Northwest MLS Tallies Busy December as First-time Buyers, Investors Return KIRKLAND, Wash. (Jan. 7, 2013) – Home buyers around western Washington made offers on 5,314 residences during December, outnumbering the 3,857 owners who listed their homes for sale. The imbalance helped push up prices and further thin already depleted inventory. While the expected seasonal slowdown occurred last month, determined buyers were undaunted by sparse inventory and record-breaking rainy days, according to December statistics from Northwest Multiple Listing Service. “This is a unique housing market,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “There is nothing normal about the combination of factors fueling the current market,” he added. MLS members reported 5,314 pending sales of single family homes and condominiums last month for a modest year-over-year increase of 1.5 percent. That volume of mutually accepted offers fell from November’s total of 6,522, but far exceeded the number of new listings, 3,857, that members added to the MLS system during December. It also marked an unprecedented fourth straight month when pending sales outnumbered new listings. MLS members tallied 5,267 closed sales during December, outgaining the same month a year ago by 526 transactions for an increase of about 11.1 percent. The 2012 total of 64,624 closed sales was 14.8 percent higher than the volume reported for 2011. (Note to editors: Northwest Multiple Listing Service will release its annual summary report for 2012 on Jan. 16) Brokers expect the housing market rebound to continue, while cautioning sellers to refrain from becoming too greedy and expressing hope for “controlled natural growth” to sustain the recovery. They also believe distressed properties, rising rents and re-engaged investors will have an impact on activity for the foreseeable future. “Buyers are taking note of sellers who overprice their homes,” reported Northwest MLS director Darin Stenvers. “These buyers are not wasting their time looking at that section of the market for fear of losing a “turnkey ready” home that they can buy and close on,” added Stenvers, the office managing broker at John L. Scott, Inc. in Bellingham. Frank Wilson, another member of the Northwest MLS board of directors and the managing broker at John L. Scott’s Poulsbo’s branch, noted similar shifts in attitudes about distressed properties. He said many buyers are no longer considering short sales or bank owned property because of the uncertainty and complexity of those transactions, opting instead to focus on non-distressed listings that would likely close in a more reasonable and more predictable timeframe. “I think as time goes by the short sale and bank owned home will become more and more of an investor target,” he remarked. -more-
page two (NWMLS news release: December activity)
Jan. 7, 2013
Even with distressed properties (and the lower prices they usually fetch) being part of the mix of sales, median sales prices are edging up. Last month’s buyers paid more for their home than purchasers of a year ago, and the number of properties that sold for a million dollars or more jumped nearly 56 percent, rising from 68 in December 2011 to 106 last month. The median price area-wide was $255,000, up 13.3 percent from twelve months ago when the price was $225,000. Prices rose by double digits in ten of the 21 counties in the Northwest MLS service area. Homes and condos that sold in King County commanded the highest prices at $342,000, reflecting a gain of more than 17.5 percent. For single family homes (excluding condos), the median selling price rose $30,000 system-wide (about 12.8 percent) climbing from $235,000 a year ago to $265,000. In King County, the median sales price of a single family home jumped nearly 18.8 percent, from $320,000 to $380,046. Within the county, the biggest increases on single family homes that sold were reported in Skyway/Bryn Mawr area (up 89.8 percent), Central Seattle (up 50.2 percent), Vashon (up 35.6 percent), Bellevue west of I-405 (up 28.6 percent) and Burien-Normandy Park (up 26.9 percent). Prices and the number of multiple offers may be rising in part because of shrinking inventory. At the end of December, there were only 17,718 properties for sale, which compares to 26,639 active listings for the same time a year ago (down 33.5 percent). Months of supply declined to 3.3 months, down from about 5 months of supply for the same period a year ago. In Snohomish County, year-over-year inventory was down more than 53 percent, while in King County the selection was about half the year ago levels: 3,801 listings versus 7,472. Looking ahead, many brokers expect a strong market in 2013, with some expressing concern about “frenzied bubble growth.” “Last year was the best year in real