Is Seattle’s real estate market cooling?

After a chaotic summer that saw extremely low housing inventory, bidding wars and record-breaking jumps in median sale prices, Seattle’s tight real estate market could be showing signs of cooling off for the fall season.

A new market report form the Northwest Multiple Listing Service (NWMLS) found that competition for homes in Seattle eased slightly in July, with brokers adding more listings and less homes going under contract. The agency saw slightly fewer pending sales in July than in June and May.

Some of that slowdown might be seasonal, while other experts took into account that the state lifted all COVID-19 restrictions on June 30, and more people could be traveling after spending so much time at home.

“Although the local market is intense, buyers can find some relief because there aren’t as many offers to compete with compared to earlier this year,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate in a news release Thursday. “August historically is the last month of the year with elevated levels of new listings before they slowly taper down in the fall and decline more substantially over the winter.”

However, inventory still remains historically low and prices are still climbing, meaning any breathing room for homebuyers might be short lived. Across all 26 Washington counties surveyed by the NWMLS, there is only 0.73 months of inventory. And only 12 counties report having more than one month of supply.

“Despite the extreme shortage of inventory and robust sales activity, there seems to be a bit of a leveling off from the market frenzy,” said Gary O’Leyar, broker owner at Berkshire Hathaway HomeServices Signature Properties. “In my opinion this is due to a typical mid-summer season market combined with some buyer fatigue.”

Prices also continued to climb. In June, median sale prices for homes in the region soared 30% compared to the previous year, marking a new record high. In King County, the median home sale price hit $775,000 in May, up 23% from the same time last year.

However, that growth is not just in the Seattle metro area. Many brokers said that suburban counties along the Interstate 5 corridor have seen sharp price increases, mirroring the fact that homes in the heart of Seattle are appreciating at a slower rate than homes located away from downtown.

“Prices in Lewis County are up 54.2% from the July 2019 level, Snohomish County is up 40.6%, and Island County is up 44.3%,” said James Young, director of the Washington Center for Real Estate Research at the University of Washington. “The search for value in the suburbs with sharp price increases suggest households are making their housing preferences known. They want to own rather than rent.”

One area of the market continues to rebound from the pandemic: condominium sales. New listings outpaced pending sales in July, and prices rose more modestly at 12.6%. In King County, where the majority of condos are sold, the median priced condo sold for $460,000.

Brokers are advising residents to make the most of the seasonal lull in the market while also warning potential sellers about overpricing.

“My advice to buyers would be to take advantage of this time before Labor Day and the fall market,” said O’Leyar. “[For sellers,] don’t get overly hyped with anecdotal information about the real estate market. Overpricing a listing in this market is still a big mistake.”

~Callie Craighead, Seattle P-I

Housing boom will end when interest rates rise

The current housing boom will flatten in 2022—or possibly early 2023—when mortgage interest rates rise. There is no bubble to burst, though prices may retreat from panic-buying highs.

The boom produced some frantic buying, bids in excess of asking prices, and plenty of worry among would-be homeowners. But this has not been a bubble. A bubble is not simply rising prices, but demand not justified by fundamental economic factors. The key to the buying boom has been low mortgage rates plus a shift in desired housing type.

Mortgage rates hit what was then an all-time low of four percent in 2011, and then remained in that neighborhood until the pandemic, when they hit three percent. The decline in mortgage rates in 2020 dropped the monthly payment on a house by 12 percent, enabling many people to buy houses now rather than later.

In addition to the low mortgage rates, some people saw a future of remote work and wanted more space, which often means moving out of an apartment into a single family house. Others found urban living less fun, so they headed into the suburbs where houses are more common than apartments.

The increased demand for houses drove prices up, quite predictably. Yet the supply could not adjust as fast as demand. Home builders ramped up production in the second half of 2020, but after a few months they ran into supply constraints. Ready-to-build lots were all bought up, labor for construction was hard to find and social distancing made workers less productive. Now rising materials prices and goods on back-order squeeze profit margins. That’s how we find ourselves in the current housing boom.

