September Reporting Roundup: “China is Very Real” 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:

Home Sales Stay Strong but Prices Approaching "Affordability Ceiling" for Some Buyers

Commenting on September’s activity, industry veteran Gary O’Leyar said he expects the Greater Puget Sound real estate market will maintain a “healthy glow” in 2015 so long as there is no radical increase in interest rates. “I foresee a general leveling off in overall market activity as prices approach the affordability ceiling for many buyers,” remarked O’Leyar, the designated broker/owner of Prudential Signature Properties in Seattle.

OB Jacobi, president of Windermere Real Estate, noted luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. “I attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest,” he remarked.

Despite keen interest in high-end homes, overpriced homes will not draw offers, cautioned Northwest MLS director Diedre Haines. “It is extremely important for sellers to know if their house is overpriced, it may not garner offers and will eventually sell for below market,” she declared, adding, “This is an absolute that has always been the case, in all market conditions, and all locations!”

Haines, who is regional managing broker for Snohomish County at Coldwell Banker Bain, described some of the newer inventory as not saleable or overpriced. “Today’s buyers are more savvy and educated regarding market values, so correct pricing has become the key factor in selling a home.”

If it is indeed true that “today’s buyers are more savvy and educated,” I hope that this site has contributed at least a little to that education.

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

Seattle Times

Sanjay Bhatt: King County home prices resume their climb

September, however, was hot for King County home sales, and Seattle’s sizzled — the median price rose 12 percent from a year earlier to $517,000, the highest appreciation among the five major King County submarkets.

“It has all the classic signs of getting very, very frothy,” said Stephen O’Connor, director of the Runstad Center for Real Estate Studies at the University of Washington. “At some particular point in time, the market’s going to take a break.”

The real estate reporting in the Seattle Times is so much better than it was during the housing bubble. Back then the only people quoted in an article like this would have been real estate salespeople crowing about how amazing the market is and how there’s never been a better time to buy, etc. Today, the very first quote of the article is from an academic who is skeptical of the frothy market.

A+ for the Seattle Times.

Seattle P-I

Aubrey Cohen: Seattle-area home prices up again

“It’s looking pretty frothy out there,” said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington. “Double-digit increases, it’s not the norm.”

“At the risk of sounding incredibly obvious, it is supply and demand,” O’Connor said.

Real estate reporting in the P-I was never as bad as the Times during the bubble, but it has improved over the years as well. The difference is that it’s been the same reporter the whole time, Aubrey Cohen holding down the fort, while the Times has is on their third different real estate reporter.

I do take issue with this bit though (which is just a quote from the NWMLS press release):

Chinese buyers are making “very significant purchases of prime properties,” particularly east of Seattle, according to [designated broker/owner of Prudential Signature Properties in Seattle Gary] O’Leyar. Beeson agreed, saying high prices in Vancouver and San Francisco are pushing these buyers here.

Again, where’s the data? Agents keep making these claims without providing any data or even really quantifying their statements. What is “very significant purchases”? Is it a small number of expensive, high-profile homes, or a large number of homes? Show me the data on this alleged Chinese boom.

Everett Herald

Herald Business Journal Staff: Snohomish County home sales jump 15.5 percent

Pending sales for Snohomish County homes jumped 15.48 percent in September compared with the same month of the previous year, according to statistics released Monday from the Northwest Multiple Listing Service.

The number of homes with pending sales rose to 1,328 last month from 1,150 in 2013. Every area of the county saw an increase in the number sales.

One novelty of the market is the number of international buyers, especially from China, who are picking up prime homes in the Puget Sound area particularly east of Seattle.

“The influx of buyers from China is very real,” O’Leyar said.

A big increase in pending sales is interesting, but pending sales are not closed sales, and many in fact do not close (we’ll post the latest numbers on that next week). It’s a bit misleading to headline the article with a pending sales stat. And again with quoting the Chinese buyers bit from the press release without pressing anyone for data. Tsk.

Tacoma News Tribune

Rolf Boone: South Sound housing market wraps up summer on positive note

The South Sound housing market wrapped up summer on a positive note in September as the number of home sales and median prices continued on an upward trend in Pierce and Thurston counties.

But this time the Thurston County housing market stood out in September, while the housing gains in Pierce County have taken on a steady quality, according to data released late Monday by the Northwest Multiple Listing Service.

Not much more here this week than a mild rehash of the press release.

The Olympian

Rolf Boone: South Sound housing market wraps up summer on positive note
It’s literally the exact same article that was in the News Tribune.

(Sanjay Bhatt, Seattle Times, 10.06.2014)
(Aubrey Cohen, Seattle P-I, 10.06.2014)
(Herald Business Journal Staff, Everett Herald, 10.06.2014)
(Rolf Boone, Tacoma News Tribune, 10.06.2014)
(Rolf Boone, The Olympian, 10.06.2014)


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.

13 comments:

  1. 1

    If You Hit “more”; and read Tim’s Opinions

    I think you’ll agree he did an excellent sum up….not much I could add to our Seattle Bubble CEO’s report. That’s the root cause trouble with using Orwellian “Newspeak” undocumented opinions….its undocumented.

