Last month brokers expected local residential markets to wobble, even slightly, to give buyers more negotiating power.
After seeing new data from the Northwest Multiple Listing Service, these tipsters may eat their hats off.
By some measurements, King County was more of a sellers’ market in November than at any time since the residential cooling began 18 months ago.
There have been more buyers chasing fewer homes for sale than at any time since May 2018.
“Just when I thought we had started a ‘new normal’ that leveled things up a bit for buyers, we had a ‘November surprise’,” said Mike Grady, president of Coldwell Banker Bain, in a statement. communicated. “It might be an aberration, but maybe not.”
To some extent, this is no surprise: inventories tend to decline towards winter. But there were also fewer new listings in November than the same month the previous three years, even at the height of the Seattle-area housing market boom.
Buyers moved quickly to get hold of the homes that were on the market.
The number of closed home sales in King County is up nearly 12% from the same period last year.
In King County, sales activity has focused on the more expensive homes. In Seattle, where prices are higher than other parts of King County, pending sales are up nearly 20% year-over-year.
Seattle’s median selling price edged down 3.3% from a year ago to $ 735,000, continuing a multi-month swing between year-over-year growth and decline. (Last month, the median Seattle home sold for $ 775,000, up 3.3% from the year before.)
Compare that to South King County, where in one neighborhood, a middle house sold for less than $ 400,000. Prices south of Seattle were up 17.2% year-over-year last month.
At the top of the market, however, that’s a different story.
Sales of leading homes, including those on the Eastside, were greased last month by the next increased excise tax for high-end properties, brokers said.
Currently, a flat rate excise tax of 1.28% is applied to all home sales. But on January 1, 2020, this flat rate will become a multi-level tax. Homes sold for over $ 1.5 million will be taxed at a higher rate – 2.75% of the value between $ 1.5 million and $ 3 million and 3% of the value over $ 3 million.
On a $ 2 million house, for example, the state’s excise tax bill would drop from $ 25,600 now to $ 32,050 after the new year.
The prospect of the new tax rate prompts some sellers to close deals quickly before December 31.
After that point, the excise tax hike, combined with other fees, means that it might make more financial sense for potential sellers to renovate than to put their home on the market, said Anna Riley, broker. Windermere Luxury.
Riley recently listed several Eastside homes in the $ 2.5-6 million range.
“TThe excise tax was imposed on every seller, ”she said. “Some salespeople were motivated to go ahead with an offer they might otherwise have pushed back a bit harshly.”
Closed sales on the Eastside were up 10% in November compared to the same period last year, the biggest such increase in six months. The trend is even more striking towards the pinnacle of the luxury market: On Mercer Island, where the middle house cost $ 2.25 million, closed sales were up 65% year-over-year.
Across the Eastside, home prices edged up from a year ago to reach $ 900,000. In recent months, prices have fallen from a spring high of $ 950,000.
Meanwhile, brokers said they are starting to notice a new class of buyers entering the local condo market, which is concentrated in Seattle and the Eastside.
Sales of closed condos in the Eastside climbed nearly 30% last month, as prices there fell 5.9% year-over-year to $ 480,000. In Seattle, condo sales remained stable. Prices were down 3.2% from last year to $ 460,000.
The new entrants are “jet-setters and investors”, looking for pied-à-terre and lucrative opportunities in a market they deem undervalued, said John Deely, senior management broker at Coldwell Banker Seattle Bath.
“Seattle is fast becoming one of those destination places for this lifestyle,” he said, especially for Californians tired of wildfires and an income tax. State.
The Seattle exodus continued to reduce inventory and push prices up in Pierce, Kitsap and Thurston counties. Among those counties, Kitsap recorded the largest year-over-year price increase, 16.7%, to $ 385,000. Thurston County followed with an 11.1% increase to $ 349,000; prices in Pierce County rose 10.15% to $ 379,950.
The cramped market in southern Puget Sound is painful for first-time buyers, who may struggle to compete with Seattle transplants, said James Young, director of the Washington Center for Real Estate Research.
While in general November saw many buyers competing for scarce stocks, this may not be the case at the end of the year. Brokers pointed to upcoming developments that could start to make sellers “a little anxious,” said Jeff Strand, broker at Queen Anne Real Estate – including political uncertainty related to the impeachment process and the presidential election. Mortgage rates, too, should eventually rise from near record lows.
In the future, he said, “ssellers may be willing to lower their asking price a little. They are looking to the future: will I be able to sell next year?