Holiday Shoppers Include Homebuyers, but Inventory is Still a Challenge

"Normal seasonal slowdowns" are reported by some real estate leaders with Northwest Multiple Listing Service, but other brokers say this holiday season is still drawing crowds at open houses along with competitive bidding in some neighborhoods. Both inventory and pending sales dipped to their lowest levels since April, while prices still increased by double-digits in most of the 23 counties served by Northwest MLS. Until we see a balanced rate of 4-to-5 months of supply, instead of hovering around one month, we're not likely to see much change. This time of year is actually one of the best times to find a home. There is less competition and sellers who list their homes at this time are usually motivated to make their move. Some of the best pricing can be attained from December through early February.

Buyers seem to be undeterred by winter weather, holiday festivities or other seasonal or - for the most part -- political distractions. For those who are both prepared and patient, the holidays can actually be a great time to buy because there is usually less competition and sellers are motivated to close out the year with a sale. Strong demand is not confined to Seattle. Every time a new listing is added all eyes focus like a laser beam to see what just happened. If a worthy property comes on the market, buyers know it instantly as the information is streamed through every device known to man. Buyers step up and buy, quickly and efficiently.

Area-wide, the volume of new listings added during November rose nearly 5.6 percent (from 5,776 to 6,098) compared to the same month a year ago. Despite improvements in new listings, brisk sales kept inventory well below year-ago levels. King County is still experiencing double-digit reductions in inventory compared to this same time last year, but the shortage is even more pronounced in some outlying counties.

Measured by months of supply, there is about 1.4 months of inventory overall. In King County, supply has dwindled to 0.79 months, and only slightly better, at 0.89 months, in Snohomish County. In King County the median price for single family homes and condos combined jumped 15.6 percent, from $497,254 to $575,000. For single family homes (excluding condos), the median price was $630,750, up nearly 14.7 percent from last year. Condo prices surged 17.1 percent, due to a combination of depleted inventory (down 28 percent from a year ago) and higher prices for new condos. (In King County, the condo component classified as new construction that sold during November had a median price of $873,490.)

Brokers tended to agree some of the provisions in the widely anticipated tax reform have "the potential to negatively affect home values nationwide." All of the projections are that market conditions are set for another robust market in 2018.

Source: NWMLS

Seasonal and Tax Implications on Current Market Conditions

November and December are usually slower months. But early seasonal snow and questions swirling around the tax plan could make the usual seasonal slowdown more pronounced

Northwest MLS figures for the 23 counties it serves show members added 8,466 new listings to inventory during October, outgaining the year-ago total of 7,575 by 11.8 percent. Buyers outnumbered new listings, with 10,586 of them having their offers accepted. That number of pending sales was up nearly 8 percent from the same month a year ago.

Buyers may find themselves in a quandary as the year winds down as they contemplate limited supply, possible upticks in interest rates and tax reform. Last week's announcement of a provision in a GOP tax proposal to cap the mortgage interest deduction is concerning to buyers, brokers and builders. Imagine if the proposed plan to cap the mortgage interest deduction at $500,000 is approved in a market that is starved for homes and where the median price [for a single family home in King County] is now $630,000. Homeowners may be less likely to sell because they would be giving up their grandfathered tax credit on their current home. That's fewer homes for sale in a market where we really need them and there could also be a flood of new buyers trying to purchase before the plan is passed, adding to the already hyper-competitive market conditions.

Northwest MLS data show 66 percent of single family homes sold so far this year (Jan. - Oct.) in King County had selling prices of $500,000 or higher.

The median sales price system-wide for October was $373,000, up more than 8.1 percent from twelve months ago when it was $344,900. All counties in the four-county Puget Sound region notched double-digit gains.

For single family homes (excluding condos), the median sales price for last month's completed transactions was $381,000. Within King County prices are considerably higher. In Seattle, year-over-year prices jumped 17.6 percent, from $625,000 to $735,000. On the Eastside, the median price for a single family home rose 10 percent from a year ago, increasing from $768,000 to $845,000. Nevertheless, high prices did not seem to deter many house-hunters. The stage is set once again for a frenzy housing market after the first of the year in the price ranges where there is a shortage of active listings for sale.

