September turned out to be a very different month for the housing market, compared to August. The temperature of the recent market for Island homes already seemed to be plunging into fall. And the heavy rain of the last days of the month did not help.
Yes, the children are back in school, and families turn their attention to getting them settled rather than searching for a new home.
But there were other reasons for the changes in the market.
Along with the rain, September tested the housing market’s resilience around Western Washington with fluctuating mortgage rates and persistent inventory shortages in some areas. But by the end of the month, as experts and number-crunchers of the Northwest Multiple Listing Service note, both pending and closed sales were still higher than the same period a year ago. But Mercer Island proved to be an exception with fewer sales in the pipeline by Oct. 1.
On the Island, there was the same number of homes listed for sale as September a year ago; 118. Of the 38 new units offered for sale, all but seven were single family. Just 11 condos were on the market at month’s end.
The number of closed or finalized sales also totaled 38; up six from September a year ago. Prices for home sales that were finalized were up 6 percent over a year ago to a median price of $1,045,000.
The number of sales that were pending at month’s end, however, were down by half to 22, down from 44 sales in process a year ago.
The average final price for an Island condominium stayed well under $400,000.
One cannot help but wonder what an extended government shutdown will bring. The market in Central Puget Sound had seemed to be recovering nicely. Local real estate professionals say that the shutdown will stall the recovery.
Processing mortgages will slow and the continued uncertainty will dampen interest for buyers, Northwest MLS director OB Jacobi said, “Lenders will face challenges verifying information from various federal agencies, like the IRS, which impacts their ability to approve and close home loans.”
Noting that all except one government agency, surprisingly, the U.S. Department of Agriculture, which is involved in housing finance, remains open, Jacobi, the president of Windermere Real Estate, explained, “This will largely depend upon the length of the shutdown and its effect on consumer confidence.”
In the four weeks preceding the shut down, mortgage rates were falling, which brokers in Western Washington credit with boosting sales. Improving inventory also helped spur activity.
Northwest MLS director and former managing broker for Coldwell Banker Bain on Mercer Island, John Deely said the Seattle market shows no signs of slowing down and house-hunters seem undaunted by soggy weather. “Buyers continue to flood open houses and multiple offers rain down on competitively priced properties,” he said.
But supply remains a concern. MLS figures show that King County has less than two months of supply (1.95 months) of available properties. Systemwide, there are 3.32 months of supply, well below the level of four to six months that is generally accepted as an indication of a balanced market.