NWMLS logo

News & Information

Rising interest rates not yet slowing home sales or "too concerning" for NWMLS officials

Latest Press Release - March Statistical Data

KIRKLAND, Washington (April 7, 2022) - Rising mortgage rates are not yet slowing home sales in most areas across Washington state, according to several brokers who commented on the latest statistical report from Northwest Multiple Listing Service. The report showed a 7.4% year-over-year drop in pending sales, but brokers suggested the decline is likely a reflection of limited supply.

"Typically, by now, we would start to see rising mortgage rates impacting homes sales and/or prices," observed Matthew Gardner, chief economist at Windermere Real Estate. "That has yet to happen despite rates rising significantly since the start of the year."

Freddie Mac reported the average rate for a 30-year loan rose to 4.56% last week, with rates climbing at the quickest pace in almost three decades.

Gardner said he expects mortgage rates to continue trending higher in the coming months, adding, "I will be watching to see if there are any negative market impacts, but as of now, I'm not too concerned."

Northwest MLS brokers reported 10,059 pending sales (mutually accepted offers) during March across 26 counties. That's down from the year-ago figure of 10,863, but compared to February, the volume of pending sales jumped nearly 31%.

Broker Dean Rebhuhn, owner at Village Homes and Properties, also said rising mortgage rates have not slowed activity. "However, if homes are priced over the market, savvy sellers are making price adjustments." For now, Rebhuhn said multiple offers "are still the rule. Buyers are making strong offers, pre-inspecting homes, and making sure financing is in place."

Well-paying jobs and lifestyle needs are driving the market, with some buyers using investments, 401K funds, and family assistance, according to Rebhuhn. He noted Grays Harbor and Ocean Shores offer "good inventory and great values." Prices in Grays Harbor County surged nearly 25% from a year ago, rising from $280,000 to $349,950. That's about $489,000 less than the median price in King County.

"The market is following the normal seasonality of spring," according to J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "This season brings more resale listings coming on the market."

The latest MLS report shows brokers added 11,197 new listings of single family homes and condominiums to inventory during March, up from the year-ago total of 10,562. Last month's total is up from February's figure of 7,920 for a gain of more than 41%. It also marked the highest volume of new listings added during a month since September 2021 when members added 11,373 listings.

James Young, director of the Washington Center for Real Estate Research at the University of Washington, noted improvements in inventory in "many of the markets along the I-5 corridor." His analysis of active listings show robust growth since January in several counties, including Snohomish (up nearly 54%), Lewis (up 47%), Thurston (up 42%), Pierce (up nearly 40%), and Skagit (up 32%). 

Nevertheless, with pending sales (10,059) nearly matching new listings, inventory remained limited system wide. The MLS report shows only 0.58 months of supply, with King, Pierce, Snohomish and Thurston counties all having less than two weeks of supply.

"When you consider at one time a normal market inventory was 4-to-6 months, we now consider that measure a relic of times gone by," commented Dick Beeson, managing broker at RE/MAX Northwest Brokers, adding, "We will not see such numbers of homes for sale for possibly a generation or more."

The supply squeeze is contributing to competition among hopeful homeowners and rising prices.

"We continue to see fierce competition for the available inventory," stated Frank Leach, broker/owner at RE/MAX Platinum Services. "Buyers have been very frustrated with some writing as many as 15 offers before landing on a home."

Median prices continue to escalate.

For last month's 7,989 completed transactions, the area-wide median price was $638,000, up about 16.4% from a year ago and up 9% from February.

Of the 26 counties in the report, only one county (Ferry) reported a year-over-year price drop, and only three counties had single-digit increases; all others had double-digit gains from a year ago.

Gardner noted median listing (asking) prices continue to rise, saying "this suggests that sellers remain quite bullish when it comes to pricing their homes."

Beeson described rising prices as being at "shock and awe levels," noting it is the third consecutive year for such escalations.

