Bob's Bugle


April 7, 2014

*Northwest MLS Brokers Report Lack of Inventory Has Slowed Sales with Prices Rising*

Kirkland, WA - April 3, 2014 - Northwest Multiple Listing Service brokers reported rising prices on fewer sales during March compared to a year ago, citing inventory shortages as the main reason.

Members of the MLS reported 9,183 pending sales (mutually accepted offers) during the month, about 300 fewer than the same period a year ago for a 3.2 percent drop. Compared to February, pending sales surged 26.7 percent in March, or by 1,936 transactions.

"The only thing holding back sales is the lack of inventory," said John Deely, a member of the Northwest MLS board of directors. He said one recent listing priced at a fair market value drew more than 40 offers. "The depth of buyer demand appears to have no bottom in the most popular price ranges," added Deely, the principal managing broker at real estate brokerage franchise in Seattle, Washington.

Closed sales were about the same as twelve months ago - 5,753 completed transactions last month, which compares to the year-ago total of 5,745 closed sales.

The median price on last month's sales of single family homes and condominiums that sold across the 21 counties in the MLS report increased  6 percent, rising from the year-ago figure of $258,500 to last month's price of $274,000.

Adequate supply to meet demand is a continuing concern, according to Northwest MLS representatives who commented on the latest numbers. Many industry leaders expect the imbalance to persist.

MLS members added 9,598 new listings to the database during March, slightly more than a year ago when they added 9,332 new listings. While last month's additions were about 33 percent more than February when 7,234 new listings were tallied, brisk sales meant supply remained low.

At month end, the Northwest MLS reported 19,736 active listings of single family homes and condos across its service area. That's up about 6.7 percent from twelve months ago.

The MLS said there is about 3.6 months of supply, which is down from the end of February when the service reported about 4.6 months of supply. King County has only about 1.8 months of supply, while Snohomish County was slighter better with 2.2 months of supply.

In general, industry analysts say four-to-six months is the supply needed for a balanced market.  "We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers," stated Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors®.

"There are many reasons potential sellers should consider selling now," said Mike Gain, CEO and president of another large real estate brokerage franchise in Seattle, WA. There is less competition now at the beginning of the spring selling season (usually the busiest time of the year) and interest rates are still very low but will likely rise, he noted.

"Now is a great time for move up sellers/buyers who can sell their home quickly and secure another at today's prices and today's lower interest rates," Gain suggested, emphasizing, "Buying a home today is going to prove to be a smart investment in the long run."

Commenting on March activity, OB Jacobi, president of Windermere Real Estate, said he expects market conditions of low inventory, strong competition among buyers, steadily rising prices - and rising rents - will continue in the foreseeable future. "Rents are on the rise, and when this happens, there's often a shift where people get priced out of the rental market and move into home ownership. This leads to more demand for homes and upward pressure on prices," he stated.

Stiff competition among buyers is creating frequent multiple offer situations, according to Gain. "We have way more people wanting to buy than we have appropriate homes to sell in the right locations and at the right prices," he remarked, adding, "Our market is literally starving for good inventory in desirable neighborhoods."

Gain also said there are more first-time buyers than he has seen in many years. "Many are very well qualified for a mortgage and have more than minimum down payments." As an example, he mentioned a resale townhome listing in West Seattle with an asking price of $439,950. Within a few days of it being listed, it had four offers, all with accelerator clauses. The property sold for $459,950, prompting Gain to say, "It's heartbreaking to have so many good purchasers and not enough good inventory to satisfy their needs."

Not all markets in the MLS service area are experiencing the same pressure. 

"Despite low inventory and falling market time, our prices are still flat overall in Kitsap County," said Frank Wilson, Kitsap district manager and branch managing broker at a real estate brokerage in Poulsbo, Washington.

Wilson noted distressed properties (short sales or bank acquired homes) are still a factor. "Those home owners are now renting and most will not be able to buy again for a few years as they get the credit ding of a short sale or repossession behind them."

