Tight housing inventories in Seattle hint at a sellers' spring
Falling interest rates, strong job growth and declining inventories could be setting the conditions for a spring reprise of the painfully hot housing market of 2017, Seattle area real estate agents say.
Although home prices rose only modestly in Seattle and King County in January, some brokers report growing signs of a continued shift back to a seller's market, including the return of multiple offers, resumption of bidding wars, and open houses that feel more like stampedes.
On Superbowl weekend, a single home on Capitol Hill drew 280 prospective buyers on Saturday, said John Deely, principal managing broker with the Seattle office of Coldwell Banker Bain. "And we still had quite a bit of traffic on Sunday during the game," he added.
One key factor: a Seattle-area job market that continues to add new buyers, many of them well-paid. According to the U.S. Bureau of Labor Statistics, Seattle-area employment jumped 3.4% between December 2018 and December 2019, the second largest increase in the nation after the Dallas region.
Another factor: the buildup of local housing inventory that normally starts in January and February and peaks in the spring has been delayed, said Deely. Instead, "home sales are exceeding the volume of inventory coming onto the market," he said. "It looks like we're headed back to a market that looks a lot like 2017."
Those premonitions are bolstered by the January sales figures from Northwest Multiple Listing Service. Although the median home price in Seattle — $719,950 — was just 1.2% higher than in January 2019, according to figures released Thursday, closings were up 19% year over year and inventory fell by more than half, leaving barely a month's supply of homes on the market.
And that modest increase in median price for January had less to do with demand than with supply: In some areas, a large number of sellers of higher-end homes took their properties off the market in late 2019, which skewed the remaining supply toward the lower end of the price range, Deely said.
That seemed to be the pattern in Queen Anne-Magnolia neighborhood, for example, where the number of sales jumped 90% even as the median price fell 0.2% year over year, to $984,500.
But elsewhere, high-end sellers in some higher-end neighborhoods saw ample appreciation. In the Kirkland-Bridle Trails area, the median home price jumped 15.6% year over year, to $1.46 million.
Elsewhere in King County, falling inventories and rising demand were already pushing up median prices, especially in communities with less-expensive homes.
Across Southwest King County, for example, the number of homes on the market in January was half the level of a year ago, while the median price rose 12.3%, to $459,000.
Bargain hunters also continued to push up prices in areas just outside the core Seattle-Bellevue area. In Snohomish County, the median price of a home in January jumped 12.1% year over year, to $509,950. In Pierce County, the median price climbed 15.2%, to $380,000.
Deely says lower inventory and higher demand also seems to be bringing back another figure from the 2017 housing market: the "all-cash buyer wanting to close in a couple of weeks."