Fall Creates New Opportunities for Buyers

Real Estate

Transition to Fall Creates New Opportunities for Buyers

KIRKLAND, Washington (October 7, 2019) - Northwest Multiple Listing Service brokers reported year-over-year gains in pending sales, closed sales and prices, but its report summarizing September activity also showed an 18% drop in inventory compared to a year ago.

"The transition into the fall housing market creates opportunities for homebuyers," suggested J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "Although there are fewer listings than what buyers find during peak summer months, there is also less competition" for the available inventory, he added.

While the intensity of sales activity is typically lower for new listings in the fall and winter, Scott noted "It appears we are headed toward a more intense winter market than last year." He said he expects the number of unsold listings will continue to decrease once the winter "clean-up" of inventory begins.

At the end of September, MLS brokers reported 15,982 total active listings, down more than 18% from the same month a year ago when the selection totaled 19,526 listings. Only three of the 23 counties served by Northwest MLS - Clark, San Juan and Whatcom - had year-over-year gains in inventory, while 18 counties had double-digit drops. Thurston County reported the sharpest shrinkage, at nearly 35%.

 

"In King County, prices were down nearly 2.7% while pending sales rose nearly 10%. This tells us there is no shortage of buyers in the Greater Seattle area," stated Jacobi. He also said home prices normally start to taper off this time of year, "so this isn't a major cause for concern." Within King County, prices rose in four of the six sub-markets; only Seattle (down 3.2%) and Vashon (down almost 28%) reported drops.

The median price for single family homes and condos that sold last month in King County was $593,750, down from the year-ago figure of $610,000 and the first time it dipped below $600,000 since January. Three other counties, Okanogan, Pacific, and Clallam, also reported year-over-year price drops. Joining Pierce County with double-digit price increases from a year ago were eight other counties.

System-wide, prices were up 5%, rising from $400,000 a year ago to $420,000. The volume of closed sales increased about 4.4% from a year ago (7,962 versus 7,630).

"Home prices have stabilized, creating good opportunities for purchasers," said Dean Rebhuhn, the owner of Village Homes and Properties in Woodinville. He expects prices to stay stable through the fall and winter markets.

"Continuing to drive the market are new jobs, lifestyle changes, and very low interest rates," Rebhuhn remarked, adding, "FHA mortgages with 3.5% down payments are very popular with first-time homebuyers."

The latest report from Northwest MLS shows pending sales were up about 9.8% from a year ago, with mutually accepted offers rising from 8,913 to 9,785. In the four-county Puget Sound region, Snohomish reported the largest gain at 18.3%, followed by Kitsap at nearly 11.9%, King at 9.8%, and Pierce at 5.4%.

Brokers were unable to replenish inventory to match demand as the volume of pending sales (9,785) outpaced new listings (9,435).

"Things were a bit different in September, but at this point it's difficult to know if it's an aberration or an actual trend," stated Coldwell Banker Bain president and COO Mike Grady, pointing to "far fewer" new listings that were added last month compared to a year ago. Area-wide, Northwest MLS brokers added 9,435 new listings last month, a decline of 1,023 from the year-ago total (down nearly 9.8%).

"It's still a seller's market, and for more than a year we've seen only 1-to-2 months of inventory, so I'm starting to think we may be looking at a 'new normal' in relation to what a balanced market looks like," commented Grady.. "With the international economy and trade issues continuing to be erratic, and interest rates staying low, these pressures will almost certainly be an influence, yet there's no clear answer to how all of this will play out," he added.

MLS figures show 2.01 months of inventory system-wide, with 12 of the counties reporting less than 2.5 months of supply. Real estate experts tend to use 4-to-6 months of inventory as an indicator of a balanced market.

 

"Prices along the I-5 corridor between the Puget Sound and Portland once again outperformed as buyers seek value for money and job growth has expanded in the entire region," observed James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington.

If millennials want to own houses, Young said the logical first step in the housing ladder is increasingly outside of King and Snohomish counties "and further afield along the I-5 corridor." With interest rates near historic lows and employment levels at historic highs, first-time homebuyers are acting while they can to get on the housing ladder, "even though that may mean long commutes," Young stated.

The September report from Northwest MLS shows single family activity outperforming condos. Year-over-year pending sales of single family homes jumped 11%, while condo sales were flat. Prices on last month's closed sales of single family homes rose more than 5.5%, but condo prices declined by 1.2%.

 

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,400 member offices includes more than 30,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.