June Reporting Roundup: Affirmations 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:

No Summer Slowdown Expected – Brisk Activity Reported

Listing activity perked up during June, but strong job growth in the Seattle/King County region has brokers predicting brisk sales with competitive bidding throughout the summer.

“We are still suffering from low inventory in parts of Snohomish County, and we’re still seeing multiple offers on the majority of new listings,” reported Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain and a director with Northwest MLS. She described the market as “strange,” adding, “We are not feeling or sensing the onset of a typical summer slowdown.”

John Deely, principal managing broker at Coldwell Banker Bain in Seattle, expects the brisk market to continue into fall, citing low interest rates, increasing prices and inventory, and high demand as drivers of the positive activity.

“Brokers in the Seattle market are keeping busy as multiple offers and cash buyers dominate new, well priced listings in most markets,” commented Deely, a director with Northwest MLS. The market for homes priced at $1 million and up around Seattle is experiencing pending sales volume at levels not seen since 2007, according to his analysis.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, shares the optimism. Pointing to recent reports on the addition of 14,400 jobs in the tri-county area (more than any two month period since the beginning of 2007), he expects a “red hot summer selling season.” Scott also credits lower interest rates with fueling what he described as a “mini power surge of sales.”

Wow this month’s press release reads like someone sneaked into the NWMLS office and stole the diary where they write down their their affirmations. If you say something enough times, maybe it will come true!

There will be no summer slowdown.
There will be no summer slowdown.
There will be no summer slowdown.

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

Seattle Times

Coral Garnick: King County home prices up 6 percent over year

Summer has eased the drought of available homes for sale in Greater Seattle, and sales are growing at a pace not seen previously this year.

After five months of declining sales activity compared with a year earlier, the number of June sales was up 2 percent annually, and the supply of homes for sale grew by almost 6 percent, according to a report Thursday by the Northwest Multiple Listing Service.

The larger inventory hasn’t lessened competition among buyers in the most sought-after areas, said Mike Gain, president of Berkshire Hathaway HomeServices Northwest Real Estate.

“We don’t have enough supply of homes for sale in desirable neighborhoods to satisfy the demand,” he said. “In those areas, it is just like a feeding frenzy when a house goes on the market,” he said.

I don’t think I’ve seen a real estate piece by Coral Garnick before. Decent first outing, but something more than quotes from home salesmen and a couple of anecdotes would have been nice. Perhaps Glenn Crellin was out for the holiday and unavailable to comment.

Seattle P-I

Aubrey Cohen: Home supply ticks up but remains tight

King County’s supply of houses for sale continued to improve, slowly, in June, even though sales rose for the first time this year, according to a new report. Seattle inventory got even tighter.

The county had 1.8 months of inventory, at the current sales pace, in June, up from 1.74 months of inventory a year earlier and 1.79 months in May, the Northwest Multiple Listing Service reported Thursday. That’s still well below the four to six months of inventory generally considered the balance zone between supply and demand.

Inventory actually fell in Seattle, from 1.4 months a year ago and 1.26 months in May to 1.23 months this June.

Not much more than a few stats and press release quotes in this month’s P-I story. I guess releasing the numbers before the holiday weekend meant nobody really had time to write a very in-depth story.

Tacoma News Tribune

Kathleen Cooper: Pierce, Thurston counties see higher home sale prices in June

Western Washington’s real estate market continued its steady improvement in June, data released Thursday show.

Big institutional investors are still major players, said Diedre Haines, a broker and NWMLS director.

As of the end of September, those two plus one other private investor were responsible for almost one in 10 purchases of single family homes in Pierce County.

American Homes 4 Rent has slowed its activity, but not Invitation Homes. Since Oct. 1 of last year, various limited liability companies affiliated with Invitation Homes have bought almost 300 more properties in Pierce County, government sales data show. That makes Blackstone the owner of about 950 homes in Pierce County alone. By comparison, American Homes 4 Rent has added fewer than a dozen properties to the 185 it purchased last year.

In a bit of a twist this month, the Tacoma News Tribune has one of the more in-depth articles, tying the NWMLS numbers to original research they’ve done recently on the big institutional buyers.

The Olympian

Kathleen Cooper: Thurston County sees higher home sale prices in June

Western Washington’s real estate market continued its steady improvement in June, data released Thursday show.

Median sale prices for single family homes and condos rose year-over-year between 5 percent and 7 percent in King, Pierce and Thurston counties. Pierce’s median sales price in June was almost $230,000. Thurston’s hit $236,000.

Not much more than a short blurb in the online edition of The Olympian this month.

(Coral Garnick, Seattle Times, 07.03.2014)
(Aubrey Cohen, Seattle P-I, 07.03.2014)
(Kathleen Cooper, Tacoma News Tribune, 07.03.2014)
(Kathleen Cooper, The Olympian, 07.04.2014)

  

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.

13 comments:

  1. 1
    Teacher Greg says:

    The real question though is whether foot traffic at open houses is up or not.

    Rate this comment: Thumb up 0

  2. 2
    Erik says:

    RE: Teacher Greg @ 1
    The people that buy the houses are programmers that look at homes on the computer, view the home once with an agent, then buy. Open houses are a thing of the past.

