KIRKLAND, Washington (Feb. 5, 2015) – Home sales this super bowl season outpaced a year ago as sidelined buyers emerged to compete for limited inventory, according to brokers who commented on January activity.

New figures from Northwest Multiple Listing Service show year-over-year increases in pending sales, closed sales, and prices, while inventory fell by double digits.

“The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker,” lamented MLS director George Moorhead, designated broker and owner at Bentley Properties.

The number of active listings of single family homes and condominiums fell from the year-ago figure of 19,195 to 17,082 at the end of January, a decline of 11 percent. Twelve of the 23 counties in the MLS system reported double-digit drops. For the four-county Puget Sound region, the selection was down 12 percent. [Read more…]

KIRKLAND, Washington (Jan. 6, 2015) – Real estate brokers around Western Washington reported a strong finish to 2014. December’s sales outpaced the same month a year ago by double digits, according to new figures from Northwest Multiple Listing Service.

“December was one of the best Decembers on record,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate upon reviewing the latest statistics from the listing service.

MLS members reported modest year-over-year price gains (about 5.5 percent) for homes and condominiums that sold last month compared to 12 months ago. The number of new listings added to inventory was nearly identical to activity of a year ago, but with pending sales outpacing new listings, the selection, as measured by total active inventory, dwindled by about 8 percent compared to a year ago.

Commenting on the combination of scarce inventory in some areas and expectations of rising interest rates, the head of one large real estate company advised, “Anyone thinking of buying a home should do it early in 2015!”

“Prices, interest rates, and rents will continue to rise,” stated Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he explained, adding, “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase.”

Many buyers appeared to heed Gain’s advice during December. MLS members reported 5,794 pending sales (mutually accepted offers) for an increase of nearly 11 percent from the year-ago total of 5,224 pendings. In the four-county Puget Sound region, brokers notched 4,410 pending sales, the highest December volume since 2005.

High-end homes are selling well, according to brokers and MLS data.

“Above the one million dollar price point in King County, we have seen back to back years of very strong sales activity,” commented Scott. Northwest MLS figures show nearly 2,000 homes priced at one million dollars and up sold in King County during 2014. That’s up more than 25 percent compared to 2013.

For more modestly priced homes, first-time and move-up buyers are taking advantage of loosening lending standards.

“It’s much easier for purchasers to qualify for a loan now than it was just a few months ago,” reported Gain. “The much needed 3 percent down payment loans are finally back for qualified purchasers,” he noted, adding, “This will allow more first-time buyers to break into homeownership.”

Northwest MLS director John Deely agreed the new low down payment loan programs and mortgage rates are a boost to activity.

“In December our brokers experienced high open house traffic and strong demand from buyers as listing inventory declined,” reported Deely, the principal managing broker at Coldwell Banker Bain in Seattle. “Buyers are determined to take advantage of the continued low interest rates and to make their move sooner rather than later,” he added.

George Moorhead, designated broker and owner at Bentley Properties, reported market activity stayed steady all the way into New Year’s. “If this level of activity continues, we will see yet another sellers’ market as inventory drops,” suggested Moorhead, who is also a member of the Northwest MLS board of directors.

MLS figures show there were 4,367 new listings added to inventory during December, about the same as a year ago when members added 4,333 homes to the selection. At month end, there were 17,659 homes and condos for sale. That’s down nearly 8.1 percent from the year-ago inventory of 19,214 active listings.
Brokers are reporting tight inventory in several neighborhoods, particularly around job centers.

“Buyers barely slowed down long enough to take a break for Christmas,” said Windermere Real Estate president OB Jacobi. “All this sales activity has eaten even further into already low inventory levels.”

MLS figures show about 2.8 months of inventory system-wide. Of the 21 counties in the monthly statistical report, King County has the tightest inventory, with only 1.4 months of supply. Snohomish County was slightly better, with about 2.2 months of supply. Six months is typically considered a healthy balance between supply and demand.

Jacobi noted many Seattle neighborhoods have less than a month’s supply, increasing the competition among buyers.

Prices climbed nearly 5.5 percent from a year ago, rising from an area-wide median selling price of $275,000 to last month’s figure of $290,000. That matches the price reported for October’s sales, a figure that was only surpassed in July when the median sales price overall was $300,000.

Some MLS members, including Diedre Haines, expect similar increases this year.

