June 2022 is a Seller's market!
The number of for sale listings was up 120.3% from one year earlier and up 47.7% from the previous month. The number of sold listings decreased 20.1% year over year and decreased 1% month over month. The number of under-contract listings was down 14.4% compared to previous month and down 25.8% compared to previous year. The Months of Inventory based on Closed Sales is 1.5, up 189.6% from the previous year.
The Average Sold Price per Square Footage was down 2.7% compared to previous month and up 10.4% compared to last year. The Median Sold Price decreased by 2% from last month. The Average Sold Price also decreased by 2.9% from last month. Based on the 6 month trend, the Average Sold Price trend is "Neutral" and the Median Sold Price trend is "Neutral".
The Average Days on Market showed a neutral trend, an increase of 8.3% compared to previous year. The ratio of Sold Price vs. Original List Price is 101%, a decrease of 4.7% compared to previous year.
It is a Seller's Market
Property Sales (Sold)
June property sales were 8101, down 20.1% from 10135 in June of 2021 and 1% lower than the 8181 sales last month.
Current Inventory (For Sale)
Versus last year, the total number of properties available this month is higher by 6428 units of 120.3%. This year's bigger inventory means that buyers who waited to buy may have bigger selection to choose from. The number of current inventory is up 47.7% compared to the previous month.
Property Under Contract (Pended)
There was a decrease of 14.4% in the pended properties in June, with 6957 properties versus 8127 last month. This month's pended property sales were 25.8% lower than at this time last year.
Housing statistics from Northwest Multiple Listing Service for June show signs of a shifting market, creating opportunities for some buyers. Compared to a year ago, brokers reported a healthy jump in inventory, double-digit drops in both pending and closed sales, and the smallest year-over-year (YOY) increase in prices since June 2020.What the changes mean in general terms, are more houses on the market, longer market times, stabilizing home prices, fewer showings and open house visitors, fewer offers at one time, and more price adjustments. It's nice to see a more balanced market for buyers. Increase in new listings, more price reductions, and still favorable mortgage rates as factors that are creating opportunities for buyers. The return of financing and inspection contingencies are now the norm.
Brokers added 14,223 new listings of single family homes and condos to inventory during June, up from both May, when they added 13,075 homes system-wide, and a year ago, when they added 13,111 properties to the database. Last month's total was the highest volume of new listings since May 2019 when brokers tallied 14,689 new listings. At the end of June there were 13,405 active listings of single family homes and condominiums in the Northwest MLS database, which includes 26 of the state's 39 counties. That's more than double the inventory of a year ago (6,358 listings), and the best selection since October 2019 when buyers could choose from 14,379 listings.
Both pending sales (mutually accepted offers) and closed sales declined from a year ago. MLS members reported 8,937 pending sales during June, down 27.5% from the year-ago total of 12,328, and down 3.8% from May. Closed sales also fell from a year earlier (down about 17.2%), but last month's total of 9,047 completed transactions nearly matched May's volume of 9,096.While there was a decrease in closed and pending sales in June, there is no reason to panic as we continue to move toward a more balanced market.
Having the standing active inventory rise above the closed and pending categories in June means we are finally building inventory, which is healthy for the marketplace. It slows down the steep price appreciation we have been seeing and provides a bit more time for buyers to look at more properties. The latest MLS report shows area-wide prices rose about 10.4%, from a median price of $589,000 to $650,000. On a percentage basis, that is the smallest year-over-year (YOY) gain since June 2020 when prices rose around 5.7%.
King County had the second highest sales price last month, coming in at $851,000. That represents a 9.1% increase from a year ago, but a slight decline (3.4%) from May's figure of $880,000. Median prices topped $1 million for both Vashon and the Eastside map areas, as well as for areas encompassing North Seattle and Lake Forest Park.
Prices of single family homes (excluding condos) system-wide rose about 10.5% from a year ago. Condo prices increased by a similar amount (10.2%).
Prices are "leveling out," but we are still not a buyer's market by far. Some of the slowdown in pending and closed sales is simply part of a seasonal cycle this region experiences in June and July once school is out and people begin to travel. In fact, travel is hitting peak numbers this summer as the world continues to open.
While we have seen an increase in market time to almost a month and a half, there is a long way to go for the market to reach a neutral level which is typically found between four and six months of inventory. Often change is good for one group but bad for another. In this case the change is good for buyers but does not really hurt sellers. Sellers who correctly price their home in today's market are still able to get top of market prices. Buyers have more choices and may see a little bit of flexibility on price and terms from the seller.
With higher interest rates and more inventory, we are seeing sellers becoming more flexible in what terms they will accept. It is an excellent time for buyers who were discouraged in the past frenzied market to step back in and find a home. Buyers are not waiving financing and inspections like they were prior to this market shift. Everything is coming together for buyers in the market, with increased selection of available listings and fewer multiple-offer situations to navigate. A strong contingent of buyers is taking note of new listings and poised to put an offer on the right home, in the right condition, at the right price. Expecting much will be made of the numbers that showed a significant increase in active listings during June, it's important to keep things in perspective.
The pandemic heavily influenced the housing market with inventory levels essentially drying up in 2020/2021. In analyzing June's data, single family home listings in the tri-county area of King, Pierce, and Snohomish counties rose more than 144% compared to a year ago. This still represents the fourth lowest number of listings in any June for this region since 1999. The market is trending back to some sense of normalcy. The increase in listings has started to slow the rabid pace of price gains that we have experienced. This is a good thing, not a cause for concern.
Both rising mortgage rates and home prices hurt affordability for many buyers," stated Nadia Evangelou, senior economist and director of forecast at the National Association of Realtors, in an interview with a reporter for MarketWatch Picks. With affordability concerns and persistent inventory shortages, she said more people are renting, but rents are rising sharply.
"For institutional buyers, rising rents translate to larger profits," Evangelou explained, adding, "However, a larger market presence of institutional buyers increases market competition for first-time home buyers. Research has shown that institutional investors may be taking a significant portion of homes that would otherwise be sold to first-time and lower-income buyers.”
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GEORGE MOORHEAD - Bentley Properties
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Direct: 425-236-6777
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