What a year! With most of 2020 behind us now we are entering that time of the year where we start reflecting. I feel very grateful to have been an essential business during these challenging times; and I feel equally grateful that this year I’ve helped more clients safely buy or sell a home than ever before. On the flip side this year has been incredibly challenging for many business owners and employees in the service industry because many of those businesses were not deemed essential. As we wind down the year I encourage us all to think about how we can support local businesses or just simply check in on those in need. While the world might slow down a bit for the holidays, the Puget Sound real estate market has yet to show us that desire with October home sales reaching record levels. As of September of this year Northwest Multiple Listing Service (NWMLS) agents closed 10,072 sales and the October numbers I will report below are even higher! Compared to September 2019 that is a 28% increase in closings! All data below is provided by the NWMLS. Let’s dig in a bit deeper:
For October 2020 the median home price across our region was $500,000 – up 19% from October of last year. For the higher volume urban areas, King and Snohomish counties saw median prices of $685,000 and $589,989 respectively. If we exclude condos from the mix, the median home price across all member counties increased slightly to $515,000 – a 20.2% increase from last year. The average price in King County (including condos) comes out on top as usual at $853,099.
Speaking of high prices, the luxury home market set records in October as well with 1,004 home sales closing at or above $1MM between King, Pierce, and Snohomish counties!
We will get into active listings, pending listings, and inventory levels below but I believe some of this price increase is due to the multiple offer scenarios occurring with many listings out there right now. The perfect storm that has allowed for prices to increase so quickly is the lack of inventory and record low mortgage interest rates. I also believe Seattle being a tech hub coupled with amazing tech stock gains this year means a lot of potential buyers out there may be cashing in RSUs and buying a new home.
If you are thinking about taking advantage of the current market conditions right now and listing your house, my advice is to have a deep conversation with your agent regarding an offer review period. While it can be advantageous in certain hot neighborhoods right now, I think it can also be off-putting to buyers. Setting an offer review period is ultimately up to what the seller wants and is comfortable with but I always present a number of listing strategies, detailing the pro’s and con’s of each.
Active and Pending Listings
The market supply is being kept in check by buyers rushing to place offers on new listings. With 11,039 pending sales last month and only 10,428 listings added in the same month, so you can see how quickly homes are going pending. King County led the pack here with 3,857 closings and 3,833 pending sales in October. I’ve had a number of my own listings go pending within 24 hours, with multiple offers, so this does not come as a surprise.
After September closed out the NWMLS reported that September 2020 saw more closings of any month since 2018. October came in even higher with 10,806 closings across the NWMLS’ 23 member counties. Now here is the wild part of current supply. If you look at my last market update from the summer I was reporting some extremely low months-of-inventory such as 1.16 months in June. What that means is that it would take about 1.16 months to deplete the current inventory in June. Now we are seeing such a small number we are talking about weeks of inventory instead of months. In Snohomish county there is currently only about two weeks worth of supply, or .49 months-of inventory. Across the region we’re currently looking at only about .8 months of inventory, down from 1.73 months this time last year. A balanced market is represented by 4-6 months of inventory!
This is a wild time for the Puget Sound real estate market and an amazing time to sell. I’ve personally closed over 25 transactions this year for both buyers and sellers so I have a really good grasp of what is going on out there right now. I would love to help you sell your home and capitalize on the higher prices and high demand for homes. If you are a buyer and concerned about the current market know that I’m actively helping a number of clients find their dream home right now. Now might not be the easiest time to buy a house but it is totally possible with the right strategy and an experienced real estate agent.