Neither the snowstorm nor the increase in mortgage rates dampened buyer demand in February. Lack of inventory continues to be a frustration as there are way more prospective buyers than there are homes for them to buy. As a result, prices continued their upward climb.
While the number of homes for sale edged up, it was still far shy of demand. This is especially true of single-family homes. There were 41% fewer homes on the market in King County in February than the same time last year. In an indication of just how competitive the current market is, the entire Eastside ended the month with just 224 homes for sale. Inventory was even more scarce in Snohomish County where the entire county had just 283 homes for sale, a drop of 58% from a year ago. Condo shoppers have more options as the number of units on the market in King County increased 56% from last February.
With inventory so slim, competition is fierce. 57% of King County properties that sold in February sold over the list price. The median sale price paid was 9% over list price. Both are record highs. Competition doesn’t show signs of easing any time soon. A hike in interest rates is expected to only increase buyer urgency. An average rate of 3.02% for a 30-year fixed-rate mortgage for the week ending March 4 is the first time since July that the benchmark mortgage rate climbed above 3%.
The enormous imbalance between supply and demand sent single-family homes prices soaring throughout the region. In King County, the median home sold for $750,000, 11% higher than a year ago. Most areas in the county saw double-digit increases. Home prices on the Eastside jumped a whopping 28%. Seattle home prices were up 9%. In Snohomish County, the February $624,075 median price was up 21% from a year earlier and far surpassed the previous all-time high of $599,990 set in January.
With seller review dates, escalation clauses and multiple offers now the norm it’s more important than ever for buyers to work with their broker to create a strategy that balances their wants and needs with their budget.
The charts below provide a brief overview of market activity. If you are interested in more information, every Monday Windermere Chief Economist Matthew Gardner provides an update on the US economy and housing market. You can get Matthew’s latest update here.