Reporting Roundup: Party Like It’s 1999 Edition

Reporting Roundup: Party Like It’s 1999 Edition

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).

For some reason, the NWMLS press release still hasn’t been published to its usual space on their public site, so we don’t have the source material to reference this month. Instead, enjoy this chart of King County single-family home prices since 1993, both in raw form and adjusted for inflation using Seattle’s CPI less shelter:

King County Single Family Median Prices

Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

[Update]
A reader emailed me a copy of the NWMLS press release that was sent to them by their friendly neighborhood real estate agent. Here’s an excerpt:

Washington homebuyers realizing “market may have reached bottom of cycle”

With spring on the horizon and consumer confidence on the rise, members of Northwest Multiple Listing Service are reporting positive gains in activity. Pending sales for February increased more than 27 percent from a year ago, more sellers are listing their homes, and brokers are reporting an uptick in multiple offers.

“Buyers are beginning to realize that we may have seen the bottom of this real estate market,” remarked Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo and a member of the Northwest MLS board of directors. “Waiting to buy may only result in paying a higher interest rate, having fewer houses to choose from, or finding that sellers do not need to give up as much as they have in the past,” he added.

Commenting on the market around Kitsap County, where prices dipped nearly 11 percent, Wilson said he expects prices to “stabilize and even reverse as we move further into 2012.” With 4.3 months of supply in that county, he believes the market is tilting toward sellers. “We continue to see more multiple offer situations on homes that come on the market correctly priced,” he stated.

Most of the rest of the quotes were printed verbatim in the news articles quoted below. I would like to point out that while I actually do think we’re basically at the bottom for prices, scare tactics like the Frank Wilson quote at the end of the second paragraph above are still lame and deserving of mockery.

[End of Update]

Read on for my take on this month’s local news reports.

Eric Pryne, Seattle Times: Shrinking inventory breaks fall in King County home prices

Fewer homes are listed for sale in King County now than at any time since the housing crisis began, and observers say the lack of inventory is starting to influence prices, at least in some neighborhoods.

Don’t get excited — overall, prices are still down.

Countywide, the median single-family sale price hit another postboom low in February — $308,125, down 2 percent from January, 8 percent from February 2011 and nearly 36 percent from the market’s peak in July 2007.

Glenn Crellin, assistant director for research at the University of Washington’s Runstad Center for Real Estate Studies, said he wouldn’t be surprised if the median dips below $300,000.

The total number of houses and condos on the market in King County last month was down 32 percent countywide and 38 percent in Seattle from February 2011, according to the listing service.

There haven’t been this few homes listed for sale in any February since 2006.

Again, Eric nails the story.

Aubrey Cohen, Seattle P-I: House prices rose in Seattle in February

What can one read into Seattle’s increase, seeing as prices were down by 10.1 percent year-over-year in January?

“I think it really is a market that’s trying to figure out exactly where it belongs, what normal looks like,” Crellin said, noting that there’s wide variation in price changes by area in and around Seattle. “It’s very much a neighborhood-specific kind of thing.”

Job growth and historic low interest rates are actually creating a seller’s market through the mid-price ranges and contributing to surging sales near job centers, J. Lennox Scott, CEO and chairman of John L. Scott Real Estate, said in a listing service news release. “It’s a special moment in time in real estate history. We have a backlog of qualified buyers looking for homes to purchase.”

Sales are up, but I think it’s still quite a stretch to say they are “surging” anywhere. And I wonder if Lennox would mind quantifying exactly how “special” this time is “in real estate history.” Is it as special or more special than, say, November 2007, when he declared that “we’re in one of the best markets in the nation here in the Northwest,” and that prices wouldn’t fall? Hmm.

Michelle Dunlop, Everett Herald: Local home sales rise in February

Home sales in Snohomish County continue to outpace last year, though the supply is beginning to dry up, according to a report released Monday.

“The only thing tempering this from being a hot, thriving market are the short sales and foreclosed properties which represent about one-third of the transactions,” said Frank Wilson of Northwest MLS in a statement.

Nearly half of the home sales in the county last year were foreclosures or short sales, according to Washington Property Solutions of Bellevue.

Those dang short sales and foreclosed properties. If only they would just go away we could get back to that hot-hot-hot market of 2005!

