December 2021 is a Seller's market! 

The number of for sale listings was down 20.5% from one year earlier and down 26.3% from the previous month. The number of sold listings decreased 10.6% year over year and decreased 13.2% month over month. The number of under contract listings was down 25.7% compared toprevious month and down 0.5% compared to previous year. The Months of Inventory based on Closed Sales is 0.4, down 21.1% from the previous year. 

The Average Sold Price per Square Footage was up 0.8% compared to previous month and up 19.8% compared to last year. The Median Sold Price increased by 0.8% from last month. The Average Sold Price also increased by 1.7% from last month. Based on the 6 month trend, the Average Sold Price trend is "Neutral" and the Median Sold Price trend is "Neutral". 

The Average Days on Market showed a upward trend, a decrease of 19.2% compared to previous year. The ratio of Sold Price vs. Original List Price is 102%, an increase of 2% compared to previous year. 

Median home prices in 2021 tended to rise each month in most counties served by NWMLS, "but December came in flat," which signals a leveling off in appreciation while demand is still high. The Fed (Federal Reserve System) signaling interest rate increases has caused some sellers to be somewhat more aggressive in getting their homes sold. Condos continue to be swarmed by first-time buyers. We aren't seeing as many relocation buyers, a result of remote work during COVID. As companies start to make decisions about working in the office, we will start to see that market pick up.

Even though the number of pending sales, at 5,850 overall, declined more than 15% from a year ago, they far outstripped the number of new listings (4,617), contributing to the meager month end inventory. In fact, a search of NWMLS records going back a decade indicates the 3,240 active listings of homes and condos area-wide is the first time the selection has dipped below 4,000 listings. A year ago, buyers could choose from 4,739 active listings while in November there were 4,621 properties in the MLS database. Stated another way, there was less than two weeks of supply (0.40) at month end. Inventory was even more sparse in seven counties, with Snohomish having the most acute shortage at 0.20 months. Other counties that fell below 0.40 months were Clark (0.26), King (0.27), Island (0.29), Pierce (0.32), Thurston (0.31) and Kitsap (0.38). Smart buyers are making their best offers using pre-inspections, family support, bridge loans, leveraging 401(k) accounts, and other resources. Mortgage interest rates are the wild card

2021 was quite a year for the housing market. Even in the face of historically low inventory levels, home sales in the Central Puget Sound area still managed to rise to levels not seen since 2006 and, notably, Pierce and Kitsap counties had more sales than ever before. Historically low mortgage rates and the ongoing pandemic led to a flood of buyers in a market with relatively few homes for sale. This caused prices to rise by double digits throughout the Puget Sound area. Expect the pace of price growth to slow significantly in the coming year due to rising mortgage rates and affordability constraints.

The Puget Sound region is in dire need of more housing units which would function to slow price growth of the area's existing housing. However, costs continue to limit building activity, and that is unlikely to change significantly this year." Builders in Kitsap County are putting up new communities of single family homes and condominiums as fast as they can. Buyers are looking for relief in 2022, hoping inventory will become available. For now, available inventory is described as "drastically low." Buyer pressure is bidding up values, and there is an inordinate amount of institutional cash buyers in our market.

Sellers are frustrated trying to find replacement properties. More contingent offers are being accepted, allowing sellers some breathing room to select their next home and sell their existing home. This trend, coupled with new lending strategies, allow sellers to address the market as though they are cash buyers with conventional 20% down programs. The current market as "truly historical," noting 2021 was one of the best years on record for pending sales. The week of snow and ice that hit Puget Sound in late December delayed the big kickoff to the 2022 housing market by about a week. This held back buyers who have been waiting patiently for each new listing to hit the market. Fresh on the heels of the holiday season and snowy weather, the local market will see continued strong buyer demand, multiple offers, and premium pricing. This year is poised to be another great year in residential real estate. We will experience strong demand and very active home sales in 2022 and maybe a slight dip in price increases. It will be similar to last year, with both opportunities and challenges. The buying and selling process will not become any easier.

Once again we start the real estate dance where buyers are chasing sellers. Sellers are chasing their replacement home, and brokers are chasing those elusive listings. Expect interest rates to climb. Prices will also rise, albeit not as quickly as during 2021. Single family home prices will rise by "high single digits" in King County, and by more than 10% in Snohomish and Pierce counties.