"In my 37 years working in the real estate industry, I have never seen inventory this low," Diedre Haines, regional managing broker for Coldwell Bank Bain-Snohomish County and a member of the Northwest Multiple Listing Service board of directors, said in a news release.
Year-over-year active listings for single-family homes and condos in Snohomish County shrank from 2,925 units in February 2012 to 1,529 this February, down 47.8 percent, the MLS reported Tuesday. In the same period, pending sales for homes and condos combined fell 11.1 percent, from 1,391 units to 1,236 units. Closed sales were down 3.6 percent, from 698 units to 673 units.
Compounding the shortage is the fact that about one-fourth of the MLS inventory is classified as "distressed," meaning they're short sales or bank-owned. Such homes are sometimes in need of significant repairs or have prolonged transaction times, which may make them less desirable to buyers.
While the dwindling supply has buyers scrambling, it's been good news for sellers. Across Snohomish County, median sales prices for homes rose 18.4 percent, from $238,750 in February 2012 to $282,617 this year. For condos, median prices rose 20.5 percent, from $132,000 to $159,000.
"Low supply and high demand continue to drive our market," Northwest MLS director John Deely said in the news release. He said multiple offers are the "rule rather than the exception" for new listings in core urban areas that are priced well.
"The market is struggling to provide enough inventory for anxious buyers seeking to take advantage of low interest rates," said Dick Beeson, principal managing broker of RE/MAX Professionals in Tacoma. Considering that 25 percent of the selection is distressed, he said, "It leaves some buyers with tough choices."
OB Jacobi, president of Windermere Real Estate Co., noted the month's supply of homes in Snohomish and King counties has dipped to about 1.2 months, well below the six-month threshold that many in the industry consider to be normal. He said the supply is at its lowest level since May 2005 during the peak of the housing boom.
"The impact of low inventory levels is stiff competition among buyers, often resulting in homes selling for well over asking price," he said. The imbalance also leads to rising median prices.
J. Lennox Scott, chairman and CEO of John L. Scott Inc., attributes surging sales and prices to several factors, including positive job growth, historically low interest rates and fewer homes being listed.
"This restriction of homes for sale is prevalent in the price ranges where more than 90 percent of activity is taking place, causing prices to rise," he said.
Haines said there are fears of an "artificial bubble" being created.
"Many of the sales that are occurring are cash buyers, tenants already living in the homes they are buying, investors and investor groups purchasing in bulk," she said. "We are beginning to see an increase in for-sale-by-owner transactions." That means many sales are not in the NWMLS database, which can skew the numbers of actual sales.
Prices up 9.7% nationwide
U.S. home prices rose 9.7 percent in January from a year earlier, the biggest increase since 2006, a real estate data analysis firm reported Tuesday.
The best-performing area of the country was Phoenix, where prices of single-family homes, including foreclosure sales, were up 22.7 percent, CoreLogic said.
Next was Southern California, with prices up 12.2 percent in the Los Angeles-Long Beach-Glendale market and 12.1 percent in the Riverside-San Bernardino-Ontario market.
The January price increase was the 11th straight and the largest year-over-year increase since April 2006, before the housing market crashed.
Los Angeles Times