It’s time once again to check in with our local press to see who simply rehashed the NWMLS press release and who did some actual journalism.
First up, the NWMLS press release that accompanied yesterday’s numbers: Inventory shrinking, sales rising, prices stabilizing in some Northwest MLS areas
Waiting longer to buy a home is not likely to pay off, according to Northwest Multiple Listing Service director Kathy Estey after reviewing reports summarizing May activity. Estey pointed to shrinking inventory (about 20 percent fewer listings than a year ago), double-digit increases in the number of pending sales (up 17.7 percent from a year ago), solid open house activity, and signs of stabilizing prices (eight of the 19 counties in the report show price gains since January) as indicators of an improving market.
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Estey, the managing broker at the Bellevue Downtown office of John L. Scott Real Estate, said affordable homes inventory is down to the levels of a normal market and reaching for a sellers’ market. “Multiple offers are common in the under $400,000 range when the home is priced well, shows nicely and is marketed professionally,” she remarked. “Buyers who are waiting for prices to come down more have missed the bottom,” Estey believes.
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“What we’re currently seeing is real estate’s version of Back to the Future,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He believes the combination of historically low interest rates, adjusted lower prices, and the $8,000 tax credit has created advantageous conditions for buyers that haven’t been seen in decades. He noted sales in the four-county area continue to see double digit increases.
You heard it here first, folks. You have missed the bottom. Again.
The release also makes mention of an “explanatory note” that is not included online. According to Aubrey Cohen’s article, the note “mention[s] the change in the definition of a pending sale but blam[es] short sales and foreclosures for the “widening gap” between pending sales in one month and closed sales in the next.”
I can’t help but think that the ever-increasing disparity between the NWMLS’ much-touted “pending sales” and the number of actual closed sales is the kind of thing they would much rather not have explained. But with the Times and the P-I both finally making a big deal about this issue (which we have been following here since August), it looks like the NWMLS couldn’t ignore it any longer.
Eric Pryne, Seattle Times: Deals made for homes are slow to close
Pending sales of King County single-family homes — offers that have been accepted by owners, but haven’t yet closed — were up 27 percent from May 2008, eliciting cheers from brokers starved for good news.
Closings, in contrast, were down 14 percent. Real-estate professionals attributed the disparity to slow-closing short sales.
Historically, the number of closed sales in a month has been about 90 percent of the previous month’s pending sales. May’s closings in King County were only about 62 percent of April’s pendings. In a note, the listing service said the gap “should begin to shorten as short sales close and the short-sale inventory shrinks.”
But others question whether the turnaround suggested by the pending-sales statistics will happen. “Short sales don’t close at the same rate as normal sales,” says Tim Ellis, who edits the bearish Seattle Bubble real-estate blog. “I definitely expect the gap to shrink, but I don’t know by how much.”
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Dave Sunlin, a senior vice president with Bank of America, which acquired Countrywide last year, told reporters last month that it typically takes 45 or 50 days to decide on a short sale. Complications can make the wait significantly longer, he added.
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But Sunlin told reporters more than 60 percent of the short sales the bank does OK, nationally, ultimately fall through, often because the buyers back out, buy another home or have trouble getting financing.
That 60% statistic is especially interesting. If indicative of the market as a whole, that would definitely indicate why so many of the now-pending sales are never turning to closed deals. The article goes into more depth on why short sales tend to take so long and often end up failing to close altogether. Also, this marks the first time I have been quoted or this site mentioned in the Seattle Times real estate section. Thanks, Eric!
Aubrey Cohen, Seattle P-I: Pending home sales up again, but will they close?
Buyers and sellers reached deals on 711 houses in Seattle and 2,246 countywide in May, up around 24 percent and 27 percent, respectively, from a year earlier, the report said. Those pending sales totals were up from increases of around 15 percent in the city and county from a year earlier in April.
Closed sales continued to lag however, down more than 15 percent in the city and 14 percent countywide in May from a year earlier, although that was around half of April’s annual drops.
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“I’m not ready to call the bottom yet. I think we’ve still got too many mortgages that could have problems in the months ahead,” Crellin said, noting that Washington had some of the biggest increases in mortgage delinquencies and foreclosures in the first quarter, according to the most-recent report from the Mortgage Bankers Association.
It’s nice to see Crellin resisting the urge to call a bottom. Aubrey’s article also includes a great little graphic that does a good job illustrating the disparity between the pending and closed numbers.
Mike Benbow, Everett Herald: Inventory of unsold homes down in Snohomish County
There were 5,656 homes on the market last month. That compares with 7,472 homes for sale a year ago, a drop of nearly 25 percent, the listing service reported.
Inventories were down by double digits in every county in the listing service except San Juan and Skagit, indicating the market is stabilizing.
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Listings weren’t the only thing to fall.Prices continued their slide, falling by more than 9 percent in May. The combined median price for a home or condominium in the county last month was $299,950, according to the listing service.
No mention in Mr. Benbow’s article of the still-record-low number of closed sales, but he does repeat the bit from the NWMLS press release about the high volume of short sales, estimated to be a third of the total pending sales volume.
Kelly Kearsley, Tacoma News Tribune: Pierce County home prices hold steady in May
The median home price in Pierce County held steady in May at $225,000 instead of dipping slightly as it has in recent months, according to figures released Thursday by the Northwest Multiple Listing Service.
And the year-over-year declines seem to be slowing. Though the median home price was down 13.4 percent compared with last May, the decline was less than the 14.5 percent decrease in April.
Dick Beeson, a broker with Windermere and a Northwest MLS director, said a two-month flattening out in the home price doesn’t necessarily mean rock bottom – or that prices can only go up from here.
“I think we’re going to bounce along the bottom for a while,” Beeson said, though he does see prices beginning to stabilize in some areas.
An interesting turnaround for Mr. Beeson, who you will notice is responsible for three of the four quotes in the above bottom-calling graphic. Perhaps he finally learned his lesson about calling the bottom.
Rolf Boone, The Olympian: Home sales rise, but prices fall
The number of homes sold in Thurston County rose in May, although South Sound real estate professionals say the housing market still has plenty of room for improvement.
Last month, more than 200 units sold in Thurston County for the second time this year, and pending sales increased 12 percent in the year-over-year May period, according to combined single-family residence and condo data released Thursday by the Northwest Multiple Listing Service.
The increase in pending and closed sales likely is due to the seasonal uptick in real estate activity during spring and summer, Thurston County real estate agents say.
Disappointing reporting from Mr. Boone. The number of closed SFH sales in Thurston (210) was up from April (191), but down 26% from May 2008 (284). Is a regular seasonal increase in sales really worth reporting? In other news, average temperatures this week are reportedly higher than a month ago.
(Eric Pryne, Seattle Times, 06.04.2009)
(Eric Pryne, Seattle Times, 06.05.2009)
(Aubrey Cohen, Seattle P-I, 06.04.2009)
(Mike Benbow, Everett Herald, 06.05.2009)
(Whitney Coleman, Tacoma News Tribune, 06.05.2009)
(Rolf Boone, Olympian, 06.05.2009)