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NWMLS Special News Release – Northwest MLS brokers say real estate activity across Washington remains strong

Northwest MLS brokers say real estate activity across Washington remains strong KIRKLAND, Washington (December 7, 2020) – Some real estate brokers expect the competition for homes to ease somewhat over the holidays, but the latest statistics from Northwest Multiple Listing Service indicate activity is unusually strong heading into December.

“The rush is on for housing,” exclaimed J. Lennox Scott, chairman and CEO at John L. Scott Real Estate.“Real estate activity typically chills as temperatures drop but buyer demand remains high. “With low unsold inventory, all eyes will be on each new home that comes on the market,” he suggested, adding, “This strong demand is present in the more affordable mid-price ranges and extends into high-end homes.”

The Northwest MLS report summarizing November activity shows strong year-over-year (YOY) increases in closed sales (up about 23%) and prices (up 13.8%). Pending sales (mutually accepted offers) rose 7.9% from a year ago, and the year’s saga of depleted inventory continued last month with the number of total listings down nearly 43%.

Windermere Chief Economist Matthew Gardner said even though the housing market has started to show some signs of its traditional winter slowdown “activity remains higher than we would normally see at this time of year. This isn’t too surprising given the fact that the spring selling season was essentially cancelled due to COVID-19.”

Commenting on the low inventory, NWMLS director Meredith Hansen emphasized buyers need to be ready to compete. “Offers that have the best chance of acceptance are from buyers who are pre-approved with a local lender or have cash. Buyers also need to be prepared to have a pre-inspection in order to waive that contingency, and be ready to escalate in price if necessary,” suggested Hansen, the owner/designated broker at Keller Williams Greater Seattle.

Although inventory is limited, a check of the supply by price range shows about 25% of the listings across the 23 counties served by Northwest MLS are priced under $400,000, and a similar number (24.4%) are priced from $400,000 to $600,000. At the high end of the spectrum, about 21% of homes and condominiums in the database have asking prices of $1 million and higher.

“With listings down 42.8%, record low interest rates, and demand very high in outer suburban areas, it seems like the perfect price storm has hit,” suggested James Young, director of the Washington Center for Real Estate Research at the University of Washington.

While overall inventory is down, a comparison of counties shows a wide range of deficits, according to NWMLS data. Perhaps surprisingly, King County’s supply declined “only” about 18% from a year ago, while five counties (Clallam, Clark, Island, Mason, and Snohomish) reported drops of at least 63%. A closer look at the MLS report for all counties shows the shortages are most acute for single family homes (off 50.6% area-wide), while the condo supply improved (up 7.1%).

Thirteen of the 23 counties in the MLS report had less than one month of supply at month end. Overall, there was about three weeks (0.73) of inventory at the end of November, well below the four-to-six months many analysts use as a gauge of a balanced market.

Commenting on the depleted supply, NWMLS director John Deely noted the absorption of standing inventory kept King County’s residential supply (single family homes) at 0.67 months and condo supply at 1.88 months by the end of November. “These are indicators of a solid sellers’ market for both butreflect differences in the demand for these two types of housing,” stated Deely, principal managing broker at Coldwell Banker Bain.

Deely described the real estate market in King County as a “tale of two cities” in November, explaining, “While the residential market continued its trend of record low inventory, the condo market holds record high inventory when looking at the second half of the year, compared to the same periods over the past eight years.”

For many first-time buyers, a condominium is the path to homeownership.

Economist Gardner said there have been some “interesting shifts in the King County condominium market.” While the supply of single family listings across the county remains painfully low, condo listings are 39% higher YOY. “Some are suggesting the increase in condo inventory is COVID-19 induced, but I think it’s too early to call this a trend as condo sales are actually higher than a year ago.”

A check of Northwest MLS statistics shows condo listings system-wide are up more than 7% from a year ago. Closed sales jumped nearly 34% overall and condo prices increased more than 11%.

The MLS map areas encompassing Seattle have about 61% more condo listings than a year ago; the Eastside selection is up 36%. Year-over-year condo prices in Seattle rose about 8.7% while on the Eastside prices on condos that sold in November surged nearly 32%. In South King County, condo prices jumped 24% on shrinking inventory (down nearly 33%).

“The lack of inventory in all price ranges has caused a ‘gold rush’ of buyers,” reported Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor. Noting inventory in Pierce County is at about half of last year’s selection, setting the stage for increasing prices, he said the coronavirus pandemic has not fazed the multitude of house hunters. “It is not deterring determined buyers who know that competing buyers from outside the state are floating into town with a boatload of cash from sales of their previous digs.”

