August Report Roundup

As expected, all the local dead-tree press are reporting today on August's NWMLS numbers. There's a lot to check out, and nothing really new, so I'm just going to give a quick overview of each report, Ben Jones style. (And this post is still going to be ridiculously long.)

First up, King5 News:

There's been talk nationwide that we are in a housing slowdown, and at any moment the bubble could burst. But the numbers in Washington State may not be so bad.
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Many homes are still selling quickly, but in general sellers aren't bombarded with buyers like they may have been last year.
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Some real-estate brokers are pointing to the sun as the reason it was a slower August. It was an exceptionally warm and dry month and many believe people were more focused on vacations than buying and selling homes.

None of this has translated into a downturn in price. In fact, home prices in Western and Central Washington were up 14.3 percent from August of last year.

Mike Benbow at the Everett Herald writes:

Home prices continued to climb in Snohomish County in August, defying simple logic and bucking a national trend.

Last month, the number of available homes rose 24 percent, pending sales fell by 16.6 percent and closed sales dipped by 5.6 percent, according to the Northwest Multiple Listing Service. All are indicators that the record home prices now existing in the county would start to fall.

Instead, they went up.
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Listing service director Ken Bacon, a Windermere broker in Redmond, said buyers on the east side of King County are running short of homes in the $400,000 to $500,000 price range and may need to look in such Snohomish County areas as Monroe to find a home they can afford.

He also said lingering concern about affordability and rising gasoline prices may force more people to buy condos near job centers.

...or maybe they just, oh I don't know... won't buy? Nah...

Although my favorite area real estate reporter Barbara Clements has moved on to bigger and better things, her replacement at the Tacoma News Tribune does a decent job of telling it like it is in Pierce County:

The days of bidding wars, 20 percent annual price increases and ridiculously short periods between listing and closing might be over in Pierce County.

In short, it's become work to sell a house in these parts again.

Sellers are being forced to reduce prices, make repairs and keep their houses on the market longer, real estate professionals said Tuesday.
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"Last year, when I worked with buyers and was showing them a house, it was kind of a place where they had to put in an offer right then and there," [Windermere Agent Richard Herron] said. "Now, they're looking and evaluating more and trying to make a more educated decision."

Part of the increase in inventory comes from people thinking they need to try to cash in on the recent boom, Herron said.

"Some people may be in a bit of a rush to maximize their equity," he said.

But [John L. Scott broker Lisa] Dreyer called the slowdown "healthy," giving first-time buyers a hope of getting into a house, and she pointed out that most homes still aren't languishing on the market for months.

Over at the King County Journal, Clayton Park focused his report this month on condo sales, which are not yet experiencing year on year sales declines:

For King County as a whole, the number of condos sold in August rose to 1,052, up from 891 in July, said Cheri Brennan, a spokeswoman for the Kirkland-based organization, which tracks home sales throughout Western Washington on a monthly basis.

Ken Bacon, managing broker for the Windermere Real Estate office in Redmond, said he has noticed a considerable increase in demand for condos on the Eastside, particularly in areas close to major employment hubs, such as Microsoft campus.

"Thirty percent of all our sales in the Redmond area are condominiums," said Bacon. "Two years ago, you were looking at (condos comprising) 10 percent" of his office's sales.

The reason, said Bacon, may have to do with condos presenting buyers with a more affordable alternative to single-family homes.

That just leaves the big guns. Over at the P-I, Aubrey Cohen took me by surprise by opening her article with some of the worst numbers in the reports, and even giving the bubble some serious mention—balanced, of course with the usual talk of the "strong job market" and the alleged lack of speculators.

Seattle home prices fell last month from their July level and posted the lowest year-to-year increase in 18 months, according to new statistics released Tuesday.

August prices fell 3.8 percent from July and were up 8 percent from August 2005, according to the Northwest Multiple Listing Service. Prices have dipped month to month several times in the past year, but the year-to-year increase was the first in the single digits since April 2005 and the lowest since February 2005.

The numbers also showed a continued increase in inventory and slight decline in sales in August, compared with the same month last year.
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Talk of a housing bubble has prompted some prospective buyers to wait.

"I'm a firm believer that there's a bubble nationally and there's a bubble in Seattle as well," recent New York City-transplant John Bitzer said Sunday after looking at a $1.05 million Seward Park home.

"I think that prices are going to fall quite substantially," he said, adding that he planned to wait.

Gardner said some homes and areas locally might see price declines, but he and other local observers do not expect citywide prices to go down year over year. They point to strong job growth and low interest rates and say Seattle hasn't attracted as many speculators or seen prices shoot as high as some other places.

"It's still a strong market," Gardner said.

And finally, we return to the Times, where for some reason Elizabeth Rhodes did not spin her wordcraft. Instead, Drew DeSilver simply expanded on yesterday's blurb:

The slowdown is coming after a record 2005. Total sales activity in the four-county region this year is still predicted to be the second-best on record, said J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate.

"We're off a frenzied market to a strong market," he said.

But the decelerating pace mirrors the national trend.
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"Effectively, a buyer this year is buying a house at about 25 percent more than they would have last year," [Mike Skahen, owner and broker of Lake & Co.] said. "At some point they have to take a little bit of a rest. Even though we have a lot of buyers out there, they're running out of money."

Generally, the feeling that I get is that the local media is running out of fuel for their denial. Things have been turning for months, but it's become so obvious now that instead of ignoring it, they're just hoping that it will taper off.

However, since we're on the topic of denial, I may as well throw in a mention of Ardell's latest post on Rain City Guide, which I found to be both confusing and amusing at the same time:

No Bubbles Bursting — It was only August

I can’t give an official report with stats until September’s sales are closed, but based on my experience out there in the trenches...It was only August! aka "The Dog days of Summer"

Even the Open House I held on Sunday was sold to a fella who walked in and said, "I was looking before, but I took August off!" August has long been known as "Agent Takes Vacation Month".
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So NO BUBBLES BURSTING. It was only August...again, here in the Seattle area.

She seems to be making excuses for a month of slow sales, but sales in August were actually up compared to July (which is normal, see this graph), so I guess I don't get her point. The indications I'm seeing that trend toward (but do not yet outright describe) what may be described as the bubble "bursting" are steadily increasing inventory (both month to month and year over year), declining sales (year over year), and prices that are beginning to flatten. None of that has anything to do with whether agents are or are not taking a vacation...

(Jane McCarthy, King5 News, 09.12.2006)
(Mike Benbow, Everett Herald, 09.13.2006)
(Adam Lynn, Tacoma News Tribune, 09.13.2006)
(Clayton Park, King County Journal, 09.13.2006)
(Aubrey Cohen, Seattle P-I, 09.13.2006)
(Drew DeSilver, Seattle Times, 09.13.2006)
(Ardell DellaLoggia, Rain City Guide, 09.12.2006)