January Reporting Roundup

It’s time for another reporting roundup. Let’s see what the local newspapers have to say about January’s not-so-positive numbers from the NWMLS. Will they claim that the market “bottoming out” and about to jump into full recovery mode? Or maybe they have finally come to accept the fact that Seattle will not avoid the downturn, which is really just getting started.

Read on to find out…

Drew DeSilver, Seattle Times:
Same sag story for home sales

Looking for a place to live in the Puget Sound region? You’ve got plenty of choices, many of them on sale.

Looking to sell your place? Um, better be patient.

Those were the messages embedded in the January housing sales figures released Wednesday by the Northwest Multiple Listing Service. The data showed home sales in the four-county region continued to sag last month.

Median sales prices — with the sole exception of single-family homes in King County — slipped further, more proof that the region has joined the nationwide housing slump.

Hey, wait a minute. That doesn’t sound like the Times’ usual upbeat real estate reporting. What gives? Oh, it’s Drew DeSilver, their actual business reporter. Seems Mr. DeSilver is more interested in actually reporting what’s going on than trying to spin the story to make the market look good. What a concept.

Aubrey Cohen, Seattle P-I:
House prices edge up; condo prices dip

Local real estate professionals say they have seen increased activity since the start of 2008, but January statistics the Northwest Multiple Listing Service released Wednesday still show a sluggish market, with an uptick in year-over-year house prices and the first condominium price drop in recent years.

Continuing the trend, the number of homes on the market increased more than 60 percent from a year earlier in Seattle and King County, and 35 percent in Western Washington. Pending sales decreased about 22.5 percent in Seattle and more than 30 percent in King County and Western Washington.

The median price of condos dropped 0.5 percent, to $305,000, in Seattle; 1.6 percent, to $270,500, in King County; and 0.7 percent, to $250,000, in Western Washington — the first posted year-to-year price declines for condos since the recent slowdown.

But looking at houses alone, the median sales price was $430,000 in Seattle, $435,000 in the county and $334,000 in the 19 counties in Western Washington — up about 1.2 percent in the city, and 1.3 percent in the county and region from January 2007.

Local land-use economist Matthew Gardner speculated that the recent tightening of mortgage standards could have a larger effect on condos, which tend to attract more young buyers with shorter credit histories and smaller down payments.

But it’s hard to make judgments on the housing market based on numbers from December and January, because that’s the slow time of year, he added. “I’d be more curious to see where we stand later on in the spring.”

Actually Matthew, it’s not that hard to make judgments based on December and January when you’re comparing them to the previous years’ December and January. It’s an amazing concept, these year-over-year comparisons. They have a way of ignoring seasonal issues.

Area sales should pick up in the middle of the first quarter with prices increasing by 3 percent to 8 percent, depending on the location, said Ken Bacon, a listing service director and associate broker at Windermere Real Estate/S.C.A. in Redmond, in a statement from the listing service.

Gardner expects area home prices to decline 5 percent in 2008, with larger drops in rural areas than closer to employment centers.

So, depending on whether you want to believe the real estate salesperson or the uncharacteristically-realistic “local land-use economist,” prices may be up 8 percent or down 5 percent this year. Or maybe both. Maybe they’ll go up 8 percent in the spring, then drop 12 percent the rest of the year, to finish down 5 percent. Or something. Now my head is spinning.

Devona Wells, Tacoma News Tribune:
Pierce County home prices decline 2.5 percent from previous year

Pierce County’s housing market got off to a bit of a rough start in 2008 with January home prices down 2.5 percent from the previous year as sales also declined.

Last year, prices appreciated 2.8 percent, though the last four months of the year saw either declining or flat home prices. Year-over-year sales for the month fell by 36.6 percent, with 563 homes sold in Pierce County in January, according to the listing service.

Real estate agents and brokers have said for months that such statistics point to a market that is normalizing after the boom years of 2004 and 2005. They also draw a distinction between small price declines here and deeper depreciation seen elsewhere in the country.

Said Mike Larson, president of Allen Realtors in Lakewood: “The numbers don’t make you jump up and down and start high-fiving each other, but when compared to the Midwest and Upper Midwest and areas really struggling, we’ve got reason to not be hanging our heads.”

