As Inventories Go Down Sales Surge

Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25 percent. Last month’s volume was down 5.6 percent when compared to twelve months ago, but it was the highest monthly total since September.

Inventory fell sharply from a year ago (down more than 14 percent), in part due to fewer new listings being added to the supply. Member brokers added 10,252 new listings during March, compared with 13,274 for the same month a year ago, for a drop of nearly 23 percent.

 Prices for last month’s completed sales fell about 14 percent area-wide from a year ago, reflecting a combination of factors, including a lingering imbalance between supply (inventory) and demand (buyers), creating a favorable market for buyers. Also, although not quantified in the NWMLS report, a sizable number of foreclosed homes and short sales are included in the monthly tallies so those deeply-discounted properties tend to drag down prices overall.

Pending sales in the MLS map areas that make up most of Seattle surged 35.4 percent in March compared to February. The southwest part of King County also registered robust month-to-month gains – 39.3 percent — while sales on the Eastside rose more than 32 percent last month compared to February.

Condominium prices are down about 8 percent from a year ago and 2.5 percent from a month ago. About half the counties that reported closed sales of condominiums during March showed price increases when compared to February.

According to Ian Shepherdson, economist at High Frequency Economics, “Single family homes, which are considered the core of the market, fell at a 10% annualized rate in the first quarter of 2009, after a 17.4% drop in the last three months of 2008. At the current sales pace, existing-home sales will be down “only 2%” in the second quarter.” 

First-time buyers made up 53% of existing home sales in March. Chales McMillan, National Association of Realtor’s president, said first-time home buyers are crucial to the overall housing market. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down.” Meanwhile, sales of “distressed properties” accounted for over half of all transactions in March. Foreclosed homes typically sell for 20% less than traditional homes.

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