Home Sales Still Brisk in Western Washing

Tuesday, March 15, 2005

News from Northwest Multiple Listing Service

February Another “Quick Action” Market
For Home Sales in Western Washington

KIRKLAND, Wash. (March 4, 2005) – For the housing market in Western Washington, the storyline is unchanged: “If we had twice as many listings we would have twice as many happy buyers,” says broker Dick Beeson, manager of Windermere Real Estate/Paragon Co. in Tacoma.

Northwest Multiple Listing Service (NWMLS) members notched 8,426 pending sales during February for a 12.9 percent increase from the same month a year ago, according to a report released today. That volume, which includes single family homes and condominiums, came despite a nagging inventory shortage in many areas.

NWMLS brokers added 9,487 new listings to inventory during February to nearly match the number of a year ago (9,590), but brisk sales over the past several months means a dwindling supply. At month end, inventory in its 15-county market area stood at 20,343 residential properties, about 3,300 fewer listings than a year ago for a drop of 16.3 percent.

Inventory is at about two-thirds of year ago levels in four counties (Jefferson, King, Grays Harbor and Skagit). Snohomish County reported a 25 percent decline in inventory compared to 12 months ago.

The imbalance continues to favor sellers in the form of upwardly trending asking prices. In King County, where there are 5,242 single family homes offered for sale (compared to 6,688 at this time a year ago), the median listing price is $415,000 -- $55,000 more than the year-ago median asking price (up 15.3 percent).

“February was yet another quick action market due to low interest rates, low inventory and large volumes of buyers,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Now more than ever it's critical for buyers and sellers to work with a qualified RealtorÒ who can represent their best interests and negotiate through multiple offer situations. With less than a three month supply of inventory currently available to buyers (even less in the more affordable prices), I expect this fast paced market will only continue in the months to come," he added.

Windermere’s Beeson, a member of the Northwest MLS board of directors, echoed those sentiments, describing the market as “strong, fast-paced and awesome.” Tight inventory and escalating prices mean many buyers are disappointed. “Many go away very sad when they are a day late or a dollar short as they’re outbid,” he lamented.

Beeson said some would-be owners are eliminating inspection contingencies just to get their offer in a better position with the seller. “We advise against that, but they do it anyway,” he noted. “Where are the days of helping people make good sound decisions,” Beeson wonders, adding, “Much of our energy as agents is spent trying to help buyers keep up with ever-changing prices.” He acknowledges today’s fast-paced market means less time to make reasoned decisions. “There is no time to wait if you are a buyer – you must make decisions much more quickly than before,” he remarked.

Although pending sales jumped nearly 13 percent from a year ago, the MLS reported declines in three counties. Kitsap, Mason and San Juan counties all had double-digit drops in the number of pending sales last month compared to the same time a year ago. In King County, sales increased by only about 3.5 percent as low inventory in some price categories crimped activity.

A check of the MLS database shows only about 15 percent of the listings in King County have asking prices of $200,000 or less. About the same number (13.3 percent) are priced at $1 million or more. In Snohomish County, only one of every six listings (about 16.5 percent) is priced under $200,000, while in Pierce County, the ratio is about one of every four listings (26 percent).

MLS director Mike Skahen, broker/owner of Lake & Co. in Seattle, reports inventory shortages are easing in some areas. “We’re finally starting to see more listings come online, but not enough to come close to satisfying demand,” he observes. He notes the Shoreline area (north of Seattle) is becoming “very hot,” with inventory quite low compared to the past. “We are seeing many multiple offers and prices being bid up on starter homes in the $270,000 to $320,000 range,” Skahen said.

Skahen described Shoreline as “the next Ballard” because it’s still relatively close to downtown Seattle and homes are more affordable for first-time buyers. “Ballard is now on par with other hot close-in Seattle neighborhoods and any house that is priced right is drawing multiple offers,” he reports, adding it is not uncommon to see homes going for more than $30,000 over the list price.

Along with scrambling for new listings and negotiating and writing offers, NWMLS members were kept busy with closings during February. Brokers reported 5,359 closed sales during the month, improving on the year-ago number by 15.9 percent.

Prices on last month’s completed transactions rose 11.1 percent from a year ago. For the 15-county market overall, the median selling price was $249,950, which compares to a year ago figure of $225,000. Eleven of the 15 counties reported double-digit price gains.

Last month’s closings included 4,555 single family homes with a median selling price of $260,000 and 804 condominiums with a median sales price of $190,000.

The average marketing time for February’s closed sales was 64 days – ten fewer days than a year ago. Homes sold at the fastest clip in Thurston County, averaging 54 days, followed by King County at 55 days.

Northwest Multiple Listing Service covers 15 counties, mostly in Western Washington, plus Grant County in the central part of the state. Based in Kirkland, NWMLS membership encompasses nearly 1,300 brokerages with around 18,000 sales associates.

Statistical summaries may be views online at www.nwrealestate.com (select "Market Statistics" from menu box)