Reporting Roundup: Empty Store Shelves Edition

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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 rebound continues, with "slow, unprepared buyers" settling for "2nd choice" homes

[MLS director Darin] Stenvers, the office managing broker at John L. Scott, Inc., in Bellingham, said the ingredients are in place for “a perfect buying season,” citing rapid absorption of inventory and well-priced homes as two factors. How long such conditions will last is “the $64,000 question,” he stated, noting pent-up demand in some areas has buyers feeling the pressure to move quickly to get their offers accepted.

Empty shelves at a grocery store by Flickr user Chris Waits
“Empty shelves at a grocery store” by Flickr user Chris Waits

Despite brisk activity, Stenvers noted foreclosures and owners who are delinquent on mortgage payments remain a concern. The number of owners nationwide who are 90 days or more late in making payments is again on the rise, a situation that will continue to affect foreclosure rates, he explained.

“The lack of foreclosed homes not coming on the market has successfully stabilized prices but also created a lack of homes for buyers to buy,” Stenvers stated.

Buyers are also weighing the pros and cons of renting or buying. “The rent versus buy conundrum is still the biggest obstacle facing buyers today,” Stenvers reported.

Wow I don’t know why NWMLS hasn’t gone to this Stenvers fellow for quotes before. He’s a gold mine. According to Mr. Stenvers, record-low inventories could be considered to be the setup for “a perfect buying season.” I also really liked “the lack of foreclosed homes not coming on the market…” double negative for the win.

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

Eric Pryne, Seattle Times: King County home sales, median prices up from year ago

…2012 so far has been the best year for sales volume since the real-estate bust in 2008. Buyers are looking again, lured back to the market by record-low mortgage interest rates, rising rents and home prices that appear to have stabilized.

But the bust still is exerting some influence. Experts blame the lack of inventory in part on homeowners who bought just before the peak in summer 2007 and now can’t afford to sell. They owe lenders more than their homes are worth.

In downtown Seattle and Belltown condos, however, the median price rose nearly 19 percent, to $409,000.

When distressed sales are excluded, the median price of condos sold downtown over the past three months is actually higher than it was during the same period in 2007 — before the crash, according to data compiled by brokerage Realogics Sotheby’s International Realty.

Hmm, interesting claim from Realogics Sotheby’s. I’ll have to dig into that to see if I can confirm.

Aubrey Cohen, Seattle P-I: King County home prices, sales up; inventory down

The story remained the same in King County’s real estate market last month: prices and sales rose from last year, while the supply continued to be down.

While increasing sales are a big factor in driving down inventory, another issue is that rising prices don’t seem to be enticing more people to list their homes for sale. In fact, new King County listings were down 2.7 percent in September from a year earlier.

It may be that prices still haven’t risen enough for people to sell for more than they paid during the bubble years. Another possibility is that people have decided to sell, but need time to prepare their homes.

Probably more the first than the second.

Kurt Batdorf, Everett Herald: Snohomish County housing prices still rising

Snohomish County home sales and median sale prices showed another year-over-year increase in September, while the number of listed homes and condominiums shrank by nearly half.

The imbalance between supply and demand is “wreaking havoc” with some buyers and sellers, said Northwest MLS director George Moorhead, branch manager at Bentley Properties in Bothell. Some sellers are lamenting “missed opportunities,” but he thinks positive momentum will continue with a combination of tight inventory, record-low interest rates and changing views on home ownership.

“We are seeing clients’ views change from a home being a short-term investment vehicle to being a place where we raise and teach our families,” Moorhead said in a news release.

Nothing much more in this article than what’s in the NWMLS press release, unfortunately.

I couldn’t find a story this month in the Tacoma News Tribune. If something pops up I might come back and update this post.

John Gillie, The Olympian: County real estate continues to lag

While a lean supply of homes and condominiums for sale coupled with a healthier supply of buyers helped drive up average residential sale prices 9.2 percent in Western Washington, median prices in Thurston County continued falling from year-ago prices, said the Northwest Multiple Listing Service said Thursday.

In Pierce County the numbers were up 4.6 percent, according to new figures from the NMLS (sic).

Looks like we only get to read the short blurb version of the article online this month. The Olympian publishes a more in-depth story, but apparently only in print.

