Housing market still hot as supply of homes for sale drops

EVERETT — Snohomish County’s housing market stayed hot this fall as home buyers competed over a dwindling supply of houses. High prices in King County pushed some shoppers north into Snohomish County, putting more pressure on the market here.

In November, the median sale price of a home in Snohomish County was $399,991. That is slightly lower than the peak of $405,000 in July. However, it is still well above the median price of $350,000 from 12 months ago.

With builders hard pressed to find open spaces for new homes from Tacoma to Everett, there is no end in sight to the region’s price squeeze.

Home sales east of Alderwood and south of Mill Creek and Snohomish led the county in sales price, with a median of $580,000 in November. Edmonds, Lynnwood and Mountlake Terrace followed with a median of $440,000. Everett, Mukilteo and Mill Creek had 240 sales — the most in the county and a median price of $400,000.

The number of homes for sale dropped again, with only 1,263 homes listed for sale in the county in November, according to the Northwest Multiple Listing Service, which aggregates real estate listings across the region.

At the current pace of sales, buyers would exhaust that supply in less than five weeks. The county’s inventory has not been that low since March, and it was never that low in all of 2015, when the market always had six weeks and often eight or more weeks worth of homes for sale.

Generally, the market does not favor buyers or sellers if it has six months of inventory, said Peter Orser, director of the Runstad Center for Real Estate Studies at the University of Washington.

However, buyers are constrained by the lack of supply and rising prices, he said. “The existing home inventory is locked up because people aren’t going to put their home on the market without their next house secured.”

Next year does not promise to get much better from Tacoma to Everett, according to Realtor.com, a real estate news website owned by News Corp and affiliated with the National Association of Realtors.

Prices are projected to rise by 7.4 percent while sales are expected to go up by 3.4 percent, according to the site’s forecast.

The Portland and Vancouver area is expected to see even bigger increases, according to Realtor.com.

The Federal Reserve interest rate is expected to go up over the next year, which would make borrowing money to buy a home more expensive. That could trigger a rush of buyers trying to beat further rate hikes.

“Every time interest rates increase 0.5 percent we see these surges because buyers become anxious about increasing rates — but on a historical basis rates are still amazing,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate in Seattle.

The biggest effect would be on first-time buyers, especially low-income people, Orser said.

Already, “it’s first-time buyers who have been missing” the most from the market, he said.

Prices are rising faster than incomes, so people shopping for a new home start with a disadvantage. Homeowners can roll the equity they have in their current home into a new house. Would-be homeowners do not have that.

Rental rates are high across the region. So, if buyers are priced out of the market now, they could have difficulty saving money for a down payment, Orser said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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