One indicator of brisk activity is the ratio of pending sales to new listings. November’s 8,584 pending sales outgained the month’s new listings, which totaled 6,425 area-wide, continuing a pattern reported during much of the year. New listings surpassed pending sales during only two months (March and April) this year, resulting in the depleted supply of active listings.

Brokers reported 6,505 total active listings at the end of November, down from the year-ago total of 11,366. Supply was at the lowest level since February.

Despite the limited selection, Deely said buyer demand remained strong through November and is more active than in previous years. “Even though open houses were curtailed in mid-November, buyers were making in-person appointments to view properties and many desirable listings had solid activity right up to the offer review date,” he reported.

As Young noted, attractive mortgage rates continued to fuel demand. Rates on a 30-year fixed-rate mortgage fell to their lowest level, at 2.71%, for the 14th time this year, according to Freddie Mac. The record-low rates are allowing people to bid up prices, Young stated.

“November has been one of our busiest months for sales and closings in years,” stated Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties. “Consumer confidence in both real estate and employment have been the benchmarks of our strong real estate market,” he added.

O’Leyar said the COVID-19 crisis has many households investing more time and monetary resources into their primary residences, with many of these homes becoming primary workplaces as well. “I see this as an ongoing trend even as we move out of the COVID crisis into the next phase of the real estate market,” he remarked.

Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville, said the “COVID Effect” is causing purchasers to want more space, both inside and outside. “Working and schooling from home, whether full- or part-time is the new normal,” he commented, noting buyers are finding suburban and rural solutions to these lifestyle changes.

Industry watchers say the in-migration of people from larger, more expensive locales is driven not only by low interest rates, but also by workers freed by the pandemic to work from home long-term, and by a desire for more living space by those who are working remotely, supervising their children’s schooling, or accommodating adult children and aging parents who may have been displaced because of the virus.

Organizers of a forum for the Pacific NorthWest Economic Region (PNWER) said the rise of virtual platforms like Zoom has prompted knowledge workers to flock to new frontiers known as “Zoom towns”– scenic destinations where they can live more cheaply and “achieve a work/life balance which many never dreamed of achieving.” Speakers identified several “Zoom towns” including two areas in Washington, the San Juan Islands and the Methow Valley.

Year-to-date closed sales in San Juan County are up more than 48% compared to the same period last year. In Okanogan County, where the Methow Valley is located, sales are up more than 17%.

“People are seeking space and value since they feel working from home may be a feature of their lives into the future,” commented Young, from the Center for Real Estate Research. He said Chelan County’s price movement is notable, saying it reflects that trend. Prices for sales that closed in that county last month surged 36% from a year ago.

Prices on last month’s 8,875 closed sales were up nearly 14% from a year ago, rising from $434,900 to $495,000. Seventeen of the 23 counties in the report had double-digit price gains compared to a year ago.

Kitsap County is among the areas experiencing double-digit activity in pending sales, closed sales, and prices. “Competition in the fast-moving market is fierce with buyers now using non-refundable earnest money and waiving inspections and financing. This is unprecedented compared to past markets,” stated Frank Leach, broker/owner at RE/MAX Platinum Services.

Leach said new construction in Kitsap County is at an “all-time high with numbers not seen since the ‘90s.” Even so, he said new construction is not keeping pace with demand. “That coupled with people looking to upsize for in-home offices or expanding families, or downsize for retirement, or looking for starter homes makes for an extremely competitive market.” Additionally, he continued, the sub-3% interest rates are converting many renters into homeowners. “This is a pivotal time for many and an opportunity of a lifetime to be a homeowner versus renting.”

NWMLS October 2020 Real Estate Market Report – Anxiety among home buyers “incredibly high” as they vie for unpreceded shortage of homes across much of Washington state

KIRKLAND, Washington (November 5, 2020) – “Finding and buying a home today is more difficult than at any time in the past 40 years of my career,” was how broker Dick Beeson summed up the latest statistics from Northwest Multiple Listing Service.

The Northwest MLS report recapping October activity showed a 40% drop in active listings compared to the same month a year ago, an increase of 16% in pending sales (mutually accepted offers), and a year-over-year (YOY) jump of nearly 30% in closed sales. The median price of single family homes and condominiums that sold last month was $500,000, up 19% from the same period a year ago, according to the MLS summary, which encompasses 23 counties, mostly in Western and Central Washington.

Beeson, the managing broker at REMAX Northwest in Tacoma-Gig Harbor, said he has never seen so many buyers needing to write multiple offers before securing a home. “Interest rates are incredibly low. Inventory is incredibly low. And anxiety is incredibly high among buyers,” he remarked.

“Sellers are struggling, too,” Beeson said. “They worry they’re leaving money on the table by accepting an offer within days of their property coming on the market,” he remarked, adding, “ But brokers know that in this market, if a seller doesn’t receive an offer within a short time after the property is listed, the home is most likely overpriced.”

