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May 2014

NWMLS reports mixed results for March

Suggest "only lack of inventory is holding back sales"

By NWREporter

May 2014

KIRKLAND, WA, April 3, 2014 - Northwest Multiple Listing Service brokers reported rising prices on fewer sales during March compared to a year ago, citing inventory shortages as the main reason.

Members of the MLS reported 9,183 pending sales (mutually accepted offers) during the month, about 300 fewer than the same period a year ago for a 3.2 percent drop. Compared to February, pending sales surged 26.7 percent in March, or by 1,936 transactions.

"The only thing holding back sales is the lack of inventory," said John Deely, a member of the Northwest MLS board of directors. He said one recent listing priced at a fair market value drew more than 40 offers. "The depth of buyer demand appears to have no bottom in the most popular price ranges," added Deely, the principal managing broker at Coldwell Banker Bain in Seattle.

Closed sales were about the same as twelve months ago - 5,753 completed transactions last month, which compares to the year-ago total of 5,745 closed sales.

The median price on last month's sales of single family homes and condominiums that sold across the 21 counties in the MLS report increased  6 percent, rising from the year-ago figure of $258,500 to last month's price of $274,000.

Adequate supply to meet demand is a continuing concern, according to Northwest MLS representatives who commented on the latest numbers. Many industry leaders expect the imbalance to persist. 

"Once again we entered the year with a low inventory of homes for sale, and we believe the shortage will persist through this year and into 2015 in price ranges where 90 percent of sales activity is occurring," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

MLS members added 9,598 new listings to the database during March, slightly more than a year ago when they added 9,332 new listings. While last month's additions were about 33 percent more than February when 7,234 new listings were tallied, brisk sales meant supply remained low.

At month end, the Northwest MLS reported 19,736 active listings of single family homes and condos across its service area. That's up about 6.7 percent from twelve months ago.

The MLS said there is about 3.6 months of supply, which is down from the end of February when the service reported about 4.6 months of supply. King County has only about 1.8 months of supply, while Snohomish County was slighter better with 2.2 months of supply.

In general, industry analysts say four-to-six months is the supply needed for a balanced market.  "We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers," stated Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors┬«.

"There are many reasons potential sellers should consider selling now," said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. There is less competition now at the beginning of the spring selling season (usually the busiest time of the year) and interest rates are still very low but will likely rise, he noted.

"Now is a great time for move up sellers/buyers who can sell their home quickly and secure another at today's prices and today's lower interest rates," Gain suggested, emphasizing, "Buying a home today is going to prove to be a smart investment in the long run."

Commenting on March activity, OB Jacobi, president of Windermere Real Estate, said he expects market conditions of low inventory, strong competition among buyers, steadily rising prices - and rising rents - will continue in the foreseeable future. "Rents are on the rise, and when this happens, there's often a shift where people get priced out of the rental market and move into home ownership. This leads to more demand for homes and upward pressure on prices," he stated.

Stiff competition among buyers is creating frequent multiple offer situations, according to Gain. "We have way more people wanting to buy than we have appropriate homes to sell in the right locations and at the right prices," he remarked, adding, "Our market is literally starving for good inventory in desirable neighborhoods."

Gain also said there are more first-time buyers than he has seen in many years. "Many are very well qualified for a mortgage and have more than minimum down payments." As an example, he mentioned a resale townhome listing in West Seattle with an asking price of $439,950. Within a few days of it being listed, it had four offers, all with accelerator clauses. The property sold for $459,950, prompting Gain to say, "It's heartbreaking to have so many good purchasers and not enough good inventory to satisfy their needs."

Not all markets in the MLS service area are experiencing the same pressure. 

"Despite low inventory and falling market time, our prices are still flat overall in Kitsap County," said Frank Wilson, Kitsap district manager and branch managing broker at John L. Scott Real Estate Poulsbo.

Wilson noted distressed properties (short sales or bank acquired homes) are still a factor. "Those home owners are now renting and most will not be able to buy again for a few years as they get the credit ding of a short sale or repossession behind them."

As these sidelined buyers reenter the market, Wilson expects inventory will drop lower and prices will rise. Qualified purchasers who are thinking about buying "should take advantage of the stay of rate increases," he suggested, referring to statements by Federal Reserve Chairwoman Janet Yellen, who made assurances earlier in the week that the Fed intends to keep interest rates low for now.

