Northwest Multiple Listing Services, which covers 26 counties in Washington state, has released a data analysis of its local market during January 2023. The MLS and quoted professionals paint an improving outlook for Washington real estate, citing an increase in transaction volume during the month.
- Pending sales in January 2023 reached their highest level since October, 2022, and were up 44% from the preceding December. While 5,776 mutually accepted offers was a 9% drop year over year, brokers are encouraged by the “favorable spike.”
- Closed sales in January 2023 edged up 0.41% year over year; nine of the 26 counties had year-over-year price bumps.
- The area-wide median price on January’s 3,264 completed transactions was $557,250; a year ago, when there were 5,085 closed sales, it was $555,000.
- Based on the number of total active listings in the MLS database, the selection of properties reached 8,220 listings at January’s end, compared to 3,092 the previous year. That total, which includes 7,179 single-family homes and 1,041 condominiums, was down about 13.2% from December’s selection.
- Brokers added 4,925 new listings to the MLS database in January, a year-over-year decline of about 1,000. However, this represented an increase from December when 2,980 properties were added, as well as November, when 4,890 listings were added.
- Adams, Columbia, Grays Harbor, Okanogan and San Juan counties each had more than six months of inventory.
- 10 counties had less than three months of supply.
- The densely populated counties of King, Pierce, and Snohomish all still sit at one to two months of inventory.
Northwest MLS consulted leading real estate professionals, both domestic and national, to help interpret this data and prognosticate what it means.
“We are seeing multiple offers once again,” stated John Deely, VP of operations at Coldwell Banker Bain. “It’s not like it was at the peak of the market, but buyers are out there and competing for properties. While residential inventory is popping above six months in a few of our reporting counties, which are at the upper edge of a balanced market, our most populated counties are still sitting at one to two months of inventory, which is indicative of a seller’s market.”
“The condo market in our most populated counties is quite a bit different and not recovering as quickly,” Deely added. “However, it is still active and the sales that are taking place are keeping the condo market in balance.”
“We saw a favorable spike of intensity in the market in January,” reported L. Lennox Scott, chairman and CEO of the Seattle-based John L. Scott Real Estate. “With fewer new resale homes coming onto the market, there’s a shortage/low level of unsold inventory, especially in the more affordable and mid-price ranges where approximately 80% of sales activity takes place.”
“While interest rates have tempered a bit, many buyers are moving forward to purchase with an intent to refinance once rates come down more,” added Frank Wilson, Kitsap regional manager and branch managing broker at John L. Scott’s North Kitsap office.
Last month’s median price for homes that sold in Kitsap County was $487,000, well below the median price in both King County ($723,000) and Snohomish County ($645,000). Prices in Kitsap are down from both a year ago and December, but inventory is tight with slightly more than two months of supply.
Wilson described the market in Kitsap as “similar to a well-planted bed of tulips. You know it is there but will not see any real color until March or April.” He believes many sellers are waiting until later in the year to sell, but noted buyers who must buy are currently out in numbers. “We are seeing good traffic at our open houses and new, correctly priced listings are receiving multiple offers.”
George Ratiu, manager of economic research at Realtor.com, said the recent decline in rates means for today’s buyer of a median-priced home, the down payment amount is lower than it would have been last summer.
NAR Chief Economist Lawrence Yun suggested the “recent low point in home sales activity is likely over.” Commenting on pending sales for December, he stated, “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”
Broker Dean Rebhuhn, owner of Village Homes and Properties, believes, “The spring real estate market is here early. A combination of pent-up buyer demand, attractive prices and low inventory in King, Pierce and Snohomish counties are driving sales.” He pointed to “reasonable interest rates” and new properties coming on the market daily as factors for the creation of what he called the “new normal market.”
Although brokers and buyers welcome declining rates and improving inventory, several obstacles still face first-time home buyers. Based on his observations, Rebhuhn said the biggest challenge for first-timers involves assembling the down payment. “Buyers are using savings, gifts, and loans from family, and borrowing from investment and retirement accounts.”
For more information, visit https://www.nwmls.com/.