Typically, the real estate market in Western Washington tends to hit the brakes in the fall. But as we head into the third week of September and are fast approaching the "first day of fall" on September 22nd, home prices are soaring to new heights.
The median King County home sold for $742,950 last month, the second consecutive month of record-setting price growth, according to new data released last week by the Northwest Multiple Listing Service (NWMLS).
So, what is driving these exponential prices? A combination of record-low interest rates, low inventory, and high demand has resulted in homes selling faster and faster. Demand is being fueled by low mortgage rates, and with unusually high buyer interest this late in the homebuying season, buyers are moving much faster than this time last year to beat out competition and lock in low mortgage rates. This means homes are sitting on the market for much less time. It is not uncommon to see multiple offers and above list price offers on a home within its first couple of days on the market, especially for starter homes that are priced more competitively.
New listings had been steadily rising through the summer, which eased some of the pressure on prices. But last month, 529 fewer homes went on the market than the month prior across Western Washington. This low inventory has largely been caused by the recent plunge in mortgage rates, which resulted in many homeowners opting to refinance rather than sell. On the flip side, many home shoppers are looking to take advantage of low-interest rates, resulting in what few new listings are available to be snatched up quickly.
Whether this buying trend will continue is up in the air as supply is lagging behind demand, which appears to be the main obstacle. What is holding homebuying back now are chronically low levels of inventory and stiff competition for homes that do come onto the market.