Housing market "warming" with multiple offers in some areas

Home sellers around Washington state are starting to see something that had all but vanished in recent months: multiple offers. Several directors of Northwest Multiple Listing Service noted they are encountering more bidding wars in certain neighborhoods and price ranges, even though the latest figures show fewer sales and lower prices than a year ago. Shrinking inventory is spurring activity, with some brokers reporting a "shortage of good listings" and "signs of normality."

Northwest MLS members reported 7,154 pending sales during April, a 24 percent drop from a year ago when buyers were scrambling to take advantage of a federal tax credit that expired April 30, 2010. Going back two years, pending sales rose by a modest 3.4 percent; when compared to the same month in 2008, last month's pending sales (mutually accepted offers) jumped 15.2 percent.

"With healthy sales activity over the last several months, a shortage of homes coming on the market and low foreclosure activity, the stage has been set for a multiple offer market," observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Scott believes buyer confidence around job centers is back, noting one office had multiple offer situations on 82 percent of recent transactions in North Seattle. Northwest MLS directors in King County, along with representatives from Whatcom and Kitsap counties, also commented on the uptick in multiple offers.

The new report from Northwest MLS shows members in the 21 counties it serves added 10,083 new listings during April, down 20 percent from the same month a year ago. Through the first four months of 2011, nearly 11,000 fewer new listings have been added to inventory when compared to the cumulative total for the same period a year ago, a drop of 23.5 percent. Total inventory is down nearly 13 percent from a year ago.

Fewer buyers are making low-ball offers and sellers are being more proactive about pricing their homes to be competitive in today's environment. Both buyers and sellers are beginning to get the message of today's market, which is ‘be realistic'.

Brokers reported 4,581 closed sales during the month, of which 3,994 were single family homes. That's a drop of about 12.6 percent from the year-ago figure of 5,243 closings. The median price on the 4,581 completed sales for April was $237,000, a decline of 9.2 percent from the year-ago median price of $261,000. In King County, prices are down about 4.6 percent, from $340,000 to $324,500. The dips reflect a significant number of foreclosed homes and short sales that are in the mix.

An analysis by Windermere Real Estate shows distressed properties accounted for about 35 percent of home sales in King County in April, up from 21 percent a year ago. Bank owned properties account for much of the growth, according to Windermere's research. The analysis shows the median price of bank-owned homes that sold in King County in April was 49 percent lower than the median price of non-distressed homes. Short sales prices were 23 percent lower.

Many of today's buyers are not seeking loans that stretch their budgets as in the past, prompting banks and the secondary market to regain confidence, and eventually loosen their credit guidelines and roll out new loan programs. Buyers will have to look at making their first offer their best offer, even on bank-owned homes. The days of lowball offers will soon fade and short sales losses will tighten. As prices stabilize and inventories drop, many buyers will feel the chance at home ownership at bargain prices slipping from their grip.

Statistical Summary by Counties: Market Activity Summary - April 2011


4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)