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Northwest MLS brokers end 2021 with depleted inventory, rising prices, weather disruptions

Latest Press Release - December Statistical Data

KIRKLAND, Washington (January 6, 2022) - Severe shortages of inventory, record-low temperatures and snow restrained December housing activity around Washington state beyond expected seasonal slowdowns, according to a new report from Northwest Multiple Listing Service.

Summary statistics from the MLS show the volume of new listings added area-wide dropped 12.3% during December compared with the same month a year earlier. Year-over-year inventory, pending sales, and closed sales all fell by double digits. Only prices rose - up 17.4% overall for homes and condominiums that sold across the 26 counties in the report.

The median price for last month's closed sales was $572,900, up from twelve months ago when it was $488,000. Prices for single family homes (excluding condos) surged nearly 17.5%, from $502,247 to $590,000. King County was one of only three counties where the single family price change was under 10%; prices there rose from $740,000 to $810,000. A dozen counties had price jumps of 20% or more.

Condo prices jumped 17.6%, from $370,000 to $435,000. San Juan County reported the highest median price for last month's condo sales ($642,500), followed by Snohomish County ($500,000).

Northwest MLS brokers reported 8,017 closed sales last month, a drop of nearly 1,000 transactions from the year-ago total of 9,008. Eleven counties had double-digit declines, including King (down 16.3%) and Snohomish (down 17.6%). October was the only other month during 2021 when year-over-year sales fell.

Commenting on the slowdown in sales, Dick Beeson, managing broker at RE/MAX Northwest Realtors, said, "That's to be expected considering inventory in the fourth quarter was down sharply from last year. You can't sell what isn't there."

Despite hurdles (including pandemic-related), Northwest MLS brokers tallied 107,354 closed sales during 2021, an increase 12.1% from the previous year when they notched 95,760 closings.

(Please note: The NWMLS Annual Highlights Report with comprehensive summaries of activity will be released on Jan. 19.)

John Deely, executive vice president of operations at Coldwell Banker Bain, noted median home prices in 2021 tended to rise each month in most counties served by NWMLS, "but December came in flat," which he said signals a leveling off in appreciation while demand is still high. "The Fed (Federal Reserve System) signaling interest rate increases has caused some sellers to be somewhat more aggressive in getting their homes sold," he added.

"Condos continue to be swarmed by first-time buyers," reported Deely, a member of the Northwest MLS board of directors. "We aren't seeing as many relocation buyers, a result of remote work during COVID. As companies start to make decisions about working in the office, we will start to see that market pick up."

Even though the number of pending sales, at 5,850 overall, declined more than 15% from a year ago, they far outstripped the number of new listings (4,617), contributing to the meager month end inventory. In fact, a search of NWMLS records going back a decade indicates the 3,240 active listings of homes and condos area-wide is the first time the selection has dipped below 4,000 listings. A year ago, buyers could choose from 4,739 active listings while in November there were 4,621 properties in the MLS database.

Stated another way, there was less than two weeks of supply (0.40) at month end. Inventory was even more sparse in seven counties, with Snohomish having the most acute shortage at 0.20 months. Other counties that fell below 0.40 months were Clark (0.26), King (0.27), Island (0.29), Pierce (0.32), Thurston (0.31) and Kitsap (0.38).

"Smart buyers are making their best offers using pre-inspections, family support, bridge loans, leveraging 401(k) accounts, and other resources," according to Dean Rebhuhn at Village Homes and Properties. Mortgage interest rates are the wild card, he believes. "How much will they rise and what effect will they have on the market? With current rates in the low 3% range and a forecast of three rate hikes this year, probably not much," he suggested.

"Last year was quite a year for the housing market," stated Matthew Gardner, chief economist at Windermere Real Estate. "Even in the face of historically low inventory levels, home sales in the Central Puget Sound area still managed to rise to levels not seen since 2006 and, notably, Pierce and Kitsap counties had more sales than ever before.

"Historically low mortgage rates and the ongoing pandemic led to a flood of buyers in a market with relatively few homes for sale. This caused prices to rise by double digits throughout the Puget Sound area," Gardner remarked, adding he expects the pace of price growth to slow significantly in the coming year due to rising mortgage rates and affordability constraints.

More supply would be beneficial, suggested Gardner. "The Puget Sound region is in dire need of more housing units which would function to slow price growth of the area's existing housing. However, costs continue to limit building activity, and that is unlikely to change significantly this year."

