For some reason, the NWMLS press release still has not been posted to their public site yet.
[Update: Here's a link to the press release on NWMLS.com: Northwest MLS brokers say housing market is recovering, but still "spongy". My favorite part is "July's unseasonably hot weather curtailed activity for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying it was just too hot." "Several" people may have delayed their home shopping by a few days, and that's even worth mentioning? Wow.]
Before we get into this month’s news reports crowing about the increase in sales, here’s a little chart that shows the time between when pending sales went negative year-over-year and when the median price went negative year-over-year.
Pending sales had been negative for over two years before prices began to fall. Keep that in mind when you hear claims that a few months of year-over-year positive sales data is allegedly a sign that prices will stabilize in the short term. Not likely.
Here’s another chart, this one showing the year-to-date change in the median price, both in 2008 and 2009:
Does the fact that prices have risen from their March low indicate price drops are over? Probably not.
Read on for this month’s reporting roundup from the Times, P-I, Herald, News-Tribune, and Olympian.
Eric Pryne, Seattle Times: King County home sales climb to 2-year high
The median price of a King County single-family home that sold in July was $384,000 — down 2.9 percent from $395,000 in June and down 13.7 percent from $445,000 in July 2008. No turnaround evident here.
But closed sales — which reflect demand — were up more than 10 percent from the same month last year, surging to their highest level since August 2007.
…
“If we’re not quite there [at the bottom] yet, I think we’re nearing it,” said Ron Sparks, managing vice president in the Bellevue office of Coldwell Banker Bain.Perhaps prices aren’t rebounding just yet because buyers’ perceptions haven’t caught up with market realities, he said — just as stubborn sellers kept prices relatively high in early 2008 despite declining sales and growing inventory.
Market forces eventually prevailed: Median prices plummeted during the second half of last year.
Well, perhaps somebody’s “perceptions haven’t caught up with market realities,” yet anyway.
Aubrey Cohen, Seattle P-I: Home sales up more than 10 percent in King County
King County house sales surged by more than 10 percent in July from a year earlier, according to a new report.
…
“I’m delighted to see the volume of home sales up from a year ago,” said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. “That’s good news, but it’s obviously coming at the expense of some of the values of the properties.”
…
In a news release accompanying the report, listing service members said July’s weather curtailed potential sales, because people found it too hot to look at homes.
…
First-time buyers are apparently motivated by the federal $8,000 tax credit for first-time purchases that close by the end of November, Crellin said.“Anything that’s going on is to some extent artificially influenced by the tax credit,” he said. “I’m delighted that it’s there, but in the absence of that incentive to bring people into the market I don’t know where we’d be.”
All that the incentive is doing is continuing to borrow more demand from the future. The exact same thing that low rates and loose financing did during the boom, but to a lesser degree.
Mike Benbow, Everett Herald: Snohomish County home sales up 19% in July
Home sales in Snohomish County rose in July for the second straight month, buoyed by a drop in prices and a federal tax break set to end in November.
Closed sales rose nearly 19 percent last month after rising about 1 percent in June, making agents hopeful that the real estate market had broken a two-year downward spiral.
…
A continuing fall in home prices certainly helped sales. The combined median price of single-family homes and condominiums was $292,000 in July, a drop of more than 12 percent from a year ago.
Duh. This is exactly what has happened in other markets where prices started falling before they did in Seattle. When prices get low enough, sales pick up. Of course, prices keep falling until they get to a point that is actually supported by the local economic fundamentals—a point Seattle has not yet reached.
C.R. Roberts, Tacoma News Tribune: 21% more home sales pending than a year ago in Pierce County
More home sales closed in Pierce County in July than were closed in any month since August 2007.
Nearly 21 percent more sales – of single-family homes and condominiums – were pending than were pending a year ago.
“I’m a happy camper at the moment,” said Windermere Real Estate broker and Northwest Multiple Listing Service director Dick Beeson on Wednesday.
“It’s good news on a lot of levels,” he said.
…
“It tells me, number one, that buyers are getting smarter, they’re taking action, they’re getting off the fence,” Beeson said. “Number two, the median price has stabilized. We’ve literally stayed the same. With buyer demand going up, and inventory going down, we’re getting back to a near-normal market.”
When a salesman tells you that you’re “making a smart move,” isn’t that usually a cause for concern? And what’s with using the worthless pending sales number in the headline? Major credibility hit there for the News Tribune.
Rolf Boone, The Olympian: Thurston County: Sales fall last month, but pending deals rise 13 percent
Thurston County home sales fell from June to July, although the number of homes sold last month still was much higher than in most recent months, according to Northwest Multiple Listing Service data released Wednesday.
