Pierce County home prices spiral upward as buyers rush to beat winter inventory lull

Pierce County home prices spiral upward as buyers rush to beat winter inventory lull
Home prices rose in August in Pierce County as low inventory and low interest rates are putting the squeeze on the local market. (File photo)

PIERCE COUNTY, Wash. — In another month of a flurry of home sales capitalizing on low interest rates, a dwindling inventory and escalating prices are combining to put the squeeze on buyers.

Regardless, August in King, Kitsap, Pierce and Snohomish counties saw a combined 9,179 pending sales. Since 2002, only August 2017 saw a higher volume of sales for those counties, with 9,188, according to the Northwest Multiple Listing Service.

The NWMLS released its review of August home sales on Friday.

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Prices were up across the board, with Pierce County’s median closed sale price for single-family homes at $433,250, up 15.84 percent from last year, and with less than a month’s worth of inventory available.

The report showed that in Pierce County, there were just 982 active listings for single-family homes in August, compared with 2,022 at the same time last year; yet pending sales were up nearly 11 percent compared with last year, and completed sales were down just 1 percent from 2019.

Kitsap County’s active inventory for single-family homes was down to 343, nearly 42 percent less than the same time in 2019. Its median closed sale price was $435,000, up 9.78 percent from last year.

Systemwide, “The lowest number of homes for sale in more than 20 years combined with the lowest mortgage rates on record are resulting in the perfect storm of frustration for buyers — but they are still out in force,” Windermere chief economist Matthew Gardner said in Friday’s report.

One pressure placed on inventory is more homeowners hanging on to their homes to refinance amid low interest rates. Nationwide, residential refinances “accounted for 62 percent of all lending activity in the second quarter of 2020, up from 54.5 percent of loans in the first quarter of 2020 and from 39.6 percent in the second quarter of 2019,” according to ATTOM Data Solutions in an August report.

Another pressure facing areas such as Kitsap and Pierce is buyers from other areas continually looking for more affordable housing away from Seattle, a trend that didn’t start with the pandemic.

Now, the same can be said for homes up to $750,000, according to a new report from John L.. Scott real estate.

J. Lennox Scott on Friday predicted that buyers “will find the greatest selection and availability of new listings coming on the market during September and October, until next March.”

In August, real estate site Redfin noted that nationwide many buyers were looking at places to live outside of their own area as remote-work options expanded amid the coronavirus pandemic.

“The work-from-home culture stemming from the coronavirus pandemic is exacerbating the trend of migration away from expensive coastal cities to more affordable inland areas that has been going on for at least five years,” Redfin noted in a late-August blog post.

Developers, well aware of these trends, are betting on the future.

In August, home builder Lennar, known for its housing developments here and nationwide, purchased nearly 110 acres along the Orting-Kapowsin Highway south of Puyallup for $20 million.

The site is close to another Lennar development, Lennar at Woodlands at Sunrise.

The news was first reported by The Registry, a Puget Sound real estate monitoring site.