One common refrain lately among real estate agents desperate to put a positive spin on the local market is that potential home buyers in the Seattle area are just being frightened by all the bad national news on the housing market. The local market is doing just fine, and would be even better if only everyone would stop paying attention to the national stories.
Well, let’s take a look at the latest national housing market data, and compare it to the Seattle area.
Associated Press: Existing home sales fall 2.6 percent in June
The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago.
The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago.
The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.
For the purposes of this post, we’ll use King County SFH + Condo statistics, since it is closest to what the national numbers are tracking. Let’s see whether Seattle’s housing market is in better or worse shape than the national market. We’ll see which market is in better shape in a number of categories, rating victories as “strong,” “weak,” or “neutral.”
Year-to-year sales were down 15.5% nationally. Locally, closed sales were down 40.9%. Ouch, that’s nearly three times the drop in the national numbers.
Advantage: National (strong)
Nationwide median prices were down year-to-year by 6.1%. In King County, prices were down 3.6% from last year, about half the drop, but still down, and only a few points different.
Advantage: Seattle (neutral)
At 4.49 million vs. last year’s 4.20 million, nationwide year-to-year inventory was up 6.9% in June. In King County, inventory was up 28.9% year-over-year. Seattle comes in with four times the increase.
Advantage: National (strong)
Nationwide “months of supply” (inventory divided by pending sales) was 11.1, versus King County’s 6.2. Both buyer’s markets, but Seattle is just barely in buyer’s territory.
Advantage: Seattle (neutral)
So, we’ve got Seattle on top in two categories, and the national market performing much better (or less crappy) in the other two. I’d call that a toss-up at best, with Seattle’s huge increases in inventory and decline in sales possibly ranking its market worse than the nationwide stats.
In other words, there’s little to no substance to arguments that the local market is doing better than what you read about in the national headlines. We’re certainly doing better so far than the worst-hit cities such as San Diego, Detroit, and Miami, but I don’t recall seeing many headlines about those cities in the Seattle media.
(Martin Crutsinger, Associated Press, 07.24.2008)
