It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).
To kick things off, here’s an excerpt from the NWMLS press release:
Housing market "healing itself," numbers are "astoundingly good"
Declining inventory, extremely low interest rates, and positive job growth are contributing to rising optimism among industry professionals, but Northwest MLS directors say distressed properties continue to be a drag on the market’s recovery.
Bzzt. Got it backwards there, friends. The continuing stream of short sales and foreclosure sales aren’t “a drag on recovery.” They’re how we get recovery. All the bad sales from the bubble need to be cleared out before we can get back to a “normal” market. Period.
The lower number of new listings coming on the market is due to a combination of factors, said J. Lennox Scott, CEO and chairman of John L. Scott Real Estate. Among them, he mentioned underwater sellers (who owe more on their homes than the current value), sellers with equity holding off for higher prices, and the lack of new construction/condominiums.
Sounds like there’s a lot of pent-up supply out there. Plus a bunch of would-be sellers that are priced in forever.
“We are simultaneously seeing the continued rise in pending and closed sales,” Jacobi stated. “Usually pent up demand and rising sales means that prices will be going up. But, unfortunately, that isn’t the case thanks to the high level of distressed properties that continue to drag down the entire market,” he explained.
“Lightning bolt!” by Flickr user Jason Foster
Oops, you said “unfortunately” when I think you meant “thankfully.”
Northwest MLS director Darin Stenvers believes “the perfect storm is brewing.” He said the pent-up need for homes in good condition is creating shorter market times and sales close to the original asking price. “It is a great time for sellers who have been waiting,” said Stenvers, the office managing broker at John L. Scott Real Estate in Bellingham.
“The market is almost done with the needed correction,” Stenvers stated, adding, “Distressed homes and REOs are not going away fast but have slowed and should soon level off.” He also foresees a loosening of overly restrictive lending guidelines.
I wonder what exactly Mr. Stenvers believes has been “overly restrictive” about recent lending guidelines. It amazes me that he seems unable to make the obvious connection between all the “distressed homes and REOs” and the fast-and-loose lending that led to this whole mess in the first place.
Anyway, I could go on all day with this ridiculous nonsense from the NWMLS, but I won’t. Read on for my take on this month’s local news reports.
Eric Pryne, Seattle Times: King County home prices drop again; median at $315,000
House prices in King County hit another new post-boom low in January, according to statistics released Monday by the Northwest Multiple Listing Service.
But King County is a big place, and the real-estate market isn’t the same in SeaTac as it is in Sammamish.
A closer look at the statistics reveals significant variations from neighborhood to neighborhood.
As in the past few months, they suggest an increase in “distressed-property” sales — bank-repossessed homes and “short sales” for less than sellers owe lenders — is responsible for much of the countywide price drop.
Those sales accounted for about 40 percent of all closings in King and Snohomish counties last month, according to an analysis by Re/Max Northwest Realtors.
Sales are up most, and prices have fallen farthest, in areas with large numbers of distressed sales.
Low prices = more sales. Go figure.
Countywide, however, distressed-property transactions “continue to drag down the entire market,” said OB Jacobi, Windermere real-estate president.
That won’t change anytime soon, Crellin said: “There’s still a tremendous backlog.”
Homeowners are at least 90 days past due on 76,000 mortgages statewide, he said, but only about 5,000 homes are completing the foreclosure process each quarter.
At that rate, it would take nearly four years to work through the backlog, Crellin said, although he expects the pace of foreclosures will pick up.
And this is why we’ll be at the bottom for quite some time to come.
Aubrey Cohen, Seattle P-I: Low home supply isn’t helping prices
Home sales continued to pick up in King County last month, helping push the inventory of homes for sale to what traditionally would look like a seller’s market. But prices continued to fall, reaching levels last seen in 2004.
Local real estate executives have made premature announcements about a market rebound several times during the housing downturn. But the economics blogger Bill McBride, of Calculated Risk, has been more bearish, until now.
“There have been some recent articles arguing the ‘housing bottom is nowhere in sight.’ That isn’t my view,” McBride wrote in a Monday post titled “The Housing Bottom is Here.“
Bold call from Bill at Calculated Risk. I love that Aubrey calls out the local real estate “professionals” for their constant bottom calls since 2008.
Kurt Batdorf, Everett Herald: Home sales increase, prices shrink in January
Declining inventory, extremely low interest rates and positive job growth are contributing to rising optimism among industry professionals, but Northwest MLS directors say distressed properties continue to be a drag on the market’s recovery.
Year-over-year median prices for single-family homes fell 9.5 percent, from $254,000 to $230,000, the MLS reported. Prices for condos were off 33.4 percent, falling from $186,000 to $123,950. Condo prices in southeast Snohomish County plummeted from a median of $209,500 last January to $72,000 this year.
“Price increases are muted by short sales and foreclosures that are causing low appraisal values,” said J. Lennox Scott, CEO and chairman of John L. Scott Real Estate.
There are price increases out there, you just have to dig deep to find them!
C.R. Roberts, Tacoma News Tribune: Pierce and Thurston County home prices drop 12.5 percent
Down: The median price of homes – both residential and condominium – in Pierce and Thurston counties.
Down: The number of homes actively listed for sale.
Down: The number of new listings.
Up: The number of home sales pending.
So much for the first month of 2012.
C.R. Roberts, The Olympian: Median home price falls by 4.2% in county
Anderson said the numbers reported Monday are no longer tied to “the artificial stimulus of various tax credits and incentives that date to 2009.”
“The improvement in the numbers show that the market is healing itself and standing on its own.”
If you want to re-read the NWMLS press release, just pick up The Olympian.
(Eric Pryne, Seattle Times, 02.06.2012)
(Aubrey Cohen, Seattle P-I, 02.06.2012)
(Kurt Batdorf, Everett Herald, 02.07.2012)
(C.R. Roberts, Tacoma News Tribune, 02.07.2012)
(C.R. Roberts, The Olympian, 02.07.2012)