NWMLS members added 10,428 new listings to the supply during the month, improving on the year-ago total of 8,394 for a gain of 24%. In keeping with the pattern of previous months, October’s 11,039 pending sales surpassed the number of new listings.

“Yet again, the four-county area of King, Snohomish, Pierce, and Kitsap counties broke the record for the month of October for the number of homes going under contract,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. The MLS reported 7,934 pending sales for the four-county region. A comparison of October pending sales dating to 2002 shows the previous high of 7,740 occurred in 2017.

Matthew Gardner, chief economist at Windermere Real Estate, said his biggest concern continues to be the ongoing lack of homes for sale in the Central Puget Sound area. “Keep in mind that a four month supply of homes for sale is a sign of a balanced housing market, but in 14 counties, including the King/Pierce/Snohomish region, there is currently less than one month of supply. This is what is allowing home prices to escalate at double digit rates.”

Whether Boeing’s recent announcement of significant layoffs will affect the housing market is being watched by industry experts.

“I’ve been watching the Snohomish County housing market closely but, as I predicted last month, there has not been any negative fallout so far,” Gardner stated. “In fact,” he continued, “compared to a year ago the number of homes for sale is down and home prices are still rising.”

Gardner said he maintains his position that “any additional inventory that may come to market will likely be absorbed swiftly as we continue to see buyers moving from the more expensive King County market to the relative affordability that Snohomish County offers.”

According to the latest MLS report, the median priced single family home (excluding condos) that sold in Snohomish County last month was about $165,000 (about 28.5%) less than the figure for King County ($579,972 vs. $745,000).

Area-wide the median price for last month’s sales of single family homes (excluding condos) was $515,000, a 20.2% jump from a year ago. For single family homes and condos combined, prices rose by double digits in 21 of the 23 counties in the MLS market area. The highest median prices for homes and condos that sold last month were in San Juan County at $705,000 and in King County at $685,000. Those two counties also had the highest median prices for single family homes (excluding condos). In San Juan County the price was $753,250, while in King County it was $745,000.

Scott noted the luxury market in the Puget Sound region also had record-breaking sales for the month. Last month, NWMLS brokers notched 1,004 sales priced at $1 million or more in the tri-county area of King, Kitsap and Snohomish. That volume easily surpassed the previous high of 553 luxury sales in 2019.

“Supply and demand continue to drive the real estate market,” observed Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville. Record low interest rates have increased purchasing power with mortgage programs such as FHA 3.5% down payments, he noted. Also, he added, “The availability of funds has allowed record refinancing for purchasing second homes and investment properties.”

With home prices increasing, which Rebhuhn believes indicates strong jobs and lifestyle demand, he said it raises questions about whether our market is underpriced. “Highly likely,” he suggested.

Brokers in Kitsap County reported a “huge pent-up demand.” Frank Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, said, “The lack of listings and the extremely low interest rates are two of a growing number of reasons why buyers are looking in our area.” He said they’re beginning to see flight from larger cities as more and more jobs can be done remotely.

Wilson also reported strong traffic at open houses since the Governor announced in early October that limited open houses would be permitted in all counties with strict adherence to occupancy restrictions and other safety guidelines.

“Now that we can hold homes open again, we are seeing anywhere from five to 20 small groups coming through, with showings often resulting in multiple offers,” Wilson stated, adding, “It is good to see both brokers and buyers working together plus the stringent use of masks, social distancing, hand sanitizer and other tools to ensure safe and healthy showings.”

Broker/owner Frank Leach at RE/MAX Platinum Services in Silverdale said Kitsap County continues to enjoy brisk activity, “but not without the frustration of having historically low inventory. Although new listings are on the rise, they are being stripped from the market at a stunning pace. Buyers are bidding up properties as demand stays steady and inventory continues to dwindle.” He attributes part of the surge to buyers east of Kitsap County coming into the market.

Northwest MLS data show Kitsap has only about two weeks of supply (0.57), with inventory plummeting more than 41% from a year ago.

Mike Grady, president and COO at Coldwell Banker Bain, said October reflected a continuation of the summer market well into autumn and puts sellers in a great position. “We’re seeing buyers snapping homes up almost as fast as they’re listed,” he commented, adding, “With interest rates remaining at record lows and employment in major tech industries very strong, this is a good indication that we may well skipthe usual slowing in the winter market altogether.”

Rebhuhn said the coming holiday season may present more opportunities for buyers, with less competition for new listings. However, given the current sparse inventory and keen competition, broker Frank Leach, a member of the NWMLS board of directors, emphasized buyers must be prepared when entering the marketplace “with funds and financials at the ready.”

