In my real estate trend posts over the past year I’ve been keeping a close eye on inventory rates and months of supply. Months of supply means how long it would take for the current inventory of homes listed on the NWMLS to sell based on the current pace of home sales. A “normal” or balanced market (a market that isn’t particularly favoring buyers or sellers) is said to have about 6 months of supply. Over the past couple years we’ve generally seen an increase in both new listings and closures on a monthly basis as compared to the same month in the prior year. With that, every time we’ve started to see an increase in months of supply, market analysts start predicting we’ll be heading back to a buyers market but in reality we’ve never really even hit a balanced market recently and the latest data is no exception.
Spring and summer are the hottest times for the market and when you’d generally expect lower months of supply. When the NWMLS released some of the latest fall statistics we see that in October 2019 the months of supply is just 1.73 months for the 23 Puget Sound counties they service. King and Snohomish counties are the primary influences of the market statistics due to highest volume of inventory, with their months of supply representing 1.74 and 1.51 respectively. This is even more of a sellers market compared to October 2018 when King County had 2.4 months of supply and Snohomish County was at 2.14. No longer am I seeing predictions of buyers or balanced market shifts like I’ve mentioned in the past, but instead this is being called the “new normal” of our market.
The demand for homes can bee seen by looking at the volume of pending sales in October at 9,517 compared to the new listings added which was 8,394. Nine counties serviced by the NWMLS had a double-digit jumps in pending sales compared to this time last year. The data aligns with my personal anecdotes of taking my home buyer clients shopping recently, especially in the affordable and mid-price range homes. I’m seeing multiple offer scenarios frequently with potential buyers using strategies such as escalation clauses, waiving inspection, and waving the financing contingency whenever possible. With the strong jobs market and low interest rates this makes sense, and it is an especially great time to sell for home owners in the affordable to mid-price range.
In terms of closing volumes and price there were 8,335 closings reported in October. This is an increase over both the previous month (increase of 4.7%) and October 2018 (increase of 4.1%). For 2019 YTD, closed sales are slightly behind the same time period in 2018 totals by 1,140 closings which is 1.4% lower. The area-wide median price for closings in October was $420,000. This is on-par with the median closing price for September but is 7.7% .
To sum things up it is a sellers market and with the holidays approaching we won’t expect to see a big influx of inventory until Spring 2020. This means extra competition for buyers so if you are in the market to buy it is useful to have an agent on your side monitoring new listings and getting you in to see properties you like ASAP when they come on the market.