Monthly Market Update

Northwest MLS brokers see signs of busy spring market despite slow January

Published on:

KIRKLAND, Washington (February 7, 2022) – A frigid first week of January, surges in coronavirus cases, and depleted inventory were among factors brokers from Northwest Multiple Listing Service cited for last month’s slower than year-ago sales.

In newly released statistics for January, the MLS reported 6,350 pending sales of single family homes and condominiums during January, about 1,000 fewer the same month a year ago for a drop of 14%. The year-over-year (YOY) number of closed sales also fell, dropping from 5,896 completed transactions to 5,085 for a decline of nearly 13.8%).

“When there’s uncertainty, the default position for most sellers is to stay put, do nothing, and hunker down,” suggested Mike Larson, managing broker at Compass Tacoma. He said many things are contributing to sellers’ reluctance to put their homes on the market, “most notably, COVID, inflation, the economy, the holidays, and finding a replacement property. Security and certainty are more important than cashing in on record amounts of equity.”

Broker-members added 5,927 new listings during January, nearly 1,000 fewer than the same month a year ago, but an improvement on December’s volume of 4,617. Only five counties reported YOY gains in new listings.

Last month’s pending sales outgained new listings to further shrink inventory. At month end the selection included a meager 3,092 active listings, down more than 30% from a year ago. There is about 2.5 weeks of supply (0.61 months) across the 26 counties served by Northwest MLS.

King County had the steepest drop in active listings, shrinking nearly 59% from a year ago, followed by Jefferson County, down 40%, and Snohomish County, down more than 35%.

A comparison of counties in the listing service report shows only about half of them have more than one month of supply, and these areas tend to be in more rural areas. King, Pierce, and Snohomish counties all have less than two weeks of supply. Kitsap County is slightly better with 0.58 months.

“The year started off with more of a whimper than a boom thanks to listing inventory in King, Pierce, and Snohomish counties being lower than any January on record,” observed Matthew Gardner, chief economist at Windermere Real Estate.

“The market remains virtually sold out, and there is a significant backlog of buyers looking for a home to purchase,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. With higher mortgage rates expected, he said buyers are more anxious to get a home, even during the inventory shortage.

“Given the market conditions, nearly all homes are going under contract within a week of being listed, and multiple offers are commonplace in price ranges where there is a shortage of available homes for sale,” added Scott.

Meredith Hansen, founder and operating principal at Keller Williams Greater Seattle and a member of the Northwest MLS board of directors, agreed saying, “The market in Seattle continues to be extremely competitive with multiple offers and prices escalating. The imminent rise in interest rates has buyers scrambling to find properties to buy.”

Larson, also a director at NWMLS, emphasized rates are still historically low. Expected increases “may be spooking some buyers, but it’s also getting others off the fence.”

“Strong activity along the I-5 and I-90 corridors outside of the Seattle area continues with strong double-digit price increases being recorded,” noted James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects strong demand and a search for value outside of Seattle will continue to push up values.

Last month’s prices were up nearly 14.9% from a year ago, climbing from $483,250 to $555,000. Five counties reported price gains of 30% or more, led by Okanogan at 46.3%. Other counties with price increases of at least 30% were Chelan, Kittitas, Pacific, and San Juan.

Condominium prices surged nearly 21% area-wide, rising from $359,950 to $435,000, while the number of new listings, active listings, pending sales and closed sales all declined from the same month last year.

Young said the combined price trend and activity levels suggest suburban growth should continue for a while longer as households seek lower costs and a more home-based lifestyle.

“The market is crazy,” exclaimed Dick Beeson, managing broker at RE/MAX Northwest Realtors. “We’ve been experiencing huge increases in median sales prices and a continued lowering of the number of days homes are on the market. The massive reduction in inventory has led to fewer pending sales and super-charged prices. Many properties have literally gained 40%-to-50% appreciation in just the last two years or so – a rate of increase no one can comfortably live with.”

Kitsap County was one of the few areas with YOY gains in new listings (up 22.3%) and only single-digit changes in active listings (-6.4%), pending sales (+8.4%) and closed sales (-2.14%). However, like nearly all the counties in the MLS report, prices jumped by double digits (up 20.8%).

“New construction in Kitsap County is roaring ahead to meet buyer and renter demands,” stated NWMLS director Frank Leach, broker/owner at RE/MAX Platinum Services. “We are seeing unprecedented construction in all areas of the county in both the residential and commercial arenas. There are more than 670 rental units currently being built in Bremerton and Silverdale alone and building permit activity at the county is at an all-time high at 3,321 units.”

Leach said available inventory is being snatched up quickly in a rush to take advantage of low interest rates. He also said they are not expecting a flood of inventory coming from foreclosures in part because of the 12%-to-18% increase in equity over the last 12 months. “Forbearance across the U.S. is below 800,000 units, down from over 4.5 million in 2020,” he noted, citing several sources.

