Here are a few relevant news stories that have popped into my inbox in the last few days:
- Associated Press: Wash. revenue down, but recession may be softening
- Seattle P-I: Housing recovery depends on jobs, banker says
- Associated Press: Wash. unemployment rate stayed same in April
- Tacoma News-Tribune: Turning little boxes into living space
- Everett Herald: Blow to Everett waterfront condo project
- Seattle Times: Boeing hands out another 100 layoff notices locally
- Seattle P-I: Signs of real estate recovery an illusion?
In the last article, Aubrey Cohen picks up on the pending story we explored on here a couple weeks ago. The NWMLS representative he spoke with provided the same two explanations for the pending/closed discrepancy that we independently deducted here: short sales and the NWMLS definition change.
From Aubrey’s article:
Bob Gent, director of business development and member relations for the listing service, acknowledged the definition change had an impact. In fact, he provided statistics showing that the rate of pending listings going back on the market jumped from 1.5 percent in January through May of 2008 to 4 percent in June 2008 through April 2009.
But said the change could only account for part of the recent increase in pending sales. Take out all the pending sales that went back on the market last April and this April, and there’s still a 6-percent increase.
”Did it have an impact? Yes,” Gent said. “It’s not big enough to explain the situation.”
So why are the increased pending sales not yet showing up in closed deals?
“The length of time from going pending to close has increased dramatically in the past few months due to short sales,” Gent said.
You may notice of course that Mr. Gent avoids addressing the issue of how many of these “pending” short sales simply never close. Local agent and Seattle Bubble regular Kary L. Krismer points out some common reasons why short sales are often failing to close in the P-I comments:
There are a number of reasons a short sale could fall out, including:
- Buyer gets tired of waiting.
- Bank refuses to accept unrealistically low price, and buyer refuses to pay more.
- Seller figures out that the bank isn’t going to release the balance, and that they’re better off being foreclosed.
Again, I’m not contending that sales are not increasing. In fact I have predicted that they will increase as prices continue to fall, just as they have in other parts of the country further along the bust cycle than Seattle. I just think the combination of short sales (which fail more often than normal sales) and the NWMLS “pending” definition change are overstating the increase.