Seattle Bubble

Here’s the NWMLS press release that accompanied yesterday’s numbers: Pending Sales Up 4.1 Percent From Year Ago, Total Inventory Unchanged

Home sales around Western Washington during September rose 4.1 percent from a year ago, reversing a 19-month pattern of declines. Members of Northwest Multiple Listing Service reported 5,982 pending sales (offers made and accepted, but not yet closed), a gain of 234 transactions from a year ago. The totals cover 19 counties in the MLS service area.

NWMLS data show the last system-wide uptick in pending sales was February 2007 when members reported a 4.8 percent gain from the previous year.

In other key indicators of housing activity, Northwest MLS reported tightening inventory with a double-digit drop in the number of new listings added during September compared to 12 months ago, and total inventory at month end that matched year-ago numbers. Figures also show area-wide softening of prices compared to a year ago.

So the industry-promoted message this month is “focus on the increased sales and flat inventory.”

Let’s take a look at the newspaper writeups about yesterday’s data from the NWMLS. Let’s see how our local reporters did at staying on message.

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Oh man. They let Elizabeth Rhodes take just one day off, and look what happens:

Gahh! It’s right there in giant black print, above the fold on the front page! I can’t imagine the Seattle Times’ real estate advertisers feeling too great about this…

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Even when we have direct access to the hard facts of the local real estate market, it’s still fun to see what kind of spin the local papers put into their report of the data. So, it is time yet again to continue our monthly tradition of rounding up all the local “mainstream” articles about last month’s housing data.

How many ways can you print “now is a great time to buy”? Read on to find out…

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This month’s theme is “let’s scare fence-sitters by telling them that rising interest rates will eliminate any savings from falling home prices.” Let’s see how well our local papers do at driving this point home.

Read on for the this month’s roundup…

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From today’s Everett Herald: Housing slump hits local banks hard

Low interest rates, the loss of the home construction boom and investor pessimism all are weighing down on bank stocks, dealing a big blow to all three of the local banks traded on Wall Street.

Lynnwood’s City Bank, along with Frontier Financial and Cascade Financial — both Everett-based banking firms — have seen their share prices decline by more than half in the past year.

They’re not alone. The nation’s biggest banks and thrifts also are suffering. Shares of Seattle-based Washington Mutual, one of the hardest hit by the mortgage meltdown, have plummeted 90 percent from their peak in 2007. The Standard & Poor’s Bank Index, which includes such national names as US Bancorp, Keycorp and Wells Fargo, has tumbled 50 percent in the past year.

Note that unlike Washington Mutual, the difficulties these local banks are experiencing can’t be blamed on making subprime loans in California. It’s all local.

Sara Hasan, banking analyst at Seattle’s McAdams Wright Ragen Inc., said the local banks are seen as vulnerable to the downturn in housing, as a substantial number of their loans have been to the construction industry.

“In the Northwest especially, it seems like we’re seeing the first wave of difficulties with the housing market,” Hasan said. “Bankers are nervous, and their investors are nervous, too.”

It seems to me that they have good reason to be nervous.

In related news, WaMu replaces president of branch network.

Washington Mutual said today it has replaced James Corcoran, president of its vast retail branch network.

Stephen Rotella, WaMu’s president and CEO, will assume Corcoran’s duties until a permanent successor is named.

(Eric Fetters, Everett Herald, 06.30.2008)
(Times Staff, Seattle Times, 06.30.2008)

Before we begin May’s reporting roundup, let’s have a little review of the year so far.

January
Barb Lamoureux, owner and broker with Lamoureux Real Estate in Everett, said the typical slow December market is over. She’s seen signs the market is picking up, including a significant increase in open house traffic and even some multiple offers on properties. Her agents are expecting a busy spring.

February
February housing activity around western Washington signaled signs of an emerging spring market with a noticeable increase in open house traffic, reports of multiple offers and a big jump in pending sales from the previous month.

March
NWMLS director Dick Beeson believes the local market has “reached bottom – or pretty darn close.” Even though inventory continues to grow, Beeson acknowledged, “so does optimism among buyers, sellers and agents.”

April
Spring did start slowly, said Coldwell Banker Bain agent Margo Hass Klein. But she said traffic in the last couple of weeks has increased by at least 10 percent at open houses.

May
“We still haven’t had summer hit us yet as the weather remains cool, wet and cloudy. I expect both temperatures and the market to heat up as summer approaches,” commented Dick Beeson, broker/owner at Windermere/Commencement Associates in Tacoma. “Open house traffic is picking up and buyers are coming off the sidelines to make buying decisions.”

I’m starting to wonder if maybe, just maybe “open house traffic” isn’t quite the best measure of real estate market health.

Read on for the this month’s roundup with all the blind real estate agent optimism you can eat.

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