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New Home Listings are Popping up like April flowers and the Bloom Has Produced a Vibrant and Healthy Market

  • 28.5 percent overall increase in active listings
  • 5.8 percent gain in pending sales
  • 2.4 percent rise in median prices for sales of single family homes
  • Slight 1.9% decrease in closings

KIRKLAND, Washington (May 6, 2019) – Housing activity during April signaled good news for buyers
in Western Washington as inventory continued to grow, the rate of price increases was slowing in many
areas (and even decreasing in a few counties), and mortgage rates remained low.

Northwest Multiple Listing Service statistics for last month show a 28.5 percent overall increase in active
listings compared to the same month a year ago, a 5.8 percent gain in pending sales, and a 2.4 percent rise
in median prices for sales of single family homes and condos that closed during April. The volume of
closings dipped slightly (down 1.9 percent).

“Listings were popping up like April flowers and the bloom has produced a vibrant and healthy market,”
exclaimed MLS director John Deely, principal managing broker at Coldwell Banker Bain. “With an
increased supply of listing inventory, low interest rates, and a positive economic climate, buyers are
confident that this is a good time to buy,” he reported, while noting a larger number of buyers are opting
out of competing with other buyers.

Home values on the priciest level, which would include most homes Seattle and the Eastside, actually dropped a smidgen on a year-over-year basis. Prices even dipped slightly on a month-over-month basis, defying the normal seasonal gains.

How unusual is that? The last time any segment of the market saw prices drop on an annual basis was eight years ago, when home values bottomed out following the recession. Flash back to this time last year and the priciest homes were surging 12% in value.

“This year’s buyers and sellers are approaching the market with more caution and a focus on an
analytical, versus emotional approach that has ruled the last several years,” Deely said.

Northwest MLS members added 11,697 new listings to inventory during April for a year-over-year gain
of nearly 3.8 percent. During the same period, brokers reported 11,188 pending sales (509 fewer than the
number of new listings), resulting in net gains in the number of active listings in many counties, but
changes in inventory were wide ranging across the 23 counties the MLS serves.

Seven counties had double-digit growth in inventory from a year ago, led by King County (up 78.5
percent) and Snohomish County (up nearly 57 percent). The number of active listings declined in 10
counties, with Jefferson County reporting the biggest drop at 24.8 percent. System-wide inventory at the
end of April totaled 12,955 active listings, which represents a 7.8 gain from March.

“The spring market has arrived, bringing new listings and sales,” stated Dean Rebhuhn, owner of Village
Homes and Properties in Woodinville. Sellers who have prepared their homes for sale are experiencing
brisk activity, and buyers are finding more opportunities to purchase, thanks to low mortgage rates and
increased inventory, according to Rebhuhn.

“As we head into the prime buying and selling season, we’re seeing better news for buyers in King
County, with statistics showing there’s a bit more time to look and make a decision,” said Mike Grady,
president and COO of Coldwell Banker Bain. Pointing to the 78 percent increase in total active listings in
King County and the 57 percent jump in inventory in Snohomish County, he described the year-over-year
gains as “impressive,” but noted there is still less than two months of inventory in many areas. “Buyers
now have three-to-four weeks instead of three-to-four days to make a decision, so it’s still quite a ways
from a balanced market,” he emphasized.

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Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties,
echoed Grady. “Despite the increase in inventory over last year at this time in King County, we are seeing
a very robust spring market laced with multiple offers in many instances,” he stated.

Eight counties had double-digit increases in pending sales versus a year ago. In the four-county Puget
Sound region, only King County had a double-digit gain, with a 15.1 percent jump in mutually accepted
offers. Pierce County, with a 6.6 percent decrease, was one of seven counties reporting drops in pending
sales. Even with mixed sales activity, supply remains tight.

Northwest MLS figures show both King County and its 23-county system have around 1.7 months of
supply. “That is still slim compared to the National Association of Realtors’ data showing a national
average of 3.9 months of inventory,” remarked O’Leyar.

