Seattle Bubble

Let’s check in on the local papers (or digital former papers, as the case may be) to see how this month’s NWMLS stats are being spun to the populace.

First up, here’s the source material: the NWMLS press release that accompanied yesterday’s numbers: Brokers report signs of improvement in “real-time” housing market

NWMLS director Dick Beeson believes continued reduction in inventory will spur buyer activity. “Well priced and well conditioned properties will generally be the first ones purchased,” Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, predicts.

Beeson said open house traffic and calls from “for sale” signs have increased twofold in recent weeks. Buyers are scouring the Internet before calling or visiting open houses so they tend to be knowledgeable about options in their price range, he remarked, while noting they’re still seeking assistance from Realtors® in navigating the negotiation and closing process.
…
“As expected, the numbers reflected in the March report continue to show year over year declines. However, these historical comparisons fail to tell the story of the real-time market, which is beginning to show true signs of improvement in many areas,” said Ron Sparks, managing vice president of Coldwell Banker Bain.
…
Encouraged by some of the positive indicators in the latest MLS report, Sparks acknowledged “we’re not out of the woods quite yet, but market improvement must begin somewhere.” NWMLS director Dick Beeson agreed. “All in all, we are seeing generally increased interest at all levels of the market, high and low end. We may not soon see 2005 or 2006 levels of sales numbers, but we’re holding our own and progressing steadily in the right direction.”

I will say that the two stand-out statistics in this month’s numbers are the record-setting drop in median prices and the slightly-larger than usual spring increase in pending sales. As prices continue to fall, we can expect to see sales continue to recover.

However, if other markets across the country are any indication, the return of buyers will not stop prices from falling further. Prices will stop falling only once they reach levels that can be supported by the fundamentals. Of course, don’t expect to read that in any of these press reports.

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Time for yet another thrilling installment of “see how the local press repackaged the NWMLS press release.”

First, for comparison, here’s the NWMLS press release that accompanied yesterday’s numbers: Western Washington Home Buyers Starting to Grasp “unique housing opportunities”

“I believe these results are reflective of what might be called a “mental filibuster” for potential home buyers — they are struggling between the desire to buy a home and the uncertainty of what might come next in the way of government stimulus, tax credits or lower mortgage rates,” observed Ron Sparks, managing vice president of Coldwell Banker Bain. Agents are reporting “tremendous activity” at open houses, with the last few weekends generating the best activity in several months. Despite the high interest, what’s stopping buyers, according to Sparks, is weak consumer confidence.

Ron Sparks also commented on housing affordability, saying it’s at its best in decades. “This certainly appears to be a once in a generation home buying opportunity, but it’s also coupled with a once in a generation economy,” he stated. The question for all potential home buyers is not whether the current economic troubles, or the unique housing opportunities they now possess, will end, Sparks suggested, adding, “Rather, they might ask where they will be living once they do.”

Mr. Sparks’ statement regarding housing affordability is flat out false, unless his definition of “decades” is “four years.” 2005 was the last time affordability was as high as it is now. In reality, home prices will still have to drop at least another 15 percent or so just to bring affordability back to its 1993-2002 average.

So what’s the story from the press going to be this month? Have we “hit bottom” yet again? Are buyers flocking to open houses, with the market “set to get its mojo back” in March, just like it was last year? Read on to find out.

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