Bob’s Bugle Real Estate Newsletter September 2015
September 15, 2015
*Some Concern Regarding Possible Homes Sales Slowdown*
Kirkland, WA – September 3, 2015 – Some brokers from Northwest Multiple Listing Service detected a slowdown in housing activity during August, “but nowhere near what is typical,” according to one industry veteran. Among MLS leaders who commented on the service’s latest report, expectations for the remainder of 2015 ranged from one who predicted “we’re on the cusp of a slowdown,” to others describing activity as “torrid” and saying “sales will continue at a fast pace.”
Newly released statistics show solid gains for several indicators used to track activity, including pending sales, closed sales, and median prices.
For the fifth month this year, pending sales system-wide outpaced the number of new listings added to the inventory. During August, members reported 10,603 mutually accepted transactions and 9,921 new listings. That new listing total for the 23 counties in the MLS service area was the lowest level since February.
“The velocity of sales activity continues at a very fast pace with pending sales eclipsing new listing inventory. This sales activity is keeping the selection of available properties at historic lows,” commented John Deely, principal managing broker at a real estate brokerage franchise in Seattle, Washington. He said the low listing inventory continues to impact some sub-markets, including Seattle’s where multiple offers and escalation clauses are “the rule rather than the exception.”
Like new listings, total inventory also declined. At the end of August, Northwest MLS members reported 20,749 total active listings in its database. That reflects a slight drop from July’s total selection of 21,069, but a 23.3 percent decline from the year-ago inventory when there were 27,060 homes for sale.
Supply, as measured by months of inventory, showed slight improvement in August, inching up to 2.38 months overall. That’s up from July’s figure of 2.24 months. In King and Snohomish counties, supply remained well under two months. Many industry analysts use a range of four-to-six months as an indicator of a balanced market.
“The biggest challenges our buyers face are the lack of inventory and the quality of homes to choose from,” said MLS director George Moorhead. Sellers who have been “pushing the pricing envelope too hard are experiencing pushback from buyers as their homes sit on the market,” according to Moorhead, the designated broker and owner of a real estate brokerage in Bellevue, Washington.
Commenting on prices, which showed year-over-year gains in most areas, Moorhead reported mixed outcomes. “We have been seeing price reductions more frequently during the normal slower market times of summer, but well-priced homes in desirable areas are still drawing multiple offers and offers above the listing price,” he explained.
MLS figures show last month’s closed sales of single family homes and condominiums had a median selling price of $315,000 area-wide for a 9.6 percent increase from a year ago. Ten counties reported double-digit gains, including King County where the median price was $450,700. That translates to a 13.2 percent increase from the year-ago figure of $398,000.
The volume of completed sales, numbering 8,718, jumped more than 12 percent from the year-ago total of 7,775 closings. Single family homes accounted for more than 85 percent of the total transactions.
Single family homes in King County sold for a median price of $499,950, just below the figure of $500,000 the MLS reported in June, believed to be an all-time high for the monthly reports. Year-over-year prices for this segment jumped 14.4 percent.
For condos, both the volume of sales and selling prices showed sizable gains from a year ago. The overall number of condo sales rose from 1,026 to 1,248 for a 21.6 percent gain. Condo prices surged 17 percent, rising from $221,000 to $258,750.
In King County, where 60 percent of condo sales occurred, the volume was up nearly 21.7 percent. Median prices increased 19.7 percent from a year ago, rising from $249,950 to $299,250.
“I don’t think any real estate market/economy can sustain steadily increasing prices like we’ve seen without a leveling or a drop-off of sorts,” cautioned Gary O’Leyar, designated broker/owner of a real estate brokerage franchise in Seattle, WA and a past chairman of the Northwest MLS board.
“As Seattle home prices reach (and in some cases exceed) the 2007 peak, I believe more potential sellers will gradually consider selling,” O’Leyar stated, adding, “Since the post-2007 recovery period I think many property owners have been waiting to recapture lost equity. If that has been the obstacle for some sellers to enter the market, we are reaching that point of value/equity recovery.”
Another industry leader also commented on a possible leveling of activity.
“Given the seasonality of real estate and low inventory levels, I think we’re on the cusp of a slowdown in the housing market,” stated OB Jacobi, president of Windermere Real Estate. “The continued double digit increases in home sales simply cannot be sustained unless we see inventory growth,” he emphasized. That is unlikely, he suggested, “since we’re entering the time of year when fewer people list their homes.
Brokers in Snohomish County were mostly upbeat about the market.
