March 20, 2006

February Home Sales Lag Year Ago But Brokers Sense Rebound

KIRKLAND, Wash. (March 6, 2006) – Pending home sales during February fell short of the number of offers made and accepted a year ago, but prices continued to climb, according to the Northwest Multiple Listing Service.

MLS members reported 7,368 pending sales last month in a 15-county area -- about 12.6 percent fewer transactions than twelve months ago. For the 17 county service area that now includes Okanogan and Whatcom counties, which became part of Northwest MLS last August, the total increases to 7,673 pending sales.

Compared to January, NWMLS logged 742 more pending sales for a 10.7 percent increase.

Pending sales during February declined in 11 counties compared to a year ago, with only Cowlitz, Lewis and Mason notching gains. In San Juan County, the number of sales was the same as a year ago. For the four-county Puget Sound region (King, Snohomish, Pierce and Kitsap counties), sales were off 11.7 percent – but the total of 6,032 sales still marked the third highest volume of sales during February in the past seven years.

Brokers reported 5,999 closed sales last month. The median price for those sales, which include single family homes and condominiums, was $283,200 across the 17-county service area. That’s up 13.3 percent compared to a year ago, with most counties reporting double-digit increases.

For single family homes only (excluding condominiums) the median price on last month’s closed sales was $299,950, up 15.4 percent from year-ago figures. Eight counties had increases of 22 percent or more compared to prices of single family homes that sold twelve months ago..

NWMLS director, Dick Fulton, attributes the slower sales to tight inventory. He said the first six weeks of the year were sluggish, but noticed a steady increase in activity in mid-February. “By month end we were going gangbusters,” he commented, noting they are still experiencing multiple offer situations.

Realtor® Sam Pace, who is also the South King County housing specialist for the Seattle-King County Association of Realtors®, emphasized listings are the “front end of the pipeline” for sales. When inventory shortages exist, he explained, “We should not be surprised if the number of pending sales is somewhat lower in the following months.”

Even with fewer sales, median prices in both the southwest and southeast areas of King County were up more than 13 percent compared to a year ago.  Home prices continue to climb steeply compared to increases in the income levels of family wage earners, Pace stated.  “The hard news for families trying to break into the housing market for the first time is that for most of them, their incomes didn't keep pace with the 13-plus percent rise in housing prices.”

Pace also detects a noticeable surge in activity. “We’re starting to regain momentum,” he observed. “Buyers who act quickly may still be able to lock up a property at a more reasonable price before the spring home buying market gathers steam.  For the best opportunities they should move quickly,” he suggests, noting South King County still has some of the best opportunities for families, “but a quarter of a million dollars for a home is now the rule, not the exception.”

While inventory remains tight in many areas, the selection is improving in several parts of the MLS service area. Brokers added 9,327 new listings to inventory last month, just under the volume of a year ago when they added 9,487 new listings.

By month-end Northwest MLS members reported a total of 22,504 active listings across its 17 county market area. Even adjusting for the two new counties that joined MLS last summer, the number of active listings is up more than 2 percent. The current selection includes 19,785 single family homes and 2,719 condominiums.

Improving weather, projections of more job growth and stable (or declining) mortgage rates are expected to bolster local housing activity in the coming months. Freddie Mac reported the third straight week of slightly lower mortgage rates on Thursday, with the rate on a 30-year-fixed rate mortgage averaging 6.24 percent.

“The locomotive is finally up to full speed,” Fulton remarked, adding, “We’re back.”

Referrals are a “very” important part of my business. Please tell me 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

This information is from the Northwest Multiple Listing Service, which is based in Kirkland, WA and owned by its member brokers, encompassing approximately 2,075 member brokerages, with more than 26,000 sales associates. The MLS covers 17 counties, including most of western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state.