Listings in Snohomish County are experiencing longer market times, fewer above-list price offers, and a noticeable increase in price reductions.

Source: NWMLS

MLS Brokers Detecting Seasonal Slowdown in Some Areas but Expect Price Hikes to Continue 

MLS figures for September show inventory reached 1.7 months of supply at the end of the month, matching the year-to-date high in February. That level is still well below the 4-to-6 months of supply that many industry analysts use as an indicator of a balanced market. Buyer intensity for new listings is higher today than a year ago.
Member-brokers in the 23 counties served by Northwest MLS added 10,120 new listings to inventory during September, slightly more than the number reported for the same month a year ago. At the end of the month there were 15,888 listings of single family homes and condos in the MLS database, a drop of 12.4 percent from a year ago when buyers could choose from 18,136 listings. New listings during September and October typically shrink 30 percent - and even more during the winter months - when compared to spring and summer months.
The strong job growth statewide is fueling demand for housing. Washington has added around 83,000 new jobs from August 2016 through August 2017 (not seasonally adjusted), according to the state Employment Security Department. Pending sales last month surpassed the number of new listings, putting pressure on prices. Year-over-year median prices for homes and condos surged 12 percent.
Buyers may be emerging on news of slightly improving supply. For only the second time this year the available inventory was over the one-month mark in King County and a notable number of new listings went past their offer review date, and more listings had price reductions. Personally, I had a listing in West Seattle that only got ONE offer and some buyers got a home in Edmonds where they were the only offer.
During spring and summer it was common to see numerous offers on individual listings. Now, it's more common to see a few in multiple offer situations. This change is a predictable seasonal adjustment as buyers and sellers enjoy the warm weather.
Excluding condos, the system-wide median price for September's single family sales was $390,000. A look at the 23 counties in the report shows a wide range of median prices, from the lowest of $124,000 in Ferry County to the highest, at $625,000, in King County. September's median price for single family homes and condos in King County, at $565,000, reflects a jump of more than 14 percent from a year ago, but it is a $20,000 decline from August (down about 3.5 percent).
In Snohomish County, for example, Northwest MLS tracks statistics for six sub-areas within that county. Last month's median price for countywide sales of single family homes and condos was $430,000, but it ranged from $352,000 in the northwest segment of the county to $606,250 in the southeast portion. Year-over-year price changes ranged from an increase of just over 6 percent to more than 19 percent.
Noting King, Pierce and Snohomish counties all reported year-over-year price hikes of more than 14 percent. All indications are that sales price increases in these neighboring counties are likely to accelerate at an even faster rate. In some of these counties, the median selling price is about half the price in King County. Faced with limited inventory and skyrocketing prices, some buyers are forced to broaden their search to these neighboring counties.
Despite some signs of a slowing market, many renters remain frustrated, pointing to the $125,000 hike in King County's median price in just two years. Builders are also frustrated, who are complaining and requesting to expand Growth Management Area guidelines. The massive shortage of developable land makes it more difficult to create affordable housing.

Source: NWMLS

Seattle Ice Cream Shops

Seattle Ice Cream Shops - On the Road with Roger is a series of exciting videos about Seattle neighborhoods and real estate topics. Come on the road with me as I tour Seattle's unique and favorite ice cream shops around the city. If you are looking to buy or sell real estate in the Seattle metro area, Roger Morris Real Estate can help you! Contact me for more information about this or other real estate questions.

Seattle Realtor Roger Morris Signs Book Deal With Prominence Publishing

The secret is out... And no, I'm not a Tony Award winner, but I have been selected as a contributing author for an upcoming book called Real Estate Game Changers. My chapter is "How to Prepare Your Home for Sale" (it's more than getting rid of your stuff...). This press release provides further details - release this year! Stay tuned...