September Reporting Roundup: Blame the Shutdown 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:

Region’s housing activity still "speeding along," but pace slowing as seasons change, uncertainty looms amid government shutdown

September tested the housing market’s resilience around Western Washington with fluctuating mortgage rates, record-setting rains, and persistent inventory shortages in some areas. By month’s end, however, both pending and closed sales outgained the same period a year ago, according to the latest figures from Northwest Multiple Listing Service.

Prices also increased compared to 12 months ago, but fell slightly from the previous month. Year-to-date figures through nine months show prices for homes and condominiums that have sold in the 21 counties served by the MLS are up 12 percent from a year ago.

With uncertainty about the duration of the government shutdown, brokers say the positive momentum could stall.

It’s the perfect scapegoat! When things slow down from the unreasonably hot market we had this spring and summer, they can now blame it on the “shutdown.” How convenient!

Also:

Northwest MLS director John Deely said the Seattle market shows no signs of slowing down and house-hunters seem undaunted by soggy weather. “Buyers continue to flood open houses and multiple offers rain down on competitively priced properties,” he commented.

I see what you did there.

Northwest MLS director George Moorhead, the branch manager at Bentley Properties in Bothell, said market activity “waned just a bit” towards the end of August and during September, a pattern he said is normal with students going back to school and last-minute vacations. He expects interest rates will climb to 5 percent by summer 2014, and says the big message is “If you want to capitalize on the current lower interest rates, don’t delay any longer.”

Coincidentally, that has been the same “big message” home salesmen have been driving home for the past three years, at least.

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

Sanjay Bhatt, Seattle Times: King County home prices dip; shutdown threatens closings

Single-family home prices in King County saw a remarkable run from January to July, when the median price hit $434,000, a 24 percent increase in just seven months.

“That’s way too fast. That’s a 2006 market,” said Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma.

Hah! As if Dick Beeson is worried about home prices rising too fast. Good one.

Aubrey Cohen, Seattle P-I: Home selection the best since February

Frustrated would-be homebuyers should be able to find a little more selection, according to a report released Friday.

February home inventory at the current sales pace was 2.2 months in King County and two months in Seattle, the Northwest Multiple Listing Service reported. Those were the highest numbers since February, although they’re still well below the four to six months of inventory generally considered balanced.

“It’s still a short inventory,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington. “It’s good to see that inventory level picking up a little bit, though, giving prospective buyers a little more choice in the marketplace.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said the area’s market is going through its third “mini power surge of sales activity” this year.

“With interest rates suddenly coming off their peak for the year, we’re having another surge of activity, which is keeping the inventory at the shortage level in both King and Snohomish counties,” he added.

I like the contrast between the sensible, logical statements from Glenn Crellin and the marketing mumbo-jumbo hype from J. Lennox Scott.

As far as I can tell, there hasn’t been an article posted on the Everett Herald yet.

Kathleen Cooper, Tacoma News Tribune: Pierce County home prices rise again last month, data shows

Pierce County home prices ticked up again in September, data released Friday showed, continuing the trend it has followed all year.

The median sale price for homes and condos in Pierce County last month was $220,000, up almost 10 percent from the same time a year ago, according to data from the Northwest Multiple Listings Service. At the median sale price, half the homes sold for more than that amount, and half sold for less.

It looks like the online edition only gets the lightweight version of the story this month, with a few numbers and a couple of direct quotes from the NWMLS press release.

Kathleen Cooper, The Olympian: Thurston home prices, sales climb in September

Thurston County median home prices rose by 8 percent to $228,497 in September, data released Friday from the Northwest Multiple Listing Service showed.

Aside from that one sentence, the rest of The Olympian’s article is literally identical to the article in the News Tribune.

(Sanjay Bhatt, Seattle Times, 10.04.2013)
(Aubrey Cohen, Seattle P-I, 10.04.2013)
(Kathleen Cooper, Tacoma News Tribune, 10.04.2013)
(Kathleen Cooper, The Olympian, 10.05.2013)

  

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.

16 comments:

  1. 1
    Blurtman says:

    Stating the obvious – real estate has become fetishized.

