How does the current inventory compare to the past?
Posted: Sat Mar 17, 2007 11:06 pmIt's hard to find stats on just King County...but this article shows that King and Snohomish had 25,000 homes for sale in 1985, and around 20,000 in 1986.
Feb.2006 Snohomish/King Inventory: 12,108.
I also love how they're so stoked about interest rates being below 10%!!!
Anyway, see what I mean? There was SOOO much more inventory and way higher interest rates and the market was just fine. No major crash, no obliteration of the economy. Today's #s look exceedingly hot by 80s standards.
Single-digit home loans are here.
Excited home owners are scrambling to refinance and take advantage of interest rates dropping below 10 percent for the first time in eight years, local mortgage bankers report.
The Bank of Tacoma, Washington Trust, Family Savings, Gibraltar, Mariner Savings & Loan, and Pacific First Federal (all at 9.88 percent) and Cascade Savings and Home Savings & Loan (both at 9.75), are among the lending institutions offering financing below 10 percent on 30-year fixed-rate home loans, according to today's Market Trends Rate Monitor, published on Page B-7.
Mortgage bankers report at least a 50 percent increase in lending activity over a year ago, a large share of it coming from home owners seeking to refinance 12 percent and 13 percent loans.
Refinancing makes sense when rates drop more than 2 percentage points. A home owner can save close to $100 a month on a $50,000 to $60,000 loan, said Jack Fischer, vice president of Continental Inc. and president of the Washington Mortgage Bankers Association.
"We've been through the 13's, and now you're starting to see the 12's disappear," he said.
Fischer said his office is processing about 200 applications a week and business is up 50 percent over six months ago. Local offices of First Interstate and Seafirst Mortgage Co. report a similar surge in business.
The boom in refinancing is a good news, bad news situation for the mortgage banking industry. Lenders are anxiously watching the yield on their portfolios decrease as home owners trade in higher-interest loans for the low- interest, fixed-rate loans.
Mortgage bankers are also finding it hard to keep up with the increase in applications, reporting a slowdown at all levels from initial applications to appraisals and approval.
"Nearly everybody is having a real time getting proficient people," said Charles Donaldson, of Seafirst Mortgage Co.
As interest rates drop below 10 percent, the ramifications are felt throughout the industry. National sales of new homes climbed 4.4 percent in January to their highest level in two years, the Commerce Department reported yesterday.
The government said the January sales pace was 20 percent higher than a year ago. Construction of new homes has jumped by 26 percent since November. Starts hit an annual rate of 2.09 million units in January while sales of existing single-family homes rose to 3.3 million units.
Record months
Local realty agents and home builders also issued good progress reports, with increased sales particularly among first-time home buyers and home owners who have been waiting for an opportunity to move up.
J. Lennox Scott, president of John L. Scott Real Estate, said January and February have been record-breaking months for his agency and March is expected to be even better. He said sales in the first two weeks of March are up 20 percent.
Although spring traditionally marks the beginning of the home-buying season, Scott attributed a good share of the sales to lower interest rates.
Realtors said the Seattle real estate market is tightening up quickly, while the suburban areas are improving at a slower rate.
"In town, it's more of a seller's market," Scott said. "I expect the same thing will happen on the Eastside within five months."
Brisk sales
Fred Burnstead, president of Burnstead Construction, predicts his home sales will be up 5 to 10 percent over last year. He said traffic has been brisk for the past six months but sales didn't pick up until the past few months.
Sam Roberson, executive vice president of the Seattle King County Board of Realtors, said the housing inventory in King and Snohomish counties has dropped from 25,000 units in mid-1985 to 19,000-20,000 today.
But Roberson believes there is still an untapped market of prospective home buyers who don't realize they qualify or are waiting for the interest rates to drop even further.
Roberson and others said stable home prices are an indication the market will not get caught up in an inflationary spiral that accompanied the last round of declining interest rates.
