Brokers reporting a return to some competitive multiple offers as mortgage rates decline By Jennifer Hawkins, key2see Team
NWMLS reports, “Pending sales around Washington state reached the highest level since October and surged nearly 44 percent from December, according to the January report from the Northwest Multiple Listing Service. Last month’s 5,776 mutually accepted offers were down about 9 percent from a year ago, but brokers seemed encouraged by the ‘favorable spike.’”
This data is encouraging, as the interest rate sticker shock that the home buyers experienced mid-year of 2022 has been mitigated some by three events—all of which are advantages to the home buyer:
1. Rates: Mortgage interest rates have settled down a bit from their peak levels in late spring 2022. This is a sign of leveling off inflation after a 40-year high, also the government’s typical response to a recession (two quarters of down markets).
2. Seasonal influx: Listings always surge in the spring and summer. The holiday lull has passed, the weather tends to dry out and life returns to gardens, making it the most popular time to list. This always relieves some pressure for the buyer that has been surfing the lowest of the low inventory levels of the middle of winter.
3. Return of some buyer terms: Sellers have also adjusted to and become more receptive to the idea of more favorable buyer-friendly negotiations and terms. Inspections have returned and sellers are okay with it!
NWMLS reports, “The selection of properties, based on the number of total active listings in the NWMLS database, improved significantly from a year ago, rising from 3,092 listings to 8,220 at month end. That total, which includes 7,179 single-family homes and 1,041 condominiums, was down about 13.2 percent from December’s selection.”
That’s good news for buyers, who are enjoying more selection and more time to shop because of the increase in inventory. I am optimistic that the downturn of the market is over and that spring will bring a very active market. Days are getting longer, mortgage interest rates have declined, and buyers will have more time to make their decisions. However, the inventory levels aren’t to “buyer’s market” levels yet, so don’t snooze on “the one” for too long buyers; we are still very much in a seller’s market.
First quarter also brings an increase in sales price for some counties. Pierce County experienced an increase in the average sales price, reporting $571,154 for January 2023 compared to $552,671 in December of 2022. Kitsap County also experienced an increase in the average sales price, reporting $568,012 up from $543,733 in December of 2022. Econ 101 is still very much in effect; supply and demand wins yet again!
It is not often that we report both a positive market for both buyers AND sellers, but this might be just that!