Windermere - Ryan Francescutti -- Ryan`s Blog

January 2010 Statistics

Tues, Feb 9, 2010

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

January has started out with a bang. Pending sales are up nicely which will lead to a good number of closings in February. For reference, King County pending sales are up 91.6% from last January and closed sales are up 41.4%. Active listings are down 10.9% from last January but are up a slight 2.1% from December. It’s very common for people to wait until after the holidays to put their homes on, or back on, the market.

Prices for King County are averaging $449,000 and $201/sqft which are both down just slightly (~1%) from December and from year ago levels. Snohomish County is averaging $307,000 and $152/sqft which is also down just slightly from December (~1%) but it is down about 5-6% from last January. Regardless, prices seem to be continuing the stabilization process that’s been occurring over most of the entire past year.

Days on market is running about 86 for King and Snohomish. Months of inventory has jumped to 9.3 for King and to 11.7 for Snohomish. Now, that is months of inventory based on closed sales, and with the big increase in pending sales with only a moderate increase in active listings, I expect that to drop back after this month but we’ll have to wait and see for sure.

To summarize, the combination of a new year, good weather, tax incentives, and low interest rates have all contributed to a large increase in activity in January. I expect that to continue for the next few months, at minimum, so if you’re considering making the plunge into a home sale or purchase-- Come on in, the water is nice and warm. J

December 2009 Statistics

Wed, Jan 6, 2010

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

Happy New Year! The market continued its seasonal trend of declining activity in December. However, it was definitely busier than a normal December. For King County, the number of listings declined from November as well as from December 2008, but Pending sales increased a whopping 85% from December ‘08 and closed sales increased over 33% from year ago levels. Snohomish County activity was also up significantly over ’08 levels.

Prices for King County are averaging $457,000 and $204/sqft which is pretty flat compared with November and down 4-5% from year ago levels. Snohomish County’s average price is $310,000 and $152/sqft which is down about 8% from year ago levels. Days on the market is running about 80 for King and 88 for Snohomish. Months of inventory is running 5.9 for King and 7.0 for Snohomish.

If you “zoom in” on the Lake Forest Park, Kenmore, and Shoreline areas, the statistics aren’t quite as clear. They seem to show worse behavior but if you look a little deeper, and if you’re immersed in the market as I am, I don’t have that opinion at all. In fact, I had an extremely busy December in our area and in all price ranges- from $300k--$750k. So, while the numbers say prices have declined double digits over the past year, I really think that is skewed lower due to lower priced properties selling more briskly. There is no reason to believe north King County is in any worse shape. Prices have declined a bit more in the outlying areas, compared with Seattle, but more inventory has also been cleared out. I could be getting too “cute” with my analysis but basically I’m saying that things seem fairly healthy at the moment and the tax credits and low interest rates are only helping to keep things moving. But at the same time, most in the industry seem to think interest rates will increase by the end of the year. Combining higher rates with an end to the tax credits is creating a significant unknown for how the market will do the second half of this year. So, my current advice for anyone contemplating selling this year is to seriously consider pushing their timeframe up a little if at all possible and try to make that move sooner than later.

November 2009 Statistics

Wed, Dec 9, 2009

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

Most every year, there is a seasonal slowdown as we hit November and December. This year is no exception as the number of listings and sales have all declined from October. But, and this is a big but, pending and closed sales are up over 70% in King County from last November, and closed sales were actually up 122% over last November in Snohomish County! I’m sure it’s a combination of the very lackluster market at the end of ’08, which makes the numbers easy to beat, as well as a bump in sales due to the tax credit that was originally going to expire at the end of November. Regardless, it’s pretty impressive.

Prices for King County are averaging $453,000 and $206/sqft which is pretty flat compared with last month and down a little over 5% from last year. Snohomish County’s average price is $306,000, down 2.5% from last month, and $158/sqft which is flat with last month. Since the average price is down more than the $/sqft price, that’s probably due to smaller less expensive homes selling better than the bigger homes. –That corresponds nicely to first time buyers trying to close before the end of the original tax credit. These Snohomish County prices are down 10-15% though over last November, which is a bigger drop than in King. That’s been the trend that King County has held up a little better than the surrounding counties. Whether that trend continues to hold up, who knows, but it’s no secret that homes closer to main cities/employment areas tend to have higher demand.

Keep that thought in mind when you’re looking for a home or evaluating the price of a home. When demand falls, prices generally also fall, but the price for a home that’s in bad shape or on a busy street, for example, will tend to fall more than the price for a similar home that’s in perfect shape or in a more desirable location or neighborhood. Basically, when there are fewer buyers, they have the luxury to be choosier and will seek out the best values, both in price AND condition/location.

