The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/King County area over the past 3+ years, for single-family homes and for condominiums.  The volume of residential sales continues to rise, median prices seem to be starting to rise, and the number of homes available in the lower prices ranges is dropping significantly.  Months-Supply, a key measure of market health, has (good news) stayed below the magic balance point of 6 months, and the lower price ranges are doing even better.  Buyers today are seeing their smorgasbord of choices diminish rapidly, and are going to have to start honing their decision-making skills again.  There is quite a bit of good news in terms of number of new purchase transactions completed, and the large Pending backlog discussed a couple of months ago is coming down significantly.  Here’s the charts for the current stats: (Required disclaimer: Statistics not compiled or published by the Northwest Multiple Listing Service)

Residential Sales Charts          Condominium Sales Charts

The number of sales transactions closed was up again in July, now five months running and feeling pretty solid, and continuing above year-ago levels for single-family homes.  People are definitely getting off the fence and starting to buy again, and they are flattening the growth in inventory of houses for sale.  The Months-Supply measure of residential inventory, i.e. houses for sale, is down dramatically from 6 months ago, and staying down – although that good news is mostly still in the lower part of the price range.   The rise in condominium inventory seems to be blunted too, now holding at levels below those of a year ago, and condominium Months-Supply is down nicely as well. 

Residential Sales Charts       Condominium Sales Charts

Given all the doom and gloom we hear about the housing market, it is fair to ask “How could that be?”  So here’s my take on it: What it looks like to me is that we may be in the early stages of a local housing shortage for single family homes. 

While Seattle and the west side have been built out for decades, Bellevue and the east side communities have been absorbing most of the region’s growth for the past 50 years or so.  But we passed the Growth Management Act in 1990, and then we added the Critical Areas Ordinances.  As a result, it has become harder and harder to get permits for housing developments of any significant size.  In fact it appears that over the last 10 years or so it has become far easier to get a permit for a 100-unit condominium high-rise than for a 100-home residential development.  And the rate of application for new building permits “fell off a cliff” last Fall, to use a phrase I heard recently, and new permits this year are running at less than half the level of this same time last year, and construction employment is continuing to drop.

So now we seem to have more condominiums than we have people who want to live in them.  And we seem to be developing a shortage of single-family homes compared to the number of people who want that suburban neighborhood lifestyle.  We still have a strong economy and a growing population, and if the people who want single family homes have to start competing for them, prices will start to rise again – and it looks like they are. 

It is a somewhat lopsided recovery, but it may be a real one.

The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/King County area over the past 3+ years, for single-family homes and for condominiums.  The volume of sales continues to rise, median prices seem to starting to rise, and the number of homes available in the lower prices ranges is dropping significantly.  Months-Supply, a key measure of market health, is (good news) dropping rapidly.  Buyers today are seeing their smorgasbord of choices diminish rapidly, and are going to have to start honing their decision-making skills again.  There is quite a bit of good news in terms of number of new purchase transactions completed, in spite of a continued large Pending backlog as discussed last month.  Here’s the charts for the current stats: (Required disclaimer: Statistics not compiled or published by the Northwest Multiple Listing Service)

Residential Sales Charts      Condominium Sales Charts    

The number of sales transactions closed was up sharply again in June, now four months running and feeling pretty solid, and also now actually above year-ago levels for single-family homes.  People are definitely getting off the fence and starting to buy again, and they are flattening the growth in inventory of houses for sale.  The Months-Supply measure of residential inventory, i.e. houses for sale, is down dramatically from 6 months ago – although that good news is mostly still in the lower part of the price range.   The rise in condominium inventory seems to be blunted too, and condominium Months-Supply is down as well.  This is beginning to look suspiciously like a recovery.  

If you have any questions or just want to swap ideas on any real estate-related topic, we are always available to help you.  And because our business depends on referrals, we appreciate your keeping an ear out for likely candidates to send our way – buyers, sellers, investors or friends who may be in financial trouble and need to consider a short sale – we’ve got a lot of info, and maybe we can help. 

Sincerely,    

       Chuck and Diane 

Here’s the graphs for the current stats: (Required disclaimer: Statistics not compiled or published by the Northwest Multiple Listing Service)

Residential Sales & Stats      Condominium Sales & Stats    

   The number of sales transactions closed was up sharply again in May, now three months running and feeling pretty solid, although still 25+% below year-ago levels.  People are definitely getting off the fence and starting to buy again, and they are almost flattening the growth in inventory of houses for sale.  The Months-Supply measure of residential inventory, i.e. houses for sale, is down dramatically from 6 months ago – although that good news is mostly still in the lower part of the price range.   The rise in condominium inventory seems to be blunted too, and condominium Months Supply is down as well. If you have any questions or just want to swap ideas on any real estate-related topic, we are always available to help you.  And because our business depends on referrals, we appreciate your keeping an ear out for likely candidates to send our way – buyers, sellers, investors or friends who may be in financial trouble and need to consider a short sale – we’ve got a lot of info, and maybe we can help. 