estate for both buyers and sellers since 2007, with better pricing for homes, lower interest rates than ever recorded in history, and best of all, the opinion the market has finally bottomed out,” said MLS director George Moorhead, branch manager at Bentley Properties in Bothell. Those factors combined to “start a buyer frenzy” from February to mid-August, he noted, but added, “We never quite got that level of excitement back for the months of September to December.” Moorhead expects a “traditionally slow” January as buyers and sellers start to “build energy to make the next move.” He fears another “perfect storm” with double-digit appreciation will return, but prefers “controlled natural growth” as the best recipe for long term economic stabilization, “not frenzied bubble growth with no foundation for support.” Wilson said he expects an exciting spring real estate market in Kitsap County, citing the imbalance between inventory and buyers and record low interest rates. “The numbers are lined up for a bit of a frenzy,” which he believes will lead to shortages of homes in some areas and some price ranges. Low unemployment, less inventory, low interest rates and rising rents are among factors that will create a strong housing market in 2013, Stenvers suggested. The return of first-time buyers who find it is becoming cheaper to own than rent and the imminent multi-billion dollar settlement involving foreclosure mishandlings by 14 banks also bode well for a more balanced recovery, he noted. “We will see a continuation of year 2012 market conditions throughout 2013,” declared Scott. “Historically low interest rates, healthy job growth, a shortage of homes for sale in many areas and price ranges, strong sales activity from both local home buyers and residential investors are creating multiple offers and price increases in areas with inventory shortages,” he noted. -more-
page three (NWMLS news release: December activity)
Jan. 7, 2013
Another positive indicator brokers noted is improving builder confidence. It recently rose to its highest level in more than six years, according to a National Association of Home Builders (NAHB)/Wells Fargo survey released last month. Although newly built homes account for only a small portion of the housing market, they are considered to be a leading revenue and job creator. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB research.
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest fullservice MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state. ###
Statistical Summary by Counties: Market Activity Summary – December 2012 Single Fam. PENDING LISTINGS CLOSED SALES Homes + SALES Condos New Total # Pending # Closings Avg. Price Listings Active Sales King Snohomish Pierce Kitsap Mason Skagit Grays Harbor Lewis Cowlitz Grant Thurston San Juan Island Kittitas Jefferson Okanogan Whatcom Clark Pacific Ferry Clallam Others MLS TOTAL
1,378 581 701 170 60 86 77 56 53 40 187 13 61 33 29 23 160 22 27 1 44 55 3,857
3,801 1,513 2,734 1,183 590 609 644 549 401 431 988 270 573 346 340 335 1,059 176 298 75 314 489 17,718
2,056 872 986 267 52 97 50 58 87 37 248 15 83 35 33 16 164 47 21 2 47 41 5,314
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2,188 892 808 226 59 105 72 50 69 50 223 17 76 37 37 15 197 36 20 4 42 44 5,267
$425,210 $279,231 $232,956 $261,724 $174,834 $257,427 $139,675 $169,263 $159,092 $161,897 $220,379 $565,059 $312,249 $350,882 $353,950 $162,260 $278,378 $234,957 $133,061 $131,216 $200,033 $219,863 $322,252
Median Price $342,000 $254,975 $200,563 $219,975 $145,000 $209,000 $132,568 $162,500 $139,000 $147,500 $203,000 $300,000 $257,500 $220,000 $252,000 $145,000 $255,000 $179,550 $125,750 $147,950 $173,400 $155,000 $255,000
page four (NWMLS news release: December activity)
Jan. 7, 2013
4-county Puget Sound Region Pending Sales (SFH + Condo combined) (totals include King, Snohomish, Pierce & Kitsap counties) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Jan 3706 4334 4293 4746 4521 5426 5275 4869 3291 3250 4381 4272 4921
Feb 4778 5056 4735 5290 6284 6833 6032 6239 4167 3407 5211 4767 6069
Mar 5903 5722 5569 6889 8073 8801 8174 7192 4520 4262 6821 6049 7386
Apr 5116 5399 5436 6837 7910 8420 7651 6974 4624 5372 7368 5732 7015
May 5490 5631 6131 7148 7888 8610 8411 7311 4526 5498 4058 5963 7295
Jun 5079 5568 5212 7202 8186 8896 8094 6876 4765 5963 4239 5868 6733
Jul 4928 5434 5525 7673 7583 8207 7121 6371 4580 5551 4306 5657 6489
Aug 5432 5544 6215 7135 7464 8784 7692 5580 4584 5764 4520 5944 6341
Sep 4569 4040 5394 6698 6984 7561 6216 4153 4445 5825 4350 5299 5871
Oct 4675 4387 5777 6552 6761 7157 6403 4447 3346 5702 4376 5384 6453
Nov 4126 4155 4966 4904 6228 6188 5292 3896 2841 3829 3938 4814 5188
Dec 3166 3430 4153 4454 5195 4837 4346 2975 2432 3440 3474 4197 4181