Pending sales in Kitsap County were about even with a year ago, while 12 of the 21 counties in the MLS system reported declines.

The condominium component ended on a positive note during March, with pending sales rising nearly 7.9 percent from a year ago. MLS members reported 1,345 pending sales, up from the year-ago total of 1,247.

Closed sales rose 2.4 percent, but prices on those sales jumped 14.7 percent. The median sales price on last month's condo sales was $220,000, up from twelve months ago when it was $191,750.

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 summaries follow.

Statistical Summary by Counties: Market Activity Summary - February 2014


Single Fam. Homes + Condos

LISTINGS

PENDING SALES

CLOSED SALES

*Months of Inventory

New Listings

Total Active

# Pending
Sales

# Closings

Avg.
Price

Median Price

This
month

Same mo
year ago

King

3,475

4,191

3,621

2,297

$462,644

$378,000

1.82

1.62

Snohomish

1,378

2,105

1,481

949

$311,314

$295,000

2.22

1.58

Pierce

1,568

3,200

1,563

919

$240,707

$222,950

3.48

2.96

Kitsap

452

1,170

434

259

$287,163

$225,000

4.52

5.23

Mason

141

579

104

68

$161,860

$134,000

8.51

9.83

Skagit

227

644

200

116

$271,083

$232,975

5.55

6.13

Grays Harbor

148

631

119

85

$122,228

$102,000

7.42

14.94

Lewis

122

576

119

72

$139,201

$129,750

8.00

9.98

Cowlitz

152

447

112

74

$157,019

$142,650

6.04

4.24

Grant

130

424

110

59

$150,344

$135,000

7.19

10.25

Thurston

447

1,092

420

246

$230,026

$222,250

4.44

4.00

San Juan

91

312

41

25

$480,060

$400,000

12.48

20.60

Island

214

616

148

93

$287,363

$243,299

6.62

8.29

Kittitas

104

341

57

42

$238,481

$220,000

8.12

8.02

Jefferson

76

333

47

38

$284,347

$264,500

8.76

8.83

Okanogan

59

348

24

18

$151,989

$147,000

19.33

20.24

Whatcom

396

1,216

311

217

$268,731

$239,950

5.60

6.55

Clark

59

149

78

42

$268,791

$245,000

3.55

2.16

Pacific

95

367

42

26

$164,920

$139,000

14.12

13.48

Ferry

2

50

0

1

$82,500

$82,500

50.00

36.00

Clallam

93

352

58

37

$212,228

$182,000

9.51

8.28

Others

169

593

94

70

$216,926

$177,000

8.47

8.36

MLS TOTAL

9,598

19,736

9,183

5,753

$339,466

$274,000

3.43

3.22

* Months of inventory are calculated using closed sales divided by active listings.

4-county Puget Sound Region Pending Sales (SFH + Condo combined)
(totals include King, Snohomish, Pierce & Kitsap counties)

 

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2000

3706

4778

5903

5116

5490

5079

4928

5432

4569

4675

4126

3166

2001

4334

5056

5722

5399

5631

5568

5434

5544

4040

4387

4155

3430

2002

4293

4735

5569

5436

6131

5212

5525

6215

5394

5777

4966

4153

2003

4746

5290

6889

6837

7148

7202

7673

7135

6698

6552

4904

4454

2004

4521

6284

8073

7910

7888

8186

7583

7464

6984

6761

6228

5195

2005

5426

6833

8801

8420

8610

8896

8207

8784

7561

7157

6188

4837

2006

5275

6032

8174

7651

8411

8094

7121

7692

6216

6403

5292

4346

2007

4869

6239

7192

6974

7311

6876

6371

5580

4153

4447

3896

2975

2008

3291

4167

4520

4624

4526

4765

4580

4584

4445

3346

2841

2432

2009

3250

3407

4262

5372

5498

5963

5551

5764

5825

5702

3829

3440

2010

4381

5211

6821

7368

4058

4239

4306

4520

4350

4376

3938

3474

2011

4272

4767

6049

5732

5963

5868

5657

5944

5299

5384

4814

4197

2012

4921

6069

7386

7015

7295

6733

6489

6341

5871

6453

5188

4181

2013

5548

6095

7400

7462

7743

7374

7264

6916

5951

6222

5083

3957

2014

5406

5587

7099