…
One explanation for the home-sales drop from June to July was the long July 4 holiday weekend, real-estate agent Blake Knoblauch said Wednesday. Knoblauch, of Greene Realty Group, expects sales to pick up in August and September as first-time buyers take advantage of the $8,000 tax-credit program before it expires later this year, he said.
Again with the pending sales data in the headline. Tsk.
Here’s one more added bonus chart. Pending sales and closed sales for King County SFH so far this year:
It looks like the change in closed sales is lagging the change in pending sales by about two months. From February to May, pending sales increased 78%. From April to July, closed sales increased 72%. If the pattern continues to hold, this month will probably see between about 1,800 and 1,900 closed sales, with September coming in lower.
(Eric Pryne, Seattle Times, 08.05.2009)
(Eric Pryne, Seattle Times, 08.06.2009)
(Aubrey Cohen, Seattle P-I, 08.05.2009)
(Mike Benbow, Everett Herald, 08.06.2009)
(C.R. Roberts, Tacoma News Tribune, 08.06.2009)
(Rolf Boone, Olympian, 08.06.2009)
Why the delay if there is good news to share? and I don’t see a spike in prices this Oct.-Dec. like last year since that is when the credit began and will end this year. Should be downhill from here on prices and sales.
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According to my stock broker, previous results are not a prediction of future performance.
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Who are these people? Goldilocks? Last month was too hot to buy houses, next month is too cold, but this month is just right!
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Poor Northwest journalists. It’s so hard to make sense of all these strange numbers. If only there were, I don’t know, A World Class University Economics Program somewhere nearby where there would be plenty of nice, very intelligent folks, highly educated in the body of knowledge that would be the most helpful in explaining these phenomena, and eager to discuss it.
Yes, it’s too bad, because those people would be able to explain to these journalists things like the interactions between changes in supply, demand, and prices. Then, instead of journalists spouting numbers they don’t understand to readers who also don’t understand them – we could have some articles which help to actually explain the significance (or lack thereof) of this quantitative data.
At the very least, we’d have some alternative quoted opinions to temper the unmitigated optimism of those who have an interest in the upward manipulation of perceptions and expectations.
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There is a sucker born every minute. Ask Warren Buffet.
The Press Release from the North West Multiple Listing Service was sent out today to agents, so Brokers must have gotten them on Monday, or Tuesday.
I have no problem saying it is a load of carp.
It’s embarrassing.
This is where lying with statistics comes in.
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RE: Indy @ 4 –
Yeah we need another bunch of idiots crunching the numbers.
A Real Estate has income potential, mortgage, rental, or production, like trees, or alfalfa. Resale is speculative.
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From a glance it looks like we have added about 70 units each months to the gap between pendings and closed sales. With 7 months that would make approx. 7 x 700 ~ 4900 units in backlog if these will close. It’s a wild card even if I think most of these are pendings that fails to close.
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I’ve got the Solution to the Seattle Price Drop Conundrum
Dr. Roubini mentioned today that Australia’s economy is weathering the recession well. How have they done it you ask?
Its called going back to “cash and carry” home financing….say, about 7% interest on a maximum 6 yr fixed loan…LOL
See the proof:
http://www.australianpropertyinvestor.com/public/121.cfm
Wellllll…..that would put a damper on Seattle RE prices and the short term price collapses would be chronic, most likely for years….but you need a rosy economy Obama smile on your face and think “change”. In the end, we’d recover like Australia and be immune from the recession. See the proof:
http://www.rgemonitor.com/roubini-monitor/257444/are_there_bright_spots_amid_the_global_recession
Annnnd…..just think of it bloggers, your 401K’s CD interest rate might actually be 5%!!!!
Hey, maybe even if the Health Reform Bill $500B butcher axe of Medicare actually occurred, the Boomers may actually even retire with the massive CD increases and open up some scarce job slots for the youth…LOL
P.S. I just heard about the $500B proposed butcher axe of Medicare due to the proposed Health Care Reform Bill by attending Congressman Reichart’s town meeting this afternoon….a very nice meeting too….informative.
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RE: patient @ 7 – “about 70 units each months” should of course be 700 not 70.
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Seems like the lag between changes in SAAS & Price would be a better predictor than the lag between the changes in demand and price. Why leave supply completely out of the equation?
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RE: mydquin @ 10 – Agreed. The purpose of the first graph was simply to point out the ridiculous nature of the claims that a few months of increasing demand somehow means prices have hit bottom and will now stabilize.
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I am so entertained when I read this blog. Other than a handful of insightful contributors the vast majority are simply negative beyond belief and it just cracks me up. Of course the negative ones will say they are just being realistic. They say just facts and look at the graphs. Listen to so and so… Whatever
I enjoy watching Tim tee up those negative softballs so his followers can hit em’ out of the park and offend a few people along the way. Even if there is a hint of positive news he likes to “ya-but” everything.
