2016: A great year for sellers, but less so for buyers of South Sound real estate

After months of impressive sales and median price data, the final tally for South Sound home sales in 2016 should come as no surprise: It was a good year for the real estate market.

So good, in fact, that sales of single-family residences rose nearly 20 percent in Thurston County and almost 13 percent in Pierce County over 2015, according to 2016 data released Thursday by Northwest Multiple Listing Service.

And median prices followed suit in both counties, rising 10 percent last year in Pierce County and 8 percent in Thurston County, the data show.

Driving the residential real estate market last year was a good economy, combined with low levels of inventory that translated favorably for sellers. Months of inventory — an estimate of how long the supply of homes would be exhausted at the current pace of sales — finished 2016 at slightly more than two months in Thurston County and just under two months in Pierce County.

A residential real estate market that doesn’t favor either buyers or sellers is thought to have months of inventory in the four-to-six month range. Because of those low levels of supply, buyers, particularly in King County, had a rough go of it.

“Inventory shortages challenged brokers and buyers throughout 2016,” Northwest MLS officials said in a news release. “Brokers said depleted inventory often led to competitive bidding and multiple offers for homes in the most desirable areas.”

In a letter to The Olympian this month, Michael Wilson of Tumwater decried the state of the rapidly increasing costs of housing.

“That’s nice for the sellers,” he said about rising median prices, “but what about the buyers and those who cannot afford housing in this market? What if the price of food was climbing this fast?”

South Sound showed significant median price gains last year, but nothing like King County. Backed by an extremely strong economy — more than 2,000 single-family residences sold for $1 million or more — median price rose more than 14 percent last year to $548,000. And despite little to no inventory — months of inventory was around one month all year — 27,137 single-family residences sold last year, up 1.66 percent from 2015, the data show.

A closer look at the South Sound 2016/2015 single-family residence data:

▪ Pierce County: Sales rose 12.6 percent to 14,954 units from 13,273 units, while median price climbed 10 percent to $275,000 from $249,950. Months of inventory for Pierce County last year was 1.74 months.

▪ Thurston County: Sales rose 19.25 percent to 4,907 units from 4,115 units, while median price climbed 8.14 percent to $264,950 from $245,000. Months of inventory for Thurston County last year was 2.14 months.

Number of single-family residences that sold for $1 million or more in 2016:

▪ King County: 2,879.

▪ Pierce County: 52.

▪ Thurston County: 8.

Number of condos that sold for $500,000 or more in 2016:

▪ King County: 1,498.

▪ Pierce County: 36.

▪ Thurston County: 3.

This story was originally published January 19, 2017 at 4:52 PM with the headline "2016: A great year for sellers, but less so for buyers of South Sound real estate."