Washington’s housing market slowed down a bit in January but still managed to eclipse the sales mark from one year ago. According to Northwest Multiple Listing Service statistics, there were 7,820 pending sales in January compared to 7,724 in 2017, for a modest increase of 1.24 percent.
Although those sales still represent an increase, some brokers are reading the tea leaves and anticipating that rapid gains in the market are set to ease up a bit.
“As interest rates rise, the rate of price increases will slow down,” predicted Northwest MLS Director Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor, in a market report.
Despite that anticipated downturn, Beeson believes that sparse supply combined with Washington’s growing national and international appeal will help to hold the market together. Including the 1.24 percent growth in home sales, the total number of active listings at the end of January stood at just 8,037 homes, which was down nearly 18 percent from last year. Industry experts note those listings represent just a 1.5-month supply, compared to the 4-6 month supply that typically constitutes a balanced market.
“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB Jacobi, the president of Windermere Real Estate, in the report. “I actually believe 2018 will bring us moderately more listings, which should help offset the growing demand that continues to result from the area’s strong economy.”
That current housing shortage is being exacerbated by high rent costs that have rippled out of urban locations and into more suburban and rural areas.
“What it costs to rent small spaces astounds me,” added Beeson, who noted that Tacoma and Olympia recently wound up on lists of top cities for increased rents during 2017. “Investors, because rents are high, compete daily with home buyers, and they often win the deal in the lower priced homes. Because they are buying all cash, they consistently beat out buyers who have to get loans.”
With that competition helping to stoke a smothered market, prices have continued to maintain a positive trajectory in all but a few counties. In January, there were 5,325 closed sales in Washington with a median price of $363,500. That median price represents an 11 percent increase over last year. Twelve counties reported similar double-digit increases.
In Lewis County in January, there were 88 new listings with 233 total active listings on the market. There were 128 sales pending and 78 closed sales with an average price of $204,667, and a median selling price of $195,350. That local housing market represented an 11.4 percent decrease in listings over last year and a 30.1 percent increase in pending sales. Overall, median sales prices have increased by 3.28 percent, and experts believe there is roughly a three-month supply of inventory.
In Thurston County in January, there were 411 new listings and 462 active listings. That market included 459 pending sales and 287 closed sales with an average price of $264,937 and a median price of $280,000. Those numbers represent a 27.81 percent decrease in listings from last year and a 3.97 percent decrease in pending sales. However, the market did show a 9.8 percent increase in median sale price. Experts believe there is just 1.61 months of housing inventory left.
“The month of March can’t come soon enough for home buyers,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, in the MLS report. “In March, the number of new listings will bump up substantially from the low number of new listings typical for winter months. Better selection will start in March as we enter the spring housing season.”