Housing Bubble

Western Washington home sales rise

July 08, 2003

KIRKLAND, Wash. -- Despite last month's news of Washington experiencing its lowest rate of population growth in 20 years and claiming a share of the nation's second-worst jobless rate, home sales continued to sizzle during June. Sellers in western Washington accepted offers from 8,685 buyers last month for a 40.7 percent jump in pending sales compared to the same month a year ago, according to the latest figures from Northwest Multiple Listing Service.

All 14 counties in the MLS service area notched double-digit increases in the volume of pending sales (offers made and accepted but not yet closed). The number of sales, which includes single family homes and condominiums, outgained the total from 12 months ago by 2,510 units, when brokers reported 6,175 pending sales.

Interest rates continue to fuel sales, even though rates for both 30-year and 15-year mortgages edged up in the past few weeks. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage for the week ending July 3 was 5.40 percent. Although slightly higher than three weeks ago, when the rate was 5.24 percent -- believed to be the lowest level since 1971 when Freddie Mac began tracking benchmark rates -- last week's rate was more than a full percentage point lower than the year-ago average of 6.57 percent. On a $300,000 loan, the difference in last year's 30-year interest rate versus last week's rate of 5.40 amounts to a savings in monthly payments of about $225 per month, according to online mortgage calculators.

Closed Sales Jump 23.5%

Closed sales rose 23.5 percent, reflecting the strong pending sales activity of the past few months. Brokers area-wide reported 7,451 closings during June, up from the year-ago figure of 6,033 sales. Those transactions had a median price of $220,000, which represents a 4.8 percent gain from the year-ago figure of $210,000.

Four counties had double-digit gains in median prices compared to 12 months ago, led by Grant County where the median price jumped 21.6 percent. Other counties with double-digit increases in median prices were Snohomish (up 15.1 percent), Cowlitz (up 11 percent) and Thurston (up 10.6 percent).

Inventory Shrinking in Many Areas

Listing activity also surpassed year-ago totals, with MLS members adding 11,881 new properties to inventory during June. That represents a 4.2 percent increase from the year-ago total of 11,397 units. The selection of new listings includes 10,203 single family homes and 1,678 condominiums.

At month end, brokers represented 30,393 active listings in the MLS market area, about 4.5 percent more than twelve months ago when inventory totaled 29,075 properties. Despite the overall gain, ten counties reported having fewer active listings at the end of June than a year ago.

Nearly 37 percent of the current inventory is priced under $200,000. About half (49.1 percent) is priced between $200,000 and $500,000, with the remaining 14 percent listed at prices of more than $500,000.

Midyear Sales Outpacing Year-Ago by Wide Margins

For the first six months of 2003, pending sales are up almost 24 percent from a year ago. Members have reported 45,566 pending sales from January through June, which is 8,771 more transactions than the same period a year ago.

Closed sales are running 5,431 units (16.5 percent) ahead of a year ago. Through June, MLS brokers have completed 38,353 transactions, which compares to a total of 32,922 closings at midyear 2002. Prices for this year's sales area-wide are up 7.5 percent. The median price for sales of single family homes and condominiums through June was $214,950, which compares to the year-ago median price of $200,000.

San Juan County claims the highest year-to-date prices among the 14 counties in the MLS market area, followed by King County. The median price for this year's sales in San Juan County is $285,000, up $10,000 (3.6 percent) from a year ago. For King County, the median price for sales through this year's first six months is $263,975, which is about 5.2 percent higher than a year ago, when the mid-year figure was $251,000.

On average, it is taking about a week longer for sales to close this year compared to 2002. The average time on market this year is 67 days, which compares to a total of 62 days for sales that closed during the half of 2002. For June's closings, the average time on market was 66 days; a year ago, the average was 59 days.

Statistical Summary by Counties: Market Activity Summary for JUNE 2003

JUNE 2003	LISTINGS		PENDING SALES	CLOSED SALES
Single Fam. Homes + Condos	New Listings	Total Active	# Pending Sales	# Closings	Avg. Price	Median Price	Avg Days on Market
King Co.	5,350	12,275	3,870	3,312	$325,968	$273,250	60
Snohomish	2,002	4,907	1,441	1,266	$243,219	$221,950	55
Pierce	1,898	4,585	1,447	1,346	$198,718	$175,260	68
Kitsap	577	1,700	444	367	$231,101	$187,000	74
Mason	168	603	128	96	$145,216	$124,000	106
Skagit	315	920	208	163	$195,662	$167,000	80
Grays Hrbr	163	674	106	84	$106,151	$98,000	124
Lewis	107	466	84	76	$125,381	$108,450	95
Cowlitz	159	550	100	80	$136,806	$122,050	114
Grant	113	404	93	61	$113,226	$110,000	108
Thurston	443	996	369	286	$186,449	$165,950	60
San Juan	44	266	18	19	$296,743	$265,000	130
Island	221	792	167	143	$225,794	$188,500	115
Kittitas	74	284	53	44	$146,076	$134,750	112
Others	247	971	157	108	$181,465	$160,250	74
MLS Total	11,881	30,393	8,685	7,451	$260,262	$220,000	66

Source: Northwest Multiple Listing Service