Let’s check in on the local papers (or digital former papers, as the case may be) to see how this month’s NWMLS stats are being spun to the populace.
First up, here’s the source material: the NWMLS press release that accompanied yesterday’s numbers: Brokers report signs of improvement in “real-time” housing market
NWMLS director Dick Beeson believes continued reduction in inventory will spur buyer activity. “Well priced and well conditioned properties will generally be the first ones purchased,” Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, predicts.
Beeson said open house traffic and calls from “for sale” signs have increased twofold in recent weeks. Buyers are scouring the Internet before calling or visiting open houses so they tend to be knowledgeable about options in their price range, he remarked, while noting they’re still seeking assistance from Realtors® in navigating the negotiation and closing process.
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“As expected, the numbers reflected in the March report continue to show year over year declines. However, these historical comparisons fail to tell the story of the real-time market, which is beginning to show true signs of improvement in many areas,” said Ron Sparks, managing vice president of Coldwell Banker Bain.
…
Encouraged by some of the positive indicators in the latest MLS report, Sparks acknowledged “we’re not out of the woods quite yet, but market improvement must begin somewhere.” NWMLS director Dick Beeson agreed. “All in all, we are seeing generally increased interest at all levels of the market, high and low end. We may not soon see 2005 or 2006 levels of sales numbers, but we’re holding our own and progressing steadily in the right direction.”
I will say that the two stand-out statistics in this month’s numbers are the record-setting drop in median prices and the slightly-larger than usual spring increase in pending sales. As prices continue to fall, we can expect to see sales continue to recover.
However, if other markets across the country are any indication, the return of buyers will not stop prices from falling further. Prices will stop falling only once they reach levels that can be supported by the fundamentals. Of course, don’t expect to read that in any of these press reports.
Eric Pryne, Seattle Times: Double-digit price declines making homes more affordable, attracting first-time buyers
House prices in King County slid again in March, recording the biggest year-over-year drop since the market peaked in summer 2007.
But statistics released Monday by the Northwest Multiple Listing Service also suggest sales activity may be starting to pick up as first-time buyers and investors search out bargains, especially in lower-priced neighborhoods.
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But the broker-owned listing service also reported that pending single-family home sales — offers that have been accepted but haven’t closed — surged 33 percent from February’s total, the biggest monthly jump since the real-estate downturn began.Sales almost always increase as winter ends. But the monthly bump was only 6 percent between February and March 2008.
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, called the increase “an encouraging sign.”
…
Not surprisingly, pending sales increased most in areas with the most affordable homes.
It’s nice to see Mr. Pryne changing his tone from last month, as he comes to realize that lower home prices are not “bleak” but rather “attractive.”
Aubrey Cohen, Seattle P-I: Spring hits Seattle-area housing market
Seattle-area home sales found some spring bounce in March, although prices continued to sink, according to a new report.
March’s pending sales of houses and condominiums surged 28 percent in King County and 35 percent in Seattle from February, the Northwest Multiple Listing Service said.
Prices were down from February and from March 2008, while the number of homes on the market dropped from a year earlier for the third straight month.
“I’m expecting the market’s going to continue to be soft for the remainder of the year,” said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. “I am unwilling to be terribly optimistic at this point in time, but I think there are some glimmers of hope in these statistics.”
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“Buyers are out there, and they’re beginning to make some offers,” Crellin said. “Closed sales numbers are still depressingly low.”Pending sales show more recent activity, although some end up falling through.
I think that is the first mention in the major local media outlets of the increasing disparity between pending and closed sales, a phenomenon we have been observing here since last August.
Mike Benbow, Everett Herald: Pending home sales offer hope for local market
Home sales and prices in Snohomish County continued to fall in March in comparison with a year ago, but real estate agents were given hope by a surge in pending sales, according to the Northwest Multiple Listing Service.
There were 485 homes sold in the county last month, a 41 percent drop from March 2008. Pending sales of 865 — offers that were accepted, but not closed — represented a 5 percent drop from a year ago, but it was the highest monthly total since last fall.
This article seems to be nothing more than a roundabout way of saying “it’s spring.”
Kelly Kearsley, Tacoma News Tribune: Home sales up from ’08 but median price falls
Pending sales of homes and condos in Pierce County increased compared to last year at this time as home buyers spent March snapping up properties in the lower price ranges.
The county counted 1,043 pending sales in March, up almost 3 percent from a year ago, according to figures released Monday by the Northwest Multiple Listing Service.
Low interest rates, a new $8,000 tax credit for first-time home buyers and more training for real estate agents on how to navigate sales of foreclosed and bank-owned properties have spurred sales of less-expensive properties, local real estate agents said.
“We’re still seeing a lot of sluggish (sales) in the $500,000, $400,000 and even $300,000 range, but below that things are pretty good,” said Tom Hume, a real estate agent with David Gala and The Hume Group in Tacoma. “It’s excellent below $150,000 – it’s actually a seller’s market if you’re in that price category.”
