Hosted by Tony and Wendi Meier of Windermere Real Estate/NE
Watch the latest episode of our Kirkland Real Estate Market Update for a recap on our local housing market. We will dive into current inventory levels and housing prices for homes in Kirkland Washington.
Would you like to know more about our local real estate market? Contact us here. We are happy to help!
KIRKLAND, Washington (June 6, 2019) – The housing market in western Washington may not be as hot as it was last spring, but it is heating up, suggested one industry leader in commenting on the latest statistics from Northwest Multiple Listing Service.
Matt Deasy, president of Windermere Real Estate/East, Inc. said his analysis of single family home sales in King County reveals 7 out of 10 properties that sold during May had 15 or fewer days on the market. He also noted more than half the listings (55 percent) in the county sold for at or above list price, the highest ratio since July 2018.
Northwest MLS figures show last month’s 12,006 pending sales across its 23 county service area nearly matched the year-ago total of 12,168 mutually accepted offers. Nine counties notched increases.
Two other indicators of activity – the volume of new listings, and the number of closed sales – both showed slight gains from a year ago. MLS member brokers added 14,689 new listings to inventory during May, up 165 units from twelve months ago. Year-over-year (YOY) closed sales rose about 1.6 percent (from 9,011 in May 2018 to last month’s total of 9,153).
Several representatives of Northwest Multiple Listing Service commented on increasing activity:
“The housing market definitely got busier in May with brokers reporting an uptick in showings, open house traffic, and offers.”- OB Jacobi, Windermere Real Estate Co.
“We are swinging into our summer market at a little faster clip than last year, and have a few more houses for buyers to choose from.”- Frank Wilson, John L. Scott, Inc.
“The spring real estate market remains very good for both buyers and sellers.”- Dean Rebhuhn, Village Homes and Properties.
“Buyers rejoiced at lower interest rates in May.”- J. Lennox Scott, John L. Scott, Inc.
In addition to favorable financing, Scott said, “Increased inventory and continued job growth built on April’s momentum, translating to strong results in May.” While inventory has increased in many areas, Scott noted there are still severe shortages of listings in some price ranges.
Inventory improved 24.5 percent from a year ago, with brokers adding 14,689 new listings to outpace the 12,006 pending sales. The MLS report for May shows 16,133 active listings at month end, up from the year-ago total of 12,956. King County recorded the largest gain in total inventory, at more than 62 percent, but supply remained below 2 months in that and several other counties.
System-wide there was 1.76 months of supply at the end of May, well below the 4-to-6 months that experts say indicate a balanced market. “While our inventory has grown a little, we’re still well within the definition of a seller’s market,” said Frank Wilson, a broker in Kitsap County where there is only 1.46 months of supply.
An analysis of Northwest MLS inventory at the end of May underscores Scott’s point. It shows only 13.8 percent of the listings of single family homes have asking prices under $600,000. That compares to 25.6 percent in Snohomish County, 31.2 percent in Pierce County and 35.3 percent in Kitsap County.
Comparing May’s prices by housing types and geographic areas shows wide variation. Prices for single family homes (up 5.2 percent) outperformed condos (up nearly 1.4 percent). System-wide, sales of single family homes and condos that closed during May increased nearly 4.8 percent YOY, and rose more than 3.5 percent from April. A county-by-county comparison shows price changes ranged from a year-over-year drop of more than 20 percent (in Okanogan County) to a jump of more than 52 percent (in Pacific County).
Single family homes:
Home prices for single family homes (excluding condominiums) are up 5.2 percent system-wide, rising from the year ago figure of $429,500 to last month’s figure of $451,800.
King County prices for single family homes show a 3.6 percent decline from a year ago, but are at the highest level since June when the median price was $715,000. Snohomish nearly matched last June’s figure of $510,000, the highest for the year. A review of figures for the past five years shows both Kitsap and Pierce counties reached new highs (at $385,000 and $370,000, respectively) for last month’s median prices for sales of single family homes.
