Are We Seeing a Seasonal Cooldown?

Some good news for buyers in the data reported by the NWMLS this month. Following annual trends, it looks like things are shaping up for a bit of a fall market cooldown. What that means is we’ve observed a month over month decrease in the core metrics I report in this blog: new listings added, available inventory, pending sales, closed sales, and median price. This decrease aligns with what we typically see for this time of the year. The back-to-school season, holidays around the corner, and shorter days means fewer people are interested in buying and selling homes during the fall and winter months. The data from August is showing the seasonal decline is already starting, so let’s take a look:

Price

In August of this year, NWMLS brokers closed 10,571 sales with a median price of $579,000. This was a drop of $10,000 from the July median price. That said, compared to the same time last year the median price has risen from $490,000 for an increase of 18.2%! I don’t really anticipate prices going down but I think since we saw such significant month-over-month price increases every month since the beginning of 2021, we may be slowly returning to more average annual increases. Around the end of spring, Zillow reported we had a national average price increase of 13.2% over the past year. This was a record high since they began recording data in 1996. Prior to the pandemic, average nationwide increases would be expected around the 4% mark annually. Hotter markets up and down the west coast have been above this for awhile now, but seeing approximately 20% YoY growth for our area is impressive.

Inventory

The monthly report from the NWMLS showed that fewer new listings were added in August as compared to July of this year. The month-over-month decrease of new listings added was 11.5% and comparing August 2020 to August 2021 we saw a decrease of 4.2%. Total inventory also fell 6.6% from July to August, and a considerable decrease of 22.6% from last August. I think that last number really reflects how quickly inventory is moving; which is represented by months of inventory. At end of August 2021, there were 7,425 active listings compared to 9,591 in August 2020.

For all residential homes (including condos) we saw a slight increase in the months-of-inventory for August. The average months of inventory across all NWMLS member counties in August was 0.7 and 0.62 in King County. During the peak months of 2021 that number was closer to 0.5 or two weeks for King County, so buyers will see this as a bit of reprieve. Note that a “balanced” buyers/sellers market is 4-6 months of inventory so we’re still far away from that number, and have been for years now.

Conclusion

The data points in this post are reflected in what I’m seeing out there with my buyer and seller clients right now. We still have lots of pent up demand and listings getting lots of early attention, but across the board I’m seeing fewer offers and fewer jaw-dropping price escalations. If you’ve been on the fence as a buyer or were frustrated by the seemingly endless all-cash price escalations from earlier this year, I think now is a great time to be looking. I’m winning lots of multiple offer scenarios for my clients and a lot of that comes down to a solid strategy and great communication. I’ve written about my strategy and approach on my buying a house in 2021 page. As always feel free to contact me if you have any questions about buying or selling in this market – there is never any pressure.

-Jennifer

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