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Published:
Thursday, July 5, 2012
Inventory shortages push up home prices
By Kurt Batdorf
HBJ Editor
A shrinking inventory of available homes has started to drive up median sales prices and volumes of single-family residences in Snohomish County.
“With inventory at such a low level, we are seeing buyers make multiple offers on well-priced homes as they come onto the market,” said George Moorhead, branch manager at Bentley Properties in Bothell.
Snohomish County's available home inventory sank from 4,548 units in June 2011 to 2,359 units this June, or 48.13 percent, according to data released July 3 by the listing service. MLS data indicates there is less than a two-month supply of homes for sale in Snohomish and King counties. Most analysts believe a supply of five to six months indicates a balanced housing market.
That tight inventory is driving sales activity upward.
MLS director Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain, said bank-owned property listings are nearly nonexistent compared to a year ago and “buyers are losing interest in making offers on short-sale listings” due to the extended time it takes to close such transactions. She said nearly every sale is a multiple-offer situation, “driving the price higher than the list price.”
June's year-over-year pending sales volume in Snohomish County rose 13.21 percent, from 1,279 units to 1,448 units, the MLS reported. Closed sales were up 18.36 percent, rising from 866 units to 1,025 units.
Median sales prices on single-family homes rose six percent from $250,000 to $265,000, the MLS reported.
The Snohomish and Skykomish Valley areas led the median price increase, improving from $199,950 to $230,000, or 15.03 percent. The Everett-Mill Creek-Mukilteo area saw median prices fall 3.98 percent, from $249,950 to $240,000, the MLS data showed.
Even though condominiums mirrored the trends of single-family homes with fewer listings and increased sales, that didn't translate into higher prices for sellers. Median sales prices for condos fell 10.13 percent, from $159,900 to $143,700, MLS data showed. The Lynnwood-Edmonds-Mountlake Terrace area posted a drop of 32.68 percent, falling from $203,513 to $137,000.
Northwest MLS directors credited several factors for contributing to brisk activity, with many of them mentioning inventory shortages.
“Consumers bothered by the lack of inventory are ready to make sure they do not miss out on the shift in the market,” said Darin Stenvers, office managing broker at John L. Scott in Bellingham.
Joe Spencer, area director for Keller Williams Northwest Region, cited two other factors crimping inventory.
“Low interest rates are prompting existing owners to refinance, while the negative equity position of another 20 to 30 percent of homeowners makes them unable or unwilling to sell,” he said.
A “fear factor” is also contributing to the tightened inventory, Haines said.
“Sellers who are interested in selling are reluctant to list their homes due to a fear of having few choices for replacement regardless of whether they are moving up or downsizing.”
MLS figures suggest prices may have bottomed out, particularly in areas close to job centers.
“Prices have been stabilizing in most markets and increasing rapidly in others,” Stenvers said.
The lack of the “shadow inventory” that was long predicted has not yet appeared and has led to a faster recovery for conventional sellers, he said. Haines agreed.
“We have not seen the materialization of what has been called 'shadow inventory' of bank-owned properties,” she said. “Moreover, we don't expect to see it anytime soon.”
A recent Bloomberg news report said the inventory of homes that are seriously delinquent, in foreclosure or owned by banks and not listed for sale tumbled in April to the lowest level in more than three years.
Kurt Batdorf: 425-339-3102, kbatdorf@heraldnet.com.
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