The local real estate market—already the hottest in the country—set yet another price record in April. The number of homes for sale dropped 27 percent compared to a year ago, the lowest amount of inventory ever recorded for a spring month. The historically low supply of homes is making competition among buyers fierce. Sellers are in the enviable position of being able to structure sales agreements to include concessions such as rent-backs and longer closing time so they can take the time to find their next home.
The median price of a single-family home on the Eastside reached an all-time high of $880,000 in April, a 21 percent jump over last April. That represents an increase of $150,000 over a year ago, the largest dollar increase on record. With our strong economy and growing population, brokers are not predicting a slowdown any time soon.
Inventory in King County just keeps getting tighter. There are just 1,900 homes on the market here. That compares to nearly 8,000 in April 2011. As buyers bid up existing homes, prices have escalated sharply. The median price of a single-family home jumped 16 percent from the same time last year to $625,000.
Seattle set a record for home prices for the third straight month. The median price of a single-family home rose 13 percent over the same time last year to $722,250. Like the rest of King County, lack of inventory was the driver. In one of the city’s hottest markets, Ballard, there are just 19 single-family homes on the market.
Home prices in Snohomish County are rising at their fastest pace in four years. The median price of a single-family home soared 17 percent from a year ago to $440,000. While that increase is substantial, prices here are still 30 percent less than in King County.
I’m happy to report that Washington State continues to add jobs at a steady rate. While the rate of growth is tapering, this is because many markets are getting close to “full employment”, during which time growth naturally slows. That said, I believe that the state will add around 70,000 jobs in 2017. Washington State, as well as the markets that make up Western Washington, continues to see unemployment fall and I anticipate that we will see this rate drop further as we move through the year. In all, the economy continues to perform at or above average levels and 2017 will be another growth year.
There were 15,652 home sales during the first quarter of 2017. This is an increase of 9.5% from the same period in 2016, but 20.7% below the total number of sales in the final quarter of 2016.
With an increase of 45.5%, sales in Clallam County grew at the fastest rate over the past 12 months. There were double-digit gains seen in an additional 10 counties, suggesting that demand remains very robust. The only modest decline in sales was seen in Grays Harbor County.
The number of homes for sale showed no improvement at all, with an average of just 6,893 homes for sale in the quarter, a decline of 33% from the previous quarter and 25% from the first quarter of 2016. Pending sales rose by 2% relative to the same quarter a year ago.
The key takeaway from this data is that 2017 will offer little relief to would-be home buyers as the housing supply remains severely constrained.
With demand continuing to exceed supply, home prices continued to rise at above-average rates. Year-over-year, average prices rose by 9.5% but were 1.1% lower than in the final quarter of 2016. The region’s average sales price is now $409,351.
Price growth in Western Washington is unlikely to taper dramatically in 2017 and many counties will continue to see prices appreciate well above their long-term averages.
When compared to the same period a year ago, price growth was most pronounced in Kittitas County, which rose by 19.6%. Double-digit price growth was seen in an additional 10 counties. The only market where the average price fell was in the ever-volatile San Juan County.
It is clear that rising interest rates have not taken much of a sheen off the market.
Days on Market
The average number of days it took to sell a home in the first quarter dropped by 16 days when compared to the first quarter of 2016.
King County remained the tightest market, with the average time to sell a home at just 31 days. Island County was the only area where it took longer to sell a home than seen a year ago; however, the increase was just one day.
In the first quarter of the year, it took an average of 70 days to sell a home. This is down from the 86 days it took in the first quarter of 2016, but up from the 64 days it took in the final quarter of last year.
Given woefully low levels of inventory in all Western Washington markets, I do not expect to see the length of time that it takes to sell a home rising in 2017. In fact, it is likely that it will continue to drop.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the first quarter of 2017, I moved the needle a little more in favor of sellers. The rapid increase in mortgage rates during the fourth quarter of 2016 has slowed and buyers are clearly out in force.
The local real estate market remains very hot with extremely low inventory and prices that are rising faster than anywhere else in the country. However, that rate of price growth appears to be cooling from last year, dropping to its slowest pace in three years. Predictions of more interest rate hikes may further limit price increases. Those considering to sell their home may want to take advantage now of this perfect storm of record-low inventory and record-high prices.
