Seattle Bubble

For some reason, the NWMLS press release still has not been posted to their public site yet.

[Update: Here's a link to the press release on NWMLS.com: Northwest MLS brokers say housing market is recovering, but still "spongy". My favorite part is "July's unseasonably hot weather curtailed activity for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying it was just too hot." "Several" people may have delayed their home shopping by a few days, and that's even worth mentioning? Wow.]

Before we get into this month’s news reports crowing about the increase in sales, here’s a little chart that shows the time between when pending sales went negative year-over-year and when the median price went negative year-over-year.

Pending sales had been negative for over two years before prices began to fall. Keep that in mind when you hear claims that a few months of year-over-year positive sales data is allegedly a sign that prices will stabilize in the short term. Not likely.

Here’s another chart, this one showing the year-to-date change in the median price, both in 2008 and 2009:

Does the fact that prices have risen from their March low indicate price drops are over? Probably not.

Read on for this month’s reporting roundup from the Times, P-I, Herald, News-Tribune, and Olympian.

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With sales skyrocketing to a massive four percent gain over last year and median prices shooting through the roof, the housing market recovery is on, and it’s a race to report it. Let’s check in with the local news outlets to see who had the most sensational write-up this month.

First up, the NWMLS press release that accompanied yesterday’s numbers: "Aware and prepared buyers" help boost Western Washington home sales during June

“Encouraging” seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service. The report shows inventory continues to shrink, pending sales increased more than 19.5 percent from a year ago, and median prices system-wide are up 4.4 percent since January.

“The positive movement in our real estate market year over year is really very encouraging,” remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, “In anyone’s book, that’s substantial improvement.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. “It’s encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago,” he stated. While the median home price is down approximately 10 percent from a year ago, median prices have flattened over the past seven to nine months, he noted. “This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges,” Scott believes.
…
“There is a definite upsurge in sales activity, from a pending sales perspective and a “lookers becoming buyers” perspective,” observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.

Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act.

This month’s release is conspicuously lacking in the bottom calls and “buy now or you’ll be sorry” sentiment that has permeated previous NWMLS publications. They almost seem to have become less certain of immenent recovery, even as the sales finally begin to pick up. Could they perhaps be looking at the bigger picture and realizing that even once the bottom is in, the market is likely to roll along the bottom for years?

Or maybe I’m just reading too much into it.

Before we get into this month’s news reports, here’s a quick graphical representation of how far off closed sales are from pending sales so far this year:

The April to June rise in closed sales actually looks rather similar to the February to April rise in pendings. Pendings rose 67% from February to April, and closed sales rose 65% from April to June. Interesting, for sure.

If the pattern holds for the next two months with the 16% pending rise from April to June carrying over into closed sales from June to August, August will see roughly 1,900 closed sales (a 25% YOY increase). That feels a little higher than I’d expect to see, but I certainly wouldn’t put it outside the realm of possibility.

Read on for this month’s reporting roundup from the Times, P-I, Herald, News-Tribune, and Olympian.

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