Northwest MLS figures show prices in the four-county region (King, Kitsap, Pierce and Snohomish) have surged nearly $200,000 (38.5%) since March 2020, jumping from a median price of nearly $520,000 to nearly $720,000.

"With rising interest rates and fuel prices, it will be an interesting time for the markets along the I-5 corridor," remarked Young. "Increased costs make purchasing a home outside of the urbanized areas a less viable option for first time buyers and others seeking value to move up the housing ladder."

Young believes the return to the city has begun in earnest. He also commented on steadily rising prices in King and Snohomish counties. "Since January, prices in King County are up 16.5% and up 10.5% in Snohomish County. No other counties in the central Puget Sound region break double digits in house price growth for this period."

Nevertheless, recent census reports indicate people are moving out of King County. Such reports are "allowing surrounding counties, such as Snohomish, Pierce, and Kitsap to prosper," surmises John Deely, executive vice president of operations at Coldwell Banker Bain. "In part, this is due to a lack of affordability and King County's inability to create new inventory given restrictions on development and the tight labor markets." He also cited work-from-home policies as "helping people decide to live in other places" - a trend he expects will continue.

Like many areas, Kitsap County is "dealing with a very active market with prices hitting unprecedented values as inventory remains extremely low," reports Leach. MLS figures show there is slightly more than a half-month of supply (0.56 months of inventory).

The median price on last month's sales of single family homes in Kitsap County rose 19.7% from a year ago, from $450,000 to $538,500. Year-over-year condo prices shot up nearly 54%, from $297,500 to $457,000.

"While we often speak in percentages, the actual numbers of listings are drastically low, and the demand is outstripping supply," Leach stated. On a brighter note, he added, "Kitsap continues to grow, and new inventory continues to pop out of the ground throughout the county. There are thousands of new residential, condominium and apartment buildings under construction and due to be available in the fall of 2022."

Leach also noted rents are rising in Kitsap County, "and there appears to be no relief on the horizon." He suggests the only way to control future expenditures in housing is to own. "With interest rates on the rise there is no better time to buy, refinance, or resize your real estate investment."

Deely saw hopeful signs in the March statistics. "King County's new listings last month exceeded the number of both pending and closed sales. Whenever new listings exceed pending, the standing inventory increases with more selection available for buyers. It's still a great time for sellers to come to the market due to buyers who are willing to pay a premium. While interest rates have gone up, slightly narrowing the buyer pool, there's still high demand."

Scott pointed to the overall economy "and specifically job growth in the central Puget Sound region" as factors for the future housing market. "For the local areas considered lifestyle and destination markets, we will be watching local in-migration as a key indicator of future home price appreciation."

Beeson acknowledged not everyone shares a rosy outlook, noting a report from the Federal Reserve Bank of Dallas that stated price and value have "become unhinged and now have little relationship to each other." He said they fear a housing bubble may be brewing, adding, "It does feel strange to be in a market that no one has experienced before. There is no road map for this one."

Commenting on an "unexpected 4.1% decline" in U.S. pending home sales, Lawrence Yun, chief economist at the National Association of REALTORS®, suggested the dip was mainly due to the low number of homes for sales, adding, "It is still an extremely competitive market, but fast-changing conditions regarding affordability ahead."

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,500 member firm offices and 32,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 26 counties, and it operates 21 local service centers.

