NWMLS logo

News & Information

"Extraordinary market conditions" sustain strong home sales around Washington state during holidays

Latest Press Release - December Statistical Data

KIRKLAND, Washington (January 6, 2021) - "Insatiable buyer demand" is keeping inventory scarce as house hunters try to outmaneuver and outbid each other, according to reports from Northwest Multiple Listing Service (NWMLS). Its statistical summary for December showed strong activity throughout the holiday season with double-digit increases in new listings, pending sales, closed sales, and prices.

Northwest MLS brokers added 5,260 new listings to inventory during December, a hefty 39.3% increase over the same month a year ago. Last month's additions fell short of meeting demand as members reported 6,883 pending sales (mutually accepted offers). That number surpassed the year-ago volume by 940 transactions for an increase of 15.8%.

Pending sales were especially robust in several counties where year-over-year (YOY) gains of 25% or greater were notched, notably Grant (up 133%), Kittitas (up 55%) and Pacific (up nearly 43%).

"As more people are working from home, they are also purchasing properties further afield from Seattle," observed James Young, director of the Washington Center for Real Estate Research at the University of Washington. He singled out Chelan, Clallam, Grays Harbor, Kittitas, and Mason as counties that had year-over-year price growth of 20% or more. The MLS report also shows Pacific and Whatcom counties with 20% or higher price gains.

"The velocity of the December market is a harbinger of the 2021 market as tight listing inventory, low interest rates, and high buyer demand continue to drive momentum," remarked NWMLS director John Deely, executive vice president, operations at Coldwell Banker Bain. "Every market serviced by NWMLS was trending below December 2019 for total active inventory," he noted. "In King County, despite a nearly 62% increase in new listings compared to a year ago, the insatiable buyer demand quickly absorbed available properties," he added.

Deely reviewed new listing activity during the month of December for the past decade and found last month's total (5,260) was the largest since 2010 (5,460).

At month end, there were 4,732 total active listings system-wide in the MLS database, which encompasses 25 counties. That's down 44% from a year ago when the selection included 8,469 listings. Measured by months of inventory, there is only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market.

"With just over a two-week supply of homes on the market, last month maintained the extraordinary market we have seen all year," commented Young. "For demand and supply to remain this out of balance for this time of year is incredible," he added.

NWMLS director Jason Wall, designated broker at Lake & Company Real Estate, said 2020 was unusual "and it ended in the same way - surprising." Noting the market typically slows during the holiday season, Wall said, "This year, with little to no travel and not much else attracting homebuyers' attention, many of them remained very active in the market. Homebuyers that hoped to take advantage of less competition in a relaxed housing market instead found the same competitive market."

NWMLS director Mike Larson, president/designated broker at ALLEN Realtors, described the market as "the best of times for sellers and a very challenging time for buyers. Sellers can be picky because there are almost always multiple offers. Buyers are being forced to add value to their offers in ways other than price." Examples he cited included shorter contingencies, closing date flexibility, higher earnest money deposits, and agreeing upfront to pay the difference if a property's appraised value is lower than the sales price.

Home prices continue to rise. For the 9,008 sales of single family homes and condos that closed last month, prices jumped nearly 12.2% from a year ago, increasing from $435,000 to $488,000. Only three counties (Ferry, Okanogan, and San Juan) reported year-over-year price drops, while nearly all other counties had double-digit gains, according to the NWMLS report.

Single family homes accounted for most of the price escalation. For the 7,848 closed sales of this property type, prices increased nearly 12.9%. YOY prices on the 1,160 closed sales of condos rose about 1.8%.

"We see home prices continue to increase with jobs and lifestyle changes being two of the major factors in sales. Unbelievably low interest rate and buyer demand continue to drive the market," commented Dean Rebhuhn, broker-owner at Village Homes and Properties. Smart buyers are winning in multiple offer situations by doing pre-inspections and having financing approved, according to Rebhuhn.

"Housing market activity is truly off the charts," exclaimed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He described activity for new listings going under contract as "frenzy-level," fueled by low interest rates and a huge backlog of buyers.

"Now that the holiday season is over, local housing markets will see a surge of buyers entering the market in 2021," Scott predicts. He also reported those who can work from home are moving to lifestyle/destination markets further outside city centers.

Inventory continues to be the biggest issue and challenge for buyers, reported Mike Grady, president and CEO of Coldwell Banker Bain. "We're seeing sparse inventory play out in more rural areas," he noted, adding, "There are indications people are continuing to move farther out as they're now able to work from home. It is most definitely a sellers' market and buyers should not depend on a significant increase in inventory or a decrease in prices in the coming months," he stated.

Grady also advised would-be purchasers to have patience and prepare for multiple offer situations. "An example is a recent sale one of our brokers facilitated for her buyers on New Year's Eve. The buyers had been looking for months and won a bidding war on a listing located near Monroe by paying 18% over list price. This is the reality of the market and it's increasingly occurring outside the major metro areas."

"COVID has not slowed the demand for housing. In fact, it has driven it up as people search for the perfect work from home location," said Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate.

