It’s that time of the month again… time to check in with the local press to hear the same old regurgitated message about how great and healthy our housing market is.
Elizabeth Rhodes, Seattle Times:
What gives? Local home-sales market is softening, but prices keep rising
Local home sales cool off; why are prices still hot?
The housing market cool-down has arrived.
King County buyers had 52 percent more houses and condominiums to choose from last month compared with the previous May — by far the biggest year-over-year increase this decade, including during the recession of 2001-02.
Part of the reason for the increased inventory was that buyers were dragging their feet. King County’s pending sales — deals signed but not yet completed — declined 7.5 percent in May compared with a year ago.
What hasn’t dropped off was what buyers paid; prices continued their incongruous climb. The median price of a house in King County reached $469,000 in May. The median, which means half sell for more, half for less, has climbed every year since 1985.
…
Why would prices grow when basic economic logic says when supply outpaces demand, prices will fall?Glenn Crellin, director of the Center for Real Estate Research at Washington State University, suspects it’s because a softening market gives buyers more wiggle room to buy more house. When they do, that makes the median prices paid rise, he said.
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WSU’s Crellin and the National Association of Realtors expect the Seattle area’s home prices to continue to go up this year. The national association is predicting an increase of about 5 percent this year. That modest figure is above what it expects will be the national average but well below Seattle’s recent appreciation growth, which hit 16 percent last year.Here’s more on Crellin’s explanation for why prices aren’t declining:
Sellers, still believing their homes are worth top dollar, price them at that. But buyers know the market is softening so they feel free to shop around. Sales slow and, as even more houses come on the market, inventory increases.
Finally, sellers either cut their listing price or agree to take less.
Buyers, realizing they can get more house than they initially thought, stretch their price range to buy up. That makes prices rise, Crellin explained.
Well I must say I’m rather surprised that Ms. Rhodes is finally reporting on the skyrocketing inventory and plunging sales. It’s only been going on for about a year now. However, Mr. Crellin’s explanations for the rising prices seem a bit tortured to me. Prices are rising because there’s more inventory? Huh?
I’m sure it has nothing to do with the fact that low-end buyers are having a more difficult time finding financing (thanks to the sub-prime shake-out), or the fact that in the last 12 months, the percentage of King County homes sold in less expensive South King County has dropped by three points while the percentage of homes sold in more-expensive Seattle proper has taken up the three-point slack. Nah, couldn’t be any of those things. Moving on…
Aubrey Cohen, Seattle P-I:
Seattle home sales shoot up
Seattle buyers, who have increasing selection and increasing competition, don’t seem to be discouraged by a shaky national home market, according to data released Tuesday.
Seattle home sales shot up in May by 21 percent, compared with May 2006, according to the Northwest Multiple Listing Service. That’s the largest year-to-year boost in more than two years and the third straight month that sales increased, after year-over-year declines for 10 of the previous 12 months.
The number of homes on the market, however, shot up by an even-more-impressive 60 percent from May 2006. Last month’s median home price in Seattle was $425,000 — down 1.2 percent from April but up 2.4 percent from May 2006.
“We’re remaining remarkably resilient,” said Matthew Gardner, a local land-use economist.
While the market is declining, it’s still good, he said. “We’re declining from a peak.”
Bob Melvey, assistant manager of Windermere Real Estate’s Ballard office, said the market has slowed, but it hasn’t reversed.
“I’m getting less multiple offers on listings, but everything that I’m listing is still selling at the list price or close to it,” he said. “Market times are a little bit longer.”
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Gardner said he considers six months the threshold for an oversupply of homes on the market and doesn’t expect an oversupply in the next couple of years.“I’m getting a bit concerned about 2010, though,” he said. “It looks like an awful lot of [condo] units will come to completion then.”
I love how Mr. Cohen focuses in on Seattle proper, in order to proudly broadcast the fact that “home sales shot up.”
Devona Wells, Tacoma News Tribune:
Let the home sellers beware
Rising prices and sinking sales made for a mixed housing market in Pierce County last month as several thousand homes vied for buyers’ attention.
The median price for stand-alone houses and condominiums increased, compared to the same month a year ago, by a respectable 6.9 percent to $281,000, according to figures released Wednesday by the Northwest Multiple Listing Service. King County’s median price came in at $411,868.
Pierce County’s pending sales, however, declined 21 percent – the largest year-over-year drop so far in 2007 and the biggest in the Puget Sound area.
At the same time, the number of homes listed for sale skyrocketed – up 57 percent to 8,039 over the previous May.
Gail Jensen, a Crescent Realty agent in Spanaway who primarily works with sellers, said she’s counseling them to price smart.
“I haven’t seen a stagnant market like this in 18 years,” Jensen said.
Dick Beeson, a Multiple Listing Service director, said Wednesday that the supply of homes countywide remains at six months – any more and the market would be considered one that favors buyers. North Tacoma sits at the better end of that measure, with about 4.5 months of supply, while Gig Harbor has entered buyer’s market territory with a supply of homes that would take eight months to sell, said Beeson, a Windermere broker.
“It seems like the listings are not hard to get. What’s hard to get are well-priced properties. Sellers being realistic is one of the main problems,” he said.
Uh-oh, looks like the serious slowdown has officially arrived in Tacoma, as they bump on past that magic number of 6 months of supply. But don’t worry, I’m sure the disease won’t spread north.
Mike Benbow, Everett Herald:
Home prices continue to climb
Home sales in Snohomish County continued to slow down in May and the number of houses on the market continued to rise, according to a report Wednesday from the Northwest Multiple Listing Service.
Continuing a monthslong trend, that didn’t stop prices from rising. The median sale price last month was $353,779, a figure more than 9 percent higher than the number a year ago.
Mike chose to go with the straight-shooting style of report this month, pretty much just listing the facts, and leaving out overly optimistic quotes from realtors and “local economists.” Good for him.
Rolf Boone, The Olympian:
County home, condo sales see gains
Thurston County home and condominium sales gained some strength in May as sales dropped about 6 percent compared with a 15 percent drop in April sales, the Northwest Multiple Listing Service reported Wednesday.
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Greene Realty Group real estate agent Blake Knoblauch said the county’s housing market still is strong, though he acknowledged that its biggest problem is that it has more than 2,000 listings.Home sellers today have to carefully consider the price, location and the condition of their homes, he said.
“Entice (buyers) with price and ‘wow’ them with value,” Knoblauch said.
Real estate agent Jackie Tosland of Abbey Realty, who closed five transactions in May, said the county’s housing market either goes up or “levels out,” but it rarely suffers like other housing markets nationally.
However, the first-time buyer continues to be shut out of the local housing market, Tosland said.
“There has been a noticeable decrease in first-time buyers and lower-end homes,” she said.
Sucks to be you, first-time buyers in Thurston County. This housing market will only ever “level out,” so says Ms. Real Estate Agent lady. It was in the paper, so it must be true.
(Elizabeth Rhodes, Seattle Times, 06.07.2007)
(Aubrey Cohen, Seattle P-I, 06.06.2007)
(Devona Wells, Tacoma News Tribune, 06.07.2007)
(Mike Benbow, Everett Herald, 06.07.2007)
(Rolf Boone, The Olympian, 06.07.2007)