Multiple Offers ‘The New Normal’

Posted: May 23rd, 2013 by Brad

Home sales prices are up 13 percent according to new figures from Northwest Multiple Listing Service (MLS). Ten Washington counties reported double-digit year-over-year price increases. Among the 21 counties in the MLS report, King County had highest median price for single family homes. Last month’s 2,096 closed sales had a median price of $400,000. That’s about 11.1 percent more than the year-ago median selling price of $360,000.

“In my 37 years working in the real estate industry, I have never seen inventory this low,” remarked Diedre Haines, a member of the Northwest MLS board of directors. “Multiple offers have become the new normal.”

Compounding the shortage is the fact that about one-fourth of the MLS inventory is classified as “distressed,” meaning they are short sales or bank-owned. Such homes are sometimes in need of significant repairs or have prolonged transaction times, which may make them less desirable.

Multiple offers are more commonplace, including in Kitsap County. A full price offer with an escalation clause is not uncommon on a newly listed home that is priced right.

 “Buyers have to be ready to buy and have an approval in hand from their lender,” suggested Frank Wilson, who serves as a board member for Northwest MLS. Open houses are drawing crowds, he stated, adding, “Just as sellers had to work harder to get their homes sold a few years ago, today’s buyers have to work harder to succeed in this competitive market.”

Here are some recommendations for altering home search strategies for today’s seller’s market:

  • Look at properties that have been on the market for an extended period of time, that meet basic requirements, but that may need some work.
  • Look outside the immediate metro market into nearby suburban markets.
  • The best buys are not always the properties that are newly listed.
  • Consider pre-inspecting a home that’s newer to the market.

Whether the market becomes more balanced may depend on listings. Northwest MLS figures show every county in its service area had year-over-year gains in new listings during April. Through the past four months, closed sales are outperforming year-ago totals for the same period by nearly 3,000 transactions.

While most of Washington is experiencing brisk activity, many areas of the country show only “modest movement,” according to the National Association of Realtors®.

In a news release accompanying NAR’s Pending Home Sales Index (an indicator based on contract signings), Lawrence Yun, NAR chief economist, said the market appears to be leveling off. “Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses,” he said. “Job additions and rising household wealth will continue to support housing demand.”

NWREporter contributed to this report.

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