“There were slight slowdowns but nowhere near what is typical,” remarked Diedre Haines, whose experience in the industry dates to 1976. “Multiple offers continue, interest rates are still low, economic forecasts for Snohomish County remain strong and inventory is still needed,” she reported.
“Recent volatility in the stock market has had little if any negative impact on our local real estate activity,” stated Haines, principal managing broker for a real estate brokerage in South Snohomish County. More and more investors are returning to real estate as being the best investment they can make, she noted. Commenting on a clause from the preamble to the Realtor® Code of Ethics, which states “Under all is the land” she added, “As we all know, it is impossible to create more of it!”
David Maider, owner/broker at Windermere Real Estate in Everett, said the market in Snohomish County “continues at its torrid pace,” bolstering his observation by citing MLS data. The latest numbers show pending sales in that county increased more than 17 percent from a year ago, with closed sales jumping nearly 24 percent.
Maider, a member of the Northwest MLS board of directors, said the primary market drivers include a general lack of supply across all price points (less than two months worth of inventory), historically attractive interest rates, and a very tight rental market. “Multiple offers are commonplace,” he reported, suggesting buyers should be prepared to be decisive and to propose compelling terms to the seller. “This is not a market for sitting on the fence,” he emphasized, adding, “We are seeing a very active market, even in higher price points.”
Dick Beeson echoed the optimism. “The number of buyers in the market place today leaves little doubt that third quarter sales will continue at a fast pace,” stated Beeson, principal managing broker at a real estate brokerage franchise in Tacoma, WA.
Northwest MLS brokers continue to remind sellers about the consequences of overpricing and to caution would-be buyers about the pitfalls of overextending themselves.
“Accurate pricing remains critical,” emphasized Deely, a director with Northwest MLS. “The market is reacting quickly to accurately priced listings but overpriced ones are sitting with little activity.”
Looser lending criteria is one such pitfall. “One trend we are seeing, sadly enough, is a return to some of the ‘no doc/low-doc’ programs with insufficient verification of a borrowers’ income, assets or employment.
“Yes, these programs may help less qualified buyers attain the dream of homeownership, but they could also be their downfall if they stretch too far without enough foundation to maintain financial security,” he suggested.
Buyers, sellers and brokers are expressing some frustration with the fast-paced market.
Getting offers accepted, and then getting the transactions to close can be frustrating, according to Haines. She expects forthcoming changes affecting mortgage lending will offer “more positives than negatives.”
“Finding a buyer for a property remains the easy part. Getting a sale to closing remains very difficult,” said Beeson. “More often than not, lenders, appraisers, inspectors and new Federal RESPA (Real Estate Settle Procedures Act) regulations appear at times to do all they can to ensure closing doesn’t occur.
Brokers sometimes overcome tremendous obstacles to help the buyers and sellers get to closing. . . Success comes after a lot of hard work,” he added.
Speculation around the direction of interest rates may also be fueling activity, according to some brokers.
“With the Federal Reserve reticent about raising rates due to international instability, U.S. homeowners will enjoy the benefit of continued low single-digit rates,” said Beeson.
“There is a general conversation — and expectation — that interest rates will be on the rise, and that is spurring buyers even more to find the perfect home before rates go up,” said Moorhead. He expects interest rates will be one percent higher a year from now. “That will continue to push buyers to aggressively find the right home which will continue to push inventory levels downward.”
Some potential purchasers may be retreating to the sidelines in hopes the competition will ease.
“Some buyers are becoming discouraged and calling it quits after losing in the multiple offer market. However, positive housing news like dropping mortgage rates continues to bring new prospective home buyers and sellers into the market,” reported Deely.
Bob’s Bugle Real Estate Newsletter September 2015
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!
Bob’s Bugle Real Estate Newsletter September 2015
Statistical Summary by Counties: Not available for August 2015
Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 23,000 brokers and agents. The organization, based in Kirkland, currently serves 23 counties in Western and Central Washington.
Bob’s Bugle Real Estate Newsletter August 2015, copyright 2015. 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.
Let a trained professional Windermere agent, Bob Chapman, assist you in your Snohomish County real estate home or vacant land buying or selling transaction.
This Snohomish County real estate website page also has a home loan or mortgage calculator.
Please use the navigation bar at the LEFT of the page or CLICK on one of the “City“, “County” or “State” Link pages above to locate Snohomish County Washington real estate. These will quickly take you to the specific information that your Snohomish County real estate search requires.
Please visit the links pages in the navigation bar. There you will find links to: Snohomish County & Washington State School Districts information which includes the official websites of School Districts in Snohomish County and Washington State; The official Washington State government website, Snohomish County & City government websites and Valuable Real Estate Informational and Resource links.