But this boom is not a bubble, because the rise in prices is easily explained by the fundamentals of cheap mortgages and supply limitations. Recent housing starts are below historical averages, though that is justified by lower population growth. But with the shift from multifamily to single family housing, recent construction levels make sense. There need be no sudden drop in new construction to maintain a reasonable equilibrium.

When will the boom end? The two keys are satisfying the new demand and mortgage rates. Low mortgage rates allowed young families to buy houses earlier than they otherwise would have. It did not change the economics of buying for people who were never going to be homeowners. Instead, low mortgage rates enabled people to achieve their dreams earlier than they otherwise would have. In this sense, the strong housing market of 2020 and 2021 has been borrowing from the future. However, the shift in preferences from urban living to suburban living by people who previously could have bought houses is permanent new demand. At least, so long as they don’t become disillusioned about home ownership.

Mortgage rates are likely to rise when financial markets anticipate more inflation and action by the Federal Reserve to stem inflation. Although the Fed’s traditional tools impact short-term rates, with only small effect on mortgage rates, the new actions by the Fed impact mortgages directly. The Fed has been buying mortgages wholesale, depressing mortgage interest rates. The Fed has also been buying many treasury securities, which are often competitors to mortgages for institutional investors.

Mortgage rates are likely to rise a full percentage point by mid-2022, though this forecast exceeds the average prediction of my fellow economists. They doubt long-term interest rates will rise by a percentage point even out to December 2022. If they are right and I am wrong, then the housing market will remain strong longer.

Business leaders in the housing supply chain should enjoy their strong sales this year but not anticipate further growth in the coming years. Major capital projects must pencil out with sales back at 2019 levels.

Prospective home buyers should probably chill. It’s been a tough buying season. Although prices are unlikely to fall nationwide, there will probably be easier buying opportunities in 2023.

by Bill Conerly, Forbes

Market offers hope to homebuyers…but may be temporary

Homebuyers may find some good news in the latest report from Northwest Multiple Listing Service (NWMLS). The number of active listings at the end of June, 6,358, reached the highest level since November when buyers could choose from 6,505 properties. The volume of new listings added last month was the highest number in 17 months (13,111 last month versus 14,689 at the end of November 2019).

“Homebuyers will be happy to hear that between May and June the number of listings in King, Pierce, and Snohomish counties rose, giving them more homes to choose from and possibly easing the pressure just a little,” remarked Matthew Gardner, chief economist at Windermere Real Estate.

For the tri-county area, total active listings of single family homes and condominiums increased 14.5% from May. System-wide, the report covering all 26 counties served by Northwest MLS shows month-to-month inventory improved 14.9%.

“Buyers need some relief, so I hope this trend continues,” said Gardner.

Broker Dean Rebhuhn, owner at Village Homes and Properties, agreed the slight increase in new listings is good news for buyers, but tempered his optimism. “Low inventory and high demand coupled with low interest rates continue to drive up the market.” He also noted Kittitas County “is no exception to brisk sales. Many homes in that county are selling within one or two weeks.”

NWMLS director Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, described Kitsap County as another “heated market” but said brokers there are growing inventory very slowly, resulting in more selection for buyers. Brokers added 621 new listings to that county’s inventory, improving on May’s volume by more than 13%. That number also marked the first time since May 2019 that the number of new listings in Kitsap County topped 600.

Other industry analysts suggested the uptick in inventory might be short-lived, citing vigorous activity as Washington state lifts several strict coronavirus restrictions.

“We continue on a trajectory that will keep the Puget Sound region at the top of national lists for one of the hottest housing markets,” stated John Deely, executive vice president of operations for Coldwell Banker Bain. “Inventory on hand remains at two-to-three weeks in the larger counties,” he noted.

