Sizeable increases in new listings compared to a year ago and reports of moderating prices "might mean we are seeing some relief for buyers," suggested John Deely, a board member at Northwest Multiple Listing Service.
In commenting on the latest statistics from Northwest MLS summarizing April activity, Deely said the market remains hot while emphasizing active listing numbers do not always reflect actual overall activity. "With a market like ours, and the velocity of new listings moving to pending status, active listing data tend to get more attention," stated Deely, the vice president of operations at Coldwell Banker Bain.
Northwest MLS figures, which cover 26 counties, illustrate that point. At month end, April's active listings stood at 5,616, yet during the month, member-brokers added 12,043 new listings of homes and condos. There was a jump of more than 57% from the same month a year ago when the pandemic shutdown began. Compared to March, the volume of new listings rose 14%, and even compared to two years ago (April 2019), new listings were up about 3%.
April's month-end inventory of 5,616 listings was a year-over-year (YOY) drop of 45%; a year ago, there were 10,282 active listings in the MLS database.
Pending sales continue to surge, keeping inventory depleted. Brokers reported 10,583 pending sales during April, up nearly 47% from a year ago when they logged 7,207 mutually accepted offers. Last month's pending sales dipped slightly (2.58%) from March.
Two other industry experts, J. Lennox Scott and Matthew Gardner, also commented on the significant gains in new listings.
"At long last, May is here. Historically, we see a nice uptick in new listings every May. This increased availability and selection will be present throughout the summer," suggested Scott, the chairman and CEO of John L. Scott Real Estate. He tempered his prediction by noting there is a large backlog of prospective home buyers, a situation he says will "keep the market in a state of 'instant response' for each new resale listing."
Matthew Gardner, chief economist at Windermere Real Estate, noted 16 of the 26 counties in the report had at least a 20% increase in active listings at the end of April compared to March, saying "There is finally some good news for buyers!" NWMLS figures show active listings increased by 1,463 properties (up 35.2%). He also pointed out the rise in inventory had a softening effect on the average listing price. He calculated a drop of 5.1% between March and April. "It's too early to suggest this trend will continue, but it's encouraging to see and hopefully the beginning of a shift back towards a more balanced market."
Even with some improvement in listings, the MLS report shows only nine counties have more than one month's supply of inventory. Areawide, there is only 0.64 months of inventory, with even less supply (0.57 months) in the four-county Puget Sound region. Many analysts consider a balanced market to be in the four-to-six-month range.
"The time between coming on the market and going off the market is the shortest I've seen in the last 40 years," stated Dick Beeson, managing broker at RE/MAX Northwest, Tacoma-Gig Harbor. "The housing bubble more than a dozen years ago didn't look like this. There was inventory. There were choices for buyers. Now they comb the internet daily, hoping they'll get the chance to compete with other battle-weary buyers for the one new listing that appears in their price range near where they really want to live," he remarked, adding he does not expect the situation to get better soon.
With supplies depleted, prices continue to climb. Brokers reported 8,791 closed sales of single family homes and condos during April, nearly 50% higher than the year-ago total of 5,866 completed transactions. Year-over-year prices on closed sales surged 25%, from $452,030 to $565,000. Nearly every county had double-digit gains.
Prices on single family homes rose about 26.5%, while condo prices increased by a more modest 12%.
"As long as housing supply remains constrained and interest rates remain low, we could see these price trends continuing well into the summer," said James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects continued price increases along the I-5 and I-90 corridors and noted peripheral areas are continuing to outperform as people seek value in a low interest rate environment.
Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, said Kitsap County and the Olympic Peninsula are experiencing vigorous activity from would-be buyers from the Seattle/King County area who are looking for "safety, community, affordability, and choices." He also cited the area's low unemployment rate and robust economy as market drivers.
Inventory in Kitsap County has not expanded at anticipated rates, according to Leach. "Builders are perplexed with new regulations, increasing costs of construction materials, and increased bureaucratic overlays," he stated.
The volume of new listings (including single family homes and condos) in Kitsap County increased 47.4% from a year ago and nearly 17% from March, but total active inventory was down 47% from a year ago, resulting in about two weeks of supply (0.57 months). Leach estimates 80% of sales in Kitsap County exceeded listed values, with "many buyers making the buying decision from a virtual tour." Year-over-year prices rose 22.7%, with the median price on last month's sales, at $485,000, significantly lower than King County where it was $750,000.
Intense competition is causing buyers and sellers to consider shortening offer review dates, according to Dean Rebhuhn, owner at Village Homes and Properties. "Sellers with offer review dates within five to seven days of the listing date are receiving strong offers on day one or day two of listing," he said, adding, "Some sellers are considering offers with no contingencies and aggressive prices."
Although bidding wars are common, Deely said some brokers are reporting things may be starting to moderate related to pricing. "Brokers tell us some sellers who have been pushing the envelope on their home price are now experiencing longer list times and, in some cases, have had to drop their prices." He emphasized sellers need to price appropriately. "With things starting to return to normal, the off-the-chart activity placing sellers in the driver's seat may be moderating," he remarked.
NWMLS director Mike Larson, managing broker of the Harold Allen Team at COMPASS, agreed in part. "The real estate market was the cornerstone of the US economy during the darkest days of the pandemic, and things are not changing as we return to normalcy. "It's still very tough for buyers."
Larson said the value used to be what the comparable properties sold for. "Now it's whatever the buyer is willing to pay, which is almost always more than the list price." Although inventory remains a challenge, he believes "there may be hope on the horizon as we head into the prime-time months for sellers."
The latest Northwest MLS report indicates condominiums may be an option for some house-hunters. A check of the MLS database shows 1,127 current condo listings with prices on these offerings ranging from $75,000 for a listing on a golf course in Adams County to $13.5 million for a penthouse on First Hill in Seattle.
Condo supply remains tight at 0.88 months (down 27% from a year ago), with prices up 12% areawide. In King County, where nearly three-fourths of current inventory is situated, year-over-year prices increased about 7%.
"It is interesting to note a continued decline in King County's condominium inventory - down from nearly 1.6 months of supply in January -- perhaps marking a return to the urban markets with increased vaccinations," suggested Young. The MLS report for April shows pending sales of condos for the map areas encompassing Seattle spiked nearly 184% from a year ago, from 135 units to 383.
CoreLogic research shows condos are increasingly popular with millennials with 47% of all condo mortgage applications submitted by millennials in 2019. Research by the National Association of Home Builders (NAHB) indicates improving perceptions about the availability of homes among some buyers, and especially among millennials, the largest share of home buyers. In its latest Housing Trends Report, NAHB reported the share of millennial buyers who expect housing availability to ease up in the months ahead rose decisively between the first quarters of 2020 and 2021, from 26% to 42%.
Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,500 member firm offices and 32,000 brokers across Washington state, NWMLS (www.nwmls.com) is the largest full-service MLS in the Northwest. Based in Kirkland, Washington, its service area spans 26 counties, and it operates 21 local service centers.