There’s nothing shocking about that. When homes come down into a price range that people can actually afford, they start to sell. It’s not rocket science here, people. It’s the eventual outcome that we’ve been expecting for years now.
Rolf Boone, The Olympian: March home sales rise, but still down year over year
More homes sold in Thurston County in March than in the previous two months, although year-over-year sales still fell nearly 32 percent between March 2008 and March 2009, according to Northwest Multiple Listing Service data.
Last month, 214 single-family residences and condos were sold in the county. That’s much better than the 147 homes that sold in February and the 177 homes that sold in January, but still was lower than the 314 units that sold in March 2008, the data show.
It’s somewhat odd that Thurston County seems to be the one place where pending sales did not pick up back to about 2008 levels, since Thurston is where we’ve been seeing some unusual strength in the numbers during our monthly Around the Sound updates.
[Update:] Here’s a day-late bonus story from Rolf Boone of The Olympian: Some bright spots in local housing market
(Eric Pryne, Seattle Times, 04.06.2009)
(Eric Pryne, Seattle Times, 04.07.2009)
(Aubrey Cohen, Seattle P-I, 04.06.2009)
(Mike Benbow, Everett Herald, 04.07.2009)
(Kelly Kearsley, Tacoma News Tribune, 04.07.2009)
(Rolf Boone, Olympian, 04.07.2009)
(Rolf Boone, Olympian, 04.08.2009)
Let me correct that. We won’t even see 2008 levels of sales – which were half what they were in 2005 and 2006. We’re currently on track for 12-13k SFH sales in King County this year. That’s the lowest in a decade.
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By deejayoh @ 1:
Well, at least something’s the lowest it’s been in a decade.
The Tacoma report and Tim’s read was particularly interesting to me, as it points to the presence of buyers at appropriate prices and may be part of the reason why sales can pick up (as numbers start to make sense for more people) while numbers still slide to more affordable levels before they bottom out and the numbers make sense on a level broad enough to support the market.
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Pending sales is just a notch better than “open house traffic” these days. Let’s wait and see where closed sales for the major selling months end up. Pendings are just pendings and there is nothing of substance until a sale closes.
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Ratio of Closed Sales to Pending Sales from the previous month
Year : Ratio
2000 : 101%
2001 : 99%
2002 : 96%
2003 : 96%
2004 : 95%
2005 : 93%
2006 : 93%
2007 : 92%
2008 : 84%
2009 : 69%
Average : 94%
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RE: deejayoh @ 4 –
Where does the 2009 number come from? Are you just taking the total number of pendings / total number of closed? If so, wouldn’t that number be highly skewed by us just entering spring? What is the % if you drop the last 30-45 days of pendings?
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RE: dancingeek @ 5 – 2009 figure is the average for the first 3 months. I should have put “YTD” but I missed the edit window.
I also ran monthly averages and there is not a whole lot of seasonality. The “close rate” is pretty constant throughout the year.
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RE: deejayoh @ 6 –
Awesome. Thank you for the clarification!
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Here is a graph of the Pendings and Failed Sales for you.
http://1.bp.blogspot.com/_qOT_WZGcHPo/SdwCkskM1rI/AAAAAAAAAI0/sqyiwu5-4Y8/s1600-h/BOM+2008-2009.PNG
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There’s about a $10,000 difference between Pending and including and excluding Pending BU (Back up offers requested), with including them being the lower figure. I wonder if most the Pending BU are short sales?
As to the main piece, I don’t understand why reduced inventory would spur buyer activity. Does anyone understand that?
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Can we get a NAR plot of open house traffic? Because if you factor in all the Beeson/NAR “data”, open house traffics should be at about thirtyfold 2007 levels right now. I went out last weekend and saw only two other families the whole day. In 2006 I remember elbow-to-elbow open houses.
And WTF is this new “real-time market”? It’s like it’s trying to say, “ignore the bad news in the nwmls and cs data. That crap is obsolete the day they report it. Five minutes ago we saw these sales, and trust me they show the recovery is happening now and you’re missing it!”
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“Buyers are scouring the Internet before calling or visiting open houses so they tend to be knowledgeable about options in their price range, he remarked, while noting they’re still seeking assistance from Realtors® in navigating the negotiation and closing process.”…Furthermore, most buyer’s agents are still charging 3% commission even though the buyers are doing 90% of the work themselves these days. The interview included several curse words preceding the phrase 500 Realty, but we decided not to print this because we’ve banned the phrase 500 Realty from our publication. We feel inclined to use the curse words though, because our %%## *&*# listing revenue has plummeted.
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Darn that 500 Realty for for giving 75% back to the consumer. They’re going to mess it up for everyone else. OK, sorry about that. My humor is a little off at times.
On another note, house prices predicted to fall another 30%. Buy now at your own peril.
http://www.cnbc.com/id/30073339? (watch the video)
I’ve seen a ReMax commercial about 5 times already tonight that says it’s a great time to buy a house. What are you waiting for?
