Northwest Multiple Listing Service Press Release

Rising interest rates not yet slowing home sales or “too concerning” for NWMLS officials

Latest Press Release – March Statistical Data

KIRKLAND, Washington (April 7, 2022) – Rising mortgage rates are not yet slowing home sales in most areas across Washington state, according to several brokers who commented on the latest statistical report from Northwest Multiple Listing Service. The report showed a 7.4% year-over-year drop in pending sales, but brokers suggested the decline is likely a reflection of limited supply.

“Typically, by now, we would start to see rising mortgage rates impacting homes sales and/or prices,” observed Matthew Gardner, chief economist at Windermere Real Estate. “That has yet to happen despite rates rising significantly since the start of the year.”

Freddie Mac reported the average rate for a 30-year loan rose to 4.56% last week, with rates climbing at the quickest pace in almost three decades.

Gardner said he expects mortgage rates to continue trending higher in the coming months, adding, “I will be watching to see if there are any negative market impacts, but as of now, I’m not too concerned.”

Northwest MLS brokers reported 10,059 pending sales (mutually accepted offers) during March across 26 counties. That’s down from the year-ago figure of 10,863, but compared to February, the volume of pending sales jumped nearly 31%.

Broker Dean Rebhuhn, owner at Village Homes and Properties, also said rising mortgage rates have not slowed activity. “However, if homes are priced over the market, savvy sellers are making price adjustments.” For now, Rebhuhn said multiple offers “are still the rule. Buyers are making strong offers, pre-inspecting homes, and making sure financing is in place.”

Well-paying jobs and lifestyle needs are driving the market, with some buyers using investments, 401K funds, and family assistance, according to Rebhuhn. He noted Grays Harbor and Ocean Shores offer “good inventory and great values.” Prices in Grays Harbor County surged nearly 25% from a year ago, rising from $280,000 to $349,950. That’s about $489,000 less than the median price in King County.

“The market is following the normal seasonality of spring,” according to J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “This season brings more resale listings coming on the market.”

The latest MLS report shows brokers added 11,197 new listings of single family homes and condominiums to inventory during March, up from the year-ago total of 10,562. Last month’s total is up from February’s figure of 7,920 for a gain of more than 41%. It also marked the highest volume of new listings added during a month since September 2021 when members added 11,373 listings.

James Young, director of the Washington Center for Real Estate Research at the University of Washington, noted improvements in inventory in “many of the markets along the I-5 corridor.” His analysis of active listings show robust growth since January in several counties, including Snohomish (up nearly 54%), Lewis (up 47%), Thurston (up 42%), Pierce (up nearly 40%), and Skagit (up 32%). 

Nevertheless, with pending sales (10,059) nearly matching new listings, inventory remained limited system wide. The MLS report shows only 0.58 months of supply, with King, Pierce, Snohomish and Thurston counties all having less than two weeks of supply.

“When you consider at one time a normal market inventory was 4-to-6 months, we now consider that measure a relic of times gone by,” commented Dick Beeson, managing broker at RE/MAX Northwest Brokers, adding, “We will not see such numbers of homes for sale for possibly a generation or more.”

The supply squeeze is contributing to competition among hopeful homeowners and rising prices.

“We continue to see fierce competition for the available inventory,” stated Frank Leach, broker/owner at RE/MAX Platinum Services. “Buyers have been very frustrated with some writing as many as 15 offers before landing on a home.”

Median prices continue to escalate.

For last month’s 7,989 completed transactions, the area-wide median price was $638,000, up about 16.4% from a year ago and up 9% from February.

Of the 26 counties in the report, only one county (Ferry) reported a year-over-year price drop, and only three counties had single-digit increases; all others had double-digit gains from a year ago.

Gardner noted median listing (asking) prices continue to rise, saying “this suggests that sellers remain quite bullish when it comes to pricing their homes.”

Beeson described rising prices as being at “shock and awe levels,” noting it is the third consecutive year for such escalations.

