By Marc Stiles, Puget Sound Business Journal – January 6, 2016
The Puget Sound region’s housing market ended 2015 the way it started, with a lack of supply causing sharp price increases.
In King County the median price of single-family homes that sold in December hit $508,000. That’s up more than 15 percent from December 2014, according to data the Northwest Multiple Listing Service (NWMLS) issued Wednesday. Housing prices are climbing from Tacoma to Everett, due to strong demand and falling inventory. In December, the number of houses and condos on the market in King County was 39 percent lower than December 2014.
In Kitsap County, the median price increased nearly 15 percent to $269,950. Pierce County saw an 11-percent increase to $252,500. And prices climbed nearly 8 percent to $358,000 in Snohomish County. John L. Scott Real Estate CEO J. Lennox Scott doesn’t expect the market to taper off. In fact, he is forecasting a more intense housing market in 2016.
The number of houses and condos for sale in the four counties was way down in December, with inventory 39 percent lower in King than a year prior. Inventory was down 28 percent in Pierce, 29.6 percent in Kitsap and nearly 33 percent in Snohomish County.
In a balanced market, there would be a four- to six-month supply of homes on the market, but in King County the inventory is less than a month. NWMLS officials peg the supply in Snohomish County at just over one month, and in both Pierce and Kitsap there’s enough supply for around 1.75 months.
“With the backlog of buyers waiting in the wings, any new inventory that comes on the market will be snapped up immediately,” said Frank Wilson, managing broker at John L. Scott in Poulsbo. He expects 2016 will be “very stressful” for some buyers. In addition to a lack of supply and climbing prices, they’ll have to contend with rising interest rates and a growing number of qualified buyers.
Every 1 percentage point increase in interest rates decreases buying power by about 10 percent.
John Deely, principal managing broker at Coldwell Banker Bain in Seattle, thinks the low inventory in Seattle will send many first-time buyers to the suburbs.