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'Frenzied' Puget Sound housing market has 'slim pickings'

Posted by Tom Covello on Thursday, October 14th, 2021 at 9:44am.

Housing activity in the Puget Sound region remained "very active" last month even as more inventory hit the market, according to a new report from the Northwest Multiple Listing Services (NWMLS).

While a slight cool-down in the market was detected in the late summer with less homes going under contract, the activity has bounced back with the report showing that brokers added a total of 11,373 new listings for single-family homes and condominiums in September. 

However, inventory remains historically low in the competitive market with prices only projected to increase in the next year. NWMLS brokers reported a total of 7,757 active listings in September, slightly up from August's high of 7,425 active listings but down 14.8% compared to the same time last year. Inventory for single-family homes in King County took a steep plummet in September, with total active listings down 32.5% from a year ago.

Across all 26 Washington counties surveyed in the report, there is only 0.75 months of inventory. The agency noted that it hasn't seen more than a one month supply in inventory since July 2020, when it reached 1.04 months."The housing market intensity for each new listing will continue its upward trajectory as the first of the year approaches," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, in a news release Wednesday.

With slim pickings in inventory and fierce competition, prices have continued to increase. In the past year, the median sales price increased by 14% — or $70,050 — across the 26 counties surveyed by the NWMLS.

And it's not just King County and the surrounding areas that have experienced steep price increases: "outer suburban" areas along Interstate 5 are also seeing growth, with home prices in Kittitas County jumping by more than 26% compared to a year ago.

The report did note that the market for condominiums — which saw huge declines last year due to the COVID-19 pandemic and less people living in dense, urban areas — has stabilized, with an increase in both sales and prices. In King County, NWMLS showed a 20% jump in the number of condos that went under contract last month compared to a year ago, with median prices rising by 8% to $466,501.

Other nearby counties also saw huge increases in condo prices compared to a year ago: Kitsap jumped by 28.5%, Snohomish was up by 17.8% and Pierce County prices increased by 16.7%. Priced out of buying a single-family home, it is likely that more residential buyers are turning to condominiums, leading to a strong rebound in that market.

"We continue to see a migration of buyers to suburban markets which has resulted in significant year-over-year price growth in areas such as Shoreline, Lake Sammamish, Auburn, Skyway, Woodinville, and Burien," said Matthew Gardner, chief economist at Windermere Real Estate. "It's likely that buyers are drawn to these areas because housing is more affordable than in the urban neighborhoods closer to Seattle and Bellevue."

Experts waned on whether the frenzy-level activity would continue into the winter and holiday season, which is typically slower.

"Buyers should consider staying in the market, if they can, as homeowners who are selling in the last quarter of the year tend to be highly motivated," said John Deely, executive vice president of operations for Coldwell Banker Bain.

Callie Craighead, SeattlePI

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