Pending sales around Washington state at mid-year surpass year-ago levels; industry leader says “It feels like we have hit the bottom of the market”
KIRKLAND, Wash. (July 6, 2011) – Continuing the double-digit gain in home sales during May, last month’s pending sales surpassed the volume for June 2010 by nearly 36 percent . Northwest Multiple Listing Service members reported 7,539 mutually accepted offers last month, up nearly 2,000 transactions from the year-ago total of 5,547 pending sales of single family homes and condominiums.
At midyear, Northwest MLS brokers have logged 41,151 pending sales for a slight improvement on the total of 41,001 for the first six months of 2010 when sales were stimulated by a federal tax incentive.
Closed sales for the 21 counties in the Northwest MLS service area are running slightly behind 2010 figures. Through June, members have completed 26,034 sales, which compares to a total of 27,624 closings for the midpoint of 2010.
MLS members reported 5,561 closed sales during June, down 3.5 percent from the same month a year ago when there were 5,763 closings. Five counties (Clark, Cowlitz, Jefferson, King and Mason) reported year-over-year increases in the number of closed sales.
PLEASE NOTE: Northwest MLS reports both pending sales (mutually accepted offers) as a barometer of the most recent activity, and closed sales (completed transactions).
“It feels like we have hit the bottom of the market,” remarked Lennox Scott, chairman and CEO of John L. Scott Real Estate. He described sales activity as being at “healthy levels” for the past seven months across all price ranges close to the Seattle-Bellevue job centers and up through the median price range in the surrounding markets. “Buyer confidence has definitely returned,” he proclaimed.
Echoing that comment, Matt Deasy, the general manager of Windermere Real Estate East, noted the early signs of a market shift, which he expects will prompt shifts in buyers’ priorities. “The combination of lower inventory levels and higher sales is leading to early signs of a market shift,” he observed, adding, “These conditions are also causing the median home price to stabilize, despite being lower than last year.”
Deasy, who is also a member of the Northwest MLS board of directors, said brokers are “seeing a lot of activity in the markets close to the job centers in Seattle and Bellevue which is causing some buyers to miss out on opportunities if they don’t act fast enough.” As this cycle continues, he expects buyers’ priorities will shift from looking for the best deal possible to finding the best house for their needs at a fair price.
Prices on last month’s closed sales area-wide were down about 9 percent from the same month a year ago, but compared to January, the drop is only about 2.8 percent. The median price for sales that closed last month was $240,950; a year ago it was $265,000. In January it was $250,000.
CoreLogic, Inc., a California company that analyzes various statistical data, attributes much of the drops in home prices to distressed sales. In a report issued last week, the company said year-over-year prices for sales during May fell 5.8 percent in the Seattle area and 7.4 percent nationwide. If homes in or under threat of foreclosure are excluded, the drops were just 1.75 percent in King and Snohomish counties, according to CoreLogic’s analysis.
Like prices, inventory is showing signs of stabilizing. Northwest MLS members added 10,334 new listings to inventory last month, about the same number as a year ago when they added 10,354 new listings. With those additions, there were 36,871 single family homes and condominiums offered for sale in the MLS database at the end of June. That’s down about 14 percent from a year ago when inventory stood at 42,940 active listings.
Measured by “month’s supply,” there is about a 5-month supply of homes system-wide, which is considered to be a balanced (or neutral) market favoring neither buyers nor sellers. Inventory is tighter in King County where the month’s supply is about 3.7 months.
“For the most part, Kitsap County is seeing a normalization of our market in the price ranges below $350,000,” said Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo. “We are seeing inventory levels in the 4-to-6 month timeline,” he reported, while noting it’s much higher at the upper end of the price spectrum. The MLS map areas encompassing East Bremerton and Silverdale are experiencing good activity said Wilson, a member of the Northwest MLS board of directors.
With the return of buyer confidence, Scott said multiple offers are occurring in markets where there is low inventory. “Buyers are seeing the advantage of historic low interest rates, lower adjusted prices and low down payment options,” he stated.
Commenting on the current market, Wilson emphasized the “basics have not changed” for buyers and sellers, “even though it is easy to get caught up in the national news. Real estate is a micro discussion, not a macro one,” he emphasized. “Your broker should be able to talk neighborhood specifics and what the inventory and turnover are within each area,” he added.
Northwest MLS director Meribeth Hutchings reported “the buyers are out there,” and noted they’re looking for an “opportunity.” She also said they are seeing multiple offers, but added no uptick in prices is expected. “Where I am seeing increased activity is with our property management company, which reports vacancy rates of only 3-to-4 percent,” said Hutchings, the designated broker/owner at Windermere Real Estate/Lake Stevens Inc.
“Buyers need to talk with a lender first to better understand their mortgage options, become informed about today’s market and be prepared to make a reasonable offer when they find a home that meets their needs,” Wilson advises. Sellers need to be priced within about 3 percent of what the home will sell for, and they need to look at their home and property through the eyes of a buyer. “Paint, clean, de-clutter and above all, be prepared to move,” he suggests.