Bob’s Bugle – Real Estate Newsletter – February 2011

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Bob Chapman
Managing Broker

Windermere Real Estate
Lake Stevens, Inc.

9327 4th St. NE, Ste #3
Lake Stevens, WA 98258
USA
Ph: (425) 268-2940
Fax: (425) 335-1838

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Bob's Bugle Real Estate Newsletter February 2011REAL ESTATE NEWS & INFORMATION

Bob’s Bugle Real Estate Newsletter February 2011

February 11, 2011

*Motivated Buyer’s Returning to Housing Market*

KIRKLAND, WA, February 3, 2011 – Dramatic increases in open house activity and shrinking inventory are fueling optimism among members of the Northwest Multiple Listing Service. Commenting on the just-released MLS report on January’s housing activity, one director stated, “There is a strong belief in the industry that the worst is behind us and we can look forward with confidence. “Seller’s accepted offers from 4,359 buyers last month, only 40 fewer than a year ago when members of Northwest Multiple Listing Service reported 4,399 pending sales of single family homes and condominiums. In 2008, members notched 3,255 pending sales, down from 2007’s total of 3,950 pendings and the 2006 figure of 5,744 mutually accepted offers.

Darin Stenvers, a managing broker in Bellingham, Washington, who made that comment, also noted consumers are gaining confidence and buyers may be seeing what they believe is the bottoming of the market. “I’m very optimistic about the housing market for 2011 and the buyers and sellers should be as well,” he exclaimed.

Year-over-year pending sales were down somewhat, the volume of new listings declined more than 23 percent, sales prices continued to slip, but the number of closed sales increased slightly across the 21 counties in the Northwest MLS service area.

Last month’s pending sales lagged totals for the same month a year ago, but only by 186 units system- wide, a decline of about 3.3 percent. Northwest MLS director Matt Deasy, a broker at Windermere Real Estate in Bellevue, said he considered anything within 5 percent of a year ago when tax incentives were boosting sales a “home run.”

Members reported 5,393 pending sales (mutually accepted offers) of single family homes and condominiums during January. That compares to 5,579 pending sales for the same period a year ago, and marked a big gain from both January 2009 (4,353 pending sales) and January 2008 (4,499 pending sales).

“I expect sales to be soft through April when compared to last year since first quarter sales volume was artificially inflated by the rush to take advantage of the tax credit that expired on April 30,” said OB Jacobi, president of Windermere Real Estate Company. “A more apples-to-apples assessment of sales will be to compare first quarter this year with first quarter 2009,” he suggested.

Closed sales rose a modest 2.1 percent from a year ago, increasing from 3,142 transactions to 3,207 sales. Prices on those completed sales were down about 6.3 percent. The overall median price for last month’s closed sales of single family homes and condominiums was $243,500, which compares to the year-ago selling price of $259,903.  For single family homes (excluding condominiums) the median selling price was $250,000, down about 5 percent from a year ago; for condos, last month’s sales had a median price of $200,000, down 16.7 percent from twelve months ago.

Only four counties (Clallam, Cowlitz, Kitsap, and Okanogan) reported year-over-year price gains.

In King County, the median sales price on last month’s sales was $333,500, a drop of 4.7 percent from twelve months ago when it was $350,000.

Brokers attribute part of the price drop to sales of distressed homes (in general, meaning homes under foreclosure or impending foreclosure).

“Distressed properties are making up an increasingly greater share of sales than a year ago, and that trend is expected to continue,” observed Jacobi. Noting the sales price for distressed properties could be 20-to-30 percent less than for normal sales, he said “it’s no surprise that a greater percentage of low-priced distressed properties are pulling down the median price.”

Whether considering a property classified as distressed or a conventional listing, house-hunters can choose from 32,647 active listings in the Northwest MLS system at the end of January. That selection is 4.7 percent smaller than a year ago when there were 34,256 properties listed with member-brokers.

Not nearly as many newly listed homes were offered for sale last month compared to twelve months ago. MLS members recorded 8,556 new listings, which included 7,167 single family homes and 1,389 condominiums. The combined total is down nearly 24 percent from the same month a year ago when members added 11,206 new listings to inventory.

MLS director Bobbie Petrone Chipman said overall, January was a positive month around Pierce County, where her office is located. Noting that area experienced a 27 percent reduction of new listings, a 2.4 percent increase in pending sales and a 10.8 percent jump in closed sales, Petrone Chipman, managing broker in the Tacoma/Puyallup area, said the month reflected “a bit more balance as we dip our toe into the new year.”

Deasy also expects more balance, with sales more evenly distributed during the year, unlike 2010 when sixty percent of their sales occurred in the first half of the year. He also predicts closed sales will increase year over year, while at the same time pending sales might decrease year over year. This is the result of a higher percentage of pending sales actually closing, he explained, citing various factors. “Banks are better at short sales, brokers are better at short sales, appraisal issues are less frequent, and lending standards are becoming more stable.”

Based on anecdotal reports of open house traffic, brokers are hopeful of upticks in sales.

“The buyer activity at open houses in the close in Seattle neighborhoods has increased dramatically in the past month, said Northwest MLS director Mike Skahen. “If there were more good new listings coming on the market there would be more sales,” he suggested.

Skahen, a designated broker in Seattle, WA, believes the shortage of new listings is causing an increase in multiple offers. As an example, he said a small Green Lake townhouse project that had been on the market for more than four months with no offers finally had one unit sell a few weeks ago. Last weekend four offers came in on another unit. “I have not seen buyers this motivated in three  years,” he remarked, adding, “Sellers should not wait for spring flowers to bloom to put their homes on the market as they usually do because there is much less competition now than there will be soon.”

