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Momentum building as home buyers respond to lower prices, favorable financing

KIRKLAND, WA, June 6, 2011. Northwest Multiple Listing Service members reported a 43 percent increase in pending sales of single family homes and condominiums during May compared to the same month a year ago. Sellers accepted offers from 7,509 buyers last month, up from the year-ago total of 5,242 pending sales.
Year-to-date pending sales are slightly under the total for the first five months of 2010 when sales were boosted by a federal tax credit. Through May 2010, Northwest MLS members had reported 35,454 mutually accepted offers; this year’s total for five months is 33,612 (down about 5.5 percent).
“We’re seeing a definite shift in the market – especially in the areas closer to Seattle and Bellevue,” remarked OB Jacobi, president of Windermere Real Estate and a member of the Northwest MLS board of directors. “Homes that are priced aggressively are seeing a lot of competition and we’re even getting reports of some homes selling before buyers can act,” he stated.

Members reported 5,015 closed sales during May, about 5 percent fewer than the year-ago total of 5,290 completed transactions. For the first five months of this year, a total of 20,473 transactions have closed, which compares to 21,861 for the same five months of 2010 (down about 6.8 percent). For the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish counties), pending sales through five months are at 97.6 percent of year-ago levels, while closed sales are at 95.6 percent of year-to-date totals for 2010.

Northwest MLS reports both pending sales (mutually accepted offers) as a barometer of the most recent sales activity, and closed sales (completed transactions). Matt Deasy, the general manager of Windermere Real Estate/East, considers the small differences between year-to-date figures for 2011 and the “tax incentive fueled market” of 2010 to be “good news.”

Mike Grady, president and COO of Coldwell Banker Bain, was also upbeat in his comments about the current market. “The substantial jump in pending home sales reported today won’t be surprising to the brokers working in the core urban markets of Seattle and West Bellevue,” observed Grady. He also noted the increasingly strong demand for homes and falling inventory “is making for a very competitive market in those areas, with multiple offers on the best properties becoming more common.”

“Low interest rates, low down payment requirements, and lower adjusted prices are attracting buyers into the market,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “We are seeing healthy sales activity close to the job centers of Seattle and Bellevue, creating a low inventory of homes for sale,” he noted.
Members added 10,293 new listings to inventory during May, about 900 more than the same month a year ago for a 9.7 percent increase. Despite those additions, the selection is smaller than 12 months ago. At month end, there were 36,261 active listings of single family homes and condos in the MLS system. That’s about 5,400 fewer than a year ago when inventory totaled 41,690 listings, a shrinkage of 13 percent.

“On King County’s Eastside, we are seeing a decrease in the number of listings that are short sales or bank-owned properties,” said Kathy Estey, managing broker of John L. Scott Bellevue Main. “Inventory of quality homes in median price ranges is low and we see multiple offers in most price ranges, including homes in the higher prices ranges. Some of the old, stale inventory has sold. However, the majority of homes are still selling for less than full price.”

Jacobi said a recent review of Windermere’s sales data shows that 40 percent of homes in the median price range are selling at list price and many of these buyers are paying cash. “With that being said, the market is still very price sensitive, so sellers need to continue to be realistic about the value of their home,” he stated.
The median price for last month’s sales system-wide was $239,999, about 11 percent less than a year ago when it was $269,950. Brokers attribute much of that price decline to the fairly high ratio (estimated at 30-40 percent in many markets) of foreclosed homes and short sales that are being sold at deep discounts.
In King County, prices slipped 8.4 percent, from $346,000 a year ago to $316,750 for last month’s closed sales of single family homes and condominiums.  For single family homes only (excluding condominiums), the median selling price was $345,000, down about 9 percent from the May 2010 figure of $379,000.
Grady is encouraged by the momentum. “The last few years, home sales haven’t sustained much momentum without government support,” he noted, adding, “This year, however, the momentum is continuing to build naturally, as we would normally expect in the spring and summer months. Remember, by this time last year we had already experienced all of the benefit of the homebuyer tax credit, and sales began to wane after that credit had expired. We see an entirely different dynamic this year.”

It’s obvious not all local markets are improving equally, Grady acknowledged, suggesting, “It’s also obvious that the basic market forces of low supply and high demand are beginning to shift buyer or seller attitudes in many neighborhoods. That’s good news for sellers, and perhaps a cautionary message to buyers as well.”
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 22,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

Statistical Summary by Counties: Market Activity Summary – May 2011

Single
Family
Homes
+ Condos
LISTINGS
PENDING
SALES
CLOSED SALES
New
Listings
Total
Active
#Pending
Sales
# Closings
Average
Price
Median
Price
King
3,786
11,030
3,113
2,104
$387,566
$316,750
Snohomish
1,388
4,621
1,315
820
$256,065
$230,000
Pierce
1,579
5,501
1,223
796
$217,376
$194,000
Kitsap
466
1,770
312
207
$271,851
$237,000
Mason
201
850
70
52
$154,670
$138,572
Skagit
233
1,123
141
103
$266,177
$199,990
GraysHarbor
210
943
85
58
$139,011
$121,500
Lewis
117
749
73
64
$137,002
$124,950
Cowlitz
136
588
101
71
$160,002
$136,000
Grant
136
620
71
53
$170,127
$153,000
Thurston
495
1,720
338
255
$232,451
$218,900
San Juan
89
477
13
12
$537,796
$395,000
Island
242
1,009
96
73
$308,393
$265,950
Kittitas
136
539
42
37
$213,929
$176,000
Jefferson
127
578
36
16
$281,341
$272,500
Okanogan
88
416
23
8
$148,688
$158,750
Whatcom
441
1,807
259
161
$273,674
$244,000
Clark
68
276
62
32
$217,863
$184,000
Pacific
83
422
26
15
$133,008
$144,400
Ferry
12
56
5
5
$100,200
$68,000
Clallam
92
463
35
31
$217,615
$205,000
Others
168
703
70
42
$202,115
$176,525
MLS TOTAL
10,293
36,261
7,509
5,015
$297,881
$239,999

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2000
3706
4778
5903
5116
5490
5079
4928
5432
4569
4675
4126
3166
2001
4334
5056
5722
5399
5631
5568
5434
5544
4040
4387
4155
3430
2002
4293
4735
5569
5436
6131
5212
5525
6215
5394
5777
4966
4153
2003
4746
5290
6889
6837
7148
7202
7673
7135
6698
6552
4904
4454
2004
4521
6284
8073
7910
7888
8186
7583
7464
6984
6761
6228
5195
2005
5426
6833
8801
8420
8610
8896
8207
8784
7561
7157
6188
4837
2006
5275
6032
8174
7651
8411
8094
7121
7692
6216
6403
5292
4346
2007
4869
6239
7192
6974
7311
6876
6371
5580
4153
4447
3896
2975
2008
3291
4167
4520
4624
4526
4765
4580
4584
4445
3346 2841 2432
2009 3250 3407 4262 5372 5498 5963 5551 5764 5825 5702 3829 3440
2010 4381 5211 6821 7368 4058 4239 4306 4520 4350 4376 3938 3474
2011 4272 4767 6049 5732 5963

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