Seattle Market Breaks Records

Posted: July 21st, 2015 by Brad

Seattle’s early start to summer with record breaking heat in June certainly didn’t put a chill on our real estate market. The bigger news from last month’s housing numbers is home values. For the first time ever, King County’s median home value hit $500,000. The previous high occurred in July 2007 at the peak of the last market cycle when median home value reached $481,000.

Our market is also experiencing the highest sales activity in 10 years. Northwest Multiple Listing Service (MLS) members reported 11,453 pending sales last month, the highest volume since August 2005 when members notched 11,546 mutually accepted offers. Last month also marked the fourth consecutive month of 11,000-plus pending transactions.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.

For the Northwest MLS market overall, only 2.2 months of inventory existed at the end of June. In King County it was down to less than 1.2 months. Snohomish County had about 1.7 months of supply at month end. Both Pierce and Kitsap counties reported about 2.2 months of inventory. Here’s how to analyze this data:
>6 Months of Supply = Buyer’s Market
4-6 Months of Supply = Balanced Market
<4 Months of Supply = Seller’s Market

Multiple offers are common throughout the Central Puget Sound region. Rising prices are prompting some house-hunters to broaden their search beyond primary job centers. Rising rents are another contributor to brisk sales.

“The cost of renting versus buying is another force that is fueling strong sales gains,” explained Gain. “In most cases buying a home costs significantly less than renting and the good news is the monthly payment will remain the same as rents continue to rise. Numerous renters are entering the home buying market. Many who are renting today think they can’t afford a home. They need to think again and get pre-qualified for a loan to see just what they can afford.”

Rising prices are prompting some worries about affordability. Broker Dick Beeson believes the growth rate in jobs and the “sheer numbers of people flowing into the state make this market appear to be sustainable for the long term,” despite some uncertainty around reaching the upper limit in pricing and the likelihood of rising interest rates.

Curious about current market conditions in your neighborhood or what you’re home is worth? Give us a call today for your complimentary, no obligation consultation 866.766.7325.

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