Despite the slow start in sales and persistent shortages of inventory, the MLS brokers expect robust activity during 2022.

“The market dipped slightly in January, mainly due to weather and concerns over the latest pandemic variant, but the general feeling is that it’s going to be a good year,” said John Deely, executive vice president of operations at Coldwell Banker Bain. Commenting on last year’s record-setting volume of closings, he believes “rate increases during 2022 combined with the sunset of the pandemic will bring more sellers to the market.”

“People waiting longer to sell their home should not expect the same steep price increases we were seeing in 2021,” Deely said, adding, “An influx of people coming to the market and a decrease in the buyer pool due to interest rates going up should help to keep prices level.”

Dean Rebhuhn, owner of Village Homes and Properties, said rising mortgage rates and the addition of inventory as spring arrives should bring more opportunities for buyers. “I see no buyer hesitation caused by rising interest rates,” he commented, adding, “Many buyers are considering homes farther north, south and east with more affordable prices and more selection. Hybrid work-from-home conditions are allowing more flexibility for buyers. Job demand and lifestyle choices continue to drive sales.”

Also commenting on the outlook for 2022 was economist Gardner. “One of the biggest questions for 2022 is how the market will be further impacted by the work-from-home paradigm given that many companies have postponed their long-term WFH plans. This is likely holding back sellers during a time when we desperately need additional inventory, as well as buyers who are concerned about rising mortgage rates.”

Gardner said he expects more sellers will list their homes and more buyers will start their searches once they know how often they need to commute to work, and this may lead to a busier spring market than expected.

Beeson believes there will not be any substantive market changes, come spring, “except for higher interest rates. That may be. But someone please explain that to a desperate buyer willing to pay more, accept less, and be glad they did.”

Leach is optimistic of upticks in activity, dismissing suggestions of a “bubble,” saying “We don’t see that happening in Kitsap or in the Pacific Northwest.” He also advises against postponing purchasing. “If you think you are saving money by waiting, you should run the numbers. Economists and pundits in real estate all say buy now. The anticipated increase in equity across the next two-to-four years will be astonishing.”


About Northwest Multiple Listing Service

As the leading resource for the region’s residential real estate industry, NWMLS provides valuable products and services, superior member support, and the most trusted, current residential property and listing information for real estate professionals. NWMLS is a member-owned, not-for-profit organization with more than 2,500 member offices and 30,000+ real estate brokers throughout Washington state. With extensive knowledge of the region, NWMLS operates 20 service centers and serves 26 counties, providing dedicated support to its members and fostering a robust, cooperative brokerage environment.

NWMLS now offers a home listing search and comprehensive broker database at https://www.nwmls.com.

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

2,083

761

2,009

1,557

$892,935

$720,000

0.49

0.92

Snohomish

867

241

901

734

$747,134

$686,792

0.33

0.41

Pierce

975

404

1,148

863

$554,686

$515,000

0.47

0.51

Kitsap

334

160

347

274

$583,528

$506,250

0.58

0.61

Mason

69

64

84

85

$399,006

$400,000

0.75

0.62

Skagit

127

95

121

108

$589,883

$529,325

0.88

0.80

Grays Harbor

125

167

135

103

$374,328

$335,350

1.62

0.81

Lewis

103

94

104

92

$414,924

$375,000

1.02

1.18

Cowlitz

95

60

131

84

$368,534

$359,250

0.71

0.45

Grant

99

118

116

78

$362,555

$325,000

1.51

1.16

Thurston

304

130

368

345

$491,415

$475,000

0.38

0.42

San Juan

12

44

15

21

$1,275,506

$821,000

2.10

2.03

Island

105

46

120

101

$657,606

$518,000

0.46

0.56

Kittitas

30

45

47

66

$638,003

$517,225

0.68

0.90

Jefferson

26

31

28

24

$608,663

$545,000

1.29

1.53

Okanogan

17

67

31

31

$399,303

$365,000

2.16

3.08

Whatcom

200

150

224

195

$562,306

$530,000

0.77

1.08

Clark

68

26

78

46

$546,729

$499,475

0.57

0.69

Pacific

50

50

61

35

$331,013

$330,000

1.43

1.44

Ferry

6

23

2

4

$324,975

$162,500

5.75

5.25

Clallam

64

63

65

67

$471,569

$431,000

0.94

0.83

Chelan

44

77

64

48

$678,650

$607,500

1.60

1.16

Douglas

34

32

38

24

$514,977

$441,000

1.33

0.94

Adams

9

21

12

9

$196,993

$165,000

2.33

0.83

Walla Walla

42

49

47

46

$374,905

$354,500

1.07

0.83

Columbia

2

8

4

3

$202,000

$194,000

2.67

1.00

Others

37

66

50

42

$417,474

$412,500

1.57

1.84

Total

5,927

3,092

6,350

5,085

$669,434

$555,000

0.61

0.75

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

2022

4405

 

 

 

 

 

 

 

 

 

 

 

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