Scarce listings drive King County home prices to new highs
March 7, 2016, Sanjay Bhatt, Seattle Times Business Reporter
The median price of single-family homes sold in King County hit a new all-time high last month — $514,975 — amid record-low inventory, heralding even more intense bidding wars ahead in the typically busy spring home-buying season.
Ominously, the more affordable Snohomish and Pierce counties also face a historically low inventory level, according to a Seattle Times analysis of data from the Northwest Multiple Listing Service.
One widely-watched gauge of supply — the ratio of active listings to pending sales — hit its lowest level since at least 2003 in all three counties in February, according to the Times’ analysis. King and Snohomish counties each had less than a month’s supply, while Pierce had just over a month’s supply.
The historic shortage of homes for sale, combined with a recent drop in interest rates, has caused the dramatic run-up in prices, experts say. In February, King County had 1,923 homes listed for sale, the MLS reported, but a greater number of pending sales that hadn’t yet closed: 2,299.
“We cannot continue to sell more homes than we list,” said Matthew Gardner, chief economist at Windermere Real Estate. “When are we going to start seeing some listings? That scares me more than anything else.”
Single-family home prices in the city of Seattle jumped 24 percent over the year to a median $644,950. Despite an older housing stock, Seattle is ground-zero for the region’s job growth.
Expedia and Weyerhaeuser are moving their suburban headquarters to Seattle. Amazon.com recently opened its new high-rise campus in South Lake Union. And Silicon Valley titans like Facebook and Apple have established satellite offices here.
Not surprisingly, areas close to the city center and to the water saw the biggest jump in median family incomes from 2010 to 2014, according to a recent report from Redfin, the Seattle-based brokerage. That’s helped home prices in Seattle outpace King County in price gains: King County’s median is 7 percent above its 2007 peak, while Seattle’s median is up 29 percent, based on MLS data.
Median prices in parts of Seattle popped even more: Central Seattle and Beacon Hill both saw prices climb over the year nearly 40 percent, while North Seattle’s median soared 42 percent.
The current run-up in prices isn’t like the 2006-2007 bubble, Gardner said, because buyers have more skin in the game and lenders are vetting borrowers more closely. Still, Gardner expects price gains to slow down eventually.
“We’re in for another crazy spring real estate market,” said J. Lennox Scott, chairman and CEO of the John L. Scott brokerage, in a statement. “It’s like déjà vu all over again. We’ve seen this pattern for the last three years, but the lack of inventory is taking its toll on homebuyers.”