Anyway, back to the action… Days on the market are 77-78ish in both counties and months of inventory ticked up slightly to 5.9 in King and decreased slightly to 6.3 in Snohomish County. On those notes, I want to make a couple anecdotal points. First, in looking closely at the area around me, I can tell you first hand that some properties are moving very well. I’ve had two listings recently, one in Kenmore and one in Brier, which have sold within 2 weeks on the market. One price point is the low $300k’s and the other is in the mid $700k’s so while the lower priced homes are selling a little better in general, even well priced more expensive homes are selling -again if they’re priced right. Further, one of those sellers has been looking for a new home and can’t find one they like! A lot of that has to do with the slower season and lack of inventory, but never assume that just because it’s 20 degrees outside and it’s the holiday season, that nobody is looking for a home to buy.

October 2009 Statistics

Mon, Nov 9, 2009

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

The trend continues with active listings decreasing and pending sales increasing. The number of sold/closed homes are flattish compared with last month. I have a feeling we’ll see a larger percentage of closings in November as the tax credit was set to originally expire at the end of this month. Of course, now it has been extended to the end of April 2010 so that should give some relief to those trying to close around the Thanksgiving holiday.

As far as prices go, King County is averaging $452,000 and $206/sqft which is slightly down from last month and down 7-8% from last October. Prices for Snohomish County are averaging $314,000 and $158/sqft which is slightly lower from last month and about 12-13% from last October. These values are equivalent to the prices in the middle of 2005 and are off about 25-26% from the peak in the middle of 2007.

Finally, days on the market is running at 76 for King and at 82 for Snohomish, and months of inventory in King County is down from 5.9 in September to 5.7 in October and Snohomish County is down from 7.3 in September to 6.8 in October.

Tax Credit Extended Until April 30, 2010

Fri, Nov 6, 2009

The homebuyer tax credit has been extended and expanded. Click this LINK for a nice breakdown of the changes to the tax credit. Here’s another LINK with Frequently Asked Questions about the changes. Last but not least, wahomeowners.com has more details on the credit as well as some other useful information.

I have a feeling that the new deadline will loom large early next year and another extension is probably not likely—but you never know. Regardless, if you’ve been considering a move, pulling the trigger in the next 6 months could get you your own little “bonus.”

September 2009 Statistics

Mon, Oct 12, 2009

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

So the trend is staying pretty much the same with active listings continuing to decrease slightly from the previous month but down considerably from last year. The pending sales continue to tick upwards while the closed sales are holding steady with the previous month. Like I said last month, this increase in the pending sales without the increase in the solds leads me to believe that some sales are stalling in the lending/escrow process. Some are indeed failing to close but the majority are still working out, it just may take a little more time than normal.

As far as prices go, King County is averaging $458,000 and $210/sqft which is fairly flat with last month and down 6-7% from last September. Prices for Snohomish County are averaging $315,000 and $158/sqft which is down more than 3% from last month and about 12% from last September. For what it is worth, this does look like it is a new low price in Snohomish County after the last major low in January. Whether this is a first sign of a continuation of the major trend or simply the effects of clearing out distressed inventory, we’ll just have to wait and see.

Finally, days on the market is running at 77 for King and at 83 for Snohomish, and months of inventory in King County is down from 6.4 in August to 6.3 in September and Snohomish County is up from 7.2 in August to 7.8 in September.

Time is running out…

Mon, Sep 14, 2009

Click this LINK for an article called “Crunch time for first-time buyers” that was just in yesterday’s Sunday Seattle Times. It discusses how the $8,000 first-time homebuyer tax credit is set to expire on November 30^th, and how you must CLOSE by that date to receive the benefit. You can also take a look at this short VIDEO that explains it as well.

Even if you’re not eligible for the credit yourself, you may want to push the fast-forward button if you’re thinking of selling before the end of the year. There will be some buyers scrambling to take advantage of the credit and with mortgage interest rates still hovering around 5%, it’s a prime time to take advantage of what should be a busy couple of months.

August 2009 Statistics

Fri, Sep 11, 2009

Please see the latest statistics by clicking directly on these links:

King County 5 Year Snohomish County 5 Year Lake Forest Park/Kenmore/Shoreline 1 Year

Just like last month, closed sales as well as pending sales continue to increase over last summer, and active listings continue to fall. For King County, sold homes increased only 0.6% over last August but pending sales increased 50%. Active homes decreased 21% from last year. Snohomish county’s sales increased 4.8% and pending sales increased 62% over last August. Active homes decreased nearly 26% from last year.

As far as prices go, King County is now averaging $461,000 and $209/sqft, down about 10% from last August and fairly flat from last month. Prices for Snohomish County average $327,000 and $164/sqft, down about 12-13% from last August, but up almost 1 percent from last month. Days on the market is running 74 days for King and 88 days for Snohomish, and months of inventory is 6.6 for King and 7.6 for Snohomish County, which are slight upticks from July.

I would like to highlight one interesting thing and that is the fact that while pending sales in both counties continue to climb rapidly, closed sales are only increasing modestly over last year, and both actually declined slightly in August compared with July. I believe this due to some of the “gridlock” problems with buyers and their lenders along with some failing appraisals. What it comes down to is that the sale/purchase is not final until the last minute when the title company records with the county on the closing date. Up until that point, nothing is 100% certain so it’s very important to be well informed on each step of the process and have a Realtor who’s on top of all aspects of the transaction from the very beginning to the very end.

