Frank Hawkins of Hawkins-Poe Real Estate, Fircrest, WA, along with the Northwest Multiple Listing Service (NWMLS) provide insight on current market trends.
Average days on the market, (the period of time from when a property goes on the market and the date it goes under contract), and the average months of available inventory are both on the rise. They are still less than a third of the way toward indicating a shift from a sellers’ market to a buyers’ market.
Days on the market today are approaching one month, while a more normal market is 3 to 4 months. It is also a general industry standard that inventory numbers from 4 to 6 months are considered neutral. Less inventory than that is considered a sellers’ market and greater inventory than that is considered a buyers’ market.
NWMLS reports: “Measured by months of supply, there are only two months of inventory, an improvement from one year ago when there were only about three weeks (0.75 months) of supply, but still well below the four-to-six months of inventory real estate analysts use as a measure of a balanced market. King County has 2.02 months of supply, but the other counties in the Puget Sound region have less than that. There is 1.61 months of supply in Kitsap County, 1.63 months in Snohomish County and 1.84 months in Pierce County.”
The crazed increase in home prices has slowed. Prices are stabilizing with a chance of seeing them decline from the unsustainable growth we saw in 2021 and the first half of 2022. In 2021, Pierce County home prices increased by nearly 20%, while in the first half of 2022 Pierce County home prices increased by over 25%. This is a market correction. This is not the market capitulation we saw in 2008.
The underpinnings of the Real Estate Market—homeowner equity, local employment numbers, population growth, and business expansion are all on solid ground and expanding.
NWMLS reports: “Brokers reported 7,504 closed sales during September, down 27% from a year ago when they notched 10,289 completed transactions. The median price on last month’s sales across the 26 counties in the report rose about 5.1% from a year ago, increasing from $570,000 to $599,000. Prices are down slightly from the August median of $600,000 and from this year’s peak of $660,000 that was reported in May.”
All this is good news for home buyers. With reduction in real estate price inflation, higher interest rates are the home buyer’s only remaining headwind.
Frank Hawkins, President of Hawkins-Poe, Inc., summarized market conditions by saying, “I firmly believe that this will only be a short period of correction. Homeowners in the Puget Sound area shouldn’t be too concerned, especially given that 64% of them are sitting on over 50% of home equity. The local economy remains strong, AND motivated sellers are seeking corrected pricing in order capture buyers who are currently in the marketplace as increasing mortgage rates are reducing buyers purchasing power.”