Kevin Lisota of Findwell sent me a heads up about a rule clarification sent out today by the NWMLS to all their members:
Short Sales: Status Change Required after Mutual Acceptance
Rule 120 (b) requires the listing office to timely report the mutual acceptance of a purchase and sale agreement for a short sale as Pending (e.g. Pending, Pending Inspection, Pending Back-Up). A Short Sale property shall not remain in the Active status if the buyer and seller have reached mutual acceptance and are waiting for the lender’s consent to the transaction. The only Short Sale properties that should remain in the Active status are those properties where the buyer and seller have not reached mutual acceptance.
In other words, properties that have any offer approved by the seller and awaiting bank approval must be marked as “pending,” regardless of the known fact that many banks are taking 2-3 months just to respond to such offers, many of which are then rejected by the bank.
This rule is not new, but according to Kevin, there is “zero consistency for this practice right now.” One would assume that many agents are already doing this, causing some of the growing discrepancy between “pending” and closed sales. Of course, if there are a non-trivial number of agents out there not doing this already that begin to do so now, this will definitely artificially inflate the pending sales data even further.
Kevin points out two problems with this rule (and the NWMLS’ newly-found fondness for enforcing it):
- Your pending numbers are going to be even more messed up. Often the distressed home seller will sign anything they receive, no matter how crazy, and then submit it to the bank. (Many banks won’t even look at it without a signed contract.) If typical wait times are a 2-3 months for a response, you’ll see all of those properties marked as pending, yet they are not pending until the bank approves the transaction. To give you an example, we have a short sale buyer that is in contract with the seller. They signed an agreement for a sales price close to $300k off the list price and more than $300k being owed to the mortgagor. I believe that this price has zero chance of success, yet the seller signed it just to move things along at the bank.
- This policy is not in the best interests of short sellers. Since there is limited success getting buyer’s offers approved, particularly lowball offers, it is in the seller’s best interests to continue marketing the property to try to attract better buyer offers while they wait for bank approval. The moment you change it to pending, it disappears from websites and no one will seriously look at the property any more.
At this point, I’ll continue to report “pending” sales in our monthly summaries, but will be converting our regularly scheduled graphs to closed sales, since that is a statistic that has had a consistent definition since 2000 (as far back as my data goes).
Categories: News
Tags: Findwell, NWMLS, pending, short sales
Please vote in this poll using the sidebar.
The biggest home price drops around Seattle...
- ..are behind us. (30%, 70 Votes)
- ...are yet to come. (70%, 163 Votes)
Total Voters: 233
This poll will be active and displayed on the sidebar through 06.06.2009.
Categories: Polls
Tags: Polls, predictions
It’s time for our regularly-scheduled check on NWMLS statistics from around the sound. Once again, courtesy Tableau Software, the Around the Sound update is rocking exclusive interactive data visualizations.
As usual, all of the underlying data and the old charts can be downloaded in Excel 2007 (or in Excel 2003 format), so if that’s the format you prefer, you can rest easy. For the rest of you, feel free to poke and prod our fancy new charts to your hearts’ content. To get specific info about a certain point on any graph, float your mouse pointer over the data.
Before we get to the cool stuff, here’s the usual table of YOY stats for each of our seven covered counties as of April 2009.
(Note: The “Sales” data below represents pending sales, not closed sales.)
(Additional Note: Certain NWMLS definitions were modified beginning July 2008 that affect the reported number of active listings and pending sales (and therefore the “months of supply”). The net result of this change is that active listings post 07/08 will appear lower, pending sales higher, and months of supply lower than prior to 07/08. See this post for more details.)
King - Price: -15.3% | Listings: -15.9% | Sales: +14.9% | MOS: 4.5
Snohomish - Price: -14.3% | Listings: -21.9% | Sales: +28.3% | MOS: 4.8
Pierce - Price: -15.0% | Listings: -25.2% | Sales: +23.5% | MOS: 4.8
Kitsap - Price: -11.9% | Listings: -27.9% | Sales: +45.4% | MOS: 4.8
Thurston - Price: -13.3% | Listings: -22.8% | Sales: -4.3% | MOS: 4.7
Island - Price: -9.8% | Listings: -14.1% | Sales: +7.5% | MOS: 9.7
Skagit - Price: -11.9% | Listings: -4.8% | Sales: -11.0% | MOS: 10.0
Whatcom - Price: -7.0% | Listings: -8.3% | Sales: +17.6% | MOS: 6.3
Summary
Hit the jump for the rest of the interactive charts.
[Read more →]
Categories: Statistics
Tags: around-the-sound, graphs, inventory, King_County, Kitsap, NWMLS, Pierce, sales, Skagit, Snohomish, Statistics, Tableau, Thurston, Whatcom
Here is your open thread for the weekend beginning Friday May 29th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Categories: Open Thread
Tags: open_thread
There’s been a lot of chatter since yesterday afternoon about treasury rates, mortgage rates, the yield curve, and so forth—and for good reason. Here’s a good write-up from Mish’s Global Economic Trend Analysis on what’s going on: Mortgage Market Locks Up
Yesterday 10 year treasury yields went soaring and the mortgage market literally seized up. Mark Hanson at the Field Check Group has this report that I can share.
As Bad As You Can Imagine
With respect to yesterday’s episode in the mortgage market — yes, it is as bad as you can imagine. Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day.
A good friend in the center of all of the mortgage capital markets turmoil said to me yesterday “feels like they [the Fed] have lost the battle…pretty obvious from the start but kind of scary to live through it … today felt like LTCM with respect to liquidity”.
For a local insider’s perspective, check Rhonda Porter’s post over at Rain City Guide: Mortgage Rates on the Move Up Today…way up.
And finally, here’s a post that goes into some of the mess going on behind the scenes that has led to this interesting development: It Is Failing: ALL OF IT
Categories: News
Tags: economy, Financing, Interest Rates, Mortgatges, treasury, yield curve
Here are a few relevant news stories that have popped into my inbox in the last few days:
The plan referred to in the second story above would be the irresponsible, counter-productive one we discussed here last month. Frankly, I hope the IRS figures out a way to prevent people from pre-acquiring the tax credit, but realistically I suspect the plan will move forward.
Nobody can accuse real estate professionals (or, more accurately, their lobbying groups) of letting the bubble deflate without a fight, I suppose.
Categories: News
Tags: buy-vs-rent, CNNMoney, Cohen, condos, link_roundup, rent, Seattle_PI, tax credit, USA_Today