  2. 2

    What, Tim is no fan of Elizabeth Rhodes? I’m shocked! ;-)

    Seriously, her reporting for the Times was bad. I’m not going to say it was balanced one way or another, but it was bad. Here’s a piece I did in 2007 covering two of her articles.

    http://blog.seattlepi.com/realestate/2007/12/30/when-basket-weaving-is-too-difficult/

  3. 3
    Jonness says:

    Tim:

    It would be interesting to see you blog on several RE agent’s whacked predictions then and now. Perhaps you could feature one agent per week or month in an ongoing series.

    The first week could feature Steve Tytler and his “stair step theory?”

    Week two could be Ardell’s most famous bottom call.

    I would like to see how time and experience has shaped people’s opinions and outlooks for the future (along with lessons learned etc).

  4. 4
    Mike says:

    Wow, glad I bought in Seattle 2 years ago… Personally I’m not seeing how this market is frothy aside from the price increase. The people buying now seem to be pretty well off. When we bought back in the trough, we were the youngest couple on our block, and now some other younger people have moved in and they’re clearly… well… a bit wealthier. Ok, that’s an understatement. We’re now the poor folks who moved in when the market crashed, and the new residents all paid $200K-$400K more for their homes than we did.

    Somehow they afforded it.

  5. 5

    By Jonness @ 3:

    Week two could be Ardell’s most famous bottom call. .

    Ah, yes, good times:

    http://www.seattlepi.com/local/article/Agent-predicts-housing-slump-s-demise-1299714.php

    My general practice is to not talk to the press, but I made an exception that time.

  6. 6
    Blurtman says:

    In my general Sammamish neighborhood there are definitely more buyers from China. (Is a discussion of this topic PC Approved™?)

  7. 7

    RE: Blurtman @ 6

    The Key Blurtman is Citizenship in America

    Yes, the Eastside is considerred a great place to buy by Asians, I lived in Belleveue at one time too…..but most of what I noticed were Asian American citizens and their families that were here like generations ago, not recent foreign investors from China, some of the realtors allege.

  8. 8

    RE: Mike @ 4

    Yes Mike

    When I lived in Lake Hills Bellevue with a family and two kids in my late 30s; I was practically the only home owner in the early 90s that wasn’t “Kidless” or old [and kidless]. It hasn’t changed.

  9. 9
    ongsomwang says:

    By softwarengineer @ 7:

    RE: Blurtman @ 6

    The Key Blurtman is Citizenship in America

    Yes, the Eastside is considerred a great place to buy by Asians, I lived in Belleveue at one time too…..but most of what I noticed were Asian American citizens and their families that were here like generations ago, not recent foreign investors from China, some of the realtors allege.

    As an Asian American myself. I’m sure a good deal of these buyers are American citizens (I don’t have any stats). Some people might just assume they are foreign because they are not your typical Anglo Saxon from prior generations.

    I’d imagine that most Chinese Americans (like most people) simply want their kids to go to good schools in a nice area.

  10. 10

    RE: ongsomwang @ 9 – As far as I know, in real estate citizenship only comes up when selling, and that’s an IRS matter not recorded of public record.

  11. 11
    Mike says:

    By softwarengineer @ 8:

    RE: Mike @ 4

    Yes Mike

    When I lived in Lake Hills Bellevue with a family and two kids in my late 30s; I was practically the only home owner in the early 90s that wasn’t “Kidless” or old [and kidless]. It hasn’t changed.

    Since be bubble burst a lot more younger families have moved in. Nearly every house sold since 2011 went to someone under 45 and most have kids or they’re likely to. Sales prior to 2011 were more weighted towards older folks – in fact early every house on our block that sold during the bubble went to empty-nesters. Now we have 6 more families within a 1 block radius with kids under 5. Some of these folks, like us, clearly took advantage of the depressed prices to get in to a neighborhood with a top elementary school in walking distance.

    What’s really been surprising me is that I’d assumed the neighborhood would go back to attracting more old fogies if the median crept back up towards the $750K range. I figured at that price point fewer young couples would be able to afford the homes. Much to much surprise the last few homes that sold in the $600-$900K price range ALL went to people under 40! We got a couple of mid-30s folks across the street now – no kids yet but they’re planning on starting a family sometime soon. We’re also expecting a child in the next few weeks, and we’re not alone – I’m seeing quite a few expectant mothers waddling around here these days.

  12. 12
    Blurtman says:

    RE: ongsomwang @ 9 – Sure, and I hesitated to comment on the subject because no one knows where anyone is from, except perhaps the folks with the mullets and Mötley Crüe T shirts. And while this isn’t proof, and I do no speak any Chinese dialects whatsoever, the folks that I pass on my evening strolls are conversing in Chinese. But the real proof is that these new neighbors are out walking through the neighborhoods, including what appear to be sexagenarians. Long term and acclimated newer citizens would be home plugged in or watching cable or streaming videos or killing countless foes in Halo or Duke Nukem.

  13. 13
    Blurtman says:

    RE: ongsomwang @ 9 – BTW, not all European Americans are Anglo Saxons. Also, very few from this frequently mischaracterized group are from the Caucasus Mountains area.

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