February Reporting Roundup

Here comes this month’s market reporting roundup. After seven months of declining/flat prices, declining year-over-year sales in 27 of the last 28 months, and 23 straight months of an ever-increasing number of homes on the market, I think we can officially declare that the Seattle-area housing market is in a slump. Of course, while the newspapers seem to have finally caught on to that fact, don’t expect most local real estate agents to admit it. Despite all the measurable data pointing to the market getting worse before it gets better, I think we can expect plenty of upbeat predictions and bottom-calling throughout this drop.

Click below to find out for yourself.

Elizabeth Rhodes, Seattle Times: King County home sales still soft, prices flat

In King County, single-family house and condominium sales were down 36 percent last month, available properties increased 69 percent and prices were nearly unchanged from a year earlier, the Northwest Multiple Listing Service reported Wednesday.

The median single-family house price had been unchanged for three months until it fell $5,000 in February to $429,900, but that price was just $25 less than in the previous February.

There were fewer buyers and abundant inventory for King County condominiums, whose prices were up a slim 1.3 percent to $289,000 year-over-year.

The number of available condos almost doubled, while sales fell 45 percent.

Surrounding counties also reported slow sales, price breaks and lots to choose from.

“It’s a whole different atmosphere,” seconds Diedre Haines, a Coldwell Banker Bain managing broker.

“In the last five years, we saw very little negotiation. Instead it was multiple offers with escalator clauses. Now sellers are more open to negotiation than they were a year ago.”

“The reality is we’re not desperate; we’re not California; we’re not Florida,” [real estate agent Kari Scott] says, recalling a recent bid. Those two states are among the national leaders in foreclosures and home-price declines. Someone offered 30 percent less than the asking price for a million-dollar house. The sellers laughed.

“It’s fruitless when people put in a ridiculous offer instead of a reasonable offer,” Scott says.

Which is more fruitless, a low offer from a buyer, or a seller’s stubborn insistence on asking 2007 prices? When the home languishes on the market for month after month, unreasonably high asking prices seem pretty fruitless, too. Our market not being as bad as California or Florida isn’t much consolation when you needed to sell your home in 60 days, but it’s been on the market 120 days.

Aubrey Cohen, Seattle P-I: Housing market perking up

Increased traffic at open houses and reports of homes fetching multiple offers also are “signs of an emerging spring market,” [the NWMLS press release] said.

“In March, the real estate market is set to get its mojo back,” J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate, said in the statement. “We’re already seeing the momentum build.”

The pending sales numbers appear to show that this year is typical — sales are picking up as the days get longer and warmer.

But compared with the same month a year ago, February’s pending sales were down 22 percent in Seattle, 36 percent in King County and 31 percent in Western Washington.

The number of homes on the market in February increased 64 percent in Seattle, nearly 69 percent in King County and 39 percent in Western Washington from February 2007.

Some economists say Seattle-area prices could fall around 5 percent this year and then stay relatively flat.

“We won’t see a strong housing market for maybe as many as five years,” said [Altos Research CEO Michael] Simonsen, although he declined to predict when the market would bottom out.

Builders are adjusting to the new market, cutting prices and offering incentives, but other sellers are taking longer to understand a market in which they no longer have the advantage, [real estate agent Nick] Upshaw said.

“Sellers have effectively beat up on buyers for the last 20 years,” he said. “They don’t really grasp the depth of the change.”

Other than the quotes from the NWMLS press release and the headline (which interestingly was rewritten from last night’s “Spring housing surge? May be too soon to tell” to today’s “Housing market perking up”), there’s not much positive news in Mr. Cohen’s piece this month. Of course, I have to point that Mr. Cohen has become the first major local newspaper reporter to actually mention/quote Seattle Bubble in an article:

Over at Seattle Bubble, a blog dedicated to the proposition that Seattle has a housing bubble, the headline of a post about February’s statistics proclaimed, “Inventory Skyrocketing, Sales in the Gutter (Still).”

“Apparently the market is so bad that the only way they can make it seem good is to compare month-to-month stats from what is traditionally the second-slowest month of the year. Awesome,” said blog editor Timothy Ellis, mocking the listing service’s news release.

Thanks for the mention, Aubrey.

Kelly Kearsley, Tacoma News Tribune: Pierce County home prices continue downward

Pierce County’s median home price has declined for five of the past six months – and February witnessed the largest drop yet, according to figures released Wednesday by the Northwest Multiple Listing Service.

The county recorded a median home price of $260,000 in February, a decrease of 7.8 percent compared to the same month in 2007. There was no change in the median price from January.

“The buying population has changed,” said Sharon Benson, Realtor and associate broker with Coldwell Banker Bain in Tacoma. “It’s been more affected by the changing (finance) regulations, hearing the real estate news, and maybe they are thinking the bottom of the market is not here.”

Now 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 turn around real quickly.” How can prices still be falling? I thought last month was the bottom!

