Home Sales Stay Strong

Posted: October 14th, 2014 by Brad

Pending sales of homes around Western Washington  surged more than 13 percent in September compared to a year ago, and listing activity picked up slightly, fueling both broker optimism and words of advice for sellers.

Along with increases in the number of mutually accepted offers, the latest report from Northwest Multiple Listing Service (MLS)  shows year-over-year gains in the number of closed sales (up 4.6 percent) and prices (up 2.5 percent).

Commenting on September’s activity, Northwest MLS Member and industry veteran Gary O’Leyar said he expects the Greater Puget Sound real estate market will maintain a “healthy glow” in 2015 so long as there is no radical increase in interest rates. “I foresee a general leveling off in overall market activity as prices approach the affordability ceiling for many buyers,” remarked O’Leyar.

Northwest MLS members reported 8,875 pending sales during September to outpace the year-ago total of 7,839 pendings. The volume tapered off about five percent from the August figure of 9,342 mutually accepted offers. All but one of the 21 counties served by the MLS reported year-over-year increases.

The number of closed sales for September also rose, climbing from 6,711 a year ago to 7,020 for a 4.6 percent increase. Prices on those sales were up 2.5 percent.

The median price on last month’s closed sales of single family homes and condominiums was $285,000, which compares to the year-ago figure of $278,000. The median price for September’s single family home sales (excluding condos) rose more than 2.2 percent, increasing from $291,000 a year ago to $297,500. In King County, the surge was 9.5 percent.

Luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. Brokers attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest.

Despite keen interest in high-end homes, overpriced homes will not draw offers, cautioned Northwest MLS director Diedre Haines. “It is extremely important for sellers to know if their house is overpriced, it may not garner offers and will eventually sell for below market,” she declared, adding, “This is an absolute that has always been the case, in all market conditions, and all locations!”

Haines described some of the newer inventory as not saleable or overpriced. “Today’s buyers are more savvy and educated regarding market values, so correct pricing has become the key factor in selling a home.”

(Industry insiders say poorly maintained homes, homes in undesirable locations, and overpriced properties are sometimes considered unsalable.)

Another MLS director, George Moorhead, expects to see slight value increases, but slower sales volume as the year winds down and into 2015. “What we are seeing is market correction and a balance of pricing, inventory levels and overall market health,” commented Moorhead.

Northwest MLS representatives also commented on the impact of international buyers, recent layoffs and new construction on housing activity.

Northwest MLS Director Dick Beeson said he expects the international connection between the Northwest and Far East will continue to grow. He believes the widely reported increase in interest from Chinese buyers is partly the result of the Vancouver BC market being so expensive. “Like the San Francisco Bay area, Vancouver was their location of choice,” but skyrocketing values in those cities are prompting some to look elsewhere, including Puget Sound.

Parents who are purchasing homes for the kids are another segment contributing to the uptick in sales, according to one MLS director. “We’ve noticed an increase in parents purchasing rental properties for their children attending local universities as the demand for rental properties has pushed rents to all-time highs,” reported John Deely. “Many of the only available rental options are sub-standard or compact, micro-sized ‘apodments’” (a term sometimes used to describe compact, one-room housing units).

MLS officials seem unconcerned about recent layoffs announced by Microsoft, Boeing and other local employers.

  • “My observation is the Microsoft layoffs are mostly within the Nokia division,” commented O’Leyar. “I think given the strength of the Eastside market if there is any impact at all it would be a minimal ripple, maybe only a slightly cooling effect, not any major shift,” he stated.
  • Moorhead agreed. “Area employment reductions with companies have had a negligible effect on home inventory and pricing,” he reported.
  • “The fourth quarter is expected to remain strong despite reports of the region losing jobs from both Boeing and Microsoft,” said Haines, who noted reports of employers having difficulty filling several high-paying tech industry jobs. (In July, the CEO of the Washington Technology Industry Association said about 5,000 computer science positions are currently unfilled in the state.)

Curious about what the market is doing in your neighborhood? Call us for your complimentary consultation (866) 766.7325.

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