No Summer Slowdown Expected
Brokers Report Brisk Activity
NWMLS, KIRKLAND, WA, July 3, 2014 - Listing activity perked up during June, but strong job growth in the Seattle/King County region has brokers predicting brisk sales with competitive bidding throughout the summer.
Figures just released by Northwest Multiple Listing Service for June activity show gains from a year ago on several key indicators, including inventory, pending sales, closed sales, and prices:
- Brokers added 735 more new listings during June than during the same month a year ago, an increase of 6.8 percent;
- Inventory (total active listings) rose 7.5 percent compared to twelve months ago;
- Pending sales (mutually accepted offers) are up about 4.5 percent year-over-year;
- Closed sales rose 3.3 percent from a year ago;
- Prices for sales of single family homes and condominiums climbed 6.9 percent from same period last year, reaching the highest level since August 2008.
"We are still suffering from low inventory in parts of Snohomish County, and we're still seeing multiple offers on the majority of new listings," reported Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain and a director with Northwest MLS. She described the market as "strange," adding, "We are not feeling or sensing the onset of a typical summer slowdown."
Even though figures for Snohomish County show sizable gains in the number of listings in many areas, Haines said good quality listings in the most desirable areas are "greatly needed as buyers, sellers, and agents all long for a more balanced market." New listings that are of high quality and priced correctly are attracting multiple offers, she reported.
Supply, as measured by the ratio between listings and sales, remains tight across many of the 21 counties in the Northwest MLS system. King County shows only 1.8 months of inventory, with Snohomish slightly better with about 2.8 months of supply. Area-wide, there is 3.35 months of inventory. Many industry experts consider 4-to-6 months to be the barometer for a balanced market.
Northwest MLS chairman Darin Stenvers said "not all sellers are feeling movement in their markets," noting in some northern parts of the state the summer selling season got a late start. In Whatcom County, where his office is located, inventory rose about 4.5 percent in June compared to a year ago, while pending sales jumped 17 percent. Prices are up more than 9 percent in that county.
Stenvers, the office managing broker at John L. Scott in Bellingham, said buyers would be "well advised" to monitor interest rates, since they have a tendency to move up as summer winds down. "This is a very good time for real estate investing with confidence and value," he stated.
New home starts and a higher demand for employees will help keep the outlook optimistic, Stenvers believes - a view shared by other brokers.
John Deely, principal managing broker at Coldwell Banker Bain in Seattle, expects the brisk market to continue into fall, citing low interest rates, increasing prices and inventory, and high demand as drivers of the positive activity.
"Brokers in the Seattle market are keeping busy as multiple offers and cash buyers dominate new, well priced listings in most markets," commented Deely, a director with Northwest MLS. The market for homes priced at $1 million and up around Seattle is experiencing pending sales volume at levels not seen since 2007, according to his analysis.
Haines also commented on all-cash activity, saying investors paying all cash or with very large down payments are "still major players."
Deely has also noticed a "marked increase in the number of contingent offers being written and accepted." He spoke of one listing that drew four offers, with two of them contingent on the sale of the buyer's home, and the other two cash. The seller elected to accept one of the contingent offers because of more favorable terms, as well as because the buyers already lived in the neighborhood and the seller was confident that neighbor's home would sell quickly due to activity in the surrounding area.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, shares the optimism. Pointing to recent reports on the addition of 14,400 jobs in the tri-county area (more than any two month period since the beginning of 2007), he expects a "red hot summer selling season." Scott also credits lower interest rates with fueling what he described as a "mini power surge of sales."
"Close to the job centers we have a severe shortage of homes for sale," Scott said, adding "Above the one million dollar price point we are also experiencing very strong sales activity with a shortage of supply."
Brokers reported 9,909 pending sales during June, outgaining a year ago by 425 transactions for an increase of nearly 4.5 percent. Ten counties reported double-digit increases. Last month's pending sales, although up from 12 months ago, declined compared to May (down about 4.5 percent).
Low appraisals are still a concern as a potential deal-killer on some pending sales, Haines reported. "We are experiencing an increase in low appraisals," she stated, explaining sometimes the difference between the sale price and appraised price can be as little as $1,500. "In most low appraisal situations, the buyers are willing and able to make up the difference by increasing their down payment."
June's closed sales (completed transactions) climbed about 3.3 percent from a year ago. Brokers reported 7,558 closings during June, surpassing May's mark by 371 transactions for a gain of nearly 5.2 percent.
The median price system-wide was just under $300,000 ($299,335), which represents an increase of more than 6.9 percent from a year ago. The last time the median price topped $300,000 for the overall area was August 2008 when it was $302,500.
King County continues to report the highest median price for single family homes and condos (combined) at $410,000. That's up 7 percent from a year ago. For single family homes (excluding condos) the county-wide price jumped more than 6 percent compared to a year ago, rising from $427,500 to $453,500.
Deely said the steady increase in prices appears to be incentivizing otherwise dormant sellers to make their move to buy and sell.
Commenting on the competition between buyers, Stenvers encouraged buyers to take advantage of technology. "Buyers that want fast, accurate data should work with a real estate professional to have a home search set up so results can be emailed directly to them," he suggested. "This will allow them first shot at all the new listings and reduce the chance of missing hot new inventory."
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.
Statistical Summary by Counties: Market Activity Summary - June 2014
|Single Fam. Homes + Condos||LISTINGS||PENDING |
|CLOSED SALES||*Months of Inventory|
|New Listings||Total Active||# Pending Sales||# Closings||Avg Price||Median Price||This month||Same mo., year ago|
* Months of inventory are calculated using active listings divided by closed sales.
4-county Puget Sound Region Pending Sales (SFH + Condo combined)
(totals include King, Snohomish, Pierce & Kitsap counties)