While homebuyers are ready for action, sellers are less so as they remain in hibernation, one broker said about the latest statistics from Northwest Multiple Listing Service.
The report, which covers 23 counties in and around Washington state, showed brokers indicate record-low inventory is spurring multiple offers, rising prices, fewer sales and frustrated house-hunters.
Pending home sales decreased annually for the first time since March last year, falling 8.9% for the year. In fact, eight counties even reported double-digit drops in pending home sales as the volume of new listings failed to keep up with rising demand.
Over the past three months, brokers added 17,572 new listings, a decrease of 5.7% from the same three-month period last year. Also during that time, MLS members reported 22,393 pending sales, up significantly from the number of new listings.
“Our robust market has created extreme conditions, and we’re seeing frenzy hot activity on each new listing coming on the market,” reported J. Lennox Scott, John L. Scott chairman and CEO. “We’re also experiencing some of the lowest inventory levels on record.”
In fact, housing inventory just hit its lowest point ever, dropping below the 10,000 mark for the first time, Northwest MLS records dating back to 2004 shows. At the end of February Northwest MLS contained 9,091 active listings, down 25% from last year.
“Home sellers and buyers are complaining equally about the current market’s low inventory,” said MLS director George Moorhead, designated broker at Bentley Properties.
“Sellers are frustrated when they cannot find another home to match their current needs, or when a home goes off market so fast that the option of a contingent sale is not even considered,” Moorhead said. “That mood has escalated into a panic as other buyers up the ante – at times to a level that even causes real estate professionals to shake their heads.”
However, experts still expect an increase in listings could be on the way as the Spring home buying season takes off closer to May.
“For buyers, hope springs eternal, but the sellers are still hibernating,” suggested John Deely, Coldwell Banker Bain principal managing broker. “We’ve been experiencing continued high buyer demand as the spring market takes off early but sellers are on a more traditional schedule as listings slowly ramp up.”
“Sellers that have come to market ahead of the traditional spring market are reaping the benefits of less competition [from others who are selling] and a highly competitive buyer pool,” Deely said.
But it should come as no surprise that homebuyers are jumping the gun this home buying season as last month didn’t see its normal Winter slow down as the high-velocity market continued during January.
And another report from CoreLogic confirms that this Spring home buying season looks to be the strongest in recent memory.
With experts predicting a strong home buying season, will the late-Spring increase in supply be enough to feed the frenzy? Probably not.
“Home sellers are benefitting from the perfect storm of market conditions, but as the ongoing low inventory levels and precipitous drop in pending sales indicate, there simply are not enough homes to meet the demand of buyers,” Windermere Real Estate President OB Jacobi said. “All of this is pushing up home prices faster than anywhere else in the country and will continue to do so if we don’t see more homes come on the market this spring.”