July 2009 Statistics

Mon, Aug 10, 2009

Please click this LINK for statistics through July, 2009…

Closed sales as well as pending sales continue to increase over last summer, and active listings continue to fall. For King County, sold homes increased by nearly 2% over last July while pending sales increased 32%. Active homes for sale decreased 20% from last year. Snohomish County did even better by increasing solds by more than 15% from July 08 and pending sales increased by a whopping 53% over last year. Like King, Snohomish County also decreased its active listings by 25%.

For a sobering perspective, keep in mind that the number of sold homes is about HALF of what it was 5 years ago in July 04— and even with the moderation in new listings, the homes for sale are still about 25% MORE than what they were in July 04. Obviously, we had been in quite the seller’s market for some time, and recently we have swung completely into buyer’s market territory, so hopefully now we’re seeing some signs of the cycle starting to swing back to a more balanced market. The consensus seems to be that while we’ve seen the worst, it will still take quite some time to repair the damage that was done.

Anyway, back to the data… As far as prices go, King County is now averaging $464,000 and $210/sqft, down close to 15% from last July. Prices for Snohomish County average $324,000 and $162/sqft, down a little over 13% from last July. These prices are down slightly from June but still off the recent lows. Days on market are still running in the upper 90’s for both counties and for those who like to follow the months of inventory, we have 6.3 and 7 months for King and Snohomish Counties, respectively.

June 2009 Statistics

Thurs, July 9, 2009

Please click this LINK for statistics through June, 2009…

I was hoping for a positive year over year number for sold homes last month but it has taken one extra month to post positive sales, at least in King County. King is up 1.5% for sold homes, while Snohomish County is only down a modest 1%. The Lake Forest Park, Kenmore, Shoreline area is up 13% though compared with last June. The further good news is that pending sales continue to rise nicely and active homes for sale continue to fall. We’re now down to 6.2 months of inventory in King and only 7.5 months in Snohomish County. These levels are less than half of what they were when they peaked late last year and early this year.

As far as prices go, King County is averaging $492,000 and $214/sqft, down about 14% from last June. Prices for Snohomish County average $336,000 and $165/sqft, down 12-14% from last June. But, these prices did tick up slightly from May. As far as time on the market is concerned, both King and Snohomish are still running in the mid to high 90’s for days on market.

Anecdotally, time spent on the market can be significantly more OR less right now. It really depends on the home’s condition and being the best priced out of the competition. Well qualified buyers still have the upper hand in negotiating in this market, but if your home for sale is in tip-top shape and priced well, you shouldn’t have much to worry about.

May 2009 Statistics

Please click this LINK for statistics through May, 2009…

Last month, I was particularly interested to see how the number of sold homes in May would stack up compared with last year. I was hoping for flat to up, but indeed the sold and closed homes did still fall in comparison to last year. Solds were down about 10% in Snohomish County and about 20% in King. But, pending sales continue to rise at a rapid rate; nearly 55% higher than last May in Snohomish County and 35% higher in King. So, the sales are coming, we’re probably just looking at a little longer closings than normal.

That does make sense since I can tell you first hand that many lenders have been backlogged with refi’s in addition to all the new purchases. It’s more important than ever to have a lender/mortgage broker that prioritizes purchases ahead of refinances. Regardless, the upward sloping line for the pending sales definitely still bodes well for the foreseeable future.

As far as sales prices go, King County is averaging $456,000 and $207/sqft, down about 17.8% from last May. Prices for Snohomish County average $329,000 and $162/sqft, down 12-15% from last May. Days on market is at 95 for King and 97 for Snohomish, and months of inventory is running at 8.1 for King and at 8.7 for Snohomish County- both counties are now significantly off their double digit highs.

So all in all, the numbers are improving along with the sentiment. There is definitely some buyer support under this market which will hopefully prevent further declines, especially in price. But, the system is still “emotionally” fragile and any significant shocks could override the improving sentiment. My current advice: Whether you’re buying or selling, or both, strike while the iron is hot and take advantage now of the first time buyer tax credit, great prices, and good interest rates. All of these will not last forever.

April 2009 Statistics

Please click this LINK for statistics through April, 2009…

Though it’s a bit soggy outside as I write this, the flowers AND the real estate market are blooming. Time will tell whether we’ve hit the bottom or just a bottom. But things have definitely picked up, and you don’t have to look any further than the pending sales numbers. In March, I started focusing on the pending sales as they tend to be a leading indicator. And indeed the sales have continued to pick up quite dramatically in April.

For the first time in I don’t know how long, pending sales (home sales under contract but not yet closed) have increased from the prior year levels. We’re up between 18% in King County to 35% in Snohomish County over last April for pending sales, AND active listings are down between 19% in King to 25% in Snohomish which is helping to reduce the inventory glut. That has brought down the Months of Inventory to only 8.9 in King and 10.1 in Snohomish. Those are nearly cut in half from their highs late last year and the beginning of this year.

Prices for King County average $443,000 and $203/sqft, down about 19% from last April. Prices for Snohomish County average $331,000 and $161/sqft, down about 14% from last April.

