First-time buyers, folks seeking $1M+ homes feeling pinch in Pierce County housing market
May home sales reported Monday by the Northwest Multiple Listing Service showed an ever-shrinking number of homes on the market, and an eager market buying up what was available.
Overall, in the NWMLS database there were 5,533 active listings by the end of May. That compares with the same time last year, when there were 10,357 listings.
In Pierce County, the median closed sale price for existing single-family homes in May was $510,000, up from $500,000 in April and up from $396,550 from the same period in 2020.
That compares with $869,975 in King County, $697,000 in Snohomish County, $500,000 in Kitsap County and $452,000 in Thurston County for May.
Pierce County’s median closed sale price for existing condos was $344,950 in May, up from $335,950 in April and up from $284,500 the same period last year.
In February 2020, a real estate agency’s reports showed virtual sellouts in Pierce and Thurston counties for homes priced under $500,000.
A new report from John L. Scott Real Estate on Monday noted Pierce County now is “ still virtually sold out” of existing single-family homes up to $1.5 million and “luxury sales activity is strong above $2 million.”
“The entire Gig Harbor market remains virtually sold out,” it added.
It noted the Thurston County market was “virtually sold out up to $1 million,” with “strong luxury sales activity above $1 million.”
With the low inventory, buyers are spending above asking price.
According to NWMLS, “prices on the 8,011 single family home sales (excluding condos) that closed last month sold for 107.3 percent of the asking price.
“In the four-county Puget Sound region (King, Snohomish, Pierce and Kitsap), the figure was 108.6 percent, while in King County it was 109.5 percent.”
The figure for Pierce County was 106.4 percent of the asking price, according to NWMLS.
‘HUGE NEED FOR STORAGE FACILITIES’
John L. Scott Tacoma University Place broker David Hayes told The News Tribune via email that the tight market is also creating issues in finding a place to stash your stuff in between selling and purchasing.
“Even in this sellers’ market you would think that all is golden for sellers, but their big concern is finding another home,” Hayes wrote. “The conditions we’ve been seeing in the real estate market in the past year have created a huge need for storage facilities. You may have noticed how many storage units has popped up this year in Pierce County.
“I had a recent closing on a property where I represented the seller. The seller also wanted to purchase another home, hopefully simultaneously. We sold the seller’s home and after a lot of shopping, (two months) we found a home. After a lot of strategic maneuvering between the seller of new home and the buyer we were able to close the same day.”
Hayes added: “The advice I give to my buyers is to stay focused, keep your emotions checked and continue the journey ... and hold on as soon as the listing goes live.”
James Young, director of the Washington Center for Real Estate at the University of Washington, noted that the market is particularly difficult for first-time buyers.
“Residential month’s supply (excluding condos) has continued to decline with less than two weeks of inventory in King, Snohomish and Pierce counties,” he said in the NWMLS report.
“Coupled with continued low interest rates and eased borrowing criteria, rapidly rising prices reflect huge supply imbalances. Given these imbalances, first-time buyers have had almost no chance to take advantage of low interest rates unless they leave the city,” Young said.
“Unfortunately for them, continued supply constraints along the I-5 corridor mean they are increasingly being left out of the market for the whole region. Only a decrease in demand will moderate house price trends.”
