Balanced Market, Selective Buyers

Posted: November 19th, 2014 by Brad

Home buyers are back, and they’re savvy and selective, according to officials who commented on the latest statistics from Northwest Multiple Listing Service. For sellers, that means pricing a home correctly at the start is vital, said industry veteran Kathy Estey, a member of the MLS board of directors.

The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices.

Northwest MLS members reported 8,643 pending sales last month, which is up nearly 6.9 percent from twelve months ago when members reported 8,086 mutually accepted offers. Most of the increases are from sales of single family homes, which rose more than 7.8 percent while condo activity was flat with less than a 1 percent rise in sales.

Brokers are scrambling to keep inventory replenished as last month’s pending sales of single family homes and condominiums (8,643) outpaced the number of new listings (8,102). Inventory at the end of October, as measured by months of supply, stood at 3.24 months, a slight drop from the previous month’s figure of 3.7 months. In King County there is less than two months of supply, well below the four-to-six month level that many industry analysts use as a gauge of a balanced market.

As the selection expands, buyers who have been on the sidelines are being lured back into the market, according to MLS director John Deely. He noted sellers whose properties were languishing on the market are now seeing brisk activity and even multiple offers after adjusting their prices. “This activity indicates there is still strong buyer demand and that buyers are watching the inventory closely,” he said.

“Watching some markets around the Puget Sound is like watching a championship tennis match, first a buyers’ market, then a sellers’ market,” board member for the multiple listing service George Moorhead said. “As these shifts become more of a blend, as they have the last 18 months, we will see good balance and stability in our market with healthy growth and competition.”

Another positive indicator during October was a healthy increase in closings. MLS members reported 7,257 closed sales during the month, a 7.5 percent gain from a year ago.

Prices on those sales were up 7 percent, rising from an area-wide median price of $271,000 to $290,000. Four counties reported double-digit price hikes, led by San Juan County, where prices jumped 18.4 percent, and Snohomish County, with a 17.4 percent year-over-year gain.

Despite only a slight improvement in the number of condo sales from a year ago, the median price system-wide surged more than 14 percent, rising from $200,000 to $228,500.

“It has never been more important to properly price properties,” advised Deely. Despite recent news about easing of mortgage standards, he reported an increase in low appraisals, which can delay or jeopardize a transaction.

MLS director Dick Beeson agreed. “The main thing sellers are realizing is that buyers have lots of data to base a sound offer on and there is no “fluff” available when pricing their home for sale,” he explained. Also, he emphasized, “Buyers are realizing they better take advantage of these incredible interest rates before they are gone, which could be after Jan. 1st.”

Also crimping activity is the practice of a delayed seller’s review of offers. “Interestingly, new listings without the delayed review restrictions are often not selling immediately, but in a few days or within a week there are suddenly multiple offers,” Estey reported. “Many buyers are just not willing to compete, so they wait to see what happens with a new listing, then ultimately end up in competition.”

Diedre Haines, another MLS director, said seasonal factors are starting to affect activity. “We are seeing the beginning signs of the post-election, year-end, holiday slowdowns,” she remarked, but described them as “modest” compared to past history. “First time and second time move-up buyers are still in abundance, but they’re taking their time in making decisions and offers,” she said.

Commenting on anticipated increases in interest rates, Haines said they are not expected to be dramatic. “The recent changes in FHFA’s easing of standards for mortgage qualifications will give the buyers’ ability to buy a major boost in the coming year,” she predicts. She also expects the relaxed qualifications will spur an increase in activity during the first quarter of 2015 and continuing throughout the year.

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

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