Northwest MLS brokers say real estate activity across Washington remains strong
Fircrest, WA December 7, 2020
Some real estate brokers expect the competition for homes to ease somewhat over the holidays, but the latest statistics from Northwest Multiple Listing Service indicate activity is unusually strong heading into December. “Normal market conditions historically ease in market activity starting with Thanksgiving and remain chilled, with the winter weather, until the springtime thaw, usually resuming normal activity in late February early March,” exclaimed Frank Hawkins, President of Hawkins-Poe. The Northwest MLS report summarizing November activity shows strong year-over-year (YOY) increases in closed sales (up about 23%) and prices (up 13.8%). Pending sales (mutually accepted offers) rose 7.9% from a year ago, and the years saga of depleted inventory continued last month with the number of total listings down nearly 43%.
Successful Buyers today need to be ready to compete. “Offers that have the best chance of acceptance are from buyers who are pre-approved with a local lender or have cash. Buyers also need to be prepared to have a pre-inspection in order to waive that contingency and be ready to escalate in price if necessary,” suggested Hawkins.
Although inventory is limited, a check of the supply by price range shows about 25% of the listings across the 23 counties served by Northwest MLS are priced under $400,000 and a similar number (24.4%) are priced from $400,000 to $600,000. At the high end of the spectrum, about 21% of homes and condominiums in the database have asking prices of $1 million and higher. “With listings down 42.8%, record low interest rates, and demand very high in outer suburban areas, it seems like the perfect price storm has hit,” suggested James Young, director of the Washington Center for Real Estate Research at the University of Washington.
While overall inventory is down, a comparison of counties shows a wide range of deficits, according to NWMLS data. Perhaps surprisingly, King County’s supply declined “only” about 18% from a year ago, while five counties (Clallam, Clark, Island, Mason, and Snohomish) reported drops of at least 63%. A closer look at the MLS report for all counties shows the shortages are most acute for single family homes (off 50.6% area-wide), while the condo supply improved (up 7.1). Thirteen of the 23 counties in the MLS report had less than one month of supply at month end. Overall, there was about three weeks (0.73) of inventory at the end of November, well below the four-to-six months many analysts use as a gauge of a balanced market.
News release: November activity December 7, 2020
“In Pierce County, the lack of inventory in all price ranges has caused an increase in buyers, some of them are searching in Pierce because they have been priced or chased out of King County,‘’ reported Jennifer Hawkins, Director of Marketing and Business Promotion for Hawkins-Poe. Noting inventory in Pierce County is less than 700 active listings, that is about 40% of what as available this time last year. “Lower inventory puts pressure on buyers and increases prices,” she said. The pandemic has created an interesting change in desires of home buyer which is driving buyers into the suburbs, out of urban areas and placing new emphasis on yards, private areas and space.
In Pierce and Kitsap Counties, an indicator of brisk activity is the ratio of pending sales to active listings. Pierce County’s November’s pending sales outgained the month’s active listings by more than two to one. In Kitsap the active listings 245 represented roughly 50% of the number of pending sales 439. “Consumer confidence in both real estate and employment have been the benchmarks of our strong real estate market. Working and schooling from home, whether full- or part-time is the new normal,” commented Charlie Hawkins Floberg, Managing Broker of Hawkins-Poe. Noting buyers are finding suburban and rural solutions to these lifestyle changes. Industry watchers say the in-migration of people from larger, more expensive locales is driven not only by low interest rates, but also by workers freed by the pandemic to work from home long-term, and by a desire for more living space by those who are working remotely, supervising their children’s schooling, or accommodating adult children and aging parents who may have been displaced because of the virus.
Organizers of a forum for the Pacific Northwest Economic Region (PNWER) said the rise of virtual platforms like Zoom has prompted knowledge workers to flock to new frontiers known as “Zoom towns” – scenic destinations where they can live more cheaply and “achieve a work/life balance which many never dreamed of achieving.” Speakers identified several “Zoom towns” including two areas in Washington, the San Juan Islands and the Methow Valley. Year-to-date closed sales in San Juan County are up more than 48% compared to the same period last year. In Okanogan County, where the Methow Valley is located, sales are up more than 17%. “People are seeking space and value since they feel working from home may be a feature of their lives into the future,” commented Young, from the Center for Real Estate Research. He said Chelan County’s price movement is notable, saying it reflects that trend. Prices for sales that closed in that county last month surged 36% from a year ago. Chelan County is among the areas experiencing double-digit activity in pending sales, closed sales, and prices.
In both Pierce and Kitsap Counties, prices are up by nearly 12% YOY for the month of November.