Interest rates are creeping up, inventory is still squeezed, and some feared revised tax laws would have a chilling effect on home sales, but Northwest Multiple Listing Service leaders say the local market remains competitive. Instead, the local market has been even hotter and more competitive than last year at this time.
Northwest MLS figures for last month show a slight year-over-year decrease (about 2.8 percent) in overall pending sales, a likely consequence of inventory being down nearly 12.9 percent. Other key indicators of the market - new listings, closed sales, and selling prices - all showed gains in February compared to 12 months ago.
Among the four Puget Sound area counties, Snohomish had the largest year-over-year price increase at 18.8 percent. Its countywide median price for February's sales spiked to $460,000 from $387,250, but that is $130,000 below the $590,000 median price for transactions that closed in King County last month.
For single family homes (excluding condos), prices rose 13.7 percent overall, from $343,000 to $390,000. Within King County, the median price was $649,950, with three areas (Mercer Island, Bellevue west of I-405, and Kirkland-Bridle Trails) reporting median prices of more than $1 million for single family homes.
There is about 1.4 months of supply area-wide, but both King and Snohomish counties have less than a month's supply. For condos, there is only 0.88 months of supply - and even less than that in King, Snohomish, and Kitsap counties.
The arrival of daylight savings usually triggers a burst in new listings. New construction could also help ease some of the pressure, suggests Mike Grady, president and COO at Coldwell Banker Bain. "Even though Commerce Department data show purchases of newly built single-family homes nationwide fell 7.8 percent in January after dropping 7.6 percent in December, and purchases have declined for four of the past six months, we are not seeing that trend in the Northwest."
The challenge is that the number of buyers is near record highs. The right plan, including help from a skilled broker, can help buyers find success in this fast-paced market. Buyers are coming to the harsh reality that high home prices are here to stay and they need to consider smaller homes or longer than hoped-for drive times.
30-year mortgage rates climbed slightly for the seventh consecutive weekly increase, but these small increases are not yet creating too much of a stir. Conversations with buyers are more around the cost of commuting and time away from home versus floor plan and home size. History tells us that the real estate market is cyclical, but no guess on when this cycle will change.