With sales skyrocketing to a massive four percent gain over last year and median prices shooting through the roof, the housing market recovery is on, and it’s a race to report it. Let’s check in with the local news outlets to see who had the most sensational write-up this month.
First up, the NWMLS press release that accompanied yesterday’s numbers: "Aware and prepared buyers" help boost Western Washington home sales during June
“Encouraging” seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service. The report shows inventory continues to shrink, pending sales increased more than 19.5 percent from a year ago, and median prices system-wide are up 4.4 percent since January.
“The positive movement in our real estate market year over year is really very encouraging,” remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, “In anyone’s book, that’s substantial improvement.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. “It’s encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago,” he stated. While the median home price is down approximately 10 percent from a year ago, median prices have flattened over the past seven to nine months, he noted. “This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges,” Scott believes.
…
“There is a definite upsurge in sales activity, from a pending sales perspective and a “lookers becoming buyers” perspective,” observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act.
This month’s release is conspicuously lacking in the bottom calls and “buy now or you’ll be sorry” sentiment that has permeated previous NWMLS publications. They almost seem to have become less certain of immenent recovery, even as the sales finally begin to pick up. Could they perhaps be looking at the bigger picture and realizing that even once the bottom is in, the market is likely to roll along the bottom for years?
Or maybe I’m just reading too much into it.
Before we get into this month’s news reports, here’s a quick graphical representation of how far off closed sales are from pending sales so far this year:
The April to June rise in closed sales actually looks rather similar to the February to April rise in pendings. Pendings rose 67% from February to April, and closed sales rose 65% from April to June. Interesting, for sure.
If the pattern holds for the next two months with the 16% pending rise from April to June carrying over into closed sales from June to August, August will see roughly 1,900 closed sales (a 25% YOY increase). That feels a little higher than I’d expect to see, but I certainly wouldn’t put it outside the realm of possibility.
Read on for this month’s reporting roundup from the Times, P-I, Herald, News-Tribune, and Olympian.
Eric Pryne, Seattle Times: June home sales are highest in King County since Oct. 2007
A new report provides the strongest evidence yet that buyers are starting to return to the local real-estate market.
The number of closed sales of single-family homes in King County in June was up 4 percent over June 2008 — the first year-over-year increase since the market peaked nearly two years ago, the Northwest Multiple Listing Service said Monday.
…
June’s increase in closed sales came after two months in which pending sales — offers accepted by owners but not yet closed — were up compared with the same months a year earlier.Real-estate professionals said closed sales eventually would follow suit, and that they were lagging because the large number of “short sales” — sales for less than what owners owe on their homes — were taking longer to process.
Pending house sales were up again in June, nearly 25 percent ahead of June 2008.
I chatted briefly with Eric about the numbers again yesterday, and got another quote in this month’s article, in which I allude to the regional shift in sales that I will be posting on later this week.
Aubrey Cohen, Seattle P-I: House sales up in King County
Countywide, 1,655 county houses sold in June — an increase of 4 percent from June 2008 and 26 percent from this May and the highest total since October 2007. Seattle had 597 house sales in June — up 10.8 percent from a year earlier and 28 percent from May and the most since August 2007.
“That’s definitely good news. I’ve been waiting to see something like that,” said Andrew Gledhill, an associate economist at Moody’s Economy.com. “It would probably be about three to four months of seeing these kinds of positive returns before I’d put much stake in it.”
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said buyers were taking advantage of lower prices and trying to ensure deals close before the Nov. 30 expiration date for the federal $8,000 first-time buyer tax credit.
“There’s some bottom feeding going on,” he said. “I think prices have fallen enough that there are some absolute bargains out there.”
Crellin did not draw any conclusions about the state of the market from the June report, saying: “It is a positive sign, but that’s really all that we can say that it is.”
Is it just me, or has Crellin significantly toned down the boldness of his claims lately? Also, it’s nice to see a comment like Gledhill’s making it into the first few paragraphs of Aubrey’s article. Too often we get a single month of upward-trending data and all the news reports are crammed full of real estate agents declaring that the bottom is here.
Surprisingly, neither the Times nor the P-I jumped on the $20,000 one-month increase in the SFH median. I can’t help but wonder if Eric & Aubrey’s real estate reporting is being influenced at least a little bit by this site. Whether it’s due to Seattle Bubble or not, I gladly welcome the more even-handed reporting.
Amy Rolph, Everett Herald: Hopeful trend for housing market
The housing market in Snohomish County showed signs of recovery in June, driven by first-time buyers shopping for homes at burst-bubble prices.
The Northwest Multiple Listing Service reported that pending sales in June increased 30 percent over the same month last year, giving real estate agents a reason to hope that a full recovery isn’t far away.
