September 20, 2006
*August Home Sales Stronger Than July as Prices Still Climb in Western Washington*
KIRKLAND, Wash. (Sept. 12, 2006) –Inventory gains, interest rates and in-migration contributed to a solid month of housing activity for members of the Northwest Multiple Listing Service. Despite reports of declining prices and sales in many parts of the country, NWMLS brokers in western and central Washington notched more sales in August than during July. The volume of pending sales dipped from the same month a year ago (down 13.2 percent), but surpassed July by 857 transactions for a gain of 9.4 percent.
Prices on sales that closed last month jumped 14.3 percent from a year ago, with most of the 17 counties in the NWMLS market area experiencing double-digit increases.
Inventory shows significant improvement – up 43 percent area-wide compared to last year – but brokers caution there are still shortages in many close-in neighborhoods and in some price categories.
Northwest MLS figures show the volume of active listings stood at 33,316 at the end of August, up from the year-ago inventory of 23,260 properties. The selection includes 29,404 single family homes and 3,912 condominiums.
MLS members added 14,077 new listings to inventory during August, slightly more than the year-ago total of 13,358 residential properties. Only two counties, Snohomish and Skagit, reported slight declines in the number of new listings added to inventory last month compared to 12 months ago.
Based on current indicators, there is about a 3.3 months supply of available inventory in the MLS system. In King County, the number drops to about 2.3 months and in Snohomish County it’s about 2.5 months.
The condominium inventory in both those counties remains tight, with only 1.6 months of supply in King County and 1.2 months in Snohomish County. Brokers expect that to ease, once thousands of condominiums in various stages of development are completed.
In the four-county Puget Sound region, which accounts for nearly two-thirds of current inventory, the supply is tightest in King County and most plentiful in Kitsap County:
Res + Condo (combined)
“In close-in Seattle neighborhoods we still have a serious inventory shortage,” reports NWMLS director Mike Skahen, a broker member of the NWMLS. A good example is a newly listed Ravenna home, he explained. Built in the early 1900s and described as being in average condition, the 4 bedroom, 2 bath home (with no garage) is priced at $700,000. More than 100 parties visited the open house this past weekend, and the agent expects at least a half-dozen offers will be presented today, according to Skahen. “Good houses in high demand neighborhoods are still in very short supply in all price ranges with no shortage of buyers,” he emphasized.
Brokers elsewhere in the NWMLS service area echoed Skahen’s comments.
“Despite a decline in sales, last month was the second best August on record,” said J. Lennox Scott another broker member of the NWMLS. Compared to the “frenzy housing market of 2005,” Scott says activity now is “more typical for a strong market.” He expects the combination of low inventory levels and attractive interest rates will fuel strong activity through the remainder of 2006.
NWMLS director Ken Bacon, a broker at Windermere Real Estate, described August as typical, but detects some shifts in buyer behavior. The area’s exceptionally dry, warm weather (with only 0.02 inches of rain during the month) may have contributed to some slowdown, he noted, as buyers, sellers and agents took a breather for vacations and back-to-school activities.
Bacon believes condominiums are becoming a growing factor in the market, with that property type now accounting for about 30 percent of sales at his office.
Some Eastside buyers in the $400,000 to $500,000 range would probably need to look at single family homes in outlying areas such as Duvall and Monroe, he said. Affordability is not the only consideration, he noted. With a variety of condominiums situated near job centers (and lingering uncertainty about gas prices), and their convenience and amenities, Bacon expects more buyers will opt for the condo lifestyle.
NWMLS statistics confirm his observations:
Closed sales priced from $400,000 – $500,000,
Eastside sub-area of King County
Single family homes
In Pierce County, the “biggest story is the multitude of choices buyers are enjoying,” according to NWMLS director Dick Beeson. “Many buyers feel empowered and are waiting to see if prices will start to fall,” observed Beeson, also a broker/owner at Windermere Real Estate. What they might not realize is even though inventory has expanded, prices have continued to climb so their indecision can be both costly and frustrating when the house they’re considering gets sold to someone else.
Beeson expects prices will continue to climb, but at a more modest rate, probably in the range of 4 to 7 percent annually. Interest rates will remain very reasonable, he believes, and may even drop slightly.
“While we aren’t coasting yet, the market has shifted from fourth gear into third gear,” Beeson commented, adding, “It’s an excellent time for well priced properties – but overpriced means overlooked in today’s market.”
National analysts credit the state’s job growth and in-migration as factors in the area’s relatively strong market.
Washington is on track to add 95,000 jobs in 2006, according to the state’s Office of Financial Management. With the improving economy, more residents from other states are relocating here. OFM data show annual migration climbed from only 22,000 in 2003 to 51,000 in 2005 and 81,000 in 2006.
Lawrence Yun, an economist with the National Association of Realtors, predicts the region’s real estate boom is likely to continue, “albeit a bit slower,” he says, citing dual factors of California transplants and a strong local economy. ” Real estate in the Pacific Northwest is still being pumped up by fleeing Californians,” Yun remarked, referring to retiring baby boomers who are selling their expensive homes there and buying more reasonably priced residences in the Northwest.
In a statement accompanying a report that lowered projections for this year’s home sales, NAR chief economist David Lereah said psychological factors account for much of the recent decline. “We’ve never seen a general decline in the housing market against a healthy economic backdrop where jobs are being created, the economy in growing and interest rates are favorable,” he said. “Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail,” Lereah remarked.
NAR President Thomas M. Stevens from Vienna, Va., said higher interest rates slowed home sales during the first half of the year, particularly in higher cost markets. “The shift we’ve seen lately results from psychological factors with buyers on the sidelines trying to time the market. Both buyers and sellers need to understand what’s going on within their local market areas, so it’s even more important now to work with a professional who can guide you through current changes and the negotiation process.”
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 2,000 companies with approximately 27,000 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.
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 September 2006
STATISTICAL SUMMARY BY COUNTIES
Market Activity Summary for August 2006
|August 2006 Single Fam. Homes + Condos|
|Total Active||# Pending Sales||# Closings||Avg. Price||Median Price|
4-COUNTY PUGET SOUND REGION PENDING SALES
(SFH + Condo combined)
(totals include King, Snohomish, Pierce & Kitsap counties)
Bob’s Bugle Real Estate Newsletter September 2006, copyright 2006. 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.
Let a trained professional Windermere agent, Bob Chapman, assist you in your Snohomish County real estate home or vacant land buying or selling transaction.
This Snohomish County real estate website page also has a home loan or mortgage calculator.
Please visit the links pages in the navigation bar. There you will find links to: Snohomish County & Washington State School Districts information which includes the official websites of School Districts in Snohomish County and Washington State; The official Washington State government website, Snohomish County & City government websites and Valuable Real Estate Informational and Resource links.