“October will be the best month for selection and availability until late February,” proclaimed J. Lennox Scott when commenting on the latest statistics from Northwest Multiple Listing Service.
MLS figures for September show inventory reached 1.7 months of supply at the end of the month, matching the year-to-date high in February. That level is still well below the 4-to-6 months of supply that many industry analysts use as an indicator of a balanced market.
Scott said buyer intensity for new listings is higher today than a year ago. “We continue to have very strong buyer demand as the typical seasonal slowdown begins for new listings.” Other industry leaders agreed seasonal adjustments are underway.
Member-brokers in the 23 counties served by Northwest MLS added 10,120 new listings to inventory during September, slightly more than the number reported for the same month a year ago (10,029). At the end of the month there were 15,888 listings of single family homes and condos in the MLS database, a drop of 12.4 percent from a year ago when buyers could choose from 18,136 listings.
“The pressure cooker for the housing market continues as the typical seasonal market comes into play for new listings coming on the market,” stated Scott, the chairman and CEO of John L. Scott. He noted new listings during September and October typically shrink 30 percent – and even more during the winter months – when compared to spring and summer months.
Brokers say strong job growth statewide is fueling demand for housing. Washington has added around 83,000 new jobs from August 2016 through August 2017 (not seasonally adjusted), according to the state Employment Security Department. Like some other months this year, pending sales last month surpassed the number of new listings, putting pressure on prices. Year-over-year median prices for homes and condos surged 12 percent.
Brokers reported 10,348 mutually accepted offers system-wide last month, about the same number as a year ago (10,370), but last month’s total was the fewest pending sales since February (8,209). For the four- county Puget Sound region, members notched 7,441 pending sales. That’s the third best September for this area in the past 18 years, topped only by last year’s total of 7,729 and the total for August 2005 when 7,561 pending sales occurred. Buyers may be emerging on news of slightly improving supply. “For only the second time this year the available inventory was over the one-month mark in King County,” said John Deely. “A notable number of new listings went past their offer review date, and more listings had price reductions.”
Deely, the principal managing broker at Coldwell Banker Bain, also observed a decrease in the overall number of buyers participating in multiple offer situations. “During spring and summer it was common to see numerous offers on individual listings. Now, it’s more common to see a few in multiple offer situations,” Deely remarked. “This change is a predictable seasonal adjustment as buyers and sellers enjoy the warm weather.” Nevertheless, Deely said the market “has the feel of a slightly slower pace.”
MLS director George Moorhead also commented on seasonality. “The seasonal summer market was felt stronger this year than what we have experienced in the last three years. Market indicators are showing we are plateauing into a healthier balanced market.”
Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor, described the market as “a wonderful adventure,” saying the scarce inventory “is like a dog at the door in winter. It refuses to go away till it’s fed. More houses for sale, please.” For Northwest home buyers, though, Beeson expects that won’t happen anytime soon.
“The entire region is off the charts,” remarked Mike Grady, president and COO of Coldwell Banker Bain, referencing the latest numbers from the Case-Shiller home price index. It shows Seattle area home prices have spiked 13.5 percent in the past year, well above second place Portland with its 7.6 percent average and more than twice the national average of 5.9 percent.
Northwest MLS figures show area-wide median prices are up more than 12 percent from a year ago, rising from $340,000 to $381,000. September’s figure is slightly lower than the peak reached in July when the median price across all counties was $385,000.
A snapshot of the luxury segment of homes priced at $1 million-plus further illustrates the strength of the Greater Seattle market:
Excluding condos, the system-wide median price for September’s single family sales was $390,000. A look at the 23 counties in the report shows a wide range of median prices, from the lowest of $124,000 in Ferry County to the highest, at $625,000, in King County.
September’s median price for single family homes and condos in King County, at $565,000, reflects a jump of more than 14 percent from a year ago, but it is a $20,000 decline from August (down about 3.5 percent).
“While prices for single family homes and condos were up more than 14 percent annually in King County, it’s hard to ignore the $20,000 price drop between August and September,” said OB Jacobi, president of Windermere Real Estate. “But if you look at the historic data more closely, it shows that
prices have also dropped between August and September in five of the past six years, which points to a seasonal pattern rather than a long-term trend that we need to be concerned about.”
Statistics are helpful for some uses, but may not always tell a complete story, cautioned one broker. “In Snohomish County, we saw increases in the luxury (higher end) segment during the summer months, which of course raised both the median and average sales prices,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynnwood. “Now we’re seeing a decrease in those types of sales with more affordable homes becoming more dominant.”
Haines also noted some reports encompass large geographic areas, such as Seattle, Everett, Tacoma and Bellevue. “When you drill down and localize the data, the picture may look quite different,” she explained.
In Snohomish County, for example, Northwest MLS tracks statistics for six sub-areas within that county. Last month’s median price for countywide sales of single family homes and condos was $430,000, but it ranged from $352,000 in the northwest segment of the county to $606,250 in the southeast portion. Year over year price changes ranged from an increase of just over 6 percent to more than 19 percent.
Noting King, Pierce and Snohomish counties all reported year-over-year price hikes of more than 14 percent, Grady said “This leap to new heights is based on high demand and low supply.” He noted neighboring counties are feeling the pinch, with several of them reporting double-digit drops in supply.
“All indications are that sales price increases in these neighboring counties are likely to accelerate at an even faster rate,” suggested Grady. In some of these counties, the median selling price is about half the price in King County. Faced with limited inventory and skyrocketing prices, some buyers are forced to broaden their search to these neighboring counties, Grady commented, adding he expects market forces will continue to fuel appreciation in housing into 2018 and beyond.
Moorhead, the designated broker and owner at Bentley Properties, said some renters who have been holding off are now becoming more active in hopes of taking advantage of longer market times and homes new to the market not receiving expected offers within the offer review date.
Despite some signs of a slowing market Moorhead said many renters remain frustrated, pointing to the $125,000 hike in King County’s median price in just two years. “Some renters say it’s like chasing a snowball down a hill that just keeps out of reach and continues to get larger and larger,” he remarked.
Builders are also frustrated, according to Moorhead. “We are hearing complaints and requests from builders to expand Growth Management Area guidelines. The massive shortage of developable land makes it more difficult to create affordable housing,” he explained, adding, “It’s becoming commonplace for new construction prices in Seattle and the Eastside to top a million dollars.”
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.