The latest report from Northwest MLS shows a year-over-year (YOY) drop in active listings of more than 34%, with only about two weeks (0.58 months) of supply available areawide. Last month marked the first time since July 2020 that the year-over-year decline fell below 40%.

Only 10 of the 26 counties in the MLS report have more than one month of supply. Of these, only one (Ferry) has more than two months of supply. Snohomish County’s inventory declined more than 44% from a year ago, leaving it with only about 10 days of inventory (0.35 months of supply), the lowest of all the counties served by Northwest MLS.

“While pending sales saw a significant drop over this time last year, we believe that rather than that being an indication of a flattening of the market, this is a result of our extreme heat events, a typical summer slowdown as schools let out and people starting vacations, and, this year, the reopening of the country and discontinuation of COVID-19 restrictions,” explained Deely.

Pending sales rose about 3.5% compared with a year ago (from 11,916 to 12,328) but fell slightly from May when mutually accepted offers outgained the number of listings added during the month.

“The local real estate market is virtually sold out in the more affordable and mid-price ranges, even into the luxury market in some areas,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “This places extra focus on each new resale listing as it comes onto the market.”

An analysis of last month’s statistics by price range illustrates Scott’s point. Fewer than 23% of June’s listings had asking prices under $400,000. About a third of the inventory was listed at $800,000 or above.

James Young, the director of the Washington Center for Real Estate Research at the University of Washington, said the decline in active listings volume suggests homes are selling and closing very quickly once listed. He noted that while listing levels for June were higher than two years ago, pending and closed sales are much higher. “This indicates that well priced properties are closing very quickly.”

Lennox Scott concurred. “Many homes are going under contract within days due to the intense buyer demand.” He anticipates two more months of “elevated new resale listings” before the selection starts decreasing. “We expect the extremely high intensity for each listing will continue in most price ranges locally into the spring of 2022 due to historically low interest rates creating a large backlog of buyers looking to purchase a home.”

Deely said affordability, especially for first-time homebuyers, continues to be a concern. “Given indications from tech companies like Amazon and Microsoft to lease large office spaces and hire thousands of employees in our region, drawing people from higher-priced markets like Silicon Valley with lots of money to spend, we don’t see much change in this scenario for buyers in the short term.”

Brokers reported 10,923 completed transactions during June, a 31.4% increase from twelve months ago, and up 16.5% from May’s total of 9,374. Prices on last month’s sales, which includes single family homes and condominiums, rose nearly 27% from a year ago, from $465,000 to $589,000.

The single family segment accounted for about 86% of the sales. The median sales price on those 9,417 transactions was $611,000, which was 27% higher than the year-ago figure of $480,950.

Condo sales jumped a whopping 59% from a year ago, with prices increasing more than 20%. For last month’s 1,506 closed sales, the median price was $440,000; a year ago it was $365,000.

Looking at month-to-month, rather than YOY changes, Gardner noted King and Pierce counties experienced only modest price increases, while prices in Snohomish County rose by “a solid 3.1%. I believe this points to an uptick in buyers who can continue working from home and have made the choice to move from King to Snohomish County where housing is more affordable. The same can be inferred for Kitsap County.”

A comparison of Northwest MLS figures shows the median price on last month’s completed transactions in King County was $779,919, while in Snohomish County it was about $105,000 less ($675,000). In Kitsap County, where the median price was $505,000, the difference is nearly $275,000. Pierce County homes that sold last month had a median price of $507,375.

Commenting on the NWMLS report, Dick Beeson, managing broker at RE/MAX Northwest, Tacoma-Gig Harbor, said it reflects a “slight turn of the wheel. Sellers are still in control, but their expectations need a slight readjustment. Instead of 20 offers, there may only be five or fewer. Maybe even only one.”

When that happens, some sellers balk at selling, thinking they are being undersold, according to Beeson. “Sellers must remember, you can’t underprice a home in this market. You can still overprice a property. The market will find you out and drive the price to the appropriate market value.”

