House hunters in western Washington can choose from the largest supply of homes in three years and they are facing fewer bidding wars, according to officials from Northwest Multiple Listing Service.
New statistics from the MLS show prices appear to be moderating (up about 6.7 percent overall), but brokers say they are not bracing for a bubble or even anticipating a quick shift to a buyers’ market.
“There have been incremental increases in listing inventory the past few months,” noted Gary O’Leyar, designated broker and owner at Berkshire Hathaway HomeServices Signature Properties, but he added, “By no means have inventory levels reached a point that is deemed to be a balanced market.”
Area-wide, the number of active listings of single-family homes and condos (combined) rose 16.2 percent, but 16 counties reported year-over-year drops in inventory; of those, nine had double-digit decreases 12 months ago. At month end, there were 18,580 active listings, the highest level since September 2015 when buyers could choose from 19,724 listings. Compared to July, inventory was up nearly 11 percent.
The latest numbers from Northwest MLS show wide-ranging changes in the volume of active listings when comparing the 23 counties in the report. In Clark County, inventory doubled from a year ago to lead the list based on percentage gains. King County was runner-up with a 74.3 percent increase, rising from 3,329 active listings a year ago to 5,803 at the end of August.
System-wide, there is about two months of supply, but less than that in the four-county Puget Sound region — well below the “balanced market” range of four-to-six months.
Supply was replenished in part by the addition of 11,994 new listings during the month, up slightly from the year-ago total of 11,781.
A slower pace of sales also contributed to the boost in supply. Brokers reported 10,109 mutually accepted offers last month, a drop of 14.8 percent from a year ago when they tallied 11,867 pending sales.
“The Puget Sound residential housing market remains positive, though the market has transitioned from a frenzied state to one of strong sales activity,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “We are seeing stability in the affordable and mid-price ranges in all market areas,” he said, citing “one of the best job-growth markets in the nation” and favorable interest rates as contributing factors.
George Moorhead, designated broker at Bentley Properties, commented on buyers “still sitting on the sidelines despite clear indicators.” He believes “this is the best time in three years to be aggressive in the marketplace,” given rising inventory, a significant increase in the number of cancelled and expired listings and more incentives being offered by builders.
“We are now seeing price reductions in new home communities as builders try to move inventory of completed homes,” he noted.
With expanding inventories “buyers are definitely taking more time to make a purchase,” stated Mike Grady, president and COO of Coldwell Banker Bain.
“This creates a declining curve in pending transactions compared to last year,” he explained.
MLS figures show last month’s pending sales in the four-county region were the fewest during August since 2012.
In the four-county Puget Sound region, pending sales were down more than 20 percent, ranging from a 12 percent decline in Pierce County to a drop of more than 23 percent in King County. Referring to King County’s sparse, 1.9 months of supply, Grady emphasized it’s “still a seller-oriented market” with prices continuing to rise at a faster clip than the rate of inflation and the historical 10-year average sales price increase of 3-3.5 percent annually.
For single-family homes, the median sales price was $415,000 overall, a 6.4 percent year-over-year increase. Single family homes in King County continue to command the highest price at $669,000, up 2.9 percent from the year-ago price of $650,000, but down from May when a countywide median price of $726,275 was reached, the highest so far this year.
Condo prices also rose by 8.1 percent area wide and 11.3 percent in King County. That segment also experienced a slowdown in sales, with closed transactions off by about 15 percent. Inventory shows signs of improving, with active listings jumping nearly 58 percent, but there was still only about 1.7 months of supply at the end of August.
“The real estate sky isn’t falling,” said Dick Beeson, who acknowledged the “huge increase in inventory the past few months speaks volumes about the anxiety levels sellers have as they try to get all they can before the market crashes, which it won’t. The Northwest still has the best economy in America.”
Why the run-up in listings? Beeson asked rhetorically.
Sellers have read about exorbitant prices and the need for inventory, he explained, adding, “I guess we should have schooled them a bit about a phasing in process and not to bunch up at the listing house door.” The velocity of the market is still strong, with well-priced and conditioned homes still selling in a matter of days or a few weeks, Beeson stated.
“Only now there are just 3-to-5 offers, not 50,” he said.