Sincerely,    

Chuck and Diane 

Historically the fall-out rate has been well under 10%, but then in early 2008 the fall-out rate started climbing like a rocket.  Recall that we had the mortgage market meltdown in late 2007, and lenders started dramatically tightening their lending practices.  Then we had the larger financial and business crash in late 2008, and more people started losing their jobs – and the other 90% got nervous.  It was also in late 2008 that we started seeing a lot more short sales in our Seattle/Bellevue area.  In a short sale, the insolvent seller is trying to avoid foreclosure by selling the property and getting the lender to accept less than is owed on it.  That lender approval process is often slow and uncertain, and it certainly is contributing to this rise in the Fall-Out Ratio. (more on Short Sales)  Short sales may be 20% or more of our current sales activity, and those delays may also be a major contributor to why the average Days-on-Market measure isn’t dropping in concert with Months Supply.  Other contributors to the fall-out rate would include failure to reach agreement on inspection, and failure to complete financing.  I wouldn’t expect the inspection issue to have changed much, but the financing process has certainly gotten tougher.

The seminar will be on Tuesday, June 16 from 6:30 to 8:00 pm in Kirkland, WA.  Details are in the flyer.

Over 600 people attended this seminar last year.  Please let me know if you’d like to attend this one: chuck@reilingteam.com.

Chuck Reiling 

www.reilingteam.com

In that west Bellevue area there were 313 active listings for single family homes.  I scanned through the agent summaries for each looking for “subject to lienholder approval” or some similar phrase.   I found 32 listings that were short sale, about 10% of the total, and 5 that were bank owned, less than 2% of the total.  So, as we sensed, there are quite a few short sales going on, and they have been affecting prices.  As a side note, the number of condo short sales in this area is very low, and I did not track it further.  That happy state may not reflect the travails of the builders of all the new condo towers in Bellevue – they may be unable to use the short sale process on unsold units in the way that individual condo owners can.   

Some other interesting observations out of this little study – this is a relatively high-priced area: 68% of the listings are over $1 million.  But 67% of the short sales are under $1 million.  Short sales are part of what is pushing the lower price range inventory down, just as in other parts of the country.

And last of all, in the past two and a half weeks 14 of those shorts have gone under contract (MLS status = Pending) and 1 more has closed (MLS status = Sold) – sounds like a pretty hot absorption rate to me

Chuck Reiling

www.ReilingTeam.com

The chart below offers you a set of headlines to pick from – all are based on exactly the same set of data, using a home sales scenario which is pretty similar to what we have been experiencing here in Seattle.                Which Headline Would You Choose?  

The key to that great range of headline choices is the mix – how many sales of homes and in what price-ranges, and how the mix has changed.  If you are a numbers junkie, here is the case data.  Watch the mix as well as the sales!

Chuck Reiling

www.reilingteam.com

As you can see in this March 22nd snapshot chart of Months Supply by Price Range in Seattle, Bellevue and King County, even as slow as things seem, properties in the lower price ranges are selling fairly well – while properties in the higher ranges are still languishing.              

It could be a good time for a move-up buyer – your leverage will be better on your purchase in the higher price range.  You might get squeezed a little on the sale of your lower-priced home, but be able to squeeze a lot more on the purchase price of your next home

Chuck Reiling

www.ReilingTeam.com

(originally posted on 3/9/09, updated 4/9/09)

This is beginning to look like a ’shoulda’ year.  House prices rolled back
three years, interest rates at historic lows, lots of inventory and
bargaining power.  The kind of year where maybe 5 years from now you will
say to yourself “I should’a bought then.”  But of course it doesn’t feel
very good right now, does it?  When the market is hot, buyers have to decide
quickly, bid high, and often take their second or third choice house – but
it is exciting and often seems fun – everybody is doing it .  When the
market is cold, buyers can take their time, bid low, and usually get their
first choice house – but it seems lonesome and uncertain out there – and not
nearly as much fun .  That ‘high is hot/low is cold’ syndrome is why it
is so hard for any of us to actually buy low and sell high, in any type of
market.  But here is that opportunity we always say we want – low prices,
low interest rates, lots of choices: the opportunity to buy your first home
(with lots of extra government incentives), the opportunity to buy up for
that better home, the opportunity to buy that investment property that will
pay for your kids college education or build your retirement nest egg.  It
takes clear goals and lots of willpower to buy when others are fearful, but
maybe this is a ’shoulda’ year.

Chuck Reiling

www.reilingteam.com

(entry originally published 2/17/09)