Given the strong, competitive market across all price ranges, Beeson offered a recipe for buyer success. “Scour the new inventory coming on the market daily; write the best offer you can using all the offer strategies you’re equipped to employ, and then decide if the extra cost to win the sale is an acceptable value to you. Close the sale quickly, and don’t whimper!”

Rebhuhn also offered hope for buyers who are prepared to act. “Generally speaking, July and August provide more opportunities for buyers as there is less competition because of vacations and fewer relocation buyers in mid-summer.”

Builders are also caught in the frenzy. “Builders are racing to bring new communities online and hoping to hit the sweet spot as prices on building materials for new construction begin to fall,” reported Frank Leach. He said new apartment buildings and condos are being approved and built all across Kitsap County to accommodate newly arriving residents. Notably, Leach said an aircraft carrier due to arrive shortly could potentially add 3,500 people to that county’s rental market.

Although pending sales in Kitsap County dipped slightly from a year ago, they were up nearly 12% from May. “The market in Kitsap County is expected to remain very competitive with exposure of only eight days on the market, on average, across all price ranges,” Leach noted.

NWMLS Press Release, July 7, 2021

Home prices keep rising

The Federal Housing Finance Agency (FHFA) found that house prices across the nation rose 16% from April 2020 to April 2021.

From March to April, house prices across the nation rose 1.8%, surpassing the previous month’s 1.6% increase.

Three regions — the Pacific coast, the western states and New England — saw more pronounced year over year increases. The FHFA index tracks seasonally-adjusted, purchase data from Fannie Mae and Freddie Mac.

In the mountain division, which includes Colorado, New Mexico, Idaho, Wyoming, Utah, Nevada, Arizona and Wyoming, house prices rose 21% year over year. In the pacific division, encompassing Washington, Oregon and California, prices rose 18%. In Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island, house prices also rose 18%.

“House prices recorded another monthly and annual record in April,” said Dr. Lynn Fisher, FHFA’s deputy director of the division of research and statistics. “This unprecedented price growth persists due to strong demand, bolstered by still-low mortgage rates, and too few homes for sale.”

Mortgage rates rose above 3% for the first time in 10 weeks last week. Mortgage applications are still on the rise, however.

House prices have risen during the past year as a result of elevated lumber prices, a lack of available homes and increased demand for homes.

Lockdowns early in the pandemic led many to work from home and divide their living space into home offices. Those who were able to bought homes with more space, better suited to the pandemic remote work trend.

That has led to astonishing price increases in markets like Seattle, where the median home-sale price rose more than 26% year-over-year to a record $737,800 in May 2021. Tech employees there, faced with working remotely from cramped apartments, instead hunted for homes with more space.

“I’ve never seen anything like this housing market,” a Seattle-area Redfin agent said.

~by Georgia Kromrei, HousingWire

Buyers struggling to buy homes

First time homebuyers and seasoned homebuyers alike are finding themselves frustrated when they bid over asking price, without concessions, only to be declined over and over.

“Why are we getting outbid?”

It’s the question on a lot of would-be homebuyers’ lips right now, and there are a few different factors at play.

Although it may feel like another housing bubble, the issues plaguing the market today are far different. In 2008, the housing market crash was precipitated by questionable mortgage practices and home builders churning out more homes than the market could absorb.

Today, that equation is flipped: lenders are only issuing mortgages to highly qualified individuals, the existing housing stock isn’t enough for a growing population, Boomers are aging in place rather than selling, and home building continues to lag behind demand. The current market conditions aren’t going away anytime soon.

Although there are nuances at the local market level, it’s safe to say that the housing market in the U.S. right now is extremely competitive. Well-qualified buyers are struggling to understand why solid offers at full asking price are no longer enough. This January, 56% of buyers faced bidding wars on their offers, according to a Redfin survey.

In order to make offers more appealing to sellers, buyers are having to go above and beyond – whether this means making an all-cash offer, an offer well above asking price, or a no-contingency offer. And frequently, buyers are offering all three.

