Hesitancy, coupled with cooler weather and increasing mortgage rates made for some shifts in the market in October. Here’s what local real estate expert, Frank Hawkins of Hawkins-Poe Real Estate, Fircrest WA, along with Northwest MLS experts see regarding the November market for potential buyers and sellers.
Northwest Multiple Listing Service brokers are detecting indecisiveness by some buyers who are getting mixed “work from home” messages from their employers. The hesitancy, coupled with cooler, wetter weather and increases in mortgage rates were likely factors in slower listing and sales activity during October.
Northwest MLS brokers reported 10,620 pending sales last month, a drop of 3.8% from a year ago and a decline of 6.2% from September. Pending sales volume fell in 13 of the 26 counties in the MLS report, but tight inventory could be hampering the ability of buyers to find their dream home. The latest report shows there were 9,983 closed sales during October. That was 823 fewer completed transactions than a year ago (down 7.6%) and 306 fewer than September (down out 3%).
House hunters were able to select from 9,219 new MLS listings added to inventory last month. That was 1,209 fewer than the same month a year ago for a drop of 11.6%. Compared to September, new listing activity shrunk nearly 19%. At month end, there were 6,588 active listings in inventory, down 23.6% compared to a year ago. This was the smallest selection since June, but the selection improved by double digits in eleven counties. Measured by months of supply, there was less than three weeks of supply area-wide.
Eleven counties, including eight in the Puget Sound region, had less than one a month of supply. Fourteen counties reported more than a month of supply, still well below the industry’s “balanced market” indicator of four-to-six months. “Inventory is still very tight,” said James Young, director of the Washington Center for Real Estate Research at the University of Washington. “Outer counties tended to record slightly more inventory.” Only four counties had more than two months of supply: San Juan (2.14), Okanogan (2.61), Adams (3.11) and Ferry (5.4). Even though inventory is scarce in many areas, brokers reported solid activity.
Area-wide, the average price for last month’s closed sales was $575,000, which was $75,000 higher than twelve months ago. For single family homes (excluding condos), prices rose 16.3% YOY, rising from $515,000 to $599,000. Condo prices were up about 11.3%, increasing from $395,000 to $439,475.
The trends provide a mixed message as to whether demand will return to the cities as quickly as anticipated. With millennials looking for value and increased opportunities to purchase a home in the suburbs, it could be an interesting few months. We will see whether the lifestyle of the city and employers can change the balance of demand from the suburbs, back into the city.