Northwest MLS Brokers Say Transition to Fall Creating Opportunities for Buyers

Northwest Multiple Listing Service brokers reported year-over-year gains in pending sales, closed sales and prices, but its report summarizing September activity also showed an 18% drop in inventory compared to a year ago.

“The transition into the fall housing market creates opportunities for homebuyers,” suggested J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Although there are fewer listings than what buyers find during peak summer months, there is also less competition” for the available inventory, he added.

Scott noted “It appears we are headed toward a more intense winter market than last year.” He said he expects the number of unsold listings will continue to decrease once the winter “clean-up” of inventory begins.

At the end of September, MLS brokers reported 15,982 total active listings, down more than 18% from the same month a year ago when the selection totaled 19,526 listings. Only three of the 23 counties served by Northwest MLS – Clark, San Juan and Whatcom – had year-over-year gains in inventory, while 18 counties had double-digit drops. Thurston County reported the sharpest shrinkage, at nearly 35%.

“September’s housing market was a bit of a roller coaster, up in certain areas and down in others,” commented OB Jacobi, president of Windermere Real Estate.. Within the four-county Puget Sound region, Pierce County prices rose more than 10% thanks to high demand and low inventory, he noted. “Buyers continue to be drawn to the area thanks to more affordable housing costs, but this influx is also driving up prices,” he remarked.

MLS data show the median price for last month’s home sales in Pierce County ($379,950) was $213,800 less than the median price in King County ($593,750). A comparison of single family prices (excluding condos) reveals a $275,500 difference between the two counties.

“In King County, prices were down nearly 2.7% while pending sales rose nearly 10%. This tells us there is no shortage of buyers in the Greater Seattle area,” stated Jacobi. He also said home prices normally start to taper off this time of year, “so this isn’t a major cause for concern.” Within King County, prices rose in four of the six sub-markets; only Seattle (down 3.2%) and Vashon (down almost 28%) reported drops.

The median price for single family homes and condos that sold last month in King County was $593,750, down from the year-ago figure of $610,000 and the first time it dipped below $600,000 since January. Three other counties, Okanogan, Pacific, and Clallam, also reported year-over-year price drops. Joining Pierce County with double-digit price increases from a year ago were eight other counties.

System-wide, prices were up 5%, rising from $400,000 a year ago to $420,000. The volume of closed sales increased about 4.4% from a year ago (7,962 versus 7,630).

“Home prices have stabilized, creating good opportunities for purchasers,” said Dean Rebhuhn, the owner of Village Homes and Properties in Woodinville. He expects prices to stay stable through the fall and winter markets.

“Continuing to drive the market are new jobs, lifestyle changes, and very low interest rates,” Rebhuhn remarked, adding, “FHA mortgages with 3.5% down payments are very popular with first-time homebuyers.”

The latest report from Northwest MLS shows pending sales were up about 9.8% from a year ago, with mutually accepted offers rising from 8,913 to 9,785. In the four-county Puget Sound region, Snohomish reported the largest gain at 18.3%, followed by Kitsap at nearly 11.9%, King at 9.8%, and Pierce at 5.4%.

Brokers were unable to replenish inventory to match demand as the volume of pending sales (9,785) outpaced new listings (9,435).

“Things were a bit different in September, but at this point it’s difficult to know if it’s an aberration or an actual trend,” stated Coldwell Banker Bain president and COO Mike Grady, pointing to “far fewer” new listings that were added last month compared to a year ago. Area-wide, Northwest MLS brokers added 9,435 new listings last month, a decline of 1,023 from the year-ago total (down nearly 9.8%).

“It’s still a seller’s market, and for more than a year we’ve seen only 1-to-2 months of inventory, so I’m starting to think we may be looking at a ‘new normal’ in relation to what a balanced market looks like,” commented Grady.. “With the international economy and trade issues continuing to be erratic, and interest rates staying low, these pressures will almost certainly be an influence, yet there’s no clear answer to how all of this will play out,” he added.

MLS figures show 2.01 months of inventory system-wide, with 12 of the counties reporting less than 2.5 months of supply. Real estate experts tend to use 4-to-6 months of inventory as an indicator of a balanced market.

Northwest MLS director Frank Leach, broker/owner of RE/MAX Platinum Services in Silverdale, said Kitsap County continues to have constrained inventory (down almost 25% from a year ago), with values stabilizing or increasing slightly. Homes priced around $350,000 and under sell quickly, while “inventory in upper ranges is taking a little longer to get traction and move to a sale,” according to Leach.

