Northwest Multiple Listing Service brokers reported double-digit gains in both pending and closed sales during April compared to a year ago, but the most eye-catching number may pertain to prices. For the first time in more than four years (since January 2008) the year-over-year change in selling prices was positive.
The price gain was a modest 1.27 percent for last month’s sales of single family homes and condominiums that closed in the 21 counties served by Northwest MLS. For single family homes (excluding condominiums) the price gain compared to 12 months ago was 2.9 percent. Condo prices fell 7.9 percent.
The median price for last month’s closed sales area-wide was $240,000 for single family homes and condominiums combined. That compares to $237,000 for year-ago sales. The figure for April also outgained the median price for completed transactions during the months of March ($225,000) and February ($218,944).
Prices for single family homes continued climbing. The median price for last month’s closed sales was $250,000, up from both a year ago ($242,950) and from March ($234,487).
While cheered by the figure that snapped a 50-month string of negative numbers for year-over-year price comparisons, Northwest MLS brokers said consumers must be realistic in their expectations. They also noted the market recovery will be slow and incremental.
“We’ve seen appreciation three months in a row, signaling a definitive turnaround in the market,” remarked OB Jacobi, president of Windermere Real Estate. “Due to the shortcomings in the Case-Shiller index I think it will take them until November to report year-over-year appreciation,” he added. (The S&P/Case-Shiller Home Price Indices track changes in the value of residential real estate both nationally as well as in 20 metropolitan regions.)
“As is fairly typical of a recovering market, the activity first heats up in the urban centers, and then spreads to the surrounding suburbs and outlining areas. We are now seeing this trend,” noted Jacobi, who is also a member of the Northwest MLS board of directors.
Tight inventory is creating sellers’ markets in some areas, according to reports from MLS directors. Inventory is down more than 27 percent for the Northwest MLS market overall, and by even larger margins in three counties: Snohomish (down 46.2 percent), King (down 39.4 percent), and Pierce (down 28.6 percent). Brokers say as demand outstrips supply, competition may intensify, especially for homes that are well-priced and in good condition in desirable locations.
Brokers added 9,166 new listings to inventory last month, which was 917 fewer listings than the same month a year ago. At month end, the selection totaled 25,291 active listings, a drop of 27.5 percent from a year ago according to the latest figures from Northwest MLS.
It is a seller’s market in Kitsap County, reported Northwest MLS director Frank Wilson, the branch managing broker at John L. Scott Real Estate in Poulsbo. Statistics show inventory there is down more than 13 percent compared with a year ago, pending sales jumped 39.3 percent and median prices increased more than 14 percent.
MLS members reported 8,790 pending sales across all 21 counties during April for a 22.9 percent increase from a year ago when there were 7,154 mutually accepted offers.
Talk of a seller’s market has to be tempered, Wilson emphasized, because “when sellers hear these words in the news they instantly think their homes are worth a lot more money….and they are not. Even if our home prices appreciated 2-to-3 percent a year – which they aren’t currently — it will take many years for homes to return to the values that we saw a few years ago,” he suggested.
Despite his cautionary words, Wilson was upbeat. “We continue to see an increase in activity across the board. More people at open houses, more listings coming on the market, more buyers making offers and more multiple offer situations on correctly priced and staged homes.”
While Kitsap County experienced an uptick in new listings in April compared to a year ago, 11 other counties reported drops. System-wide, based on current inventory and demand, there is less than a three month supply, about half the volume needed for a balanced market.
Inventory is considered by many industry observers to be a key indicator affecting the housing market. In a recent Bankrate.com interview about the market’s recovery, Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate in Los Angeles, suggested zeroing in on inventory, which he called “the most important statistic.”
“The pent up demand of local home buyers who are now purchasing homes has ignited a surge of sales activity,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He said this surge is creating a shortage of inventory, causing multiple offer situations for many new properties coming on the market. “For homeowners who have equity, and have been cautiously waiting to sell, this ultimately means they can sell their home today and purchase within the same market timing,” Scott explained. Historically low interest rates are an added advantage, he added.
Also commenting on inventory and the lively market was MLS director Joe Spencer, area director for Keller Williams Northwest Region.
“As Yogi Berra said, ‘It’s like déjà vu all over again’ as the Puget Sound real estate market continues trending in the same positive direction for the fourth month in a row,” Spencer remarked. With new and available inventory in a diminished state, he said there’s been a strong increase in buyer activity. “Low interest rates continue to energize buyers, while for sellers, prices in the Puget Sound are stable and up in areas close to job centers,” according to Spencer.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 22,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.