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High Demand and Low Inventory

Buyer anxiety keeps rising: This article about high buyer demand and low inventory was originally published on April 6, 2015. Two years later, buyer demand is higher, inventory is lower and prices have climbed more than 20%.

KIRKLAND, Washington – Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. Figures just released for March show 11,408 pending sales during the month while only 10,505 sellers listed their homes for sale during the same period.

“The frenzied market has returned and is in full bloom in King and Snohomish counties. Listings are selling as soon as they come on the market for sale,” said J. Lennox Scott, chairman, and CEO of John L. Scott Real Estate.

Multiple Offers

The multiple offer market has become commonplace on well-priced new listings, observed John Deely, the principal managing broker at Coldwell Banker Bain. However, he cautioned, “Some sellers are pushing pricing boundaries and are not seeing the same action as their well-priced competition.”

Deely, a member of the Northwest MLS board of directors, said buyers are flooding into the Greater Seattle market due to abundant job opportunities. He also attributed the high demand to low-interest rates and skyrocketing rents. “Some high-demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” according to Deely.

This market is pushing buyers beyond their comfort level, suggested Northwest MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo. “They’re being asked to write offers faster, for more money, and with less help from the seller and the result is stress. Multiple offers only add to their stress.”

The market imbalance is played out with rising prices, an acute shortage of listings — particularly in areas close to job centers — and bidding wars.

The volume of new listings (10,505) added during the month increased by 9.4 percent compared to a year ago but fell short of satisfying demand in many areas. At month-end, inventory in the MLS service area that encompasses 23 counties was down almost 14 percent, dropping from 19,736 listings to 17,007. Twelve counties reported double-digit declines from this time a year ago.

Measured by months of supply, there are about 2.5 months of inventory area-wide. In King County, there are slightly more than 1.3 months of supply, and in Snohomish County supply stands at just 1.7 months.