deely noted. Northwest MLS figures show year-to-date closed sales are up nearly 10 percent compared to first quarter 2016.

“Some, including me, are seeing signs of a developing bubble,” said Haines. She said most new construction in Snohomish County is being sold before foundations are even poured. “Builders are trying to keep up with the demand, but it isn’t or doesn’t seem to be possible in the near future. Buyers are starting to move into panic mode and doing unadvisable things just to get their offers accepted.”

Haines said problems with low appraisals have “dissipated for now,” adding, “We’re seeing a definite resurgence of 1031 exchange offers. Sellers are accepting contingent offers with confidence and no fear the contingent home won’t sell.” She also reported “Folks from the city and south of our county line are once again migrating north creating yet another logjam.”

Scott expects “seller gridlock” to abate this summer for sellers who are waiting to put their home on the market. “As more inventory comes on the market it will be just as easy for them to purchase their next home as it is to sell their current one.”

Wilson said the Kitsap County market is “struggling to find its new trend. We are being buffeted by the winds or rising interest rates, shortages of inventory, increasing prices and the effects of new or improved ferry service in various parts of our county. We are seeing increased interest in Port Orchard, Bremerton and Kingston by both investors and Seattle commuters.”

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.

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