The median and lower priced homes (sub $500k) still seem to be the ones selling with more vigor. I’m sure that’s due to a lot of first time buyers finally getting out and buying as well as a lot of distressed homes (short sales and foreclosures) being sold. But, even many of the mid-range homes that are priced fairly are getting quite a bit of activity and sales. And, rates continue to be the best in the $417k and under range and still quite attractive in the sub $567,500 range as that is currently the cutoff before you get into “jumbo loan” rates.

I’m particularly interested to see if May shows a year over year gain in number of Sold homes. I suspect it should be close to flat if not up for these two counties, but we’ll have to wait and see. I’ll give an update in early June!

March 2009 Statistics

Thurs, Apr 9, 2009

Please click this LINK for statistics through March, 2009…

This month, I’m going to focus on Pending sales as that tends to be more of a leading indicator than the sold properties. After a very quiet January and February the pending sales had a nice pop in March for both King and Snohomish Counties. The pending sales are still down 3% from last March in King County, but they are up 7.6% from last March in Snohomish County. This is the first year over year gain in quite some time.

Active listings only increased very slightly. So, with the increasing sales, the months of inventory has decreased from the lofty heights of the past few months. They are still high at 10.7 months for King and 12.3 months for Snohomish, but at least they are moving in the right direction.

Prices for King County average $429,000 and $197/sqft, down about 20% from last March. Prices for Snohomish County average $338,000 and $164/sqft, down 12%-14% from last March.

Interestingly, the average asking price in King County is $729,000 whereas it is only $439,000 in Snohomish County. So the spread between asking and the sold price is much larger in King. Under $500k seems to be the busiest price range in both counties… probably because it’s more affordable, especially for the first time buyers that are starting to get very active. Also, rates are much better in the lower price ranges.

April seems to be continuing where March left off, so I expect more “good numbers” after this month is over. Look for those stats in early May!

Tues, Mar 17, 2009

In my post from March 6^th (It’s All About Jobs), which I also sent out in a local newsletter, I received an “animated” email in response. I encouraged feedback and was hopeful to hear some differing opinions. This guy wasn’t interested in getting a dialogue going, he is just throwing mud to see if it sticks, but at the same time it does bring up some points that I’m sure others may be thinking about as well.

First is the email I received and then my response:

“You say in your recent “expanding horizon” that the government is the root of our financial crisis. What about
1. The real estate agents who sold homes to people who couldn’t afford them. The public goes to agents the way they go to a stock broker for advice. Bottom line-agents got their commission and some of the public got screwed. Agents should have pointed out the problems that could occur.
2. What about the mortgage brokers who sold mortgages to NINJAs (people who had No Income, No Job or Assets) These mortgages would obviously pose problems in the future. The brokers got their commission and the public got screwed. Of course loan documents are pages and pages of legal terms. Most of the public couldn’t understand. The public relies on Real Estate Agents and Mortgage Brokers to advise and help them, but commission is more important

Some of the public can be talked into anything. If you’ve ever been to a time-share presentation, you know it’s true.

3. What about the mortgage companies who bundled worthless NINJA loans and graded them as A+++ and sold them in the same way stocks and bonds are sold. There is fraud here and these people should go to jail.

WHY DON’T YOU TELL THE WHOLE TRUTH

Your comment about “redistributing the wealth” is apparently uninformed. We already do that. Presently we have six tax brackets( 10%, 15%, 25%, 28%, 33% and 35%). Apparently we are ALREADY “redistributing the wealth”. All President Obama wants to do is return the taxes on the wealthy to what it was before the Bush era and reduce taxes to the common man. The “trickle down” economics didn’t work during the Bush administration. The working man’s income, adjusted for inflation, decreased while executive compensation skyrocketed.

If you want to listen to Rush Limbaugh that’s fine, but don’t pass it on as the truth.”

While you make some very good points, I would like to pose a different perspective to your statements.

You don't know me so please don't assume that you know how I conduct my business. I am not a salesperson. I am a marketer and facilitator of real estate. I have NEVER forced, coaxed, or otherwise pressured anyone to buy a house. In fact, I’ve told many clients to be careful not to “bite off more than they can chew.” There have been and will continue to be many real estate agents and mortgage brokers who are “shady” and just in it for a quick buck. I intend to be in this business for a long time so it is very important to me that I am a good representative for my clients and that I inform them of all possible outcomes of their decisions. It doesn’t do me any good to encourage reckless behavior as I want my clients to come back to me in 5-10 or more years when they’re ready to make a move again.

Regardless, the “public” is not stupid. People make decisions for themselves and it is not my job to judge or tell them what to do or not to do. I can do my best to inform them of all the information and the potential outcomes of their actions. But again, people are human and emotion often gets involved in any purchase, especially big ones, but that doesn’t make them naïve.

