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February real estate: less inventory means higher prices and fewer choices for buyers
The median sales price for residential properties on Mercer Island was up 21.05 percent from a year ago last month. In February 2011 the median was $712,500 compared to last month’s $862,500, still a far cry from the median in February 2010 of $1,150,000.
But everything else was down last month. Closings were down 44.4 percent from 18 in February 2011 to 10 last month. Pending sales were down 12.12 percent from 33 mutually agreed transactions in Feb. 2011, to 29 last month.
Inventory continues to dwindle, with a total of 114 offerings last month compared to 139 a year ago.
According to the latest statistics from the Northwest Multiple Listing Service, buyers have fewer homes to choose from compared to a year ago, with inventory down 22.5 percent area-wide, and Mercer Island would seem to be following that trend.
There are 92 single family homes on the market on Mercer Island, and 22 condos right now. A year ago there were 106 single family listings and 33 condos.
Nine single family homes closed last month compared to 15 a year ago, and only one condo closed last month, whereas three closed in February 2011.
EJ Bowlds, a principal broker with Coldwell Banker Bain, said Mercer Island inventory was at a 10-year low at the end of December 2011. Typically, by now, inventory should be picking up.
“Here we are in the first quarter, and inventory isn’t rising that much,” Bowlds said. “There are a lot of buyers, so I don’t understand why more people are not putting their homes on the market. There’s less than three months inventory in King and Snohomish counties.”
Bowlds said it’s very interesting, that more sellers are not entering the market because from 2007 to present, prices fell 35 percent, but before that they rose 50 percent from about 2002 to 2007. So folks who bought before 2007 do indeed have equity.
“Why people aren’t listing is a bit of a conundrum because Washington continues to have a better economy than the rest of the country,” Bowlds said. “We have lots of buyers. The people you think might have been most affected by the economy are entering the market. People want to get on with their lives.”
Bowlds said low interest rates and low prices are bringing buyers in. But inventory is still down 20-25 percent in Puget Sound.
In a statement with the NWMLS report, Lynn Franco, director of The Conference Board Consumer Research Center, said consumers were more optimistic about the short-term outlook than they were a month ago.
“Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects and their financial situation,” she said.