January brought more good news for homebuyers. Prices were down, inventory was up and interest rates hovered near a nine-month low. Those factors drove more buyers into the market and resulted in an uptick in sales for the month. We’ll see how this transitioning market evolves as we head into the prime Spring home buying season.
The most expensive region in King County saw prices soften in January. The median price of a single-family home on the Eastside dropped 3 percent over last January to $910,000. It’s an excellent time for buyers to leverage the cooling market and negotiate terms that work best for their needs. Last January, 39 percent of the homes in this area sold for over asking price. This January, that figure dropped to 12 percent. With its favorable business climate and high rankings for both economic growth and technology capabilities, demand on the Eastside is projected to remain strong.
January marked the first time home prices in King County decreased year-over-year in seven years. The median price of a single-family home was $610,0000, a drop of 3 percent over the prior year. Inventory more than doubled. Unlike recent months, this was due primarily to more people putting their homes on the market, as opposed to homes taking longer to sell. Despite the surge in listings there is just two months of available inventory, far short of what is needed to meet demand.
The median price of a single-family home in the city was $711,500 in January, a decrease of 6 percent year-over-year. Despite a 107 percent increase in homes for sale compared to a year ago, Seattle continues to have the tightest inventory in King County with less than two months of supply. A booming economy that shows no signs of slowing continues to draw more people to the city. The area will have to significantly add more inventory to meet that growing demand.
The median price of a single-family home in January inched up 1 percent from last year to $455,000. That price is down from the median of $470,000 recorded in December. Snohomish County also saw a surge in inventory with the number of homes on the market double of what it was last year at this time.
This post originally appeared on the WindermereEastside.com Blog.
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent.
The Washington State economy continues to add jobs at an above-average rate, though the pace of growth is starting to slow as the business cycle matures. Over the past 12 months, the state added 96,600 new jobs, representing an annual growth rate of 2.9% — well above the national rate of 1.7%. Private sector employment gains continue to be quite strong, increasing at an annual rate of 3.6%. Public sector employment was down 0.3%. The strongest growth sectors were Real Estate Brokerage and Leasing (+11.4%), Employment Services (+10.3%), and Residential Construction (+10.2%). During fourth quarter, the state’s unemployment rate was 4.3%, down from 4.7% a year ago.
My latest economic forecast suggests that statewide job growth in 2019 will still be positive but is expected to slow. We should see an additional 83,480 new jobs, which would be a year-over-year increase of 2.4%.
Home Sales Activity
- There were 17,353 home sales during the fourth quarter of 2018. Year-over-year sales growth started to slow in the third quarter and this trend continued through the end of the year. Sales were down 16% compared to the fourth quarter of 2017.
- The slowdown in home sales was mainly a function of increasing listing activity, which was up 38.8% compared to the fourth quarter of 2017 (continuing a trend that started earlier in the year). Almost all of the increases in listings were in King and Snohomish Counties. There were more modest increases in Pierce, Thurston, Kitsap, Skagit, and Island Counties. Listing activity was down across the balance of the region.
- Only two counties—Mason and Lewis—saw sales rise compared to the fourth quarter of 2017, with the balance of the region seeing lower levels of sales activity.
- We saw the traditional drop in listings in the fourth quarter compared to the third quarter, but I fully anticipate that we will see another jump in listings when the spring market hits. The big question will be to what degree listings will rise.
With greater choice, home price growth in Western Washington continued to slow in fourth quarter, with a year-over-year increase of 5% to $486,667. Notably, prices were down 3.3% compared to the third quarter of 2018.
Home prices, although higher than a year ago, continue to slow. As mentioned earlier, we have seen significant increases in inventory and this will slow down price gains. I maintain my belief that this is a good thing, as the pace at which home prices were rising was unsustainable.
When compared to the same period a year ago, price growth was strongest in Skagit County, where home prices were up 13.7%. Three other counties experienced double-digit price increases.
Price growth has been moderating for the past two quarters and I believe that we have reached a price ceiling in many markets. I would not be surprised to see further drops in prices across the region in the first half of 2019, but they should start to resume their upward trend in the second half of the year.
Days on Market
The average number of days it took to sell a home dropped three days compared to the same quarter of 2017.
- Thurston County joined King County as the tightest markets in Western Washington, with homes taking an average of 35 days to sell. There were eight counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in five counties and was unchanged in two.
Across the entire region, it took an average of 51 days to sell a home in the fourth quarter of 2018. This is down from 54 days in the fourth quarter of 2017 but up by 12 days when compared to the third quarter of 2018.
I suggested in the third quarter Gardner Report that we should be prepared for days on market to increase, and that has proven to be accurate. I expect this trend will continue, but this is typical of a regional market that is moving back to becoming balanced.
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am continuing to move the needle toward buyers as price growth moderates and listing inventory continues to rise.
2019 will be the year that we get closer to having a more balanced housing market. Buyer and seller psychology will continue to be significant factors as home sellers remain optimistic about the value of their home, while buyers feel significantly less pressure to buy. Look for the first half of 2019 to be fairly slow as buyers sit on the sidelines waiting for price stability, but then I do expect to see a more buoyant second half of the year.
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the Unversity of Washington where he also lectures in real estate economics.
This post originally appeared on the Windermere.com Blog.
The real estate market continued to improve for buyers in King County and beyond in November. Interest rates dropped slightly, price increases slowed and inventory soared. It’s important to note that inventory increases, while significant, are being compared to the record low supply of last year. We’re still far short of the inventory needed for a truly balanced market, however buyers have greater choice and less competition than they’ve had in years. Sellers who price their home according to current market conditions continue to see strong interest. Heading into the holiday season, there’s something for everyone to celebrate.
The Eastside economy continues to be very strong. Heavy investment in commercial construction from companies such as Vulcan boost expectations that the area will continue to thrive. The median price of a single-family home in November hit $885,000 on the Eastside. Although an increase of 4 percent from a year ago, home prices have remained steady since this fall. With continued demand and only 2.4 months of inventory, the market has a long way to go to becoming balanced.
Price increases continued to slow in King County. The median single-family home price was $643,913 in November, an increase of 2 percent over a year ago. South King County, where the most affordable homes in the county are located, saw significantly greater increases compared to a year ago. North King County also posted greater increases than the county overall. Inventory has skyrocketed as the number of homes for sale in King County more than doubled year-over-year. While that’s good news for buyers, there is only 2.1 months of available inventory in the county, slightly down from October and not nearly enough to meet demand.
The median price of a single-family home in Seattle was $760,000 in November. This is up 3 percent from a year ago and slightly up from October. Inventory jumped 177 percent year-over-year however, at just two months of supply, the Seattle area has the tightest inventory in King County. With the city’s strong economy and lifestyle appeal, that’s not expected to change any time soon. Forbes recently named Seattle as the best place for business and careers in the nation. U.S. News & World Report ranked the University of Washington among the top ten universities in the world with Money Magazine rating Seattle the #5 Best Big City to Live In.
Inventory in Snohomish County continued to climb, surging 88 percent in November as compared to a year ago. That said, the area has fewer homes for sale than King County with just 1.8 months of inventory. This is still far short of the four to six months of supply that is considered a balanced market. The median price of a single-family home sold in November was up 6 percent from last year to $470,000, virtually unchanged from October.
This post originally appeared on the WindermereEastside.com blog.
Contact Kari Haas at 206-719-2224 to discuss your best strategy for buying and selling today!