    Rate this comment: Thumb up 0

  2. 2
    Macro Investor says:

    I’m sure glad the rain didn’t hurt the real estate market. I was worried about that.

    The next threat is the early Christmas sales. The tinsel and lights will make buyers think of SNOW. Must not venture out under threat of snow. Xmas 2013 — The Apocalypse.

    Rate this comment: Thumb up 0

  3. 3
    No Name Guy says:

    August or September?

    Rate this comment: Thumb up 0

  4. 4
    Blake says:

    Hanson seems to be a perma-bear but makes some good points:
    http://www.bloomberg.com/news/2013-10-07/a-lonely-housing-bear-predicts-a-big-fall.html

    – snip –
    Hanson’s critical view of the housing market, which he shares with mutual fund and hedge fund clients, extends down to how those very statistics are generated. A reporting lag makes existing-home sales stats deeply misleading, he says. The statistics are calculated 30 to 60 days after sales contracts are signed. July’s positive data, for example, were mainly for homes sold before most of the rate increase.

    Digging into the data does, however, reveal one reason why Hanson is so leery of housing now. Some 58 percent of existing-home sales in 2013 have been made by all-cash investors purchasing large swaths of distressed properties to lease to renters. Hanson says private-equity firms caused about 50 percent of the price appreciation in cities like Phoenix and Las Vegas, and generally overpaid by 10 percent to 20 percent, according to his calculations.

    With gains of more than 35 percent since the crash for properties in Las Vegas, Phoenix and other of the hardest-hit regions, these vultures will begin to lose interest, he figures. With property prices and interest rates both higher, they may find better opportunities in Treasury and high-yield bonds than in houses. That’s because as house prices rise the yield you can get from renting the house declines. The loss of some of these buyers will remove what Hanson sees as an artificial support for prices.

    Rate this comment: Thumb up 0

  5. 5
    Saulac says:

    No more thumb down button? Maybe I should start posting more…

    Rate this comment: Thumb up 0

  6. 6
    Chas Holman says:

    Shutdowns are SUPPOSED to hurt by INTENT.. That is the only point of having a shutdown.

    Which is the most frustrating part of this self made Republican debacle. Real people (and LOTS OF THEM) who are finally climbing out of the last hole ‘they’ tossed us into being tossed back in callously BY INTENT.

    Only one party could open the Government within the hour if they wanted, and it isn’t the Democrats. This shutdown is an economic CHOICE and it is doing immediate and long term economic distress by DESIGN. The party of ‘patriots’ my hind leg..

    Call your Congressman and tell them to stop this nonsense before it costs far more to get out of than it cost to get in to.

    Rate this comment: Thumb up 0

  7. 7
    Erik says:

    RE: Chas Holman @ 6
    I agree. A government job is one step up from welfare. Government workers are the ones that aren’t valuable enough to get a real job anyway. Those people would otherwise do nothing and get paid. My professor in college told me that. Just go to the department of licensing. They hire the losers in society that would otherwise be on welfare. I think we should replace them with more capable people and cut the number of employees in half like a real business would.

    Sorry for being so harsh, but all the government employees I know are fat and lazy.

    Rate this comment: Thumb up 0

  8. 8
    mike says:

    RE: Chas Holman @ 6 – Unfortunately the GOP is in a position where a continued economic downturn is politically beneficial. They’re desperate enough to try, and the rational thinkers in the party are scared to buck the leadership’s trend.

    RE: Erik @ 7 – I’ve worked with a large number of government workers over the years. It really depends on the kind of project you’re working on. If it’s well funded, they can and do pay for talent. From my perspective, after Obama was elected things changed a bit. Government jobs (and especially contractor jobs) were no longer the secure ‘cash cow’ occupations they were during the previous administration. Positions were cut, and the better workers moved out to the private sector either by choice or because the gravy train ended.

    I haven’t worked on a government project for over 3 years now, and I don’t know of anyone that left during the Obama purge going back to it either. I find it amusing when I talk to people who get their news from Fox, and they’re convinced beyond any doubt that Obama vastly increased federal employment. Didn’t happen.

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  9. 9
    Dr Rick says:

    By Blurtman @ 1:

    Stating the obvious – real estate has become fetishized.

