Home prices rise, but few would-be sellers dive into market
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New listings rose from 1,258 in May 2012 to 1,564 this May, an increase of 24 percent, but total active listing volume of 1,777 single-family homes and condos was still down by more than 25 percent year over year, Northwest Multiple Listing Service data released June 5 showed.
"There are still homeowners who want or need a higher equity position in order to sell their home, so they may continue to wait and watch," said Dan Gunderson, broker with Windermere Everett.
That reluctance helped drive up median prices for homes and condos across the county by more than 16 percent, from $245,000 to $285,000. Median prices in the Bothell-Clearview-Maltby area were the highest in the county at $400,000, up 23 percent from $325,000 last May.
Closed sales rose from 1,000 to 1,310 units, an increase of 13.1 percent.
"We currently have significantly less inventory of bank-owned and short-sale properties," Gunderson said. "New construction is currently about 15 percent of the inventory and we would like to see it at 20 percent. Supply is certainly a driver of the increased property values. Affordability, low interest rates and the job market in this region are contributing to the increased value as well."
Ed Wendling, with Wendling Real Estate Services at Windermere Real Estate GH LLC in Edmonds, noted a number of drivers in the continuing price run-up.
Distressed properties, defined as short sales or lender-owned, accounted for 39 percent of closed sales at the end of the first quarter of 2013, down from 48 percent of the total market in 2011, Wendling said.
"Nondistressed sellers have the choice to sell, but many fear with the low inventory they will be unable to find a good replacement home and could be caught in the cold if their home were to sell quickly," he said.
There is another segment of sellers who are on the cusp of being solvent with their home's value.
"They are not delinquent and have strong desire to move but would have to bring money to closing in order not to be short," Wendling said. "This would not allow them the necessary down payment for their next home so they need to sit on the sidelines waiting for home prices to rise."
Across the rest of the 21-county Northwest MLS service area, inventory showed signs of improving with the addition of 11,445 new listings during May, the highest number since April 2010. May's total outgained the year-ago figure of 9,861 new listings for a 16 percent improvement.
The increased inventory is "cooling some buyers," said George Moorhead, managing broker at Bentley Properties in Mill Creek and a member of the MLS board of directors.
"We also have buyers who are stepping back as they are frustrated with current inventory and multiple offers going well above asking price," he said.
That shows in the county's MLS numbers of pending sales for May. They fell from 1,579 homes and condos to 1,487, a decrease of 5.8 percent.
"It has been refreshing to see more listings coming on the market, but with overall inventory remaining low, the competition among buyers is still fierce for homes that are priced properly," said Northwest MLS director Kathy Estey, the managing broker at John L. Scott in downtown Bellevue.
Well-priced homes continue to draw multiple offers and sell at a brisk pace around Western Washington as buyers react to recent upticks in interest rates and asking prices, MLS brokers said.
"The economy has picked up to a level allowing home owners to feel financially secure," Wendling said. "Together with the lack of inventory, pent-up demand and interest rates at historic lows, still below 4 percent, there are simply more buyers than sellers."
Moorhead said increased activity is noticeable, with mixed outcomes.
"We are seeing multiple offers at 5 to 12 percent over list price in highly sought after areas," he said. "But there are other homes on the market that are not selling, with no real reason why."
Estey said recent interest rate increases are "adding fury to the already frenzied buyers who must finance their purchase."
Federal officials have downplayed rising interest rates. In a recent interview, Frank Nothaft, Freddie Mac's chief economist, addressed the issue.
"While this may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks," he said in a published report. "The rates are also lower today than they were a year ago at this time."
Kurt Batdorf: 425-339-3102; firstname.lastname@example.org.