    I would guess inventory will rise this summer, prices rise, but not nearly as much as the past couple years. Cooling off compared to previous summers when sellers had buyers fighting to buy.

    Rate this comment: Thumb up 4

  3. 3
    wreckingbull says:

    RE: Erik @ 2

    It was a joke.

    http://en.wikipedia.org/wiki/Sarcasm

    Rate this comment: Thumb up 2

  4. 4
    Erik says:

    RE: wreckingbull @ 3
    Do you know Teacher Greg?

    If he does confirm that it is a joke… HAHAHAHAHA!! Whoop Whoop!! LOL!!!

    Here is a better joke… What do you call an old programmer that has lost his mind?

    Drum role please………………………………………….. Wreckingbull. BAM!

    Now that is funny. Your turn Wreckingbull.

    That felt good after taking lashing after lashing from you with no comebacks. I warned you Wreckingbull and you continued to push forward. I will not do to you what corndogs did to Losh because I do have a conscience, but I may increase your blood pressure slightly.

    Rate this comment: Thumb up 0

  5. 5
    Mike says:

    RE: Erik @ 2 – I actually bought my house after first viewing it during the open house. While I’m not a programmer per se, I do work for one of the big tech companies. Granted, I’d already viewed the house on RedFin and driven by it prior to the open, but actually seeing it during the open house was what convinced me to get an offer together stat. I don’t know how common that is, but it did happen in my case.

    But that was way back in the “slow” market of 2012…

    Rate this comment: Thumb up 2

  6. 6
    One Eyed Man says:

    RE: Erik @ 4

    Erik, the line about open house traffic being up has been a standing joke on Seattle Bubble for years. Among other things, it relates generally to comments by the heads of the big Seattle area real estate brokerages and other so called pundits in the monthly press release (by NWMLS?), where during the crash they would point to anecdotal evidence of open house traffic being up as a sign of a potential market turn around.

    Rate this comment: Thumb up 3

  7. 7
    Erik says:

    RE: One Eyed Man @ 6
    Thanks for laying it out for me.

    wreckingbull @ 3 –
    Sorry for the thrashing wreckingbull. I would delete that comment if I could. I will stand down now and think about my inappropriate outburst.

    Rate this comment: Thumb up 4

  8. 8

    That was productive.

    Maybe we can have another six posts to determine that prior sentence was me being sarcastic?

    Rate this comment: Thumb up 2

  9. 9
    Erik says:

    RE: @ 8House salesman –
    I had a good time laughing while I posted comments, therefore it was productive. I also understand the joke now. Good times.

    Rate this comment: Thumb up 1

  10. 10
    Kmac says:

    Lenders Warn of New Housing Bubble on Horizon

    Mortgage bankers are fearful that another real estate bubble is on the horizon, according to a quarterly survey of 203 bank risk managers from the United States and Canada conducted by FICO. Fifty-six percent of respondents said that an “unsustainable real estate bubble is inflating.”

    See more at: http://realtybiznews.com/lenders-warn-of-new-housing-bubble-on-horizon/98725422/#sthash.5ebHMxJU.dpuf

    Rate this comment: Thumb up 0

  11. 11
    Deerhawke says:

    Underwriting standards and downpayment requirements are high. Virtually all the loans are standard conventional 15 or 30 year loans with 20% down. Inventory and new construction are low. Foreclosures and short sales are down to normal levels. Affordability is under pressure but still not terrible. So other than rapid price appreciation, none of the normal indicators of a bubble seem to be evident….yet.

    Rate this comment: Thumb up 1

  12. 12

    By Deerhawke @ 11:

    Underwriting standards and downpayment requirements are high. Virtually all the loans are standard conventional 15 or 30 year loans with 20% down.

    WTF are you talking about? FHA is 3.5% down and conventional 5% (w/ PMI). VA is still 0%.

    Rate this comment: Thumb up 2

  13. 13
    Deerhawke says:

    True, but this misses the point.

    First, VA FHA and PMI loans have always been around. I don’t have any evidence to believe they play a more significant role now than they ever did. I haven’t heard that documentation requirements have been eased for these loans– quite the opposite.

    This kind of non-conventional financing probably plays a bigger role in other areas of the country, but I would be surprised if it is more than 10% of the transactions in King County. In the last 110 transactions I have been involved in (admittedly all in good neighborhoods and all in the city of Seattle) not one. A friend who has done about the same number of transactions in more marginal Seattle neighborhoods saw 2 FHA loans– both during the recession.

    In a hot market it is likely these loans play a smaller role because it is hard to get sellers to take a flyer on unconventional financing. I have some young friends looking for their first house and they were told by their agent that FHA would put them at a competitive disadvantage in a seller’s market.

    But the real point here Gary is that you do not see financial institutions offering the kind of financial crack now that they did from 2000 to 2008– Option ARMs, Liar loans, NINJA loans, non-verified owner occupied loans, low-doc no-money down LOC+ARM loans, etc, etc. I certainly haven’t heard of any banks modeling themselves on Wamu or Countrywide. So, that is WTF I am talking about.

    If you have a case to make that we are seeing the beginnings of another bubble, then make that case and tell us what mechanisms are at work.

    Rate this comment: Thumb up 1

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