Signs Of A Calmer Housing Market Emerge In Western Washington: NWMLS

KIRKLAND, WA — There are some signs of calming for Western Washington's wild housing market, thanks to improving inventory and a slower rise in prices, according to a new report. The Kirkland-based Northwest Multiple Listing Service released its findings for May this week, detailing the latest real estate trends across 26 Washington counties.

The level of relief for buyers varies greatly by county — and often within counties — but the NWMLS said overall listings last month were up almost 10 percent across the state, making for the best inventory since last June. Snohomish and Douglas counties doubled their active listings over that timeframe, with Cowlitz, Island and Walla Walla not far behind.

At the same time, overall pending sales declined nearly 12 percent from May 2021, and closed sales dipped by about 3 percent, the report found. Realtors said the trends are a positive sign, ideally leading to a less frenzied market.

“The significant increase in the number of homes for sale has some speculating that the market is about to implode, but that is very unlikely,” said Matthew Gardner, chief economist at Windermere Real Estate. "What’s more likely to occur is that the additional supply will lead us toward a more balanced market, which after years of such lopsided conditions, is much needed."

Even as the market potentially allows buyers some breathing room, median prices for homes and condos are still on the rise and increased by a combined 12.8 percent since last May, the NWMLS reported. The surges were far sharper on the Eastside and in North King County. However, the largest of them may be in the rear-view mirror, and the pace of growth has recently slowed.

"In May, we saw a slowdown in the steep price increases we have witnessed so far this year," said John Deely, an executive vice president at Coldwell Banker Bain. "Rising interest rates coupled with inflation are causing buyers that rely on conventional mortgages to reconsider the affordability, and possibly take a break or look in the areas that are less costly. We seem to be heading from an extreme seller's market toward a more balanced market with increasing inventory."

In King County, Deely noted the median price for single-family homes rocketed from $775,000 to $995,000 between January in April but remained virtually unchanged in May. Homes are still selling above their asking price, but fell from 108.2 percent in March to 105.7 percent in May.

Prospective buyers searching instead for a condo continue to face some difficulty across the region, with available inventory down 9 percent over the year and prices up 15 percent, averaging $500,000.

The luxury housing market, meanwhile, has shown little sign of a slowdown, which one realtor attributed to a backlog of buyers with more cash to spend. During each of the last three months, more than 300 properties priced at or above $2 million found buyers.

Prices also vary greatly within many of the state's "micro markets," which is especially apparent in the state's most populous county. NWMLS said median home prices around Dash Point and Federal Way were $565,400 last month, compared to $2.6 million on Mercer Island. In the area encompassing Shoreline and Lake Forest Park, year-over-year prices soared more than 50 percent, topping the $1 million mark for the first time.

Still, realtors said better inventory and seasonal trends should both lend to a better outlook for buyers in the coming months.

"Though there is still a steady backlog of buyers in the market, the increase in inventory means each home will receive fewer offers and may not go pending the first weekend," said J. Lennox Scott, CEO of John L. Scott Real Estate. "Seasonal home price flattening is also in play, which means premium pricing is off for most properties."