Time for the monthly reporting roundup, where I read all the local paper rehashes of the NWMLS press release so you don’t have to.
First up, an excerpt from the NWMLS press release itself: Northwest MLS brokers agree "there’s a lot to be optimistic about"
“There’s a lot to be optimistic about,” according to one director of the Northwest Multiple Listing Service upon reviewing summary statistics for September’s housing activity. The report shows a big jump in pending sales compared to a year ago (up almost 27 percent), continued drops in inventory (down 17.7 percent versus a year ago) and brisk demand for homes at the lower end of the price spectrum.
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Joe Spencer, president and COO of John L. Scott Real Estate, estimates up to 10 percent of pending sales do not close because they’re caught in the short sale cycle. Still, he comments, “There is a lot to be optimistic about.” He cites interest rates that are now in the high four percents as bordering “on being epic” and the federal tax credit as stimulants to the market.
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Activity at open houses is reported to be brisk in many areas…
Sweet! The return of the ever-popular “open house traffic” metric of market health. I love it. Also classic is the heavy focus on the pending sales stat, which has been rendered practically meaningless in the past year. FYI, that 10% estimate is way too low. I’d put it around 20-25%.
Anyway, click below to read the rest of this month’s reporting roundup, in which the incredible surge and uplifting rally is detailed by the enthusiastic local press corps.
Eric Pryne, Seattle Times: King County home sales surge in September, but prices continue to fall year-over-year
Matt and Priscilla Karwoski bought their first house last month: a new, three-bedroom town house in West Seattle. One factor: the $8,000 tax credit the federal government approved for first-time buyers this year.
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The $8,000 credit has helped fuel a surge in home sales, nationally and locally. Closed sales of single-family homes in King County were up 14.3 percent in September from the same month last year, the Northwest Multiple Listing Service reported Monday.It was the fourth consecutive month of year-over-year gains.
But the tax credit is scheduled to expire Nov. 30. After that, some observers say, home sales could drop again, just as auto sales plummeted after the federal “cash-for-clunkers” program ran its course.
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As for the $8,000 tax credit, it wasn’t the decisive factor, he [Matt Karwoski] added — but it was a factor.
Eric quoted a few thoughts from me on the current state of the market in today’s article. If you’re interested I have posted the full text of my comments to Eric. It is interesting to note that the buyer profiled in today’s article admits that $8,000 tax giveaway was not “the decisive factor.” Here’s another potential buyer in the comments on the Times’ site:
The $8,000 tax credit is one of the big reasons I’m trying to buy a home before November 30. … Without the tax credit I’d be willing to watch things for another year decline.
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I even had some friends who bought a house a month before his wedding because of the tax credit. The bride already had a condo, but the groom bought a house, got the $8,000 and they have the condo rented out on a 2 year lease.
Another example of today’s $8,000 tax credit-inspired buyers being either borrowed demand or purchases that would have happened anyway. What a complete waste of a program.
John Stang, Seattle P-I: King County home sales surge, but pitfalls remain
Seattle-area house sales continued to show signs of life in September. But the magic economic window to encourage homes sales is closing.
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Coldwell Banker Bain Managing Vice President Ron Sparks crowed about the report in the listing service news release.“Our market has certainly come a long way since this time last year,” Sparks said. “For all the challenges that remain, it would be difficult to not appreciate the reemerging market vitality that continues to build even as the summer buying season closes.”
Crellin said it remains to be seen whether all of the currently pending sales will translate into closed sales. He said the turnaround time for short sales — in which a banks agrees to accept less than its owed as part of a sale to avoid the costs of foreclosure — has jumped from 4.5 weeks a year ago to 9.5 weeks today, according to Campbell Communications of Washington, D.C.
Short sales also have helped keep down prices, Dick Beeson, a director of the Northwest Multiple Listing Service, in the news release.
“Because there are so many short sales and bank owned property sales, it was inevitable that prices would fall slightly,” he said.
I can’t help but feel that Crellin’s being pretty disengenuous here. We’re not just looking at a time delay. We’re looking at a large number of completely failed pending sales. As of September there are now 4,887 “orphaned” single-family pending sales in King County for 2009. There is absolutely no way that those are all going to eventually translate into closed sales. I’ll be surprised if even half of them do.
Mike Benbow, Everett Herald: Prices down, but home sales up 9 percent in county
Snohomish County home sales rose for the fourth straight month in August, aided by falling prices and a rush by first-time buyers to beat the deadline for an $8,000 tax break.
There were 755 homes sold in the county last month, a 9.1 percent increase from a year ago, The Northwest Multiple Listing Service reported today.
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The tax break was also a big issue, said Bob Maple, an Everett broker for John L. Scott Real Estate.
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The tax credit, that’s what’s driving sales,” Maple said. “Nearly all of our business has been from first-time buyers.”
…first-time buyers that probably would have bought in 2010 or 2011, had a free money giveaway not pulled them into the market before they were otherwise prepared to take the leap.
C.R. Roberts, Tacoma News Tribune: Real estate rallies, agents say
We’ve already hit the bottom and we are no longer there.
So say real estate professionals who have reviewed the latest numbers, out Monday, from the Northwest Multiple Listing Service.
“It appears that we’ve seen the bottom, and we’re starting to climb out,” said Bill Riley, an owner of GMAC Real Estate in Puyallup and president-elect of Washington Realtors.
“People now know they can buy a house and it will be worth more down the road,” he said Monday. “I wasn’t sure last month, but we are definitely in an upswing. There’s a possibility we can see the price of homes increase in 2009.”
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According to Dick Beeson, a Windermere broker and a director of Northwest MLS, the latest numbers reflect “a lot of pent-up demand. A lot more people are realizing closed sales.”The demand for homes, he said Monday, “is there. It’s just getting the darn things to the point where they’re actually closing – and that’s starting to happen. I think it’s pretty close to a trend. More people are getting into the market and off the fence.”
Nice. Another explicit bottom call for the scrapbook.
Rolf Boone, The Olympian: Home sales start Rally, agents say
Pending home sales in Thurston County rose more than 11 percent in September, a sign that first-time homebuyers rushed to take advantage of an $8,000 tax incentive program before it expires next month, South Sound real estate agents said Monday.
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Windermere Olympia real estate agent Gregory Moe agreed that the tax incentive program has boosted pending sales. Moe said he recently worked with a buyer who wanted to buy specifically to take advantage of the program.
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Although the housing market is improving, the lack of local employment is holding the market back, he said.
Huh, so people without jobs can’t buy houses? Go figure.
(Eric Pryne, Seattle Times, 10.05.2009)
(Eric Pryne, Seattle Times, 10.06.2009)
(John Stang, Seattle P-I, 10.05.2009)
(Mike Benbow, Everett Herald, 10.06.2009)
(C.R. Roberts, Tacoma News Tribune, 10.06.2009)
(Rolf Boone, Olympian, 10.06.2009)