You are right in bringing up the bundled worthless mortgages that were sold with AAA ratings. That is bordering on fraud. But, to be more accurate, it wasn’t the mortgage companies that gave them high ratings, it was the rating agencies that gave them high marks, and that is closer to the heart of the problem. Why wasn’t there closer examination and scrutiny by the SEC of these “exotic” assets and their subsequent ratings? It seems that everyone in the government dropped the ball and failed to do their jobs-- ALL of the government including the SEC, the FED, Congress, AND Bush. Existing regulations were not enforced and frankly common sense was not used and EVERYONE got used to the “easy money.” I am not being partisan- I didn’t like Bush, and I detest all politicians whose desires are to get their agendas through just to further their status as a career bureaucrat. And, at least thus far, Obama and his team seem to be clueless about how to clean up this financial mess so that is what I find most frustrating.

Now, it’s very obvious that we already redistribute the wealth through the tax system; it is just MY OPINION that FURTHERING redistribution will NOT make our country and economy stronger in the future. Keynesian vs. supply side economics both have merit but that’s a debate for another day.

And for what it’s worth, I don’t listen to Rush Limbaugh, so I can’t pass anything he says along as truth. If I’m bringing up similar points as he does, it’s coincidence. There are some well respected, non-celebrity types that are concerned with the state of affairs in the government. I’m not trying to be an alarmist. In fact, I am quite hopeful that things will turn out ok; I’m just concerned for our future and my children’s future.

February 2009 Statistics

Tues, Mar 10, 2009

Please click this LINK for statistics through February, 2009…

February statistics are out and I am encouraged. February was still relatively slow, but I definitely saw an uptick in activity towards the end of the month and even more so in the first week of March. But, since February is over, let’s take a look specifically at those numbers…

Both King and Snohomish Counties saw an increase from January in new listings, pending sales, and closed sales. They are all down from one year ago, however, but I think that’s ok given that many people had been waiting to see the results of the government’s actions. Average days on market contracted slightly to 85 days for King County and to 92 for Snohomish. Months of inventory is holding fairly steady in the 15-16month range.

As far as prices go, the average sales price for King County increased to $478,000, from $452,000 in January. That is still down almost 11% from one year ago, yet up 36% from 5 years ago. Similarly, the $/sqft price for King County also increased a bit to $215/sqft. That is still down over 12% from one year ago, yet up over 33% from 5 years ago. Snohomish County has the same trend with the average price at $327,000, up from $324,000 in January. That’s down 16% from 1 year ago, but up nearly 26% over the last 5 years. The $/sqft is at $161/sqft, down slightly from January and down over 14% in 1 year, but up almost 17% over the last 5 years.

As activity increases, consumer confidence will increase, and vice versa. Hopefully, spring will bring not only and end to the snow around here, but also bring a more positive outlook for an eventual economic recovery.

It’s All About Jobs

Jobs are the key to the housing market. When someone is gainfully employed and not fearing the loss of that job, that person can feel confident in planning future events. As the case is now, people’s actions are stymied by uncertainty. Also, as I’ve said before and I’ll say it again, home prices must come into parity with income. That disparity which has increased at an alarming rate over the past few years is obviously continuing its correction. And frankly, it is my opinion that the government is the root cause of the problem in the first place, so the best they can do now is to soften the blow. They are attempting to do just that with all the various programs being put in place, and I do believe that the stimuli will work to a certain extent. For example, the new tax credit of $8,000 for first time home buyers is a decent incentive, and I have clients currently taking advantage of it.

But again, incomes and house prices have to come into check. Home prices have made a substantial correction, and hopefully now incomes can be increased in some way rather than having prices come down much more. Artificial support of incomes by redistribution of wealth is certainly not the solution, however. Giving incentives to those who will use it to create new jobs and to those who will use it for innovation is the key to a long lasting, sustainable, increase in productivity and income. The current method of printing money until the ink runs out will do one thing— it will foster future inflation. The only good that will come of that is that at least eventually it will have the benefit of causing wage inflation as well. That probably will work to help bring income and house prices into check, but our overall level of wealth will be diluted.

My hunch is even stronger that we are heading down that second road. So, I will repeat what I said two months ago: If your time horizon is more than 5 years and if any part of my inflation scenario proves correct, you will never have such low fixed interest rates again, and your buying power may not be any stronger than it is right now. Fixed rate debt gets cheaper with inflation, so in the long run real estate could prove to be a good inflation hedge.

Stimulus for First Time Buyers

Here’s a nice chart showing benefits for first time homebuyers this year. The originally talked about $15k tax credit was reduced to $8k, and it still is only available to first time buyers, whereas they had discussed making the credit available to all buyers. But, at least it’s done and now buyers don’t really have anything else to wait for. Interest rates are great, conforming loan limits are being re-raised, and slowly but surely, buyers are coming off the fence as we head to the busy spring season.

January 2009 Statistics

Tues, Feb 10, 2009

Please click this LINK for stats through January, 2009…

January numbers are out and the results are mildly encouraging. For both King and Snohomish Counties, active homes for sale have decreased from December levels, which is the opposite of recent history. Usually people wait until after the holidays and you get a bump up in listings come the new year. Sold and closed homes did decrease to the lowest level in my charts history (5yrs), but pending sales did tick up which bodes well for February closings.