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RE: Jonness @ 11 – If you think buyers are doing 90% of the work, you’re sadly uninformed as to what it takes to close a real estate transaction.
I had a listing once where I showed the unrepresented buyer the property at least twice, and then they went to another agent to write up the offer (something I suggested was an option). The seller didn’t understand why I did that, not because they wanted me to cut the commission, but because they thought I’d earned a double commission simply by showing the house twice. They thought it unfair that the other agent get a commission just for writing up an offer.
In this particular case, finding and looking at the property were the easy parts of the transaction. There were a lot of unexpected inspection issues that came up, as well as some unique neighborhood issues that the buyer wanted researched. The other agent did a lot of work to advise her client.
And this raises another issue. A lot of people seem to think that they can save money by not using an agent. In that situation it clearly wasn’t the case, because the seller thought I earned 6% and the other agent gave them a rebate. But beyond that, having someone with experience negotiate on your side the inspection issues clearly has a lot of value. You can’t just rely on the inspector. What the inspector thinks is minor might be major, and visa versa. The buyer would typically have no idea, but the agent has presumably had experience dealing with such matters.
Finally, even from the listing agent’s side, representing only the seller on a transaction, and having an unrepresented buyer (what the situation would typically be in Washington) raises a lot of legal and ethical issues. Unless you’re dealing with an experienced buyer (e.g. a flipper) it’s better to forgo the extra commission and have an agent on the other side.
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RE: Jonness @ 12 – Hey, if CNBC says prices are going to fall another 30%, it probably is a great time to buy! I didn’t check out the video, but it it was Cramer saying that, then it’s almost certainly a great time to buy! ;-)
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By Kary L. Krismer @ 9:
The implication is that people are becoming worried about “missing out.” As in, better buy that jar of peanut butter now as it is the last one on the shelf. Of course, that is not at all what people are thinking now but wishful thinking on the part of realtors.
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Kary:
It’s out of character for you to attack me for providing a link that you never even went to. Usually you are very collected, logical, and factual.
The link I provided is to an interview of Merideth Whitney. I mean no disrespect because you are obviously a talented and capable person. However, I trust her analysis more than yours (see her credentials for more info). Even if she’s overstated this thing by 100%, I’ll still save $60K in principle reduction + $60K in interest savings + $60K in additional saving for a downpayment (i.e. cheaper loan and no PMI). Actually, I’ll save more than that because the RE agent’s commission will be calculated from the same home, but it will be less expensive.
Does anyone here really believe we’ve seen the bottom? Then please answer me this, who is going to lend all the money for these homes that cost up to 2x what they did when they were actually affordable? The smart money got out a long time ago. Heck, even the flippers got out a long time ago. The only one’s left in the game are delusional sellers, insolvent banks, and average citizens that don’t know any better. Thus, we have a classic supply/demand issue that won’t balance out for at least 2 more years.
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RE: Jonness @ 16 – The reason I didn’t watch it is two-fold, in this order. 1. It’s CNBC, a source I have less than zero respect for. 2. I don’t have speakers on my computer, so video sources don’t really do much.
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She’s on every media source on the planet, but I get your point.
On another note, I don’t do well with the concept of negative numbers. How do you have less of something that doesn’t exist in the first place?
One last general comment to the group. I’m seeing a lot of extremely cheap REO’s out in the market. Since the moratorium was only listed a few days ago, we should see a slug of them in a few months.
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LIFTED! Where’s Freud when you need him?
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My biggest grip used to be banks and short sales, but it may become banks and their inability to adequately market properties they own. It’s total incompetence, and it’s costing them a lot in their recoveries, which means it’s costing the rest of us a lot.
Maybe I should start marketing to private parties for listings like that. All I’d have to do is promise to do absolutely nothing to fix up the property, other than perhaps make it look as bad as possible, list it for 20% less than what it would otherwise be worth, but turn off the power and water and only take 5 pictures, while doing nothing further to sell it. Banks seem to like that marketing approach, so there must be a lot of people that would like it too, right? Of course, to really complete the deal I’d have to come up with required forms that were written by a group of people over many years such that they no longer made any sense.
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By Kary L. Krismer @ 20:
I don’t usually pick on people for misspellings, but this particular one cracks me up for some reason. Kary, tell us more about your grip, please.
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RE: Kary L. Krismer @ 20 – Our federal governent is responsible for the lack of marketing on bank owned property. The banks will simply collect the difference from the taxpayers. Hopefully this process will drive the price of homes down to the point where working people can afford to own.
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[...] am becoming more impressed with Eric Pryne’s reporting lately. Last month he came around and referred to falling prices as “attractive” rather than [...]
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[...] in any centralized database. Mostly we have anecdotal evidence and skeptics like those at the Seattle Bubble blog are justified in being skeptical when real estate agents talk about increased activity at open houses and [...]
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