“While some recent reports indicate a cooling of appreciation in 2015, unless more inventory hits the market, I anticipate the percentage increases to be about the same as 2014 due to sustained demand,” said Haines, who is Coldwell Banker Bain’s principal managing broker for South Snohomish County.

Haines, a past board member at Northwest MLS, cautioned sellers about unrealistic pricing. “It is well worth repeating that if sellers are serious about getting their homes sold, it is not a good idea to ‘go fishing’ even though there may be high demand,” she advised, adding, “Buyers are serious about making a purchase, but they are in no mood to play games as they are very well educated regarding price. If the house is overpriced – even by a small amount – buyers will simply not make offers,” she emphasized while urging sellers to heed the advice of their agent.

Brokers also stressed the importance of a home’s appearance.

“Homes need to be in the best condition possible, de-cluttered, including cupboards and closets, cleaned, especially carpets and floors, freshly painted, and attractively staged,” advised Haines. “The outside appearance needs to be in top-notch condition and have the best ‘curb appeal’ possible. These factors are vitally important in obtaining the best and highest price,” she added.

Looking ahead, brokers believe many factors signal a continuing housing market recovery. For example, Mike Gain, a past chairman of Northwest MLS, points to Fannie Mae’s recent National Housing Survey. Its research shows 44 percent of consumers say now is a good time to sell a house, an all-time survey high. Nearly two-thirds of survey respondents (65 percent) say now is a good time to buy. “These results and attitudes will drive a healthy housing market in 2015,” Gain believes.

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 23 counties in Washington state. (Note to editors: Data for Chelan and Douglas counties will be added to future reports. For now, activity for those counties is reflected in the line for “Other” areas.)

Statistical Summary by Counties: Market Activity Summary, and 4-County Puget Sound Region Pending Sales

 

Information and statistics compiled and reported by the Northwest Multiple Listing Service.

Buyer interest remains high and many good values exist for those whose holiday wish list includes a new home, according to brokers with Northwest Multiple Listing Service. A new report from the MLS summarizing November activity shows year-over-year gains in pending sales, closed sales and median prices.

The report encompasses 21 counties, mostly in Western Washington.

“During the holidays we usually see a drop in home buyers, but this year they’re remaining engaged later than usual. Both showings and offers are still going strong,” reported OB Jacobi, president of Windermere Real Estate. He said recent purchasers include people relocating to Seattle as well as international buyers “who aren’t showing any signs of slowing.”

Attractive financing is luring both first-time and move-up buyers.

“The holiday season is in full swing and the most special gift this year is that interest rates have dropped down to touch the upper 3 percent range. Interest rates at this low level are considered unbelievable,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Northwest MLS figures show pending sales (mutually accepted offers) for November jumped nearly 3 percent from twelve months ago, rising from 6,624 pendings to 6,821.  For the four Puget Sound region counties (King, Kitsap, Pierce and Snohomish) the total of 5,220 pending sales marked the highest level for November since 2006 when these counties reported 5,292 sales.

“There may be a chill in the air – but not in the real estate market in Kitsap County,” observed Frank Wilson, branch managing broker at John L. Scott’s office in Poulsbo. He noted the number of new listings added in that county year-to-date (4,963) is nearly equal to the number of listings that have gone under contract (4,864).  “This is why we are beginning to see home prices edge up,” suggested Wilson, a member of the Northwest MLS board of directors.

The median price for homes and condos that sold during November in the Northwest MLS service area was $289,000. That reflects an increase of more than 6.6 percent from the year-ago sales price of $271,061. Ten counties experienced double-digit gains, while two had price drops compared to the same month a year ago.

In King County, prices rose 5.2 percent, from $379,202 to $399,000. Nearby counties had sharper increases, led by Kitsap at nearly 11.4 percent. In Pierce County, prices jumped 10.7 percent while in Snohomish County the year-over-year gain was nearly 9 percent.

Compared to October, the overall median price for last month’s sales fell by $1,000, although a county-by-county comparison shows a mix of slight gains and declines.

Brokers seemed upbeat as the year winds down, pointing to good open house traffic, the reentry of small, local builders, and job growth as factors that should bode well for home sales.

“There has been a noticeable increase in market activity during October and November,” commented MLS director George Moorhead. That uptick has helped offset what he described as unexpected slow activity from July to early October that dampened some sellers’ interests.

With brisk activity, supply is tight in many areas served by Northwest MLS.  Half the counties have less than six months of supply. Area-wide, there is slightly more than 3.5 months of supply, but in King County it’s about two months; Snohomish has about 2.8 months of supply.