Lagging prices mean the market is still in a period of adjustment, said Larson, also an MLS director. But once-hesitant buyers are beginning to pick up steam in the home-selection process, he said.

“The bottom is here or pretty soon, I think. I would be surprised if things don’t turn around real quickly,” he said.

Prepare for a surprise, Mr. Larson. I guess you haven’t learned the lesson about calling the bottom from David Lereah.

Mike Benbow, Everett Herald:
Home sales slow, prices slip slightly

Home sales in Snohomish County continued to drop dramatically in January compared to a year ago, but median prices dipped only slightly.

The number of homes listed for sale last month was 47 percent higher than a year ago, according to statistics released Wednesday by the Northwest Multiple Listing Service. The market for condominiums was especially slow, as the number of those units for sale rose 83 percent, and both pending and closed sales for condos declined by more than 25 percent.

Given that change in demand, the median sales price for condos fell more than 3.6 percent, to $224,999 last month from $233,514 a year ago.

Sales of single-family homes also were off by more than 30 percent compared to a year ago, but sales prices suffered less.

The median price for a single-family home stood at $365,000 last month, down less than 2 percent from last year’s median of $370,700.

Those home prices coupled with low interest rates, a good selection of homes and a strong local economy are combining for some of the best conditions local buyers have seen in years, said Meribeth Hutchings, broker and owner of Windermere Real Estate in Lake Stevens. Additionally, financing is getting a little easier for buyers to obtain.

“We’re seeing an improvement in the market,” she said. “There is light at the end of the tunnel. Buyers are beginning to understand that bad market hype isn’t specific to the Northwest.”

Nice. Start off with the hard statistics, and lead right into yet another local real estate agent calling the bottom. I like it. Maybe I should start a page where all we do is collect specific quotes from local agents calling the bottom or making unrealistic upbeat predictions. That could be fun.

Rolf Boone, The Olympian:
Home sales slide continues

For the second consecutive month, Thurston County home sales fell 30 percent in the year-over-year period, the Northwest Multiple Listing Service reported Wednesday.

Regardless, median home price appreciation in the county continues to eke out small year-over-year gains.

Northwest MLS area services manager Jerry Wilkins said Thurston County homes continue to hold their values because of the county’s steady employment base.

“We have job growth but also stability, which is reflected not only in state government but other stable businesses,” Wilkins said.

Keller Williams Realty Olympia associate broker Phil Harlan said an influx of buyers from Pierce County also continues to prop up home prices.

As prices begin to decline, I think the opposite will start to happen. People realize that they can actually afford something decent closer in, so they get out of the outlying areas, which leads to more supply and less demand, which puts negative pressure on prices. I don’t guess you’ll read the local agents talking about that in the paper when it happens, though.

(Drew DeSilver, Seattle Times, 02.06.2008)
(Drew DeSilver, Seattle Times, 02.07.2008)
(Aubrey Cohen, Seattle P-I, 02.06.2008)
(Devona Wells, Tacoma News Tribune, 02.07.2008)
(Mike Benbow, Everett Herald, 02.07.2008)
(Rolf Boone, Olympian, 02.06.2008)

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

27 comments:

  1. 1
    vboring says:

    surprisingly little emphasis on the slight rise in median prices in the city.

    i figured that would be the headline for the RE sections:

    “seattle RE continues to buck national trend with increasing prices”

  2. 2
    Wanderer says:

    I look forward to the next two months of YOY “appreciation” numbers. February and March of 2007 had some of the highest MOM appreciation figures from the last few years (excluding condos). Just by keeping level over the next 2 months, single family homes would be DOWN 4.4% YOY by March. Trying to be completely objective and not propagate the image of hysterical bubblehead, I just don’t see prices jumping up in the next couple months like they did last year. They will have to dig a little deeper from their statistics grab bag to find a rosy picture if -4.4% pops out for SFH.

  3. 3
    rose-colored-coolaid says:

    Maybe I should start a page where all we do is collect specific quotes from local agents calling the bottom or making unrealistic upbeat predictions. That could be fun.

    In addition to all the numeric charts about sales figures and prices, I wish we had a historical chart for when bottoms are called. It could track local experts, and I predict it would look something like this.

    This would be an excellent resource to know when we had hit the actual bottom. When all the experts give up on calling the bottom, it’s here.

