All four Central Puget Sound counties are exhibiting a similar pattern: Prices are going up, but inventory is going down. All four have less than two months of inventory, according to the Northwest Multiple Listing Service.
The shortage of homes for sale in the Seattle region is now stretching beyond King County.
All four central Puget Sound counties are exhibiting a similar pattern: Prices are going up, but inventory is going down. All four have less than two months of inventory, going into the season when home sales typically heat up.
“Every price segment in every geographic area where we have listings in King and Snohomish are selling either quickly or above asking with multiple offers,” said Vija Williams, CEO of the Vija Group, which represents homebuyers and sellers.
The median price for a single-family home in King County rose by 20.7 percent to $531,250 in March compared with $440,250 during the same month last year, according to the Northwest Multiple Listing Service.
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Prices in Seattle climbed 19.6 percent to $640,000 in March, up from $535,000 the same month a year ago.
In Snohomish County, the single-family-home median reached $385,000 in March, a 13.2 percent year-over-year leap. In Kitsap County, the median price rose 16.3 percent to $279,475, and Pierce County’s median price was up 8.2 percent to $265,000.
“These growth rates are really quite high and are driven by strong demand and the fact that you see such few homes on the market,” said Svenja Gudell, chief economist of Zillow, a Seattle-based real-estate information company. “First-time homebuyers, they are the ones who are really feeling it. They are searching for relatively inexpensive homes and there’s just not a lot of them.”
Buyers often start their search in one part of the region and then, if they can’t find anything, begin looking at places farther and farther away, said Redfin agent KC Brants.
Competition for homes is heating up all over the map, from Everett and Monroe to Kent, Renton and North Bend.
“Those areas used to not have people talking about multiple offers and contingencies being waived,” Brants said. “Now you have more aggressive offers than you had in the past.”
In Kitsap and Pierce counties, active listings in March dropped by 33 percent. Meanwhile, inventory in King County dropped by 21 percent, to 2,157 listings.
A year ago, King and Snohomish were the only sizable counties where the number of home listings equated to less than two months’ worth of pending sales. Now all four Central Puget Sound counties are in that squeeze. And the Northwest Multiple Listing Service’s entire 23-county territory now averages 1.8 months of inventory, compared with 2.5 months a year earlier.
“The housing pool is getting smaller, resulting in a market that is extremely hard on people who are looking to find a place to live in Kitsap,” Frank Wilson, managing broker at John L. Scott’s Poulsbo office, said in a statement released by the MLS.
Homes that aren’t selling, he said, “are truly overpriced or have some other challenging condition.”
Many would-be sellers are deciding not to list their homes, further exacerbating the inventory problem.
Most new homes coming on the market sell in a matter of days, which means some sellers don’t have enough time to find a new place to live, said Lennox Scott, chairman and CEO of John L. Scott Real Estate.
“Oftentimes, sellers need to sell their current home in order to have the financial resources and the leverage needed to be successful in purchasing their next home,” he said in a statement. “They are hesitant to put their home on the market because they fear their home would sell instantly and they might not win their next home.”
Because of that potential problem, about 30 percent of the sales the Vija Group handles include a “rent-back,” which is when the buyers agree to let sellers stay in the house after the sale closes, said Williams. Some sellers need an extra month or two to move out.
Gudell said mortgage rates are still relatively low, and buyers think prices could continue going up.
What’s more, the Seattle region is enjoying “a well-functioning economy,” she said. “The fundamentals are still supporting home-value growth.”
The hot seller’s market is reminiscent of the run-up to the 2007 peak, with so much demand and prices shooting up, but this market is fundamentally stronger, Gudell said. Buyers are much better qualified than back then, and demand is fueled by job and population growth.
“We’re not seeing a ton of flipping going on,” Gudell said. “People just need housing. … There’s no overbuilding going on. I don’t really think we’re in bubble territory yet.”