Northwest MLS figures show prices in the four-county region (King, Kitsap, Pierce and Snohomish) have surged nearly $200,000 (38.5%) since March 2020, jumping from a median price of nearly $520,000 to nearly $720,000.

“With rising interest rates and fuel prices, it will be an interesting time for the markets along the I-5 corridor,” remarked Young. “Increased costs make purchasing a home outside of the urbanized areas a less viable option for first time buyers and others seeking value to move up the housing ladder.”

Young believes the return to the city has begun in earnest. He also commented on steadily rising prices in King and Snohomish counties. “Since January, prices in King County are up 16.5% and up 10.5% in Snohomish County. No other counties in the central Puget Sound region break double digits in house price growth for this period.”

Nevertheless, recent census reports indicate people are moving out of King County. Such reports are “allowing surrounding counties, such as Snohomish, Pierce, and Kitsap to prosper,” surmises John Deely, executive vice president of operations at Coldwell Banker Bain. “In part, this is due to a lack of affordability and King County’s inability to create new inventory given restrictions on development and the tight labor markets.” He also cited work-from-home policies as “helping people decide to live in other places” – a trend he expects will continue.

Like many areas, Kitsap County is “dealing with a very active market with prices hitting unprecedented values as inventory remains extremely low,” reports Leach. MLS figures show there is slightly more than a half-month of supply (0.56 months of inventory).

The median price on last month’s sales of single family homes in Kitsap County rose 19.7% from a year ago, from $450,000 to $538,500. Year-over-year condo prices shot up nearly 54%, from $297,500 to $457,000.

“While we often speak in percentages, the actual numbers of listings are drastically low, and the demand is outstripping supply,” Leach stated. On a brighter note, he added, “Kitsap continues to grow, and new inventory continues to pop out of the ground throughout the county. There are thousands of new residential, condominium and apartment buildings under construction and due to be available in the fall of 2022.”

Leach also noted rents are rising in Kitsap County, “and there appears to be no relief on the horizon.” He suggests the only way to control future expenditures in housing is to own. “With interest rates on the rise there is no better time to buy, refinance, or resize your real estate investment.”

Deely saw hopeful signs in the March statistics. “King County’s new listings last month exceeded the number of both pending and closed sales. Whenever new listings exceed pending, the standing inventory increases with more selection available for buyers. It’s still a great time for sellers to come to the market due to buyers who are willing to pay a premium. While interest rates have gone up, slightly narrowing the buyer pool, there’s still high demand.”

Scott pointed to the overall economy “and specifically job growth in the central Puget Sound region” as factors for the future housing market. “For the local areas considered lifestyle and destination markets, we will be watching local in-migration as a key indicator of future home price appreciation.”

Beeson acknowledged not everyone shares a rosy outlook, noting a report from the Federal Reserve Bank of Dallas that stated price and value have “become unhinged and now have little relationship to each other.” He said they fear a housing bubble may be brewing, adding, “It does feel strange to be in a market that no one has experienced before. There is no road map for this one.”

Commenting on an “unexpected 4.1% decline” in U.S. pending home sales, Lawrence Yun, chief economist at the National Association of REALTORS®, suggested the dip was mainly due to the low number of homes for sales, adding, “It is still an extremely competitive market, but fast-changing conditions regarding affordability ahead.”

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.

 

 

Multiple offers “the norm” for home buyers, but may ease with uptick in listings

Latest Press Release – February Statistical Data

KIRKLAND, Washington (March 7, 2022) – Multiple offer situations are the norm for today’s home buyers, but some brokers with Northwest Multiple Listing Service suggest February’s improving inventory and a slowing pace of price increases may ease some of the competitive pressures.

Commenting on the latest statistical report from Northwest MLS, representatives of the service expressed optimism for the housing market as pandemic-related restrictions ease, but also uncertainty due to the global economic crisis around Russia’s invasion of Ukraine.

Northwest MLS brokers added 7,920 new listings to inventory during February, a 6.8% improvement from a year ago, and a gain of more than 33% from January’s total of 5,927. Pent-up demand led to big month-over-month gains in pending sales and more shrinkage in overall supply.

