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Tuesday, May 08, 2007

April Reporting Roundup

Here's a compilation of what your local press (aka real estate advertisers) had to say about last month's home sales data from the NWMLS. It's depressing to think that these sources are where most people get their news of the market from...

Elizabeth Rhodes, Seattle Times:
King County home prices keep rising, bucking national trend
Buying a home here: You'll pay even more

"Overall, people have been getting worn out paying what in their opinion is an inflated price," Martin said.

Plus there are significantly more properties to choose from compared with a year ago.
Mrs. Rhodes' article is riddled with inaccurate assertions such as a claim that decreasing sales are "explained" by increasing inventory (huh?), and a quote that sales activity is "improving" and "at a faster pace than last year." She also says "Whether April will be the strongest month remains to be seen," when in fact it is already known that March experienced both more sales and larger price increases than April. Take home lesson: When reality isn't as rosey as you'd prefer, just pretend that it is!

Aubrey Cohen, Seattle P-I:
Home sales in city shoot up 14% in April
Anshul and Christine Pandhi were in their second week of seeing what they could get for $500,000 to $700,000 if they moved from Tacoma to Seattle.

"It's expensive," Anshul Pandhi said. "In our price range, the pickings are pretty slim."

John and Sahrah Marcantonio sold their Woodinville house in November and have been renting in Seattle while looking for a house in the city.
...
Sahrah Marcantonio was pessimistic about the market, but didn't care.

"I think it's a bubble, we're at the peak of the bubble, and yet, I want a house now," she said. "It's for the long term."
Aubrey's article was much more even-handed than we've come to expect. I was floored by the quotes he managed to get out of recent home buyers.

Devona Wells, Tacoma News Tribune:
Housing market still shows signs of slowing
The jump in the number of Pierce County houses and condos for sale puts the county at a six-month supply, generally considered the point a market moves from one favoring sellers to one favoring buyers, said Dick Beeson, a Windermere real estate broker and MLS director.

"The news is, pay attention, sellers, you’re not going to have the spring and summer you usually have," he said.
Apparently the market just south of us is a bit harder to spin in a positive light. Of course, that doesn't mean they aren't trying...
...though sales have slowed, [John L. Scott agent David Gala] said Tacoma homes under $400,000 remain hot. Two of his listings priced at $250,000 and $210,000 sold in the last week after multiple offers, Gala said.

But agents say three to six months tends to be the time it takes to sell a home today. As recently as two years ago, homes often sold in a few days.
Mike Benbow, Everett Herald:
Buyers drive up condo sales
While Snohomish County houses are less expensive than in King County, they're still out of reach for many people in the market, especially with the tightening of loan qualifications that has followed the recent increase in home foreclosures.

That has attracted more people to condos and their much lower price range.
Those buyers had better get into any type of home they can possibly afford, because as everyone knows, if they don't buy now, they'll be (you guessed it) priced out FOREVER!

Rolf Boone, The Olympian:
Condos sustain housing market
The pace of new South Sound loan applications has so far been strong this year, said Jeff Devlin, a Wells Fargo Home Mortgage consultant. Devlin said he doesn't sense the "doom and gloom" today that hung over the real estate market a year ago.
Hmm. Year over year pending (res + condo) sales down 15%, listings up 50%. SFH median up 9% vs 23% (April '05-'06). But the market is in better shape today than a year ago. Yeah.

Just for kicks, here are a couple of stories from a little further out in Western Washington than we usually focus on.

Dave Gallagher, Bellingham Herald:
Home sales slowing as supply rises

Evan Caldwell, Longview Daily News:
Region's home sales bucking U.S. trend

(Elizabeth Rhodes, Seattle Times, 05.08.2007)
(Aubrey Cohen, Seattle P-I, 05.08.2007)
(Devona Wells, Tacoma News Tribune, 05.08.2007)
(Mike Benbow, Everett Herald, 05.08.2007)
(Rolf Boone, The Olympian, 05.08.2007)

36 comments:

Terry said...

....Sahrah Marcantonio was pessimistic about the market, but didn't care.

"I think it's a bubble, we're at the peak of the bubble, and yet, I want a house now," she said. "It's for the long term."....


It's this type mentality that I just don't understand. She admits to believing that there is a bubble, but does not care that she could be hit for a significant loss. I understand the "long term" concept, but who can really predict with 100% certainty what their employment / lifestyle situation will be a few years down the road.

meshugy said...

I'd say this is the attitude of most people. There's an incredible urge and/or social pressure own a house. The security and status of owning often outweighs the risk in most people's minds. That's why people will keep buying in Seattle. Now that the speculators and subprimers are gone, we can see that there still is a hell of a lot of genuine demand generated by families with decent income. That explains increasing sales and prices....

