February 2022 is a Seller's market!
The number of for sale listings was down 4.3% from one year earlier and up 10.4% from the previous month. The number of sold listings decreased 12.5% year over year and increased 2.7% month over month. The number of under contract listings was up 33.4% compared to previous month and up 13.9% compared to previous year. The Months of Inventory based on Closed Sales is 0.7, up 15.6% from the previous year.
The Average Sold Price per Square Footage was up 7.3% compared to previous month and up 19.1% compared to last year. The Median Sold Price increased by 5.4% from last month. The Average Sold Price also increased by 8.7% from last month. Based on the 6 month trend, the Average Sold Price trend is "Neutral" and the Median Sold Price trend is "Appreciating".
The Average Days on Market showed a neutral trend, a decrease of 8.3% compared to previous year. The ratio of Sold Price vs. Original List Price is 103%, was the same compared to previous year.
It is a Seller's Market
Property Sales (Sold)
February property sales were 4523, down 12.5% from 5171 in February of 2021 and 2.7% higher than the 4402 sales last month.
Current Inventory (For Sale)
Versus last year, the total number of properties available this month is lower by 143 units of 4.3%. This year's smaller inventory means that buyers who waited tobuy may have smaller selection to choose from. The number of current inventory is up 10.4% compared to the previous month.
Property Under Contract (Pended)
There was an increase of 33.4% in the pended properties in February, with 6465 properties versus 4847 last month. This month's pended property sales were 13.9% higher than at this time last year.
Multiple offer situations are the norm for today’s home buyers, but February’s improving inventory and a slowing pace of price increases may ease some of the competitive pressures. In February, we saw an increase in listings, which could be an indicator that more sellers are primed and ready to go. Inflation, rising interest rates, and new financing options are bringing more sellers into the market. Pent-up demand led to big month-over-month gains in pending sales and more shrinkage in overall supply. Buyers in King County are jumping for joy over the nearly 40% increase in new listings that we saw in February compared to January. The result was a 31% increase in pending home sales month-over-month, as well. Sellers system-wide accepted 7,697 offers on their homes during February, about the same number (7,724) as a year ago, but a 21% jump from January’s volume of pending sales (6,350).
Prices continue to trend upward. The area-wide median price for last month’s closed sales of single family homes and condominiums were $585,000, up 14.3% from a year ago, and up 5.4% from January. Prices for single family homes (excluding condos) rose at a smaller rate, about 12.2%, increasing from $535,000 a year ago to $600,000 last month. Some areas were “clearly very popular” with buyers of single family homes because they had especially strong growth. West Bellevue, West Lake Sammamish, and Redmond on the Eastside, and in Seattle named Ballard, Magnolia, and Queen Anne. Condo prices soared nearly 23% area-wide, with a YOY jump from $399,000 to $490,250. With median prices up in all but three counties, buyers who are sitting on the sidelines waiting for prices to come down could be waiting some time. Seasonal trends will bring more listings, but there is a large pent-up demand as well.
Sellers are fuelling some of the demand. Every seller is generally also a buyer and many placed their real estate dreams on hold during the pandemic. They are now ready to take action and explore their next chapter. Market conditions will probably continue to favor sellers.
At the end of February, there were 3,461 total active listings in the MLS database, up from January’s total of 3,092 for a gain of nearly 12%, but down about 19.5% from twelve months ago when inventory included 4,298 listings of single family homes and condominiums. Measured by months of supply, there was about 19 days (0.67 months) at the end of February. That was the highest level since September 2021 when the MLS reported 0.75 months of supply. As we head into spring, it’s time for buyers to reenergize and go through a renewal of spirit as they begin or continue their home search. Buyers will be pleased to hear that more listings are on the way! Historically, the number of new listings bumps up in March and April, and then goes up even higher in May and June. Until inventory grows, expect a heightened focus on each new listing coming on the market. It seems even homes that wash up on the beach are getting multiple offers.
The sound of interest rate increases is ever nearer, and when coupled with the enormous price increases, the wringing of buyers’ hands will surely be a sad tale of 2022. There’s no relief in sight. In King, Pierce and Snohomish counties both listings and closed sales trended downward. Home prices continue to rise (up nearly 23%). This is concerning because we are just starting into the spring market. Expect that this year will be “a real squeeze for home affordability,” rising prices and projected increases in interest rates. This will just make it harder for buyers who are already struggling to have an offer accepted. The extreme dynamics of the market underscore the importance of buyers getting assistance from a knowledgeable, patient, persistent broker. Multiple offers are the norm.
Is the housing market going to have a correction? Here are 5 Factors why it is not
• High job growth and high pay. • Remote hybrid work models. • Consumer willingness to drive to locations along I-90, I-5, I-405. • Investor interest in residential rentals, plus political pushback on short-term rentals. • Increasing demand for second homes located in high amenity communities within driving distance, particularly the Eastside. Whether higher gasoline prices will have an impact on the market remains to be seen.
In the pre-pandemic past, increasing gas prices tended to create higher demand for shorter commute locations closer to the center of Seattle’s business district. This could cause a slight shift in the extreme demand for listings between King and Snohomish counties. Other unknowns are the impacts of rising mortgage rates and geopolitical tensions. Something on everyone’s minds is how the invasion of Ukraine might affect the housing market here at home. While these events have helped push mortgage rates lower, it doesn’t mean they are on their way back to the historic lows of a year ago. In fact, that’s almost guaranteed not to happen.
A year ago, the average rate was 2.81%. The Mortgage Bankers Association forecasts average rates will be slightly above 4 percent by the end of 2022. Mortgage data provider Black Knight estimates the average borrower with a 20% down payment would pay about $100 more a month on a new mortgage than one taken out at the end of last year due to rising rates and higher home prices. The pace of home price increases may slow from double-digit to single-digit percentages this year, conditions will likely continue to favor sellers. Freddie Mac believes short-term mortgage rates will stay low but are likely to increase in the coming months. The mortgage finance giant said geopolitical tensions caused U.S. Treasury yields to recede last week as investors “moved to the safety of bonds.” Along with inflationary pressures, Freddie Mac points to “the cascading impacts of the war in Ukraine” for creating market uncertainty.
Know the Top 5 Things You Need To Ask For When Getting Mortgage Rates.
George Moorhead of Bentley Properties talks about Inflations Causing Rates To Go Up and Is The Real Estate Market Crashing? Plus, Top 5 Things You Need To Look For When Getting Mortgage Rates.
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GEORGE MOORHEAD - Bentley Properties
[email protected]
Direct: 425-236-6777
14205 SE 36th St., Suite 100, Bellevue WA 98006
www.GeorgeMoorhead.com