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Snohomish County housing prices continue to trend up as inventory shrinks

Northwest Multiple Listing Service figures show that the median Snohomish County price for single-family houses and condos increased 18% from March 2012 to March 2013.
A Mill Creek home waiting for a buyer. According to Northwest Multiple Listing Service figures, home prices continue to increase. Photo credit: News of Mill Creek.

Northwest Multiple Listing Service figures show that the median Snohomish County price for single-family houses and condos increased 18% from March 2012 to March 2013. The median price for last month’s closed sales of single-family homes and condos in Snohomish County was $269,950 compared to $228,500 in March of 2012.

The year-to-year increase was even more for Everett, Mukilteo, and Mill Creek. Over the past year prices for single-family houses and condos increased 21% in this multiple listing service area. According to Northwest Multiple Listing Service figures the median price for last month’s closed sales of single-family homes and condos in this part of the North Sound was $270,000 compared to $222,600 in March of 2012.

According to a April 4, 2013 Northwest Multiple Listing Service news release, “Brokers added 9,332 new listings to the Northwest Multiple Listing Service database during March, but pending sales topped that number to further crimp inventory and trigger competitive bidding among buyers who are flocking to open houses.”

"All price ranges are feeling a lift," reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. Northwest MLS director John Deely echoed that comment: "We are seeing many homes in Seattle meet and exceed pre-bubble price levels," stated Deely, the principal managing broker at Coldwell Banker Bain in Seattle.

"The recovery continues on a slow and steady pace in most areas and surging hard in others," concluded Darin Stenvers, vice chair of the MLS board.

"The market continues to be incredibly competitive with at least one in four buyers paying cash," noted MLS director OB Jacobi. "For those not paying cash, the average down payment is between 20 percent and 50 percent," he added.

Demand continues to outpace supply, creating high absorption rates, Deely stated, adding, "Open houses are drawing large crowds."

According to the Northwest Multiple Listing Service news release, “Brokers say even distressed sellers are receiving multiple offers for their homes.”

"As one of my brokers told me, when you have 12 offers on a short sale, it pushes the price of the home up to market value. This is clearly reflected in the appreciation we continue to see in prices across the board," Jacobi stated.

Stenvers, the branch manager at John L. Scott’s Bellingham office, also noted the impact of distressed homes (including bank-owned and short sales) on the market. "They are not going away, but have slowly leveled off, leaving room for a sustainable return to the ‘normal’ market volume of 2001-2004," he reported. "This should help the market to continue its recovery, but appraisals will remain a looming concern for buyers until comparable sales can close," he added.

The Northwest Multiple Listing Service news release stated, “Inventory is depleted area-wide, with only 18,500 active listings in the MLS system at month end. That total is down by almost 6,400 listings year-over-year for a 25.7 percent drop. Counties with the largest declines include Clark (down 46 percent), Snohomish (down 43.8 percent) and King (down 42.4 percent).”

“System-wide, there is less than a two-month supply of homes, with the tightest selection in Snohomish (0.93 months), King (1.03 months), Clark (1.81 months) and Pierce (1.68 months) counties. In general, analysts consider four-to-six months of supply to be normal.”

The upward spike in prices is largely the result of limited supply. "Whenever we get down to a severe shortage of homes for sale, we get double-digit home price appreciation," observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

"The old supply and demand equation is fully in play," observed Stenvers. Citing data from the chief economist for Stewart Title, Stenvers said the pressure on rental markets will continue to drive buyers back into home ownership for the next 15-24 months, magnifying inventory shortages. He said the northern regions of the state (encompassing Whatcom, Skagit, San Juan and Island counties) are experiencing declining inventory and rising sales consistent with a recovery.

Stenvers also noted most economists agree it’s not a matter of if interest rates will go up, but only a question of which quarter of 2013 the rise will occur. "If inventory stays low and interest rates climb, buyers may feel they missed out on the bargain they are looking for and sales my slow again by the end of the year," he surmised. Nevertheless, he pointed out with home sales expected to return to 2003-2004 (pre-bubble) levels, and median prices not yet reaching those same levels, "homeownership is still very attractive and remains a solid investment."

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, currently serves 21 counties in Washington state.

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