Square foot prices decreased about 15% from year ago levels in both counties to $204/sqft in King and to $163/sqft in Snohomish. These prices are still up about 20% though from 5 years ago. The average price came down to $456,000 in King County and to $322,000 in Snohomish County. Obviously, these are just averages across large areas so an average home in your neighborhood could vary significantly from these levels.

The average days on market is currently about 93 days in KC and 99 days in SC. And, the months of inventory is at 16 months + for both counties. I suspect these will both come down a bit as we get towards the busier spring season, however. Regardless, if you’re thinking of moving within the next 6 months, it would be prudent to start consulting a Realtor now to make your plan of action, given the lengthier market time.

Basically, I think it’s too soon to get much of a gauge of how this year is going to be. February and March will be better indicators to see if sentiment has changed and/or if the stimulus plan gets any buyers to come off the fence and get into the market.

Stimulus Package Update

Here’s some encouraging news I received today from the Washington Realtor’s Association. For what it’s worth, these are some of the exact things buyers are waiting to see happen- non repayable tax credits for all buyers, not just first time buyers, as well as higher conventional loan limits. There are a lot of buyers on the fence just waiting for this kind of encouragement. If the government can approve a package with these kinds of items and then frankly get out of the way, in the sense of not promising anything else in the future, these incentives along with the low interest rates will be enough to increase activity so that inventory can be reduced. That will be the best thing to stabilize the housing market, which will in turn make everyone feel more confident, which will in turn help to turn the economy around…

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Washington Economic Stimulus Package Update

Good news you can share with your clients

Due to the efforts of the National Association of REALTORS® and specific members of Congress, we are making significant progress in regards to housing provisions in the National Economic Stimulus Bill.

Last week, the US House of Representatives passed the American Recovery and Reinvestment Act (H.R.1). This bill has some key provisions that will stimulate the housing market:

· It will restore FHA, Fannie Mae and Freddie Mac to 125 percent of median home prices - up to $729,750

· It would eliminate the repayment provision for the $7,500 first time home buyer tax credit

· It expands tax-exempt housing bonds

Two days ago, the Senate approved an amendment to their bill that offers up to a $15,000 tax credit to people that purchase a home in the next year. The credit would apply to anyone, not just first time homebuyers and you would not need to repay the credit. The credit is based on 10% of the purchase price of the home and the credit is spread over two years. So for example, if you buy a house with a purchase price of $300,000, you would qualify for the maximum credit of $15,000. The first year you claim the credit, you receive $7,500, and you would receive the remaining $7,500 the next year.

Senator Patty Murray Introduces Housing Amendment

In addition to supporting the $15,000 credit, Senator Patty Murray (D) Washington, has introduced her own amendment to the Senate Stimulus Bill relating to the FHA and conforming loan limits. Specifically, Murray's amendment:

· Ensures that the 2008 FHA mortgage limits and conforming loan limits do not decline during calendar year 2009.

· Provides discretion to the Secretary of HUD and the Director of the Federal Housing Finance Agency (FHFA) to raise loan limits in sub-areas, up to the conforming ceiling for high cost areas.

· Temporarily increases FHA's Home Equity Conversion Mortgage (HECM) limit to $625,500 for 2009.

"On behalf of all American families and over 20,000 Washington REALTORS® I'd like to thank Senator Patty Murray for introducing this amendment to the Senate Stimulus Bill to increase the loan limits" said Greg Wright, President of the Washington REALTORS®.

The Senate is considering its version of the bill. We anticipate much more debate and some changes in the days ahead, so please check Realtor.org often for updates.

Once the Senate passes a bill, we expect lawmakers to hold a conference to work out the differences, before sending it along to the President. The President wants a finished product by February 16, 2009.

December 2008 Statistics

Please click this LINK for stats through December, 2008…

End of year statistics are even more interesting to look at for assessing the previous year as a whole and also to see what the future could bring. For King County, active listings increased by 8.6% from the end of ‘07, but the number of sold homes decreased a healthy 32% while pending sales decreased only 8.7%. That means there were a larger number of homes selling under contract, but not actually closing yet. This probably is a result of some bargain hunters coming out and buying homes that are in or near foreclosure, but those types of properties can take longer to close due to the added negotiations with the lenders. Months of Inventory is at 10.7, down just slightly from November, but still very high, and the days on market has increased to 84.

The average sold price for King County is $484k which is down 10.5% from December ’07, but for perspective, that is still up 32.6% from December ’03. The average price per square foot is $214/sqft which is down 12.2% from ’07, but still up 31.7% from the end of ’03. Again, for reference, the average price in King County is now down 23.8% from the peak in the spring/summer of ’07 and the average price per square foot is down 25% from that same time.

For Snohomish County, active listings are down 4.8% from December ’07, sold homes are down a whopping 39.2%, but like King County, pending sales are only down a moderate 0.7%. Months of Inventory is at 14.5 which is also down slightly from November, and the Days on Market is holding fairly steady at 93. The average sold price in Snohomish County is $336k which is down 12.3% from December ’07 and a total of 27% from the highs in early ’07, but still up 27.8% from December ’03. The average price per square foot is $165/sqft which is down 13.3% from December ’07 and 27% from early ’07, but still up 22.9% from December ’03.