(Eric Pryne, Seattle Times, 10.04.2012)
(Aubrey Cohen, Seattle P-I, 10.04.2012)
(Kurt Batdorf, Everett Herald, 10.04.2012)
(John Gillie, The Olympian, 10.05.2012)

  

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.

10 comments:

  1. 1
    softwarengineer says:

    Let’s Compare Real Estate to Farming

    Because of alcohol [banks] in the gasoline sucking the supply [FC’d homes] of corn [BTW, 10% alcohol in our gas, not only raises the price and lowers the mpgs; it takes more oil to add it than to just give us pure gas at the pump], the inventory of corn is inadequate to feed livestock economically. Hence, pigs [homes for sale] are running short worldwide, with bacon and such going up in price.

    Now the clincher for buyers at the supermarket for bacon and such, the price of pork [homes] is so high now; the sales rates are being mitigated and/or we’re just not eating pork as much anymore. I suppose that’s why Top Foods had pork sirloins for $2/lb last week, and WINCO has ‘em for $2.28/lb right now….the buyers are gun shy…..irrespective of inventory shortages of pork.

    Now let’s go “Macro” with this comparison, Albertsons is closing down in Auburn. Why? We’re just not buying high priced low inventory food anymore….in fact, I’ve learned to spot the overages they can’t sell [FCd homes] and stock up my freezer with sales when the buyers stop buying. I’d also compare this to saving your cash [not mortgaging it] for an economy that makes sense, not this quagmire.

    Rate this comment: Thumb up 0

  2. 2

    “raise and teach our families”

    What, everybody homeschooling now according to George Moorehead?

    That seems like a weird comment. Buy now so you can raise and teach your families in a house instead of….a rental home or apartment?

    I’m lost. Somebody help me. What could he possibly have meant?

    Rate this comment: Thumb up 0

  3. 3
    David S says:

    RE: Jill Schlicke @ 2 – ‘Because children raised in homes with mortgages have higher self esteem than those raised in rental homes’.

    I saw this on the NAR website a while back. My wife and I chuckled over the audacity of that statement.

    Rate this comment: Thumb up 0

  4. 4
    Pegasus says:

    RE: David S @ 3 – They have a huge list of similiar benefits for home owners:

    According to several studies, children of homeowners score higher in reading and math than their counterparts whose families do NOT owner their own home. They also are also 25% more likely to finish high school, 116% more likely to graduate from college, and twice as likely to acquire some post-secondary education.

    The benefits are not limited to the area of education, however. The social benefits are even more pronounced.

    Daughters of homeowners are 40% less likely to become pregnant as teenagers. Children of homeowners have fewer behavioral problems. At age 20, children of homeowners are 40 % less likely to rely on welfare.

    http://www.habitatsa.org/about/benefits.aspx

    I am sure that financial wealth has nothing to do with these statistics. ;^)

    Rate this comment: Thumb up 0

  5. 5

    “Thus it appears that the claims for some social and individual benefits from home ownership are supported but only weakly.”

    Here’s the full study:
    http://content.knowledgeplex.org/kp2/img/cache/kp/1374.pdf

    Rate this comment: Thumb up 0

  6. 6

    By Pegasus @ 4:

    I am sure that financial wealth has nothing to do with these statistics. ;^)

    Parental wealth, income, education and intelligence all undoubtedly play a big role in that.

    Rate this comment: Thumb up 0

  7. 7
    David S says:

    RE: Jill Schlicke @ 5 – I think this study may fall short in one critical area. It seems that when they use the word ownership they are referring to anyone that has a 120% LTV with first and seconds, or a 2.5% down payment mortgage up to full title holders. Renters are all others.

    These studies use a pretty broad definition of home owner.

    Rate this comment: Thumb up 0

  8. 8
    HappyRenter says:

    RE: Pegasus @ 4
    I think the problem here is that correlation does not imply causation. The fact that home owners tend to have more successful children does not necessarily imply that owning a home will make your children more successful.

    Rate this comment: Thumb up 0

  9. 9
    HappyRenter says:

    RE: softwarengineer @ 1
    People not buying high-priced low-inventory homes = people don’t need to buy homes and can save their cash instead

    Also, I don’t understand why the “the rent versus buy conundrum” is an obstacle. It’s a choice and fortunately we can all make it in an informed way.

    Rate this comment: Thumb up 0

  10. 10

    RE: HappyRenter @ 8 – Correlation does imply causation, but it doesn’t prove squat.

    Rate this comment: Thumb up 0

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