Condo shoppers are less pressured in some parts of the market. System-wide, inventory is up about 5.4% compared to twelve months ago, aided in part by the addition of 1,589 new listings during the month – a healthy 37.6% YOY improvement. At month end there was about 1.5 months of supply.

Pending sales of condos jumped nearly 35%, while area-wide closings nearly doubled from a year ago, rising from 950 transactions to 1,414. Prices were up slightly more than 14%. The overall median price on last month’s sales was $395,000. In King County, which accounted for nearly six of every 10 sales (58.7%), the median price was $459,970, which reflects a 19.5% increase from this time a year ago.

NWMLS September 2020 Real Estate Market Report – Northwest MLS brokers say September’s home sales reached highest level since June 2018

KIRKLAND, Washington (October 7, 2020) – Northwest Multiple Listing Service brokers completed 10,175 sales transactions during September – the highest monthly volume since June 2018 when MLS members reported 10,072 closed sales. September’s closings also marked a jump of nearly 28% from thesame month a year ago, according to the latest statistical summary from the MLS.

“I believe this significant increase speaks to sellers becoming much more confident and buyers competing more effectively, most likely due to low interest rates,” remarked Mike Grady, president and COO at Coldwell Banker Bain. “It’s as if we just completed our typical ‘spring’ market,” he added.

The new report from Northwest MLS showed a sharp year-over-year (YOY) drop in inventory (down 43% from a year ago), a robust increase (23%) in pending sales (mutually accepted offers), and a sizeable surge (19%) in prices for single family homes and condos combined. Northwest MLS serves 23 counties, mostly in Western and Central Washington.

Whether last week’s announcement from Boeing to consolidate to a single 787 production location in South Carolina resulting in the loss of about 900 Puget Sound jobs will dampen home sales is unclear.

“It’s too soon to make any solid predictions about how Boeing’s announcement will affect the Snohomish County housing market, but I am watching it closely,” stated Matthew Gardner, chief economist at Windermere. “ We could see an increase in the number of homes for sale as workers either leave the area or decide to sell to access the equity they have in their homes. If this does happen, the increased supply will likely be absorbed by buyers who currently have a limited number of homes to choose from and counter any downward pressure on prices.”

Grady believes any impacts will be counteracted “given recent expansion announcements by Facebook, Amazon, and Microsoft to either purchase, build or renovate major office buildings in the region.”

Impacts of the coronavirus pandemic on the housing market are prevalent, according to several Northwest MLS representatives who commented on last month’s activity.

“COVID-19 has made many reflect on what their home means to them,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “As a result, many people are looking to create that ideal place to call home. We are seeing a rotation of home ownership, whether that means refinancing, remodeling, or moving.”

“With the trend toward employers allowing (and in some cases, requiring) employees to work remotely, we have seen a very noteworthy increase of sales in the more affordable suburban cities,” stated Gary O’Leyar, owner and designated broker at Berkshire Hathaway HomeServices Signature Properties.

“I consistently hear examples of COVID-related housing movement from our agents, such as a willingness to live further out, plans to move to the Pacific Northwest due to the ability to work remotely, a desire for a yard, home office, vacation property, etc.” said Robb Wasser, branch manager at Windermere Real Estate/East, adding, “But I do wonder if I’m noticing these instances because I’m on the lookout for them.”

James Young, director of the Washington Center for Real Estate Research at the University of Washington, also commented on shifting desires. “People working from home, especially those with kids being schooled at home, seek both space and value. Those who already have a home have little incentive to leave.” He described the current scenario of “too much demand and limited supply” coupled with low interest rates as “the perfect price storm.”

Supply continues to be inadequate to meet demand.

Brokers added 11,210 new listings to inventory during September, a healthy increase from a year ago when they added 9,435 for a YOY gain of 18.1%. Compared to August, the volume declined by 733 listings (down about 6%).

At the end of September, the supply totaled 9,099 active listings, well-below the year-ago selection of 15,982 listings (down 43%), and the lowest level since February.

Measured by months of supply, there is less than one month of supply (0.89) system wide. In the Puget Sound region, only King County notched more than a month’s supply, but if condos are excluded there is only 0.85 months of supply. Mason, Thurston and Snohomish counties had the tightest inventory, with only about two weeks of supply.

Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville, attributes the “very active market” to record low interest rates, jobs, and lifestyle choices. “We see a desire for homes with large yards or with acreage. Prepared purchasers are bringing strong offers to sellers, at or over asking prices with few, if any, contingencies,” he stated.

“In most areas, we are virtually sold out in the more affordable, mid-price and upper end segments of the market,” stated Scott, adding, “We’re also seeing a record-setting number of luxury properties going under contract across King, Pierce, and Kitsap counties.”