The problem is, of course, that many buyers are limited in what they can offer. First-time home buyers are often lucky if they can put down 20%, let alone an entire cash offer, and often have student loans and other obligations holding them back from bidding higher. Other buyers – rightly so – are wary of waiving inspection contingencies. And even if a buyer is offering over asking, in this market, it may simply not be enough.

In the Philadelphia suburbs, homes in poor condition are going for 15% over asking. If the house has several really desirable features, the bids are reaching the 25% over asking range. And if a house is fully move-in ready–it’s actually in decent condition, it’s clean, and everything is great–it can go for 35 to 50% over asking price.

Historically low mortgage rates have been adding fuel to the fire. Mortgage rates reached an all-time low of 2.8% over the past year and continue to remain low, which allows qualified buyers to purchase more house while maintaining lower monthly payments. Knowing that rates will eventually rise is encouraging buyers to stay in the game, rather than waiting for a cooling-off period. There are simply more people than ever competing for a limited number of homes.

Appraisals have also been a factor in buyers losing out on homes. Buyers can bid high, but the lender isn’t going to approve a loan for more than the appraisal amount. Cash offers are preferable only because sellers seem to be looking for the path of least resistance to closing.

FHA loans, while popular among first time home buyers, are at a distinct disadvantage in this market because sellers – whether it’s fair or not – are often under the impression that these buyers will need to jump through more hoops to close on the house, and will have less cash on hand to make up for gaps between the offer and the appraised value.

Those searching for a new home shouldn’t expect the market to dramatically change anytime soon. People are slowly transitioning back to the workplace from work from home, mortgage rates may be going up, and as the country continues to re-open, there may be a cooling off period. Even still, thanks to pent-up demand from the years before COVID, it will likely only go from an “extreme” sellers market to a “strong” sellers market. Demand will continue to outstrip supply for the next several years.

So what can buyers do?

Buyers may want to start off their home search looking 10-20% below their ideal price range. This will give them more room for leverage and to comfortably bid well over asking. If they need a home a year from now, start searching for that home now, because many buyers are waiting 5+ months until they get into a home.

When mortgage rates are so low, another thing buyers can do is talk to mortgage lenders about taking a slightly higher interest rate to get lender credits they can put towards closing costs. This tactic has been helping first time home buyers who don’t have a lot of cash on hand.

If a buyer needs to take out a mortgage to purchase a home, they should consider making a statement to the seller as to exactly how much cash they are willing to bring to closing, in case the appraisal comes back below what the lender will pay. That’s a major factor in why people are getting outbid, and it’s something that someone who needs a mortgage is going to have to consider doing.

It can be tempting to add in contingencies (such as your own home having to sell for the purchase to go through), but realistically it is important to keep the deal as uncomplicated as possible, because buyers simply don’t have the upper hand in this competitive market.

However, there’s one compromise buyers should never make. Don’t eliminate the inspection! Buyers can write the condition of the home in the contract “as is, with right to terminate” so that they have the ability to walk away if any major problem is uncovered. This protects buyers from buying a home with a major, undisclosed issue such as structural/foundational issues or a rotting roof while still assuring the seller they won’t be squabbling over a loose tile.

Buyers should have an in-depth talk with their Realtors about what will help them stand out in their local market and follow their advice. If they say your offer is too soft, it probably is. If a Realtor says the buyers must drop some of their “must haves,” do it.

Buyers should manage expectations so that they’re prepared for the likely event that they need to bid on multiple homes. Don’t fall in love with the first home either; see a second home right after it. Expect to write multiple offers, and expect to get outbid multiple times. It’s all part of the journey to homeownership in today’s market, and it’ll be worth it once the home has been secured.

Mike Maher, Houzer

Strong, chaotic Seattle housing market had record-breaking price increases in May

Seattle’s intensely competitive housing market continued to see record-breaking growth in May, and the summer season is looking to be just as hot as low inventory in the region persists.

