Northwest MLS Brokers Report Brisk Activity During September

Thursday, October 06, 2005

News from Northwest Multiple Listing Service


Northwest MLS Brokers Report More Rises in Housing Demand and Prices

KIRKLAND, Wash. (Oct. 6, 2005) – Members of Northwest Multiple Listing Service notched another month of strong sales during September despite adding the fewest number of new listings to inventory since April.

The latest figures from Northwest MLS show pending sales rose 12.7 percent from a year ago, while prices on sales that closed last month jumped 16.3 percent compared to twelve months ago. Those figures compare activity in 15 counties, mostly in Western and Central Washington. In August, NWMLS added two more counties, Okanogan and Whatcom, to its service area, bringing the total to 17.

Year-to-date comparisons of closed sales for the 15-county market area show the volume is 10 percent ahead of a year ago. Through nine months, Northwest MLS members logged 75,426 completed transactions, which compares to 68,539 closings at this time last year.

Brokers expect brisk activity to continue through the fourth quarter, spurred in part by speculation of rising interest rates, persistent inventory shortages, favorable financing and possibly even the recent announcement of Microsoft’s $72 million payout to former contract workers. (A federal judge overseeing a lawsuit involving around 8,600 of the company’s “permatemps” recently approved a payout plan. Checks averaging $8,429 will be mailed in mid-October to each worker who was part of the 1992 class-action lawsuit.)

“The inching up or threat of higher interest rates, together with the Microsoft payout should help prolong our active market,” said NWMLS director Ken Bacon, the broker at the Redmond office Windermere Real Estate. “The payout could be a boost for marginal buyers who suddenly have a down payment or closing costs,” he remarked.

For September, every county except Island County showed gains in the volume of pending sales (offers made and accepted but not yet closed) compared to a year ago. System-wide,including the two new counties, MLS members reported 10,014 pending sales during September, improving on the same month a year ago by 1,367 transactions for a 15.8 percent gain. (Excluding the two new counties, members reported 9,593 pending sales last month, which compares to a year-ago total of 8,509 transactions for a 12.7 percent increase.)

“Homes continue to sell briskly with sellers benefiting from eager, competitive buyers who are willing to bid above the listing price and waive contingencies to improve their chances of having their offer accepted,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He attributes the ramped activity and intense competition – especially in the more affordable price ranges -- to the continued shortage of inventory in the Puget Sound region. “It’s no surprise September was another record month,” Scott commented, adding he expects price appreciation to remain steady for the remainder of the year.

All counties showed improvement in the number of new listings added to inventory during September compared to a year ago, contributing to a gain of more than 23 percent across the 15 counties. The additions across counties included 10,540 new listings of single family homes and 1,698 new listings of condominiums. The 15-county combined total of 12,238 properties was the smallest number of new listings since April when members added 12,116. It surpasses the 9,913 new listings added during the same month a year ago, but high demand means brokers must continue to scramble to replenish inventory. At month-end, nine counties had fewer listings than a year ago.

In the Central Puget Sound Region, housing demand remains strong because the supply of housing is “woefully inadequate” to meet the actual demand for housing created by local employment growth, according to Sam Pace, a housing specialist for the Seattle-King County Association of Realtors®. Pace, who is a Realtor® with Executive Real Estate in Bellevue, said the imbalance is due in part to the fact that in King County from 1993 to 2000, the gap between the supply of housing and the actual demand for homes grew by approximately 60,000 units. Nearly 44 percent of that increase could not be met here. Although the imbalance abated somewhat during the recession that began around 2001, Pace said it is again widening as a result of job growth and a shortage of available zoned land.

Northwest MLS figures show the number of active listings is down about 6.5 percent area-wide compared to a year ago. King County’s selection is down almost 19 percent from a year ago (7,496 listings compared to a year-ago total of 9,230 offerings). Other counties reporting sharp drops in inventory are Island (down about 20.2 percent), Grant (down 19.6 percent) and Snohomish (down 12.8 percent).

Figures for King County show a very depleted inventory of condominiums. A year ago, MLS members reported 2,121 listings; now there are only 1,347 condos on the market countywide, a drop of more than 36 percent. As buyers compete for the shrinking selection, the pace of sales quickens. Since May, condos that sold in King County were on the market for fewer days than single family homes.

Market conditions continue to favor sellers. Last month’s closed sales across 17 counties fetched a median price of $282,500. That’s more than 15 percent higher than a year ago, when the median sales price was $245,000. (Excluding the two new counties, the area-wide median selling price was $285,000, a 16.3 percent increase from the year-ago figure of $245,000.) Nine counties reported price gains of 20 percent or higher compared to twelve months ago.

In King County, the median price for last month’s completed sales of single family homes and condominiums (combined) was just under $350,000 ($349,898), up almost 17 percent from the year-ago figure of $299,610. For single family homes (excluding condos) the median selling price was $381,250, while for condominiums it was $229,950.

Of last month’s 8,462 closed sales of single family homes, the least expensive was a two-bedroom “fixer upper” in Cowlitz County that sold for $15,000. At the other end of the price spectrum was a home on Lake Sammamish that sold for $8.4 million.

Northwest Multiple Listing Service, based in Kirkland and owned by its member brokers, serves 17 counties, mostly in Western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state. Its membership encompasses more than 2,000 companies with approximately 25,000 sales associates.


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