OLYMPIA — Brokers from the South Sound real estate market are reporting strong activity, with pending sales outgaining new listings, and heavy traffic at open houses during March and April.
An April 5 report from Northwest Multiple Listing Service shows 539 new listings in Thurston County, 489 of which are active and 581 have pending sales. The average price for a home sold in Thurston is $350,219, according to the MLS.
In Mason County, the MLS report shows 127 new listings with 164 active and 99 pending sales. The average price is $254,463.
Kitsap County has 466 new listings with 448 active and 492 sales pending. The average price in Kitsap is $402,641.
Both pending sales and new listing activity around Western Washington surged during March as buyers, sellers and brokers emerged from February's record snowfall.
Brokers added 10,516 new listings of single family homes and condos to the Northwest Multiple Listing Service inventory last month, the highest monthly volume since August 2018. Compared to the same month a year ago, new listings across the 23 counties in the report were down slightly (79 fewer units).
Broker Dick Beeson said the South Sound market is somewhat of an anomaly, as prices continue to rise despite growing inventory. "Multiple offers are less frequent in this market, and, unlike 6-to-12 months ago, sellers are now agreeing to do repairs and pay buyer's closing costs," said Beeson, principal managing broker at RE/MAX Northwest Realtors. "Some type of negotiation is once again prevalent in almost every sale.”
Beeson said in certain higher price ranges buyers and sellers have "almost equal footing." He suggested it could become a buyer's market in South Sound "when the Seattle-King County market flattens out even more and can provide homes at affordable prices so those who don't work in high tech can afford them."
Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott's Poulsbo office, said buyers have arrived to the market faster than sellers.
"Low interest rates are giving buyers a break in house payments, which allows them to buy a little more house. Buyers have received the message about the spring market, but sellers are still waiting in the wings," Wilson said.
Areas outside of King County and along the I-5 corridor outperform as people continue to look for value outside the main urban centers, said James Young, director of the Washington Center for Real Estate Research at the University of Washington. He expects the spring price growth will be solid as long as demand remains.
"The market is highly interest rate sensitive, and this is reflected in current price trends in the region," Young said. "Given interest rates are now 70 basis points lower than their peak in November last year (and back down near historic lows), house prices could rise by 8.4 percent and people could keep the same mortgage repayments.”
This means someone who could have purchased a $450,000 house six months ago can now purchase a house costing $487,800 and keep the same monthly repayment, an 8.2 percent increase, he said.
MLS members in Western Washington also reported 10,261 pending sales during the same timeframe, the highest number of mutually accepted offers since July, and nearly matching the year-ago total of 10,311.
"After the housing adjustment in 2018, this year's spring market is back to frenzied in the more affordable and mid-price ranges," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Noting March is the start of the prime-time selling season, he expects this year "will be no exception."
Year-over-year prices area-wide were up 3.5 percent, rising from $401,761 to $415,950, with most counties reporting gains. King County was an exception. Prices there were flat — down 0.4 percent — slipping from the year-ago median of $625,000 to last month's figure of $622,500, but rising from February's price of $604,000.
Compared to February, prices rose 2.2 percent system-wide. The four-county Puget Sound region had larger month-to-month increases, led by Kitsap County, up 5.9 percent from February. Prices in Snohomish County jumped nearly 5.5 percent, while King County's median prices rose more than 3 percent when comparing February to March.
Broker Dean Rebhuhn pointed to lower mortgage interest rates and a growing selection of properties as drivers of activity.
"Well-priced properties are selling. Buyers who are getting fully underwritten loan commitments are winning the prize - the home," stated Rebhuhn, the owner of Village Homes and Properties.
At month end, there were 12,017 active listings of single family homes and condos in the Northwest MLS database. That represents an increase of more than 36 percent from a year ago when there were only 8,825 active listings.
Inventory more than doubled in King County compared to a year ago, rising from 2,060 active listings to 4,263 at the end of March. Nine counties reported less inventory than 12 months ago.
In most counties, there is less than a two-month supply of housing overall, the MLS reports.
"March signaled the beginning of the annual rise in King County residential listing inventory, and this year's active listings are building on a higher base of listings than previous years," said John Deely, principal managing broker at Coldwell Banker Bain in Seattle. He also noted pending sales — 10,261 during March — kept pace with new listings— 10,516 — to slow the buildup of inventory.
"Many buyers found the increased inventory meant more choices and less competition in many market areas," said Deely, a member of the Northwest MLS board. "In core Seattle markets, new listings that are competitively priced are seeing multiple and contingency-stripped offers," he added.
OB Jacobi, president of Windermere Real Estate, described March as an "eventful month for real estate," as the snow finally melted and interest rates dropped, "nudging buyers off the fence and back into the market. The result was a spike in pending sales between February and March — up more than 49 percent — and a pop in price growth in several counties, suggesting we are entering an active spring market."
Another MLS director, Meredith Hansen, attributed the downturn in last month's closed sales to inclement weather.
Northwest MLS members report 6,750 completed transactions during March, a drop of about 8.3 percent from a year ago, and likely a result of February's heavy snows that resulted in hazardous roads and kept many people housebound for several days.
J. Lennox Scott also expects momentum to continue.
"Looking ahead, more new listings are on the way, and the more affordable and mid-price ranges will see strong price appreciation this year — just not at last year's extreme levels," Scott said.
Condominium activity remains mostly unremarkable, although inventory is improving.
Brokers added 1,487 new listings to the selection last month and reported 1,387 pending sales. Inventory at month end stood at 1,610 active listings, up more than 85 percent from a year ago. That still leaves months of supply below two months in many areas.
MLS members reported 932 closed sales of condominiums during March with a median price of $367,150, about the same as the year-ago price of $365,000. In King County, the median sales price for condos was $434,000, a drop of almost 7 percent from 12 months ago.