Can a balanced market be on the horizon?

After 90 days of residential inventory increases in the Metro Seattle area, we are beginning to see signs that a balanced market may be closer than we thought. While median sales price in October dropped a modest 2%, most Seattle neighborhoods have seen more aggressive reductions in August and September. October is the first month we have seen sales numbers increase and inventory numbers decrease at the same time. This may be an indication that prices and inventory are stabilizing. If you have questions about this quickly adapting market and the details that could benefit you, I welcome an opportunity to discuss.

METRO SEATTLE Real Estate Market Update
Metro Seattle residential inventory is DOWN 5% following 90 days of significant increases.

NWMLS Data: OCTOBER 2018 statistics with % change from SEPTEMBER 2018
MEDIAN SALES PRICE: $760,000 -2%
NUMBER OF HOMES FOR SALE: 1303 -5%
NUMBER OF SOLD LISTINGS: 606 +18%
NUMBER OF PENDING SALES: 603 +6%
NUMBER OF NEW LISTINGS: 862 -25%
AVERAGE DAYS ON MARKET: 25 +9%

Seattle’s Real Estate market is slowing                       
The Seattle Real Estate market has shown signs of a slowdown for the third consecutive month. Inventories continue to increase and almost all Seattle neighborhoods showed price declines in August. Buyers and sellers are both watching the market closely for short term indicators. This balancing of our real estate market is healthy. However change can be uncomfortable, having a trusted advisor available to navigate you through the facts will benefit you significantly. There are many reasons our market will continue to lead the nation, I welcome the opportunity to assist.

Both median sales price and average price per square foot have declined for 3 consecutive months and for the first time in more than 4 years.

NWMLS Data: AUGUST 2018 statistics with % change from JULY 2018
MEDIAN SALES PRICE: $760,000     -5%
NUMBER OF HOMES FOR SALE: 1,012     +3%
NUMBER OF SOLD LISTINGS: 638     -13%
NUMBER OF PENDING SALES: 583     -8%
NUMBER OF NEW LISTINGS: 827     -11%
AVERAGE DAYS ON MARKET: 17     -6%

2018 Q1 vs. Q2 shows a significant change in metro Seattle prices. With an increase of only 4%, this is a stark contrast from
the double-digit jumps observed over the last 4 years. The most compelling data to support the shift, centers around a 97% influx in
inventory and 57% increase in new listings. The last time inventory AND new listings grew in tandem was more than 4 years ago. With
more homes to choose from and moderating sale prices, an uptick in buyer activity is expected.

June 2018 Market Snapshot | NWMLS.com

KIRKLAND, Washington (July 5, 2018) – Home buyers around many parts of Washington state had more choices and less competition during June, prompting some industry leaders to comment on “a feeling of change in the market.”

“Inventory is up and demand has dropped,” reported Robert Wasser, an officer with the board of directors at Northwest Multiple Listing Service. That combination is “a pretty simple economic recipe for a softening market,” he added in commenting on the latest MLS statistics.

Figures for June show a 5.2 percent improvement in the number of active listings system-wide, coupled with drops in the volume of pending sales (down 8.4 percent) and closed sales (down .07 percent) compared with a year ago. Despite the shift of some indicators favoring buyers, prices area-wide continued to rise, increasing more than 10 percent from twelve months ago.

“There was a feeling of change in the market this June and the numbers supported that feeling,” remarked John Deely, principal managing broker at Coldwell Banker Bain. He noted many brokers also reported an increase in properties going past their offer review date, more price reductions, and an increase in reverse prospecting (a tool that allows the listing broker to view a list of brokers with potential buyers for that listing). “We’re also experiencing a decrease in multiple offers and the number of buyers participating in multiple offers,” added Deely.

Northwest MLS brokers added 13,153 new listings to inventory during June, a drop from both a year ago when they added 13,658, and from May when 14,524 new listings were added. With new listings outgaining sales, total inventory as measured by active listings and months of supply improved.

At month end, Northwest MLS reported 15,234 active listings and 1.5 months of supply. Inventory of single family homes and condos reached its highest level since October. The supply of active listings in King County surged 47 percent from a year ago, boosting the months of supply to just under 1.3 months — the highest level since September 2016 when there was 1.37 months of supply.

“Although still a quick response market, with more new listings coming on the market during the summer months, we experienced dispersed buyer energy due to the greater availability and selection,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He estimates sales activity is off 15-to-20 percent for each new listing’s first 30 days on the market. “Now through October will be the best time of year for homebuyers,” he remarked.

“Sellers are becoming more active in the market as they sense buyers pulling back,” suggested George Moorhead, designated broker and owner at Bentley Properties. Improving supply, a marked increase in expired or cancelled listings, and market times almost doubling are factors he mentioned when describing the market as “more than just lackluster” with summer showing no sign of improvement.

Windermere president OB Jacobi also saw the second straight month with a “pretty significant rise in the number of homes for sale across the Western Washington region” as encouraging. “This is great news for home buyers because not only does it mean more selection, but also less competition.”