As these sidelined buyers reenter the market, Wilson expects inventory will drop lower and prices will rise. Qualified purchasers who are thinking about buying "should take advantage of the stay of rate increases," he suggested, referring to statements by Federal Reserve Chairwoman Janet Yellen, who made assurances earlier in the week that the Fed intends to keep interest rates low for now.

Pending sales in Kitsap County were about even with a year ago, while 12 of the 21 counties in the MLS system reported declines.

The condominium component ended on a positive note during March, with pending sales rising nearly 7.9 percent from a year ago. MLS members reported 1,345 pending sales, up from the year-ago total of 1,247.

Closed sales rose 2.4 percent, but prices on those sales jumped 14.7 percent. The median sales price on last month's condo sales was $220,000, up from twelve months ago when it was $191,750.

I am a Short Sale specialist for Seller's needing to list their home for sale or Buyer's wanting to obtain a Great deal by Buying a Short Sale home!

Referrals are a “very” important part of my business. Please let me know of anyone that you know who may be considering Buying or Selling real estate – or please give them my name and contact information!

Thank You! Bob Chapman

Statistical Summary by Counties: Market Activity Summary - March 2014

+ Condos
# Pending
This Month Same
Year Ago
King 3,475 4,191 3,621 2,297 $462,644 $378,000 1.82 1.62
Snohomish 1,378 2,105 1,481 949 $311,314 $295,000 2.22 1.58
Pierce 1,568 3,200 1,563 919 $240,707 $222,950 3.48 2.96
Kitsap 452 1,170 434 259 $287,163 $225,000 4.52 5.23
Mason 141 579 104 68 $161,860 $134,000 8.51 9.83
Skagit 227 644 200 116 $271,083 $232,975 5.55 6.13
Grays Hbr 148 631 119 85 $122,228 $102,000 7.42 14.94
Lewis 122 576 119 72 $139,201 $129,750 8.00 9.98
Cowlitz 152 447 112 74 $157,019 $142,650 6.04 4.24
Grant 130 424 110 59 $150,344 $135,000 7.19 10.25
Thurston 447 1,092 420 246 $230,026 $222,250 4.44 4.00
San Juan 91 312 41 25 $480,060 $400,000 12.48 20.60
Island 214 616 148 93 $287,363 $243,299 6.62 8.29
Kittitas 104 341 57 42 $238,481 $220,000 8.12 8.02
Jefferson 76 333 47 38 $284,347 $264,500 8.76 8.83
Okanogan 59 348 24 18 $151,989 $147,000 19.33 20.24
Whatcom 396 1,216 311 217 $268,731 $239,950 5.60 6.55
Clark 59 149 78 42 $268,791 $245,000 3.55 2.16
Pacific 95 367 42 26 $164,920 $139,000 14.12 13.48
Ferry 2 50 0 1 $82,500 $82,500 50.00 36.00
Clallam 93 352 58 37 $212,228 $182,000 9.51 8.28
Others 169 593 94 70 $216,926 $177,000 8.47 8.36
MLS TOTAL 9,598 19,736 9,183 5,753 $339,466 $274,000 3.43 3.22

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 4869 6239 7192 6974 7311 6876 6371 5580 4153 4447 3896 2975
2008 3291 4167 4520 4624 4526 4765 4580 4584 4445 3346 2841 2432
2009 3250 3407 4262 5372 5498 5963 5551 5764 5825 5702 3829 3440
2010 4381 5211 6821 7368 4058 4239 4306 4520 4350 4376 3938 3474
2011 4272 4767 6049 5732 5963 5868 5657 5944 5299 5384 4814 4197
2012 4921 6069 7386 7015 7295 6733 6489 6341 5871 6453 5188 4181
2013 5548 6095 7400 7462 7743 7374 7264 6916 5951 6222 5083 3957
2014 5406 5587 7099

NorthwestMultiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington.

Copyright 2014. All material contained herein is owned and protected. Any attempts to reproduce this information without the express written consent from the owner will be prosecuted.

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Bob Chapman
Bob Chapman, Managing Broker
Windermere Real Estate/Lake Stevens, Inc.
9327 4th St. NE, Ste #3
Lake Stevens, WA 98258
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