Looking specifically at the Lake Forest Park, Kenmore, Shoreline area, the number of active listings is the same as one year ago, but sold homes decreased 34.5% and pending sales are down 14.3% from December ’07. Months of Inventory nicely continued its decline to only 7.2 months- that is down from the high of 13.3 in September. Days on Market fluctuates quite a bit in this small sample but it is at 75 which is about the middle of the recent range. The average price is at $418k which is down 8.3% from December ’07, and down 28.5% from the peak in early ’07, but still up 44.6% from December ’03. The price per square foot is $192/sqft which is down 18.2% from December ’07, and down 34.4% from the peak in early ’07, but still up 39.6% from December ’03. Again, there were only 19 properties that sold last month so it is definitely important to cross reference with the overall county numbers. I think this data does show that this area is a desirable area- hence the greater than average increases over the last 5 years. But, like many markets, the higher and faster you climb, the quicker and deeper the decline. Though, the specific fact that Months of Inventory has declined ahead of everyone else ‘may’ be a precursor to the idea that the more desirable areas will be the first to rebound.

Rosy Eyed Armageddon

There seems to be 2 different extreme schools of thought right now…

1- The Armageddon scenario: Due to the excesses of these last few years, the economy will not be able to recover anytime soon no matter how much money the government throws at it. We are in a very severe recession and possibly another depression. Housing is still at unsustainable levels and the market has to self correct to bring prices down to where people can afford a legitimate mortgage again.

2- The Rosy Eyed scenario: We are in different times and a “new economy” in which the coordinated world government’s stimuli will be able to prevent the Armageddon type melt down. Really, we’re just building a base for a new bull market that will be fueled by a huge productivity and consumption phase created by a myriad of new strong emerging markets. As one of the largest economies in the world, we will benefit.

Frankly, we can probably head down either path at this point. There is evidence for both positions, but more than likely, I believe that we’ll probably end up in the middle. I think all the efforts to prevent a disaster will be effective, but not without some serious costs. While we won’t head into the abyss, it’s also going to be too difficult to climb the mountain with the weight of the massive bailout backpack on our shoulders. That debt cannot be ignored, but my theory is that as the possibility of the Armageddon scenario reduces with the passage of time, we will start to deal with absorbing the ramifications of printing all this money. Since we’ve already decided not to let the free market take care of housing prices or companies that made bad decisions, I think there is a good chance that we’ll inflate our way out of it. Meaning that house prices will bottom out soon and flatten for awhile, but as inflation starts to really get going, incomes will increase to make homes more affordable. Of course, we won’t really feel richer, since our incomes may not keep up with the prices of everything else. But, since house prices need to return to a more “affordable“ level without the use of all those fancy loose loans, at least housing can return to a mean without necessarily going down too much more in price.

My point is to say that it could be a very good time to buy real estate right now. If your time horizon is more than 5 years and if any part of my inflation scenario proves correct, you will never have such low fixed interest rates again and your buying power may not be any stronger than it is right now. Fixed rate debt gets cheaper with inflation, so in the long run real estate could prove to be a good inflation hedge.

November 2008 Statistics

Please click this LINK for stats through November, 2008…

Given the time of year, it’s not surprising for activity to decrease in general and that is indeed the case for King and Snohomish Counties. You can look at the charts yourself for specifics, but I’ll give a general overview and perspective here—

For King County, active listings are up 3.4% from last year, but solds and pending sales have decreased 46% and 18% respectively. The average sales price and $/sqft price has declined about 10% from last year at this time, and about 20% total from the peak in ’07, but we are still up 30% from 5 years ago! Even though active listings are decreasing from past months, the number of sold homes are decreasing faster and therefore the Months of Inventory has reached a new high at 13.6.

For Snohomish County, active listings are down 5.5% from last year, but solds and pending sales are down 52% and 22% respectively which has also spiked the Months of Inventory to a new high of 18.7. The average $/sqft price declined 10.4% from last November and about 15% from the peak in ’07, but it is still up 29.1% from 5 years ago. Similarly, the average sales price has declined 8.2% from last year and about 16% from the high, but it is still up 38.8% over 5 years!

Focusing on the Lake Forest Park, Kenmore and Shoreline areas, active listings have also decreased from earlier in the year and is 6.2% lower than last year. Solds and pending sales have declined as well by about 32-35%. This is better than both counties overall which shows as a benefit in the Months of Inventory as this area has come down to “only” 7.9 months. With a relatively small number of sold properties, it’s hard to put huge emphasis on the prices, but we’ll look anyway—The average $/sqft price decline is 20.4% from last November and 28% from the highs, but again it is still up over 23% from 5 years ago. The average sales price is actually up 1.7% from last year, but down 10% from the high and still up 48% from 5 years ago. Again, let me emphasize that the small sample skews these numbers quite a bit. Look at the overall county data for a more accuracy.

