No relief in sight for Seattle-area homebuyers as prices soar in May
June 6, 2016
Marc Stiles, Puget Sound Business Journal
In King County, the median price of single-family houses that sold in May was $560,000, an increase of nearly 16.5 percent over a year ago, and in Snohomish County the median price jumped 11.4 percent to $389,950.
The Northwest Multiple Listing Service on Monday released this data, which is the latest sign that the Puget Sound region’s housing market remains super charged.
“The May housing market was not just hot, it was frenzy hot,” John L. Scott Real Estate Chairman and CEO J. Lennox Scott said in a statement.
The issue remains a lack of supply. A year ago, there were around 10,250 houses and condos for sale in the four-county metro region. Now there are only 7,800.
This isn’t stopping people from buying. Pending sales in the metro area increased nearly 6.2 percent to around 9,150.
The lack of inventory is making multiple-offer situations the norm, and this is causing buyers to become more aggressive with offers. This concerns some brokers, according to George Morehead, the designated broker at Bentley Properties in Bothell.
As the gap between pricing and value widens, some would-be buyers may overextend themselves. Plus, appraisers are struggling with a lack of comparable sales versus multiple offers that escalate well beyond the listing price, said Moorhead. Since lenders base loans on appraised values, buyers will likely need to make up the shortfall.
In Pierce County, the median sales prices in May for single-family homes increased 7.8 percent to $275,000, and in Kitsap County prices increased 8.4 percent to $289,250.
It’s a similar story for condos with median sale prices jumping between 9 percent and 13.7 percent in three of the four counties, with Pierce County logging the biggest jump. The median sales price did drop nearly 21.5 percent last month in Kitsap County, though that is based on a small number of just 21 sales.
Brokers do not see an easing in the inventory crunch “for some time to come,” said Frank Wilson of John L. Scott in Poulsbo. Even if the Fed raises interest rates, he believes shortages will persist because of the backlog of buyers.