Rising interest rates and inflation, coupled with slight improvement in inventory, may bring some normalcy to Western Washington’s frenzied housing market suggest some brokers with Northwest Multiple Listing Service. Here’s what local real estate expert, Frank Hawkins of Hawkins-Poe Real Estate, Fircrest WA, along with Northwest MLS experts see regarding the May market for potential buyers and sellers.
Last month’s sales of single-family homes and condominiums across 26 counties in the report had a list price to sales price ratio of 107.8%, which was down from March when it reached a 12-month peak of 108.2%. A year ago, the ratio was 106.6%. The latest MLS report showed a mix of positive and negative numbers. Member-brokers added 11,681 new listings of single-family homes and condos during April, the highest number since last July when 12,916 listings were added, prompting some upbeat comments.
Only two counties, King and Jefferson, had year-over-year drops in inventory. At month end, the selection of homes and condos in the database totaled 6,514, the highest level since September 2021 when there were 7,757 total active listings. Notably, the number of new listings (11,681) surpassed the number of pending sales (9,760), to help boost inventory. Pending sales were down about 7.8% from a year ago and down 3% from March.
Commenting on April’s improvement in total inventory compared to a year ago, James Young, director of the Washington Center for Real Estate Research at the University of Washington, suggested “This is evidence that interest rates are having a cooling effect on some parts of the suburban market and along the I-5 corridor. Young also noted a sharp decline in condo inventory in King County from a year ago – down about 35% countywide, with even greater shrinkage in Southwest King County (-49%) and the Eastside (-42%). With limited selection, sales in those areas also plunged, while prices increased. For condos, system-wide, the median price on last month’s sales was $485,000 (up 15.5% from a year ago); in King County, where more than 60% of sales occurred, YOY prices rose 12.6%, from $460,000 to $518,000. Area-wide prices for single family home sales (excluding condos) in King County also increased, climbing nearly 20% from a year ago, from $830,000 to $995,000.
Closed sales of homes and condos slid from a year ago, from 8,791 to 8,344 for a drop of around 5.1%. Young suggested higher priced homes requiring a mortgage are feeling some heat from recent interest rates. The NWMLS report shows there was about three weeks (.78 months) of inventory of homes and condos combined at the end of April. By this metric, that is the highest level in nearly 18 months. MLS data show there was .80 months of supply in October 2020. Despite the improving inventory, and in spite of rising interest rates, brokers report brisk activity and are not seeing prices ease much. Inventory is improving in most counties giving buyers more choices.