Lower supply, low rates draw multiple offers on pricey homes

A tight housing supply and low interest rates last month combined to drive closed sales up as high as 21 percent in parts of King County, causing sellers to receive offers from several buyers — even on homes selling for $1 million or more.

Since interest rates bottomed out two years ago and attracted hordes of first-time homebuyers, the market for entry-level homes, or those priced below $300,000, has been rife with multiple offers. But now real-estate agents are seeing more multiple offers on high-end homes starting at $800,000 around the region. The high-end home market was sluggish and saddled with an oversupply of homes for several years after the tech bust.

March is typically a busy month as people gear up for a summer move. Most of King County had fewer homes on the market last month than March 2003, although new listings climbed, according to figures released yesterday by the Northwest Multiple Listing Service, a Kirkland company that tracks home sales in 14 Washington counties.

Restricted supply, increased demand and continued low interest rates have driven up prices and drawn several buyers for many homes.

"From low to high, we're seeing multiple offers," said Renee Manier, a real-estate agent with Windermere Wall Street in Seattle. "People are scrambling to get into the entry-level market of $200,000 to $300,000, but we're also seeing multiple offers on that $500,000 Craftsman that everyone wants."

A pair of Des Moines condominiums with two bedrooms and two baths each, sold last month for $600,000 and $700,000 after languishing on the market for six months.

Although the condos came with water views, granite countertops, limestone floors and appliances, it was difficult to attract buyers, said Susie Horan, general manager of the Coldwell Banker All-American Associates office in Federal Way.

Interest rates on 30-year mortgages continued their fall last month, dropping from 5.59 percent at the start of March to their lowest level since July at 5.40 percent, according to the Federal Home Loan Mortgage Corp.

New listings recovered slightly last month from their fall in February — up 3.2 percent in King County, 7.7 percent in Snohomish County, 4.9 percent in Pierce, and 5.5 percent in Kitsap. But overall inventory remained tight, with total listings down as much as 25.1 percent north of Seattle and 19.1 percent in Southeast King County.

"We're not getting as many listings as usual, and when we do, they sell really quickly," Horan said. "People either refinanced and are not selling or they're selling their homes on their own."

More people are coming to open houses, agents say, and more buyers are getting pre-approved for loans, paying for home inspections before they make offers, and offering more than asking prices. Agents say homes getting multiple offers are typically closer to Seattle.

"At our last sales meeting, we recommended when a first offer comes in not to take it," said Kathy Estey, managing broker of John L. Scott's Bellevue Place office.

"An agent said that wasn't fair to the buyer, but I told her that it's not fair to the seller to put a house on the market and not get the best offer. We don't want to leave money on the table."

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com