With sales skyrocketing to a massive four percent gain over last year and median prices shooting through the roof, the housing market recovery is on, and it’s a race to report it. Let’s check in with the local news outlets to see who had the most sensational write-up this month.
First up, the NWMLS press release that accompanied yesterday’s numbers: "Aware and prepared buyers" help boost Western Washington home sales during June
“Encouraging” seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service. The report shows inventory continues to shrink, pending sales increased more than 19.5 percent from a year ago, and median prices system-wide are up 4.4 percent since January.
“The positive movement in our real estate market year over year is really very encouraging,” remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, “In anyone’s book, that’s substantial improvement.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. “It’s encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago,” he stated. While the median home price is down approximately 10 percent from a year ago, median prices have flattened over the past seven to nine months, he noted. “This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges,” Scott believes.
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“There is a definite upsurge in sales activity, from a pending sales perspective and a “lookers becoming buyers” perspective,” observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act.
This month’s release is conspicuously lacking in the bottom calls and “buy now or you’ll be sorry” sentiment that has permeated previous NWMLS publications. They almost seem to have become less certain of immenent recovery, even as the sales finally begin to pick up. Could they perhaps be looking at the bigger picture and realizing that even once the bottom is in, the market is likely to roll along the bottom for years?
Or maybe I’m just reading too much into it.
Before we get into this month’s news reports, here’s a quick graphical representation of how far off closed sales are from pending sales so far this year:
The April to June rise in closed sales actually looks rather similar to the February to April rise in pendings. Pendings rose 67% from February to April, and closed sales rose 65% from April to June. Interesting, for sure.
If the pattern holds for the next two months with the 16% pending rise from April to June carrying over into closed sales from June to August, August will see roughly 1,900 closed sales (a 25% YOY increase). That feels a little higher than I’d expect to see, but I certainly wouldn’t put it outside the realm of possibility.
Read on for this month’s reporting roundup from the Times, P-I, Herald, News-Tribune, and Olympian.
Eric Pryne, Seattle Times: June home sales are highest in King County since Oct. 2007
A new report provides the strongest evidence yet that buyers are starting to return to the local real-estate market.
The number of closed sales of single-family homes in King County in June was up 4 percent over June 2008 — the first year-over-year increase since the market peaked nearly two years ago, the Northwest Multiple Listing Service said Monday.
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June’s increase in closed sales came after two months in which pending sales — offers accepted by owners but not yet closed — were up compared with the same months a year earlier.Real-estate professionals said closed sales eventually would follow suit, and that they were lagging because the large number of “short sales” — sales for less than what owners owe on their homes — were taking longer to process.
Pending house sales were up again in June, nearly 25 percent ahead of June 2008.
I chatted briefly with Eric about the numbers again yesterday, and got another quote in this month’s article, in which I allude to the regional shift in sales that I will be posting on later this week.
Aubrey Cohen, Seattle P-I: House sales up in King County
Countywide, 1,655 county houses sold in June — an increase of 4 percent from June 2008 and 26 percent from this May and the highest total since October 2007. Seattle had 597 house sales in June — up 10.8 percent from a year earlier and 28 percent from May and the most since August 2007.
“That’s definitely good news. I’ve been waiting to see something like that,” said Andrew Gledhill, an associate economist at Moody’s Economy.com. “It would probably be about three to four months of seeing these kinds of positive returns before I’d put much stake in it.”
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said buyers were taking advantage of lower prices and trying to ensure deals close before the Nov. 30 expiration date for the federal $8,000 first-time buyer tax credit.
“There’s some bottom feeding going on,” he said. “I think prices have fallen enough that there are some absolute bargains out there.”
Crellin did not draw any conclusions about the state of the market from the June report, saying: “It is a positive sign, but that’s really all that we can say that it is.”
Is it just me, or has Crellin significantly toned down the boldness of his claims lately? Also, it’s nice to see a comment like Gledhill’s making it into the first few paragraphs of Aubrey’s article. Too often we get a single month of upward-trending data and all the news reports are crammed full of real estate agents declaring that the bottom is here.
Surprisingly, neither the Times nor the P-I jumped on the $20,000 one-month increase in the SFH median. I can’t help but wonder if Eric & Aubrey’s real estate reporting is being influenced at least a little bit by this site. Whether it’s due to Seattle Bubble or not, I gladly welcome the more even-handed reporting.
Amy Rolph, Everett Herald: Hopeful trend for housing market
The housing market in Snohomish County showed signs of recovery in June, driven by first-time buyers shopping for homes at burst-bubble prices.
The Northwest Multiple Listing Service reported that pending sales in June increased 30 percent over the same month last year, giving real estate agents a reason to hope that a full recovery isn’t far away.
More than 1,190 sales were pending in June, up from 915 last year. Pending home sales also increased in May and April in Snohomish County, compared to the same months in 2008. However, completed home sales increased less than 1 percent in the county compared to June 2008.
I thought we hit the bottom months ago. How can recovery now be “not far away”? It’s interesting to see the mental shift at play here. I wonder what the agents will be saying if sales and prices dive down in the second half of the year like they did last year.
Kelly Kearsley, Tacoma News Tribune: Pierce County shows signs of life in real estate
The residential real estate market in Pierce County is perking up for the summer as more people move from simply looking at homes to actually making offers on them.
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Local real estate agents said low interest rates, first-time home buyer credits and the prospect of good deals are spurring some hesitant shoppers to take action.
If that reasoning sounds familiar (more people buying homes thanks to lower prices), it’s because that’s what we’ve been predicting would happen for some time:
I am betting that the double-digit YOY drops in sales will not last beyond the first or second quarter, but will eventually flatten out and maybe even show YOY gains. My sales prediction is based largely on an assumption that home prices will continue to fall as well, eventually coming down to a level that is able to attract more buyers.
Ding, we have a winner.
Rolf Boone, The Olympian: Home sales stage best month of ’09
The Thurston County housing market had its best month of the year in June as home sales rose above 300 units for the first time in 2009 and nearly matched total sales in June 2008, according to Northwest Multiple Listing Service data released Monday.
Single-family residence sales, excluding condominiums, performed even better last month – rising 1 percent to 303 units from 299 units in June 2008, the data show.
South Sound real estate agents attributed the June increase in home sales to wider acceptance of tax incentive programs for first-time home buyers and a slight increase in mortgage interest rates that spurred some buyers to action.
As 30-year mortgage interest rates rose higher, some prospective buyers jumped in to buy now rather than wait for interest rates to rise again, said Mark Kitabayashi, president-elect of the Thurston County Realtors Association. Last week, Freddie Mac reported that mortgage rates averaged 5.32 percent nationally. Earlier this year, rates dipped below 5 percent but have climbed in recent weeks.
“People on the fence got off the fence,” he said.
That darn fence. Someone should just go and burn it down or something. All those darn buyers sitting up there selfishly destroying the local housing market. Tsk.
(Eric Pryne, Seattle Times, 07.06.2009)
(Eric Pryne, Seattle Times, 07.07.2009)
(Aubrey Cohen, Seattle P-I, 07.06.2009)
(Amy Rolph, Everett Herald, 07.07.2009)
(Kelly Kearsley, Tacoma News Tribune, 07.07.2009)
(Rolf Boone, Olympian, 07.07.2009)