Bob’s Bugle – Real Estate Newsletter – July 2007

 

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Bob's Bugle Real Estate Newsletter July 2007REAL ESTATE NEWS & INFORMATION

 

July 11, 2007

*Housing Prices Around Washington State Rising at More Modest Rates*

KIRKLAND, Wash. (July 5, 2007) –  With inventory at an all-time high in the Northwest Multiple Listing Service system, buyers are becoming more selective and sellers are receiving fewer multiple offers, according to MLS officials. Condominiums remain a bright spot, they noted.

Mid-year figures show the volume of pending sales of single family homes and condominiums (combined) is down about 7.3 percent from a year ago, while prices climbed 9 percent. Through June, members have reported 43,543 closed sales, off 3,430 units from the year ago total of 46,973. The median price for completed sales area-wide (through six months of 2007) is $326,000, up $27,000 (9 percent) from this time last year.

For single family homes (excluding condominiums), the year-to-date median sales price is $345,000. That’s a 10.2 percent increase from a year ago, but the trend is pointing toward single-digit increases, except perhaps for condominiums.

June marked the third straight month of single-digit gains in sales prices overall, although several counties are still reporting double-digit jumps.

New figures from Northwest MLS for June show:

  • The median sales price on last month’s closed sales of single family homes and condominiums increased 6 percent compared to a year ago. For June, the median sales price was $334,000.
  • Year-over-year pending sales are down nearly 12 percent
  • Inventory is up about 51 percent from twelve months ago; at month end, there were 45,223 active listings in the MLS database (39,047 single family homes + 6,176 condominiums).

Even though the inventory is fairly robust, the selection is slim in some close-in neighborhoods and in some price ranges. For homes priced at $247,000 or less (the price a median-income household in King County can afford, according to housing specialists from the Seattle-King County Association of Realtors), there are only 110 current listings priced under that threshold in King County. Of these single family homes, 94 are in south King County, seven are on the Eastside, two are in Seattle, with the remainder scattered elsewhere in the county.

“Inventory levels overall were somewhat higher in June, but still well below the national average and we continue to see multiple offers in certain markets,” remarked an NWMLS board member. Not surprisingly, he noted, markets that are closer to job centers tend to have lower inventory levels and higher price appreciation.

Area-wide there is about a 4.9 month supply of inventory, which compares to the national average of 6.8 months. In King County, there is about a 3.2 month supply, meaning if no other homes were to come on the market it would take 3.2 months to sell the available inventory.

Condo Activity Remains Strong

A closer look at the inventory shows part of the increase is due to a growing number of condominiums. In King County, for example, condos account for about 35 percent of the active listings. Of the condo inventory system-wide, about one-third of them are classified as new construction.

The volume of condominium sales and prices are both outperforming last year. Through six months this year, condo sales are up 6.1 percent compared to 2006, with prices jumping 15.6 percent. In King County, which accounts for nearly two-thirds of the transactions, the year-to-date median selling price of a condominium is $285,000, a 17.8 percent increase from the year-ago YTD figure of $242,000.

Buyers Finding Good Values

Buyers realize good values are all around them, but some are waiting too long to act, observed NWMLS director Dick Beeson, a Windermere Real Estate broker/owner in Tacoma.

“Traffic at open houses has been brisk with many buyers having started their search on the Internet, thereby increasing their knowledge and awareness of the market,” Beeson stated. “When they hit the door they are generally qualified by a lender and ready to buy if the right house appears. However, some of these ‘knowledgeable buyers’ tend to be slow to pull the trigger on a purchase as they search endlessly for the ‘perfect home.’ Often, it is the one they didn’t end up buying, but somebody else did,” he reported.

“If you’re a seller, you really, really need to put your best foot forward and understand what the competition is,” emphasized NWMLS director Mike Larson, a broker in Lakewood. “Sellers still don’t quite understand that buyers have much more to choose from – and often a back-up property to act on,” he commented. They’ll end negotiations and make offers elsewhere if they perceive sellers to be unreasonable, he added.

NWMLS director Ken Bacon characterized the market as “balanced.” This balance “creates a need to price the house at value” and requires agents and sellers to look more seriously at the prices of other active listings (the competition), he explained. In the past, pending and closed sales were the focus for determining value ranges, but the more balanced market requires more scrutiny of current listings around the neighborhood, according to Bacon, a Windermere Real Estate broker in Redmond. “Having a price that is higher than the competition only helps the other homes sell,” he stressed.

Noting appreciation for homes is at a lower pace than in 2006, Bacon still expects new job growth and overall economic strength of the Seattle area will sustain appreciation through the end of 2007.

Economists suggest the market is underperforming and believe fallout from subprime lending practices may be taking a toll on home sales.

NAR senior economist Lawrence Yun said consumer behavior is outweighing economic indicators. “Psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers,” he said. Household formation has slowed dramatically since late 2006, Yun noted, implying that “many people are doubling-up – they’re adding roommates or moving in with parents.”



“The market is underperforming when you consider positive fundamentals such as the strength in job creation, economic growth, favorable mortgage interest rates and flat home prices,” Yun said, adding, “It appears some buyers are simply waiting for more signs of stability.”

The average person on Main Street doesn’t understand the impact of tightening lending standards and rising rates, according to Bob Walters, chief economist at Quicken Loans, the nation’s largest online retail mortgage lender. “But it means that 10 to 15 percent of borrowers who could get a mortgage at the beginning of the year can’t get one today. That’s substantial. That’s a rippling effect,” he remarked.  

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 July 2007

Statistical Summary by Counties: Market Activity Summary for June 2007

June 2007

Single Fam. Homes + Condos
LISTINGS

PENDING SALES

CLOSED SALES

New Listings

Total Active

# Pending Sales

# Closings

Avg. Price

Median Price

King Co.

5960

12282

3766

3634

$507,969

$414,950

Snohomish

2481

6194

1443

1418

$394,710

$355,000

Pierce

2470

8426

1276

1215

$320,489

$277,500

Kitsap

711

2588

391

370

$375,365

$303,250

Mason

259

872

110

95

$252,026

$220,000

Skagit

375

1226

221

199

$348,038

$303,750

Grays Harbor

215

915

112

114

$186,174

$170,000

Lewis

192

783

102

82

$205,519

$195,000

Cowlitz

216

723

94

104

$228,266

$199,250

Grant

173

545

103

100

$191,559

$162,953

Thurston

731

2372

455

419

$302,136

$272,000

San Juan

60

362

29

24

$689,542

$506,900

Island

254

1112

141

126

$357,148

$308,850

Kittitas

125

546

81

76

$325,146

$283,225

Jefferson

105

534

54

44

$368,607

$277,250

Okanogan

77

376

63

40

$229,709

$167,500

Whatcom

630

2415

410

376

$320,413

$278,750

Clark

375

1321

178

166

$300,167

$276,000

Pacific

67

386

32

35

$209,700

$199,000

Others

342

1245

145

125

$206,055

$179,000

MLS TOTAL

15,818

45,223

9,206

8,762

$405,133

$334,000

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

 

 

 

 

This information is from the Northwest Multiple Listing Service which is the largest full-service MLS in the Northwest. Based in Kirkland and owned by its member brokers, it currently encompasses more than 2,100 companies with approximately 26,000 sales associates. Together, they serve 19 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state. NWMLS recently added service to Clark County with the opening of an office in Vancouver.

Bob’s Bugle Real Estate Newsletter July 2007, copyright 2007. 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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