MLS figures show the median price of homes and condos that sold in Kitsap County last month was $384,000, up nearly 8.2% from the year-ago figure of $355,000.

Leach noted condominium inventory in Kitsap County rose more than 27% from a year ago, but the selection of single family homes dropped by the same percentage. He said several multifamily projects in the county have been submitted or approved, and those homes are expected to be absorbed in the market as soon as they’re available.

“Prices along the I-5 corridor between the Puget Sound and Portland once again outperformed as buyers seek value for money and job growth has expanded in the entire region,” observed James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington.

If millennials want to own houses, Young said the logical first step in the housing ladder is increasingly outside of King and Snohomish counties “and further afield along the I-5 corridor.” With interest rates near historic lows and employment levels at historic highs, first-time homebuyers are acting while they can to get on the housing ladder, “even though that may mean long commutes,” Young stated.

The September report from Northwest MLS shows single family activity outperforming condos. Year-over-year pending sales of single family homes jumped 11%, while condo sales were flat. Prices on last month’s closed sales of single family homes rose more than 5.5%, but condo prices declined by 1.2%.

 

~NW Multiple Listing Service

Fall real estate may bring big openings for Seattle buyers, experts say

While supply problems hamstrung most of the market during the end of summer — what’s normally known as the peak real estate season — September was a different beast entirely, more like a “roller coaster” where prices were up in certain areas and down in others.

But as the summer season gives way to fall, that can open up avenues for those trying to break in to the market.

“The transition into the fall housing market creates opportunities for homebuyers,” J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said in the latest Northwest Multiple Listing Service report. “Although there are fewer listings than what buyers find during peak summer months, there is also less competition.”

By the end of last month, NWMLS brokers reported 15,982 total active listings, more than 18% less than from the same time a year ago (in 2018 that number was 19,526). Only three of the 23 counties served by NWMLS — Clark, San Juan and Whatcom — reported year-over-year gains in inventory; 19 counties had double digit drops.

With that drop in both number of listings and competition comes a predicted drop in price as well; this is the time of year that home prices typically start to taper off a bit, given the drop in demand.

In King County, the median price for single family homes and condos sold in September was $593,750 — down from the September 2018 figure of $610,000 and the first time the median price dipped below $600,000 since January.

Unfortunately for hopeful homebuyers, OB Jacobi, president of Windermere Real Estate, says that’ doesn’t necessarily mean it’s going to be easy pickings in King County.

“In King County, prices were down nearly 2.7% while pending sales rose nearly 10%. This tells us there is no shortage of buyers in the Greater Seattle area,” Jacobi said in NWMLS report. “Buyers continue to be drawn to the area thanks to more affordable housing costs, but this influx is also driving up prices.”

Still, there’s opportunity to be had; as the market begins to hunker down for the winter, Jacobi and Scott both expect the number of unsold listings to continue to decrease once the “winter clean-up” of inventory begins. For some lucky homebuyers, this could be the perfect set of circumstances.

~Zosha Millman, Seattle PI

What to know about buying a co-op apartment in Seattle

Sunny Eckerle

Homebuying is time- and energy-consuming, and for the uninitiated, co-ops can be especially confusing. The extra designation of “co-op” is another murky term on an already lengthy list of unfamiliar vocabulary words. (We’re looking at you, PMI, escrow, and rate lock.)

For Seattle homebuyers considering their options, here’s what you need to know about co-ops.

What’s a housing co-op?
The National Cooperative Bank, which supports and advocates for American co-ops, defines housing co-ops as groups of people who own or control the buildings where they live together.

When someone buys a co-op, they’re buying stock—or a membership—in a cooperative corporation that owns the building, land and common areas. Buyers don’t receive a deed to the property like they would with other housing types. “Instead, they’re issued a stock certificate and proprietary lease for their shares within the co-op,” explains Tessa Gaines, loan officer at the National Cooperative Bank.

Typically, the bigger a co-op unit is, the more shares its owner(s) hold and the higher proportion of the building’s property taxes, utilities, and insurance they pay. Cooperative corporations are governed democratically with each member getting a say in decisions—from the furnace to the roof—that will impact the community.

Who are co-ops a fit for?
From first-timers to folks looking to downsize, there’s no typical co-op buyer, says Jeff Reynolds, a real estate broker with Windermere that runs the blog Urban Condo Spaces. “I encourage buyers to keep an open mind. Know the situation you’re buying into, and if it fits your objectives—buy it!”

One characteristic most co-op denizens do share is an interest in being active within their co-op community. Every member is vetted by the board and is expected to weigh in on matters related to the cooperative.

