Seattle PI's Take on Sept. NWMLS Numbers

Signs of housing slowdown

Seattle's median home price in September was up just 4.4 percent from a year ago and down from both July and August, according to new statistics. It's the lowest year-to-year increase and the first time prices have dipped two months in a row since January 2004.

The median home sold for $400,000, down from $405,000 in August and $420,000 in July, and up from $383,000 in September 2005, according to numbers the Northwest Multiple Listing Service released Friday. The number of homes on the market shot up 30 percent from a year ago, while sales were down by nearly 16 percent.

One caveat is that condominiums made up slightly more of September's home sales than a month ago and significantly more than a year ago. The typical condo sold in September cost 32.4 percent less than the typical house, pulling down the median for all homes combined.

Are they suggesting that the median price went down because more condos were sold? Seems plausible if you don't believe in bubbles...

The slowing market means buyers can take more time to find just what they want, Crellin said. "A year ago, the environment was such that if you could afford a property you almost had to make a bid on it, no matter how much you liked it."

Crellin's message for sellers? "Don't panic."

"Yeah, it's going to take a while to sell a home," he said. "The mere fact that it hasn't sold in the first couple of weeks is not an unusual situation."

The slowing market means buyers watch television, read articles online and listen to radio broadcasts. The slowing market means buyers may decide not to buy at all. If someone is telling you not to panic, that generally means it is time to panic.

During peak times in the market, buyers might have set aside qualms about the floor plan and jumped at the place, she said. "Maybe that sense of total urgency has lessened a little bit."

Realtors also say stories about the slowing market, particularly nationally, have some holding off.

Now we're getting somewhere.

Realtor Marty Grasa, also of Windermere, said he had two clients who held off on buying through the summer and now can't afford what they want.

"They waited themselves out (of the market)," he said.

One is Cat Cabalo, a lawyer who said she originally started her condo search in 2004, then suspended it later that year because she "was convinced the bubble was going to burst."

One condo with everything that Cabalo wanted sold for $188,500 in 2004, she said. "Now if I were to find something comparable I would have to spend, I would say, at least $250,000."

She missed the equity train by sheer dumb luck.

After watching her friends buy homes and gain equity, Cabalo looked again this spring. By August, news of the slowing national home market, evidence of Seattle condos taking longer to sell and her busy schedule led her to suspend her search again, despite regrets about her previous decision.

"I just told myself I'd rather wait," she said, adding that she planned to do more research on the local market.

Crellin expects the region's home market to settle into year-over-year price increases near the rate of inflation, which tends to be about 3 percent. He also cautioned against applying national stories to the region.

I like this Crellin person. Really tells it like it is. I used to have a computer integration business and sold quite a few PC's. I had a few customers that would hem and haw over buying a new computer and then wouldn't go through with it because they knew the price was going to come down soon after they purchased.

In the world of the computer PC, it's always been like that. Prices always go down, so to some it never seems like the right time to buy. Those people forgo the productivity gains of a faster system to try to save a little, then end up wanting the newer, more expensive model with more bells and whistles - then the process starts all over again.

Realtors love to create the fear in buyers that if they don't commit quickly, they'll never be able to get in the game. Or, as we see above, to insinuate that she not only missed the boat but prices are going to continue to increase - although at the slightly moderate rate of inflation.

"We have to be very careful not to assume that trends that are taking place in Florida and California are going to be replicated locally," he said. "I think our market is more resilient."

I would think that Crellin needs to be more careful in the words he uses and in the direction he is taking the reader.

(Aubrey Cohen, Seattle PI, 10.07.2006)