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)

March Reporting Roundup

Back from my busy week of travel and recharged over the Easter weekend, it's time to post the March roundup.

As usual, let's kick things off with Seattle's #1 real estate cheerleader, Ms. Rhodes, with her fawning article about all about how great and wonderful it is that median prices increased last month.

After stalling for two months, home prices in King and Snohomish counties perked up last month, disappointing potential buyers who thought slowing price appreciation had presented an opportunity.

Brian and Jennifer Rutherford are experiencing King County's strengthening real-estate market firsthand as they shop for a Bellevue home in the $500,000 range.
...
"We were just hoping things would cool off. It might have cooled off from its highest point, but not too far," he said. "Now we're making more of an effort to step up our looking."
...
Thursday's news that Microsoft is leasing 1.3 million square feet of Bellevue office space, enough to house 4,000 employees, is a near guarantee that Brian Rutherford is correct about home-buying prospects.
...
Lennox Scott, chairman of John L. Scott Real Estate, said a shortage of affordably priced homes will keep the local market strong.

Wait, what? Am I the only one that sounds like utter nonsense to? Less affordable = strong market? Hmm.

Surprisingly, Mr. Cohen of the P-I chose to focus primarily on Seattle proper, where the picture is somewhat more grim.

There are more homes on the market in Seattle these days -- and their prices slowly are creeping up.

The number of homes increased by nearly half in March from March 2006, according to data the Northwest Multiple Listing Service released Thursday. The median home price was $418,000 — up 2.7 percent from a year earlier and 3.2 percent from February 2007.

The median price for a Seattle single-family house went up 4.5 percent from a year earlier, to $460,000, while the median condo price was up 5.8 percent, to $316,950.

Of course, a Cohen article wouldn't be complete if it didn't end on an upbeat with the same-old "strong market" arguments repeated yet again:

In a statement accompanying the Northwest MLS numbers, Mike Skahen, owner of Lake & Co. Real Estate, called the market for close-in Seattle neighborhoods "hotter right now than it was at this time last year," with homes in virtually every price range attracting multiple offers.

Dick Beeson, owner of Windermere Real Estate/Commencement Associates in Tacoma, said, "It just feels like a normal market with well-priced homes seeing offers in 30 days or less and sellers of overpriced properties having a gut check and a motivation check to see if they really are serious about selling."

Recent revelations about failing loans in the subprime market, which serves those with poorer credit, have caused trepidation about the national housing market.

But the Puget Sound region is fairly well protected from this because of its healthy economy, continued home price appreciation and fewer subprime loans compared with other parts of the country, said Erik Hand, president of John L. Scott Real Estate subsidiary Response Mortgage Service, in the MLS statement.

Ahh, that's better.

Down in Tacoma, it's getting harder to ignore the picture that the numbers are painting:

The median price was $274,950, up 5.8 percent over the same month a year ago, though down from February, according to figures released today by the Northwest Multiple Listing Service.

Sales, however, continued to fall as the number of listings skyrocketed to 6,554 – up 48.6 percent from March 2006.
...
Bob Niehl, an agent for Crescent Realty, said Thursday that it’s not uncommon for the kind of house that once would draw multiple offers to sit for more than 100 days.

The Everett Herald appears to be doing somewhat of a victory dance, proudly proclaiming Snohomish County as immune to supply and demand.

Prices for homes and condominiums in Snohomish County continue to soar, even as sales of both in March continued to be down compared with a year ago.

The median price for single-family homes hit $382,550 countywide last month, according to the Northwest Multiple Listing Service report issued Thursday. That's nearly 16 percent higher than the median of $330,000 in March 2006.

Prices rose despite a 44 percent increase in the number of homes listed for sale from year to year and a nearly 18 percent drop in pending sales.

Finally, down in Olympia, slowing sales are all too obvious.

Thurston County single- family home and condominium sales dropped 7.5 percent in March, though last month’s results were softened by a surge in the condo market, the Northwest Multiple Listing Service reported Thursday.
...
Other year-to-year March home sales data for Thurston County:

• Total active listings for single-family homes increased 38 percent to 1,802, up from 1,303.
• The median price of a single-family home rose 4 percent to $254,950, up from $244,900.
• Total active listings for condos increased 133 percent to 49 units, up from 21.
• The median price of a condo dropped nearly 6 percent to $171,203, down from $182,000.

Sounds like a stellar spring bounce all around the Sound, wouldn't you say?

(Elizabeth Rhodes, Seattle Times, 04.06.2007)
(Aubrey Cohen, Seattle P-I, 04.06.2007)
(Devona Wells, Tacoma News Tribune, 04.05.2007)
(Eric Fetters, Everett Herald, 04.06.2007)
(Rolf Boone, The Olympian, 04.05.2007)

Bubble Link Roundup

Here are a few short quotes from some recent interesting articles (followed by some pithy one-liners) that I haven't had the time to dedicate entire posts to:

Slumping sales of lots could presage fewer new houses for region

A key future indicator of the housing market is down sharply, but that could be a good thing, local real estate executives are saying.

Puget Sound area home builders have been buying substantially fewer finished lots from residential developers as the builders try to gauge the demand for their new homes in the months ahead.

Builders buying fewer lots today could mean fewer new homes tomorrow.

"Finished lots are hanging around longer than they have in quite some time," said consultant Matt Gardner, a principal at Gardner Johnson LLC in Seattle.

But, I thought the Seattle market was still hot, hot, hot!

Generous pay isn't enough to keep some on the road

The number of commuters in South Sound continues to grow, but some people are bucking the trend.

They've quit.

Melinda Spencer of Olympia took the step a few years ago. Spencer used to commute from Olympia to her job as a technical writer at Redmond-based Microsoft, where she earned about $73,000 a year.

Making that kind of money, Spencer's husband, Keith, could complete his degree at The Evergreen State College, and they could invest in property. In 1997, the couple paid $110,000 for their Olympia home.
...
Yet after three years of driving to Redmond, spending three hours in her car each day, something had to change. "It was awful," she said about her commute. "I felt like I showered (in the morning), ate (at night), and turned around and did it all over again. It was time to end this lifestyle."

She ended it by starting her own home-based technical communications business. Another reason to stay home was the birth of her first son, she said. Today, her husband works as a high school teacher in Rochester, while Spencer works at home and raises their two children. The money is tighter. Spencer estimates their combined income at just more than $2,000 a month after taxes and health insurance are deducted.

But in the 10 years they've owned a home, it has tripled in value to $300,000; they would be unable to afford it today, Spencer said.

"We would be looking at one of those old dogs that has been foreclosed on," she said.

Isn't appreciation wonderful?

Home bailout scams on rise

As interest rates rise, many people with adjustable-rate mortgages find their payments too high to manage. That has paved the way for con artists offering relief.

WASHINGTON – As home foreclosures increase across the country, scam artists promise struggling homeowners a quick bailout, but they end up stripping the properties of their value or owning the homes outright.
...
State officials urge cash-strapped property owners – particularly the elderly, immigrants, minorities and low-income – to be wary of mailings, phone calls and visitors offering to help "save your home" and "avoid foreclosure."

The Washington State Attorney General's Office recently settled a suit against three businesses that claimed to save the homes of people who were facing foreclosure for unpaid property taxes. The companies – Fiscal Dynamics Inc. and Cumulative LLC, of Tacoma, and Northwest Assets of Seattle – allegedly broke promises to pay the back taxes and instead tried to sell the houses at auction and keep the owners' rightful proceeds, according to the complaint.

Now wait just a minute. How can people possibly be facing foreclosure in the fantasy rainbow-land of forever double-digit appreciation? Hmm...

Last and most certainly least: Average Seattle worker can't afford to live here

Last year, the typical single person in Seattle earned enough to buy a home for just under $200,000 while the typical family of four had enough to pay just over $280,000, according to the U.S. Department of Housing and Urban Development. The median prices were about $450,000 for a house and $290,000 for a condo.

Typical families can afford apartments, but the rent for the average one-bedroom apartment in King County rose 8.5 percent in the past year as vacancies fell 17 percent — down to 3.9 percent, according to Dupre + Scott Apartment Advisors. Hal Ferris, a partner in developer Lorig Associates, said increasing construction prices mean living in a new development will cost more than what HUD assumes typical families can pay.

And many median-income workers choose to buy and commute rather than rent.

"They can buy somewhere, but that somewhere isn't in the city of Seattle," said Adrienne Quinn, director of the Seattle Office of Housing.

First off, I'd take that data from Dupre + Scott with a giant frikkin' grain of salt. Secondly, government solutions like the ones discussed in this article are like putting a band-aid on a tumor. They completely ignore the root cause of the problem, and don't even effectively address the symptoms.

(Jeanne Lang Jones, Puget Sound Business Journal, 03.26.2007)
( Rolf Boone, The Olympian, 04.01.2007)
(Tony Pugh, Tacoma News Tribune, 04.02.2007)
(Aubrey Cohen, Seattle P-I, 04.02.2007)

December Reporting Roundup

After just nine months of increasing YOY home inventory and fourteen months of declining YOY home sales, the local media has apparently taken notice. Even Elizabeth Rhodes at the Seattle Times can't ignore the slowing trend:

In fact, buyers weren't racing to make offers anywhere in the central Puget Sound area last month, according to home-sales numbers released Friday by the Northwest Multiple Listing Service.
...
But nowhere could the drops be attributed to a lack of homes to choose from.

Indeed, last month the number of houses and condos available increased 48 percent in Kitsap County, 42 percent in Pierce, 34 percent in Snohomish and 24 percent in King, compared with the previous December.

I can hardly believe I read such a thing with Ms. Rhodes' name on it, but there it is in black and white. I guess the inevitable slowdown has become impossible to ignore.

Aubrey Cohen chimes in at the P-I with what I think may be the first in-print prediction of actual YOY price declines for the Seattle market.

"It's more of the same," said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. "My expectation is that we're moving into a period where sales are going to remain strong, but certainly not as strong as they had been, and where prices are going to be moderating and stabilizing."
...
Michael Simonsen, chief executive of Altos Research, in Palo Alto, Calif., has noticed cooling in the Seattle home market.

"Any comparison with last year is down in terms of demand and numbers of sales," he said. "Not great but certainly not falling through the floor."
...
Simonsen predicted that Seattle would start seeing slight year-over-year price declines this spring or summer, although he said the city had a strong economy, and its housing market would fare better than outlying areas.

"While we see some positive things to keep the bottom falling out, we don't see any big catalyst that will let prices jump upwards," he said.

Price cuts might not reassure already skittish buyers, Simonsen said. "I kind of think that people are attuned enough to the bubble headlines that if we see year-to-year price declines that might even scare people."

Of course, it just wouldn't be a news roundup without an article proudly proclaiming what a "healthy market" we have. This month's optimism comes to us courtesy of Mike Benbow at the Everett Herald:

December home sales dropped in Snohomish County, but prices continued to rise, according to information released Friday by the Northwest Multiple Listing Service.
...
December followed the trend for about the last six months where listings rose dramatically, sales slumped and prices continued to climb. Unlike many areas of the country, prices in the county continue to rise each month.

"The market is really healthy now," [Windermere broker Vern Holden] said. "I think everyone prefers the more balanced market we have today compared to a year ago."

And just to round out the experience, here's John Gillie at the Tacoma News Tribune with your monthly dose of lame excuses:

In a twist in the law of supply and demand, median December home prices in Pierce and 18 other Washington counties were substantially higher than in the same month in 2005 despite a larger supply of homes on the market and fewer sales.
...
December figures released by the Northwest Multiple Listing Service on Friday followed the pattern seen for several months, stubbornly refusing to join the price deflation that has happened in other markets as the supply of homes increases and sales slow.
...
...sales undoubtedly have been affected by the dose of miserable winter weather – record rains, devastating winds and heavy early season snow – Washington has had the past two months.

Things should get really interesting if we do actually see YOY price declines this year. I can't wait to hear the excuses for that.

(Elizabeth Rhodes, Seattle Times, 01.06.2007)
(Aubrey Cohen, Seattle P-I, 01.06.2007)
(Mike Benbow, Everett Herald, 01.06.2007)
(John Gillie, Tacoma News Tribune, 01.06.2007)