Article 101 - June 2020
Housing activity in Western Washington shows resiliency as buyers, sellers and brokers adjust to COVID-19 restrictions...
News release: June 12, 2020, May activity
"This market is reacting much more like the recession following the Dot Com bubble in 2001, than the financial crisis of 2008 - 09," remarked Frank Hawkins, Designated Broker and President of Hawkins Poe Inc., Realtors upon reviewing the statistical report for May. "After taking a very deep breath in April, Pierce Count activity accelerated again in May," added Hawkins. Despite the economic downturn and disruptions stemming from the coronavirus pandemic, Northwest MLS member-brokers reported impressive improvement from April to May on some key indicators. The volume of new listings, including single family homes and condominiums, rose 29.2% and pending sales jumped more than 44% system wide. Not surprisingly, year-over-year comparisons showed sharp declines. The number of new listings fell nearly 33%, total active listings plummeted nearly 36%, pending sales declined 13.5%, and closed sales dropped about 35%. Prices remained in positive territory, rising about 2.3% from a year ago.
"Home Buyer confidence remains quite high the activity in the Puget Sound area market is amazing," remarked Hawkins. "I didn't think 1 would miss open houses until they could not happen," he said, referring to limitations on in-person interactions. "The pandemic may be causing buyers to move farther out, wanting to get some space and a useable yard." Amenities such as yards, parks and trails are also important in current home buying decisions, he added. With the evolution of working from home, extra bonus rooms are also sought after. Brokers and homebuyers alike seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic. "The local real estate market is hot, but it looks different than it traditionally does," remarked Hawkins "The constraint on available inventory makes it feel like we're running out of homes to sell." Brokers added 9,871 new listings to the MLS database during May, which compares to 14,689 for the same period a year ago. At month-end the selection included 10,357 active listings; that volume was 5,766 fewer than the year ago total of 16,133. Stated another way, at the end of May there was 1.74 months of supply across the 23 counties served by Northwest MLS. Inventory levels ranged from 1.1 months of supply in Thurston County to more than 8 months in San Juan County. Within the four-county Puget Sound region, supply ranged from 1.2 months in Pierce County to 1.74 months in King County.
Every new property presented to the market place is attracting multiple sets of eyes from the eagerly awaiting pool of home buyers, especially in the more affordable price ranges and in outlying areas away from the urban setting.
"Anything under $600,000.00 is selling quickly, and most new listings coming to market are going pending in just a few days," stated Hawkins. Multiple offers are common in nearly every listing brought into this market, especially in the price range from $600,000.00 and under. ''I don't think we'll see balance in the market in the short term until the hot market attracts more sellers, or new construction increases production to meet the demand.." He noted activity was showing steady improvement in each passing week and month. "Our Brokers are constantly commenting on an improving outlook and activity, so I’m cautiously optimistic about what we will see in this summer selling season. multiple offers and waived inspections are common as we head into the prime selling season, especially as interest rates are still very low."
The NWMLS report shows 10,389 pending sales during May, improving on April's total of7,207 (up 44%), but down about 13.5% from the year-ago total of 12,006. NWMLS director Frank Leach, broker/owner at RE/MAX Platinum Services in Silverdale, said sales are brisk in the $350,000 and below range, and sales of $1 million and up are gaiuing. "The tempo of the market seems to be very hot, with buyers trying to take advantage of lower interest rates, and both lenders and real estate agents scrambling to meet demand." Leach believes this is "likely one of the best markets we have ever seen both in interest rates and affordability. People who are betting there will be a bubble burst are going to miss the market."
NWMLS members completed 5,957 transactions during May, a slight improvement from April's total of 5,866. When compared to a year ago, however, the number of closed sales, at 9,153, marked a decline of about 35%. The median price on last month's closed sales was $449,950 across the NWMLS coverage area. That compares to the year-ago figure of $440,000 an increase of about 2.3%. Five of the 23 counties in the report had year over year price drops: Ferry (-30%), King (-2.8%), Kittitas (-2.95%), Pacific (-12.8%), and San Juan (-17.8%). The biggest increases were in Okanogan County (30.3%) and Grays Harbor County (15.7%).
A couple of antidotal comments of interest:
When Kitsap County moved into Phase 2 of the governor's reopening plan, the Kitsap Department of Community Development processed over 400 permits, which might just be the tip of the iceberg as builders rush to meet consumer demand. Builders are now seeing folks who commuted to work looking to purchase homes with an extra den or office as they anticipate the "work from home" aspect is here to stay.
I also noticed a slight drop in the average sales price, the average mean sold price but an increase in the overall price per square foot, Hawkins said saying, He believes it's a reflection of reduced activity in the luxury home market ($1+ million), which disproportionately impacts price averages. The reality that there are increases in the average price per square foot indicates we are selling more lower price homes or perhaps just that this may be a reflection of a 'wait and see' attitude or just the uncertain times we're in regarding the luxury market."
Information and Data compiled in this report Courtesy of NWMLS
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