New residential listings couldn’t keep up with home sales in Southwest Washington last month, pushing Clark County’s remaining inventory to a new record low. The latest report from the Regional Multiple Listing Service estimated the region had only half a month’s worth of inventory.
“The market is virtually sold out up to $1.5 million, but this isn’t due to a lack of new listings — it’s caused by high buyer demand for every new listing continuing at a rapid pace,” John L. Scott chairman J. Lennox Scott wrote in a monthly analysis of the RMLS numbers.
New listings rose sharply from 711 in February to 940 in March, an increase of 32.2 percent, but still fell 8 percent short of the 1,022 reported in March 2020.
The increase wasn’t enough to outstrip the rise of pending sales, which climbed from 700 in February to 926, an increase of 32.3 percent. The pending sales number also represented a 23.5 percent increase over the 750 pending sales from March 2020.
Closed sales jumped too, rising 23.8 percent from 610 in February to 755 in March, and rising 21.8 percent from the 620 in March 2020. Compared to the first three months of 2020, pending sales are up 18.2 percent and closed sales are up 18.8 percent, while new listings are down 1.4 percent.
The region’s inventory in months, an estimate of how long it would take to sell through the current backlog of listings, fell to an all-time low of 0.5, the latest in a string of low-inventory months that has continued since last summer.
Aside from a brief dip to 1.8 in December 2019, the inventory in months had stayed within a range of 2.1 to 3.2 throughout all of 2019 and the first five months of 2020. The COVID-19 pandemic initially had a dampening effect on the local housing market because Washington’s stay-at-home order halted in-person real estate activity for several weeks in the spring of 2020.
That pattern reversed in the summer once restrictions began to lift and the market was hit by a sustained surge in demand for housing as families settled in for the work-from-home long haul. New listings were never able to catch up.
The inventory in months fell rapidly starting in June and reached a then-record low of 0.8 in October and November, only to break it again in December at 0.6. January saw a slight rebound to 0.8, but the downward trend returned with 0.7 in February and now 0.5 in March.
Lumber up 180 percent
The average sale price rose from $482,000 in February to $486,500 in March, and the median climbed from $433,100 to $435,000. The latest prices represent a 14.1 percent increase in the average price from a year ago and an 11.1 percent increase in the median.
The analysis from the John L. Scott office included a breakdown of the sales data by price range, which showed that the “extreme” shortages extend all the way up to the $1 million segment.
The $250,000-to-$350,000 and $350,000-to-$500,000 price ranges were both estimated to have only 0.2 months of supply, while the $500,000-to-$750,000 and $750,000-to-$1 million ranges had 0.4 and 0.5, respectively.
March’s sales numbers equaled or exceeded the number of new listings in all price ranges up to $750,000. In the $350,000-to-$500,000 range, which accounted for more than half of the total market activity, 94 percent of listings had pending sales within their first 30 days on the market.
The heightened market activity has also left builders scrambling to keep up. Terry Wollam, managing broker at Vancouver-based Wollam and Associates, noted last month that builders have had to contend with material delays, labor shortages and increased costs from code updates during the pandemic.
Lumber is the biggest culprit — lumber prices have risen more than 180 percent in the past year, according to the National Association of Homebuilders, which translates to a $24,000 increase in the average cost to build a single-family home.
New construction accounts for more than a third of new listings in Southwest Washington, Wollam wrote in an email, so longer construction timelines can have a significant impact on the size of the market’s inventory.
“We know that we have a housing supply problem and until the industry can somewhat alleviate that problem, housing prices will continue to soar, thus limiting the affordability of housing,” Avaly Scarpelli, executive director of the Building Industry Association of Clark County, said in a statement.
There’s still plenty of construction happening, according to a Wednesday press release from the BIA — it’s just a struggle to keep pace with the skyrocketing demand. The BIA reported Wednesday that single-family residence permits had increased 41 percent, citing March data released by the city of Vancouver.