July Reporting Roundup: Skyrocketing Bottom Edition

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).

To kick things off, here’s an excerpt from the NWMLS press release:

July housing activity around Washington described as "classic good news, bad news story"

“It’s classic good news, bad news story,” said Northwest MLS director Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo. “The good news is that we seem to be at the bottom,” he remarked, adding, “The bad news is we are just sitting there. Although homes are still selling, and in some cases at the asking price and in a reasonable amount of time, these are isolated to specific price ranges and geographic areas.”

“In selected areas and price ranges, where there is a low level of homes for sale, we are seeing high sales activity for new properties when they come on the market,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Scott noted healthy sales activity is occurring close to the job centers of Seattle and Bellevue, with transferees leading the way. However, he acknowledged, “lower sales activity is being reported in the outlying markets and in the high end.”

Awesome. Yet another bottom call from a local agent. Time for another look at the median price chart:

King County SFH Prices

Also, I really enjoy that big string of qualifiers from Lennox before he refers to “high sales activity.” Translation: for the kinds of homes that are selling, there are homes that are selling! Wow!

Read on for my take on this month’s local news reports.

Christine Harvey, Seattle Times: Seattle-area home sales jump in July; prices skid

Despite the increase over last July, the total sales so far this year aren’t much different from in 2010.

Single-family closings in King County totaled 10,310 from January through July 2010, compared with 10,204 this year, MLS data showed.

Median home prices, however, were down significantly in July.

Glenn Crellin, director for the Washington Center for Real Estate Research at Washington State University, said there is “a substantial amount of bargain hunting in the market.”

His observations were reflected in the King County statistics, where activity was up 34.7 percent in Southwest King County and 29.4 percent in North King County — the cheapest areas.

So weird! When homes are cheap, people want to buy them. Go figure!

Aubrey Cohen, Seattle P-I: Home sales rise, but price drops accelerate

While Seattle-area home sales rose in July, prices posted their biggest drop of the year, according to a new report.

Problem: sales actually fell June to July and prices actually rose slightly. The apparent large changes year-over-year in sales and prices are skewed since we’re comparing to the first post tax credit month of 2010.

“We’ve got a market that is reflecting some stabilization compared to the severe dropoff that we saw last July” after the tax credit expired, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

The housing market needs good economic news, Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo, said in the news release. “Until consumers get excited about what is happening in our economy, here we will sit, which in the big picture is better than where we were a few years ago.”

I think we need more than some “excitement” to see a boost in homebuying. We need to see some actual improvement in the underlying economic fundamentals. You know, employment, incomes, that sort of thing?

Mike Benbow, Everett Herald: Home sales climb in July in Snohomish County

It’s a little too early to tell, but Snohomish County’s long drop in home sales may have reached bottom and started to climb out.

For the first time in a long time, home sales rose significantly in July in comparison to a year ago, the Northwest Multiple Listing Service reported Thursday.

*Sigh* Mike apparently completely forgot about the cliff sales fell off of a year ago. This despite the fact that he wrote about it at the time.

Rolf Boone, Tacoma News Tribune: Pierce County home sales skyrocket as prices fizzle in July

Pierce County home sales soared in July, likely lifted by bargain prices, which fell more than 11 percent from last year, according to data released today by the Northwest Multiple Listing Service. It was the third consecutive month since May that Pierce County median prices have fallen more than 11 percent.

Still, home sales last month rose more than 20 percent to 838 units from 686 units, the year-over-year combined single-family residence and condominium data show.

Wow, “skyrocket”? Really? Total fail.

Rolf Boone, The Olympian: Thurston County home sales flat in July

Thurston County home sales were flat in July, likely a disappointing result for the South Sound real estate community after home sales trended upward in June, according to data released today by the Northwest Multiple Listing Service.

Year-over-year sales for July fell less than 1 percent to 247 units from 249 units, and median prices fell 4 percent to $225,000 from $234,900, the combined single-family residence and condo data show.

Sadly, although there is apparently an interesting story here (sales were actually down from 2010, when they were up everywhere else?), all we get for Olympia is this super-short blog post.

