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Western Washington housing market "more balanced, and not so crazy - and that's a good thing"

Latest Press Release - May Statistical Data

KIRKLAND, Washington (June 6, 2022) - "Home sellers really need to re-think their expectations," suggested Mike Larson, a member of the board of directors at Northwest Multiple Listing Service (NWMLS) when commenting on statistics summarizing May activity. The new report showed a significant increase in active listings compared to a year ago, a slowdown in sales, and prices still rising.

Larson, the managing broker at Compass in Tacoma, said the days of "multiple offers and waived inspections, at least in Pierce County, are behind us." He described the market as "more balanced and not so crazy, and that's a good thing. Buyers are getting a little relief - not much, but a little as we're slowly easing back into the kind of market we had pre-COVID."

NWMLS members added 13,075 new listings to inventory during May, up 9.7% from a year earlier and the highest monthly number since June 2021.

At the end of May, buyers could choose from 8,798 active listings system-wide, up a whopping 59% from a year ago when there were only 5,533 properties in the database. That is the largest selection since September 2020 when there were 9,099 single family homes and condominiums offered for sale across the 26 counties served by Northwest MLS.

Two counties more than doubled their number of active listings from a year ago. The selection in Snohomish County jumped from 500 to 1,182 listings (up 136.4%). Douglas County had a similar increase, rising 134.5%. Also nearly doubling their inventory from a year ago were Cowlitz, Island, and Walla Walla counties.

"The significant increase in the number of homes for sale has some speculating that the market is about to implode, but that is very unlikely," stated Matthew Gardner, chief economist at Windermere Real Estate. "What's more likely to occur is that the additional supply will lead us toward a more balanced market, which after years of such lopsided conditions, is much needed," he added.

Even with the healthy uptick in inventory, there is still less than one month of supply area-wide (0.97 months). Twenty of the 26 counties in the report are showing more than a month of supply, with the tightest inventory (0.85 months or less) in the four-county Puget Sound region.

Both pending sales (mutually accepted offers) and closed sales during May were down from a year ago, but up from the previous month.

Pending sales declined about 11.7% from twelve months ago but increased 8.2% compared with April. Members reported 10,563 pending sales of homes and condos last month, up from April's figure of 9,760, but down from the year-ago total of 11,969.

Gardner believes the April-to-May increase indicates rising mortgage rates are not yet negatively impacting the housing market. "The additional supply of homes for sale is giving buyers more choices, which is something they haven't had in several years," he remarked.

Closed sales dipped slightly from a year ago (down about 3%) but rose 9% from April. Members completed 9,096 sales last month, which was 278 fewer than a year ago. May's total outgained April by 752 transactions.

Buyers can expect to pay more for homes and condos, although the increases may be moderating. Last month's system-wide median price of $660,000 was up 12.8% from the year-ago figure of $585,000. Comparing percentages, that was the smallest YOY increase since December 2020 when it was 12.2%.

"In May, we saw a slowdown in the steep price increases we have witnessed so far this year," observed John Deely, executive vice president of operations at Coldwell Banker Bain. He noted prices for single family home sales (excluding condos) in King County jumped from $775,000 in January to a whopping $995,000 in April, a change of $220,000 in only four months (a jump of 28.4%). Prices for single family homes in King County were nearly unchanged from April ($995,000) to May ($998,888).

"Rising interest rates coupled with inflation are causing buyers that rely on conventional mortgages to reconsider the affordability, and possibly take a break or look in areas that are less costly," Deely commented. "We seem to be heading from an extreme seller's market toward a more balanced market with increasing inventory."

J. Lennox Scott also commented on market adjustments. "Unsold inventory is ticking upward locally as more new listings hit the market. This gives buyers an increased selection of desirable properties to choose from as they hunt for their new home," said Scott, the chairman and CEO of John L. Scott Real Estate.

"Though there is still a steady backlog of buyers in the market, the increase in inventory means each home will receive fewer offers and may not go pending the first weekend," Scott remarked, adding, "Seasonal home price flattening is also in play, which means premium pricing is off for most properties."

NWMLS figures show last month's sales fetched 105.7% of the asking price, down from April when it was 107.7% and March when it was 108.2%.

Scott also noted luxury sales activity has held steady due to strong buyer demand in the Puget Sound area. He attributes this to "a backlog of buyers along with factors like job growth and our thriving local economy."

MLS figures show there were 95 sales of properties priced at $2 million or more in January. That number rose to 136 in February, 325 in March, 389 in April and 353 in May.

Frank Wilson, Kitsap regional manager at John L. Scott Real Estate, is detecting "light breezes of change" in that county. "Homes are staying on the market a few days longer. We are still receiving multiple offers, but not as many." He also noted inventory is slowly growing. MLS figures show supply in Kitsap County is up nearly 39% from a year ago.

"Finally, some balance in the market for homebuyers," exclaimed Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. "Last month provided more buying opportunities due to increasing number of new listings and more flexible sellers willing to work with buyers on finance and inspection contingencies," he remarked, but also reported, "Price reductions are on the increase from sellers as overpriced properties are languishing on the market."

