Monthly Market Update

Northwest MLS brokers say September’s home sales reached highest level since June 2018

KIRKLAND, Washington (October 7, 2020) – Northwest Multiple Listing Service brokers completed 10,175 sales transactions during September – the highest monthly volume since June 2018 when MLS members reported 10,072 closed sales. September’s closings also marked a jump of nearly 28% from the same month a year ago, according to the latest statistical summary from the MLS.

“I believe this significant increase speaks to sellers becoming much more confident and buyers competing more effectively, most likely due to low interest rates,” remarked Mike Grady, president and COO at Coldwell Banker Bain. “It’s as if we just completed our typical ‘spring’ market,” he added.

The new report from Northwest MLS showed a sharp year-over-year (YOY) drop in inventory (down 43% from a year ago), a robust increase (23%) in pending sales (mutually accepted offers), and a sizeable surge (19%) in prices for single family homes and condos combined. Northwest MLS serves 23 counties, mostly in Western and Central Washington.

Whether last week’s announcement from Boeing to consolidate to a single 787 production location in South Carolina resulting in the loss of about 900 Puget Sound jobs will dampen home sales is unclear.

“It’s too soon to make any solid predictions about how Boeing’s announcement will affect the Snohomish County housing market, but I am watching it closely,” stated Matthew Gardner, chief economist at Windermere. “We could see an increase in the number of homes for sale as workers either leave the area or decide to sell to access the equity they have in their homes. If this does happen, the increased supply will likely be absorbed by buyers who currently have a limited number of homes to choose from and counter any downward pressure on prices.”

Grady believes any impacts will be counteracted “given recent expansion announcements by Facebook, Amazon, and Microsoft to either purchase, build or renovate major office buildings in the region.”

Impacts of the coronavirus pandemic on the housing market are prevalent, according to several Northwest MLS representatives who commented on last month’s activity.

“COVID-19 has made many reflect on what their home means to them,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “As a result, many people are looking to create that ideal place to call home. We are seeing a rotation of home ownership, whether that means refinancing, remodeling, or moving.”

“With the trend toward employers allowing (and in some cases, requiring) employees to work remotely, we have seen a very noteworthy increase of sales in the more affordable suburban cities,” stated Gary O’Leyar, owner and designated broker at Berkshire Hathaway HomeServices Signature Properties.

“I consistently hear examples of COVID-related housing movement from our agents, such as a willingness to live further out, plans to move to the Pacific Northwest due to the ability to work remotely, a desire for a yard, home office, vacation property, etc.” said Robb Wasser, branch manager at Windermere Real Estate/East, adding, “But I do wonder if I’m noticing these instances because I’m on the lookout for them.”

James Young, director of the Washington Center for Real Estate Research at the University of Washington, also commented on shifting desires. “People working from home, especially those with kids being schooled at home, seek both space and value. Those who already have a home have little incentive to leave.” He described the current scenario of “too much demand and limited supply” coupled with low interest rates as “the perfect price storm.”

Supply continues to be inadequate to meet demand.

Brokers added 11,210 new listings to inventory during September, a healthy increase from a year ago when they added 9,435 for a YOY gain of 18.1%. Compared to August, the volume declined by 733 listings (down about 6%).

At the end of September, the supply totaled 9,099 active listings, well-below the year-ago selection of 15,982 listings (down 43%), and the lowest level since February.

Measured by months of supply, there is less than one month of supply (0.89) system wide. In the Puget Sound region, only King County notched more than a month’s supply, but if condos are excluded there is only 0.85 months of supply. Mason, Thurston and Snohomish counties had the tightest inventory, with only about two weeks of supply.

Dean Rebhuhn, broker-owner at Village Homes and Properties in Woodinville, attributes the “very active market” to record low interest rates, jobs, and lifestyle choices. “We see a desire for homes with large yards or with acreage. Prepared purchasers are bringing strong offers to sellers, at or over asking prices with few, if any, contingencies,” he stated.

“In most areas, we are virtually sold out in the more affordable, mid-price and upper end segments of the market,” stated Scott, adding, “We’re also seeing a record-setting number of luxury properties going under contract across King, Pierce, and Kitsap counties.”

Statistics compiled by Northwest MLS for these three counties show there were 883 closed sales of single family homes and condos last month in the “luxury” segment based on selling prices of $1 million and above. A year ago, there were 429 sales in this category.

“With the region’s supply plummeting by over 43% compared to a year ago and month’s supply below one, double-digit house price growth should come as no surprise,” remarked Gardner.

The median price for homes and condos that sold last month across the Northwest MLS market area was $499,950, a hefty 19% jump from the year-ago figure of $420,000. San Juan County had the highest median price at $850,000, followed by King County at $698,230.

For single family homes only (excluding condos), last month’s median price system wide was $519,864. In King County, the median price for single family homes was $753,600. Within King County, where NWMLS tracks 30 sub-areas, six of these areas had median prices over $1 million; five of those areas were on the Eastside.

One of the few counties that did not have double-digit price increases from a year ago was Kitsap. Prices there were up almost 8.9%.

Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, described Kitsap County as a “hotspot” for both first-time homebuyers and high-end buyers. “The phenomenal affordability factor in Kitsap bodes well for first-time buyers and those looking to downsize or upsize.” The median price for last month’s sales in Kitsap County was $418,000, according to the MLS report. That was $280,230 less than the price in King County.

Leach has noticed significant movement in the million-dollar-plus segment and said many rentals are now going on the market as investors look to move into new investments or change platforms.

Considering depleted inventory (down nearly 44% from a year ago) and vigorous demand, Leach said buyers need to “step up with their best foot forward to compete in the multi-offer environment or deal with the frustration of being outbid. Those without a pre-approval letter are not even going to get on the playing field.” He reported a resurgence of offer escalation clauses, adding, “The Kitsap market is exceptionally hot on anything below $375,000.”

“Kitsap County, like all regions, is going into year-end with an extreme deficit of listing inventory,” said Frank Wilson, the Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. “With 507 new listings come to market and 564 go to pending status, our deficit is deepening.”

Wilson also reported a backlog of buyers. “Our brokers are working with buyers who have made offers on 10 or 12 homes only to lose out to cash buyers or buyers who were willing to pay significantly more than the list price and waive all conditions, including an inspection.” He said brokers are bracing for an influx of buyers from King County where some residents have concerns about living in the Seattle area. Wilson believes “more buyers in the hunt for homes in Kitsap will only intensify competition and inflate prices.”

O’Leyar believes Seattle continues to be a desirable destination. “Despite the numerous negative news stories about Seattle and anecdotes of an exodus out of the city, it is still a city where more people are moving into versus out of.” MLS figures indicate YOY closed sales of homes and condos in Seattle jumped from 750 sales in September 2019 to last month’s total of 1,189 (up 59%).

Notably, the Seattle map areas tracked by Northwest MLS showed a modest 8.4% gain in active listings compared to a year ago, fueled by the addition of 527 listings of condos. That’s up from the year-ago total of 308. The median price for last month’s closed sales in Seattle (including single family homes and condos) rose 11%, from $684,500 to $760,000.

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. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers.

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