Kathleen Cooper, Tacoma News Tribune: Home sales up last month in Pierce and Thurston counties

Successful sales provided a glimmer of hope for the Pierce and Thurston county housing markets in February.

More homes sold in Pierce and Thurston counties last month than the same time a year ago, though sale prices continued their drop.

But the median sale price of single-family homes and condos fell 16 percent in Pierce to $169,450. That’s about 40 percent off the peak of $285,000 in August 2007.

Not much meat here in this month’s article.

Kathleen Cooper, The Olympian: County home sales up, but price declines

More homes sold in the two counties last month than the same time a year ago, though sale prices continued their drop.

Closed sales rose 2 percent in Thurston and 30 percent in Pierce, according to data released Monday by the Northwest Multiple Listings Service, which represents 21 counties in Western and Central Washington.

…Thurston’s median sale-price drop wasn’t quite as bad, down almost 3 percent to $211,500.

Not much here, either.

I actually had a nice chat on the phone last month with Rolf Boone, who usually writes the real estate stories for The Olympian. I learned that the reason we mostly see just these short blurb articles online is that the full articles that he writes for some reason are only published in print, and not online. That’s a bummer, because it sounds like he really cares about his work and is trying to really feel out the story, but the fruits of his labor are hidden from me in the digital space.

(Eric Pryne, Seattle Times, 03.05.2012)
(Aubrey Cohen, Seattle P-I, 03.05.2012)
(Michelle Dunlop, Everett Herald, 03.05.2012)
(Kathleen Cooper, Tacoma News Tribune, 03.06.2012)
(Kathleen Cooper, The Olympian, 03.06.2012)

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

11 comments:

  1. 1

    Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

    Somewhat misleading since prior to 2008 there were relatively few REOs and short sales, so there’s clearly been a change in the mix.

    Rate this comment: Thumb up 0

  2. 2
    tomtom says:

    By Kary L. Krismer @ 1:

    Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

    Somewhat misleading since prior to 2008 there were relatively few REOs and short sales, so there’s clearly been a change in the mix.

    This is somewhat more misleading since all real estate is local. Not every area has a significant number of REO and foreclosure sales.

    Rate this comment: Thumb up 0

  3. 3
    whatsmyname says:

    By tomtom @ 2:

    By Kary L. Krismer @ 1:
    Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

    Somewhat misleading since prior to 2008 there were relatively few REOs and short sales, so there’s clearly been a change in the mix.

    This is somewhat more misleading since all real estate is local. Not every area has a significant number of REO and foreclosure sales.

    That’s all very gallant, but since we are comparing all of King County to all of King County over time, the pertinent factor is the mix for all of King County. Apples to apples.

    Rate this comment: Thumb up 0

  4. 4
    John Bailo says:

    Yes, but prices are driven by expectation as much as “value” — whatever that is.

    In 1999, everthing pointed upward. The stock market. Low unemployment. High population growth for Seattle. High tech. Growth.

    And now? Well…if Oregon is any type of bellwether for Washington…

    Portland State estimates Oregon’s population growth slowing, with fewer migrants, more deaths than births

    The population explosion in Oregon in the earlier part of the decade has slowed so much that deaths now outnumber births, a Portland State University estimate shows.

    http://www.oregonlive.com/pacific-northwest-news/index.ssf/2010/11/portland_state_estimates_oregons_population_slowing_again_with_fewer_migrants_more_deaths_than_birth.html

    Rate this comment: Thumb up 0

  5. 5
    jp says:

    RE: John Bailo @ 4 – Less people in the NW is always a good thing.

    Rate this comment: Thumb up 0

  6. 6
    Scott Weitz says:

    Shadow inventory is still huge. Foreclosures will be a bigger problem now that the banks have reached a settlement with the AGs.

    Agree with Tim that low end is at or near bottom as it is easy for investors to cash flow and the government is making certain financing is relatively available. That said, look for the high end to continue to slide as strategic foreclosures are still coming and financing on the high end is incredibly difficult.