"Things have changed," agreed Dick Beeson, managing broker at RE/MAX Northwest Realtors in Gig Harbor. "Sellers who expect to get more than their asking price are unhappy if they receive offers only slightly above their list price. Sellers are now more often required to consider offers contingent upon financing, inspections, or the sale of the buyer's home. Things that were normal in purchase contracts just two years ago are making their return," he stated.

Beeson expects inventory will continue to grow as more sellers realize now is the time to sell. "Otherwise, their home's appreciation simply becomes unrealized phantom equity, especially if prices fail to continue their dizzying upward spiral." And, he suggested, "That day is drawing near."

Despite some conditions tilting to favor buyers, Beeson said some buyers have given up hope, choosing to sit on the sidelines waiting for a more "normal" or falling market. "Those days are a mirage."

Reflecting on his 40 years in the business, Beeson wondered, "Who would ever imagine increases of nearly 65% in inventory in Pierce County and nearly 36% in Pierce and King County would only produce less than a month's supply of homes for sale? Imagine prices escalating at 15% or more a year, yet the number of closed sales is falling. Imagine buyers looking at the increased inventory, increased prices and still experiencing serious competition with a plethora of other buyers for most homes. That's the world of today in Western Washington!"

Would-be owners of condominiums will find limited choices with inventory down more than 9% from a year ago. Prices are up nearly 15%, rising from $435,000 to $500,000.

"The only constant is change," said Gary O'Leyar, another broker with decades of experience. "Although we have been through a long run-up in the market, history tells us that the real estate market never remains static. There is a definite shift in buyers' patterns," according to O'Leyar, the designated broker/owner at Berkshire Hathaway HomeServices Signature Properties in Seattle.

O'Leyar also noted there are many "micro markets" within each county. Within King County, for example, Northwest MLS tracks data for 30 map areas. Last month's median sales prices ranged from $565,400 in the area encompassing Dash Point and Federal Way to nearly $2.6 million on Mercer Island. Also notable is area 720 where Shoreline and Lake Forest Park are located. That area had a year-over-year price bump of 52.4%, with the median price surpassing $1 million for the first time, according to MLS records. In nine of the 30 map areas in King County, median prices exceeded $1 million last month.

O'Leyar acknowledged "outside influences beyond our local control" are factors contributing to market changes. He cited interest rates and the price of gasoline among them.

There are local dynamics that also impact activity, O'Leyar emphasized. "Employment is a significant barometer," he suggested. "King County enjoys an extremely low unemployment rate, recently at about 2% which is notably below the state and national rates around 4.1% and 3.6%, respectively. When clients ask for market forecast opinions, my consistent 'go to' reply has been "Watch the employment numbers along with population numbers of people entering or exiting the market. It's basic supply and demand."

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

4,581

2,708

3,606

3,281

$1,099,144

$880,000

0.83

0.55

Snohomish

1,973

1,182

1,571

1,394

$856,607

$782,800

0.85

0.34

Pierce

2,018

1,214

1,736

1,502

$639,121

$575,000

0.81

0.51

Kitsap

593

351

569

446

$648,543

$550,000

0.79

0.62

Mason

174

152

142

115

$493,205

$410,000

1.32

0.72

Skagit

270

203

230

178

$634,636

$555,500

1.14

0.72

Grays Harbor

240

276

181

156

$370,221

$350,000

1.77

1.08

Lewis

199

190

149

119

$412,148

$406,000

1.60

1.28

Cowlitz

197

157

152

120

$443,325

$400,000

1.31

0.74

Grant

152

143

108

114

$424,687

$385,000

1.25

0.89

Thurston

646

371

600

475

$569,080

$519,933

0.78

0.47

San Juan

58

94

28

17

$1,188,824

$985,000

5.53

2.39

Island

269

186

199

145

$678,711

$610,000

1.28

0.59

Kittitas

167

152

105

89

$719,857

$550,000

1.71

0.98

Jefferson

86

82

61

46

$703,283

$625,000

1.78

1.15

Okanogan

121

149

76

39

$395,729

$310,000

3.82

1.86

Whatcom

491

355

402

341

$691,615

$610,000

1.04

0.84

Clark

130

90

108

95

$613,614

$550,000

0.95

0.64

Pacific

79

102

66

46

$342,545

$352,000

2.22

1.05

Ferry

12

27

12

7

$216,714

$175,000

3.86

12.00

Clallam

132

113

115

83

$520,324

$444,950

1.36

1.00

Chelan

180

179

119

97

$692,532

$570,900

1.85

1.03

Douglas

78

68

53

65

$464,491

$425,000

1.05

0.55

Adams

19

23

17

10

$429,679

$390,790

2.30

1.63

Walla Walla

98

85

82

65

$522,498

$445,000

1.31

0.93

Columbia

18

24

8

10

$391,540

$315,250

2.40

5.00

Others

94

122

68

41

$468,870

$420,125

2.98

1.70

Total

13,075

8,798

10,563

9,096

$818,146

$660,000

0.97

0.59

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

6908

7482

 

 

 

 

 

 

 

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