April Reporting Roundup: “Risky Behavior” Edition

It’s back! Time for another 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:

Housing inventory improves, but market still favors sellers

“Our market is near historically low levels of absorption. This has things weighted in sellers’ favor,” remarked Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty and a former Northwest MLS director. “Successful buyers are working closely with their brokers to study the market, choose great lenders, and make smart choices in composing compelling but not careless offers,” he added.

J. Lennox Scott, chairman and CEO of John L. Scott, Inc. described April as “another grand slam month for housing,” adding, “The market is more intense than a year ago. We are still seeing 80 percent of the homes coming on the market sell within the first 30 days.”

Scott said “virtually all new listings are selling, many with multiple offers in all the market areas in King, Snohomish, Pierce and Kitsap counties in the price ranges where 90 percent of the sales activity is happening.” Heavy open house traffic and multiple offer situations are keeping brokers extremely busy, he added.

Brokers believe the frenzied market is altering some buyers’ behavior – and not all of it is prudent, they suggest.

Diedre Haines, a former chairman of the Northwest MLS board of directors, reports there are growing signs “of buyers’ fatigue, and game-playing at its finest.” Pre-inspections are being conducted as the “new normal,” and/or buyers are waiving many of their rights with regard to inspections, title reviews, neighborhood reviews, and financing contingences, according to Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County.

“In my opinion, this is risky behavior for both buyers and sellers,” Haines commented, adding, “Buyers need to perform their due diligence investigations, and sellers should be cautioned about the wisdom, or lack thereof, in thinking these waivers strengthen the offer, are good for them, or that they create a ‘no hassle’ quick-close transaction.” She urged parties to a transaction to think through the potential consequences of taking such risks.

Wow, a home salesperson urging prudence and they’re being quoted in the NWMLS press release? I’m floored.

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

Seattle Times

Blanca Torres: Home prices charge ahead, driving some buyers farther afield

The list of cities some might call suburbs of Seattle now stretches to places like North Bend, Poulsbo and Cle Elum. More homebuyers are willing to trade longer commutes to buy a house they can afford or for more space and features.

Some would-be buyers are looking at such alternatives as a lack of available homes on the market drives up prices in the hot housing markets of Seattle and the Eastside.

Multiple bids and bidding far above the asking price are the norm in hot submarkets, leaving some prospective buyers demoralized. That is prompting some buyers to consider moving to another part of the region.

“You see Seattle fatigue, where you have buyers who have been outbid many times or have seen homes go well above asking prices,” said Stacie Gall, a Redfin agent based in Bainbridge Island.

“A lot of people are being willing to move out of their comfort zone and are finding that Seattle and the Eastside are becoming too expensive,” said Shane Raff, a real-estate agent with John L. Scott. “People are just getting priced out of the market and there’s nowhere for them to go.”

I don’t know if this is a real trend, but if it is, it’s worrisome. It’s this same kind of “buy a home no matter what” mindset that contributed to the frenzy and eventual bubble burst ten years ago.

Everett Herald Business Journal

Jim Davis: More homes land on market in county, but still too few

More homes hit the market in Snohomish County during April, but inventories remain far below what was available a year ago, the Northwest Multiple Listing Service says.

It’s part of a trend that’s been going on for months: There just aren’t enough homes available for the number of active buyers in the area.

It was nice to get a local article in the Everett Herald for the first time in a long time, but unfortunately the article was little more than window dressing on the NWMLS press release.

Puget Sound Business Journal

Marc Stiles: New home listings up, but not enough to cool down region’s blistering market

Pending home sales in the Puget Sound region’s four-county area are at a near record, more owners are putting their houses on the market, and price increases for single-family homes have started to slow down some.

Yet prices still are climbing, and it remains a seller’s market, especially if you’re unloading a condo.

The temperature of the condo market remains torrid, especially in King and Kitsap counties. In King, where inventory fell nearly 27 percent, the median sales price was up 19 percent. Downtown Seattle condo prices jumped 37 percent even as inventory remained about the same. In Kitsap, condo prices soared nearly 62 percent, though the number is based on just 16 sales. The Pierce County median price increased 13 percent and Snohomish County’s went up 3.6 percent.

Not a lot of depth to this article, but those are at least some interesting observations about the condo market. I’ll have to see if there’s enough data to see any interesting trends in condos lately.

Tacoma News Tribune

Craig Sailor: Pierce County still a real estate bargain compared with King

A tight inventory of homes continues to drive up prices in King and Pierce counties.

But that’s only one of the direct factors affecting affordability.

Land regulations, development costs, job growth and labor shortages also are raising prices. And builders are turning toward higher-end projects where those costs can be more easily worked in. The result is less affordable and entry-level housing.

That’s the conclusion of Robert Dietz, a national economist for the National Association of Home Builders, and Aaron Terrazas, a senior economist for housing data company Zillow.

The pair spoke early Wednesday at the annual Master Builder’s Association housing forum in Puyallup.

This article technically isn’t about the latest NWMLS data, but it is interesting and worth a read. You’re obviously going to get a very pro-buying-always message from an event put on by a homebuilder organization, but it’s interesting to see the latest spin they’re putting on it and the kinds of underlying factors they’re looking into.

The Olympian

Rolf Boone: Sellers had the advantage in South Sound housing markets in April

South Sound home sellers remained in the catbird’s seat in April as a lack of inventory and rising prices continued to favor them, according to Northwest Multiple Listing Service data released Thursday.

But if prospective buyers can’t find the houses they want or get outbid, guess what happens? Sales slow. That was the case in Pierce County, at least, as sales were essentially flat, rising only 1 percent last month compared with April 2015.

Thurston County has had a little more breathing room, but not much. In April, months of inventory was 2.06 months, the data show.

This one is the article covering the NWMLS numbers for the Tacoma and Olympia area. Not a lot of meat on the bone here, but frankly there’s not a lot of new and interesting things to say about the market right now.

(Blanca Torres, Seattle Times, 2016-05-05)
(Jim Davis, Everett Herald, 2016-05-05)
(Marc Stiles, Puget Sound Business Journal, 2016-05-05)
(Craig Sailor, Tacoma News Tribune, 2016-05-04)
(Rolf Boone, Tacoma News Tribune, 2016-05-05)

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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.