More buyers, few sellers, push up King County home prices
Home sales in November outpaced new listings, helping push prices up.
Seattle Times business reporter
On the last day of November 2011, 158 houses were listed for sale in Bellevue east of Interstate 405.
And on the same date this year? Just 62, according to the Northwest Multiple Listing Service.
Inventory — or a lack of it — is driving King County’s residential real-estate market, brokers and industry observers say. Statistics released Wednesday by the listing service underscore the impact.
Countywide, just 3,720 houses were on the market as of Nov. 30, 14 percent fewer than at the end of October and 43 percent fewer than a year ago.
Inventory always dips in winter. But it hasn’t been this low since at least 1999.
Closed sales in November, however, were up 19 percent year-over-year. There were 16 percent more closings than new listings last month.
“We’re not replacing what we’re depleting,” said Kathy Estey, managing broker in John L. Scott Real Estate’s Bellevue Main office.
“If you did that at the grocery store, pretty soon you wouldn’t have anything left.”
The imbalance between demand and supply helped push the median single-family sale price for November to $385,000, tops for the year. The previous high, $380,000, came in June.
“We’ve been in this same place all year — sales are up, but inventory’s down,” said real-estate blogger Tim Ellis of Seattlebubble.com. “At some point, you can’t have any more of a sellers’ market.”
Why aren’t homeowners putting their houses up for sale? Ellis, Estey and others offer several explanations:
Many homeowners bought just before the market crashed and still owe more on their mortgages than their homes are worth.
If the owners sold, Estey said, they’d most likely have to rent, and rents are rising. “They might as well stay in their homes and make their payments and take their [mortgage-interest] tax deduction.”
Other homeowners may not be “underwater” on their mortgages, but prices still haven’t recovered enough to motivate them to sell, said George Moorhead, branch manager at Bentley Properties in Bothell.
“They’re saying, ‘I want to try and recoup that 30 percent that I lost,’ ” he said.
Buyers outnumber sellers in part because more people are buying second homes for investment or retirement, but not selling their original residences, Moorhead said.
Another factor in the lack of inventory: Little new construction is coming to market.
Builders stopped building when the recession hit, Estey said, and only now are gearing back up.
So will supply increase anytime soon? Yes, but probably not until spring, said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies.
Rising prices mean fewer homeowners are underwater, he said, but many don’t want to be bothered with listing their properties during the holidays, or when it’s wet and nasty outside.
“They’re going to use that time to make their properties ready for the market,” Crellin said.
But sellers may find fewer buyers, he cautioned, if the “fiscal cliff” results in widespread tax increases or pushes the economy back into recession.
Other gleanings from the listing service’s November report:
•King County’s median single-family sale price of $385,000 was up 20 percent from November 2011. But that’s somewhat misleading: The median fell to post-crisis lows last winter, but has been in the $370,000-$380,000 range since June.
The year-over-year increase also reflects a change in the makeup of houses being sold.
Bank-repossessed houses accounted for just 6.6 percent of all sales last month, according to online brokerage Redfin, down from 18.5 percent in November 2011.
•While closed house sales were up 19 percent countywide compared with the same month last year, they soared nearly 41 percent in Seattle. Closings were up 91 percent in Queen Anne and Magnolia, 49 percent in Ballard and other northwest neighborhoods.
Crellin said he’s not surprised: “Look where the employment growth has been. It’s all been in downtown and South Lake Union.”
Buyers are more selective now about where they want to live, Ellis added, and more are choosing Seattle.
•King County condo inventory fell even more steeply than the single-family supply. It was down 56 percent from November 2011.
Condo sales volume and prices rose, but more modestly than houses. Closed sales were up 10 percent year-over-year, while the median sale price, $204,500, was up 7 percent.
•Single-family sales volume in Snohomish County was flat, with just three more houses changing hands this November than last.
The median price, $271,000, was up 11 percent.
Eric Pryne: firstname.lastname@example.org