Just how competitive is Western Washington’s housing market?
A recent listing for a four-bedroom home in Puyallup drew 45 offers.
Some relief could be on the way for would-be homebuyers jockeying in such a fiercely competitive market. For the second month in a row, the number of new homes listed for sale in February edged up from the previous month, according to data released Thursday by the Northwest Multiple Listing Service (NWMLS).
That followed five months of month-to-month decline starting last summer.
But even with new homes up for grabs, there are still signs of more home shoppers than houses for sale.
Across King, Snohomish, Pierce, Kitsap and Thurston counties, it would take less than three weeks to sell the houses currently for sale at today’s pace of demand. Compared to this time last year, buyers have fewer homes to choose from across the region.
The conditions have created a sellers’ market where buyers are pushed to spend more and to waive protections, like their right to commission their own pre-inspection rather than using the seller’s inspection records. With a recent uptick in mortgage rates — the rate for a 30-year fixed-rate mortgage crossed 3% this week for the first time since July — some buyers are feeling the pressure to secure a house before borrowing becomes more expensive, brokers said.
For homebuyer Amy Jarvis and her husband, the search stretching from October to February was an “emotionally, mentally and physically exhausting process,” she said.
Jarvis said they paid about 25% over the list price for the three-bedroom home, plus a garage converted into an accessory dwelling unit, near Green Lake.
“Do I wish I had to pay that much for that house?” Jarvis said. “Of course not. But I don’t think we overpaid for the market. I think the market is nutty and not sustainable.”
Single-family home prices are up all over the Puget Sound region. In King County, the median home sold for $750,000, 11.1% higher than last February and about 3.4% higher than in January, the biggest month-to-month price jump since June.
In Snohomish County, the $624,075 median is up 21.2% from a year earlier and up 4% from January. In Pierce County, the $462,000 median is up 17% from last year and up 5% from January. And in Kitsap County, the $432,950 median is up 7.4% from last year and 1.8% from January.
Compared to single-family homes, sellers are trying to offload a relative abundance of condos.
At current demand in King County, it would take about a month and a half to sell all of the condos on the market, compared to less than three weeks for single-family homes. The median price of condos dropped about 1.3% in Seattle compared to last year. On the Eastside, though, the median price is up 13%.
For single-family homes outside Seattle, prices rose year over year by double-digit percentages in both pricey and affordable markets, including the Eastside, Vashon Island and south King County. In Seattle, single-family home prices are up most in southeast Seattle and Queen Anne/Magnolia, echoing national trends that suggest buyers are still shopping in cities, despite the work-from-home draw to rural and suburban areas.
Sally Li, a broker at Beacon Hill Realty, said she has watched buyers push farther south to find homes they can afford. In November, she said, her client competed for the house in Puyallup that drew 45 offers.
“They didn’t even have time to call everyone back,” she said. “They just sent a mass email.”
Buyers face pressure not just to raise their price but also waive protections, like the appraisal contingency meant to protect a buyer if an appraiser finds the house they plan to buy is worth less than they’ve offered, brokers said.
“I’ve had agents straight up tell me: If you’re not willing to include that, it just won’t be competitive,” Li said.
Some buyers make a play for a seller’s attention by submitting an early offer instead of waiting for the set offer-review date, when the seller plans to review all competing offers.
The issue has become a hot-button one among brokers, said Windermere agent Chad Dierickx.
“For our buyers, the ball is always moving. We can never say the review date is the review date,” Dierickx said.
In January and February, about 11.5% of pending sales in Western Washington went under contract at least one day before their offer review date, compared to 3.5% in the same time last year, according to Redfin, which used data from the NWMLS.
For sellers, taking an early offer risks leaving money on the table, but it also offers some certainty, especially for those trying to move quickly, said Redfin listing agent Julie Granahan. Many agents attempt to give other buyers a heads up, she said.
One of Granahan’s clients recently received two early offers in the first 12 hours after the home went on the market — one for $100,000 over the list price, she said.
“It’s always happened, since the market has been hot,” Granahan said.
Jarvis said that by the fifth house she and her husband attempted to buy, they finally decided to put in an early offer.
Although the seller didn’t take the early deal, instead waiting until the offer review date, the couple got the house in the end. Making the early offer felt risky “because it sort of showed our cards,” but also “showed how serious we were,” Jarvis said.
Buyers “have just gotten tired being in these multiple-offer situations,” she said.