A new report from the Northwest Multiple Listing Service found median sale prices for homes in the region soared 30% compared to a year ago, a new record high. In King County, the median home sale price hit $775,000 in May, up 23% from the same time last year. In Snohomish County, median prices hit $655,000, increasing nearly 35% year over year.

“Everything is about breaking records this past year with record-breaking housing prices, record-breaking low inventory, and record-breaking consumer savings rates during the pandemic,” remarked Meredith Hansen, owner/designated broker at Keller Williams Greater Seattle. “All this equals a very strong, chaotic market that may not slow down for the next year.”

Despite hopes in April that homebuyers could be getting some relief with more homes added to the market and moderating prices, listings remain lower than expected in May. The report found that active listings from April to May declined for the first time in 20 years, down 4,824 listings — or 46% — compared to last year.

“Last month’s listings came in lower than we would normally see due to the month starting on a Saturday and ending with a holiday weekend,” noted J. Lennox Scott, chairman and CEO at John L. Scott Real Estate. “New resale listings typically go on the market on Wednesday, Thursday or Friday. In today’s instant-response market, new listings often go pending over the weekend or early the next week.”

And the day of the week a home is listed does have significance for buyers and sellers: last week, a market-report from Zillow found that homes in Seattle sell the fastest when listed on a Thursday, moving from for sale to pending sale in just six days.

Homes are also selling for well over asking price, reflecting possible bidding wars driven by competition. NWMLS found residential homes in the Puget Sound region — comprising of King, Snohomish, Kitsap and Pierce counties — sold for 108.6% over the asking price. And that high demand is expected to continue into the summer.

“Frenzy-level buyer demand has not waned,” Scott said. “The local market is still virtually sold out in the more affordable and mid-price ranges, as well as into the luxury ranges in some areas.”

However, there are some bright spots as the region recovers from the pandemic: Seattle’s market for condominiums is finally stabilizing. The NWMLS report found condo inventory in May was down nearly 36% from a year ago while pending sales shot up 83.7%.

Windermere Chief Economist Matthew Gardner noted that many condo owners decided to sell amid the height of the COVID-19 pandemic and more out of the urban downtown core, leading to high inventory and lower demand. Some downtown properties even began offering price reductions to attract new buyers, giving them the upper hand.

“The good news is the Seattle condo market has settled back down with inventory dropping and sales rising. Because of the shift in this market there was a price reset, but this appears to be luring buyers who previously thought they could not afford to buy downtown, leading to more balance between supply and demand,” Gardner said.

~Callie Craighead, Seattle PI

Buyers snapping up homes in 5 days or less

Nationwide, almost half of homes sold above list price. These and several other record-breaking measures made April a historic month for housing.

Note: Pandemic lockdowns significantly slowed home buying and selling in April 2020, which means the year-over-year trends for home prices, pending sales, closed sales and new listings are somewhat exaggerated. 

April was another history-making month for housing, with homes selling for higher prices and in fewer days since at least 2012. The following measures all hit new records:

• The national median home-sale price hit a record high of $370,528, up 22% from 2020.
• The number of homes for sale fell to a record low.
• The typical home sold in just 19 days, a record low.
• 49% of homes sold above their list price, a record high.
• The average sale-to-list ratio, a measure of how close homes are selling to their asking prices, hit a record high of 101.6%.

“To put the scarcity of housing into context, there is plenty of room for supply to increase and demand to taper off, and we would still find ourselves in a historically strong seller’s market,” said Redfin Chief Economist Daryl Fairweather. 

“While Americans brace themselves for a lot of changes as workplaces and schools reopen, the story of the housing market will largely remain the same. There simply aren’t enough homes for sale in America for everyone with the desire and the means to buy one right now. Until new construction takes off–over the course of years, not months–home prices will continue to increase. This housing boom is nowhere close to over.”

Indianapolis is home to the country’s fastest housing market. The typical home in the Indianapolis metro went under contract after just four days on the market in April, down from 10 days a year earlier.