Three other counties (in addition to King) reported year-over-year drops in median prices on single family homes, led by Okanogan County where selling prices plunged more than 20 percent. Also reporting declines were San Juan County (-0.51 percent) and Snohomish County (-0.01 percent).
Condos:
Condo prices also rose, but at a smaller rate, as inventory continued to build (up nearly 65 percent). Area-wide prices increased about 1.4 percent from a year ago. Pierce County prices surged 18 percent, while condo prices in King County were mostly flat (up 0.7 percent). Only six counties reported year-over-year price declines.
Prices overall (single family homes and condominiums):
Prices overall, including single family homes and condos are up $20,000 (nearly 4.8 percent) from a year ago, increasing from $420,000 to $440,000. In King County, the median sales price was $645,000, down less than a percent (-0.77) from a year ago. Snohomish County also reported a fractional drop, declining from $478,615 to $476,025 (down 0.54 percent).
“Home prices in the Seattle metro area are still lower than they were a year ago, but only marginally,” remarked Jacobi, but added, “Thanks to the pretty significant drop in interest rates last month, we can expect to see home prices trending higher through the end of the year, but at a far more moderate pace than the last several years.”
Rebhuhn agreed, crediting lower interest rates, lower median prices, and new jobs as driving factors in South King County, Pierce County and Tacoma. “We look for a very active summer market,” he remarked.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, also attributed strong activity along the I-5 corridor and outer urban centers to low interest rates. Also noteworthy, he suggested, was Douglas County where YOY prices surged more than 24 percent. “Cowlitz, Thurston, and Lewis counties continue to outperform,” he added.
Young said interest rates could drop further as 10-year yields continue to fall. “Given the search for value among those sellers trading down along with first-time buyers in all urban areas across the state, prices should continue to rise throughout the peak season,” he stated.
“The data for May extends the same phenomenon we’ve been part of for nearly five years,” said Mike Grady, president and COO of Coldwell Banker Bain. “Recall that just one year ago the headlines were asking, ‘Has the hot market ended?’ as inventory increased from 3-to-5 days to 1.8 months between May and August. Now, one year later, while we see many more listings are available, accepted offers are keeping pace and inventory remains relatively stable at 1.7-to-2 months.”
“A balanced market should have about a 6-month supply,” explained WCRER’s Young, noting the national month’s supply figure is at about 4 months. “Except for a few small counties, every county in the NWMLS area has a month’s supply of 4 or less. Except for Skagit County, with 2.2 months of supply, every county along the I-5 corridor has less than 2 months.”
Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo, emphasized “the numbers are all relative, relative to a ‘normal’ market which we are not in.” Noting the current inventory of 644 homes and condos is higher than last year when there were 519 active listings at this time, “it is half of what might be considered a balanced market here in Kitsap County.”
What people read about the Puget Sound market “is not reflective of our micro market” Wilson continued, noting one “huge difference” is the amount of vacant land that is available. “We have seen a bump in vacant land listings,” he reported, adding, “For those looking to build a home, there are a lot of opportunities in this area, though be prepared for a lengthy process to get a home plan approved and built here in Kitsap.”
“We’re in the midst of the four best months in the year for buyer activity,” Scott emphasized. “I recommend sellers ensure their home’s appearance, marketing strategy and broker associate relationship are all in tip-top shape,” he added.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
KIRKLAND, Washington (May 6, 2019) – Housing activity during April signaled good news for buyers in Western Washington as inventory continued to grow, the rate of price increases was slowing in many areas (and even decreasing in a few counties), and mortgage rates remained low.
Northwest Multiple Listing Service statistics for last month show a 28.5 percent overall increase in active listings compared to the same month a year ago, a 5.8 percent gain in pending sales, and a 2.4 percent rise in median prices for sales of single family homes and condos that closed during April. The volume of closings dipped slightly (down 1.9 percent).
