Pent-up demand triggering record pace of home sales around Western Washington
Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.
Buyer confidence and buyer ability to purchase are fueling activity, suggested Ken Anderson, the managing broker and owner of Coldwell Banker Evergreen Olympia Realty. "Long building pent-up demand is being unleashed," he commented.
MLS members reported an 18.7 percent year-over-year increase in pending sales, with the volume of mutually accepted offers rising from 9,590 transactions to 11,384. For the four-county Puget Sound region members logged 8,671 pending sales to top the 8,000 mark for only the second time in the past 16 years.
Closed sales and prices also accelerated, according to Northwest MLS statistics. Across the 23 counties covered by the report there were 7,696 closed sales. That total represents a 24.3 percent increase from the year-ago volume of 6,190 closings. Within the four county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, "That is super amazing."
"We are still very clearly in the midst of a seller's market and unless we see a significant increase in listings, it will remain that way for the foreseeable future," remarked OB Jacobi, president of Windermere Real Estate. Jacobi and other brokers reiterated the dire need for listings.
Members added 11,495 new listings to inventory during April, but brisk sales kept supply tight and well below the level of a year ago. At the end of April, the MLS reported 18,132 listings of single family homes and condominiums in its database, a drop of more than 15 percent from the year-ago total of 21,390.
Compared to March, inventory at the end of April improved by 6.6 percent, but pending sales jumped 13.7 percent from the previous month.
"We're in desperate need of inventory so I hope to see an increase in listings as we move further into the late spring/early summer," stated Jacobi.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted the record sales activity is lowering the months of supply of inventory and continuing the upward movement of pricing.
Northwest MLS figures show less than 2.4 months of supply at the end of April, down from the March figure of 2.5 months and down from a year ago when there was about 3.5 months of supply. Inventory is especially tight in King County, with 1.3 months of supply, and Snohomish County, with about 1.5 months. Many industry analysts use a range of four-to-six months as an indicator of a balanced market.
Prices on last month's closed sales were up 12.4 percent. The median price for April's sales of single family homes and condos was $309,000, which compares to the year-ago price of $275,000. For single family homes only (excluding condos), the median price rose from $287,500 to $320,000 for a gain of 11.3 percent. Condo prices jumped nearly 13.8 percent system-wide.
In King County, where homes fetch the highest prices, the median price of last month's sales of single family homes was $480,000. That reflects a gain of 11.5 percent from the year ago price of $430,500. King County condo prices increased about 8.8 percent from a year ago, rising from $250,000 to $272,000.
"What's available and that looks at least 'pretty good' is selling," according to MLS director Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. Commenting on the latest MLS statistics, he said, "What we have in the Greater Puget Sound real estate market is too many buyers chasing too few homes."
Beeson cautioned buyers against "playing games" with sellers. "The new normal for buyers is that the quest for the perfect home may have to wait," suggested Beeson. "You should buy now, get in the mix, buy a home and build equity for a future decision," he advised. "Don't wait to pay more for the same home next year."
Brokers do not appear to be worried about a housing bubble.
"Some are talking about the potential for another housing bubble given the lack of homes for sale and the bullishness of buyers in bidding up properties," acknowledged Jacobi. "For now," he said, "I believe there are sufficient safeguards in place to keep this from happening."
Anderson agreed. "With pending home sales in Thurston County at record levels I am often asked if we are repeating the problems the last run-up caused," he stated, adding, "There are two important differences in this market. There is not the overbuilding we saw before, and the buyers are truly qualified for today's mortgages. Both facts suggest we won't have a problem with the oversupply that contributed to the recent downturn. This time the market improvement is built on solid footings."
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 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.
Statistical Summary By Counties
Market Activity Summary and 4-County Puget Sound Region Pending Sales (PDF)