Shrinking inventory putting “stranglehold” on sales around Western Washington

Source: NWMLS

May 4, 2017
Shrinking inventory putting “stranglehold” on sales around Western Washington
as brokers continue grappling with challenges of multiple offers

KIRKLAND, Washington (May 4, 2017) – “Frustrating” is how brokers are summarizing the mood of
buyers, brokers – and industry professionals – during the current housing market frenzy. New statistics
from Northwest Multiple Listing Service show declines in inventory and sales, while prices continue their
upward trajectory, but those numbers only tell part of the story.

“The real estate market is going absolutely gangbusters,” remarked OB Jacobi, president of Windermere
Real Estate. “The remarkably low number of homes for sale can be blamed for the drop in sales,” he
emphasized, adding, “The uptick in interest rates at the end of last year has clearly done nothing to slow
things down.”

Inventory fell nearly 25 percent from the volume of active listings being offered a year ago. At the end of
April, MLS brokers reported 10,679 homes and condos for sale across a 23-county area, which compares
to the year-ago selection of 14,235 listings.

Viewed another way, there is only about 1.5 months of supply (about six weeks), which compares to
twelve months ago when supply totaled about 1.85 months. (In general, four-to-six months is considered
a balanced market.) There has not been more than two months of supply since September 2016.
MLS members continue to struggle to keep pace with demand. Brokers added 10,648 new listings to their
database last month, down from 11,939 during April 2016, and they reported 10,514 pending sales. That
total was down 893 transactions for a drop of year-over-year drop of 7.8 percent.

The near-match in new listings and pending sales meant little change in the number of total active listings,
although inventory edged up slightly from March, growing from 9,774 listings to 10,679.
“Without a doubt this is the most frustrating market for both buyers and sellers that we’ve experienced in
24 years of business,” stated George Moorhead, designated broker at Bentley Properties. He said the
frustration of low inventory is prompting sellers who haven’t been able to find their next home to look
into undertaking major remodels instead of moving, thereby putting even more pressure on buyers who
are struggling to find a home. Although buyers are being aggressive, Moorhead believes offer prices are
starting to plateau. “Educated buyers cannot justify many of the home prices,” he reported.

Prices area-wide shot up 10.4 percent from a year ago, from $325,990 to $360,000. The four-county
Puget Sound region, which accounted for more than 77 percent of last month’s 7,276 closed sales,
reported a price hike of nearly 14.7 percent, led by Snohomish County at 16.7 percent. In Snohomish
County, the median price for single family homes and condos (combined) eclipsed the $400,000 mark,
climbing to $416,668.

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