“Listings were popping up like April flowers and the bloom has produced a vibrant and healthy market,” exclaimed MLS director John Deely, principal managing broker at Coldwell Banker Bain. “With an increased supply of listing inventory, low interest rates, and a positive economic climate, buyers are confident that this is a good time to buy,” he reported, while noting a larger number of buyers are opting out of competing with other buyers.
“This year’s buyers and sellers are approaching the market with more caution and a focus on an analytical, versus emotional approach that has ruled the last several years,” Deely said.
Northwest MLS members added 11,697 new listings to inventory during April for a year-over-year gain of nearly 3.8 percent. During the same period, brokers reported 11,188 pending sales (509 fewer than the number of new listings), resulting in net gains in the number of active listings in many counties, but changes in inventory were wide ranging across the 23 counties the MLS serves.
Seven counties had double-digit growth in inventory from a year ago, led by King County (up 78.5 percent) and Snohomish County (up nearly 57 percent). The number of active listings declined in 10 counties, with Jefferson County reporting the biggest drop at 24.8 percent. System-wide inventory at the end of April totaled 12,955 active listings, which represents a 7.8 gain from March.
“The spring market has arrived, bringing new listings and sales,” stated Dean Rebhuhn, owner of Village Homes and Properties in Woodinville. Sellers who have prepared their homes for sale are experiencing brisk activity, and buyers are finding more opportunities to purchase, thanks to low mortgage rates and increased inventory, according to Rebhuhn.
“As we head into the prime buying and selling season, we’re seeing better news for buyers in King County, with statistics showing there’s a bit more time to look and make a decision,” said Mike Grady, president and COO of Coldwell Banker Bain. Pointing to the 78 percent increase in total active listings in King County and the 57 percent jump in inventory in Snohomish County, he described the year-over-year gains as “impressive,” but noted there is still less than two months of inventory in many areas. “Buyers now have three-to-four weeks instead of three-to-four days to make a decision, so it’s still quite a ways from a balanced market,” he emphasized.
Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, echoed Grady. “Despite the increase in inventory over last year at this time in King County, we are seeing a very robust spring market laced with multiple offers in many instances,” he stated.
Eight counties had double-digit increases in pending sales versus a year ago. In the four-county Puget Sound region, only King County had a double-digit gain, with a 15.1 percent jump in mutually accepted offers. Pierce County, with a 6.6 percent decrease, was one of seven counties reporting drops in pending sales. Even with mixed sales activity, supply remains tight.
Northwest MLS figures show both King County and its 23-county system have around 1.7 months of supply. “That is still slim compared to the National Association of Realtors’ data showing a national average of 3.9 months of inventory,” remarked O’Leyar.
“We just experienced a strong spring market and are now heading into the pre-summer phase of the housing cycle where more inventory but also more buyer competition is commonplace,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He expects momentum will continue “in line with positive job growth, lower interest rates and a strong U.S. economy,” but believes price appreciation will start to level out heading into summer. “All eyes will be on each new listing this summer, a welcome sight for home buyers encountering multiple-offer situations in the more affordable and mid-price ranges,” Scott added.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, said low mortgage rates (averaging 4.4% for a 30-year fixed) are enabling buyers in outlying areas along the I-5 corridor to purchase in areas with cheaper prices, notably Skagit, Cowlitz and Whatcom counties.
“There are two key demographic trends driving prices along with mortgage interest rates,” Young said. “Older householders trading down are competing with first-time buyers along this corridor seeking value.” He used the example of an empty-nester Seattle homeowner deciding to trade down. “If I sell in Seattle to trade down, then I will have significant amounts of cash available from selling my existing home to be able to move to Mount Vernon or Cle Elum with cash left over.” First time buyers may look at the same relatively low priced areas as a place to raise a family. “With these two groups competing for value, this is a perfect storm for house price growth, particularly in regional markets,” Young believes.
Areas adjacent to King County had mixed results.