(Christine Harvey, Seattle Times, 08.04.2011)
(Aubrey Cohen, Seattle P-I, 08.04.2011)
(Mike Benbow, Everett Herald, 08.04.2011)
(Rolf Boone, Tacoma News Tribune, 08.04.2011)
(Rolf Boone, The Olympian, 08.04.2011)

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

11 comments:

  1. 1
    Scotsman says:

    “The good news is that we seem to be at the bottom,”

    Yet, on another thread, Sniglet is back with his 80% off peak call.

    If anyone seriously thinks this is the bottom, please explain where the additional new money (aggregate) is going to come from to drive prices up.

  2. 2
    Real World Express says:

    I love the way the blockheads here ignore all other events and “analyze” real estate in a complete vacuum.

    So peoples mutual funds losing ten per cent of value in one week (money that would become a down payment) has no effect.

    Hilarious.

  3. 3
    Lurker says:

    I was among a group of people the other day and several were all lamenting on home prices and the albatross of being a homeowner. They offered to burn each others houses down and I joked about how we have gone from “mortgage burning parties” to “home burning parties.”

  4. 4
    MichaelB says:

    Yes, Tim they did make some dumb comments and you are very clever to point that out!

    On the other hand, I bet none of them were dumb enough to buy a house in Everett during the last few months, live next to a bunch of pedophiles and drug addicts, and then write about it in a blog!

  5. 5
    3rd Generation says:

    “buy a house in Everett during the last few months, live next to a bunch of pedophiles and drug addicts,”

    Hey, everone has to live somewhere. Who cares if they are werewolves or even worse –
    ( fill in the blank ) .

    Frankly, I prefer outlaw bikers – REAL ones, 1% er style.

    That way, you never have to call 911, EVER. And, they usually are excellent at eviction and collection work when required. You rarely have tenant problems a second time.

    Do they pay the rent on time & Does it cash flow ? The rest is blogger Bullshit.

  6. 6
  7. 7
    ray pepper says:

    RE: MichaelB @ 4

    I thought we already determined he does not live NEXT to anyone such as that and instead it was miles away..

    It fascinates me when people tell me they think we are at a bottom or near..As Scotsman points out what could possibly prop prices up? The properties are sure piling up at the Trustee Sales and nearly all are not getting bought. This Shadow Inventory will be far worse then anyone ever realized and the carnage has not yet even begun to rear its ugly head….

    BTW..spencer you think you will be able to hold **Z** abover 25.00 for a reduced 90days to CASH OUT with your cronies? Good Luck big boy! http://www.geekwire.com/2011/zillow-insiders-stock-25-share

  8. 8
    Hugh Dominic says:

    “Until consumers get excited about what is happening in our economy, here we will sit, which in the big picture is better than where we were a few years ago.”

    Not so fast, Frank. Two years ago the US had a AAA debt rating, today it is AA+, an all time low. Two years ago unemployment was 9.5% with average time unemployed of 25 weeks, today it is 9.1% and 39 weeks, an all time high. Two years ago the nation carried $11T in debt, today it is $14T, an all time high.

    Tell me again about that big picture?

  9. 9
    ; says:

    By Lurker @ 3:

    I was among a group of people the other day and several were all lamenting on home prices and the albatross of being a homeowner.

    same here. none of the home owners i known who bought in the last 5 years are overjoyed with the size of their mortgage payments.

    contrast that with how extremely happy they were after successfully outbidding everyone else to buy their home at the time of purchase.

    it’s interesting that when prices were crazy high everyone was overbidding on 600sqft dumps in the ghetto. now that prices have dropped 10% to 40%, decent houses just sit.

    lessons for today?
    a) people are irrational.
    b) don’t bother with multiple bid situations. few years after purchase you’ll likely regret it.

  10. 10
    Jonness says:

    By Hugh Dominic @ 8

    Tell me again about that big picture?

    Thanks Hugh. I got a laugh out of that. Apparently, the U.S. government is out of bullets. :)

    Isn’t it about time for Tim to break out his chart showing where we are at in the bubble cycle of emotions?

    https://seattlebubble.com/blog/2011/04/21/has-the-tide-turned-against-home-ownership/

    As far as yet another RE agent bottom call, this is really getting old. There should be laws against this kind of behavior.

  11. 11
    paradox says:

    The bottom will be reached when people stop viewing houses as an investment but rather as a place to live.

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