Reporting Roundup: Market Momentum 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:

High demand, low inventory sparking multiple offers, market momentum

Roller Coaster "Python" Theme Park Efteling - The Netherlands. by Flickr user Dirk-Jan Kraan
Woo! Momentum!

“The market is done with needed correction,” declared one broker.

“There continues to be extremely low inventory levels and high buyer demand which is causing multiple offers in many local areas,” reported OB Jacobi, president of Windermere Real Estate. He also noted a “definite uptick” in the number of cash buyers, “many of which are investors.”

Frank Wilson, another MLS director and the branch managing broker at John L. Scott Real Estate, described the current market as “the best of most worlds: low interest rates, a supply of homes to choose from that are aggressively priced, and lenders who are beginning to engage in ‘make sense’ loans.”

Moorhead noted short sales are up significantly from two years ago “and now outpace bank owned (REO) listings,” prompting outreach to hesitant sellers. “We all have a call out to sellers who are on the fence to remind them this is the first ‘sellers market’ we have seen since 2007. This also means sellers who were on the edge of being in a short sale situation may actually be on the positive side of the ledger,” he added.

It’s always a great time to buy or sell a home! I also love the claim that somehow today’s market is great for buyers because of “a supply of homes to choose from.” Never mind that it’s the smallest supply we’ve seen since they started keeping records.

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

Eric Pryne, Seattle Times: More buyers, few sellers, push up King County home prices

Inventory — or a lack of it — is driving King County’s residential real-estate market, brokers and industry observers say. Statistics released Wednesday by the listing service underscore the impact.

Countywide, just 3,720 houses were on the market as of Nov. 30, 14 percent fewer than at the end of October and 43 percent fewer than a year ago.

Inventory always dips in winter. But it hasn’t been this low since at least 1999.

Closed sales in November, however, were up 19 percent year-over-year. There were 16 percent more closings than new listings last month.

As usual, a straightforward take on the latest data from Eric Pryne. Nothing overly sensational and a clear explanation of the various factors that are driving the market.

Aubrey Cohen, Seattle P-I: Seattle-area house prices surge

“Incredible,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Research at the University of Washington. “I’m surprised by how much they’ve jumped.”

Median prices can go up if there’s a change in the makeup of houses that sell in a given month. It could be, for instance, that buyers are taking advantage of record low interest rates to buy pricier houses. Indexes that look at repeat sales of the same houses have shown smaller gains.

But the median price “is indicative of how much money people are spending in the marketplace,” Crellin said.

It “certainly” reflects the extremely low inventory of homes for sale, particularly nice homes close to urban centers, he added. “There are bidding wars.”

I still think it’s a stretch to describe what’s going on right now as a “surge” in home prices. Bank-owned sales have fallen through the floor, so when we compare the median sale price in November 2011 to the median sale price in November 2012 we’re looking at two very different sets of homes.

Herald Staff, Everett Herald: Home sales steady in number, higher in price

The number of homes sold last month in Snohomish County was on par with November 2011, but prices were up.

The Northwest Multiple Listing Service indicated in a report Wednesday that a total of 806 single-family homes and condos sold in the county last month.

That’s half of the entire “story” from the Herald this month. Apparently they didn’t have anyone available to write a real piece this month.

Rolf Boone, Tacoma News Tribune: Pierce County home sales, prices continue to rise

Pierce County home sales and median prices rose in November, the second consecutive month in which both categories showed improvement, according to Northwest Multiple Listing Service data released Wednesday.

Home sales increased nearly 11 percent to 841 units last month from 758 units from November 2011, the combined single-family residence and condo data show. Median prices rose, too, climbing 5.5 percent to $195,000 last month from $184,848 a year ago, the combined data show.

And that’s about half of the News Tribune’s story, too.

Rolf Boone, The Olympian: Increases in Thurston home sales stop

An eight-month streak of improved home sales in Thurston County came to an end in November as sales fell 11 percent, according to Northwest Multiple Listing Service released Wednesday.

Thurston County home sales fell 11.66 percent to 197 units last month from 223 units in November 2011, the combined single-family residence and condo data show.

Several Thurston County real estate brokers could not be reached to comment on November’s data.

Now that is interesting. I did not notice that home sales were down year-over-year in Thurston. I’ll have to look at this a bit more in the next few weeks to see if there’s anything more noteworthy behind this blip in Thurston.

(Eric Pryne, Seattle Times, 12.05.2012)
(Aubrey Cohen, Seattle P-I, 12.05.2012)
(Herald Staff, Everett Herald, 12.05.2012)
(Rolf Boone, Tacoma News Tribune, 12.05.2012)
(Rolf Boone, The Olympian, 12.06.2012)

  

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.

12 comments:

  1. 1
    Kim says:

    One guess on the Thurston market slow-down is the election. Many people who live in Thurston County work for the state government, so there may have been a slow-down in the market while the state’s leadership was being decided. (Job impacts and all.)

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  2. 2
    softwarengineer says:

    Hey Tim, I Hope Your Fever is Gone and You’re Feeling Better

    You did a good job of analyzing the allegations for evidence BTW.

