Mission Statement
The North Peninsula Building Association represents builders and associates of the building industry. We advocate constant improvement of building and business practices to provide quality construction in our community.
Vol. 5, Issue 7
www.npba.info
360-452-8160
PO Box 748 • 3430 E. Highway 101, Ste. #1, Port Angeles, WA 98362
What’s Wrong with this Picture? by Greg McCarry Westerra Homes
Imagine a conversation in which someone is describing a market where rents are rising, home prices are low, interest rates are below 4 percent, home inventory is shrinking, housing affordability is at a record high, new purchases are up 22 percent over last year and prices are starting to rise. What would you say? Take a look at these indicators: • -42.65 percent: Year over year (as of May) decline in Seattle area for sale home inventory • -28 percent: Decline in available inventory in 22 counties covered by NWMLS • 22 percent: Increase in Washington pending sales in 22 counties covered by NWMLS • 5.9 percent: Nationwide increase in pending sales for month of May • 12.8 percent: Average increase in prices since January 2012 in 22 counties covered by NWMLS • 3.66 percent: National average 30-Year Mortgage Rate • 2.1 Million: Pent-up demand for homes estimated by National Association of Home Builders • 4 percent: Annual rate of increase in rents • 183 percent: Housing Affordability Index. A family earning the median income has 183 percent of the income needed to qualify for a median-priced home, assuming 20 percent down. • 19.8 percent: Nationwide increase in new home sales over
last year Conditions for buying homes — including a record high affordability index, low prices, and rock bottom interest rates — may represent a once-in-a lifetime opportunity for a home purchase. However, the combination of increasing rental demand, rising investor cash purchases and declining home inventories are creating competitive conditions for those buyers getting into the market for homes and for those sitting on the sidelines thinking the chance to buy will still get better. All markets are local and these conditions don’t exist everywhere — like our own Clallam County market. For Clallam County homebuilders, the gap between cost to build and the median price is still too wide to unleash even a normal rate of new home construction. Generally, buyers are willing to pay a 7-percent to 10-percent premium for a brand new home over a resale. However, with an average price of $190,000 for a 1,700-square-foot home and cost to build (sales price) of $250,000, there is a gap of 25 percent. We still have to narrow that gap by at least another 15 percent. Fortunately, the markets that ultimately send customers to our area are steadily improving, including the four counties on the I-5 corridor: King, Snohomish, Pierce and Thurston. Here is a snapshot of year-to-year activity in those markets for pending sales activity. Pending sales are newly written purchase agreements for the month. From January through May of 2012, there has been steady improvement in the numbers. See the chart below:
July 2012
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Return on Industrial Insurance (ROII®) Check Distribution NPBA recently held an ROII® check distribution event and returned nearly $170,000 to members who participate in the program. If you are interested in learning how you can get a refund on your L & I premiums and more about this great member benefit, please contact the NPBA at 452-8160 or e-mail faleana@npba.info.
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Source: Northwest Multiple Listing ServiceNumber of Homes For Sale vs. Sold
NPBA Member Dave Lamon of Precision Truss is happy to have received a refund check, as well as his Green Spike award. NPBA would like to thank Dave and his company for being a charter member of the NPBA and for supporting the organization for nearly 36 years!