Housing market activity is truly off the charts. Right now, with low inventory rates and an increasing number of buyers looking to purchase, homes are selling above list price at an average of over 18%. It is the reality of the market, which last month saw double-digit increases in new listings, sales, and prices.
Although inventory increased in December, it still couldn't keep up with buyer demands, which the Northwest Multiple Listing Service (NWMLS) described as insatiable. Year over year, the median sales price in the four-county metro rose between 9.6% to $740,000 in King and 17.1% to $439,000 in Pierce. Prices in Snohomish and Kitsap counties both increased by about 12% to $573,495 and $426,000, respectively.
Not surprisingly (as more and more people realize they can work from home and therefore do not have to live close to their work in a metropolitan center) the counties that saw the largest increases were outlying counties like Kittitas — up 30.4% to $452,500 — and Pacific, where prices jumped nearly 38% to $282,500.
At the end of December, there were only 4,732 active single-family and condominium listings across all 25 Washington counties, which is down 44% from December 2019. Winter is normally described as the "slow season" for residential real estate, so for demand and supply to remain this out of balance for this time of year is incredible. Although there was a 62% increase in King County's new listing inventory compared to a year ago, high buyer demand absorbed any relief it would have supplied.
Just how hot is the Seattle area housing market going to be in 2021? The velocity of this year's winter market is a signal of what's to come. Additionally, now that the holiday season is over and a new year has begun, local housing markets will see a surge of new home buyers entering the market. And with more professionals working remotely, Smaller cities stand to be beneficiaries of the move to remote work and remote life. Regions where state income taxes do not exist, like here in Washington State, will be increasingly attractive for these kinds of workers. California’s high state income tax rates provide incentives for people to relocate out of California if they can, which is one of the reasons why we are seeing a large influx of buyers looking to relocate to Washington State from this area of the US.