More than 1,190 sales were pending in June, up from 915 last year. Pending home sales also increased in May and April in Snohomish County, compared to the same months in 2008. However, completed home sales increased less than 1 percent in the county compared to June 2008.
I thought we hit the bottom months ago. How can recovery now be “not far away”? It’s interesting to see the mental shift at play here. I wonder what the agents will be saying if sales and prices dive down in the second half of the year like they did last year.
Kelly Kearsley, Tacoma News Tribune: Pierce County shows signs of life in real estate
The residential real estate market in Pierce County is perking up for the summer as more people move from simply looking at homes to actually making offers on them.
…
Local real estate agents said low interest rates, first-time home buyer credits and the prospect of good deals are spurring some hesitant shoppers to take action.
If that reasoning sounds familiar (more people buying homes thanks to lower prices), it’s because that’s what we’ve been predicting would happen for some time:
I am betting that the double-digit YOY drops in sales will not last beyond the first or second quarter, but will eventually flatten out and maybe even show YOY gains. My sales prediction is based largely on an assumption that home prices will continue to fall as well, eventually coming down to a level that is able to attract more buyers.
Ding, we have a winner.
Rolf Boone, The Olympian: Home sales stage best month of ’09
The Thurston County housing market had its best month of the year in June as home sales rose above 300 units for the first time in 2009 and nearly matched total sales in June 2008, according to Northwest Multiple Listing Service data released Monday.
Single-family residence sales, excluding condominiums, performed even better last month – rising 1 percent to 303 units from 299 units in June 2008, the data show.
South Sound real estate agents attributed the June increase in home sales to wider acceptance of tax incentive programs for first-time home buyers and a slight increase in mortgage interest rates that spurred some buyers to action.
As 30-year mortgage interest rates rose higher, some prospective buyers jumped in to buy now rather than wait for interest rates to rise again, said Mark Kitabayashi, president-elect of the Thurston County Realtors Association. Last week, Freddie Mac reported that mortgage rates averaged 5.32 percent nationally. Earlier this year, rates dipped below 5 percent but have climbed in recent weeks.
“People on the fence got off the fence,” he said.
That darn fence. Someone should just go and burn it down or something. All those darn buyers sitting up there selfishly destroying the local housing market. Tsk.
(Eric Pryne, Seattle Times, 07.06.2009)
(Eric Pryne, Seattle Times, 07.07.2009)
(Aubrey Cohen, Seattle P-I, 07.06.2009)
(Amy Rolph, Everett Herald, 07.07.2009)
(Kelly Kearsley, Tacoma News Tribune, 07.07.2009)
(Rolf Boone, Olympian, 07.07.2009)
No specific comment on your post, Tim, but I wanted to post this tidbit I saw on Yahoo today, from smartmoney.com. The article dealt with avoidance of the 5 worst housing markets in the country right now, in their opinion. Portland was on the list:
*******
4) Portland, Ore.
In the Northwest, median home prices are down but they remain above the national average. Portland’s prices fell 2.1% in March. Home prices in Seattle were down 2.0% for the month.
“Portland’s still going down,” says Dave McCarthy, president and chief executive of Integrated Asset Services, a real estate valuation and asset disposition and management company that collects data on the housing market.
The city “has remained pretty strong but they’re starting to feel some of the effects,” he adds.
The local labor market may be playing a role, Moody says. Portland’s unemployment rate was 11.6% in April, according to the Department of Labor. That’s well above the national average for the month (8.9%).
The Pacific Northwest bubble was among the last to burst, which could mean the market will be among the last to recover.
******
Note the last sentence…..it seems some real estate folks are starting to change their tune (?)
RE: atcguru @ 1 – Yes, we linked up that story yesterday morning. Also, please keep off-topic comments on the open threads. Thanks.
It seems like the latest unemployment numbers put a fork in many of the recovery expectations. It’s kind of hard to believe that the bottom will occur during increasing unemployment. It’s also hard to believe that the bottom will occur in peak selling season. Not that reasonable assumptions have stopped these sources to proclaim bottoms before. The timing to turn less optimistic when there actually are some positive data as support is surprising to say the least.
On the note of sensational reporting, NPR had a bit about housing this morning (I’m pretty sure it was Greg Heberlein’s bit) and it was very much overly optimistic. I found myself chuckling and thinking that the folks on Seattle Bubble would have some thoughts regarding how “GREAT” things are.
RE: patient @ 3 –
YES PATIENT
The seasonal spurt of wanna-be home owners shuffing pending sales documentation [mostly worthless?] at banks and other mortgage agencies, takes like 5 months to digest I hear….plenty of time for the following:
More home price collapses, causing pending sales to default.
Potential sky-rocketing mortgage rates making them “unqualified”, because of the depression we’re in IMO.