It is a bad soap opera, but man it is addictive! Keep the glass half empty boys…
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By Softwarengineer @ 8:
Wow a country of 10X smaller population wise of the USA that has much lower overhead it surviving the rescession?
Have you even looked at real estate prices in Sydney? $500k USD for a mediocre 2 bedroom condo, in a city of 4 million people. Roughly 1/2 the size of the Chicago metro area.
I am really not sure what your point is. Mortgages are harder to get, and everything is just as expensive.
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I enjoy watching Tim tee up those negative softballs so his followers can hit em’ out of the park and offend a few people along the way. Even if there is a hint of positive news he likes to “ya-but” everything.
The last few years has pretty much been shooting fish in a barrel for us prudent bears. I’d say swinging at a softball connotes way too much effort.
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RE: Racket @ 13 –
Before you go spouting negative untruths, please look it up on Google first
Australia homes go as low as $50K each and prices include big land lots too :-)
See the proof:
http://www.propertyoptionsblog.com.au/tag/best-places-to-buy/
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RE: wreckingbull @ 14 –
Its just the opposite
Tim’s trolls are the interesting ones to read….we don’t get them much anymore, I wonder why?
Its always interesting to hear their convoluted lack of common sense logic , lack of good data and/or shameless name calling [in hopelessness] Tim’s trolls hand out….it makes me smile :-)
Please come back trolls, the bubble heads need a laugh. LOL
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RE: Realitycheck @ 12 –
Here’s a reality check for you. Home prices double every seven years, or is it ten, or is it that people move every three years, or is it seven. Real Estate is about supply and demand. The one I like about Seattle is that we are land locked so the prices are higher. Never mind the I5 corridor, or that we are the only metropolitan area I can think of the shuns development close to the air port. No we need a Light Rail Transit to the air port so people don’t need to live there. How about that interest rates are low so you can afford to spend more. My personal favorite is that Real Estate is worth what a buyer is willing to pay for it. Isn’t it? Isn’t it all true? Or is Real estate based on a highly rational, income based, formula?
Prices are too high.
It took a gosh darn kid, with an electrical engineering degree, who doesn’t even own a house, to point that out.
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By Softwarengineer @ 15:
In the middle of the desert?
Wow you really one upped me there.
Do a google map search of those places. Have you seen what they pay for water in those areas. Its rationed in most of those desert cities.
Also have you seen the price of goods in Australia vs. US.
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Heh not one of those areas is closer than an hour from a major city.
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By David Losh @ 17:
That must be a different definition of “land locked” than I am used to!
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RE: deejayoh @ 20 –
Yeah that should be water locked.
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RE: Realitycheck @ 12 –
Not me, baby! The bottom is in! Let’s go buy a house, or three or four so we can have some rentals. Real estate doubles every 10 years, so in three years or so we should have some equity to buy a couple more, and in six years we can do it again. Ten years from now… retirement! We’ll be RICH!
You in? ……. Hello? Hey, where’d he go…? Hello? Sheesh.
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My favorite: “If you people weren’t so dang negative, this market would be in recovery! It’s all these negative press reports that are depressing the market!
The reality- we are so screwed, already in a deep hole, and everyone just keeps digging, because that’s all they know how to do.
Scotty- beam me up. There is no intelligent life on this planet.
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RE: NoMoreWork @ 3 –
Here’s my prediction:
“August’s pleasant weather in the mid 70′s was simply too “just right” for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying they wanted to enjoy the nice weather while it lasted.”
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By Orion @ 24:
I suppose, however in 102 degree weather it was even too hot to sit by the pool.
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RE: Orion @ 24 – I had actually wondered what the effect of the extreme July heat would be. In the winter you want sellers to keep at least some heat on so that buyers linger a while rather than rushing through because they’re freezing their butts off. Most houses here, however, don’t have A/C, and if they were vacant and locked up, they’ve be very hot.
I’m not suggesting it would cause sales to decline, but instead that it would make certain properties (the hot ones) more difficult to sell, and others (shaded or with A/C) more likely to sell.
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Blake Knoblauch reminds me of Bob Loblaw (Arrested Development)
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RE: Kary L. Krismer @ 26 –
Kary, it probably could have an effect, much like the fresh baked cookies smell in a house. Creating positive reactions on a subliminal level. Of course, ephemeral aspects of a house should be ignored in a rational, logical purchasing decision, but most people aren’t rational or logical.
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By Realitycheck @ 12:
Then post a counter-point. Prove Tim wrong. Influence me with statistics that say Puget Sound housing prices are at normal levels. Put up or shut up, eh?
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By Orion @ 28:
Well some of that shouldn’t be ignored. For example, my first condo I noticed the units were a lot warmer on the west side than the east side, so I bought on the east.
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[...] July Reporting Roundup: Sales are Up, Up, UP! (seattlebubble.com) [...]
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