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July Real estate Market update

July NWMLS Press Release

KIRKLAND, Washington (August 6, 2020)  

Summarized by Tom Perry – Realty Executives Brio

 

Brokers added the largest monthly number of new listings during July since May 2019, but pent-up demand from homebuyers meant inventory remained tight. The Northwest MLS report for July, which covers 23 counties in Washington state, shows the following broker activity for July 2020:

 

  • New Listings 12,514, up 11.8% from the year-ago.
  • Pending sales jumped nearly 14%
  • Inventory of available properties is down 39% from a year ago.
  • Months of inventory slipped to about one month (1.04 months).
  • Closed Sales were up 3% from last year at 9,840, the highest volume since June 2018.
  • Sold prices for single family homes and condos, jumped 12.8% from $429,900 last year to $484,995.
  • Prices on single family homes (excluding condos) surged 13.6% (to $499,950).
  • Year-over-year (YOY) condo prices rose about 8.6% (to $380,000).

Fourteen of the 23 counties in the report had double-digit price increases. 

Only two counties (Jefferson and Pacific) reported small declines in sold median price. One prediction is, due to the continued shortage of homes for sale and market demand, 2020 home prices will rise by 5.4% in King County and 5.8% in Snohomish County compared to prices in 2019.

 

An unprecedented eight counties in the NWMLS report had less than one month’s supply of homes and condominiums for sale at the end of July. They included Clark, Cowlitz, Island, Kitsap, Mason, Pierce, Snohomish, and Thurston. King County was at 1.3 months.

 

King County continues to have the highest median price. 

Prices for homes and condos at $670,000 (up 7.2% from a year ago), but a look at that county’s 29 map areas covered in the report shows price changes ranging from an increase of 21.6% in North Seattle to a 17.4% decrease in the Bellevue area west of  I-405.

 

Last month’s pending sales volume in King, Snohomish, Pierce and Kitsap Counties were the best-ever for the month of July. Sellers benefited from the highest median home prices and low inventory, while buyers took advantage of the lowest interest rates on record. This is a historic moment in residential real estate.

 

The Market is in high gear. Pent-up demand and the need for housing is outweighing fears of the coronavirus. Although new listings of single-family homes in King County jumped more than 24% from a year ago, the total available inventory dropped to a 10-year low for the month. Single family listings priced at or below market are receiving multiple offers with one recent Seattle listing attracting 40 offers.

 

The escape to the suburbs and rural areas continues. 

The double-digit home price growth in Pierce County, might point to the theory that there is a COVID-induced flight from more urban markets. This also supports the forecast that home prices in Pierce County in 2020 will rise a significant 10.6% above those in 2019.

 

Kitsap County continues to be an attractive alternative for East Puget Sound buyers as well as stay-at-home professionals. Residents are now enjoying the speedy open-access fiber-optic connections that Kitsap PUD started installing years ago.

Kitsap County showed 527 pending sales of single-family homes in July, outgaining the 508 new listings. The current available home inventory is down 37% from a year ago. The median value in Kitsap County jumped from $383,500 to $428,193 an increase of 11.7% from 2019.

 

The predicted median price increases of around 20% or more in counties outside of the metro job centers, including Cowlitz, Grays Harbor, Lewis, and Okanogan show that remote work practices are definitely influencing prices.

 

Opportunities abound for both buyers and sellers. 

Interest rates at historical lows, means those who are looking to purchase their first or even their second home can get much more for their money. A Kirkland broker reported that her first-time homebuyer client obtained a 30-year, fixed-rate FHA secured loan at an incredible rate of 2.25%! We are also seeing more and more buyers making buying decisions based on virtual tours. They are quickly realizing that if you see something that piques your interest, they can’t delay!

A lot of people who would otherwise be content to stay in their homes are now rushing to get their homes on the market. Many of these sellers are soon to be buyers and don’t want to miss out on buying before the prices and interest rates increase.

 

Buyers are faced with multiple offer situations in just about every market and at every price point. There is only about 24 days of inventory in the major population centers in King, Kitsap, Pierce, and Snohomish counties. However, sellers that aggressively price their properties over market values are sitting idle as the current pool of savvy buyers waits for price reductions or for properly priced, new listings.

 

The suburban lifestyle continues to draw buyers. 

The July sales data suggest, homes outside the urban areas may be underpriced. With record low interest rates under 3%, buyers have increased purchasing power, but with low inventory and increased demand, prices continue to increase.

Outer areas continue to outperform the urban markets. There not only appears to be a continued move to areas outside the Seattle region, there also appears to be a move outside the other main cities. With the virus and increased home working opportunities, people are able to move to suburbs and outer areas in search of value and lower population density. Demand will continue to far outstrip supply for a quite a while. When you can work from home, why pay a premium to be close to the office?

 

Some brokers contend that the current trend foretells stronger results moving forward as far as November. Others expect this robust activity to continue until at least April 2021. Their guess is, at that time, we may be back to normal seasonal patterns.

 

I am an experienced full-time REALTOR® on Seattle’s eastside. I been through all the ups and downs in the market for the past 30 years and have helped sellers make through it all. Feel free to contact me if you have any questions about the market, these numbers, or the value of your home. You can also go to my website to get information on my “Net Top Dollar” market system for Sellers or my “Stress Free” Buyer program.  Tom Perry, Realty Executives Brio

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