“We’re moving in a positive direction” broker says in comments about April statistics from Northwest MLS

Published on: May 4, 2023

Market dynamics are influencing adjustments in housing prices, suggested an officer at Northwest Multiple Listing Service, but with “very constricted” inventory, he said homes that are well priced continue to receive multiple offers.

Commenting on the latest statistics from Northwest MLS, Frank Leach, vice chairperson of the MLS board of directors and the broker/owner at RE/MAX Platinum Services in Silverdale, said despite limited inventory (about 1.5 months of supply overall), it is an “excellent market.” As summer approaches, Leach expects to see increased activity with inventory “being snapped up as it comes onto the market and savvy buyers taking advantage of softening interest rates.”

The latest report from NWMLS, summarizing April activity, shows year-over-year drops in new listings, pending sales and closed sales, an increase in total active listings, and lower prices.

Brokers reported 7,137 pending sales of single-family homes and condos during April, down nearly 27% from a year ago, but notching the highest volume so far this year, edging out March by one transaction. Pending sales are up more than 23% from January’s total (5,776).

Closed sales slipped 36%, from the year-ago total of 8,344 to last month’s total of 5,338. Compared to January’s figure of 3,264 sales, April’s completed transactions surged 63.5%.

The median price for last month’s sales of single-family homes and condos across the 26 counties in the report was $603,250, down about 8.6% when compared to twelve months ago. When compared to January’s median price of $557,250, prices are up nearly 8.3%. April marked the fourth consecutive month of rising prices.

In King County, which accounted for 35% of last month’s closed sales, the median price of $790,244 fell 10.2% from the year earlier price of $880,000. A comparison with January shows prices are up 9.3%.

J. Lennox Scott, company executive officer at John L. Scott Real Estate, noted fewer resale listings are making it to the market. “The supply of housing remains limited due to a persistent shortage of available homes as fewer homeowners are putting their homes on the market after locking in low home mortgage interest rates during the pandemic.”

Scott said the limited supply results “in a return to multiple offers and the restart of premium pricing – especially in the more affordable, mid-price and into the upper-end price points.”

Northwest MLS brokers added 7,303 new listings to the database during April. That total was down from both March, when they added 7,904 new listings, and the same month a year, when they added 11,681 new listings. On a percentage basis, the year-over-year drop was 37.5%.

With slower sales, total supply improved compared to a year ago.

At the end of April, there were 8,114 active listings in the NWMLS database, an increase of 1,600 from the year-ago supply for a gain of nearly 24.6%.

“When looking at the inventory of single-family homes (excluding condos), only one county has more than six months of supply (San Juan),” said John Deely executive vice president of operations at Coldwell Banker Bain. A typical balanced market is considered between 4-to-6 months, he noted.

Continuing, Deely acknowledged “we’re moving at a slower pace than last year. We are maintaining a seller’s market given the lack of inventory along with multiple offers, as a healthy number of buyers absorb what is being listed. The key is we can’t compare today’s market to the record years we had during the pandemic.”

To illustrate his point, Deely pointed to King County. “In King County residential (excluding condos), the median price change year-over-year is down 12%. This year, the median price has been going up steadily every month. Year to date, the median price is up 12%. From March to April, it’s up over 4%. We are moving in a positive direction,” he stated.

Northwest MLS figures show the median price for single-family homes that sold last month in King County was $875,000; a year ago, it was $995,000. In January, the median price was $781,098.

“Proper pricing is the important factor for sellers to consider in attracting buyers,” emphasized Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. “First-time homebuyers are very price sensitive, and they are hurt by increasing mortgage rates.”

Freddie Mac data show the 30-year fixed rate mortgage rate near the end of April was 6.43%. That compares to the year-ago rate of 5.1% and a rate of 2.98% on 4/29/2021. (On Wednesday, the Federal Reserve raised its key interest rate by a quarter-point to the highest level in 16 years. That was the 10^th straight hike of the current cycle.)

Even with the market still experiencing an inventory shortage, Rebhuhn said buyers are looking for homes, with lifestyle decisions continuing to drive the market.

“Motivated sellers who recognize today’s market conditions with prices down about 10% from last year are attracting buyers,” Rebhuhn reported. “We do see a vibrant spring market for both buyers and sellers.”

Windermere Chief Economist Matthew Gardner believes sellers “are getting a little more comfortable with the market,” noting his analysis of data shows median listing prices are rising in most areas compared to the previous quarter. “If listing prices continue to rise, one can surmise that home prices will follow suit.”

The April report from Northwest MLS shows seven counties had year-over-year price increases (Adams, Clallam, Columbia, Ferry, Jefferson, Pacific, and San Juan). Five counties had double-digit price drops. Prices were unchanged in Lewis County.