Statistics compiled by Northwest MLS for these three counties show there were 883 closed sales of single family homes and condos last month in the “luxury” segment based on selling prices of $1 million and above. A year ago, there were 429 sales in this category.

“With the region’s supply plummeting by over 43% compared to a year ago and month’s supply below one, double-digit house price growth should come as no surprise,” remarked Gardner.

The median price for homes and condos that sold last month across the Northwest MLS market area was $499,950, a hefty 19% jump from the year-ago figure of $420,000. San Juan County had the highest median price at $850,000, followed by King County at $698,230.

For single family homes only (excluding condos), last month’s median price system wide was $519,864.In King County, the median price for single family homes was $753,600. Within King County, where NWMLS tracks 30 sub-areas, six of these areas had median prices over $1 million; five of those areas were on the Eastside.

One of the few counties that did not have double-digit price increases from a year ago was Kitsap. Prices there were up almost 8.9%.

Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, described Kitsap County as a “hotspot” for both first-time homebuyers and high-end buyers. “The phenomenal affordability factor in Kitsap bodes well for first-time buyers and those looking to downsize or upsize.” The median price for last month’s sales in Kitsap County was $418,000, according to the MLS report. That was $280,230 less than the price in King County.

Leach has noticed significant movement in the million-dollar-plus segment and said many rentals are now going on the market as investors look to move into new investments or change platforms.

Considering depleted inventory (down nearly 44% from a year ago) and vigorous demand, Leach said buyers need to “step up with their best foot forward to compete in the multi-offer environment or deal with the frustration of being outbid. Those without a pre-approval letter are not even going to get on the playing field.” He reported a resurgence of offer escalation clauses, adding, “The Kitsap market is exceptionally hot on anything below $375,000.”

“Kitsap County, like all regions, is going into year-end with an extreme deficit of listing inventory,” said Frank Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. “With 507 new listings come to market and 564 go to pending status, our deficit is deepening.”

Wilson also reported a backlog of buyers. “Our brokers are working with buyers who have made offers on 10 or 12 homes only to lose out to cash buyers or buyers who were willing to pay significantly more than the list price and waive all conditions, including an inspection.” He said brokers are bracing for an influx of buyers from King County where some residents have concerns about living in the Seattle area. Wilson believes “more buyers in the hunt for homes in Kitsap will only intensify competition and inflate prices.”

O’Leyar believes Seattle continues to be a desirable destination. “Despite the numerous negative news stories about Seattle and anecdotes of an exodus out of the city, it is still a city where more people are moving into versus out of.” MLS figures indicate YOY closed sales of homes and condos in Seattle jumped from 750 sales in September 2019 to last month’s total of 1,189 (up 59%).

Notably, the Seattle map areas tracked by Northwest MLS showed a modest 8.4% gain in active listings compared to a year ago, fueled by the addition of 527 listings of condos. That’s up from the year-ago total of 308. The median price for last month’s closed sales in Seattle (including single family homes and condos) rose 11%, from $684,500 to $760,000.

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS ( www.nwmls.com) is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers.

NWMLS August 2020 Real Estate Market Report – Would-be homebuyers have more buying power, but also more competition for meager inventory

KIRKLAND, Washington (September 4, 2020) – Extremely low interest rates mean would-be home buyers have more buying power, but sparse inventory and increasing home prices in many parts of Washington state are leaving many buyers unable to take advantage of these attractive rates, reported broker Frank Wilson upon reviewing the latest statistical report from Northwest Multiple Listing Service.

The August report from Northwest MLS, which covers 23 counties, shows pending sales surged nearly 25% from a year ago, rising from 10,602 mutually accepted offers to last month’s total of 13,224. Within the four-county Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties, brokers reported 9,179 pending sales. A review of MLS records dating to January 2002 shows that volume was surpassed only once, in May 2017 when brokers notched 9,188 pending sales.

“In order for buyers to be successful in purchasing a home in today’s climate, they have to do some pretty illogical things,” remarked Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. As examples, he listed waiving inspections, paying more than the house is worth, or agreeing to pay the difference in cash between the lower appraised value and the sales price. “These are counterintuitive to what we used to see with a negotiation process,” he lamented.

“The lowest number of homes for sale in more than 20 years combined with the lowest mortgage rates on record are resulting in the perfect storm of frustration for buyers – but they are still out in force,” stated Windermere Chief Economist Matthew Gardner. “The few homes that are on the market are being snapped up quickly, and this excess of demand is causing record-high prices for single family homes in the Puget Sound area.” H e also noted rising demand for lower density housing in outer suburbs.

Brokers added 11,943 new listings to inventory during August, down from July, when they listed 12,514 homes and condominiums, but up from the 10,488 properties they listed during the same month a year ago. Commenting on the dwindling supply, J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said “For the greatest selection and availability, the next two months of September and October will be the best months until next March.

