July Reporting Roundup: “Cyclone of Sales” 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:

Home sales, prices still rising in Western Washington despite lean inventory and increasing mortgage rates

Rising interest rates, rising prices and rising consumer confidence are creating a “positive cyclone of home sales activity,” according to members of the Northwest Multiple Listing Service. A robust job market around the Greater Seattle area is also spurring sales.

“We experienced a mini power surge of sales activity that was touched off by a sudden raise of interest rates during the month of May,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Scott attributes part of the surging activity to buyers who rushed forward to purchase a home before rates climb higher. He also reported more sellers are listing their homes “due to the realization that the next home they purchase will be at a higher interest rate.” As these sellers become buyers, they’re contributing to the “positive cyclone of sales activity,” Scott stated.

Without even reading the attribution, I already knew that quote was from Lennox. Classic.

Interestingly, there are a few bits in this month’s release that aren’t quite so optimistic:

Despite improving inventory overall…

…some sellers are testing the waters with aggressive pricing, but they are experiencing longer market times.

…the seller’s market will continue for at least the next few months.

…some economists expect weaker U.S. economic growth for theremaining months of 2013 and moderating home price increases…

If you read between the lines, it sounds like they’re actually bracing for a slowdown in the second half of the year.

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

Sanjay Bhatt, Seattle Times: King County median home price up 15 percent over year ago

The silver lining: Last month’s number of listings in King County was the highest level so far this year.

Experts said rising prices drew more sellers into the market in July than expected, including banks with repossessed properties and owners once underwater on their mortgages, a welcome sign for a tight market.

“We’re looking at a stabilizing marketplace,” said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies.

Once again I find myself in agreement with Mr. Crellin.

Aubrey Cohen, Seattle P-I: More homes hit market, but supply still tight

The number of listings is the most significant news in the July report, according to Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

“While the total listings are down (from July 2012), they’re not down as sharply as they have been,” he said. “That’s a sign to me that we’re starting to get inventory a little bit in better balance.”

Another great quote from Glenn C. He’s on fire this month!

Kurt Batdorf, Everett Herald: Prices rise in ‘cyclone’ of local homes sales

Members of the Northwest Multiple Listing Service said the threat of rising interest rates, quickly rising prices and growing consumer confidence are creating a “positive cyclone of home sales activity.”

The greater Seattle area’s robust job market is also spurring sales just north of the King County line.

As late as the Herald’s story was posted this morning, the content disappointingly relies somewhat heavily on the NWMLS press release.

Rolf Boone, Tacoma News Tribune: Pierce housing market riding summer hot streak

After a sizzling June for the Pierce County housing market, the heat was turned up even higher in July as sales and median prices not only blew the roof off the house but burned right through it, according to new Northwest Multiple Listing Service data released Tuesday.

Prices have benefited from fewer homes on the market, giving sellers the upper hand in recent months after buyers had been in the catbird seat for years. But inventory is on the rise as new listings begin to outpace the number of last year’s listings.

The result is that inventory was down only 8 percent last month to 3,495 units from 3,786 units in July 2012. Previous monthly inventory levels had been down 20 percent or 30 percent from the year-ago period.

“A more balanced market is certainly healthier,” [Allen Realtors president Mike]Larson said about the higher inventory levels.

I like how in that last quote the real estate agent almost sounds disappointed.

Rolf Boone, The Olympian: Thurston home sales rise 20 percent in July, prices inch up

The Thurston County housing market had another strong month as sales rose 20 percent in the year-over-year July period, according to Northwest Multiple Listing Service data.

Apparently to get the full story in the Olympian this month you have to buy a paper copy. Oh well.

(Sanjay Bhatt, Seattle Times, 08.06.2013)
(Aubrey Cohen, Seattle P-I, 08.06.2013)
(Kurt Batdorf, Everett Herald, 08.07.2013)
(Rolf Boone, Tacoma News Tribune, 08.07.2013)
(Rolf Boone, The Olympian, 08.06.2013)

  

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
    Erik says:

    Welcome friends! I have 5 whole new comments this round, so here we go…

    What is the definition of a sellers market and buyers market for king county real estate if I wanted to quantify it? Can we define it in terms of houses on the market? Months of housing inventory? When we turn to a buyers market, inventory will increase, but to what number of houses? How many months of inventory?

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  2. 2
    Fed up with Erik says:

    RE: Erik @ 1

    I have been reading this blog for about 3 years and have never once felt the need to comment. But I am going to break my silence with the request that @Tim please block Erik from commenting. He is a constant distraction and I am tired of the majority of the comment section being dedicated to an asinine discussion about him and his condo in Juanita. Enough is Enough!

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  3. 3
  4. 4
    Erik says:

    RE: Fed up with Erik @ 2
    I never commented on those things on my above comment. You made one comment in 3 years and it was at a time I wasnt even discussing myself. I was asking about quantifying a sellers market.

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  5. 6
    Blurtman says:

    RE: Fed up with Erik @ 2 – And yet you are strangely compelled to read his posts. “Get out of my head!!!!!!!”

    Rate this comment: Thumb up 0

  6. 7
    whatsmyname says:

    RE: Erik @ 1 – Wow, Erik. It looks like there is one thing that can get you into more trouble here than talking about your condo.

    I personally think it’s kind of high, but the number bandied about here over the years for a “balanced market” is 6 months sales in inventory. As you can see from the previous thread; once the months of supply number quadruples from the present, we will be on the edge of a buyer’s market.

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  7. 8
    Erik says:

    RE: Sparky @ 3
    Thanks for the references Sparky.

    One of the links said this:

    “Using trial and error, I found that the best relationship between the change in price and inventory is found when the inventory changes are lagged by 14 months – that is, the inventory change for a given period is matched with the price change for a period 14 months later. Intuitively this makes sense. Buyers see a big change in inventory, and factor it into their pricing decision.”

    If we believe this is true and the bottom is 3/2013, inventory should drive prices until 5/2014. I will trust this model and subscribe to this. The other link was about bottom calling and some methodology to it. It links to numerous methods, which I will have to read about. Thanks for the links. This is helpful information.

    Whatsmyname- Yeah, tough crowd I guess… I think when I popped off to ChrisM and slammed Clark County, he launched an attack on me. Suddenly people are crawling out of the wood works to slam me. When I fight back, they gang up on me.

    6 months of sales inventory does seem high to me too. That can probably change quickly though. I’m sticking with it turning to a buyers market on 5/2014 and we’ll have 6 months of inventory.

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  8. 9
    Azucar says:

    RE: Erik @ 4

    It was still somehow annoying enough that I gave it a thumbs down, though.

    Rate this comment: Thumb up 0

  9. 10
    Erik says:

    RE: Azucar @ 9
    Okay. Yeah i gets old having these idiots constantly attack me.

    Do you think that the market will turn into a buyers market on 5/2014 as described in the post below?
    http://seattlebubble.com/blog/2007/06/17/why-inventory-matters/

    To me it seem reasonable and kind of intuitive as deejayoh describes. What do you think?

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  10. 11
    Lo Ball Jones says:

    On the one hand, having waited, I see prices going up slightly.

    On the other hand, I notice that it seems to be bringing sellers with real homes (not garbage) out into the market.

    The perfect storm will be a lot of people trying to sell all at once and pushing the prices back down but making the inventory stick.

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