Housing market rebound continues, with “slow, unprepared buyers” settling for “2nd choice” homes KIRKLAND, Wash. (Oct. 4, 2012) – Home sales around western Washington continue to outpace activity of a year ago while inventory remains thin, according to new figures from Northwest Multiple Listing Service. Brokers say that combination is resulting in disappointment for buyers who are slow to accept the reality of a recovering housing market. Commenting on September data from Northwest Multiple Listing Service that shows upticks in sales and prices, broker Frank Wilson said buyers who make unrealistic offers and requests are “back on the street looking at their second choice home.” Meanwhile, some sellers with well-priced, well-prepared homes are receiving multiple offers according to Wilson, a member of the Northwest MLS board of directors and the managing broker of John L. Scott Real Estate in Poulsbo. Northwest MLS figures for September show the pace of sales slowed from the past six months, but still outgained activity of a year ago. Members reported 5,535 closed sales, which compares to the year ago total of 4,988 for an increase of nearly 11 percent. Thirteen of the 21 counties served by the MLS reported double-digit gains in the number of completed transactions. Through three quarters of 2012, closed sales are up 14.6 percent from a year ago (48,022 versus 41,906). Prices on last month’s closed sales rose 9.2 percent from twelve months ago. The area-wide median price on single family homes and condominiums that sold last month was $255,500. Prices on single family homes (excluding condominiums) increased more than 12 percent, rising from $240,000 to $269,000. The most expensive homes sold in San Juan County, which reported a median sales price of $380,000, and in King County, where the median selling price was $375,000. Brokers added 7,300 new listings to inventory last month, the fewest number since January. With those additions, there were 25,476 active listings in the MLS system at the end of September. That total is down 27.7 percent from the year-ago selection that encompassed 35,254 listings. The sharpest drop in active listings occurred in Snohomish County, which has about half the inventory of a year ago (2,187 currently versus 4,308 active listings at end of September 2011). Northwest MLS figures show year-over-year prices there jumped 14.6 percent. The imbalance between supply and demand is “wreaking havoc” with some buyers and sellers, said Northwest MLS director George Moorhead, branch manager at Bentley Properties in Bothell. Some sellers are lamenting “missed opportunities,” but he believes positive momentum will continue with the combination of below-normal inventory, record-low interest rates and changing views on home ownership. “We are seeing clients’ views change from a home being a short-term investment vehicle to being a place where we raise and teach our families,” Moorhead remarked. -more-
page two (NWMLS news release: September activity)
Oct. 4, 2012
MLS members tallied nearly 600 more pending sales last month than a year ago. Brokers reported 7,494 mutually accepted offers for an increase of 8.7 percent from the year-ago total of 6,897 pending transactions. Sales results were mixed across the MLS market area, with 12 counties reporting increases, eight reporting declines and one unchanged. The rapid pace of sales in some areas coupled with dwindling inventory means below-average months of supply in some counties. Area-wide there is about 3.4 months of supply, with five-to-six months considered to be average. King, Pierce and Snohomish counties all report levels below three months. All cash buyers are returning to the entire market, observed MLS director Darin Stenvers. “Cash offers are being made across the price spectrum, including the million dollars-plus ranges,” he added. Stenvers, the office managing broker at John L. Scott, Inc., in Bellingham, said the ingredients are in place for “a perfect buying season,” citing rapid absorption of inventory and well-priced homes as two factors. How long such conditions will last is “the $64,000 question,” he stated, noting pent-up demand in some areas has buyers feeling the pressure to move quickly to get their offers accepted. New home construction will continue making a rebound, Stenvers believes. He said builders are moving cautiously in most markets, being careful to build only the sizes and quality of homes that are likely to sell before completion, and not starting too many foundations at one time. Despite brisk activity, Stenvers noted foreclosures and owners who are delinquent on mortgage payments remain a concern. The number of owners nationwide who are 90 days or more late in making payments is again on the rise, a situation that will continue to affect foreclosure rates, he explained. “The lack of foreclosed homes not coming on the market has successfully stabilized prices but also created a lack of homes for buyers to buy,” Stenvers stated. Buyers are also weighing the pros and cons of renting or buying. “The rent versus buy conundrum is still the biggest obstacle facing buyers today,” Stenvers reported. Referring to new reports on recent and planned rent increases and low availability of good rentals in some areas, Stenvers said home ownership is “a better investment in many areas even if buyers are thinking of holding the home for a relativity short time frame.” It is hard for someone to move into an apartment after having the freedom of a larger home, so displaced home owners are looking to rent homes first, he reported, adding, “This alone is driving investors back into the housing market,” he stated. MLS director Wilson said while the story of a few years ago has flipped, the path to ownership remains constant. “We used to say the seller who priced and staged their home the best would get buyers. Today we’re saying buyers who are most realistic with their offers and pre-approved with a lender, and who are the most aggressive might get the house they want.” “This is what a normal market looks like -- buyers and sellers negotiating fairly with each other and each feeling they may have left a little on the table,” Wilson remarked. One of the benefits of a “normal” market is that it is not all about sale price, he explained, noting closing costs, type of loan, closing date, possession date and work orders are all things that balance out a normal transaction. Setting up buyers for success remains the paramount goal, according to Wilson. A buyer’s path for success includes pre-approval with a lender, sufficient funds to pay their own closing costs, and the patience to wait through the closing process, especially if they are buying a short sale or bank owned home, he explained. -more-
page three (NWMLS news release: September activity)
Oct. 4, 2012
George Moorhead, another MLS director, echoed that advice, saying “Smart recovery is what everyone should be considering as we heal from the neglected financial actions of the past.� Current buyers are cautiously optimistic, Moorhead reported. Clients in general are united in debt reduction, building up savings and reserves, spending more wisely than they ever have, and have an optimistic outlook of the economy as a whole. Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state. ###
Statistical summaries follow
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Statistical Summary by Counties: Market Activity Summary – September 2012 Single Fam. PENDING LISTINGS CLOSED SALES Homes + SALES Condos New Total # Pending # Closings Avg. Price Listings Active Sales King 3,009 6,312 3,072 2,312 $424,085 Snohomish 987 2,187 1,206 880 $284,833 Pierce 1,128 3,731 1,247 773 $231,335 Kitsap 379 1,552 346 238 $282,866 Mason 102 791 75 68 $202,012 Skagit 156 904 146 121 $267,587 Grays Harbor 100 858 93 59 $142,108 Lewis 107 717 64 68 $159,612 Cowlitz 137 526 102 78 $141,492 Grant 70 571 52 57 $147,326 Thurston 323 1,283 317 289 $223,461 San Juan 18 408 35 29 $736,017 Island 114 848 132 90 $311,867 Kittitas 67 506 55 38 $259,489 Jefferson 47 515 52 39 $239,002 Okanogan 35 438 18 22 $206,500 Whatcom 272 1,529 271 216 $277,558 Clark 45 229 37 30 $194,755 Pacific 34 414 34 23 $138,635 Ferry 8 82 1 0 0 Clallam 49 422 39 37 $223,025 Others 113 653 100 68 $219,385 MLS TOTAL 7,300 25,476 7,494 5,535 $323,747
Median Price $335,000 $261,658 $200,500 $240,250 $180,000 $230,000 $130,000 $155,000 $127,450 $137,000 $211,000 $375,000 $270,900 $196,500 $225,500 $192,150 $239,944 $175,450 $119,000 $0 $220,000 $214,750 $255,500
4-county Puget Sound Region Pending Sales (SFH + Condo combined) (totals include King, Snohomish, Pierce & Kitsap counties) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Jan 3706 4334 4293 4746 4521 5426 5275 4869 3291 3250 4381 4272 4921
Feb 4778 5056 4735 5290 6284 6833 6032 6239 4167 3407 5211 4767 6069
Mar 5903 5722 5569 6889 8073 8801 8174 7192 4520 4262 6821 6049 7386
Apr 5116 5399 5436 6837 7910 8420 7651 6974 4624 5372 7368 5732 7015
May 5490 5631 6131 7148 7888 8610 8411 7311 4526 5498 4058 5963 7295
Jun 5079 5568 5212 7202 8186 8896 8094 6876 4765 5963 4239 5868 6733
Jul 4928 5434 5525 7673 7583 8207 7121 6371 4580 5551 4306 5657 6489
Aug 5432 5544 6215 7135 7464 8784 7692 5580 4584 5764 4520 5944 6341
Sep 4569 4040 5394 6698 6984 7561 6216 4153 4445 5825 4350 5299 5871
Oct 4675 4387 5777 6552 6761 7157 6403 4447 3346 5702 4376 5384
Nov 4126 4155 4966 4904 6228 6188 5292 3896 2841 3829 3938 4814
Dec 3166 3430 4153 4454 5195 4837 4346 2975 2432 3440 3474 4197