”At the end of August, the Northwest MLS database included 9,591 total active listings, down almost 43% from a year ago when the selection totaled 16,697 listings. With pending sales (13,224) outpacing new listings (11,943), the months of inventory continues to shrink. Area-wide there is less than one month of inventory (0.97). Nine counties had under a month’s supply. Four-to-six months is a common indicator of a balanced market, according to industry experts.

“The housing inventory deficit continues in Kitsap County w ith 558 new listings coming on the market during August and 664 going under contract, leading to an ever-declining number of available homes to purchase,” said Wilson. NWMLS statistics show there is 0.81 months of supply in that county. “ There currently seems to be no path back to a ‘normal’ market of 1,400 to 1,600 homes available, which has historically been a balanced market in Kitsap County,” he added.

“Kitsap County continues to have a competitive market,” agreed Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale. He noted buyers from eastern Puget Sound and South Sound are among those who are competing for the depleted inventory.

“Many buyers are bidding up their offers. We are also seeing some of the highest historical numbers of contingent offers,” added Leach, a member of the Northwest MLS board of directors. He also noted builders are scrambling to get projects approved. “Builders were looking for some relief from the COVID shutdown and a quick startup only to be faced with runaway prices on building materials and supplies which has caused delays in delivering new homes on time.”

With an insufficient supply, prices are appreciating at double-digit rates in most counties in the NWMLS report. Systemwide, for last month’s closed sales, prices increased nearly 14% compared with a year ago. Member-brokers reported 9,847 closed sales, up more than 4.8% from a year ago. That volume was the highest since June 2018 when there were 10,072 completed transactions.

In the four-county Puget Sound region year-over-year (YOY) prices jumped 17%, from $500,000 to $585,000.

Commenting on prices, James Young, director at the Washington Center for Real Estate Research, noted prices all along the I-5 corridor and the Puget Sound increased by double digits. “As people continue to seek housing outside the urban centers and within a two-hour drive of Seattle, the expected seasonal increases in prices in areas such as Island and San Juan counties have been extraordinary,” he remarked. NWMLS reports show San Juan County experienced the most notable spike at 43.6%. Island County prices increased nearly 22% from twelve months ago. Also noteworthy was Jefferson County where YOY prices jumped 27.9%.

“Home prices continue to increase, suggesting that now is a good time to buy,” stated Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville. He described low inventory as “problematic,” adding “Based on current low inventory and low interest rates, I expect the real estate market will continue to be robust into 2021.”

“We continue to see a flurry of activity in a market that has not allowed the pandemic to have a continued effect,” observed Mike Grady, president and COO at Coldwell Banker Bain. “Case in point: in January, the median sales price for the entire NWMLS was $422,750 and it is now $490,000 – a 15.9% surge in eight months. At the same time, we have nearly half as many months of inventory now than April – just four months ago (0.97 vs. 1.75). “The competition for buyers continues to be relentless, but luckily, much lower interest rates offer some relief.”

Scott said one area of note is luxury sales. “We’re seeing strong luxury activity in all areas locally. August brought strong and at times record luxury sales numbers in many areas.”

John Deely, principal managing broker at Coldwell Banker Bain, agreed, saying his analysis indicated the luxury market of residential properties priced at $2 million or more reached all-time highs in several areas during August. “The number of both pending sales and closed sales over $2 million hit new records in August. The number of new listings coming to market in the $2 million-plus range also set records.”

Deely also reported seeing “many more low appraisals with the rapid price increases and bid up prices due to the low inventory.”

Another metric cited by one of the Northwest MLS representatives was the “sale fail rate,” which tracks the percentage of failed transactions as a part of total written transactions. “What’s interesting is that it hasn’t changed through this entire year,” according to Grady in referencing Coldwell Banker Bain’s experience. “This seems to indicate that brokers are able to quickly move and successfully close a high number of sales. COVID conditions have had little or no effect on buyers and sellers closing transactions.”

NWMLS July 2020 Real Estate Market Report – Opportunities abound for home buyers and sellers, but brokers say “don’t delay”

KIRKLAND, Washington (August 6, 2020) – Brokers added the largest monthly number of new listings
during July since May 2019, but pent-up demand from homebuyers meant inventory remained tight,
according to Northwest Multiple Listing Service (NWMLS) representatives who commented on the latest
housing activity report.

The Northwest MLS report for July, which covers 23 counties in Washington state, shows brokers added
12,514 new listings during July, up from the year-ago total of 11,193 for a gain of 11.8%. Pending sales
jumped nearly 14%, while inventory remained well below year-ago levels (down about 39%). Measured
by months of inventory, the system-wide supply slipped to about a month (1.04 months).