With open houses prohibited due to the pandemic, Wilson said brokers remain busy showing new listings by appointment and in accordance with protocols. "We're seeing increases in website traffic and virtual tours."

Wilson said the story in Kitsap County, where his office is located, is not just about low inventory. "It's deeper than that. We've had more houses come on the market when compared to last year. The real story is about the pent-up demand of buyers." He said buyers are coming from all areas of the buyer spectrum, including those who are moving to improve their quality of life or escape densely populated cities, those who can now afford a house due to low interest rates, and those who need a change based on life cycles.

Dick Beeson, managing broker at RE/MAX Northwest in Tacoma-Gig Harbor, analyzed inventory and price changes in five Puget Sound area counties, concluding "The huge price rise in each county is driven by the extraordinarily low interest rates and incredible lack of inventory."

Beeson believes some King County sellers will opt for less expensive homes outside the county, such as the South Sound area encompassing Pierce, Thurston, and Kitsap counties. "With teleworking becoming the norm for many people, sellers in King County can buy a good home in a good neighborhood in the South Sound and have money left in their pocket. South Sound is a slowly awakening giant," he predicts.

"The 2020 housing market was remarkable for many reasons, not the least of which was its extraordinary resolve through the COVID-19 pandemic," stated Windermere Chief Economist Matthew Gardner, adding, "Who would've thought back in April that we would be ending the year with strong increases in both sales and prices?"

Deely, Larson, Rebhuhn, and Wall expect activity in 2021 to resemble 2020:

  • "Demand driven by the continued growth of the tech and biomedical sectors and our high quality of life with access to vast marine and alpine activities will continue to drive prices up and growth toward the suburbs." ~ John Deely
  • "So much of what is driving the market is interest rates and I don't see the Fed raising rates in the foreseeable future. I expect 2021 to be much like 2020." ~ Mike Larson
  • "2020 real estate activity ended with a bang, indicating that 2021 will be an explosive year for listings and sales." ~ Dean Rebhuhn
  • "I expect the first half of 2021 will be very similar to last year: low interest rates combined with low housing inventory resulting in a very active and competitive market. Multiple offers and waived contingencies will likely be the norm as we roll into the new year." ~ Jason Wall

Economist Gardner echoed some of those sentiments, saying, "As we move into 2021, I expect continued strong demand from buyers, but unfortunately, the likelihood that there will be any significant increase in inventory is slim. As a result, I believe prices will continue to rise, which is good news for sellers, but raises concerns about affordability. This, combined with modestly rising mortgage rates, could end up taking some steam out of the market but overall, I expect housing to continue being a very bright spot in the Puget Sound economy."

Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 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 25 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

1,793

1,949

2,351

3,096

$837,507

$676,000

0.63

0.94

Snohomish

806

373

1,018

1,413

$590,450

$535,000

0.26

0.87

Pierce

898

515

1,156

1,538

$479,229

$430,000

0.33

0.87

Kitsap

258

195

326

420

$509,128

$425,950

0.46

0.82

Mason

64

54

99

117

$376,936

$335,000

0.46

1.53

Skagit

132

109

149

188

$481,973

$431,000

0.58

1.79

Grays Harbor

101

127

134

147

$278,333

$252,500

0.86

2.73

Lewis

87

112

124

133

$331,390

$291,000

0.84

2.51

Cowlitz

67

61

118

126

$345,654

$320,000

0.48

2.13

Grant

75

99

114

135

$282,754

$271,911

0.73

2.35

Thurston

300

144

361

481

$428,222

$395,950

0.30

0.68

San Juan

23

75

29

45

$883,097

$670,000

1.67

8.40

Island

109

65

126

155

$538,713

$423,500

0.42

1.74

Kittitas

37

46

59

104

$605,981

$447,473

0.44

1.71

Jefferson

34

57

41

48

$480,681

$406,000

1.19

2.65

Okanogan

22

89

33

46

$289,347

$269,500

1.93

5.17

Whatcom

190

249

238

320

$505,716

$466,000

0.78

2.24

Clark

42

35

59

85

$483,769

$420,000

0.41

1.35

Pacific

35

66

50

57

$308,807

$275,000

1.16

3.70

Ferry

4

23

6

7

$211,286

$175,000

3.29

11.33

Clallam

48

61

73

88

$394,057

$371,500

0.69

2.01

Chelan

42

61

72

97

$507,831

$409,000

0.63

2.56

Douglas

28

39

39

54

$424,913

$387,500

0.72

2.57

*Adams

5

13

10

19

$197,650

$216,065

0.68

2.50

*Walla Walla

34

40

67

46

$387,272


$349,250

0.87

1.80

Others

26

75

31

43

$334,918

$285,000

1.74

4.54

Total

5,260

4,732

6,883

9,008

$607,576

$488,000

0.53

1.19

*Adams and Walla Walla counties are added as separate rows this month; previously, statistics for those counties were included in the row for "Others/Out of area"

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

2002

4293

4735

5569

5436

6131

5212

5525

6215

5394

5777

4966

4153

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


Other resources: