September Reporting Roundup

Here’s the NWMLS press release that accompanied yesterday’s numbers: Pending Sales Up 4.1 Percent From Year Ago, Total Inventory Unchanged

Home sales around Western Washington during September rose 4.1 percent from a year ago, reversing a 19-month pattern of declines. Members of Northwest Multiple Listing Service reported 5,982 pending sales (offers made and accepted, but not yet closed), a gain of 234 transactions from a year ago. The totals cover 19 counties in the MLS service area.

NWMLS data show the last system-wide uptick in pending sales was February 2007 when members reported a 4.8 percent gain from the previous year.

In other key indicators of housing activity, Northwest MLS reported tightening inventory with a double-digit drop in the number of new listings added during September compared to 12 months ago, and total inventory at month end that matched year-ago numbers. Figures also show area-wide softening of prices compared to a year ago.

So the industry-promoted message this month is “focus on the increased sales and flat inventory.”

Let’s take a look at the newspaper writeups about yesterday’s data from the NWMLS. Let’s see how our local reporters did at staying on message.

Eric Pryne, Seattle Times: King County home prices slide again, but more people are buying

While prices continued their yearlong decline, the number of pending home sales in King County increased in September for the first time since the real-estate slump began last year, the Northwest Multiple Listing Service said Monday.

Brokers said it could be a sign the market has hit bottom and is starting to turn around. Or not.

“It’ll be more important to see how things go in October and November and December, now that we have the [Wall Street] bailout in place,” said Eirik Olsen, owner-broker of the ReMax Real Estate Center in Redmond.

Oh my. If local agents are counting on the Wall Street bailout to perk the local market back up, they’re in for a heaping helping of disappointment. Also, does Elizabeth Rhodes still work for the Times? She’s been AWOL for two months now. I miss her.

Aubrey Cohen, Seattle P-I: Area housing market shows signs of stability

The Seattle area’s real estate market showed signs of stabilization in September, according to new statistics released Monday.

Pending sales of houses and condominiums in Seattle increased 8.8 percent from a year earlier and 1.8 percent from August, while sales countywide went up 4.2 percent from September 2007 and declined 0.8 percent from August, according to the Northwest Multiple Listing Service.

The inventory numbers were the bright spot in September’s numbers, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. “That’s the first step that we really need to take to get the market stabilized.”

Crellin attributed the increase in pending sales to the fact that many buyers are having a tougher time getting loans approved.

“I think we’ve got a buildup in pendings simply because the time lags on getting through the approval process have clearly lengthened,” he said.

More buyers are getting off the fence, said Mike Skahen, owner/broker of Lake & Co. Real Estate in Seattle.

“I’m convinced that as the national financial crisis subsides and with Seattle’s good economy, buyers who have been waiting for the bottom will return and wish they had bought now.”

Yes, another bottom-caller. Get off the fence you fools, and buy, buy buy! If you don’t, you’ll be sorry! Note that Mr. Skahen’s comments are directly from the NWMLS press release, which also includes the following delicious morsel:

Commenting on the relatively low sales numbers over the past year, he remarked, “There must be substantial pent-up demand.”

Bzzt. Sorry, but you’ve got it backward, Mr. Skahen. The unusually high sales numbers 2003 through 2006 borrowed buyers from the future (as in, now). There is no pent-up demand.

Mike Benbow, Everett Herald: House prices drop 10% in Snohomish County

Home sales continued to fall in Snohomish County during September, but things picked up elsewhere in the Puget Sound area, according to the Northwest Multiple Listing Service.

Pending sales were down 6.8 percent last month, combined with a 29 percent drop in closed sales for September, the listing service reported.

Not much to the Everett Herald report this month, more or less just a little blurb with the pertinent numbers.

Rob Carson, Tacoma News Tribune: Another big dip in Pierce County home prices

Home prices in Pierce County continued to fall in September, dropping to $241,950, a 10.4 percent decline from September 2007.

Home sales in Pierce County and around the country have been falling for the last year, though prices here declined less than elsewhere.

Brokers blamed the recent economic turmoil for the drop in overall activity but also said there is a perceived difficulty in getting home loans.

“For people with good credit getting a loan is not a problem,” [President of the Tacoma-Pierce County Association of Realtors Virgil ] Wells said. “It depends on your credit score. Obviously there have been some buyers cut out of the market simply because there is no longer a potential for zero-down loans.”

Buyers waiting longer for the market to bottom out could be making a mistake, Wells said.

“A lot of it depends on what the stock market does in the next few weeks,” he said. “That, and who wins the elections in November. There are too many variables for me to be able to predict a bottom with any accuracy.”

“I think we just need to get the media to paint a positive picture,” Wells said. “The fact is, this is the best time for buyers to buy since 1996.

Seriously, that darn media! If only they would be more positive, people would stop trying to time the bottom and the market could recover tomorrow. Wait, people really believe that? Yikes.

Also just a short blurb, nothing even really worth quoting in The Olympian: Home sales show an increase

So it would seem this month’s message is that after last month’s double-digit declines, the slight uptick in pending sales has signaled the end of the housing market downturn. Hooray, crisis averted! It’s back to double-digit price increases any day now for sure. We’ll all be rich.

(Seattle Times, 10.06.2008)
(Eric Pryne, Seattle Times, 10.07.2008)
(Aubrey Cohen, Seattle P-I, 10.06.2008)
(Mike Benbow, Everett Herald, 10.07.2008)
(Rob Carson, Tacoma News Tribune, 10.07.2008)
(Olympian, 10.07.2008)


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

47 comments:

  1. 1
    vboring says:

    Re: the Rob Carson article comment

    Which presidential candidate will cause housing price inflation to resume in Tacoma?

    This is me, gleeful that I may one day be able to afford a house that I will both be able to afford and want to live in. Mocking ridiculous MSM pronouncements is just bonus.

  2. 2
    Jbeans says:

    Great. Give those unrealistic sellers a little false hope with some media spin. They’ll hold off on price drops even longer, ultimately losing more money on their homes.

  3. 3

    OUR CHOICE FOR LEADERSHIP: SENILITY OR INEXPERIENCE

    The old voices just want to cash in soon and could care less about a future for the rest of us, while the inexperienced mouth generalizations with no workable plans.

    Sounds like the real estate management running Seattle’s media.

  4. 4
    TJ_98370 says:

    .
    The Kitsap Sun is on message also –
    .
    Pending Home Sales Jump
    .
    Home prices slipped in Kitsap County in September, but the number of sales in the making rose sharply.
    .
    The median price of home and condominiums combined in September was $260,317, a 6 percent decline over the month before and an 18 percent decline over September 2007, according to real-estate tracker Northwest Multiple Listing Service.
    .
    Meanwhile, pending sales of Kitsap County homes rose 31 percent in Kitsap County in September, one of the biggest jumps of the 19 counties tracked by the service, most of them in Western Washington. Only San Juan County had more. On average among all the areas, pending sales rose 4 percent.
    .
    The rise in pending sales reverses a 19-month pattern of declines, according to the NMLS.
    .
    “We are definitely starting to see more buyers that have been waiting months to get off the fence,” said NMLS Director Mike Skahen.
    .
    Buyers in this still-slow market are first-time buyers, move-up buyers and investors, according to J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.
    .
    “These three groups of buyers are moving forward with the opportunities that exist thanks to low interest rates, increased affordability and a strong selection of home to choose from,” he said.
    .

  5. 5
    The Clizz says:

    An interesting article about the populist idea of home ownership in America……

    http://online.wsj.com/article/SB122325772150706655.html

  6. 6
    Everett_Tom says:

    first-time buyers, move-up buyers and investors

    What other kinds of buyers are there? Doesn’t that cover just about everyone?

  7. 7
    vboring says:

    @The Clizz #5,

    thx for the link. i have antipodean family and have been trying to explain the differences in mortgage law for a while.

    what the author fails to mention is that house prices in Oz are just as inflated as they were here and that the economic impact of their correction is going to last much longer and be much more severe because of the differences in mortgage law.

  8. 8
    Joel says:

    Brokers said it could be a sign the market has hit bottom and is starting to turn around. Or not.

    Brilliant reporting.

    “I think we’ve got a buildup in pendings simply because the time lags on getting through the approval process have clearly lengthened,” he said.

    ABORT! ABORT! You’re straying from the message!

  9. 9
    david losh says:

    Real Estate blogs are spinning this as good news. Here you put up a number of articles that also spin the news in a moderate way.

    This is a great site for balanced Real Estate news, even if it does slant, in my opinion for good, rather than evil.

    You would have to be brain dead to be closing a Real Estate transaction at today’s prices. I advocate making offers on properties that make sense and make the best deal you can.

    Whether it’s the FHA NEAMIA program or a gift of 3% interest the majority of properties I see are still at full retail pricing with a 10% discount. It makes no sense.

    What does make sense is giving this site the credit it deserves. I’m hoping that my pitch for a contribution to the blog by clicking the button at the upper right hand corner of this web site will help continue the good work done here.

  10. 10
    Yesler Hill says:

    I agree with the Australian essayist to some extent; but I think what’s being left out, is that into the 50s and 60s, renting was considered a honest family choice, and in many major cities various forms of rent stabilization made it so that families and individuals could remain in their rented home for years on end. This creates social/neighborhood stability and sustainability. When rents are stable and affordable people can hold lower paying jobs and not be living in poverty.

    Also, I think it’s important to note that as reasonable paying jobs are outsourced over seas, it has become near to impossible for working class people to accumulate the capital to then meet more stringent lending regs. So, once “Reaganomics” (I consider Clintonomics to be the same thing – deregulate privativize and globalize, took off, the only way to maintain the mortgage industry was to create ponzi scheme lending mechanisms – NINJAs, etc.

    What I’m saying is simple; the decline in home ownership does not have to mean increased immiseration if society decides that a large, stable, renting class is a completely legitimate life/culture. And the way to make that a long term viable policy is varying forms of rent stabilization policies.

    I realize the above if off the mark re the post; but as home ownership declines and fades away, renting needs to be addressed.

  11. 11
    rose-colored-coolaid says:

    What I find tiring is the frequent use of the “those who wait will be sorry” refrain. I just want to know, what will we be sorry for?

    We’re staring a massive recession in the eye. Major local employeers are going out of business or have rumors of layoffs. Globally, credit is contracting at a remarkable pace. Loans of all kinds are becoming harder to attain. Inflation is up, but wage growth is flat. 60% of Americans now think we’re heading for a depression…

    Given all of that, let’s assume that today were the bottom of the real estate market. What kid of premium will I pay for waiting one more year? My guess is 1% at worst given all the trouble in the economy. If I bought a $500k house, that’s just $5,000. That’s a small price to pay for being certain we’ve hit the bottom.

    I wish the media would own up to how pathetic the “you’ll be sorry” refrain is at this point. It might be legitimate if the choices are buy today or buy never, but if the choices are buy now or wait several months, we all know what the wisest choice is.

  12. 12
    Charles Dean says:

    This increase in pending sales I believe has to do with the dissolution of downpayment assistant programs. They all went away effective October 1st, so there was a rush to get them closed.

    This is also why there was a spike back in April. Regular zero down loans went away effective April 1st, so there was a scramble to get them closed.

    November and December are going to be seriously painful for housing.

  13. 13
    vboring says:

    the disappearance of downpayment assistance plus we briefly had very low interest rates right after Fannie and Freddie were nationalized – together, these could be enough of to justify the late summer bounce.

  14. 14
    pfft says:

    “Home prices in Pierce County continued to fall in September, dropping to $241,950, a 10.4 percent decline from September 2007.”

    So if you were goaded in Sept 2007 into buying that “gem” by a used home salesperson you’re out $20,000, plus property taxes, interest on your money side aside to buy your “gem,” maintenance costs, insurance costs AND most importantly the large savings in renting versus owning. you could be out much more than $20,000.

  15. 15
    Markor says:

    The Dow fell another 5%, down 34% in the last year. A depression is looking more likely, putting more downward pressure on house prices. If I were selling, I’d discount the price fast (like 5% every two weeks) to get ahead of the tsunami.

  16. 16
    Markor says:

    Wow, the stock market is now negative for the entire Dubya reign.

  17. 17
    frede says:

    is it me, or are prices still completely fucking nuts? 375 avg home price is seen as a bargain? that’s like applauding $3.50/gal gas prices.

    there’s someone somewhere who made a lot of money off inflated home prices and they need to be rounded up and dealt with.

    375 is not reasonable, it’s just not. call me when we get under 250. that’ll still be nuts, but at least it’ll make homedebting look better than renting.

  18. 18

    SPEEA TO GO ON STRIKE IN DECEMBER TOO?

    To add to the Seattle home price collapse witches brew is the frustration Boeing technical employees are apparently having with Boeing management’s globalist “in-sourcing” and “outsourcing” at alleged slave labor rates and incapable/subpar schedule deliveries. Here’s an Aug 2008 SPEEA excerpt:

    “…SEATTLE – In a press release issued Aug.
    18, SPEEA officials said problems with
    contractors contribute to delays with the
    787 and other commercial and defense
    programs.
    Union efforts to address the issue with
    Boeing and track contract labor have been
    rejected.
    “We continue to uncover a pattern of
    abuse of foreign contract labor at Boeing
    facilities,” said Ray Goforth, SPEEA executive
    director. “This is bringing the mistake
    of outsourcing, which continues to
    delay the 787, right into Boeing offices
    and factories.”
    In April, SPEEA specifically asked the
    aerospace and defense giant for information
    on the process used to renew foreign
    worker visas and the treatment of the
    workers while at Boeing.
    “Boeing is refusing to tell us how many
    foreign contractors are being brought here
    and what programs they are working on,”
    Goforth said.
    Earlier this year, SPEEA learned that 300
    contractors from Russia were working at
    Boeing under the B1 (business) visa program.
    The B1 visa is typically reserved for
    visitors on business trips. All of the foreign
    contractors were doing jobs previously performed
    by U.S. workers.
    “Boeing is undermining its own products
    by arming these workers with high-tech
    knowledge and skills and then sending
    them home with work that should be performed
    by U.S. workers,” Goforth said.
    “Japan, China and Russia all have large
    scale efforts to compete in the commercial
    airplane business with skills they learned
    from Boeing.”
    To see the press release, go to http://www.speea.org….”

    It isn’t just the Boeing machinists this local area should be worrying about, no not at all.

  19. 19
    Interloper says:

    I went out looking last weekend, and the inventory for affordable housing in Seattle is still crap.

    I’m compromising on neighborhood and several other things, and I still haven’t seen a home in my price range that’s not crap or in a bad neighborhood.

    We’re not near the bottom yet. Amazing: while the rest of the country is talking about a depression, the Seattle media wants to put saddles on the pink ponies.

  20. 20
    TJ_98370 says:

    Off topic –
    .
    The Northwest is featured today in Ben Jones Housing Bubble blog. Stories are quoted from newspapers throughout, including the Seattle Times, Seattle PI, and Tacoma Tribune.
    .
    The Challenge Is That Prices Got Stupid
    .

  21. 21
    david losh says:

    There are good values in the market place today. A few weeks ago I’d say 20% this week I say 10%. There are some very substantial properties closing at what in my opinion are fair prices. One per neighborhood here or there is slim pickings, I negotiated a $250K deal in the Mathews Beach area between a buyer and seller.

    A lot of properties make no sense in terms of pricing and people still buy them.

    What does make sense is giving this site the credit it deserves. I’m hoping that my pitch for a contribution to this blog by clicking the button at the upper right hand corner of this web site will help continue the good work done here.

  22. 22
    Markor says:

    Now that the stock market has gained less than 0% since Jan. 2001, is there any good reason why house prices should have gained more than 0% since then? Look at sale prices in 2001 to see what houses might be worth today.

  23. 23
    richie says:

    The statistic is flaw. Many pending sales will never materialize in the current environment. Yes, you still can find a good interest rate for a 30-year mortgage. However, you better have a FICO score of 740 and are willing to put a 20% down payment. Why NWMLS does not publish the statistics of failing pending sales?

  24. 24

    Everett_Tom @#6 they forgot one (that I can think of) some people buy homes to down size for space or economic reasons.

  25. 25
    spectator says:

    Everett_Tom at #6: What other kinds of buyers are there? Doesn’t that cover just about everyone?

    Compulsive shoppers previously enabled by irresponsible lending practices are not in the list for obvious reasons.

  26. 26
    Everett_Tom says:

    Thanks Rhonda,

    I guess I counted people who moved to have their house fit their needs as “Move up”. but I see your point.

    Spectator.
    Thanks for the gallows humor, it made me laugh .

  27. 27
    david losh says:

    Sorry, I got an e-mail asking where the donation button was on this site. I was wrong, it’s not at the upper right hand corner, it’s below the ad to buy your house and above the traffic signs.

    A donation here is one of the best contributions you can make for quality of information.

    Donate to Seattle Bubble

    $10.00 – Donation $25.00 – Donation $50.00 – Donation $100.00 – Donation $150.00 – Donation $200.00 – Donation $250.00 – Donation

  28. 28
    Angie says:

    Losh, what’s the deal with you lately? Tim giving you a commission on all the donations you drum up?

    Relax already, he’ll be OK financially. I mean, it’s not like he has to pay for the roof over his head or anything.

  29. 29
    economist says:

    what the author fails to mention is that house prices in Oz are just as inflated as they were here

    More so. It’s like California were a country by itself. Oz has no reasonably priced big cities like Houston or St. Louis. Oz also has a much higher % of the population living in big cities than the US.

  30. 30
    Red says:

    I think news media is spoiling the real estate markets in Seattle by projecting everything as good news.

    How in the world is it possible to buy a home in Seattle/Redmond and keep paying Mortgage for next 30-40 years?

    The prices should come down! It will!

  31. 31
    Sniglet says:

    At last! The Federal Reserve, along with many other central banks around the world, have cut interest rates. This is what the markets have been waiting for, everything will be fine now. After all, the previous rate cuts over the last year have done so well that its obvious that a globally coordinated rate reduction will do wonders.

    This is clearly poppycock. Interest rates are already at historic lows but that hasn’t helped the economy. Lowering the cost of borrowing further won’t do anything to encourage people to borrow more, or prevent a further decline in the value of assets. Japan has been trying to almost GIVE money away for nearly 20 years and that didn’t re-ignite their economy, and there is no reason to suppose this recent rate cut is going to help anyone either.

    http://surkanstance.blogspot.com/2008/10/another-rate-cut-another-failure.html

  32. 32
    Sniglet says:

    Tim,

    Another of my posts seems to have vanished into that great SPAM engine of the sky. Would you mind trying to resurrect it?

  33. 33
    david losh says:

    Good Morning Angie,

    Thank you for the opportunity to explain my experiment with this site.
    For all the talk and comparison to 1930, 1970, 1980, 1990 and the recessions or Great Depression the internet is a wild card. There is an economic theory about the impact of the internet that is obscure. So let’s give it a try.

    My intention is for Tim to have a million dollars in the bank after taxes and expenses. Let’s give Tim a million dollars.

    If you like the site great, it’s worth the donation. If you question the site, or have a dislike for it, a million dollars may moderate the point of view here.

  34. 34
    Tyler says:

    @ David Losh

    I think your reminding us that Tim is providing a valuable service/resource is laudable, but I don’t see how him being a millionaire will have an effect on the global credit bubble!

    However, I believe that there will be far fewer real estate related advertising dollars in the future (those that would naturally fit with this site) so users paying Tim directly instead of relying on shrinking advertising revenues is a good option.

  35. 35
    mukoh says:

    Dave,
    I give Tim credit for organizing data for people who didn’t have it before. I however am not a donator, since Tim probably clears enough to pay hosting from the google ads, even as small in traffic value as this blog is, and I have had access to this data and other pertinent data for a long time. And this is just a hobby, if this was Tims business he would likely be in the higher ranks among blogs.
    He does a great job of providing people enough information to make an educated decision instead of a reckless one.

  36. 36
    david losh says:

    As I understand it this is Tim’s business. It makes no difference to my experiment though.

  37. 37
    mukoh says:

    Seems more like a great hobby, and a great blog, not a business IMO.

  38. 38
    buyStocks says:

    that’s what they first said about google…

  39. 39
    The Tim says:

    Heh, while I am making a business out of this site (among other things), I’m certainly not so full of myself as to give credence to any comparison with Google. :^)

  40. 40

    “Heh, while I am making a business out of this site (among other things), I’m certainly not so full of myself as to give credence to any comparison with Google. :^)”

    That’s only because you haven’t gone public yet. Just wait: people will be clamoring for those Thatch Mound IPO shares.

  41. 41
    david losh says:

    Over on the 360 blog they are lamenting the fact that craigslist is having Real Estate brokers register. Then there was some speculation craigslist may charge for listing a property for sale.

    That actually might make the site better by cutting down on spammers.

    What I was really thinking today was about EBay laying people off. So what? EBay can make money by being self monitored and the owners, stock holders, or investors could still make profits.
    I was also thinking that Google has gotten to be such a mess that it might improve by charging a fee for searches, annual membership, or subscription fees. It could offer more features rather than relying on advertising. It could even have a research site without all the googley mess of advertisers.

    Let’s take Ray and $500 Realty. If two people a week give Ray $500 he makes a $1000 a week for being Ray and having a website.

    Better yet, let’s contribute here.

    The possibilities of the internet are boundless. Let’s really see what can happen.

  42. 42
    Angie says:

    My intention is for Tim to have a million dollars in the bank after taxes and expenses. Let’s give Tim a million dollars.

    Well, you know, I’d like to have a million dollars in the bank, too, and I’m not going to have it if I hand out ten bucks to every Tim, Dick, and Harry on the Internet.

    I still think commissions are involved. Or maybe brainwashing, a la The Manchurian Candidate (Frank Sinatra version, of course!) “The Tim is the nicest, sweetest, most reliable source of real estate information I’ve ever known!”

  43. 43
    b says:

    david – I believe craigslist already charges in NY and has for a few years. It would make sense for them to roll it out into smaller metro areas if it brings in money and keeps the spam down.

  44. 44
    Joel says:

    My intention is for Tim to have a million dollars in the bank after taxes and expenses. Let’s give Tim a million dollars.

    Wow, The Tim has a stalker.

    if this was Tims business he would likely be in the higher ranks among blogs.

    Yeah, if you took this more seriously you’d be getting as much traffic as TechCrunch or BoingBoing.

  45. 45
    tomtom says:

    Hey, that reminds me:

    What’s the difference between a REALTOR(R) and a spammer?”

    Anyone?

    Anyone?

  46. 46

    “What’s the difference between a REALTOR(R) and a spammer?””

    Spammers don’t pretend to be ethical.

  47. 47
    Ray Pepper says:

    “far fewer advertising dollars in real estate”

    That goes without saying. I inspected our booth yesterday at the Tacoma Dome Home Show and found just 1 Mtg Company and 500 Realty as the only Real Estate office. The booth only cost 1500.00 and last year there were 3 companies. Watch for continued closure of satellite Brick and Mortar Real Estate offices and many more models resembling ours utilizing Lead Generation for Revenue.

    It was planned that in MID 2009 500 Realty Home Show Booths will be sitting alongside 500 Mortgage Booths. It appears it may happen sooner with the impending sale of NCC. I got my “emergency call meeting” for noon tomorrow with NCC. I was supposed to be sitting in the Dome but it appears I get a break at Red Lobster at lunch time to hear the news.

    Change is Good!

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