Or God forbid, the pending sales [closed too, leading to an imminent foreclosure?] household incomes suffer a lay off….
hey didn’t I try to point out just how credible JLS is
I think Aubrey does try to be balanced, and probably figures he’s succeeded when he’s upset agents and bubble bloggers equally. I don’t have a feel for the new guy at the Times yet.
The insurers tell us all we need to know. Throw the charts and graphs out the window! Sorry Tim!
http://finance.yahoo.com/news/PMI-Second-Quarter-2009-Risk-prnews-3858533375.html?x=0&.v=1
Good Lord Buyers!
Make your offer AND DONT BUDGE!
Let the prices come down to you!
Avoid all multiple offer scenarios!
Take your time and find that GEM!…………There will be more then you can imagine.
Our friends (two small kids) just bought a 100 year old home here in Bellingham. They had been renting, which I had urged them to do after they sold their home “in the county” at the peak a couple years back. But they drank the juice, I couldn’t stop them, I tried. They paid way too much for a too small fixer-upper on a small lot. They could’ve paid half the (new) monthly payment for a great rental in a nicer neighborhood with lots more room. And waited a bit more…
Ya don’t have to be a teenager to respond to peer pressure groupthink. All those links to Tim’s charts, facts and trends sort of worked for awhile… but could I have done more?
RE: The Tim @ 2 –
What about Moody’s putting Bremerton/Silverdale in the top five places for appreciation? Was that a link I saw here?
That’s one I really do not understand.
To be fair comment 1 is on topic for a news round up.
The industry is finally coming to face the fact that this is not a typical cycle with bottoming and upticks. They are starting to recognize longer term trends such 13.8 trillion in consumer debt does make a difference and the fact that purchaser’s priorities in a home have changed. Once prices got low enough the buyers came out assisted by low rates and the government $8,000 give away but at the street level even the over $1,000,000 market saw volumes rise once prices got to the point where you could buy under replacement cost and that didn’t even include the lot in some cases which in essence had no value. All of these trends will discourage future inventory but I am seeing a VERY price concious ourchaser who has had a total “shift” in values. Many of the purchasers who bought did not do so with the idea of it being a trade and reselling they are taking longer term views and in the case of the folks purchasing homes over a $1,000,000 I saw cases where the purchasers got shorter term mortagages with the idea the home would be paid off at the time they would be ready to move on. The real estate industry has never seen this type of thinking before. This is a total shift from a “consumption” economy to a “conservation” economy and how this all plays out over the next few years will be interesting. My persoanl opinion is that typical “cyclical” thinking will bite you.
RE: george @ 11 –
RIGHT ON GEORGE
With stable bank money markets under 1% and even their 12 mo CDs around 1.5% [notice I said "stable bank"; I consider, IMO, higher CD rates a good indication of an unstable bank]; where’s the “tax advantage” of borrowing with net pay at 5% mortgage interest, or even 3% for that matter?
Paying off even a make-believe 3% home mortgage loan makes you like the equivalent of 4-5% interest on gross pay….after-all you pay the make-believe reduced 3% house payments out of your net pay bloggers.
Now, tell me how this makes sense, even saving 6 months gross pay extra cash, while you make house payments; to protect you from a lay off?
Especially if renting is 1/2 the monthly cost.
With the Boeing 767 soon to move out with Vought, I have to wonder how long these Spring bubble prices will appear to be bargains?That strike right in the heart of the worst financial downturn since the Great Depression has turned out to be a real stroke of genius. Buy now or be priced out forever!
RE: george @ 11 –
Sorry George, but over a million is a cash market. If you’re not paying cash you can’t afford it. Real Estate has always been something you pay off. That’s how it works.
When you leverage you do it to pay off behind you. If I buy ten houses and build equity the goal is to sell off five to own five free and clear. That’s the game in a nut shell. A million is a move up, or inheritance.
By Jonness @ 13:
The Seattle Time articles is amusing.
Gregoire says “The idea of labor giving up the right to strike is a huge issue for them. There has to be something on the other side equally compelling.”
It’s called a job. The union is asking for guarantees? Bye, Boeing.
Jon you are clueless about Boeing but I guess that would not stop you from commenting.
Now that the housing market has returned, we can ditch the housing market stimulus. Let the market stand on it own.
#9-Meadows
Whatcom and Skagit bother me…
the Realtors are generally awful, no redfin representation, overly close relations between small banks, developers and local gov. along with non-existent real estate news (unless local paper decides to interview yet another zombie realtor) makes for major ignorance in buying community. Relying upon being in the (hidden?) corner of US and prices make no sense while realtors simply lie about prospects, potential rents, etc. I think these markets are propped up with crap – as these two counties totally lack jobs and income; and the California retiree is gone.
They need bubble coverage! as the Bellingham buyer appears to be surprisingly uninformed.
By Jonness @ 13:
In the open thread I indicated this is more likely an indication that Voight plant will move up here. S.C. is not really the place you go for high end workers, and Boeing will now discover that when they have to deal with the employees and potential workforce directly.