    OK Blurty, I have to ask you to use one of your posts to inform us on what “fetishized” is. I know the meaning of fetish, and how to make it into an adjective, but I really want to know what you mean.

    FWIW, Good Wife and I bought a small place in Sequim just as the rates started to jump. The increase in rates afterwards did cool the market there a bit, noticeably so.

    Fel Temp Reparatio.

    Rate this comment: Thumb up 0

  10. 10
    Dr Rick says:

    By Erik @ 7:

    RE: Chas Holman @ 6
    I agree. A government job is one step up from welfare. Government workers are the ones that aren’t valuable enough to get a real job anyway. Those people would otherwise do nothing and get paid. My professor in college told me that. Just go to the department of licensing. They hire the losers in society that would otherwise be on welfare. I think we should replace them with more capable people and cut the number of employees in half like a real business would.

    Sorry for being so harsh, but all the government employees I know are fat and lazy.

    A friend told me once that bureaucracies were populated by the cross section of society; there are masses of functionaries and a group of “can do” individuals who take pride in public service. I have found this to be true.

    Public service should be a high calling, working to keep society moving and grooving regardless of which branch of the party should be in office. Call me a dreamer…

    On the flip side, just because someone comes from the private sector does not mean he or she is virtuous, ethical or beneficial to the public wheal. Often quite the contrary, with agendas and goals oriented towards short them personal benefit. The unseen hand does not have my benefit in mind, nor yours. As a science geek, I find little to no evidence that a purely self interested approach benefits the greater good, at least consistently enough to place a bet on it.

    Fel Temp Reparatio

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  11. 11

    Actually, Even the National News Blames the Shutdown of Seattle Jumbo Mortgages

    They say loans over $417K [somewaht typical in the Seattle city and parts of the eastside] are shutdown due to mortgage approval delays.

    Cash is definitely “KING” in high price Seattle loans.

    Rate this comment: Thumb up 0

  12. 12

    By Erik @ 7:

    RE: Chas Holman @ 6
    I agree. A government job is one step up from welfare. Government workers are the ones that aren’t valuable enough to get a real job anyway. Those people would otherwise do nothing and get paid. My professor in college told me that. Just go to the department of licensing. They hire the losers in society that would otherwise be on welfare. I think we should replace them with more capable people and cut the number of employees in half like a real business would.

    Sorry for being so harsh, but all the government employees I know are fat and lazy.

    If you actually read Chas Holman’s post, I’m not sure what in his post you agree with. But, for your sake, the next time you go to the Department of Licensing, let’s hope that they don’t take you up on your suggestion and cut the number of employees in half. The next time you’re a crime victim, let’s hope they haven’t taken your suggestion and cut the number of cops in half. The next time you’re trapped in a burning building, let’s hope they haven’t taken your suggestion and cut the number of firefighters in half. And the next time you fly, let’s hope they haven’t cut the number of air traffic controllers in half. Ah, and that publicly funded university known as the UW? That professor of yours? A government employee! Let’s get rid of half of them so class sizes double. So what is it that you agree with Chas Holman about? He’s saying the shutdown is a really bad thing, that it’s the Republicans fault, and that people need to pressure their congresspeople to get the govt employees back to work. You’re saying that they’re fat and lazy.

    Rate this comment: Thumb up 0

  13. 13
    Blurtman says:

    RE: Ira Sacharoff @ 12 – Don’t cut you. Don’t cut me. Cut that fellow behind the tree. And tell the US government to stay out of my Medicare!

    Rate this comment: Thumb up 0

  14. 14
    The Tim says:

    RE: No Name Guy @ 3 – Geez. *smacks forehead* Sorry, fixed. Thanks.

    Rate this comment: Thumb up 0

  15. 15
    ARDELL says:

    RE: Ira Sacharoff @ 12

    I sometimes wonder if the people who don’t want anyone except the brightest and best to be working for a living, want everyone else to be on welfare. Or don’t they think it through that far?

    Rate this comment: Thumb up 0

  16. 16
    Blurtman says:

    RE: Dr Rick @ 9 – It’s just a place to live, in’t it?

    Rate this comment: Thumb up 0

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