“Buyers in King County are jumping for joy over the nearly 40% increase in new listings that we saw in February compared to January (2,901 vs. 2,083),” noted Matthew Gardner, chief economist at Windermere Real Estate. “No surprise,” he continued, “the result was a 31% increase in pending home sales month-over-month, as well.”

Sellers system-wide accepted 7,697 offers on their homes during February, about the same number (7,724) as a year ago, but a 21% jump from January’s volume of pending sales (6,350). Fourteen of the 26 counties in the MLS report had fewer pending sales than a year ago, a likely consequence of tight supply.

Closed sales also reflected 2022’s slower start compared to a year ago. Member-brokers logged 5,147 closed sales during February, a drop of 665 units (down 11.4%) from a year ago. This year’s volume of completed transactions through February is lagging year-ago totals by 12.6%.

Prices continue to trend upward. The area-wide median price for last month’s closed sales of single family homes and condominiums was $585,000, up 14.3% from a year ago, and up 5.4% from January.

Prices for single family homes (excluding condos) rose at a smaller rate, about 12.2%, increasing from $535,000 a year ago to $600,000 last month. Commenting on the increases, Gardner noted some areas were “clearly very popular” with buyers of single family homes because they had especially strong growth. He singled out West Bellevue, West Lake Sammamish, and Redmond on the Eastside, and in Seattle named Ballard, Magnolia, and Queen Anne.

Condo prices soared nearly 23% area-wide, with a YOY jump from $399,000 to $490,250.

Sellers are fueling some of the demand, according to Deely. “Every seller is generally also a buyer and many placed their real estate dreams on hold during the pandemic. They are now ready to take action and explore their next chapter.”

Industry analysts believe conditions will probably continue to favor sellers.

At the end of February, there were 3,461 total active listings in the MLS database, up from January’s total of 3,092 for a gain of nearly 12%, but down about 19.5% from twelve months ago when inventory included 4,298 listings of single family homes and condominiums.

Measured by months of supply, there was about 19 days (0.67 months) at the end of February. That was the highest level since September 2021 when the MLS reported 0.75 months of supply.

“As we head into spring, it’s time for buyers to reenergize and go through a renewal of spirit as they begin or continue their home search,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Buyers will be pleased to hear that more listings are on the way! Historically, the number of new listings bumps up in March and April, and then goes up even higher in May and June.”

Until inventory grows, Scott expects “heightened focus on each new listing coming on the market.”

“It seems even homes that wash up on the beach are getting multiple offers,” said Dick Beeson managing broker at RE/MAX Northwest Realtors, “The sound of interest rate increases is ever nearer, and when coupled with the enormous price increases for homes around Puget Sound, the wringing of buyers’ hands will surely be a sad tale of 2022. There’s no relief in sight.”

A comparison of counties around Puget Sound shows positive growth in inventory and closed sales in Kitsap County. In King, Pierce and Snohomish counties both listings and closed sales trended downward.

“Market activity is up across the board in Kitsap,” stated Frank Wilson, branch managing broker and Kitsap regional manager at John L. Scott Real Estate. “We have more new listings (up 30.6%), more total active listings (up 36%), and more pending transactions (up 10%) compared to last year’s numbers. Also, home prices continue to rise (up nearly 23%). This is concerning because we are just starting into the spring market.”

Wilson reported increases in customer calls to the office and more people at open houses, remarking, “We have not even gotten out our garden gloves for spring.” He expects the year will be “a real squeeze for home affordability in Kitsap County,” citing rising prices and projected increases in interest rates. “This will just make it harder for buyers who are already struggling to have an offer accepted.” He anticipates seeing multiple offers on homes.

Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, reported a continuation of the multiple offer market in February. “There were instances when our brokers made 10 or more offers for buyers before reaching successful purchase agreements.”

