September 2021 Snohomish County Market Report
Welcome to Fall in the Pacific Northwest!
With the rain, football and Pumpkin Spice lattes all coming into season, I wanted to take a moment and also catch you up on what is going on in the real estate market here locally.
There is a nationwide inventory shortage of homes that is continuing to apply pressure to prices, as well as to drive significant competition for buyers.
I am getting questions everyday right now on how our current market compares to that of 2008, so I have gone ahead and pulled some historical data so you can see the contrasts of the markets from that time to now. They really could not be more different.
Here’s the key data stats:
Average Price: $685,000 (+20.9% year over year)
Average Price in 2008: $384,000
Home prices have climbed massively in the last year, and over the last two years are closing in on 40% increases in certain areas. This is making home affordability an issue for many buyers unless they have a home that they are selling as well where they have built up equity and can apply that equity to their new purchase.
If you put 3.5% down on a $685k home you are looking at $3800+ in a monthly mortgage payment, inclusive of taxes and interest.
New Listings: Up 13.1%
We are seeing more listings hitting the market compared to the same period last year, and a lot of this is driven by sellers that paused their selling plans when the pandemic hit last year, but have decided to move forward with those plans now.
Homes for Sale: 540 (-49.9% year over year)
Homes for Sale in 2008: 5581
While the new listings are up, the number of homes that are for sale are down drastically compared to the same period last year. This shows us that homes are being sold at record pace, and that you need to move quickly when a home does come on the market that you like.
Days on Market: 12 as an average, 5 as the median (-58.3% year over year)
Days on Market in 2008: 84 days
We are continuing to see a record sales pace from when homes are listed to when they go under contract. The offer review date (where a seller lists a home and waits a certain amount of time before reviewing offers) is still in play on many new listings. Without the offer review date the days on market median would likely be one day or less.
Months of Inventory Supply: 0.5 months (-58.3% year over year)
Months of Inventory Supply in 2008: 7.9 months
The inventory level continues to hover around ½ a months supply, which is applying pressure to the pricing and resulting in the continued double digit price increases we have seen for years now. When inventory levels are super low, prices will always be on the climb.
Remember that most economists agree that a 6 month inventory supply of homes represents a balanced or neutral market that is not in favor of the buyer or the seller. With the inventory levels so low, it could take years to get back to a balanced market and you will likely continue to see prices climbing until this occurs.
Percent of List Price to Sale Price: 105.4%
We are seeing escalations of 3-10% over list price depending on the area and the type of home, and the market average is just a touch over 5% above the listed price.
Having a strategy as a buyer for how to handle multiple offers and escalations is extremely important and is something that you need to consult with your agent on before you even start the home buying process.
The big takeaways….
Record low inventory levels are likely to keep prices climbing in double digit pacing
We are in an aggressive sellers market and will likely be there for years to come
Buying a home now is the best way to insulate yourself from the inflation and escalating prices. The home becomes your hedge to the market continuing to climb
Having a strategy as a buyer BEFORE you start looking at homes is more important now than ever. Invest the time upfront so you don’t miss out on the perfect home when it does come on.
Mike Novak
(360)-393-0396
mike@novakteam.com