The Seattle area housing market remained competitive once again in January, with homes in the area continuing to fly off the market that has been marked by low inventory for months.
According to the latest report from Northwest Multiple Listing Service, the housing market in Puget Sound region doesn’t appear to be slowing down this winter, and is seeing high prices that are worrying some brokers about what the market’s future will look like.
“The economics of scarcity are driving prices up at an unsustainable pace,” said Dick Beeson, managing broker at RE/MAX Northwest. “What will happen this spring and summer will likely be more of the same. The real estate vortex we’re in of depleted inventory and high prices is real and unrelenting.”
He noted the historically low interest rates, saying homes would be largely unaffordable to many buyers if not for the low rates.
“We’re feeling nervous about where this market is headed,” Beeson said. “Help is not on the way. Sellers are almost as rare as the dodo bird.”
Even as new listings increase, they are “immediately devoured by a plethora of waiting buyers,” he said.
In King County in January, there were 2,598 new listings added, up from the same time last year when there were 2,361 new listings added. But the total number of active listings last month was still about 12{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} lower than it was in January of 2020, according to the report. That could be due to how fast homes have been going off the market.
“Most of those homes sold so quickly they aren’t reflected in the overall total active inventory numbers,” said Matthew Gardner, chief economist at Windermere Real Estate. “Clearly, demand is still very strong which is further confirmed by the fact that year-over-year (YOY) price growth remains well above long-term averages.”
The market “ignored the traditional winter slowdown and kept its foot firmly on the accelerator in January,” Gardner said.
Pending sales went up by about 6{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} year over year in January, to a total of 2,625. Closed sales also rose to 2,006, a significant 20{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} increase over January of last year.
The median price for closed sales in King County last month was $644,950, a rise of more than 9{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} compared to the same time last year. For single family homes, prices were up nearly 15{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} year over year, reaching a median price of $725,000. The median closed sale price for single family homes in Seattle reached more than $791,000. On the Eastside, it was $1,149,000, up about 29{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} year over year.
Real estate agents are encouraging buyers who may be priced out of the region’s competitive home market to take a look at condominiums. In King County, there is a larger inventory of condos when compared to single family homes and they’re more affordable.
“With the trend toward telecommuting and moving to outlying suburban areas, the Seattle/King County condominium market presents a new option,” said Gary O’Leyar, owner and designated broker at Berkshire Hathaway HomeServices Signature Properties.
He called them a “window of opportunity” for homebuyers.
The median asking price for condos in King County in January was $525,495. The median sale price for condos in King County was $399,975, down slightly year over year.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, predicted after this weekend, there would be more listings added to the market. He called Super Bowl Sunday a “kickoff to the early spring housing market.”
“It still feels like multiple-offer everything this winter,” he said. “To compete in today’s ultra-competitive market, we’re seeing some buyers front-loading their offer above the list price…This is done in an attempt to ‘stop the action’ and push the sellers to accept their offer before the set review date.”
It’s not just King County that’s seeing its prices rise and inventory stretched. All across the Puget Sound region, buyers are competing over few homes.
“It is difficult to think of the last time when nearly every Western Washington county with the exception of Clallam, King and Jefferson had double-digit percentage price growth,” said James Young, director of the Washington Center for Real Estate Research at the University of Washington.
“It is somewhat of a ‘prisoner’s dilemma’ for the housing market in Western Washington,” he continued. “Those who own do not want to sell because there is little inventory to buy. They will stay put. Those who want to buy (and get on the housing ladder) cannot get into the market because there is little available for sale.”
Some brokers, though, remain optimistic moving forward, as coronavirus restrictions are lifted and vaccinations ramp up.
“With the major counties moving into Phase 2, resulting in open houses resuming with up to 10 visitors socially-distanced (including the broker), a new administration, and COVID-19 vaccinations underway, we’re hearing much optimism from our brokers,” Northwest MLS director John Deely said.
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