“Extraordinary market conditions” sustain strong home sales around Washington state during holidays
Fircrest, Washington (January 6, 2021)
“Insatiable buyer demand” is keeping inventory scarce as house hunters try to outmaneuver and outbid each other, according to reports from Northwest Multiple Listing Service (NWMLS). Its statistical summary for December showed strong activity throughout the holiday season with double-digit increases in new listings, pending sales, closed sales, and prices.
Northwest MLS brokers added 5,260 new listings to inventory during December, a hefty 39.3% increase over the same month a year ago. Last month’s additions fell short of meeting demand as members reported 6,883 pending sales (mutually accepted offers). That number surpassed the year-ago volume by 940 transactions for an increase of 15.8%.
Pending sales were especially robust in several counties where year-over-year (YOY) gains of 25% or greater were notched, notably Grant (up 133%), Kittitas (up 55%) and Pacific (up nearly 43%).
“As more people are working from home, they are also purchasing properties further afield from Seattle,” observed James Young, director of the Washington Center for Real Estate Research at the University of Washington. He singled out Chelan, Clallam, Grays Harbor, Kittitas, and Mason as counties that had year-over-year price growth of 20% or more. The MLS report also shows Pacific and Whatcom counties with 20% or higher price gains.
“Inventory continues to be the problem and high buyer demand exacerbates that problem, commented Frank Hawkins, President of Hawkins Poe Inc., Realtors. “Every market serviced by NWMLS was trending below December 2019 for total active inventory,” he noted. “In King County, despite a nearly 62% increase in new listings compared to a year ago, the insatiable buyer demand quickly absorbed available properties,” he added.
Pierce and Kitsap Counties are no different, each with less than one half a months standing residential inventory. Jennifer Hawkins Hansen, Vice President and Marketing / Business Promotion Director for Hawkins Poe Inc., commented, “At the end of December, Pierce County had only 518 residential listings in inventory while in the same month, there were 1,538 residential properties sold and closed, representing only 1/3rd of a months’ worth of inventory. “ She added, “although the numbers are much lower in Kitsap County the story is the same, in December there were only 195 properties available while the were sold and closed 420 which represents just less than ½ of a months’ worth of inventory.”
page two (news release: December activity) January 6, 2021
At month end, there were 4,732 total active listings system-wide in the MLS database, which encompasses 25 counties. That’s down 44% from a year ago when the selection included 8,469 listings. Measured by months of inventory, there is only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market.
“With just over a two-week supply of homes on the market, last month maintained the extraordinary market we have seen all year,” commented Young. “For demand and supply to remain this out of balance for this time of year is incredible,” he added.
Home prices continue to rise. For the 9,008 sales of single family homes and condos that closed last month, prices jumped nearly 12.2% from a year ago, increasing from $435,000 to $488,000. Only three counties (Ferry, Okanogan, and San Juan) reported year-over-year price drops, while nearly all other counties had double-digit gains, according to the NWMLS report.
Single family homes accounted for most of the price escalation. For the 7,848 closed sales of this property type, prices increased nearly 12.9%. YOY prices on the 1,160 closed sales of condos rose about 1.8%.
“We see home prices continue to increase with jobs and lifestyle changes being two of the major factors in sales. Unbelievably low interest rate and buyer demand continue to drive the market,” commented Charlie Hawkins Floberg, Vice President and Managing Broker at Hawkins Poe Inc., “smart buyers are winning in multiple offer situations by doing pre-inspections and having financing approved”, according to Charlie.
“Not this year, but it is typical for there to be a slowing down in the housing market for the holidays, now that the holiday season is over, I suspect we will see the local housing markets surge full of buyers entering the market in 2021,” Charlie predicts. Not since the birth of the tech sector in King County have we seen such a lifestyle shift impact the housing market, then it was flooding into the Cities for the Urban cultural environment, now with the work from home movement we are seeing the flow has shifted toward moving to lifestyle/destination markets further outside city centers. Privacy, open space, larger rooms, a space to ZOOM from are all much more important than commute time,” she stated
“This COVID pandemic has not slowed the demand for housing. In fact, it has whipped buyers up into a frenzy while driving people in search of the perfect work from home location,” including those who are moving to improve their quality of life or escape densely populated cities, those who can now afford a house due to low interest rates, and those who need a change based on life cycles.
Economist Gardner echoed some of those sentiments, saying, “As we move into 2021, I expect continued strong demand from buyers, I believe prices will continue to rise, I expect housing to continue being a very bright spot in the Puget Sound economy.”