    I bought in 1999 and King County was giving up on real estate [interest rates were just down to 6.75% then, from like 10% in the earlier 90s]….they built my HOA in 1991 and originally offerred them up as rentals with a lease to possibly buy later….the middle class couldn’t hardly buy a house in King County the 90s.

    So if inventory was low, so were qualified buyers [driving down inventory?].

    Good job Tim!

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  3. 3
    David Losh says:

    Glenn Kelman sent me an e-mail this morning predicting a great Real Estate year to come.

    Redfin is on a rampage, growing like crazy.

    Why don’t you ever quote Glenn Kelman in these posts?

    He seems to be on the band wagon.

    He signed off with a cheery greeting!

    Happy holidays and thanks for your support!
    Glenn

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  4. 4
    Feedback says:

    Thanks, Tim! Always glad to hear that it’s a good time to buy a home now that our bubble has thoroughly burst and deflated. Rents are skyrocketing and rates are at historic lows, making homebuying the most affordable it has been in years. I’m glad to see some positive attitudes about homeownership, a cornerstone of the American dream.

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  5. 5

    I couldn’t get past the first sentence in the Times’ article:

    On the last day of November 2011, 158 houses were listed for sale in Bellevue east of Interstate 405.

    What an amateur! Doesn’t he know the most relevant data is north of I-90? ;-) :-D

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  6. 6
    ray pepper says:

    RE: David Losh @ 3 – yes, and they are hiring 200 NEW Agents! I think that was in the email. However, his analysis of RedFin doing well I would find very suspect. Compared to the last 5 years this is probably so but as for REAL earnings that would EVER justify IPO, I think not….They MUST expand their revenue streams and by this I don’t mean opening more offices. I suspect a merger in the coming years(s).

    As Z remains in the gutter at 26.00 pps and a PE of 150+ http://finance.yahoo.com/q?s=Z and companies like Zipr http://finance.yahoo.com/q?s=ZIPR&ql=0 hanging on by a fine thread success ahead in the real estate industry will be through entirely different companies and models..

    Bank it! …………Until then (like my daughters soccer team the Diamonds) ..Diamonds and Red Fin Rock but both always need money!

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  7. 7
    ChrisM says:

    RE: ray pepper @ 6 – Holy cow, I thought that P/E 150 was a typo!

    Class action lawsuit against Z:
    http://zlkdocs.com/Z-Info-Request-Form-509

    Levi & Korsinsky announces that a class action lawsuit has been commenced in the USDC for the Western District of Washington on behalf of investors who acquired Zillow, Inc. (“Zillow” or “the Company”) (Nasdaq: Z) stock between February 15, 2012 and November 6, 2012.

    The complaint alleges that defendants concealed the difficulties Zillow was having signing up new real estate agents as subscribers and the churn it was experiencing in existing subscribers. As a result, Zillow’s stock traded at artificially inflated prices during which time Company insiders sold more than 3 million shares of their own Zillow stock for nearly $115 million. The Company then raised $156 million through a follow-on offering in September 2012 just thirty days after assuring investors that the filing of a Form S-3 Registration Statement was not intended for a follow-on offering. Then on November 5, 2012, Zillow issued a press release announcing its third quarter 2012 financial results and reducing its fourth quarter and full year 2012 revenue guidance that fell below analysts’ estimates. Furthermore, Zillow announced that it had lost a large display advertiser, Foreclosure.com, and therefore defendants expected weakness in the Company’s display advertising business. These disclosures caused Zillow stock to fall $6.22 per share to close at $28.15 per share on November 6, 2012. If you suffered a loss in Zillow you have until January 28, 2013 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff.

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  8. 8
    ray pepper says:

    RE: ChrisM @ 7 – yes poor Zillow doomed the day it hit the market..Had a nice “artificial” ride for awhile but Z is not alone in its slow death spiral…Look at Trulia: http://finance.yahoo.com/q?s=TRLA ………

    Definitely not a way to play any sort of real estate rebound…Gonna play in this space? Buy the Lenders! BAC is on a tear! http://finance.yahoo.com/echarts?s=BAC+Interactive#symbol=bac;range=6m;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

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  9. 9

    By Feedback @ 4:

    Thanks, Tim! Always glad to hear that it’s a good time to buy a home now that our bubble has thoroughly burst and deflated. Rents are skyrocketing and rates are at historic lows, making homebuying the most affordable it has been in years. I’m glad to see some positive attitudes about homeownership, a cornerstone of the American dream.

    Betting pool on whether Feedback is in the real estate industry? My money says yes.

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  10. 10
    David Losh says:

    RE: Ira Sacharoff @ 9

    My money is that they are kidding.

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  11. 11
    The Tim says:

    RE: Ira Sacharoff @ 9 – The only comments “Feedback” ever leaves are patronizing over-the-top sarcastic “compliments” like the one above. They’re a troll but unfortunately despite ignoring them completely they never seem to go away.

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  12. 12

    […] A 4.9% increase is decent, but obviously nowhere near the nearly 20% increase in the raw median that made headlines last week. […]

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