“Listing activity in Snohomish County rose modestly in April but the rate of growth has slowed,” said NWMLS director David Maider. MLS figures show brokers added 30 more new listings than a year ago (1,746 versus 1,716), with total inventory up 56.8 percent. Pending sales rose 6.9 percent and prices were flat (up 0.84 percent).
Maider, the owner/broker at Windermere Real Estate M2 in Everett, described the jump in pending sales as “significant” and an indicator that there is clearly demand in the market. “We expect that mortgage rates will not move significantly as we move toward summer and that well-positioned and well-priced homes will still see significant interest from potential buyers,” he commented.
Another MLS director, Dick Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig Harbor (in Pierce County), acknowledged the slowing rate of price increases in the Puget Sound region, commenting, “But the direction remains the same: higher prices.” He believes buyer demand and scarce inventory mean buyers need to “be ready to rumble,” since conditions don’t favor “faint-hearted buyers.” For sellers, he advised, “Don’t be stupid, increases can’t go on forever. Get a fair price and move on.”
Home prices for last month’s completed sales of single family homes and condos rose 2.4 percent area-wide compared to a year ago, with eight counties reporting double-digit gains. Mason County had the biggest jump, at 24.9 percent, followed by San Juan (up 23.5 percent), Kittitas (up 20.5 percent) and Skagit (up 18.7 percent). Six counties reported year-over-year decreases: Clallam, Clark, Ferry, Island, Jefferson, and King.
Condo prices dipped 3.2 percent as inventory improved (up 75 percent). Pending sales rose 3 percent.
“Interestingly, condominium prices in King County continue to fall as the number of properties on the market continues to climb rapidly,” remarked Young. MLS figures show prices in King County dropped about 9.6 percent and inventory surged nearly 122 percent compared to twelve months ago.
“Anecdotally, this corresponds with possible regulatory and tax uncertainty signaled for private landlords in Seattle ahead of local government elections. Given this situation and significant supply in the multifamily sector coming online, many smaller landlords may be selling to lock in capital value growth and exit the rental market ahead of the November election,” Young suggested.
Some developers of new condo projects are reporting strong activity. First Light, a 459-unit development to be built at 3rd and Virginia in downtown Seattle, has announced more than half the units in the 48-floor tower have been reserved prior to groundbreaking.
Looking ahead, Grady believes, “We are very slowly trending away from a complete seller’s market,” citing single-digit increases in sales prices, “instead of double-digit increases we saw in 2018,” and the lack of inventory. “We believe these two considerations will now move sellers who have been waiting to sell in order to take advantage of equity gains to finally take action.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.
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.
ECONOMIC OVERVIEW
Washington State employment slowed to an annual growth rate of 1.7% — a level not seen since 2012 — and continues a trend of slowing that started in the summer of 2018. I was a little surprised to see such a significant drop in employment growth, but it may be due to the state re-benchmarking their data (which they do annually). As such, I am not overly concerned about the lower-than-expected numbers but will be watching to see if this trend continues as we move through the spring months. The state unemployment rate was 4.5%, marginally below the 4.6% level a year ago.
My latest economic forecast suggests that statewide job growth in 2019 will be positive but is expected to slow. We should see an additional 84,000 new jobs, which would be a year-over-year increase of 2.2%.
HOME SALES
HOME PRICES
DAYS ON MARKET
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. I am again moving the needle toward buyers as price growth moderates and listing inventory continues to rise.
I do not see any clouds on the horizon that suggest we will see a downturn in sales activity in 2019. That said, this will be the year we move closer to balance. Buyers who were sidelined by the significant increase in listings in the second half of 2018 are starting to get off the fence as mortgage rates drop. I foresee a buoyant spring market ahead.
Watch the latest episode of our Eastside, King & Snohomish County Real Estate Market Update for a recap on our local housing market. We will dive into current inventory levels and housing prices for homes in the Eastside, King & Snohomish County Washington.
Would you like to know more about our local real estate market? Contact us here. We are happy to help!