MLS member-brokers reported 9,840 closed sales during July, up slightly more than 3% from a year ago
and the highest volume since June 2018 when they notched 10,072 completed transactions. Overall prices
on those sales, which include single family homes and condominiums, jumped 12.8% from twelve
months ago, rising from $429,900 to $484,995. Prices on single family homes (excluding condos) surged
13.6% (to $499,950), while year-over-year (YOY) condo prices rose about 8.6% (to $380,000).

“Opportunities abound for both buyers and sellers if they’re willing to act quickly,” said Mike Grady,
president and COO of Coldwell Banker Bain in Bellevue. Interest rates at historical lows means those
who are looking to purchase their first or even their second home can get much more for their money, he
explained. He mentioned a broker in their Kirkland office reported her first-time homebuyer client
obtained a 30-year, fixed-rate FHA secured loan “at an incredible rate of 2.25%!”

Conversely, Grady acknowledged, depleted inventory means “We are seeing multiple offers in just about
every market and at every price point.” He estimates there is only about 24 days of inventory in the major
population centers in King, Kitsap, Pierce, and Snohomish counties.

“We’ve seen an uptick in the number of listings in King and Snohomish counties, but it’s still well below
what we need to meet the volume of buyers right now,” emphasized Matthew Gardner, chief economist at
Windermere Real Estate.

NWMLS director John Deely characterized the market as being in “high gear” during July, with pent-up
demand and the need for housing outweighing fears of the coronavirus. “Although new listings of single
family homes in King County jumped more than 24% from a year ago, the total available inventory
dropped to a 10-year low for the month,” he remarked. “Single family listings priced at or below market
are receiving multiple offers with one recent Seattle listing attracting 40 offers,” reported Deely, the
principal managing broker at Coldwell Bank Bain in Seattle.

“I see a lot of people who I think would otherwise be content to stay in their homes now rushing to get
their homes on the market. Likewise, for buyers – particularly first-timers. It’s the fear of missing out,”
stated Mike Larson, president/designated broker at ALLEN Realtors and a director at NWMLS.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted that last month’s pending sales in
King, Snohomish, Pierce and Kitsap Counties were the best-ever for the month of July. “Sellers benefit
from the highest median home prices, while buyers are taking advantage of the lowest interest rates on
record. The combination of the huge backlog of home buyers and being virtually sold out of inventory
makes it feel like it’s a multiple-offer everything,” he exclaimed, saying, “This is a historic moment in
residential real estate.”

An unprecedented eight counties in the NWMLS report had less than one month’s supply of homes and
condominiums for sale at the end of July. They included Clark, Cowlitz, Island, Kitsap, Mason, Pierce,
Snohomish, and Thurston.

“Kitsap County continues to be attractive to East Puget Sound buyers as well as stay-at-home
professionals,” said Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale. Residents
are now enjoying the speedy open-access fiber-optic connections that Kitsap PUD started installing years
ago, initially to serve rural areas that lacked broadband access, according to Leach. “High speed internet
access has become a definite selling point for many homes and building sites,” stated Leach, who also
serves as a director at NWMLS.

Leach noted July’s 527 pending sales of single family homes in Kitsap County outgained new listings
(508), contributing to a 37% YOY deficit in active listings (382 last month versus 606 a year ago). “As
market demand continues, the median value jumped 11.7% from a year ago.” MLS figures show the
median price on that county’s single family home sales rose from $383,500 to $428,193. “Buyers are
frustrated with the low inventory but elated to see interest rates continuing to drop. We are seeing offers
coming in well over the list price, but this may not last long as inventory continues to inch up.”

“Suburban lifestyle continues to draw buyers,” agreed Dean Rebhuhn, owner at Village Homes and
Properties in Woodinville. “July sales suggest homes may be underpriced. With record low interest rates
under 3%, buyers have increased purchasing power, but with low inventory prices continue to increase,”
he observed.

Economist Gardner suggested the double-digit home price growth in Pierce County “might point to the
theory that there’s a COVID-induced flight from more urban markets,” adding, “This also supports my
forecast that home prices in Pierce County in 2020 will rise a significant 10.6% compared to 2019.”

Grady suggested the median price increases of around 20% or more in counties outside of the metro job
centers, including Cowlitz, Grays Harbor, Lewis, and Okanogan “show that remote work practices are
having an effect, and people can now move to more rural areas and work from home.”

James Young, director at the Washington Center for Real Estate Research, also commented on increased
activity in areas outside of King County. “Outer areas continue to outperform. There not only appears to
be a continued move to value in areas outside the Seattle region, there also appears to be a move outside
the main cities.”