“I’m helping buyers understand the current market by advising them that it’s no longer unusual for a home to sell for up to $50,000 above asking price,” said Indianapolis Redfin agent Andrea Ratcliff. “Builders have waiting lists of at least a year and people are hesitant to sell their homes because there are so few options available for them to buy. Plus, remote workers are moving into the Indianapolis area, fueling even more homebuyer demand. Those factors are exacerbating our local housing shortage and fueling the competitive cycle.”

Homes in Seattle also sold exceptionally fast in April, with half of all homes pending sale in just 5 days in each of those metros.

Three of the five most competitive markets of the month were in California. In Oakland, 81.5% of homes sold above list price, a higher share than any other metro. It’s followed by San Jose (78.2%), Tacoma, WA (73.7%), Austin (73.7%) and Sacramento (72.5%).

~Tim Ellis, Redfin

Seattle one of top 10 cities with highest home price gains over decade

Home prices in the Seattle area have gone up significantly over the past year during the coronavirus pandemic.

Low inventory and high buyer demand has lead to competition over the few homes on the market, driving the already expensive home prices in the area even higher.

According to a new study from PropertyShark, Seattle homes that were sold in 2009 were resold in 2019 at a more than 50% higher median price. Seattle ranked ninth among cities with the highest home price gains over the course of the decade, according to the study.

“Bookended by the 2008 crash and COVID-19, the decade between 2009 and 2019 was a transformative one for the real estate industry,” the report said. “Curious to see how the housing market had fared between the two most significant, yet wildly different economic downturns in history, we analyzed residential sales across the U.S., putting the largest urban centers in the country into sharp focus.”

The study looked at home prices and analyzed homes that were sold in 2009 and then resold in 2019 to see how much those homes rose in value. The study sought to identify where home prices have risen the most significantly over the course of a decade.

“Overall, buying a home in the 2010s was worth it, especially in the majority of large urban centers,” the report said.

Across the country, homes sold in 2009 were resold in 2019 for about 35% more, with a median selling price of about $275,000, the study found.

“Meanwhile, when looking at homes that sold in both 2009 and 2019 in the country’s largest urban centers, sales trends both paralleled and diverged from national trends,” the report said.

“More precisely, homes in large urban centers appreciated in value at a noticeably more accelerated pace than the overall U.S. residential market. For instance, homes in the $500,000 to $750,000 range traded at a 35% increase, compared to the 30% national gain for that category. Even more noticeably, homes in the $100,000 to $250,000 price range resold at a 49% price jump than a decade prior, while nationally that range was up 33%.

The median resale price for homes in Seattle increased by 51% over the course of the decade, the report found.d.

by Becca Savransky, Seattle P-I

Despite snowstorms, Puget Sound housing markets stayed strong

February saw one of the snowiest days on record in the Seattle area, with people in some areas waking up during Valentine’s Day weekend to nearly a foot outside their windows.

But, even with the weather, the Puget Sound region housing market didn’t let up, according to the February report from Northwest Multiple Listing Service.

“It’s amazing how close the February numbers are when compared to February 2020, which was, of course, right before our world changed,” said Mike Grady, president and CEO of Coldwell Banker Bain. “Despite our similarly lousy February weather, the data shows that the market continues to be hot, with residential inventory very tight and median prices rising by double digits across most of our counties.”

In King County in February, there were 2,893 new listings added to the market, slightly lower than in February of last year. Total active inventory in the county was down nearly 18% year-over-year, reflecting the limited inventory that has marked the region’s housing market over the past year.

For residential listings, total active inventory was down nearly 41% compared to the same time last year. The total number of active listings for condos, however, was up more than 50% compared to February of 2020.

Pending sales overall were down slightly year over year, but were up compared to last month, the report found.

“This tells me that neither the snowstorm that hit the region nor the jump in mortgage rates deterred buyers who were still out in force last month,” Windermere Chief Economist Matthew Gardner said.