Industry leaders have recommendations to benefit both sellers and buyers.

Accurate pricing is paramount. “Sellers are learning there is a small window of opportunity to have consumers sees their home before ruling it out and moving on,” suggested Stenvers.

 MLS director Pat Grimm, a designated broker for Windermere Real Estate, detected some hesitancy to list properties now. Distressed properties sell for less, but buyers face uncertainty and a long timeframe, he explained, noting the large percentage of distressed properties on the market has resulted in an interesting side effect: sellers of non-distressed properties are having an advantage.

“On one hand, I’m seeing sellers that are hesitant to bring their listings onto the market and compete with the price of short sale properties,” Grimm commented. On the other hand, he said buyers are looking at all the inventory and, because of the complications of purchasing distressed properties, are favoring properties that are not short sales or bank owned.

In Seattle, Grimm said the sweet spot is homes priced $400,000-500,000, in good shape that are not distressed. “They appeal to both first-time buyers and downsizers,” he reported, citing two examples:

 A Capitol Hill home went on the market at $450,000, received seven offers and sold in a week for significantly more than asking price. In the second example, a View Ridge listing priced at $499,000 had 25 groups through an open house in a two-hour span. It has a view and a great location above the Burke-Gilman trail. “Both homes were in the $400-$500,000 price range, well maintained, and not distressed.”

Several other NWMLS directors commented on the impact of distressed properties:

  • “We still have the better part of the next five years to work through short sales and bank owned property but this is a start,” commented Frank Wilson, a managing broker at in Poulsbo, WA. He described January 2010 as an anomaly due to the tax credit, and said even though last month was down in many respects compared to last year, it better reflects the true market. “It is good to start a new year off without any government incentives and is hopefully the start of returning to normal.”
  • Some owners are opting to rent their homes as the market recovers. As demand increases and rents rise, investors are returning, said Stenvers. Also emerging is a new group of renters – past owners who lost their home to foreclosure or short sale, he noted, adding, “These renters are willing to sign long-term contracts so they can get their credit rating repaired.” For example, Stenvers said his office recently listed a rental. The renters were a professional couple in the midst of a short sale in Florida. “They are looking at a very long term commitment to renting to help them save money and recover from their loss.”
  • “Buyers are reluctant to look at distressed properties not because of the characteristics of the property, but because of the process,” said Grimm. He called the long delays with lenders regarding the sale of distressed properties “a major choke point.” Grimm acknowledged there has been significant progress with the banks trying to figure out the situation, but stated, “We’re still a long way from making it buyer-friendly.”

Figures from the National Association of Realtors® show distressed homes rose to 36 percent of sales of existing homes in December, up from 33 percent in November and 32 percent a year ago. Such homes are typically discounted by 10 to 15 percent, according to NAR research.

Commenting on the volume of distressed homes on the market, Windermere’s Jacobi said, “Hopefully new regulations requiring banks to speed up the sales process for distressed homes will help move that inventory more quickly.”

Check out my website(s): www.washingtonrealestatepage.com or www.washingtonlandandhomes.com

I am a Short Sale specialist for Seller’s needing to list their home for sale or Buyer’s wanting to obtain a Great deal by Buying a Short Sale home!

Referrals are a “very” important part of my business. Please let me know of anyone that you know who may be considering Buying or Selling real estate – or please give them my name and contact information!

Thank You!

Bob Chapman

Bob’s Bugle Real Estate Newsletter February 2011

Statistical Summary by Counties: Market Activity Summary for January 2011

January 2011

Single

Family

Homes

+ Condos

LISTINGS

PENDING

SALES

CLOSED SALES

New

Listings

Total

Active

#Pending

Sales

# Closings

 

Average

Price

Median

Price

King

3,311

10,294

2,101

1,259

$411,353

$333,500

Snohomish

1,475

4,691

938

533

$263,195

$239,000

Pierce

1,345

5,124

985

554

$225,206

$200,000

Kitsap

391

1,515

248

145

$271,257

$239,000

Mason

130

649

62

34

$160,849

$154,250

Skagit

202

1,016

105

81

$207,543

$197,000

GraysHarbor

159

874

76

37

$155,976

$130,000

Lewis

108

694

63

37

$169,248

$165,000

Cowlitz

103

560

72

42

$163,588

$154,950

Grant

76

480

39

21

$175,689

$153,000

Thurston

385

1,528

241

155

$225,735

$214,950

San Juan

30

325

10

9

$554,480

$450,000

Island

144

845

68

45

$290,644

$258,000

Kittitas

63

386

33

27

$177,499

$157,000

Jefferson

48

421

26

24

$286,345

$243,500

Okanogan

34

339

8

9

$188,344

$159,500

Whatcom

287

1,463

193

110

$262,916

$232,250

Clark

87

261

33

21

$215,401

$198,550

Pacific

29

315

30

11

$161,009

$118,000

Ferry

4

54

0

1

$85,000

$85,000

Clallam

62

369

39

21

$245,690

$220,000

Others

83

444

23

31

$176,960

$157,500

MLS TOTAL

8,556

32,647

5,393

3,207

$305,428

$243,500

 

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

Bob’s Bugle Real Estate Newsletter February 2011

 

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

334628412432
2009325034074262537254985963555157645825570238293440
2010438152116821736840584239430645204350437639383474
20114272           

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington.

Bob’s Bugle Real Estate Newsletter February 2011, copyright 2011. All material contained herein is owned and protected. Any attempts to reproduce this information without the express written consent from the owner will be prosecuted.

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