5.0% for a 30 year FIXED rate! Click here to check rates at Windermere Mortgage Services. Lance Morgan is a great resource for all your mortgage related questions. Contact him at 206-306-9483 or at lancemorgan@windermere.com.

Another positive article about Seattle Real Estate…

October 2008 Statistics

Please click this LINK for statistics through October, 2008…

To recap the real estate statistics for King County, the number of active listings, pending sales, and closed sales have all decreased from September. The numbers of pending and closed sales have decreased about 20% from last year at the same time. Active listings are up slightly from last year, but they are decreasing as they normally do going into the holiday and winter season. Prices declined to $225/sqft from $227/sqft in September and from $254/sqft last October. The average sales price actually rose very slightly to $489,000 from $486,000 in September, but that is still off about 10% from last year’s level of $549,000. Days on market increased slightly again to 76 and the months of inventory rose as well to 9.7, nearly matching the high of 10 back in January.

For Snohomish County, the directions of movement are similar although there are fewer active listings than last year which I think is a good sign since there has been a huge glut of homes for sale in that county. Although, with even fewer sold, the months of inventory is at a new high of 13.5. Average price/sqft actually increased a bit to $182/sqft from $180/sqft in September but again that is down about 9% from last year’s $200/sqft. The average sales price did decline to $355,000 from $360,000 in September and from $409,000 one year ago. Days on market is near the highs at 95.

Focusing in on the Lake Forest Park, Kenmore, Shoreline area; active listings are down significantly to 167 from 199 in September and 189 last year. Pending and closed sales have held even with last month at 24 and 15 respectively. The steady sales combined with the decline in new listings have reduced the months of inventory in our area to 11.1—still very high compared with recent history. After the slight uptick in prices last month, they’ve rolled over again and are now at $202/sqft vs. $214/sqft in September and at $354,000 vs. $384,000 in September. Again, the low number of sold properties can add to the volatility of prices as well as other stats such as the spike in Days on Market to 121. It is usually more useful to use the full county report to give you a better indication of averages in most of the categories.

Glass Half Empty or Glass Half Full?

Between the massive meltdown of our financial system, including the implosion of some major companies, and the election of a new president and administration, it’s not surprising that many people have chosen to stay on the real estate sideline waiting to see how the “dust settles.” I do like to point out that one major benefit of owning real estate is that a house is a much less liquid asset than a stock, for example. Therefore, while it may be more difficult to sell a home at a given time, it is also less likely to have its value cut in half in one day. My point being that real estate is and will always be a sound investment in the long run. Plus, you can live in a home or rent it out for income, whereas a stock certificate won’t keep you very dry in our wet fall weather.

The real estate market may very well still have a way to go to retrench and to absorb the excesses of previous years. It will also hinge on how fast or slow the economic recovery will be for the overall country. We’re still better off here in the Puget Sound where buildable land is at a premium and where we have a multitude of quality companies, not just one major corporation or industry. Unemployment will probably continue to increase for a while and that will be a defining factor on people’s actions since good paying jobs increase confidence and in turn allows people to get loans with which to buy homes. Thankfully, the reckless approval of questionable loans has ended, but unfortunately that has had the net effect of decreasing the affordability for many- partially leading to our current debacle.

Regardless, people will always need and/or want to move for various reasons so there will always be buyers and sellers. So, if you’re someone who needs or wants to move in the near future, it is still possible to sell your home and get mortgages these days. And even if you can’t get as much for your home as you could last year, you will still benefit on the purchase side. Use a Realtor who knows the local market and current effective strategies as an advocate to market you aggressively against the competition and to get you the best deal on both sides in the least amount of time.

Here are 2 recent articles showing some positive signs for Seattle Real Estate:

Forbes.com

Seattle PI

September 2008 Statistics

I will often be sharing a tool I use called Trendgraphix. It is a website that compiles statistics from the Northwest Multiple Listing Service and puts them in a nice and "pretty" format. Please click this LINK for statistics through September, 2008.

To recap the real estate statistics for King County, the number of active listings, pending sales, and solds have all decreased slightly. Prices declined to an average of $227/sqft and to $486,000 vs. $234/sqft and $512,000 in August. Days on market increased slightly to 74 and despite the decline in listings, the Months of Inventory increased to 8.8, the highest since it reached 10 in January.

For Snohomish County, the directions of change are pretty similar although the Days on Market time is at 84 and the Months of Inventory is at a new high at 11.5. Prices in Snohomish County average $180/sqft and $360,000 vs. $186/sqft and $378,000 in August.

Narrowing the search further to my "home area" of Lake Forest Park, Kenmore, and Shoreline... The statistics show that while the inventory of available homes also decreased slightly to 199 from 205 in August, sold and closed homes were nearly cut in half to only 15 from 24. This made the Months of Inventory skyrocket to 13.3. But, prices did actually improve to $214/sqft from $209/sqft, and to $384,000 from $375,000. Take that info with a grain of salt however, as only 15 sold homes can skew the numbers a bit.