O’Leyar said one recent would-be purchaser made a strong offer $250,000 over the asking price of $2 million on a new listing in the Tangletown/Wallingford neighborhood, only to be beat out by several hundred thousand dollars. “This is not uncommon,” he said, adding “The extreme dynamics of the market underscore the importance of buyers getting assistance from a knowledgeable, patient, persistent broker.”

Commenting on rising prices and low inventory, broker Dean Rebhuhn, owner of Village Homes and Properties, said multiple offers are the norm. “I’ve been asked many times if the housing market is going to have a correction.” He believes it will not, citing five factors: 

  • High job growth and high pay.
  • Remote hybrid work models.
  • Consumer willingness to drive to locations along I-90, I-5, I-405.
  • Investor interest in residential rentals, plus political pushback on short-term rentals.
  • Increasing demand for second homes located in high amenity communities within driving distance of Puget Sound, and particularly the Eastside.

Whether higher gasoline prices will have an impact on the market remains to be seen, suggested O’Leyar. “In the pre-pandemic past, increasing gas prices tended to create higher demand for shorter commute locations closer to the center of Seattle’s business district. This could cause a slight shift in the extreme demand for listings between King and Snohomish counties.”

Other unknowns are the impacts of rising mortgage rates and geopolitical tensions.

“Something on everyone’s minds is how the invasion of Ukraine might affect the housing market here at home,” said Gardner. “While these events have helped push mortgage rates lower, it doesn’t mean they are on their way back to the historic lows of a year ago. In fact, that’s almost guaranteed not to happen.”

According to Freddie Mac, the average rate on a 30-year, fixed-rate mortgage was 3.76% on March 3, down from two weeks prior when it was 3.92%, the highest rate since May 2019. A year ago, the average rate was 2.81%.

The Mortgage Bankers Association forecasts average rates will be slightly above 4 percent by the end of 2022. Mortgage data provider Black Knight estimates the average borrower with a 20% down payment would pay about $100 more a month on a new mortgage than one taken out at the end of last year due to rising rates and higher home prices.

Danielle Hale, the chief economist for Realtor.com, said the pace of home price increases may slow from double-digit to single-digit percentages this year. She also expects conditions will likely continue to favor sellers.

Freddie Mac believes short-term mortgage rates will stay low but are likely to increase in the coming months. The mortgage finance giant said geopolitical tensions caused U.S. Treasury yields to recede last week as investors “moved to the safety of bonds.” Along with inflationary pressures, Freddie Mac points to “the cascading impacts of the war in Ukraine” for creating market uncertainty.

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.

 

Northwest MLS brokers see signs of busy spring market despite slow January

Latest Press Release – January Statistical Data

KIRKLAND, Washington (February 7, 2022) – A frigid first week of January, surges in coronavirus cases, and depleted inventory were among factors brokers from Northwest Multiple Listing Service cited for last month’s slower than year-ago sales.

In newly released statistics for January, the MLS reported 6,350 pending sales of single family homes and condominiums during January, about 1,000 fewer the same month a year ago for a drop of 14%. The year-over-year (YOY) number of closed sales also fell, dropping from 5,896 completed transactions to 5,085 for a decline of nearly 13.8%).

“When there’s uncertainty, the default position for most sellers is to stay put, do nothing, and hunker down,” suggested Mike Larson, managing broker at Compass Tacoma. He said many things are contributing to sellers’ reluctance to put their homes on the market, “most notably, COVID, inflation, the economy, the holidays, and finding a replacement property. Security and certainty are more important than cashing in on record amounts of equity.”

Broker-members added 5,927 new listings during January, nearly 1,000 fewer than the same month a year ago, but an improvement on December’s volume of 4,617. Only five counties reported YOY gains in new listings.

Last month’s pending sales outgained new listings to further shrink inventory. At month end the selection included a meager 3,092 active listings, down more than 30% from a year ago. There is about 2.5 weeks of supply (0.61 months) across the 26 counties served by Northwest MLS.

King County had the steepest drop in active listings, shrinking nearly 59% from a year ago, followed by Jefferson County, down 40%, and Snohomish County, down more than 35%.