In Kitsap County, prices slipped about 8.7% from a year ago, but are up 4.7% since January. “There continues to be heavy pressure on the market,” Leach reported. “Many buyers are looking for their replacement home before selling their current home,” he stated, adding, “Don’t expect a burgeoning inventory as it will go as fast as it comes onto the market.” That’s due in part to that county’s highly mobile military population.

Pending sales in Kitsap County fell 18.8% — much less than nearby counties. Mutually accepted offers were down more than 27% in both King and Pierce counties and down nearly 34% in Snohomish County.

Leach attributes the slower pace of sales in Kitsap County to both interest rates and the addition of several new apartments, which he described as “a safe haven for those not ready to buy.” He noted many of the newer complexes are offering incentives to attract renters.

Commenting on mortgage rates, Gardner said rates in the first quarter of 2023 were far less volatile than last year. “It appears that buyers are jumping in when rates dip, which was the case in mid-January and again in early February.”

Gardner expects rates will continue to move lower with occasional spikes, and that they will hold below 6% in the second half of this year. Citing factors that favor home buyers, but also factors that favor sellers, he said he is “moving the needle towards a balanced market, but one that ever so slightly favors sellers.”

Windermere’s economist said he is “not seeing any signs of panic in the market.” Gardner also said the probability of a national recession this year is now fifty-fifty. “I do not see any reason for buyers to lose confidence in their housing decisions based purely on economic factors.”

Some industry-watchers suggest easing inflation could bode well for the housing market. Inflation fell to 5% in March, the lowest rise in nearly two years. “With inflation showing some signs of slowing, mortgage rates could come down,” suggested Greg McBride, Bankrate’s chief financial analyst.

Kevin Graham, senior blog writer for Rocket Companies and Rocket Mortgage, the nation’s largest home lender, explained mortgage rates and the federal funds rate aren’t directly correlated, but “they do tend to follow the same general direction.” For buyers, rate hikes mean they would likely qualify for a lower loan amount, have higher mortgage payments, and may have difficulty finding homes in their price range.

“Some buyers may be temporarily priced out of the market,” Graham wrote. The impact of higher interest rates may be more acute for first-time buyers, he noted, “because they don’t have the money from the sale of a home to offset a lower loan amount with a higher down payment.”

No one likes higher mortgage rates, Graham stated, but added, “they’ll always be lower than the interest rate you could get on a credit card.”

Single Fam. Homes + Condos	New Listings	Total Active Listings	# Pending Sales	# Closed Sales	Avg. Closed Price	Median Closed Price	This mo. Inventory	Same mo., yr ago
King	2,638	2,561	2,435	1,876	$1,017,428	$790,244	1.37	0.69
Snohomish	946	735	988	778	$779,369	$703,827	0.94	0.64
Pierce	1,019	950	1,151	885	$585,760	$515,000	1.07	0.62
Kitsap	344	398	392	255	$618,627	$510,000	1.56	0.71
Mason	120	154	115	71	$446,723	$400,000	2.17	1.05
Skagit	157	196	129	103	$619,358	$545,000	1.90	1.14
Grays Harbor	159	299	141	92	$378,978	$345,000	3.25	1.49
Lewis	92	164	110	71	$427,462	$389,000	2.31	1.06
Cowlitz	94	142	106	84	$408,899	$383,750	1.69	0.84
Grant	118	209	84	59	$318,511	$300,000	3.54	0.90
Thurston	363	314	376	283	$520,438	$489,000	1.11	0.67
San Juan	50	99	23	15	$937,448	$875,000	6.60	3.78
Island	153	184	147	103	$660,773	$560,000	1.79	0.85
Kittitas	94	176	66	51	$615,813	$490,000	3.45	1.80
Jefferson	63	65	61	32	$626,935	$621,450	2.03	1.20
Okanogan	57	129	27	21	$320,562	$235,000	6.14	2.49
Whatcom	290	447	271	231	$642,958	$570,000	1.94	1.10
Clark	91	80	95	66	$555,748	$499,000	1.21	0.68
Pacific	73	151	52	33	$384,386	$359,000	4.58	1.72
Ferry	10	21	4	4	$284,975	$274,950	5.25	3.71
Clallam	97	116	104	54	$515,452	$455,000	2.15	1.02
Chelan	102	191	83	48	$631,149	$522,500	3.98	1.39
Douglas	38	64	42	25	$501,918	$438,000	2.56	1.09
Adams	16	43	20	17	$365,094	$336,000	2.53	2.50
Walla Walla	58	96	46	37	$462,128	$365,000	2.59	1.35
Columbia	3	10	2	8	$287,300	$282,450	1.25	2.40
Others	58	120	67	36	$399,663	$393,000	3.33	2.14
Total	7,303	8,114	7,137	5,338	$749,786	$603,250	1.52	0.78

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
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	5560	7312	6908	7482	6031	5934	6581	5208	4410	3521	2778
2023	4111	4402	4951	4966

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