  4. 4
    singliac says:

    I second rose-colored-coolaid’s idea. Wouldn’t it be great 5 years from now to look at that graph with real estate “experts” calling the bottom. You could even put their real estate logos by each prediction.

  5. 5
    MisterBubble says:

    Agreed with the bottom-calling. Anything to make these people look like the fools that they are is a good thing.

    Also, it’s a source of factual information that will hit people in the gut when they come to the site — you don’t very often see hard facts that prove that pundits are idiots.

  6. 6
    vboring says:

    next month, there may be a small month to month improvement. that will be the focus of the RE professionals, instead of looking at the year to year declines.

    this strategy may take them through next summer.

  7. 7
    Olaf says:

    Those optimistic comments by realtors are just part of the template for that story. If you were in the realty business and a reporter called you for a quote, would you really go on the record saying your sector is tanking?

    It’s no different than the Romney campaign giving quotes about fighting on, one day before he dropped out. They don’t expect anyone to believe them, and the reporter quoting them doesn’t expect readers to take those quotes as unbiased analysis, either.

    Redfin now puts up each listing’s price change (drop), with dates. Look up any house that’s been on the market for a while. It’s not as scientific as Tim’s stats, but it tells the story pretty convincingly.

  8. 8
    nitsuj says:

    “Area sales should pick up in the middle of the first quarter with prices increasing by 3 percent to 8 percent, depending on the location, said Ken Bacon, a listing service director and associate broker at Windermere Real Estate/S.C.A. in Redmond, in a statement from the listing service.”

    Tim, you need to do interviews with these people. Find out what statistics he’s using to base his predictions on.

    i agree with the bottom calling. If you could list the names, dates, prediction v. actual I think it’d be a great “who is full of b.s.” resource for people looking for an agent when they hit the market. Assuming, of course, any of these B.S. talkers are still in RE when it comes time to purchase.

  9. 9
    wreckingbull says:

    Those optimistic comments by realtors are just part of the template for that story. If you were in the realty business and a reporter called you for a quote, would you really go on the record saying your sector is tanking?

    Yes, and here is the reason:

    If prices don’t fall, sales volume will stay in its current pitiful state. If sales volume stays in its pitiful state, many, many, real estate professionals go out of business. I don’t see why this concept is so hard to grasp.

    If I were a Realtor, I would be doing everthing in my interest to get sales volume back up. You don’t need a 3-digit IQ to realize this means a major drop in prices.

  10. 10
    Mike2 says:

    If I were a Realtor, I would be doing everthing in my interest to get sales volume back up. You don’t need a 3-digit IQ to realize this means a major drop in prices.

    Unfortunately, the converse is not true. Just because prices drop does not mean sales volume will increase.

    Looking at my own neighborhood, similar homes were selling at close to $500K at the peak, and volume was high. Now, there are dozens for sale at at an average price in the high $300’s and they sit. All these new listings have popped up in recent weeks, all asking the same $389,999 or a few bucks up or down – and buyers are nowhere to be found.

    At some point, the price drops become so startling, people have lost so much equity, and inventory multiplies like rabits and despite the improvement in “affordability” buyers just aren’t buying.

  11. 11
    Moe Ronn - Realitor® says:

    Yup, my plan is to have a tidy sum of $40-50K ready for a down payment on a 15-year fixed mortgage in no less than 2 years from now, possibly as long as 4 years. If it’s 4 years, I’ll have more like $70K ready. I will stay under $200 for my purchase.

  12. 12
    Moe Ronn - Realitor® says:

    $200K that is!

  13. 13
    Olaf says:

    I wasn’t being fascetious in my remarks earlier. I meant what I said: If you’re a realtor, it’s in your interest to lie and fluff up the market. Any realtor who tells the truth will be tarred as the guy who doesn’t believe in the market — and sellers will find some other guy who’s willing to keep stroking their delusions about getting $600 K for that bungalow in Northgate that grandma died in.

    Especially now, with commissions getting scarcer, they have zero incentive to be straight. It’s not their fault: it’s just the pernicious nature of the commission-based system.

  14. 14
    deeplennon says:

    Olaf: “Redfin now puts up each listing’s price change (drop), with dates. Look up any house that’s been on the market for a while. It’s not as scientific as Tim’s stats, but it tells the story pretty convincingly.”