A comparison of counties in the listing service report shows only about half of them have more than one month of supply, and these areas tend to be in more rural areas. King, Pierce, and Snohomish counties all have less than two weeks of supply. Kitsap County is slightly better with 0.58 months.

“The year started off with more of a whimper than a boom thanks to listing inventory in King, Pierce, and Snohomish counties being lower than any January on record,” observed Matthew Gardner, chief economist at Windermere Real Estate.

“The market remains virtually sold out, and there is a significant backlog of buyers looking for a home to purchase,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. With higher mortgage rates expected, he said buyers are more anxious to get a home, even during the inventory shortage.

“Given the market conditions, nearly all homes are going under contract within a week of being listed, and multiple offers are commonplace in price ranges where there is a shortage of available homes for sale,” added Scott.

Meredith Hansen, founder and operating principal at Keller Williams Greater Seattle and a member of the Northwest MLS board of directors, agreed saying, “The market in Seattle continues to be extremely competitive with multiple offers and prices escalating. The imminent rise in interest rates has buyers scrambling to find properties to buy.”

Larson, also a director at NWMLS, emphasized rates are still historically low. Expected increases “may be spooking some buyers, but it’s also getting others off the fence.”

“Strong activity along the I-5 and I-90 corridors outside of the Seattle area continues with strong double-digit price increases being recorded,” noted James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects strong demand and a search for value outside of Seattle will continue to push up values.

Last month’s prices were up nearly 14.9% from a year ago, climbing from $483,250 to $555,000. Five counties reported price gains of 30% or more, led by Okanogan at 46.3%. Other counties with price increases of at least 30% were Chelan, Kittitas, Pacific, and San Juan.

Condominium prices surged nearly 21% area-wide, rising from $359,950 to $435,000, while the number of new listings, active listings, pending sales and closed sales all declined from the same month last year.

Young said the combined price trend and activity levels suggest suburban growth should continue for a while longer as households seek lower costs and a more home-based lifestyle.

“The market is crazy,” exclaimed Dick Beeson, managing broker at RE/MAX Northwest Realtors. “We’ve been experiencing huge increases in median sales prices and a continued lowering of the number of days homes are on the market. The massive reduction in inventory has led to fewer pending sales and super-charged prices. Many properties have literally gained 40%-to-50% appreciation in just the last two years or so – a rate of increase no one can comfortably live with.”

Kitsap County was one of the few areas with YOY gains in new listings (up 22.3%) and only single-digit changes in active listings (-6.4%), pending sales (+8.4%) and closed sales (-2.14%). However, like nearly all the counties in the MLS report, prices jumped by double digits (up 20.8%).

“New construction in Kitsap County is roaring ahead to meet buyer and renter demands,” stated NWMLS director Frank Leach, broker/owner at RE/MAX Platinum Services. “We are seeing unprecedented construction in all areas of the county in both the residential and commercial arenas. There are more than 670 rental units currently being built in Bremerton and Silverdale alone and building permit activity at the county is at an all-time high at 3,321 units.”

Leach said available inventory is being snatched up quickly in a rush to take advantage of low interest rates. He also said they are not expecting a flood of inventory coming from foreclosures in part because of the 12%-to-18% increase in equity over the last 12 months. “Forbearance across the U.S. is below 800,000 units, down from over 4.5 million in 2020,” he noted, citing several sources.

Despite the slow start in sales and persistent shortages of inventory, the MLS brokers expect robust activity during 2022.

“The market dipped slightly in January, mainly due to weather and concerns over the latest pandemic variant, but the general feeling is that it’s going to be a good year,” said John Deely, executive vice president of operations at Coldwell Banker Bain. Commenting on last year’s record-setting volume of closings, he believes “rate increases during 2022 combined with the sunset of the pandemic will bring more sellers to the market.”

“People waiting longer to sell their home should not expect the same steep price increases we were seeing in 2021,” Deely said, adding, “An influx of people coming to the market and a decrease in the buyer pool due to interest rates going up should help to keep prices level.”

