Housing activity in the Northwest sped up at the start of despite fears that tax reform would slow it down, according to the latest report from Northwest Multiple Listing Service.
Although interest rates are rising and inventory is still tight, the local market in the Northwest remains competitive, according to the report, which covers 23 counties in and around Washington state.
“It seemed like there would have been a chilling effect on the real estate market at the start of 2018 with the newly revised tax laws limiting mortgage interest deductions,” said Gary O’Leyar, Berkshire Hathaway HomeServices Signature Properties designated broker and owner. “Not only did the revisions not have a chilling effect, if anything, the local market has been even hotter and more competitive than last year at this time.”
During February, the Northwest saw a decrease of about 2.8% in overall pending home sales as housing inventory dropped a full 12.9%. But other key indicators of the market, including new listings, closed sales, and selling prices, all showed gains in February compared to 12 months ago.
While pending home sales were down, closed sales increased to 5,548 sales in February, up from 5,358 sales this year. Median home prices on those sales surged a full 14.8%, rising from $335,515 last year to $385,000 in February.
“As was the case the last two years, home values spiked in February, thanks to a cyclical low point in supply,” said Robert Wasser, Prospera Real Estate owner/broker. “Prices are now back around the peak levels of last summer, and cyclically speaking, are headed for additional increases until summer arrives.”
Overall, the Northwest holds only about 1.4 months of supply, however new construction could soon change that. The Pacific Northwest is currently booming with new home construction, bucking the national trend of newly-built single-family homes which dropped 7.8% in January.