Mike said...

Now that the speculators and subprimers are gone, we can see that there still is a hell of a lot of genuine demand

Uh... I hesitate to ask you for a source to back up this statement, but here it goes:

Do you have a source to back up the claim that speculators have left the Seattle housing market?

Also, if you think subprime is gone, you may want to check out The Grapevine. Subprime mortgage companies are still churning out plenty of new loans.

Terry said...

Well, I guess I'm not most people. It's stupid personal economics to invest in an expensive asset that you believe has a significant chance of depreciating, as what she admits.

Captain Murphy said...

The security and status of owning often outweighs the risk in most people's minds.

Correction: The perceived security and status of renting money to slowly pay for a bank-owned house outweighs the risk in most people's minds.

Now that the speculators and subprimers are gone, we can see that there still is a hell of a lot of genuine demand generated by families with decent income.

Wait, I thought Seattle didn't have any speculators? Given your admission that Seattle is not somehow devoid of speculators, by what means do you come to the conclusion that they are now gone? Just because you say so?

Also, lending standards are currently undergoing a continual process of tightening, constantly reducing the buyer pool. This process has only just begun.

That explains increasing sales and prices...

Except that sales are decreasing.

Mike said...

Wait, I thought Seattle didn't have any speculators? Given your admission that Seattle is not somehow devoid of speculators, by what means do you come to the conclusion that they are now gone?

He mesmerized them with his magic guitar and lead them to the ship canal where they all drowned.

Benjamin said...

Sales do appear to be strong in some segments. As was mentioned in another thread, the sale of $800k - $1.2M is doing very well. It's pretty clear this is skewing the mean and median measurements.

On a side note, CNN posted expected declines of 1% this year, but qualified the statement by saying that declines in higher end markets make housing look worst than it is. Why didn't they similarly qualify that rises in higher end markets made housing appear stronger than it actually is two years ago?

meshugy said...

Except that sales are decreasing.

Sales is Seattle are up 14% YOY...this is the Seattle bubble blog, right?

Mike said...

I've been tracking a few same house re-sales, sans remodel and the asking prices tend to be 3-5% above last year. Better than the case-shiller index reports, but then again they are asking prices, not closed sale prices which is what C-S uses to calculate appreciation.

I suspect the lack of appreciation thus far has convinced some flippers to take their homes off the market for a few months.

I say this because of the properties I watch the investor owned homes are more likely to go off the MLS with no sale recorded.

wreckingbull said...

There's an incredible urge and/or social pressure own a house

YES! Finally you get it. This is what caused the bubble, and this is what will unwind it. Little 'I get what I want NOW' Sahrah is a perfect example of these fools doing things for the wrong reason. The piper always comes back to collect.

This EXACT same attitude is what caused the dot-bomb crash. How soon we forget.

You are coming around!

meshugy said...

Do you have a source to back up the claim that speculators have left the Seattle housing market?

Objects Of Appreciation: Some Spots Buck The Housing Slump

It's not Las Vegas, Phoenix or Miami circa 2005. It's downtown Seattle and nearby downtown Bellevue — in the present day.

Buyers are not speculators, either. Most are people who actually plan to move into the units.

HomerLoanseeker said...

One thing the rise in prices "might" do is give sub-prime borrowers a little wiggle room to possible finance into a fixed loan. Now that many borrowers are aware of the risks that arms bring, this might be a chance for seattle borrowers to save themselves...

but i wouldn't count on it.

Eagle Eye said...

"I think it's a bubble, we're at the peak of the bubble, and yet, I want a house now," she said. "It's for the long term."....

PNW shoppers take to the web and surf Zillow where visions of Mercedes and BMWs dance in their heads. They know they want membership in the equity club and the euphoric utopian lifestyle of everyone they talk to.

Captain Murphy said...

this is the Seattle bubble blog, right?

Oh, right. Thanks for pointing that out. I forgot that if it's outside of the Seattle city limits, it may as well be Mars. This blog has never covered anything other than the City of Seattle, proper. Why would it?

Buyers are not speculators, either. Most are people who actually plan to move into the units.

Really? Are you sure about that?

Mike said...

Meshugy, did you see the bit where it said

Like Seattle, Austin's housing market saw no big double-digit price gains during the boom. "We were just trotting along at 5%, 7% or 8% a year," she said.


Credibility = 0.

They even interviewed Lawrence Yun for the article and provided no counterpoint. Puff Puff.

Benjamin said...

homeloanseeker,

That's an interesting point, that people will learn from other's misery. Ironically there is little historic evidence to back this up. When the dotcoms crashed, a few select companies didn't crash immediately. Because they missed the first series of collapses, people thought those companies had clearly weathered the storm. Some of their stocks actually surged as others around them crashed. When it was finally the late comer's turn, they hit the ground just as hard as the rest.