Dean Rebhuhn, owner of Village Homes and Properties, said rising mortgage rates and the addition of inventory as spring arrives should bring more opportunities for buyers. “I see no buyer hesitation caused by rising interest rates,” he commented, adding, “Many buyers are considering homes farther north, south and east with more affordable prices and more selection. Hybrid work-from-home conditions are allowing more flexibility for buyers. Job demand and lifestyle choices continue to drive sales.”

Also commenting on the outlook for 2022 was economist Gardner. “One of the biggest questions for 2022 is how the market will be further impacted by the work-from-home paradigm given that many companies have postponed their long-term WFH plans. This is likely holding back sellers during a time when we desperately need additional inventory, as well as buyers who are concerned about rising mortgage rates.”

Gardner said he expects more sellers will list their homes and more buyers will start their searches once they know how often they need to commute to work, and this may lead to a busier spring market than expected.

Beeson believes there will not be any substantive market changes, come spring, “except for higher interest rates. That may be. But someone please explain that to a desperate buyer willing to pay more, accept less, and be glad they did.”

Leach is optimistic of upticks in activity, dismissing suggestions of a “bubble,” saying “We don’t see that happening in Kitsap or in the Pacific Northwest.” He also advises against postponing purchasing. “If you think you are saving money by waiting, you should run the numbers. Economists and pundits in real estate all say buy now. The anticipated increase in equity across the next two-to-four years will be astonishing.”

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.

 

 

 

Northwest MLS brokers end 2021 with depleted inventory, rising prices, weather disruptions

Latest Press Release – December Statistical Data

KIRKLAND, Washington (January 6, 2022) – Severe shortages of inventory, record-low temperatures and snow restrained December housing activity around Washington state beyond expected seasonal slowdowns, according to a new report from Northwest Multiple Listing Service.

Summary statistics from the MLS show the volume of new listings added area-wide dropped 12.3% during December compared with the same month a year earlier. Year-over-year inventory, pending sales, and closed sales all fell by double digits. Only prices rose – up 17.4% overall for homes and condominiums that sold across the 26 counties in the report.

The median price for last month’s closed sales was $572,900, up from twelve months ago when it was $488,000. Prices for single family homes (excluding condos) surged nearly 17.5%, from $502,247 to $590,000. King County was one of only three counties where the single family price change was under 10%; prices there rose from $740,000 to $810,000. A dozen counties had price jumps of 20% or more.

Condo prices jumped 17.6%, from $370,000 to $435,000. San Juan County reported the highest median price for last month’s condo sales ($642,500), followed by Snohomish County ($500,000).

Northwest MLS brokers reported 8,017 closed sales last month, a drop of nearly 1,000 transactions from the year-ago total of 9,008. Eleven counties had double-digit declines, including King (down 16.3%) and Snohomish (down 17.6%). October was the only other month during 2021 when year-over-year sales fell.

Commenting on the slowdown in sales, Dick Beeson, managing broker at RE/MAX Northwest Realtors, said, “That’s to be expected considering inventory in the fourth quarter was down sharply from last year. You can’t sell what isn’t there.”

Despite hurdles (including pandemic-related), Northwest MLS brokers tallied 107,354 closed sales during 2021, an increase 12.1% from the previous year when they notched 95,760 closings.

(Please note: The NWMLS Annual Highlights Report with comprehensive summaries of activity will be released on Jan. 19.)

John Deely, executive vice president of operations at Coldwell Banker Bain, noted median home prices in 2021 tended to rise each month in most counties served by NWMLS, “but December came in flat,” which he said signals a leveling off in appreciation while demand is still high. “The Fed (Federal Reserve System) signaling interest rate increases has caused some sellers to be somewhat more aggressive in getting their homes sold,” he added.

“Condos continue to be swarmed by first-time buyers,” reported Deely, a member of the Northwest MLS board of directors. “We aren’t seeing as many relocation buyers, a result of remote work during COVID. As companies start to make decisions about working in the office, we will start to see that market pick up.”