Gardner added even though pending condo sales also decreased compared to the same time last year, several neighborhoods in Seattle, including Queen Anne, downtown Seattle and Ballard, “performed better than expected.”

“That suggests to me that there may not be the mass exodus from the core urban areas that many have been predicting,” Gardner said.

Closed sales in King County were up about 13.5% compared to the same time last year, with 2,146 closed sales over the course of the month. Home prices were also up more than 10% year over year, with the median price for closed sales in February coming in at $679,075.

Prices were also up from last month, when the median closed sale price was $644,950. Among residential homes, prices rose even more steeply in February, up more than 11% year over year. For condos, prices rose only about 1% compared to the same time last year.

“Like last year, before we knew what was just around the corner, buyer demand is high. There continues to be opportunities for buyers seeking condos, and median prices are more stable, so that’s also good news for buyers,” Northwest MLS Director John Deely, executive vice president of operations at Coldwell Banker Bain, said.

For buyers looking for residential homes, though, they face a more difficult market.

“Our brokers are working hard to help prepare buyers both emotionally and financially for the realities they face, and to help position them as the winning purchaser,” he said.

“With things opening up, and open house restrictions eased to allow more people at one time, brokers are also spending a good amount of time preparing their sellers to get comfortable with having people in their homes and to safely facilitate viewings, as well as managing and analyzing all the offers.”

Moving forward, brokers said they were optimistic more homes would be added to the market and the region’s housing market would stay strong.

“After an intense winter in the local real estate market, more new resale listings are on the horizon this month. March historically marks the beginning of the eight month prime-time real estate market,” said J. Lennox Scott, Chairman and CEO of John L. Scott Real Estate. “The intensity we’re seeing in the market should come down slightly as more available homes enter the market, but we have to play catch up with pent-up buyer demand first.”

~Becca Savransky, Seattle P-I

Listings are at a record low; existing sales highest since 2006

Pandemic-driven demand sent total 2020 home sales to the highest level since 2006.

Still, even the most avid buyers are bumping up against barriers in today’s housing market. Record low supply and record high prices are limiting the exceptionally high demand.

Closed sales of existing homes in December increased just 0.7% from November to a seasonally adjusted annualized rate of 6.76 million units, according to the National Association of Realtors. Sales were 22% stronger than in December 2019.

As unexpected as a global pandemic was, so too was the reaction of homebuyers. After plummeting in March and April, sales suddenly began to climb. Total year-end sales volume ended at 5.64 million units, the highest level since 2006 and far stronger than predicted before the pandemic. Buyers were driven by a desire for larger, suburban homes with dedicated spaces for working and schooling.

“Home sales could possibly reach 8 million if we had more inventory,” said Lawrence Yun, chief economist for the Realtors. “Mortgage rates should remain very low throughout 2021, although we may have seen the lowest already.”

Strong demand exacerbated what was already low inventory of homes for sale at the start of the year. At the end of December, inventory stood at just 1.07 million homes for sale, down 23% year over year. At the current sales place, that represents a 1.9-month supply. That is the lowest number of homes since the Realtors began tracking this metric in 1982.

Low supply and strong demand continued to raise the heat under home prices. The median price of an existing home sold in December was $309,800, a 12.9% increase compared with December 2019 and the highest December median price on record.

Part of the sharp increase in the median price is that home sales are stronger on the higher end of the market, where there is more supply. Sales of homes priced below $100,000 were down 15% annually in December, while sales of homes priced between $500,000 and $750,000 were up 65% annually. Sales of million-dollar-plus homes were up 94% from one year ago.

Steep competition for homes also has more buyers making all-cash offers.

First-time buyers made up 31% of sales. They usually make up about 40% historically.

It also took just 21 days on average to sell a home in December.

“It is unusual, because every year during the holiday season we would see days on market increase, but not this year,” said Yun.

~by Diana Olick, CNBC