Another interesting side note - because it's pertinent to the current asset bubbles - was what happened following Black Monday 1929. I think this quote says it all.


"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

Benjamin said...

If my Hebrew is any good (doubtful), meshugy is just a misspelling of meshugar - interpretation "crazy".

So from now on, I suggest that people respond to meshugy as kraizei.

And for the record kraizei, you continue to ignore King County or even Seattle when it's inconvenient. Every part of the state could be crashing, but if you knew of at least one good block (around Microsoft maybe) that is all we would hear about. It's boring!

Deejayoh said...

Buyers are not speculators, either. Most are people who actually plan to move into the units.

I read it, therefore it must be true!

these are some of those "owner/occupiers"

Comrade Chairman Greenspan said...

"I think it's a bubble, we're at the peak of the bubble, and yet, I want a house now."

They managed to find someone even more irrational than a bubble denier: a kamikaze buyer.

Comrade Chairman Greenspan said...

http://www.literature.org/authors/dickens-charles/two-cities/book-03/chapter-06.html

"...a species of fervour or intoxication, known, without doubt, to have led some persons to brave the guillotine unnecessarily, and to die by it, was not mere boastfulness, but a wild infection of the wildly shaken public mind. In seasons of pestilence, some of us will have a secret attraction to the disease-a terrible passing inclination to die of it."

Ouch! said...

In my effort to quit fighting with the troll, this is related to the actual topic of real estate news---

Did you notice that the Seattle Times print version has Rhodes'"Buying a home here: You'll pay even more" on the front page, which compliments the full-page ad on the back page "Stop Worrying and Start Celebrating" New No-Fee Mortgage Plus from B of A. What a happy coincidence! I'm sure that the Times' editoral staff is completely removed from the influence of advertisers.

softwarengineer said...

THESE MAIN STREAM MEDIA ASSUMPTIONS ABOUT ROSEY SEATTLE REAL ESTATE IS TOTAL BUNK

I look at foreclosures from the Wall Street Journal and belive me its GRIM AS HADES IN SEATTLE. Here's a 1000 repossesions to GRAB UP in the Kent area alone:

http://www.realtytrac.com/freeSearchResult.asp?zipOnly=true&zipcode=98042&accnt=12580

Do they include the sales prices of these babies in with their $400K rosey Seattle area average?

I've got $10,000 to bet anyone they don't.

Wake up, dig up your own data separate from the MSM, they feed ya melanine tainted wheat gluten and tell ya its FDA approved.

Mike said...

Foreclosures aren't generally sold through the MLS, and they don't qualify as comps because the seller doesn't have the choice not to sell.

So to answer the question, the majority of foreclosures do not get reflected in the MLS sold statistics, nor do they have an effect on the appraised value of the surrounding homes. (theoretically anyway)

meshugy said...

Here's a 1000 repossessions to GRAB UP in the Kent area alone:

Hi Softy,

That link only shows 3 houses in pre-foreclosure. Most of them are just resales and new homes for sale, not foreclosures.

In fact, there are very, very few foreclosures being auctioned in King County. We actually have less foreclosures this year then last...so the trend is downward, not up.

HomerLoanseeker said...

In fairness...Seattle should never be compared to Kent...

Anyplace south of bellevue could be considered subprime.

The closer you get to Pierce County the worse it gets. Kent, Auburn, Skyway, Tacoma, Tukwila, seatac etc....all subprime.

Renton, maple valley, south seattle, snohomish, Kitsap areas are Alt-A land...

Areas to the east and seattle are Prime Borrowers

Deejayoh said...

That link only shows 3 houses in pre-foreclosure. Most of them are just resales and new homes for sale, not foreclosures.

Shug - You're right that the foreclosure trend has been pretty flat - but you should get your eyes checked. There are 259 REOs and 288 auctions on that page.

Not sure how realtytrac comes up with only 3 pre-foreclosures. Foreclosure.com shows over 1000 for king county and 340 foreclosures.

biliruben said...

Cohen's calculations for how much a montly payment is going to be in the final two examples are completely wrong.

Ignoring that taxes and insurance would probably add about $400-500/mo, the final example actually comes out to $2440, not $1954. Adding in the taxes and insurance, a buyer is looking at a payment pushing 3 grand a month. Moron.

Deejayoh said...

You're right that the foreclosure trend has been pretty flat

Oops. Looks like I spoke too soon. Saw this on bubbletracking.com

Using foreclosure.com as the source, foreclosure figures are listed first, pre-foreclosures are listed next, with the % of pre-foreclosures moving forward to foreclosures in parentheses.

Seattle Metro/King-Snohomish Counties
10/31/06: 195/2,165 (9.0%)
11/30/06: 126/2,376 (5.3%)
12/30/06: 131/1,500 (8.7%)
01/30/07: 146/1,548 (9.4%)
02/27/07: 124/1,503 (8.3%)
03/30/07: 251/1,466 (17.1%)
04/30/07: 511/1,566 (32.6%)


Lets see... looks like preforeclosures are 3x as likely to end up in foreclosures, which are up 250%. and the trend is pretty unmistakable. wow.

Of course, that's not "just Seattle", but I don't tend to conveniently exclude all the data I may not happen to like

aj said...

I have been reading this blog since last July. I was all gung ho on buying a house here. We had just moved from Southern CA and sold our house and after reading many of your comments, we decided to not buy anything at this time. Thank you all! One of the best decisions we ever made. Reading Meshugy's veiw and the local papers here remind me of CA real estate a few years ago and we all know what is going on there now. What is going on around the rest of the country WILL eventually hit Seattle as well. perhaps not as severe as places like CA, but it will. Last time I checked, Seattle is part of the United States. What is going on is more then a housing bubble, it is a credit bubble and this nation is going to suffer the consequences, sorry, including Seattle! Even the the chief economist for the NAR David Lereah has changed his tune. Copy and paste to your browser. Worth it. http://www.chicagotribune.com/business/chi-0705050112may06,0,848236.story?coll=chi-business-hed

S Crow said...

This may be of interest:

King Co. Median Price for Residential & Condo:

March 07 - $399,500
April 07 - $407,265

March 06 - $365,000
April 06 - $377,000

Days on market (av.)

March 07 - 51
March 06 - 43

Most folks are aware that inventory is increasing and outpacing sales.

---------------

Snohomish County Residential & Condo Month-over-month Median Sale prices down $10,000. This is not insignificant.

Snohomish County Residential & Condo Median Sales Prices:

March 07 - $359,950
April 07 - $349,950

Average Market time:

April 06 - 47
April 07 - 63

The list price reductions that have been occuring consistently over the past many weeks are starting to show up in sales statistics. This softenining in median sales price from March to April is not exactly what many would expect during the Spring season.

What would happen to the median price if our inventory, which many say is at around 2-3 months YTD, goes up to about 6 month absorption rate---what some construe as a "balanced or normal" market in our area.

plymster said...

Cohen's calculations for how much a montly payment is going to be in the final two examples are completely wrong. ...Moron.

His example is more there for a quick rule of thumb. He states that this is what the mortgage costs (I'm guessing he's just using a handy-dandy calculator on one of the RE sites).

Say what you like about Cohen, but I have to say he does the most balanced, respectable reporting on housing in the area. He cites his data well, and presents it clearly. The titles of his articles are all BS, but it's usually the editor who makes up the headlines.

biliruben said...

Fine, but his numbers are off by close to 25% on the second calculation, simply using the same bankrate calcluator.

That's some shoddy reporting. Shoddy reporting is shoddy reporting, regardless of whether you agree with his view.

plymster said...

Ah. I see what you're saying, now. I just ran the Bankrate.com calculations on the mortgage info Aubrey just provided.

A 30 year $430k loan at 6% with no down payment comes to $2,578.07 vs the $2,062.45 Aubrey quotes.

In example 2, his 30 year $407.5k loan at 6% with no down payment comes to $2,443.17, vs the $1,954.53 he reported.

I apologize, biliruben. You're absolutely right. That is shoddy reporting.

softwarengineer said...

HEY WHO BLOCKS PEOPLE OUT OF THIS BLOG? GATES?

Anyway, I had to go through Google again [retype the same stuff I just typed a few days ago] to reply....lol

Oh, Kent doesn't compare to the rest of King County....lol

The homes in Kent make's Seattle's look like dumps on tiny lots.

PDX Renter said...

If you think the Seattle Market has lost its speculators and investors, here are the facts:

45.18% of homes in Seattle are owner-occupied
50.39% of homes in Seattle are *rented and owned by someone else*

OVER HALF of all homes in the Seattle are not owner-occupied. That is TWICE the national average incidentally.

So if this 50.39% are not owned by investors/speculators, who are they owned by then?

The stats I cited above can be found here: http://www.bestplaces.net/city/Seattle_WA-5363000031.aspx

PDX Renter said...

Housing Tracker shows overall appreciation for Seattle at +2.6% for the year. Total inventory is up
+42.7%.

Appreciation depends on how you look it. I'm sure if you cherry pick high-performing neighborhoods you can come up with a number more like 14%. But the aggregate is only 2.6%

http://www.housingtracker.net/askingprices/Washington/Seattle-Tacoma-Bellevue/