Even though the number of pending sales, at 5,850 overall, declined more than 15% from a year ago, they far outstripped the number of new listings (4,617), contributing to the meager month end inventory. In fact, a search of NWMLS records going back a decade indicates the 3,240 active listings of homes and condos area-wide is the first time the selection has dipped below 4,000 listings. A year ago, buyers could choose from 4,739 active listings while in November there were 4,621 properties in the MLS database.

Stated another way, there was less than two weeks of supply (0.40) at month end. Inventory was even more sparse in seven counties, with Snohomish having the most acute shortage at 0.20 months. Other counties that fell below 0.40 months were Clark (0.26), King (0.27), Island (0.29), Pierce (0.32), Thurston (0.31) and Kitsap (0.38).

“Smart buyers are making their best offers using pre-inspections, family support, bridge loans, leveraging 401(k) accounts, and other resources,” according to Dean Rebhuhn at Village Homes and Properties. Mortgage interest rates are the wild card, he believes. “How much will they rise and what effect will they have on the market? With current rates in the low 3% range and a forecast of three rate hikes this year, probably not much,” he suggested.

“Last year was quite a year for the housing market,” stated Matthew Gardner, chief economist at Windermere Real Estate. “Even in the face of historically low inventory levels, home sales in the Central Puget Sound area still managed to rise to levels not seen since 2006 and, notably, Pierce and Kitsap counties had more sales than ever before.

“Historically low mortgage rates and the ongoing pandemic led to a flood of buyers in a market with relatively few homes for sale. This caused prices to rise by double digits throughout the Puget Sound area,” Gardner remarked, adding he expects the pace of price growth to slow significantly in the coming year due to rising mortgage rates and affordability constraints.

More supply would be beneficial, suggested Gardner. “The Puget Sound region is in dire need of more housing units which would function to slow price growth of the area’s existing housing. However, costs continue to limit building activity, and that is unlikely to change significantly this year.”

Frank Leach, broker/owner at RE/MAX Platinum Services, said builders in Kitsap County are putting up new communities of single family homes and condominiums “as fast as they can. Buyers are looking for relief in 2022, hoping inventory will become available.” For now, he described available inventory as “drastically low.” Buyer pressure is bidding up values, and “there is an inordinate amount of institutional cash buyers in our market.”

“Sellers are frustrated trying to find replacement properties. We are seeing more contingent offers being accepted, allowing sellers some breathing room to select their next home and sell their existing home.” Leach said this trend, coupled with new lending strategies “allow sellers to address the market as though they are cash buyers with conventional 20% down programs.”

“We continue to see an influx of buyers from markets east of Kitsap County looking to telecommute from or completely relocate to our county,” Leach commented, adding “the overall outlook for Kitsap County is excellent with billions of new money coming from government and private sector projects.”

J. Lennox Scott, chairman and CEO of John L. Scott, described the current market as “truly historical,” noting 2021 was one of the best years on record for pending sales in the Puget Sound region. “The week of snow and ice that hit Puget Sound in late December delayed the big kickoff to the 2022 housing market by about a week. This held back buyers who have been waiting patiently for each new listing to hit the market.”

The year-end storms did not dampen Scott’s optimism for 2022. “Fresh on the heels of the holiday season and snowy weather, the local market will see continued strong buyer demand, multiple offers, and premium pricing. This year is poised to be another great year in residential real estate,” he exclaimed.

Rebhuhn agreed. “We will experience strong demand and very active home sales in 2022,” he predicts, but added “and maybe a slight dip in price increases.”

Beeson expects 2022 will be similar to last year, with both opportunities and challenges. “The buying and selling process will not become any easier,” he stated.

“Once again we start the real estate dance where buyers are chasing sellers. Sellers are chasing their replacement home, and brokers are chasing those elusive listings.” Like many of his colleagues, Beeson expects interest rates to climb. “Prices will also rise, albeit not as quickly as during 2021.”

Economist Gardner predicts single family home prices will rise by “high single digits” in King County, and by more than 10% in Snohomish and Pierce counties.

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.