Reporting Roundup: Price Jump Fake Out 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).

To kick things off, here’s an excerpt from the NWMLS press release:

Housing recovery continues with prices rising as inventory dips to lowest level since 2006

Jump! by Flickr user mao_lini
“Jump!” by Flickr user mao_lini

Last month’s housing inventory around western Washington fell to its lowest level since February 2006, according to statistics from Northwest Multiple Listing Service.

The shortage of inventory is helping propel prices. J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, commented on the correlation of sharply reduced inventory and rising prices. “The rise in prices is derived from seasonally strong sales activity in a shortage of inventory market,” he remarked.

That comment makes no sense. The median price is down $10,000 from its summer peak, so how could “seasonally strong sales activity” (whatever that even means) have anything to do with the current price trend?

Unfortunately that’s the most interesting bit in their release. It seems that even the home salespeople that run the show over there are having a hard time coming up with anything new to say about this boring market.

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

Eric Pryne, Seattle Times: Home sales rise while inventory plummets in October

October’s 16 percent rise in the median single-family sale price in King County was the biggest year-over-year jump since July 2006.

But that increase is somewhat misleading.

House prices took a big drop in October 2011, with the median falling to $320,000 after hovering in the $345,000-350,000 range for several months.

This October’s $370,000 median looks strong in comparison. But the median has been slightly higher, between $375,000 and $380,000, in each of the past four months.

Another factor in the big year-over-year increase: The mix of houses selling has changed.

In October 2011, bank-repossessed houses, which are generally priced lower, made up 21 percent of all sales in King County, according to Redfin. Last month, that figure was just 7 percent.

As usual, Eric hits the nail on the head. It is such a refreshing change from the bubble years to have a competent, coherant real estate reporter at the Seattle Times who doesn’t just regurgitate the breathless sales spin from the MLS and local agents.

Aubrey Cohen, Seattle P-I: Home prices post biggest jump in six years

King County house prices registered their biggest gain in more than six years in October, according to a new report.

The median price of a house that sold in October was $370,000, up 15.6 percent from a year earlier, the Northwest Multiple Listing Service reported Monday. That’s the biggest year-to-year jump since July 2006, although the median price is still down 23 percent from its peak in July 2007.

“Wow. Things are certainly going very very well for the county,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

That said, the big boost to the median sales price is “probably an overstatement of what would be viewed as ‘appreciation,'” Crellin said.

One reason for this is that sales of homes in or under threat of foreclosure are down from last year, as a share of all homes, Crellin said. Such homes typically sell at a discount. Meanwhile, sales of higher-end homes in better condition and locations are picking up, he said.

Glenn Crellin, representing the voice of reason.

Kurt Batdorf, Everett Herald: Local real estate sales prices up 11 percent in October

Snohomish County’s housing market mirrored the rest of Western Washington in October, with listings at their lowest level since February 2006 driving year-over-year sales prices up by double digits for the first time since March 2007.

No real meat in the Herald today, just some regurgitated press release quotes. Disappointing.

John Gillie, Tacoma News Tribune: Home prices up in Pierce and Thurston counties on shrinking supply

Single family home prices showed a significant rebound in Pierce, King and Thurston counties last month as the supply of homes on the market continued to shrink.

The median Pierce County home sales price rose by 6.97 percent to $201,000 in October, reported the Northwest Multiple Listing Service. In Thurston County, median prices rose to $220,000 from $212,500, and in King County, median home sales prices hit $370,000, up 15.63 percent from $320,000 a year ago October.

Same story in the News Tribune. Just a handful of numbers with no real insights.

John Gillie, The Olympian: Sales, prices for condos, homes increase from ’11

Single-family home prices showed a significant rebound in year-over-year comparisons in Pierce, King and Thurston counties last month as the supply of homes on the market continued to shrink.

Wait a minute… this is the same article that was in the News Tribune. I guess Olympia is basically the same as Tacoma. Or something.

(Eric Pryne, Seattle Times, 11.05.2012)
(Aubrey Cohen, Seattle P-I, 11.05.2012)
(Kurt Batdorf, Everett Herald, 11.05.2012)
(John Gillie, Tacoma News Tribune, 11.05.2012)
(John Gillie, The Olympian, 11.06.2012)

  

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.

3 comments:

  1. 1
    softwarengineer says:

    Dry Summer Homes in Seattle Look and Smell Better Than When the Rain Storm Season Hits in October

    I think the grey days make the homes look more dreary too.

    Perhaps that’s the logic behind seasonal price fluxuations; we aren’t gonna spend top dollar for a unit with hints of roof moss and that slight twinge of mold smell when we walk in to examine it….time to break out the Pacific Northwest home selling tool, burning incence. And if you’re a home seller; don’t get cheap with the heat thermostat either, set it for 73-75 degrees….so the northeast damper outer portions of the house stay above 67 degrees, stay drier and less chance they don’t stink up the place, even a slight twinge.

    http://finance.yahoo.com/news/home-prices-dip-september-string-133424666.html;_ylt=AqDRBndsjEyAuIAYYI8sN7CiuYdG;_ylu=X3oDMTRwdGgwa3BsBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yaWVzIG1peGVkIGxpc3QEcGtnA2M5MGViZDhiLTNjZWMtM2NlZC05MjBjLWZlNjIwZDM3Yjk3ZgRwb3MDNgRzZWMDTWVkaWFCTGlzdE1peGVkTFBDQVRlbXAEdmVyA2ZkZGJlNGM5LTI4MWYtMTFlMi05ZmJmLWQxY2VhZTJjZTllZQ–;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

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  2. 2

    You’re mis-describing the Seattle Times from the bubble years. ER didn’t just regurgitate stuff from agents. Sometimes she came up with her own nonsense.

    http://blog.seattlepi.com/realestate/2007/12/30/when-basket-weaving-is-too-difficult/

    Front page Times story about how the market was bad because you couldn’t sell a one bedroom $600,000 condo a few months after buying it for 10% more than you paid.

    Rate this comment: Thumb up 0

  3. 3
    Jonness says:

    As predicted by me, Santa Clause is the next president of the U.S., due to having promised an unlimited amount free Chinese dollars for all Americans, and there’s a 100% chance of recession.

    http://www.businessinsider.com/recession-probabilities-index-2012-11

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