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Wednesday, June 07, 2006

May Reporting Roundup

Let's take a look at today's reporting on the May NWMLS numbers. First up: Home prices keep climbing by Mike Benbow of the Everett Herald:

Home prices soared again in May, but that didn't stop significant numbers of buyers.

Sales last month did drop by 1 percent in comparison with May 2005, but they still continued at the high level Snohomish County has seen for several years, according to statistics released Tuesday by the Northwest Multiple Listing Service.
...
In addition to higher prices, Snohomish County saw an increase in the number of homes available for sale in May. After seeing inventory shrink during the past year or so, buyers actually saw a nearly 13 percent increase in the number of homes on the market in May. A year ago, there were 3,200 homes in the county to choose from. Last month, that number rose to 3,606.
Not much to say about this one, it's pretty pedestrian stuff. Mike didn't even try to take some kind of "angle" or present the numbers in a confusing way. Actually it's a pleasantly even-handed report on the May numbers.

Next let's check out the scene in Tacoma with Barbara Clements' article, More homes, bigger prices:
The number of houses for sale in the county, which had a median home price of $262,950 last month, jumped by 37.6 percent in May when compared with the same month last year, according to statistics released Tuesday by the Northwest Multiple Listing Service.

Brokers confirmed the trend.

"We have about 25 homes in our inventory right now," said Katina Toscas-Atz, a broker with Keller Williams Realty in Lakewood. "Last year at this time, we have five."
...
"I think as long as the seller doesn't try to wrest every dollar out of the home, it's still a fast-paced market," [Dick Beeson, Windermere broker] said.

Lennox Scott, CEO of John L. Scott Real Estate, said there seem to be two markets in the region now.

Homes near cities seem to still be selling at a fast clip. Markets farther away from the economic centers are selling more slowly.
Another fairly balanced report, highlighting the signs that things are finally slowing down a bit, but pointing out that the market is still relatively hot compared to most years. This is turning out to be a refreshing month of even-handed reporting.

Moving on to Seattle, the P-I tackles the story with a tag-team report titled Prices high but homes still hot property by Cecelia Goodnow & Kathy Mulady:
First-time home buyers Carrie and Tim Matthews really did their homework. They took a home-buying course, got advice from friends and co-workers, lined up financing and viewed about 60 houses for sale in the Seattle area.

But in one respect they were naive. They had the quaint idea that they'd find a great house up for grabs, rush to make the first offer and win the prize.

Not in today's heated market, where hungry buyers circle the most popular neighborhoods like sharks in search of lunch.

"We wanted to live in Ballard, and that's a real popular area right now," said Tim, 35, a marketing director. "So if you're looking in a popular area you have to be prepared for multiple offers and be patient, because you're probably going to lose a few."
...
The inventory of houses and condos for sale would seem to favor buyers like these. The listing service report showed an increase — 4.7 percent — from the same month a year ago. But even if the pace of sales has slackened a bit, "There is still a strong demand for the better-priced properties," said Dick Beeson, director of the service.
...
Now, as Tim and Carrie Matthews nervously count down to their closing date, all they have to worry about are the typical stresses of home ownership, including mortgage payments of between $2,000 and $3,000 a month — more than double their current rent. Not that they're complaining.

"As long as you're patient and you end up with something you want," Tim said, "it's all worth it."
Whoa, it looks like I spoke too soon. So much for refreshing even-handedness. "Heated market," "hungry buyers," "strong demand," and "all worth it." Let's party like it's 2005, because apparently it still is!

Also, is the P-I getting story cues from commenters on this blog (re: Ballard)? Draw your own conclusion on that one.

And who could forget our favorite real estate reporter—back from vacation—Elizabeth Rhodes, who writes More for-sale signs, but prices still hot:
Homebuyers throughout most of Western Washington caught a bit of a break last month, but it wasn't in their wallets.

The number of single-family homes and condominiums for sale grew 18 percent in the 17-county area served by the Northwest Multiple Listing Service, its May sales report released Tuesday said.

Even King County, hard hit this spring by a shortage of for-sale properties, posted an 8.4 percent gain compared with May 2005.

