No, it is not your imagination inventory in King County has never been lower (last 12 years anyway) and it is not changing anytime soon.
Here are two graphs that can help explain exactly what’s happening and what we can expect as we move into the spring and summer.
First is overall For Sale/Sold/Pending for King County over the last 15 months. Notice a few things:
1. January 2015 inventory (light green bars) was 15% lower than January 2014.
2. February 2015 inventory was 1.4% lower than January 2015 which was double the decrease from January 2014 to February 2014.
Takeaway: Not only is inventory at historical lows it is getting lower at a faster rate than it did last year.
Now look at the red line – this is the number of homes that went Pending by month. Notice the following:
1. In February 2014 7% more homes went under contract than had in January of 2014
2. In February 2015 24% more homes went under contract than had in January of 2014. This represents roughly a 3X increase in month over month sales.
Takeaway: This explains any experience you have of there being no inventory – not only is inventory at historic lows but whatever inventory there is has been moving off the market in larger numbers than last year.
OK – that’s the past. But what can that tell us about what to expect? Here is one place for us to look is the days on market (yellow bars).
1. Homes were on the market 5% fewer days in February 2015 compared to February 2014.
2. Homes moved 3% faster between February 2015 compared January 2015 than they did between February 2014 and January 2014.
Takeaway: This lets us know that not only are more houses moving off the market than there were last year but they are also moving at a faster rate than they were last year.
When we project this into the spring and summer we can see that last year homes moved off the market twice as fast in June, July and August as they had in January and February.
Given the lower inventory we are starting with this year, and the increase in both volume and speed with which homes have been selling we should be prepared for a summer of multiple offers, increased bidding wars, escalating prices and less inventory than last year.
While this makes it harder to find inventory it should produce a premium price when selling.
This is a very cursory interpretation of all the possible data available and if you would like a deeper dive or if you’d like this kind of analysis for a region, area or neighborhood please contact me and I’ll work it up for you.
Let me know if you have any questions or if there is anything I might be able to provide your business.
Aaron Hendon | Broker
Christine & Company
1307 N 45th Street, Suite 300
Seattle, WA 98103