“Co-ops are hands-on, and that’s beneficial for people who truly want to be part of a community and to build better relationships and friendships,” says Val Gaifoulline, broker and realtor with Keller Williams Realty Greater Seattle.

What are some pros and cons of co-op ownership?
Co-ops are hands-on, and that’s beneficial for people who truly want to be part of a community and to build better relationships and friendships.
Like any condo, townhouse, or single-family home, there are pros and cons to co-op ownership that prospective buyers should consider. Reynolds says that related expenses—purchase price, price per square foot, closing costs and property taxes, for example—are typically lower at co-ops. If owners maintain the co-op themselves instead of hiring a staffer, that further lowers costs. As mentioned, co-ops can create an environment ripe for community in the city. If you’re looking for that, it can be another positive aspect of choosing a co-op.

On the flip side, getting into a co-op through its board can be difficult. Rules governing everything from renovations to bike parking and pets can be more stringent at co-op buildings, too. Reynolds says that cooperatives are responsible for paying the salaries of any employees through the owner-paid monthly maintenance fees, including doormen and cleaning staff. If funds are needed elsewhere or if most owners prefer it, residents can be on the hook for a larger portion of the building’s upkeep compared to condos.

What are some common misconceptions about co-ops?
One myth is that co-ops may be harder to sell, Gaines says, “but co-op owners are able to sell their units just like any other real estate transaction.” Reynolds agrees that issues associated with co-op resales are mostly just perception. “The challenge is getting over the misconception that ‘you don’t own it,’” he says.

Like other property types, co-op owners looking to sell set a list price and entertain offers, negotiated or not, from there. There are some unique aspects to selling a co-op though, including that all prospective buyers are thoroughly vetted and ultimately approved or denied by the co-op’s board. Many prohibit subleasing, too.

“That’s good for the long-term co-op tenants cut cuts out the portion of buyers that are investors,” Gaifoulline says. Both could add time to the process, though recent data suggests that on average, co-ops in Seattle spend only slightly more days on the market compared to condos—44 days for co-ops vs. 33 days for condos.

What else do prospective homebuyers need to know?
Financing a co-op is different than financing other property types and can be tricky, Gaifoulline says. “You’re buying shares, and most banks don’t provide that type of financing—called a share loan,” he says.

Are there other types of co-ops?
The term co-op can refer to more than the residential co-ops that house more than a million people in the U.S. Member-owned and controlled business and organizations exist across industries, services, and interests, including food and agricultural enterprises, insurance companies, banks, childcare providers, and more. Seattle co-ops unrelated to housing include Verity Credit Union, the grocery store Central Co-op, and the Flying Bike Cooperative Brewery in Greenwood.

~Kelly Knickerbocker, Curbed Seattle

Late September Brings Good Market for Seattle Home Buyers

When you crunch the numbers, the final weeks of September are the period when home buyers might find they get a little more for their money and there’s not as much competition.

Statistics show a house that goes on the market in September or is still on the market often doesn’t sell for list price. It’s a pattern the economists at Zillow have tracked over the last few years.

“You’re most likely to get a seller who is willing to cut the price on their house and on the flip side there’s a lot of homes on the market,” Zillow Economist Jeff Tucker explained.

“A lot of people who listed [their homes] in the summer or planned to list in the summer and didn’t quite get around to it and they’re all getting a little frantic to get rid of that house and sell it,” he said.

The price reductions are even steeper in the winter months but the inventory isn’t nearly as good, so economists say right now might be a sort of golden period for buyers.

“If we break out the year into half months, we find the second half of September hits this sweet spot of pretty big price reductions and really abundant inventory,” explained Tucker.

Seattle-based Realtor Matt Miner recently listed a house in Shoreline and said there were concerns about timing.

“You get a lot of carryover inventory really from August into September and that’s when you start seeing deeper price cuts as people need their houses to move,” Miner said.

Miner said they focused on making sure the house was in prime condition by adding new paint, staging and doing some work in the backyard.

He and many other Seattle realtors say it’s not just this week, they believe the entire fall season is a good time to buy in Seattle with solid inventory that lasts through October.

This time of year also proves to have lower interest rates and less competition, meaning more perks for first time home buyers.

“The entry market has gotten a lot warmer because people who thought they couldn’t compete now know that they can,” said Miner.

All the work Miner did on his Shoreline listing paid off.

“We ended up selling in three days for $50,000 over ask,” he said, which also shows, even in a slower market, a desirable home will sell.

~King 5 News