Mike Benbow, Everett Herald: Home buyers seeking stability

Snohomish County home sales fell in February and prices remained flat, but real estate agents say there were some hopeful signs that things will improve this spring along with the weather.

“The atmosphere is definitely changing,” said Diedre Haines, a broker with Coldwell Banker Bain in Lynnwood, who is also a director of the Northwest Multiple Listing Service.

General concern about the economy and frequent news stories about the sagging real estate market in many parts of the country have clearly had an effect, said Dick Beeson, a Tacoma broker and a director of the listing service.

“Buyers need stability to trust that all is well and that they’ll be able to obtain financing,” he said.

Real estate agents hope the stronger economy in the Northwest and the new bank rules will provide potential buyers with the assurance their seeking.

When all the data shows decline, I guess all you can do is cling to abstract concepts like atmosphere, stability, and hope.

Rolf Boone, The Olympian: Thurston home prices steady

While median home prices continue to fall in other Western Washington counties, including an 11 percent drop in Kitsap County last month, Thurston County homes continue to go up in value.

Several factors are propping up South Sound home prices, said Pete Swensson, senior planner for the Thurston Regional Planning Council.

The region’s job market remains strong, it has avoided overbuilding by home developers, and it is attractive to buyers unable to afford more expensive King and Pierce county homes, Swensson said.

Wait, wait, wait. Are “home prices steady,” or are they “going up in value”? I’m not sure how a 5.8% decline since July’s peak could be characterized as either of those. When prices start to show a year-over-year decline, I wonder if that means the job market suddenly collapsed overnight. Say, prices are declining in King County, so does that mean that our job market isn’t strong anymore? Hmm.

(Elizabeth Rhodes, Seattle Times, 03.06.2008)
(Aubrey Cohen, Seattle P-I, 03.05.2008)
(Kelly Kearsley, Tacoma News Tribune, 03.06.2008)
(Mike Benbow, Everett Herald, 03.06.2008)
(Rolf Boone, Olympian, 03.06.2008)

0.00 avg. rating (0% score) - 0 votes

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.

35 comments:

  1. 1
    NostraDamnUs says:

    It’s a slump – the market ain’t dead. Stuff is selling – you just have to work harder and be able to be straight with people who develop emotional attachments to their home (thus pricing it unreasonably).

    Dead is at might appear to you while you’re scouring the web for articles to substantiate your musings, it is actually not that bad.

  2. 2
    Jason says:

    Give me a break NostraDamnUs. lol

  3. 3

    Things are a little different in my neck of the woods. We seem to be rebounding in Leavenworth, though we still have a glut of new condos.

    http://www.myleavenworth.com/2008/02/real-estate-in-leavenworth-is-heating.html

    January and February have posted great YOY gains (prices up, volume of sales up) and sellers are not adding to the inventory like they have in years past.

    I’d be curious to hear how other vacation markets around the PNW are doing.

  4. 4
    Mike says:

    Well, three homes that we looked at this past weekend all went STI yesterday. So if there is a slump, it must be affecting things that are out of our price range. :-/

  5. 5

    …But there is really a “drink the Kool-Aid” mentality amongst RE professionals, even the honest ones, that now is a good time to buy. I speak to a lot of folks in the industry, and I’ve come to respect a few for their honesty, and I don’t think they’re “lying” when they say that now is a good time to buy. I think they’re wrong, but I think they believe what they’re saying.
    I’d like to see some evidence that this market has stopped declining, or that pending sales start exceeding new listings before I’ll tell people to jump in.
    At the same time there are a few more listings in certain areas where sellers have grown desperate and offering significant discounts to market value. I expect these to increase.

  6. 6
    John says:

    Another wild card is how big of a hit people will be taking in their 401k.

  7. 7
    deejayoh says:

    Nostra is a local real estate expert.

  8. 8
    David McManus says:

    Nostra, aren’t you supposed to be out inking deals instead of playing on the Innernets?

  9. 9
    NostraDamnUs says:

    I refi-ed my own home at 5.6% (30 y, fixed) w/Countrywide, they had ‘specials’ right as they were being liquidated/sold off to BoA. If you look at the Freddie Mac surveys, there’s only a few months where we go below 5.6% over the span of last few years, so yes, about a month ago, right before the fed announced the last cut that’s now current, markets had already incorporated the cut into the price, and fortunately, I have a good mtg broker who calls me when he sees something noteworthy, and we were able to refi at 5.6%!

    So, yes, it was, still is a good time to buy – I think we may test the low 5’s on the interest rates again, soon, and those with brokers who can tell their ass from a hole in the ground, will be fortunate enough to either buy or refi at a pretty damn good rate.

    Don’t fret people. You still have some time to play, but hurry it up. A new sherrif (president) will be in town in 2009, and that’ll be a different ball game than what you’re seeing now…

    Then agian, I could be wrong – and Tim and his blog could be right. Or your ‘hunches’ could be right (or wrong)… Or your little angels or devils sitting on your shoulder(s) could be right or wrong ;)…. Who knows, eh? :)

  10. 10
    NostraDamnUs says:

    I should add – 5.6% w/0 points down. That’s what made it particularly good, out of pocket cost was about 1600….