Commenting on the steady improvement of supply with more choices for buyers, Mike Grady emphasized “We still remain far below a balanced market of 3-to-5 months of inventory.” The imbalance is reflected by rising prices, up more than 10 percent in King County and nearly 15.5 percent in Snohomish County, he noted. “As long as we are creating 100,000-plus net new jobs annually in the Pacific Northwest and building fewer than 30,000 new single family homes, these trends will continue,” suggested Grady, the president and COO of Coldwell Banker Bain.

Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo said the market there has slowed “but not to the degree that Seattle has. There are fewer listings coming on the market, to a large degree because potential sellers cannot find a home to buy.”

MLS figures show inventory in Kitsap County is down more than 20 percent from a year ago and pending sales declined 5 percent. Wilson said some potential sellers are opting to stay in their current house and remodel citing rising prices and limited selection as reasons for their decision.

“This market is reaching westward to Jefferson and Clallam counties,” Wilson reported, noting Port Ludlow, Port Townsend and Port Angeles are all feeling a bump in value and shrinking inventory. Jefferson County inventory dropped 32.2 percent year-over-year while prices surged 29.8 percent. The supply in Clallam County shrunk nearly 30 percent, with prices jumping 10.4 percent.

Twenty of the 23 counties covered by the Northwest MLS report had double-digit increases in median sales prices. Grant, Kitsap, and Skagit counties were the exceptions, each with gains under 6 percent.

Of the 29 map areas the MLS tracks within King County, six areas, including Queen Anne/Magnolia and most sub-areas of the Eastside, reported median prices topping $1 million for sales of single family homes and condos that closed during June.

Despite the overall gains, buyers might be cheered by one notable figure: The median sales price of a single family home (excluding condos) in King County fell from May, at $726,275, to June, a $715,000, for a drop of nearly 1.6 percent. That May-to-June decline hasn’t happened since pre-recession, noted MLS director Wasser, owner/broker at Prospera Real Estate in Seattle.

“While home prices are still trending above average rates, the pace is moderately slowing as the housing market becomes less frenetic,” Jacobi stated, adding, “We have a ways to go before we approach anything close to a balanced market, but we’re certainly trending in the right direction.”

The softening was evident in the four-county Puget Sound region where pending sales (mutually accepted offers) were down nearly 11 percent from a year ago. Last month’s 8,052 mutually accepted offers in King, Kitsap, Pierce and Snohomish counties was the lowest total for June since 2014.

Wasser agreed. “It’s still a seller’s market out there, but I’m seeing signs of a more balanced market on the horizon,” he stated.

While year-over-year prices rose in all counties, compared to May they were flat in some areas, including King County where the median price of $650,000 was unchanged. The overall median of $425,000 for June’s closed sales was only $5,000 higher than the previous month.

Buyers who want to live in King County still face hefty prices for existing inventory. Deely said his analysis of active listings of single family homes revealed more than a third of the choices for single family homes has asking prices of more than $1 million. And, he added, there are fewer than 80 listings (only about 2 percent) are priced below the US national median sales price of $313,000.

Escalating prices and depleted inventory in desired neighborhoods are top concerns Moorhead hears from buyers, but “they have another challenge on the list: rising interest rates.” The hikes — with more expected — are pushing buyers into a lower price point, or forcing them to come up with a larger down payment, he added.

Grady also commented on rising mortgage rates, resulting in some buyers being priced out of mortgage qualification. He also suggested the slowdown in pending sales has an international angle. “There have been slightly fewer sales to international buyers as China continues to make taking cash out of China more difficult,” he stated.

Home builders continue to be challenged. Wilson noted builders are “struggling to ramp up production to meet demand” with local regulations and processes being inhibitors.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of more than 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.

Statistical Summary By Counties
Market Activity Summary and 4-County Puget Sound Region Pending Sales (PDF)

TO the 20 clients who trusted in me to assist them this year with their housing goals:
A Gracious THANK YOU for your support, dedication, hard work, and trust this past year. We’ve had some ups and downs in this feverish market, but It’s truly an honor to be of service and to have helped you either find or sell your most trusted asset. With a full heart, I Thank You so much.

In gratitude,
Leah

To celebrate! I’ve listed out the charities I’ve donated to this year. I invite you to let me know if your most favorite charity is missing from this list, and I’ll make a donation in your name to your fav charity {you can post your fav charity name in the comment box below}.

2017 Charitable Giving:
Windermere Foundation
ARC – Associated Rec Council
UW Foundation: Jackson School of Intl Studies
Mary’s Place
Social Justice Fund NW
IRC
American Heart Association
White Center Heights PTA
White Center CDA
StampsLicked.org
AH Co-op Preschool
Arthur C. Butler Elem School Fundraiser
Living Wisdom School
JDRF
American Red Cross

What is #LiveLoveOwn? Click to find out:

Via Matthew Gardner, Windermere Economist, find him on FB