January Reporting Roundup: “Full Recovery Mode” 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:

Western Washington housing market "definitely in full recovery mode"

“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how [CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate Mike] Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014,” Gain added, emphasizing there is pent up demand and “a very active market is anticipated once the number of listings increases.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate agreed. “Available inventory remains tight with shortages or low inventory where 90 percent or more of the sales activity is taking place,” he remarked.

Thirteen counties have more listings than a year ago, but eight counties are reporting declines in total inventory. “We are literally starving for inventory. We need more homes to sell, especially in the most desirable neighborhoods,” Gain stated.

Literally starving, you guys. Literally.

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

Seattle Times

Sanjay Bhatt: Thin inventory puts pressure on King County home prices

In general, many houses that are listed are overpriced because those sellers are incorrectly comparing their homes with others in top condition and top locations, said Deidre Haines, principal managing broker for South Snohomish County at Coldwell Banker Bain.

“Sellers need to pay better attention to what their brokers are telling them about the value of their homes, and not think that Zillow knows,” Haines said, referring to the Seattle-based online real-estate marketplace.

Zillow’s algorithm for estimating a home’s value is a great starting point, she said, but isn’t incorporating all factors.

“You can’t smell it, you don’t know what condition it’s in, you don’t know if it’s been updated, you don’t know if the neighborhood has parked cars in the front yard,” Haines said.

I love that. Not only is Zillow terrible for home buyers thanks to intentionally incomplete data, but it’s bad for sellers because “you can’t smell it on Zillow.”

Another interesting note from the Seattle Times article:

Starting with Wednesday’s report, the listing service said it was changing how it reported the months of supply, using closed sales instead of pending sales, relative to total active listings. The service said it wanted its supply ratio to be comparable to those calculated by the National Association of Realtors and other groups.

I may switch to this method in these posts as well, just to be consistent with what shows up in other media.

Seattle P-I

Aubrey Cohen: Area home inventory picked up in January

It’s getting a little easier for Seattle-area home shoppers to find a place, according to a new report.

King County had just under 2.4 months worth of houses for sale at the current sales pace in January, the highest inventory since June 2012, the Northwest Multiple Listing Service reported. That said, he inventory level is still well below the 4- to 6-month range considered balanced between supply and demand. Seattle had 2 months of inventory in January.

“It’s still a situation with an inventory that isn’t as robust as it needs to be,” said Glenn Crellin, associate director for research at the University of Washington’s Runstad Center for Real Estate Studies.

Despite the slow growth of inventory, we’re still near record lows. For buyers’ sake, let’s hope this spring sees a big bump in the inventory of homes for sale.

Tacoma News Tribune

Kathleen Cooper: Home prices continue climb in Pierce County

The residential real estate market in Western Washington continued to heal in January, with most counties seeing an increase in sale prices and overall sales.

Pierce County’s median sale price increased almost 12 percent from January 2013, to $212,500, according to data released Wednesday by the Northwest Multiple Listing Service.

Pricing also is a concern. “Many listings are overpriced,” said Deidre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain. “Buyers are not interested in making offers on those properties,” she said.

Isn’t that true in every market though? There are always a lot of overpriced listings…

The Olympian

Kathleen Cooper: Thurston home prices mysteriously slip a bit

Thurston County’s median sale price took a tiny dip, dropping almost 3 percent from the same time a year ago, to $208,250, according to data released Wednesday by the Northwest Multiple Listing Service. The reason for the drop wasn’t immediately clear. Other data indicate market strength, including a 27 percent increase in closed sales and about 4.5 months worth of inventory.

“I really don’t understand it,” said Randy Reynolds, president of the Thurston County Realtors Association. “I haven’t truly analyzed it yet, but what I’m feeling is that we’re seeing more investors picking up properties at the low end” of the price range, which would drive that median point down a bit.

I highly doubt we’re seeing an up tick of investor activity. Most of the investors bought lots of homes in 2012 and early 2013. Investor activity has been on the decrease lately.

(Sanjay Bhatt, Seattle Times, 02.05.2014)
(Aubrey Cohen, Seattle P-I, 02.05.2014)
(Kathleen Cooper, Tacoma News Tribune, 02.06.2014)
(Kathleen Cooper, The Olympian, 02.06.2014)

  

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.

4 comments:

  1. 1

    Seems like after another month of relatively flat numbers they’re resorting to reporting on market basics, like some listings are over-priced. But mentioning Zillow, that’s really scraping the bottom of the barrel.

    As to the NWMLS changing how it computes months of inventory, wasn’t that interesting when I reported it in the prior thread? ;-)

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  2. 2
    joe smith says:

    In your written response to the Seattle Times part, you say that its bad for sellers because they can’t smell it on zillow. Don’t you mean its bad for buyers? EDIT – never mind, they were saying sellers. I misread it.

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  3. 3
    mike says:

    That’s one of the things I like about the Redfin agent reviews of homes. You see something like “Hardwoods covered in pet stains” and you just know what it smells like.

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  4. 4
    The Tim says:

    RE: joe smith @ 2 – Sorry I wasn’t more clear. Zillow is lousy for buyers because they are flat out missing many homes for sale and show many homes as for sale that are actually already pending or sold. They are bad for sellers because their magic secret sauce that’s supposed to value homes can’t take into account things like the smell of the house (i.e. its condition).

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