Seattle Area Real Estate Blog

 

Feb. 18, 2020

Seattle Real Estate Market Starts 2020 Hot!

As a real estate broker I’m constantly asked by clients and friends “how’s the market?”.  Well we’re a month and a half into 2020 and based on how things have started we are headed for an intense market this spring.  The Northwest Multiple Listing Service just released statistics for January and their data showed pending sales outgained new listings, record-low inventory that is down 33% from a year ago and many counties with double-digit price increases.

We now have a three month trend of pending transactions exceeding new listings in all the major counties around Puget Sound.  Inventory has slowly but steadily declined and we are back to having right around a month in many areas.  The average for all of the NWMLS is at 1.54, which is a 36% drop in comparison to January 2019. Inventory around Puget Sound comes in at 1.1 months in Pierce County, 1.2 months in Snohomish County and 1.3 months in King County.  A balanced market between buyers and sellers is considered to be 4 months of inventory, so that gives you a sense of how much of a seller’s market we currently have.

At the end of January, the entire MLS database had only 7,791 active listings of single family homes and condos, a drop of 33% from a year ago. Going back through data since 2005 shows that amount is a new low, below the previous one of 7,921 in February 2018.  In fact, for the 15 years from 2005-2019, inventory has dipped below 10,000 listings only eight months. 

This low inventory coupled with high demand is the trigger for large increases in sales price and values. King County had only a fairly modest value increase of 4.4% over January 2019. However the other counties around Puget Sound reported double-digit  increases with Pierce County at 14.7% and Snohomish County at 12.8%.

Double digit price appreciation in those counties is being pushed by buyers searching and purchasing outside of King County as they look for price points that line up as more affordable and accessible particularly for first time buyers. We started seeing this trend start in 2018 and it exploded during 2019 as the intensity and pricing of the market in King County propelled buyers to look at properties farther away from Seattle.   

The luxury home market is also  feeling the pressure in Seattle and on the Eastside of King County, with very few properties available in the $1 to $1.5  million range.  Evidence of the heat of that market can be exemplified by one central Seattle property, priced around $1.2 million which had more than 300 visitors to its weekend of open houses recently. WOW! 

This high of demand early in the year coupled with strong consumer confidence is certain to push us back from the trend we had towards an improving market for buyers throughout most of 2019.  Inventory is back to being very tight and I do not expect that to change much even as we move into the spring months when we typically see a larger number of homes come on the market.  Unless something unexpected happens to affect our local job market, there’s no reason to think that our trend of shrinking inventory and robust price gains over 10% per year will be altered. 

It’s starting to feel like the market is trending towards the intensity we had in 2017 and the start of 2018.  That would be a market with multiple offers, escalation clauses, waiving of contingencies and sales well above list price.  We’re already seeing that on some listings in particular areas/prices because of the interest level they receive in a market with very little inventory for those buyers to choose from.  If you’re a seller and you’re considering selling this year it could be a great opportunity to do so.   Buyers will face some challenges and in order to succeed in a market like this you need the input and expertise of a professional who is experienced with it and how to win when you have to compete with other buyers for a property. 

 

If you're thinking of buying or selling please contact me for details about your needs or questions. If you want to know what your home value currently is check out NWPremierbrokers.com for an accurate automated value range or request a full evaluation from me anytime. We all can look forward to what is likely to be an exciting year in Seattle area real estate in 2020!

Jan. 17, 2020

End of 2019 Market Statistics and Summary

The Seattle area real estate market as we start 2020 is currently experiencing a market with a home sales pace increasing over the slower period of mid-2018 through early 2019 due to demand that is increasingly higher than supply, making for a growing inventory shortage.

Year-over-year prices for single family homes (excluding condominiums) increased about 6.1% system-wide, jumping from $410,000 in 2018 to last year's median price of $435,000. Condo prices were flat, rising less than one percent from the 2018 figure of $352,000 to last year's median selling price of $355,000.

Inventory shortages persisted throughout 2019. Brokers added 110,940 new listings (down 5.3% from the 2018 total of 117,177), but that volume was outpaced by pending sales. Member-brokers reported 114,410 mutually accepted offers during 2019, a slight gain (1.9%) over 2018 when they logged 112,267 pending sales.

In 2019 the area-wide supply, as measured by months of inventory, averaged 1.78 months, about the same as 2018. Among the counties in the MLS service area, Thurston had the lowest level, averaging just 1.14 months, followed by Pierce at 1.3 months. Five other counties reported averaging less than two months of supply. In general, industry analysts use a 4-to-6-month range as an indicator of a balanced market, favoring neither buyers nor sellers.

Newly released figures from Northwest MLS show inventory at the end of December was down 31% from the same month a year ago, with only 8,469 active listings compared to the year-ago total of 12,275. The figures include single family homes and condominiums across the 23 counties in the MLS service area.

December 2019 marked the sixth straight month of declining inventory. MLS figures show inventory peaked in June 2019 when the database had 16,680 active listings, about twice as many as December.  Inventory for single family homes and condos (combined) was down by more than 30% in seven counties:  The inventory of single family homes (excluding condos) is especially tight in several counties, notably Thurston (-54%), King (-41.4%), Pierce (-40%), Snohomish (-36.1%), and Kitsap (-34.3%).

The sharp drop in King County marked the first time since March 2018 that the supply of homes dropped below one month. Going all the way back to 2012 when home values first began recovering from the crash, King County has only logged six months with supply levels lower than where we currently stand.

Northwest MLS brokers recorded 7,093 completed transactions during December, a gain of more than 11% from the 6,374 closed sales of the same month a year ago. Prices on last month's closed sales of single-family homes and condos rose 8.75% from a year ago. For the MLS market overall, the price was $435,000 versus the year-ago figure of $400,000.

The four-county Puget Sound region (encompassing King, Kitsap, Pierce and Snohomish counties), the median sales price for December 2019’s closed sales was $495,000, up 10% from the year-ago figure of $449,950.  In King County, which had the highest volume of sales and the highest prices, the median sales price for last month's closed sales was $615,000. That was an increase of about 3% from a year ago. Prices in King County peaked in May at $645,000.

Kitsap, Mason, Pierce and Thurston counties continue to have constrained inventory, and the market remains very competitive in all price categories there.  NWMLS figures show December 2019 inventory in those four counties declined more than 35% from those of a year ago, while prices jumped 10.4%. Collectively, there is less than a month's supply (0.94 months) in these South Sound counties. We are frequently seeing multiple offer situations in the median or lower prices ranges. Price growth in Pierce County continues to be above 8% year-over-year for the past three years and will likely maintain or exceed that in 2020.

With inventory back below one month in King County, we expect that 2020 will show a return to faster rising home prices as a result of the lack of inventory and continued robust job market. While buyers continue to benefit from low interest rates, there are simply not enough homes for sale. These elements indicate that the first quarter of 2020 will likely be an active market.

As to be expected in a market with an imbalance of supply vs. demand, prices continue to rise significantly. What makes this current market different from what happened in 2007-08 is that it is being pushed upwards by the lack of supply and not speculation or exotic loan products. However even as mortgage rates remain very low and attractive, buyers are not necessarily jumping on just any home that comes on the market. Although it’s still slightly a sellers market, buyers have become increasingly price-conscious and conservative.  This is reflected in home price growth slowing a little from where it was in 2014-2018 however indications are that 2020 may return to those levels as supply has dropped back down to levels seen during that last mini boom.