The Northwest posted a surge in first-time homebuyers thanks to rising rents and an influx of relocating workers, according to the latest report from the Northwest Multiple Listing Service.
“The cost of renting versus buying is another force that is fueling strong sales gains,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate.
The Northwest isn't the only place reporting a rise in rental costs, with a recent Zillow (Z) report stating that rents outpaced home values in 20 of the 35 largest U.S. housing markets.
“In most cases buying a home costs significantly less than renting and the good news is the monthly payment will remain the same as rents continue to rise. Numerous renters are entering the home buying market. Many who are renting today think they can’t afford a home. They need to think again and get pre-qualified for a loan to see just what they can afford,” said Gain.
Northwest Multiple Listing Service members reported 11,453 pending sales last month, the highest volume since August 2005 when members posted 11,546 mutually accepted offers.
Additionally, last month also marked the fourth consecutive month of 11,000-plus pending transactions.
Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”
The area-wide median price for last month’s 9,163 closed sales of single-family homes and condos was $321,500, up 7.4% from a year ago, when the median price was $299,335 and up 1.4% from May’s figure of $317,000. Since January, prices are up 13.6 percent.
Meanwhile, the uptick in sales is causing a greater shrinkage in inventory.
For the Northwest MLS market overall, only 2.2 months of inventory existed at the end of June.