    Interesting, I seemed to have found one that’s still appreciating :) How serious can these people be?

    http://www.redfin.com/stingray/do/printable-listing?listing-id=300992

  15. 15
    just_checking says:

    My link can beat yours anytime :).

    http://www.redfin.com/stingray/do/printable-listing?listing-id=134055

    Take that deeplennon !! :)

    1121 days on the market and a 50K price reduction.

  16. 16
    Everett_Tom says:

    just_checking // Feb 7, 2008 at 4:57 pm

    My link can beat yours anytime :).

    http://www.redfin.com/stingray/do/printable-listing?listing-id=134055

    Take that deeplennon !! :)

    1121 days on the market and a 50K price reduction.

    Wow… $1.2 Million for my very own junk yard… From the Bird’s Eye view on Zillow you can even count the school buses, boats and cars..

    wonder why no one has picked up this….. uh.. deal…

    (note: the first line of the description is great… “Seller is very motivated. ..” )

  17. 17
    patient says:

    Here’s one with a slightly more motivated seller…$268k or 26% reduction in less than 3 months. Now we’re talking!

    http://www.redfin.com/stingray/do/printable-listing?listing-id=1289686

  18. 18
    patient says:

    And it looks like the poor soul who owns it bought it for $995k in Feb 2007. I wonder if he/she agrees with that “prices are edging up”?

  19. 19
    Shawn says:

    I just read that the S&P/Case-Shiller reports that “NO” US city saw price increases in the last three months (Seattle included).

  20. 20
    Shawn says:

    Three cities did emerge with higher prices compared with 12 months ago: Prices rose 2.9 percent in Charlotte, N.C., 1.8 percent in Seattle and 1.3 percent in Portland, Ore. But even these markets have turned down over the last three months. Indeed, every city in the index recorded at least three consecutive months of falling prices through November.

  21. 21
    jess/pumpkin says:

    “Interesting, I seemed to have found one that’s still appreciating :) How serious can these people be?
    http://www.redfin.com/stingray/do/printable-listing?listing-id=300992

    Wow, I remember bringing up this house on the forum back in October:
    http://seattlebubble.com/forum/viewtopic.php?f=1&t=782

    I didn’t bother to keep track of it, and I am SHOCKED that they continued to raise the price! God, no wonder I’m developing buyer’s ulcers (as evidenced this morning).

  22. 22
    disbelief says:

    Ha, I love Redfin! Seeing the history of price drops is great and should provide much entertainment in the future. Burn baby burn!

  23. 23
    j says:

    however there’s no way for redfin to fully track when a listing gets pulled and reposted under a different number, correct?

  24. 24

    I have to disagree with Olaf on this one. It’s NOT in my best interest to lie and fluff up the market…I did speak with Aubrey Cohen of the P-I in September, and was quoted in the paper saying that prices were going to drop. And I did get a few calls from other agents, basically telling me that I didn’t know what I was talking about.
    Sure, I want clients. But do I want to view these people as “suckers” who won’t be repeat customers, who won’t refer me to their friends and family because I’m a liar?
    I don’t think many agents have a long term perspective, they want business now, and at all costs…me, I’ve got more of a hippie-dippie philosophy of ” if I’m doing the right thing, business will come.”, and lying is not the right thing.

  25. 25
    Mike2 says:

    however there’s no way for redfin to fully track when a listing gets pulled and reposted under a different number, correct?

    As of yet there’s no way to GET this information from the RedFin website, but it does exist in the MLS. RedFin reports the DOM (days on market) statistic, but there’s also a CDOM (cumulative days on the market) recorded. I havent’ seen any site that reports that to the public. CDOM has different reset characteristics, the more important of which is “after a material change in the property” – whereas DOM resets every time the house is listed.

  26. 26
    AndySeattle says:

    The Tim said:
    “Maybe I should start a page where all we do is collect specific quotes from local agents calling the bottom or making unrealistic upbeat predictions.”

    Yes please! That would be great!

  27. 27

    […] wait a minute. Last month’s Tribune quoted Lakewood Realtor Mike Larson as saying “The bottom is here or pretty soon, I think. I would be surprised if things don’t […]

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