Housing Report: Inventory levels in 23 counties in Washington State have dropped to record lows.
The Washington housing report for February 2017 is less than encouraging for those looking to buy their dream home right now. But for those willing to put in the work, opportunity still beckons.
A Look At The Numbers
Let's take a quick look at the NWMLS numbers for Feb. 2017.
- In the 23 counties served by the Northwest Multiple Listing Service year over year, pending sales fell 8.9% in February 2017. This is the first drop in year over year sales since March of 2016.
- Active homes for sale as of February 28th 2017 were 9,091. This is the first time the active number of homes for sale has fallen below 10,000 since 2004.
- Sales in King County were down in February 2017 vs. February 2016 but prices were up over 14% with a median price of $560,000 for single family homes. Snohomish County home prices (excluding condos) jumped over 18% Pierce County median price increased over 10%.
Median Sale Price for All NWMLS Counties
Inventory Is Low, Low, Low
The lack of inventory is creating all manners of problems for buyers and sellers.
Buyers are having difficulties finding homes that meet their needs, and when they do find one they often find themselves in a bidding war with multiple other buyers. Brokers we have chatted with recently are writing multiple offers for buyers only to lose out and have their buyers decide to not purchase anything out of sheer frustration.
Brokers we have chatted with recently are writing multiple offers for buyers only to lose out and have their buyers decide to not purchase anything out of sheer frustration.
Active Listings vs Sold Listings for All NWMLS Counties
Sellers are enjoying a sellers market unlike any in recent memory. However, this comes at a cost as well. Where will a seller move to when they sell their home? Since the inventory is so low and buyers are so plentiful, sellers are not inclined to take contingent offers on their properties. Thus forcing sellers to either stay put and not sell or sell their home and move into temporary housing until they can find a home that meets their wants and needs. Many sellers are simply staying put and not selling.
During recent conversations, many of the brokers we talked to feel that inventory levels should begin to rise this month and continue to rise during our “traditional selling season”. While they do not expect inventory to exceed demands, they are hopeful that there will be more homes available for sale. Interestingly, brokers were almost nostalgic for the good old days of a balanced housing market.
Brokers are trying different methods to create inventory.
Can we learn from this approach?
Many brokers are now proactively going into neighborhoods to see if home owners would be interested in selling their home if the broker provided them with a ready, willing, and able buyer. Perhaps we will soon see buyers agents bicycling into neighborhoods in pairs and door knocking to introduce themselves to potential home sellers.
Other brokers are using technology to find sellers using statistical analysis. Equity, time of ownership, age of owner, etc. When they find a candidate that meets their criteria they are directly marketing to them. SABR Metrics meets home sales if you will.
Listing brokers are trying different methods as well to maximize their sellers sales price and net profits. It is now common for sellers to have their home listed but not to review offers for 3 to 5 days. This allows many different buyers to see the home and submit offers. The listing agent then gathers all of the offers and reviews with the seller. The multiple offers are creating a feeding frenzy with many buyers making offers that just months ago would have been considered insane.
Some brokers are also using auctions to sell homes with. Others are leveraging open houses to show the home to multiple groups at the same time. All strategies to increase the sellers net.
The flip side is that many brokers have stopped creating marketing materials because the home will not be on the market long enough to bother. In my opinion this is a shortsighted strategy and is harming both the public and the brokers. Every property needs to be marketed to the best of a brokers abilities to insure the seller of receiving the best offer possible.
Pending Listings for All NWMLS Counties
The market is definitely tipped in favor of the sellers right now. We all like a balanced market, but for those who are willing to roll up their sleeves and continue to plow through the hard work (and maybe even try something new), the rewards are out there.