Frank Leach, broker/owner at RE/MAX Platinum Services, said builders in Kitsap County are putting up new communities of single family homes and condominiums "as fast as they can. Buyers are looking for relief in 2022, hoping inventory will become available." For now, he described available inventory as "drastically low." Buyer pressure is bidding up values, and "there is an inordinate amount of institutional cash buyers in our market."

"Sellers are frustrated trying to find replacement properties. We are seeing more contingent offers being accepted, allowing sellers some breathing room to select their next home and sell their existing home." Leach said this trend, coupled with new lending strategies "allow sellers to address the market as though they are cash buyers with conventional 20% down programs."

"We continue to see an influx of buyers from markets east of Kitsap County looking to telecommute from or completely relocate to our county," Leach commented, adding "the overall outlook for Kitsap County is excellent with billions of new money coming from government and private sector projects."

J. Lennox Scott, chairman and CEO of John L. Scott, described the current market as "truly historical," noting 2021 was one of the best years on record for pending sales in the Puget Sound region. "The week of snow and ice that hit Puget Sound in late December delayed the big kickoff to the 2022 housing market by about a week. This held back buyers who have been waiting patiently for each new listing to hit the market."

The year-end storms did not dampen Scott's optimism for 2022. "Fresh on the heels of the holiday season and snowy weather, the local market will see continued strong buyer demand, multiple offers, and premium pricing. This year is poised to be another great year in residential real estate," he exclaimed.

Rebhuhn agreed. "We will experience strong demand and very active home sales in 2022," he predicts, but added "and maybe a slight dip in price increases."

Beeson expects 2022 will be similar to last year, with both opportunities and challenges. "The buying and selling process will not become any easier," he stated.

"Once again we start the real estate dance where buyers are chasing sellers. Sellers are chasing their replacement home, and brokers are chasing those elusive listings." Like many of his colleagues, Beeson expects interest rates to climb. "Prices will also rise, albeit not as quickly as during 2021."

Economist Gardner predicts single family home prices will rise by "high single digits" in King County, and by more than 10% in Snohomish and Pierce counties.

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

1,387

693

1,724

2,592

$948,438

$749,000

0.27

0.63

Snohomish

682

232

776

1,165

$746,384

$679,950

0.20

0.26

Pierce

834

461

1,115

1,458

$566,584

$515,000

0.32

0.33

Kitsap

242

156

328

414

$592,200

$499,950

0.38

0.46

Mason

86

77

115

105

$426,038

$380,000

0.73

0.46

Skagit

92

91

112

153

$580,003

$510,000

0.59

0.58

Grays Harbor

90

176

119

145

$355,771

$330,000

1.21

0.86

Lewis

71

93

119

129

$418,066

$387,500

0.72

0.84

Cowlitz

78

78

113

135

$430,351

$365,000

0.58

0.48

Grant

75

133

88

92

$365,815

$327,450

1.45

0.73

Thurston

302

148

346

477

$509,619

$480,000

0.31

0.30

San Juan

20

49

20

22

$1,264,616

$823,275

2.23

1.67

Island

90

48

114

164

$561,448

$501,000

0.29

0.42

Kittitas

49

63

75

99

$708,303

$545,000

0.64

0.44

Jefferson

27

30

26

39

$658,969

$600,000

0.77

1.19

Okanogan

29

89

45

38

$376,507

$293,500

2.34

1.93

Whatcom

161

171

209

295

$589,178

$535,000

0.58

0.78

Clark

44

23

55

87

$532,925

$460,000

0.26

0.41

Pacific

27

53

41

47

$356,273

$335,000

1.13

1.16

Ferry

2

19

11

12

$472,358

$245,000

1.58

3.29

Clallam

58

60

75

77

$514,197

$484,000

0.78

0.69

Chelan

48

100

68

99

$681,410

$524,900

1.01

0.63

Douglas

26

36

37

56

$497,220

$439,900

0.64

0.72

Adams

8

23

17

12

$324,473

$287,127

1.92

0.68

Walla Walla

36

50

48

52

$443,277

$398,500

0.96

0.87

Columbia

1

10

1

7

$209,071

$215,000

1.43

2.75

Others

52

78

53

46

$414,168

$387,500

1.70

1.82

Total

4,617

3,240

5,850

8,017

$702,001

$572,900

0.40

0.53

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


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