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:
Local real estate leader calls December "One of best on record"
Real estate brokers around Western Washington reported a strong finish to 2014. December’s sales outpaced the same month a year ago by double digits, according to new figures from Northwest Multiple Listing Service.
“December was one of the best Decembers on record,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate upon reviewing the latest statistics from the listing service.
Commenting on the combination of scarce inventory in some areas and expectations of rising interest rates, the head of one large real estate company advised, “Anyone thinking of buying a home should do it early in 2015!”
“Prices, interest rates, and rents will continue to rise,” stated Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he explained, adding, “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase.”
“Buy now! The price is only ever going to go up, up up!” Gee, now where have I heard that before…
Oh yeah only from basically every single real estate agent prior to the collapse of the bubble. But wait, didn’t home prices totally crash, while interest rates simultaneously fell to historic lows? Don’t you worry your pretty little head about that. Surely it could never happen again. Never ever.
Read on for my take on this month’s local news reports.
King County’s housing market ended 2014 with a flurry of sales, but with the lowest supply of active listings in any month going back more than a decade.
That crunch affected total sales: The MLS reported 24,393 sales of single-family homes for the year, 300 fewer than in 2013. In the previous five years, total sales volume climbed each year in King County.
The $440,000 median price of single-family homes in 2014 was 6 percent higher than in 2013, MLS data shows.
“I’m looking forward to 2015,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “It’s just going to be a very healthy, steady year. I don’t think we’ll see price increases off the charts.”
The initial version of the Seattle Times story focused primarily on the very slight decrease in annual sales rather than the crazy low supply of listings on the market. The story was updated before the end of the day to this version, which has a more complete view.
It’s interesting that Mike Gain gave the Seattle Times a much more toned-down quote than what he provided to the NWMLS for their press release.
Aubrey Cohen: Supply of homes for sale falls even more
It’s getting even harder to find a home to buy in the Seattle area, according to a new report.
King County had just 1.39 months’ worth of houses for sale, at the current sales pace, in December, the Northwest Multiple Listing Service reported Tuesday. That’s down from 1.74 months last December and 1.96 months in November, and well below the four to six months considered balanced between buyers and sellers.
Supply is even tighter in Seattle itself, at 0.86 months, down from 1.19 months a year earlier and 1.25 months in November.
“It’s phenomenal,” said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington.
Inventory fell because new listings ticked down slightly from a year ago in Seattle and countywide, while sales jumped 15 percent and 10.5 percent, respectively. O’Connor speculated that buyers are acting now because they see mortgage interest rates going up, along with prices.
Hmm, what happened to Glenn Krellin? Can’t say I’m a fan of the breathless tone of the quote provided by his stand-in Stephen O’Connor. I mean, tight supply is an interesting phenomenon, but calling it “phenomenal” has a strong positive implication that I doubt many home buyers would agree with.
Everett Herald Business Journal
Dan Catchpole: County housing market finishes strong in 2014
The housing market in Snohomish County and around metro Puget Sound finished strong in 2014.
Residential sales and median home prices climbed in December compared to the same month last year, according to data released Tuesday by the Northwest Multiple Listing Service.
But while more houses and condos sold, new listings did not keep pace. The county’s only has enough homes for sale to feed demand for about two months, according to NWMLS. King County has lowest supply of listings. It has less than six weeks of supply.
Hey, the Herald decided to post something this month. There isn’t much “meat” in their story, but it’s better than nothing.
Tacoma News Tribune / The Olympian
A tight housing market where demand is outpacing supply could drive prices higher for Western Washington homes and condominiums, real estate experts are predicting for the coming year.
Over the past year through December, median home prices have jumped by 6.41 percent in King County, 6.68 percent in Thurston County and nearly double digits, 9.76 percent, in Pierce County, according to new December 2014 statistics from the Northwest Multiple Listing Service.
The median home and condo sales prices in December in King County increased from $375,900 in December 2013 to $400,000 last month. In Pierce County, the median sales prices increased from $205,000 to $225,000 in that same period. Thurston County’s sales prices jumped from $224,950 to $239,975 from December 2013 to December 2014, said the listing service.
While home prices were moving the right direction for sellers, the market has yet to return to pre-recession highs, said Michael Robinson, residential investment specialist at Windermere Professional Partners in Tacoma. That high was $285,000. The low in February of 2012 was $185,000.
Robinson said that as long as interest rates remain low, the Pierce County market is affordable to many potential buyers.
“Prices, interest rates and rents will continue to rise,” said Mike Gain, chief executive of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he said. “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase,” Gain said in a news release.
And the bait has been taken. Buy now! Don’t wait!
Puget Sound Business Journal
The prospect of higher interest rates spurred home-buying activity last month in the greater Seattle area, where the number of pending sales hit the highest level in nine years.
Sales of million-dollar-plus properties in King County jumped significantly last year. According to the MLS, nearly 2,000 homes priced at $1 million and up sold in 2014. That’s up more than 25 percent compared to 2013.
Reflecting the strong regional economy, the overall housing market is firing on all cylinders.
I rather doubt that sales volume has much to do with “the prospect of higher interest rates.” More likely it’s entirely due to the last bit quoted there: the Seattle area’s roaring economy.
(Sanjay Bhatt, Seattle Times, 01.06.2015)
(Aubrey Cohen, Seattle P-I, 01.06.2015)
(Dan Catchpole, Everett Herald Business Journal, 01.06.2015)
(John Gillie, Tacoma News Tribune, 01.06.2015)
(John Gillie, The Olympian, 01.06.2015)
(Marc Stiles, Puget Sound Business Journal, 01.06.2015)