Still, price appreciation hit double digits throughout the region — a sure sign that demand outstripped supply.
...
"In all honesty, I think we're seeing a little bit of a slowing down," said Rick Oxford, broker in the North Seattle office of Keller Williams Realty.

That was seconded by Phyllis Danforth, owner of Coldwell Banker Danforth Associates in Federal Way.

"Comparing all our data from a year ago, we're down a little bit," Danforth said. "There are some concerns about the interest rates going up. But it still seems to be a very good market."
Okay, I was with her at the beginning there, cheering on massive appreciation and nodding my head about demand that "outstripped supply." But what's that part at the end? Could it be... is it really... acknowledgement of the real estate market slowdown? I guess the vacation must have softened Ms. Rhodes. I have to say, I'm quite surprised. I guess you can only ignore it for so long.

To sum up: Is the market as hot as last year? Not hardly. Is it headed off a cliff? Also negative. It still seems quite strange to me though that prices continue to climb while supply increases and demand decreases. I don't see how those three trends can continue indefinitely. But I'm no economist.

(Mike Benbow, Everett Herald, 06.07.2006 )
(Barbara Clements, Tacoma News Tribune, 06.07.2006)
(Cecelia Goodnow & Kathy Mulady, Seattle P-I, 06.07.2006)
(Elizabeth Rhodes, Seattle Times, 06.07.2006)

8 comments:

christiangustafson said...

I'd love to see a follow-up piece to the story last year about the empty-nester who "bought" a $600K condo in the Eastlake neighborhood, with an I/O ARM or similar suicide financing. Daughter is off to college at Wazu.

Does anyone have the link to the original? I wonder how this story will end, considering that RE only goes up.

meshugy said...

To sum up: Is the market as hot as last year? Not hardly. Is it headed off a cliff? Also negative. It still seems quite strange to me though that prices continue to climb while supply increases and demand decreases.

It all depends on what #'s you look at...if you just look at Seattle it's pretty much the same as last year. $4 more inventory but 3% more sales...so it's basically just as tight as last year.

King County as a whole seems to be loosening up a bit...but you also have to keep in mind that when you're talking about year over year comparison's, last year was the hottest year ever on record. 2004 was the second hottest, and we're not even back to 2004 #s yet.

I wasn't sure what was going to happen earlier this Spring. I thought maybe this would be the year things really cooled off. But it's pretty clear that we're going to see big gains all summer. Maybe Fall will slow down....

BN said...

I doubt we will see a slowdown this year in the eastside. As i mentioned
earlier the asian population here
has a huge appetite for owning real
estate and outbidding each other :(

Also, the influx of people from
CA has not yet stopped. Lately
I see a lot of TX eople moving in as well.

Disclaimer - I am an asian

Anonymous said...

Okay, fine, prices are still going up year-over-year. But what about month-over-month? What is the median price trend in Seattle and King County from Jan-Feb-Mar-Apr-May 2006? Isn't that a more realistic picture of what's going on?

The Tim said...

anon@7:26,

All that information and much, much more can be found in my handy little Excel spreadsheet.

biliruben said...

Again, kudos on the spreadsheet, Tim.

Anyone have a source for inventory in the 1990s (particularly early?).

Eric D. said...

Pierce County is down month-to-month for the first time in recent history. Very nice for us down here. I think the problem is obvious though- Tacoma and surrounding area is far less rich than Seattle. We have run out of the few buyers who can afford anything now. Seattle commutters and California expatroits are the only one left buying expensive houses now.

meshugy said...

I took a look at the median condo/res prices for king county going back a year:

2006
May $385
Apr $377
Mar $365
Feb $344
Jan $352
2005
Dec $355
Nov $350
Oct $355
Sep $349
Aug $349
Jul $340
Jun $355
May $329
Apr $322

What you see is a big increase last Spring, then the median price floated around $350 till Feb. which saw a slight drop. Then we see another big increase this Spring. So it seems like a lot the appreciation did actually happen during the last few months. The rest happened in Spring 05.