Single Fam. Homes + Condos

LISTINGS

PENDING SALES

CLOSED SALES

MONTHS OF INVENTORY

New Listings

Total Active

# Pending Sales

# Closings

Avg. Price

Median Price

This month

Same mo., year ago

King

4,150

1,395

3,557

2,863

$1,079,936

$838,753

0.49

0.60

Snohomish

1,767

517

1,543

1,238

$859,238

$758,707

0.42

0.28

Pierce

1,788

621

1,716

1,291

$604,375

$550,000

0.48

0.35

Kitsap

526

218

496

392

$631,816

$534,997

0.56

0.42

Mason

144

90

122

114

$449,604

$410,000

0.79

0.60

Skagit

238

140

197

160

$595,614

$550,000

0.88

0.67

Grays Harbor

192

193

184

134

$374,050

$349,950

1.44

0.83

Lewis

158

110

146

126

$436,749

$399,500

0.87

0.57

Cowlitz

167

88

159

131

$406,866

$370,000

0.67

0.42

Grant

132

89

156

106

$370,954

$352,500

0.84

0.89

Thurston

543

196

507

445

$541,029

$500,000

0.44

0.37

San Juan

32

52

22

16

$1,450,469

$897,500

3.25

2.33

Island

173

78

163

138

$678,541

$610,000

0.57

0.45

Kittitas

96

62

75

50

$823,348

$555,730

1.24

0.92

Jefferson

53

34

49

46

$684,087

$547,450

0.74

1.32

Okanogan

53

72

53

28

$381,675

$336,750

2.57

1.83

Whatcom

390

218

322

276

$659,687

$619,975

0.79

0.82

Clark

103

33

112

90

$569,461

$465,000

0.37

0.35

Pacific

59

60

62

43

$350,998

$330,000

1.40

0.87

Ferry

8

17

9

7

$267,271

$224,000

2.43

3.40

Clallam

107

76

106

77

$482,101

$430,000

0.99

0.51

Chelan

117

94

109

67

$655,990

$520,000

1.40

0.89

Douglas

64

38

53

37

$564,183

$525,000

1.03

0.73

Adams

15

18

14

11

$359,090

265,000

1.64

1.00

Walla Walla

63

38

64

52

$426,237

423,500

0.73

0.85

Columbia

11

9

12

1

$229,000

229,000

9.00

1.50

Others

48

65

51

50

$468,586

$392,495

1.30

1.61

Total

11,197

4,621

10,059

7,989

$797,444

$638,000

0.58

0.53

4-county Puget Sound Region Pending Sales (SFH + Condo combined)

(totals include King, Snohomish, Pierce & Kitsap counties)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2003

4746

5290

6889

6837

7148

7202

7673

7135

6698

6552

4904

4454

2004

4521

6284

8073

7910

7888

8186

7583

7464

6984

6761

6228

5195

2005

5426

6833

8801

8420

8610

8896

8207

8784

7561

7157

6188

4837

2006

5275

6032

8174

7651

8411

8094

7121

7692

6216

6403

5292

4346

2007

4869

6239

7192

6974

7311

6876

6371

5580

4153

4447

3896

2975

2008

3291

4167

4520

4624

4526

4765

4580

4584

4445

3346

2841

2432

2009

3250

3407

4262

5372

5498

5963

5551

5764

5825

5702

3829

3440

2010

4381

5211

6821

7368

4058

4239

4306

4520

4350

4376

3938

3474

2011

4272

4767

6049

5732

5963

5868

5657

5944

5299

5384

4814

4197

2012

4921

6069

7386

7015

7295

6733

6489

6341

5871

6453

5188

4181

2013

5548

6095

7400

7462

7743

7374

7264

6916

5951

6222

5083

3957

2014

5406

5587

7099

7325

8055

7546

7169

6959

6661

6469

5220

4410

2015

5791

6541

8648

8671

8620

8608

8248

7792

7179

6977

5703

4475

2016

5420

6703

8130

8332

9153

8869

8545

8628

7729

7487

6115

4727

2017

5710

6024

7592

7621

9188

9042

8514

8637

7441

7740

6094

4460

2018

5484

5725

7373

7565

8742

8052

7612

6893

6235

6367

5328

4037

2019

5472

4910

7588

8090

8597

8231

7773

7345

6896

6797

5788

4183

2020

5352

6078

6477

5066

7297

8335

8817

9179

8606

7934

6122

4851

2021

5216

5600

8002

7716

8674

8824

8049

8586

7880

7405

6022

3943

2022

4405

5560

7312

 

 

 

 

 

 

 

 

 

Other resources: