Monthly Mortgage News

News from NW Multiple Listing Service
FOR IMMEDIATE RELEASE: November 5, 2013
Home sales “pause” with government shutdown,
but brokers mostly bullish on market recovery

Kirkland, WA – November 5, 2013. Home sales “paused” during October but prices continued to rise, according to the latest statistics from Northwest Multiple Listing Service. Commenting on year-to-date totals for 2013 compared to 2012, one industry expert remarked, “I would say the real estate market is recovering nicely.”
Pending sales during October dipped 2.7 percent when compared to the same month a year ago, but rose nearly 3.2 percent from September’s volume. October’s decline was the first negative change in year-over-year comparisons since April 2011. (That drop-off was attributed in part to a frenzy during April 2010 when buyers were scrambling to take advantage of a federal tax credit that was expiring.) 
Brokers point to the federal shutdown during the first two weeks of October, below-normal inventory, and shaken consumer confidence as factors in the slowdown.
MLS figures summarizing last month’s activity across the 21 counties in its service area show year-over-year improvement in inventory (up 5.5 percent), double-digit increases in the volume of closed sales (up 12.5 percent), and moderate increases in selling prices (up 7.7 percent).
Mike Gain, president and CEO of Prudential Northwest Realty Associates, believes the market has taken a “slight pause,” but emphasized one month’s numbers don’t indicate a trend.
“We are two years into what has been a very steady recovery. It’s okay – and actually healthy – to have a slight slowdown,” he remarked. The government shutdown “definitely hurt consumer confidence” and put many would-be buyers on the sidelines, according to Gain.
Consumer confidence “deteriorated considerably” in October as a result of the shutdown and debt ceiling squabbles, according to The Conference Board. A recent Gallup poll found some improvement in Americans’ economic confidence, but reported it is still well below mid-September, before the shutdown.
Gain said despite improving inventory the limited supply of homes for sale is also hampering sales. “Numerous buyers are looking but just can’t find the right home to fit their needs,” he reported.
Northwest MLS brokers reported 8,086 pending sales during October, down from the year-ago total of 8,312 sales, but outgaining the number of mutually accepted offers in September by 247 transactions for a 3.2 percent increase. Eleven counties had fewer pending sales last month versus a year ago.
In King and Snohomish counties the “torrid pace” of home sales activity has eased to a “healthy/strong level,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He believes the housing market is transitioning from a recovery market to a sustainable mode.
Prices on sales that closed last month rose 7.7 percent ($19,375) from a year ago. Area-wide, the median price for single family homes and condominiums (combined) was $271,000.
Homes that sold in San Juan County last month fetched the highest median price at $384,000, up 17.2 percent from a year ago. King County prices were slightly lower at $380,000, about 11 percent more than the median price of a year ago.
For single family homes only (excluding condos), King County prices topped the list. The median price for last month’s completed sales was $426,000, or 15.1 percent higher than the year-ago selling price of $370,000. System-wide, the median price for single family homes (only) was $283,000, about 8.4 percent higher than twelve months ago when it was $261,050.
Gain said the increases reflect a healthy and stabilizing real estate market. “It is good to see the prices rising modestly, allowing the market to become more balanced,” he stated.
Northwest MLS director George Moorhead agreed, saying more moderate and balanced growth helps “mitigate huge home price fluctuations.” The slowdown is also reflected in the time it is taking listings to sell, he noted. “We are seeing inventory staying on the market longer, which will continue through the holiday season until late January to mid-February,” said Moorhead, the managing broker at Bentley Properties in Bothell.
More inventory is still needed to meet demand, suggested Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma and a past chairman of the Northwest MLS board of directors. In Pierce County, where his office is located, inventory is about even with year-ago levels, but 2,019 more sales have closed so far this year for a jump of 25.4 percent.
Three counties – King, Pierce and Snohomish – have less than three months of supply, well below the 4-to-6 month level that is generally considered to be an indicator of a balanced market.
“It still looks like a potential housing shortage in Puget Sound come 2015 if building doesn’t increase,” Beeson commented.
At least one segment of the new construction market shows signs of rebounding: condominiums.
“Most residential developers went into hibernation during the real estate bear market of the past five years, but this past month heralded a bullish resurgence of several developments,” said John Deely, a member of the Northwest MLS board of directors. Last month was like spring in the South Lake Union neighborhood, he reported.
Deely, the principal managing broker at Coldwell Banker Bain in Seattle, cited the opening of sales for a new 41-story condominium community and the restart of two other major residential developments as positive indicators. The projects include a high-rise residential development near the Space Needle and the restart of a hotel-condo building in the Denny Triangle area of downtown Seattle. “This is good news as the market is starving for new condominium inventory,” he stated.
Beeson also commented on upticks in condo activity.  He said some condo developers who placed units in the rental pool during the 2008-2010 downturn are converting them back to for-sale housing and trying to sell them in today’s improved market. “The price points have still not returned to 2006-2007 levels but the chance to move some product now exists,” he commented.
MLS brokers added more than 1,000 new listings to condo inventory last month, a jump of 24.3 percent from a year ago. Total inventory is 9.1 percent higher than at this time last year. Closed sales during October jumped 15.3 percent, with prices rising about 5.3 percent.
Condos that closed during October had a median price of $200,000. In King County, which accounted for about two-thirds of those sales, the median price was $234,000.
“The real estate market has been moving in the right direction,” observed Gain, adding, “It has been a huge improvement over the past several years.” To underscore his point, he noted pending sales year-to-date are up by nearly 6,000 units (at 5,994) for a 7.3 percent increase. YTD closed sales are already up 10,167 units from a year ago for an increase of almost 19 percent (18.8), and prices are up by $27,000 for an increase of 11.1 percent. “I would say the real estate market is recovering nicely,” he concluded.

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 Summary by Counties: Market Activity Summary – October 2013
Single
Family
Homes
+ Condos
LISTINGS PENDING
SALES
CLOSED SALES MONTHS
SUPPLY
New
Listings
Total
Active
# Pending
Sales
#
Closings
Avg.
Price
Median
Price
 
King
3,047
5,799
3,306
2,798
$461,138
$380,000
1.75
Snohomish
1,217
2,629
1,219
1,041
$293,894
$270,000
2.16
Pierce
1,217
3,571
1,324
1,014
$236,761
$217,898
2.70
Kitsap
400
1,483
373
328
$286,658
$244,975
3.98
Mason
113
710
91
75
$194,380
$165,800
7.80
Skagit
174
796
180
150
$268,572
$232,710
4.42
Grays Hbr
115
757
109
77
$121,497
$118,000
6.94
Lewis
89
696
79
54
$156,788
$148,700
8.81
Cowlitz
111
456
114
107
$172,207
$153,000
4.00
Grant
102
501
74
54
$161,476
$148,000
6.77
Thurston
380
1,276
370
302
$222,805
$203,495
3.45
San Juan
27
389
22
25
$450,260
$384,000
17.68
Island
150
757
139
112
$270,065
$255,000
5.45
Kittitas
64
440
57
60
$238,981
$201,675
7.72
Jefferson
52
428
58
38
$259,120
$267,000
7.38
Okanogan
54
482
34
23
$211,470
$128,000
14.18
Whatcom
272
1,440
276
280
$282,221
$249,000
5.22
Clark
60
207
55
36
$269,104
$239,000
3.76
Pacific
44
429
37
31
$142,745
$124,000
11.59
Ferry
8
69
2
3
$89,667
$79,000
34.50
Clallam
56
397
63
58
$216,245
$200,000
6.30
Others
142
679
104
86
$222,125
$194,500
6.53
MLS TOTAL
7,894
24,391
8,086
6,752
$339,607
$271,000
3.02
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 5868 5657 5944 5299 5384 4814 4197
2012 4921 6069 7386 7015 7295 6733 6489 6341 5871 6453 5188 4181
2013 5548 6095 7400 7462 7743 7374 7264 6916 5951 6222
__________

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