February 14, 2007
*January Housing Activity in Western Washington Starts Slow – Finishes Strong*
KIRKLAND, Wash. (Feb. 7, 2007) – January’s stormy start kept home buyers, sellers and agents hunkered down, but the milder weather during the final two weeks of the month prompted a surge of activity. By month’s end, the storyline of recent months continued, but with an optimistic twist.
Members of Northwest Multiple Listing Service reported rising inventory, slower – but an improving pace of sales, and rising prices compared to a year ago. The mood is upbeat:
- “Demand will outpace inventory in the second and third quarters of 2007,” predicts one MLS director;
- “The 2007 real estate market kicked off much stronger than anticipated,” remarked another broker;
- “When the sun came out, so did the buyers,” according to another MLS director.
January is typically a month of strong listing activity and this year was no exception. MLS members added 11,719 new listings to inventory during the month, nearly 1,300 more new listings than twelve months ago. That volume boosted the month-end total to 30,700 offerings of single family homes and condominiums, a 39 percent jump over a year ago.
While larger than a year ago, this seasonal buildup of listings is creating more balance, said Ken Bacon, who believes conditions still favor sellers. Bacon, a broker at Windermere Real Estate in Redmond, WA, expects inventory will shrink and demand will keep rising heading into the second quarter.
Pending sales lagged a year ago, with a week of more power outages, snow, ice and below freezing temperatures taking a toll. Brokers reported 6,522 pending sales (offers made and accepted, but not yet closed) for the month — about 400 fewer transactions than the same month a year ago, for a drop of 5.9 percent.
Pending sales of single family homes (excluding condos) declined about 6.9 percent, while pending sales of condominiums nearly equaled year-ago totals (down 0.9 percent).
Well-priced homes in popular neighborhoods are still drawing multiple offers. Bacon said his office had two condominiums priced in the $300,000 range that generated multiple offers – one with seven competing bids. “We also had multiple offers on a $5 million home,” he noted.
Prices across the Northwest MLS market area, which encompasses 19 counties, climbed nearly 10.6 percent compared to a year ago. The median price for sales of single family homes and condos that closed during January was $312,975, nearly $30,000 higher than the year-ago figure.
For single family homes only (excluding condominiums) the area-wide price increased about 10.4 percent, rising from $299,000 to $329,950. For condominiums, the jump was nearly 20 percent.
In the four-county Puget Sound region, the median sales price for last month’s completed transactions of single family homes was $40,000 more than a year ago, for a 12.3 percent gain. Condominium prices in the four-county area shot up 21.3 percent.
“Starting in early January, we saw a great deal of pent-up excitement about the market from buyers who had previously been reluctant, said Joe Spencer, citing “negative media hype” in the latter part of 2006 as a likely factor. “Sales are down slightly compared to last year, but are much better than expected, especially considering the weather we experienced in January,” he noted. Spencer, the president and COO of a local real estate company and member of the Northwest MLS, said that company’s web traffic increased 14 percent from a year ago. “This tells us buyers are coming back into the market with a vengeance,” he remarked.
NWMLS director Dick Beeson, a broker at Windermere Real Estate in Tacoma, WA, attributes the pickup in activity to a number of factors, including “small blips” in interest rates. Even though small, recent increases may have “awakened some buyers and some agents to the fact that they better act now – no telling what will happen tomorrow,” according to Beeson.
Improved weather brought a noticeable surge of activity in the latter part of January, observed NWMLS director Kathy Estey, a managing broker in Bellevue. “Pent-up, frustrated people who, due to snow, wind and rain, postponed looking, found their way out of the house and into open houses,” she commented, noting the increased traffic prompted bidding wars for some homes in the more affordable price ranges. “On some, the prices went above the asking price by a significant amount,” she reports, while on others, the buyers were willing to pay full price but waive inspections.
Location is more and more important as traffic and concerns about the cost of gas for long commutes are driving activity in commuting corridors, according to Bacon.
That condominiums are becoming an attractive option for more buyers is underscored by some of the statistics:
- In King County, condos accounted for more than 29 percent of last month’s pending sales.
- The median price for January’s closed sales of condos in King County was $274,900, up $45,000 (19.6 percent) compared to twelve months ago.
Bacon attributes the rising popularity to amenities featured on conversions, resales and newly built condos, along with location. Baby boomers are downsizing to condo style living and prefer closer in urban communities, while “Gen X” buyers weigh quality of life issues in their search and consider the cost of gas and time spent commuting, he stated.
With spring on the horizon, brokers cautioned sellers to be patient.
“Sellers are getting antsy if the house is not sold in a week,” Estey said, while noting homes that have been on the market for a couple months are suddenly popular, with some of them now getting multiple offers.
The traditional suggestions still stand, she advised. They include pricing it right, having the home and yard in the right condition, marketing it right to get full exposure and hiring the right agent with good negotiating skills.
Even though buyers are taking longer to make decisions and sellers are sometimes impatient, all in all, the market feels “right” according to Beeson. There’s a rhythm coming back where there had been unsettledness and upheaval, he commented. Projections for continued job growth translate to “a very stable real estate market,” he believes.
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!
Bob’s Bugle Real Estate Newsletter February 2007
Statistical Summary by Counties: Market Activity Summary for January 2007
Jan 2007Single Fam. Homes + Condos
# Pending Sales
4-county Puget Sound Region Pending Sales (SFH + Condo combined)
(totals include King, Snohomish, Pierce & Kitsap counties)
This information is from the Northwest Multiple Listing Service which is the largest full-service MLS in the Northwest. Based in Kirkland and owned by its member brokers, it currently encompasses more than 2,100 companies with approximately 26,000 sales associates. Together, they serve 17 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state. NWMLS recently added service to Clark County with the opening of an office in Vancouver.
Bob’s Bugle Real Estate Newsletter February 2007, copyright 2007. 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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