Those looking to buy a home on the Eastside continue to face rising prices and strong competition for limited inventory. With less than a month’s supply of homes, properties here are getting snapped up as soon as they come on the market, and often sell for well over asking price. The median price for homes sold in January climbed 14 percent compared to a year ago to $793,000.
Buyers scrambling to beat increasing interest rates have depleted an already record-low supply of homes. Fewer than 1,600 single-family homes were on the market in King County in January, beating December’s all-time low. The median price of a single family home was up 7 percent over last year to $525,000, but that is the cheapest home prices have been in 11 months. Time will tell whether that price moderation is an anomaly or the continuation of a trend.
After months of robust increases, Seattle home prices slowed down in January. The median price of a single-family home in the city inched up 3 percent over a year ago to $635,000. Some areas of the city even saw small price drops. That should spell good news for buyers, yet razor thin inventory continues to make it a solid seller’s market.
After months of double-digit price increases, Snohomish County may be starting to experience the same market softening as King County. The median price of a single-family home in Snohomish County rose 8 percent as compared to a year ago to $410,000. Tight inventory continues to be a problem. There are 40 percent fewer homes on the market here than the same time last year.
A record low number of houses for sale in December indicates that 2017 will continue to be a very competitive market for buyers. The good news: those who decide to take the plunge and list their home can count on getting a premium price for their property. Brokers reported that about three-fourths of the homes sold in December involved bidding wars.
Strong demand driven by a booming tech economy and great schools continue to strain the already low inventory on the Eastside. It’s not unusual for a well-priced new listing to receive dozens of offers and to sell for well over asking price. With supply failing to meet demand, the median price for homes sold in December soared 19 percent to a new record high of $803,500.
King County had only about 1,600 single-family homes on the market in December, an all-time low. With the healthy regional economy, demand remains very strong. Prices, however, appear to be moderating somewhat. The median price for a single-family home sold in December was $550,000, up 8 percent over a year ago, but unchanged from October and November. A traditional uptick in inventory this spring may help keep price increases more modest this year compared to the double-digit increases seen in 2015.
According to the Case-Shiller home price index, home prices are rising faster in the Seattle metro area than in any other major region in the country. One issue is space. The city’s existing density means that virtually no new single-family homes are being built in Seattle. As new residents flood in, more people are competing for the already tight inventory. As a result, home prices are up. The median cost of a single-family home rose 6 percent from a year ago to $635,000.
While home prices in Snohomish County are well below those of King County, the gap is closing as prices here are increasing at a faster pace than neighboring counties. The median price of a single-family home in Snohomish County rose 12 percent as compared to a year ago to $400,000. Like King County, inventory is very slim, indicating a market heavily favoring sellers.
Home sales outgained new listings again in October, further squeezing already tight inventory and pushing prices higher. Since new listings traditionally decrease in the fall, that inventory shortage is expected to last until spring. Sellers willing to put their home on the market now can expect plenty of interested buyers, and a highly favorable chance of getting the best possible price for their home.
Home prices on the Eastside took a big leap in October, fueled by record low inventory. The median price of a single-family home sold that month was $768,000, a jump of 15 percent over the same time last year, and the fastest price growth in several months. With the market so strongly favoring sellers, brokers are hopeful more consumers will opt to list their homes.
The amount of inventory in King County fell to levels not seen since the 1990s with just one month of available inventory. With supply falling well behind demand, prices jumped significantly. The median price of a single-family home sold in October jumped 15 percent over a year ago to $550,000.
There is no place where the supply of homes is tighter than Seattle, particularly in areas close to the city center. Just three weeks of inventory has kept this market in solid multiple-offer territory. Prices in October increased accordingly. The median price of a single-family home in Seattle rose 13 percent to $625,000.
Inventory in Snohomish County dropped more than 20 percent from a year ago. With just over a month of available inventory, prices climbed. The median price of a single-family home was up 6 percent over last year to $386,599. Even with that increase, buyers continue to be drawn to the area by home prices that average 30 percent less than King County.