NWMLS April Press Release: March 2014, Lack of Inventory is Holding Back Sales

MC900432680Low inventory throughout our local housing market is still affecting our numbers. Closed sales were almost identical year-over-year, while pending sales experienced a drop for the same time period. When looking at month-to-month changes, pending sales for March were significantly higher than February 2014. There definitely is a continued eagerness to buy within our region.

When looking at new listings, year-over-year, there was a slight increase. However, well priced homes accounted for brisk sales activity and a 3.6 month supply, on average, throughout the NWMLS. King County, at 1.8 months of supply, and Snohomish County, at 2.2 months, are starved for inventory. With Federal Reserve Chair, Janet Yellen, indicating in her March 31st press conference that interest rates shall remain on the lower end for now, sellers may be unsure how to move forward. There are buyers eager to buy, but what are seller options for a new home? Windermere president, O.B. Jacobi, mentions the rising rents in our housing market that are also moving people to explore their options to purchase a home. If you are contemplating a home sale, but are unsure of how to proceed and plan for your next step, please consider speaking with a real estate broker. Meeting with a knowledgeable real estate professional is the best way to formulate a plan that best suits your lifestyle and goals.

Below are excerpts of the April press release. To read the whole press release, please click here.

Northwest Multiple Listing Service brokers reported rising prices on fewer sales during March compared to a year ago, citing inventory shortages as the main reason.

Members of the MLS reported 9,183 pending sales (mutually accepted offers) during the month, about 300 fewer than the same period a year ago for a 3.2 percent drop. Compared to February, pending sales surged 26.7 percent in March, or by 1,936 transactions.

Closed sales were about the same as twelve months ago – 5,753 completed transactions last month, which compares to the year-ago total of 5,745 closed sales.

The median price on last month’s sales of single family homes and condominiums that sold across the 21 counties in the MLS report increased  6 percent, rising from the year-ago figure of $258,500 to last month’s price of $274,000.

Adequate supply to meet demand is a continuing concern, according to Northwest MLS representatives who commented on the latest numbers. Many industry leaders expect the imbalance to persist.

MLS members added 9,598 new listings to the database during March, slightly more than a year ago when they added 9,332 new listings. While last month’s additions were about 33 percent more than February when 7,234 new listings were tallied, brisk sales meant supply remained low.

At month end, the Northwest MLS reported 19,736 active listings of single family homes and condos across its service area. That’s up about 6.7 percent from twelve months ago.

The MLS said there is about 3.6 months of supply, which is down from the end of February when the service reported about 4.6 months of supply. King County has only about 1.8 months of supply, while Snohomish County was slighter better with 2.2 months of supply.

In general, industry analysts say four-to-six months is the supply needed for a balanced market.  “We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers,” stated Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors®.

Commenting on March activity, OB Jacobi, president of Windermere Real Estate, said he expects market conditions of low inventory, strong competition among buyers, steadily rising prices – and rising rents – will continue in the foreseeable future. “Rents are on the rise, and when this happens, there’s often a shift where people get priced out of the rental market and move into home ownership. This leads to more demand for homes and upward pressure on prices,” he stated.

Pending sales in Kitsap County were about even with a year ago, while 12 of the 21 counties in the MLS system reported declines.

The condominium component ended on a positive note during March, with pending sales rising nearly 7.9 percent from a year ago. MLS members reported 1,345 pending sales, up from the year-ago total of 1,247.

Closed sales rose 2.4 percent, but prices on those sales jumped 14.7 percent. The median sales price on last month’s condo sales was $220,000, up from twelve months ago when it was $191,750.

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 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

NWMLS 4 county pending stats_March 2014