By David Losh @ 14:
I partially agree with this. As I’ve repeatedly pointed out with examples, people who buy higher priced homes put down well over 20%, and a lot pay cash. Most common is just getting the maximum conventional loan.
No one wants a $5,000 a month mortgage payment.
I live in Bellingham and rent as well. I’ve noticed that some of the houses we’ve been keeping tabs on have sold in the past month or so. We are still waiting it out as we rent for about half what we would expect our mortgage to be. I’d be curious to know who is buying these homes though. My wife and I make well over 100,000 which I don’t think is typical for Whatcom county and we are reluctant to spend more than 300,000 but we aren’t going to spend that kind of money for a pos.
I noticed that someone was so happy about the news reports that the housing market is recovering that they decided to raise their list price! Hmm…
Date Event Price Appreciation Source
Jul 07, 2009 Price Changed $1,010,000 — NWMLS #29045521
Apr 01, 2009 Listed $999,000 — NWMLS #29045521
Are Canadians still buying in Whatcom County?
Not like they used to.
In Depth: America’s Fastest-Falling Neighborhoods:
City: Seattle
Neighborhood: Central Business District
Median Price: $285,000
Decline (year-over-year): -51%
src : http://www.forbes.com/2009/07/06/neighborhoods-home-prices-lifestyle-real-estate-neighborhood-home-prices_slide_16.html
RE: Raj @ 25 – More Forbes BS.
I did a one mile radius from an address very close to the star in that map, and the six month period prior to today is actually slightly higher than the six month period a year ago. And the number is almost $500,000.
There were 7 that went under $300,000 this year, and only one last year. The minimum price both years was $240,000.
RE: Raj @ 25 – 6 of the 7 under 300k were in the area bordered by Broadway on the west, 23rd on the east, between Madison and Yesler. Just searching that area the median did drop, from about 425,000 to 391,000.
RE: Tim @ 21 –
I too am looking to buy in Bellingham. There does appear to be a lot of ambiguity in this area, it’s very difficult to find good market analytics up here. I am especially interested in how the Vancouver Olympics might affect the market here, I wonder if we are close enough to the action to enjoy any of the post Olympics surge that most cities have seen.
Average household income of only 40k really makes me wonder how anyone affords a house up here.
“S.C. is not really the place you go for high end workers, and Boeing will now discover that when they have to deal with the employees and potential workforce directly.”
OTOH, it doesn’t require a degree in rocket science to do assembly line work. S.C. might be the perfect place to find people willing to handle a screwdriver for less than 6 figures/yr.
RE: Jonness @ 29 – I think SC is more tech savy than has been suggested. I am no expert, but I went to several Cisco training courses at Cisco offices in SC. I think that they produced telecom gear there.
Also, it is sort of a ridiculous argument that the talent must be locally grown. If there is actually a chance of Boeing moving anything there, I am sure the Real Estate agents there are talking up the potential for high paying positions that will be moving in from Wa…
This was not directed at you Jonness, I was just too lazy to scroll up.
By Kary L. Krismer @ 19:
Tell that to BMW.
http://en.wikipedia.org/wiki/BMW_Manufacturing_Co._Spartanburg
RE: faster @ 31 – Okay, I looked up CR’s reliability records for BMW, for the cars made in SC per your link. The X5 is dismal, the Z4 pretty good, and there’s no report on the X6. So a mixed bag. So maybe only half the 787s made in SC will fall out of the sky. ;-)
BTW, Mercedes reliability has apparently improved since I looked at CR last. It’s still not good, but it’s no longer Land Rover bad. But they also seem to be reporting less data–most the Land Rover report is blank now. VW is still horrible, much worse than Mercedes now. I don’t even need to look up what they build in SC, because it’s bad no matter where it’s made. Maybe it is the German engineering.
“Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the Taft-Hartley Act, which prohibit agreements between trade unions and employers making membership or payment of union dues or “fees” a condition of employment, either before or after hiring.”
Wow…so BMWs sedans, which they’ve been making just short of forever are more reliable than their SUVs?
Just out of curiousity, what is it about SC that makes it less likely to have high quality workers? You aren’t one of those PNWers who thinks everybody in the South is a redneck are you?
RE: Faster @ 34 – I don’t know what makes it less likely. I know my wife did training down in AZ for a short time, and the quality there was much worse, but that could have been due to the quantity they had to hire at the time.
I’m not the one who makes the reports of certain employers being unhappy, I just read them.
By Faster @ 34:
Since when did a car have to have been made forever to be reliable? Not that the BMW sedans had good ratings.
RE: Faster @ 34 – I think I’d turn this around on you. What was it about Vaughn that was soooo bad that Boeing had to buy the entire company? They better hope it was only the management, or they just wasted the purchase price, and still have a plane model in serious trouble.