“We just experienced a strong spring market and are now heading into the pre-summer phase of the
housing cycle where more inventory but also more buyer competition is commonplace,” stated J. Lennox
Scott, chairman and CEO of John L. Scott Real Estate. He expects momentum will continue “in line with
positive job growth, lower interest rates and a strong U.S. economy,” but believes price appreciation will
start to level out heading into summer. “All eyes will be on each new listing this summer, a welcome
sight for home buyers encountering multiple-offer situations in the more affordable and mid-price
ranges,” Scott added.

James Young, director of the Washington Center for Real Estate Research at the University of
Washington, said low mortgage rates (averaging 4.4% for a 30-year fixed) are enabling buyers in outlying
areas along the I-5 corridor to purchase in areas with cheaper prices, notably Skagit, Cowlitz and
Whatcom counties.

“There are two key demographic trends driving prices along with mortgage interest rates,” Young said.
“Older householders trading down are competing with first-time buyers along this corridor seeking
value.” He used the example of an empty-nester Seattle homeowner deciding to trade down. “If I sell in
Seattle to trade down, then I will have significant amounts of cash available from selling my existing
home to be able to move to Mount Vernon or Cle Elum with cash left over.” First time buyers may look
at the same relatively low priced areas as a place to raise a family. “With these two groups competing for
value, this is a perfect storm for house price growth, particularly in regional markets,” Young believes.
Areas adjacent to King County had mixed results.

“Listing activity in Snohomish County rose modestly in April but the rate of growth has slowed,” said
NWMLS director David Maider. MLS figures show brokers added 30 more new listings than a year ago
(1,746 versus 1,716), with total inventory up 56.8 percent. Pending sales rose 6.9 percent and prices were
flat (up 0.84 percent).

Maider, the owner/broker at Windermere Real Estate M2 in Everett, described the jump in pending sales
as “significant” and an indicator that there is clearly demand in the market. “We expect that mortgage
rates will not move significantly as we move toward summer and that well-positioned and well-priced
homes will still see significant interest from potential buyers,” he commented.

Another MLS director, Dick Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig
Harbor (in Pierce County), acknowledged the slowing rate of price increases in the Puget Sound region,
commenting, “But the direction remains the same: higher prices.” He believes buyer demand and scarce
inventory mean buyers need to “be ready to rumble,” since conditions don’t favor “faint-hearted buyers.”
For sellers, he advised, “Don’t be stupid, increases can’t go on forever. Get a fair price and move on.”

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Home prices for last month’s completed sales of single family homes and condos rose 2.4 percent areawide
compared to a year ago, with eight counties reporting double-digit gains. Mason County had the
biggest jump, at 24.9 percent, followed by San Juan (up 23.5 percent), Kittitas (up 20.5 percent) and
Skagit (up 18.7 percent). Six counties reported year-over-year decreases: Clallam, Clark, Ferry, Island,
Jefferson, and King.

Condo prices dipped 3.2 percent as inventory improved (up 75 percent). Pending sales rose 3 percent.
“Interestingly, condominium prices in King County continue to fall as the number of properties on the
market continues to climb rapidly,” remarked Young. MLS figures show prices in King County dropped
about 9.6 percent and inventory surged nearly 122 percent compared to twelve months ago.

“Anecdotally, this corresponds with possible regulatory and tax uncertainty signaled for private landlords
in Seattle ahead of local government elections. Given this situation and significant supply in the
multifamily sector coming online, many smaller landlords may be selling to lock in capital value growth
and exit the rental market ahead of the November election,” Young suggested.

Some developers of new condo projects are reporting strong activity. First Light, a 459-unit development
to be built at 3rd and Virginia in downtown Seattle, has announced more than half the units in the 48-floor
tower have been reserved prior to groundbreaking.

Looking ahead, Grady believes, “We are very slowly trending away from a complete seller’s market,”
citing single-digit increases in sales prices, “instead of double-digit increases we saw in 2018,” and the
lack of inventory. “We believe these two considerations will now move sellers who have been waiting to
sell in order to take advantage of equity gains to finally take action.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service
MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real
estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

“Information and statistics derived from Northwest Multiple Listing Service.”

 

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