“Everyone is buying now,” Young remarked. “With the virus and increased home working, people are
able to move to suburbs and outer areas in search of value and lower population density,” he added,
pointing to dwindling supply in several outlying areas. “Demand will continue to far outstrip supply for a
quite a while,” he predicts, adding, “When you can work from home, why pay a premium to be close to
the office?”

Median prices area-wide rose 12.8% from a year ago, with only two counties (Jefferson and Pacific)
reporting small declines. Fourteen of the 23 counties in the report had double-digit price increases.

Gardner predicts 2020 home prices will rise by 5.4% in King County and 5.8% in Snohomish County
compared to 2019 due to the continued shortage of homes for sale and market demand.

King County continues to have the highest median price for homes and condos at $670,000 (up 7.2%
from a year ago), but a look at that county’s 29 map areas covered in the report shows price changes
ranging from an increase of 21.6% in North Seattle to a 17.4% decrease in the Bellevue area west of I405.

Commenting on prices, Deely said properties with aggressive (over-market) pricing “are sitting idle as the
current pool of savvy buyers waits for price reductions or for properly priced, new listings.”
“July was great month,” Grady concluded. “The trend we’re seeing foretells stronger results going
forward for the next three months, especially in the context of the slowdown we experienced in April and
May.”

Scott agreed but expects robust activity to continue for a longer period. “We anticipate the market will
remain this way until at least April 2021. At that time, we believe normal seasonal patterns will emerge.”

Leach reported builders are frustrated at not having the inventory to meet current demand and
“tradespeople are strained to meet the construction needs.” He also noted more and more buyers are
making buying decisions based on virtual tours and cautioned buyers, “If you see something that piques
your interest, don’t delay!”

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates
cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000
brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the
Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20
local service centers.

The Gardner Report: Western Washington Economic and Real Estate Report – 2nd Quarter 2020

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.

REGIONAL ECONOMIC OVERVIEW

It appears as if the massive COVID-19 induced contraction in employment that Washington State — along with the rest of the nation — experienced this spring is behind us (at least for now). Statewide employment started to drop in March, but April was the real shock: total employment dropped almost 460,000 between March and April, a decline of 13.1%. However, this turned around remarkably quickly, with a solid increase of 52,500 jobs in May. Worthy of note is that, in May alone, Western Washington recovered 43,500 of the 320,000 jobs that were lost in the region the prior month. Although it is certainly too early to categorically state that we are out of the woods, the direction is positive and, assuming we respect the state’s mandates regarding social distancing and mask wearing, I remain hopeful that Washington will not have to re-enter any form of lockdown.

HOME SALES

There were 17,465 home sales during the second quarter of 2020, representing a drop of 22.2% from the same period in 2019, but 30.6% higher than in the first quarter of this year.
The number of homes for sale was 37% lower than a year ago, but was up 32% compared to the first quarter of the year.
Given COVID-19’s impacts, it’s not surprising that sales declined across the board. The greatest drops were in Whatcom and King counties. The smallest declines were in Grays Harbor and Cowlitz counties.
Pending sales — a good gauge of future closings — rose 35.7% compared to the first quarter of the year, suggesting that third quarter closings will grow as well.

HOME PRICES

Home-price growth in Western Washington rose by a relatively modest 3.5% compared to a year ago. The average sale price in the second quarter was $559,194.
Compared to the same period a year ago, price growth was strongest in Grays Harbor County, where home prices were up 14.3%. Clallam County also saw a double-digit price increase.
It was interesting to note that prices were up a significant 6.6% compared to the first quarter. This suggests that any concern regarding negative impacts to home values as a function of COVID-19 may be overblown.
I will be watching for significant price growth in less urbanized areas going forward. If there is, it may be an indication that COVID-19 is affecting where buyers are choosing to live.

DAYS ON MARKET

The average number of days it took to sell a home in the second quarter of this year matched the second quarter of 2019.
Across the entire region, it took an average of 40 days to sell a home in the second quarter. I would also note that it took an average of 14 fewer days to sell a home than in the first quarter of this year.
Thurston, King, Pierce, and Snohomish counties were the tightest markets in Western Washington, with homes taking an average of only 17 days to sell. All but two counties, Grays Harbor and Cowlitz, saw the length of time it took to sell a home drop compared to the same period a year ago.
Market time remains well below the long-term average across the region. This is due to significant increases in demand along with the remarkably low level of inventory available.

CONCLUSIONS

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

What a difference a quarter makes! Given that demand has reappeared remarkably quickly and interest rates remain historically low, it certainly remains a seller’s market and I don’t expect this to change in the foreseeable future.

The overall housing market has exhibited remarkable resilience and housing demand has rebounded faster than most would have expected. I anticipate demand to remain robust, but this will cause affordability issues to remain as long as the new construction housing market remains muted.

ABOUT MATTHEW GARDNER

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.