It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).
First up, let’s have a look at the source material from the NWMLS itself. Here’s their press release: February housing activity yields “reason for optimism”
In King County, the median selling price for last month’s completed transactions was $320,000, down about 6.8 percent from a year ago. For the four-county Puget Sound region, last month’s median price for single family homes and condos that sold during February was $262,250.
Brokers point to distressed properties as a major reason for depressed prices.
Jacobi said his company’s tracking showed distressed properties accounted for 37 percent of single family home sales in King County in February as compared to 30 percent a year ago. Most of that growth was from sales of bank owned properties, he noted.
Distressed properties continue to drag down home prices, Jacobi remarked. “Since they can sell for 30-to-40 percent less than non-distressed homes, we expected a price drop. In Windermere’s analysis, if you take out the distressed sales for February, the median home price jumps from $334,000 to $390,000.”
Of course. That makes perfect sense. If the numbers aren’t saying what you want them to say, just keep removing low-performing segments from the data until you get the result you were wishing for.
Read on for my take on this month’s local news reports.
Eric Pryne, Seattle Times: Median home price in King County drops in February, dragged down by repos
Home prices plummeted to new post-boom lows in February, dragged down by a continuing surge in lower-priced “short sales” and bank resales of repossessed homes.
…distressed sales are driving much of the market, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, and that won’t end anytime soon.
“It’s going to be a problem for us to deal with for the rest of this year, and perhaps a little beyond,” he said.
Standard & Poor’s estimated in another recent report that, based on recent sales rates, it will take nearly five years to clear all the “shadow inventory” — homes that are in foreclosure, or are about to be — in King, Snohomish and Pierce counties.
I tend to think it will take more than a year to work through all these foreclosures. Especially when prices are continuing to fall and unemployment is still extremely elevated. The fact that the NWMLS and its members don’t seem to want to face is that “distressed” inventory is going to be the main segment of the market that drives prices over the next few years.
Aubrey Cohen, Seattle P-I: Area house prices post largest drops since 2009
This is hitting now because lenders that have been sitting on foreclosures or short sales (where lenders accept less than they’re owed because a property is worth less than the mortgage balance) are starting to make deals, Crellin speculated. “I think we’re seeing some of that market clearing going on.”
But the area still has a lot of this inventory to clear, he added. “On the sales side we’re probably above where the bottom was. Price side, we’re probably going to continue to struggle for the remainder of this year.”
Glenn Grellin and I are in agreement again. With these ever-lower prices, sales basically have nowhere to go from here but up. I’m not saying we’re going to get anywhere near the breakneck sales pace of 2005, but we’re not likely to be testing new lows this year, either.
Mike Benbow, Everett Herald: Home values in Snohomish County down 13.6%
Bob Maple, owner-broker at the John L. Scott office in Everett, said bank-owned homes and short sales are reducing prices.
“The bank-owned (homes) drag down the prices,” he said. “These banks don’t like to sit on this stuff. It’s priced to sell.”
Maple said that in January more than 30 percent of the homes sold were by banks looking to get houses off their books.
Add short sales and the number is larger, complicating the county’s real estate market. “It’s a large chunk of the market,” Maple said.
Which is exactly why it makes no sense at all to pretend that these sales don’t exist.
Kathleen Cooper, Tacoma News Tribune: Home-sales prices decline in Pierce County
OB Jacobi, president of Windermere Real Estate Co., said in the release that the drop stems from the effect of distressed properties on sellers. People are reluctant to compete with the prices of properties that are bank-owned or going through foreclosure, so they’re holding off on listing their home.
Distressed properties generally sell for 10 to 15 percent less than others, but some sell for even larger discounts.
The downward pressure on prices is likely to continue. Foreclosure listing firm RealtyTrac’s data show that in January, 884 homes were added to the list of distressed properties in Pierce County. At the end of 2010, the county had 7,884 properties in some stage of foreclosure, RealtyTrac data show.
Wow, the NWMLS really hit a home run this month with the distressed inventory talking point. It seems every single paper took that angle and ran with it.
Rolf Boone, The Olympian: Thurston home sales, prices decline
After Thurston County home sales rose in January, the South Sound housing market took a step back last month as home sales, median prices and pending sales all fell in the year-over-year February period, according to Northwest Multiple Listing Service data released Thursday.
Thurston County home sales fell 17.49 percent to 151 units from 183 units, median prices fell 6.61 percent to $217,600 from $232,995 and pending sales fell 5.48 percent to 293 units from 310 units, the combined single-family residence and condominium data show.
Unfortunately it seems that The Olympian is fairly uninterested in real estate these days. Half the time we get no story at all, and when we do get a story all we get are these super-short blurbs.
(Eric Pryne, Seattle Times, 03.03.2011)
(Aubrey Cohen, Seattle P-I, 03.03.2011)
(Mike Benbow, Everett Herald, 03.04.2011)
(Kathleen Cooper, Tacoma News Tribune, 03.04.2011)
(Rolf Boone, The Olympian, 03.04.2011)