By Cheri Brennan
Special to the Reporter
With plentiful inventory, recently announced increases in lending limits, and moderating prices, prospective home buyers are finding more options around Western Washington, according to industry experts from Northwest Multiple Listing Service.
“Moderating interest rates over the past few weeks could provide a window of opportunity for buyers this month, even if the Fed is widely expected to raise them again in December,” said Mike Grady, president and COO of Coldwell Banker Bain. “We are continuing to see a balancing of the market.”
Grady noted that moderating prices and increasing inventory are contributing factors in the recent figures from Northwest Multiple Listing Service.
House hunters have a bigger selection than a year ago. Northwest MLS figures for the 23 counties in its report show the year-over-year volume of inventory rose from 11,193 homes and condos to 15,830. The increase is a gain of more than 41 percent.
King County registered the biggest gains, with active inventory surging 135 percent from a year ago. The number of single family homes more than doubled from a year ago, rising from 1,879 to 4,020, while the condo selection more than tripled, jumping from 355 active listings twelve months ago to last month’s total of 1,221. Eight counties reported fewer listings than a year ago.
Both King County and the Northwest MLS market area overall have 2.3 months of supply. Supply is still below the four-to-six month level industry analysts use as a gauge of a balanced market.
The surge in supply is not yet reflected in sales during this typically slower holiday season. Pending sales for November were down 10.4 percent from a year ago.
Closed sales declined about 15.3 percent from 12 months ago, with 13 counties reporting double-digit drops. Year-over-year prices still rose (up 4.2 percent overall). Ten counties had double-digit appreciation in their median sales price for single family homes and condos (combined).
Condo activity was also mixed. The number of active listings more than doubled area-wide, and more than tripled in King County. Pending and closed sales were weaker than a year ago. Prices rose slightly (1.5 percent), from $330,000 to $335,000. The median price in King County, which accounted for 55 percent of last month’s closings, rose 5.2 percent, from $384,990 a year ago to $405,000.
“This massive increase in the number of homes for sale in King County last month means we are officially on our way back to a more balanced market,” remarked OB Jacobi, president of Windermere Real Estate. “This is good news for buyers who just a year ago were in fierce competitions for very limited inventory.”
Loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019 are increasing for both conforming and jumbo loans. The Federal Housing Financing Agency [FHFA] announced the loan limit will rise from $453,100 to $484,350; the new ceiling for jumbo loans in high cost areas — including King, Snohomish and Pierce counties — will be $726,525.
Northwest MLS director Dick Beeson said the combination of stabilizing factors, including more inventory and only slightly increased interest rates, coupled with “more receptive and savvy sellers” are resulting in a “more reasoned approach to buying and selling.” As inventory grows, he believes price increases will be “slower and smaller.”
Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor, suggested South Sound buyers should get ready for steady, sustained price increases, pointing to the wide gap between King County’s median price for a single family home and that of Pierce County.
A comparison of median prices for single family homes in the tri-county region illustrates his point. Since January, the median price in King County is up about 2.5 percent. In Snohomish County, it has climbed about 4.4 percent. But in Pierce County, the median price of a single family home has jumped more than 10 percent since January.
Another MLS director, principal managing broker at Coldwell Banker Bain John Deely, said recent increases in listings have led to changes in the Seattle market. “Most notably, buyers are taking more time and not feeling rushed to make quick decisions,” he said. “Most of the contingencies allowing buyers to perform their due diligence, including financing and inspection, have returned to the purchase and sale agreements. I expect this trend (to a more balance market) to continue into 2019, which will cause appreciation to slow somewhat, while giving buyers more options.”
“This does not mean the real estate sky is falling, rather it’s a much-needed shift towards a more sustainable, balanced market,” he added.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. It has membership of about 2,200 member offices.