    Rate this comment: Thumb up 0

  7. 7

    The Stock Market is Waiting for the February Jobs Report Before Predicting Trends

    The 1.7M employed in the Seattle/Bellevue/Everett area has gone up and down 10K or so since the fiasco year 2008 peak of 1.8M, but basically hasn’t recovered a bit. Meanwhile were adding population [need for more jobs] to the Seattle area like IHOP flips pancakes:

    “…The historical core municipality of Seattle grew eight percent between 2000 and 2010 (from 563,000 to 608,000), while the suburbs grew 14 percent. The suburbs attracted 89 percent of the metropolitan population growth….”

    http://www.newgeography.com/content/002073-seattle-denver-portland-slowing-growth-rates-convergence

    The article is about a year old on population growth in Seattle, but let’s face it, once they get here do hardly any of them go back home soon? I’d need a recent article to disprove my allegation.

    Rate this comment: Thumb up 0

  8. 8

    By whatsmyname @ 3:

    By tomtom @ 2:
    By Kary L. Krismer @ 1:
    Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

    Somewhat misleading since prior to 2008 there were relatively few REOs and short sales, so there’s clearly been a change in the mix.

    This is somewhat more misleading since all real estate is local. Not every area has a significant number of REO and foreclosure sales.

    That’s all very gallant, but since we are comparing all of King County to all of King County over time, the pertinent factor is the mix for all of King County. Apples to apples.

    Thank you for providing proof for my statements in the past here that some people only like to point out change in mix when it goes a certain direction.

    You really think mix is unimportant just because it’s all of King County? If the square footage of all the houses doubled in one month, and the median shot up 75%, that should just be ignored since would be dealing in both months with all of King County?

    The non-distressed median has stayed mainly around $400,000, but was well below that this last month at about $385,000. That’s what you would compare to the numbers from before 2008, since those numbers had few distressed properties.

    As a practical matter though if you’re looking at change in value for an individual house it would be better to attempt to value it by comps currently and at the point in time you were interested in comparing (e.g. 2006, 2004, 1999, etc.). That can easily be done if you don’t go too far back.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

    Rate this comment: Thumb up 0

  9. 9
    Scotsman says:

    Real estate industry fears homes will flood market as prices rise

    http://www.postandcourier.com/news/2012/mar/04/shadow-inventory/

    Buy now, or be priced out forever! (Except in Renton and Covington.)

    Rate this comment: Thumb up 0

  10. 10
    The Tim says:

    In case anyone’s interested, here’s that inflation-adjusted chart with the Case-Shiller HPI and the NWMLS King Co. SFH median. They tend to track pretty closely over time.

    Rate this comment: Thumb up 0

  11. 11
    whatsmyname says:

    By Kary L. Krismer @ 8:

    By whatsmyname @ 3:
    By tomtom @ 2:
    By Kary L. Krismer @ 1:
    Inflation-adjusted home prices in King County are back to about where they were in early 1999. Nice.

    Somewhat misleading since prior to 2008 there were relatively few REOs and short sales, so there’s clearly been a change in the mix.

    This is somewhat more misleading since all real estate is local. Not every area has a significant number of REO and foreclosure sales.

    That’s all very gallant, but since we are comparing all of King County to all of King County over time, the pertinent factor is the mix for all of King County. Apples to apples.

    Thank you for providing proof for my statements in the past here that some people only like to point out change in mix when it goes a certain direction.

    You really think mix is unimportant just because it’s all of King County? If the square footage of all the houses doubled in one month, and the median shot up 75%, that should just be ignored since would be dealing in both months with all of King County?

    The non-distressed median has stayed mainly around $400,000, but was well below that this last month at about $385,000. That’s what you would compare to the numbers from before 2008, since those numbers had few distressed properties.

    As a practical matter though if you’re looking at change in value for an individual house it would be better to attempt to value it by comps currently and at the point in time you were interested in comparing (e.g. 2006, 2004, 1999, etc.). That can easily be done if you don’t go too far back.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

    ??? My post was a one statement validation of your original post – pointing out that the reasonable comparison is “like with like”, i.e. all King County with all King County, and not all King County with some portion of King County where the mix would be different.

    I agree with your conclusions, buy I am mystified by your framing. The question “You really think mix is unimportant just because it’s all of King County?” has no basis in anything that I wrote or thought.

    Rate this comment: Thumb up 0

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