Many industry experts consider six months of supply to be an indicator of a balanced market. As supply dips below that threshold, competition intensifies, and prices are more likely to rise.

Not surprisingly, brokers reported a falloff in the volume of new listings added to inventory from October to November, in part because some sellers opt to focus on holidays rather than home showings.

MLS members added 5,521 new listings last month, which compares to 8,102 during October. November’s figure also trailed the year-ago total of 5,853. As the month ended, buyers still had a choice of 20,864 active listings system-wide, down 5.4 percent from a year ago.

Although some sellers postpone listing their homes during the holidays, brokers say there are advantages that might be overlooked. Open houses tend to attract more serious and motivated buyers is one benefit they mentioned.

“The mood of many sellers is ‘I know when buyers come to see my home they will be serious and not just looky loos or nosey neighbors,'” explained Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. “Broker interest remains high partially because many buyers feel interest rates could rise next year, and they realize now is a good time to take advantage of rates under 4 percent.”

Commenting on the South Sound market, Beeson said 2014 activity is tracking 2013 “almost eerily,” with very little difference in the number of closed sales through 11 months in both Thurston and Pierce counties.

Beeson, a former chairman of the Northwest MLS board, acknowledged the lower seasonally adjusted inventory will cause some buyers to wait until spring. “Others know there are good values to be had now considering the number of vacant homes currently offered for sale and needing to be sold. Most sellers don’t want to go through winter with a vacant home,” Beeson stated. His analysis shows more than half the active residential properties in the tri-county (King, Pierce Snohomish) area are vacant. “For some buyers, opportunity knocks as the weather gets chillier,” he suggested.

MLS director Diedre Haines agreed with Beeson. “December is always a good time to sell,” she said, noting there may be fewer buyers, but those who are out looking are highly motivated, with many wanting to buy before year end. “For buyers, it’s also a good time because competition is limited,” said Haines, Coldwell Banker Bain’s regional managing broker in Snohomish County.

Inventory shortages are a challenge according to Haines, in part because of the distressed component. She estimates about a third of the new inventory is simply not quality or almost unsalable due to poor condition or their status as auction listings and short sales.

“Correct and spot-on pricing of homes for sale remains vitally important,” Haines emphasized. Sites that estimate value may be fun to use and a good starting point, but they can’t replace the role of an experienced professional who knows the neighborhood, the condition of the property and nearby homes, and is able to compare the competition in determining an asking price. “Sellers are encouraged to heed the counsel of their real estate advisors and to trust the market analysis that the agent prepares,” she advised.

Gary O’Leyar, designated broker/owner of Prudential Signature Properties called December “one of the best times of the year for home buyers.”  Considering many prospective (competing) buyers are busy with other activities and active sellers are committed to selling, he said there’s less competition for limited, good inventory, making now a great opportunity for would-be homeowners.

Other brokers agreed with O’Leyar’s assessment.

“If sellers are willing to keep their homes on the market through the holiday season, the numbers appear to be in their favor,” Jacobi noted.

In addition to reasons already cited, Frank Wilson noted decorated homes may look “picture book perfect.”  In keeping with the spirit of the season, he offered another hint for sellers, suggesting that “it’s okay to leave cookies and milk out for your Realtors, too!”

Looking ahead, the MLS spokespersons expect market recovery momentum will continue into 2015.

“We in Snohomish County are becoming increasingly excited about the return of the small local builders providing good inventory to the 2015 market, plus the relaxed financing guidelines for qualification and costs,” Haines remarked. Citing rosy economic outlooks for the region, she expects there will be more first-time buyers and an increase in move-up buyers in the coming year, but added, “Hopefully as 2015 progresses, we will start to experience a more balanced market,” but admitted it may not be evident before next year’s fourth quarter.

Moorhead, the branch manager at Bentley Properties in Bothell, suggested increased buyer activity means sellers should be making their plans and getting last-minute home improvements done for 2015. “We do not see any red flags on the horizon that should cause any alarms for buyers and sellers.” Moorhead believes interest rates will remain mostly flat, but expects gradual rises in the latter part of 2015.

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 23 counties in Washington state. (Note to editors: Data for Chelan and Douglas counties will be added to future reports. For now, activity for those counties is reflected in the line for “Other” areas.)

Statistical Summary by Counties: Market Activity Summary, and 4-County Puget Sound Region Pending Sales

 

Information and statistics compiled and reported by the Northwest Multiple Listing Service.