  11. 11
    David McManus says:

    Nostra, call Dave Ross now and talk to Tim!!!!

  12. 12
    NostraDamnUs says:

    Who’s Dave Ross?

  13. 13
    tlw says:

    Dave Ross a radio show host on KIRO AM 710 station.

  14. 14
    tlw says:

    I see that NostraDammUs is possibly past the anger phase and now in acceptance.

  15. 15
    David McManus says:

    Not from here, nostra?

  16. 16
    deejayoh says:

    New GSE loan ceiling for Seatlte was just announced – $567,500

    http://www.ofheo.gov/media/hpi/AREA_LIST.pdf

  17. 17
  18. 18
    NostraDamnUs says:

    Sorry, I don’t really listen to AM radio. NPR I do listen sometimes, but that’s FM, and I really get tired of talk show hosts -they’re worse than this blog, wanting to be right all the time….

    Who told you I was angry? It was you guys getting pissed for not being able to afford a home, not me. You’re the ones bitching and moaning about home prices being too high and you being unable to afford a home. Otherwise wtf are you doing here (unless you are into following trends, and this would obviously be the shittiest place to do that anyway)?

  19. 19
    David McManus says:

    I think when prices are artificially set higher by government intervention, the fall ends up being much harder.

  20. 20
    David McManus says:

    Nostra, I own a home. I’m just a realist, so don’t be mad at me about being grounded in reality.

  21. 21
    David McManus says:

    Sorry…not own….I rent from a bank.

  22. 22
    Joel says:

    New GSE loan ceiling for Seatlte was just announced – $567,500

    Making it easier than ever to cut yourself trying to catch a falling knife.

  23. 23
    b says:

    NostraDamnUs,

    Yes, all of us are very poor and nearly homeless on the streets. Nobody can match the powerful riches of yourself or your fellow homeowners. Having hundreds of thousands of dollars invested in a declining asset is the newest path to wealth, I envy you greatly. Sorry, have to go now, the soup can I am heating over a candle is hot and if I don’t eat up I might not be able to work a full shift at McDonalds tonight.

  24. 24
    NostraDamnUs says:

    b – you just need a little love man. Nothing wrong w/working at McDonalds.

  25. 25
    NostraDamnUs says:

    Dave – I rent 1/2 my home from the bank , other half’s paid off.

    Now back to my McDonald’s night shift ;).

  26. 26
    David McManus says:

    Will you please let us know which agency or brokerage firm you work at, so that we may avoid it at all costs in the future?

  27. 27

    […] throw a wrench in a well-planned list.  Today when I thought I was going to just make a quick reporting roundup post on Seattle Bubble, and spend the rest of the day writing for project Artichoke.  Instead, I began […]

  28. 28
    MarkM says:

    Almost makes me nostalgic for the commercial where buying a home was supposedly as easy as buying a latte. Obviously buying a $3.50 latte and a $350,000.00 home should be in the same league… right? ;-)

  29. 29
    Joel says:

    Obviously buying a $3.50 latte and a $350,000.00 home should be in the same league… right? ;-)

    No dummy, people in the NW take their coffee products seriously. They put way more thought into buying a latte than buying a house.

  30. 30

    ….and if the house has a built in espresso machine? Then it doesn’t even need granite countertops!

  31. 31
    disbelief says:

    I’ve been away and apparently missed something. Did Nostra “come out” as a Realtor or something related. Oh, what a surprise! Please stick around Nostra, looking forward to your posts this year (should be a great year for sales! or, uh, fires in any case)

  32. 32
    Faster says:

    NostraDamnUs…I can afford a house, a nice house at that. If you doubt it, make me a meaningful wager and we’ll put your theory to the test.

  33. 33
    MacAttack says:

    “I’d be curious to hear how other vacation markets around the PNW are doing.”

    Really? Go here: http://www.bendbubble2.blogspot.com

    Enjoy,
    Mac

  34. 34
    MacAttack says:

    From Bend, Or…

    We are soliciting stories for the tabloid newspaper insert of our “Best
    Buyers Market in 20 Years” campaign. The deadline for stories is Mar. 17.
    The tabloid is scheduled to appear first in The Bulletin on April 2,
    followed by other local papers. The target audiences for the insert are
    first-time homebuyers, home “upgraders”, and active retirees. Our key
    messages are large inventory, affordable financing options, and the
    resources available to first-time buyers. We are seeking stories from
    Realtors that focus on recent sales experience in this market, including
    testimonials from first-time and other buyers who took advantage of current
    conditions, especially people who just couldn’t wait to move here and jumped
    at this great opportunity.

    Please send me your stories before the March 17 deadline so that we can edit
    them into the first draft of the tabloid.

  35. 35

    […] buyers flocking to open houses, with the market “set to get its mojo back” in March, just like it was last year? Read on to find […]

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