Brokers say home buyers are back, but they’re choosy

Home buyers are back, and they’re savvy and selective, according to officials who commented on the latest statistics from Northwest Multiple Listing Service. For sellers, that means pricing a home correctly at the start is vital.

The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices. Northwest MLS members reported 8,643 pending sales last month, which is up nearly 6.9 percent from twelve months ago when members reported 8,086 mutually accepted offers. Most of the increases are from sales of single family homes, which rose more than 7.8 percent while condo activity was flat with less than a 1 percent rise in sales.

Broker says Western Washington housing market “definitely in full recovery mode”

 

 KIRKLAND, Wash. (Feb. 5, 2014) – Home sales during January may not have been as super as the Seahawks’ performances, but brokers cite several reasons for optimism during 2014. “We are finally going to be looking at the ‘housing crisis’ in the rear view mirror,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “In 2014 we are definitely in full recovery mode,” he added.

 

Following the usual pause during the holidays, activity picked up during January when members of Northwest Multiple Listing Service reported 7,044 pending sales, about even with the same month a year ago, and a jump of nearly 35 percent from December’s total of 5,224 mutually accepted offers.

Inventory, while improving, continues to be a source of worry.

“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014,” Gain added, emphasizing there is pent up demand and “a very active market is anticipated once the number of listings increases.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate agreed. “Available inventory remains tight with shortages or low inventory where 90 percent or more of the sales activity is taking place,” he remarked.

Members added 7,342 new listings to inventory during January, improving on the year-ago total of 7,096. With those additions, the selection increased to 19,195 active listings across the 21 counties served by Northwest MLS. That’s up 6.6 percent from the same period a year ago when there were 18,008 listings.

Thirteen counties have more listings than a year ago, but eight counties are reporting declines in total inventory. “We are literally starving for inventory. We need more homes to sell, especially in the most desirable neighborhoods,” Gain stated.

Area-wide there is about 4.5 months of inventory, an amount at the low end of the 4-to-6 month range most analysts deem to be a balanced market. At this time a year ago, there was about 4.2 months of inventory. The tightest supplies are found in King County (less than 2.5 months) and Snohomish County (3.5 months).

Note to editors/reporters: Effective with January 2014 reports, Northwest Multiple Listing Service is calculating months of inventory using closed sales, rather than pending sales. While there is rationale for using either method (as well as a 12-month rolling average favored by some analysts), the MLS is switching to closed sales to facilitate comparisons with NAR and some other groups. Figures above for 2013 are also calculated using closed sales.)

One of the counties with fewer listings is Kitsap, where there is about 5.2 months of supply, down from the year-ago figure of 6.6 months.

Northwest MLS director Frank Wilson, the branch managing broker at John L. Scott in Poulsbo, described overall activity in that market as healthy. “Homes are still coming on the market and buyers are still buying them,” he commented, but noted they are starting to see a bit of stratification on prices.

“Homes that are overpriced are sitting on the market a while, but homes that are priced correctly for today’s market may receive multiple offers,” Wilson explained. Countywide prices are down about 9.4 percent from a year ago. His analysis indicates prices on waterfront listings are lagging, and MLS data indicate prices on condos (a small segment of sales) dropped by double digits compared to a year ago.

Overpriced homes are also a concern in Snohomish County. “Even though we have a nearly 40 percent increase in inventory compared to a year ago, many listings are overpriced, and buyers are not interested in making offers on those properties,” reported Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain.

“We are not yet fully recovered from the recession and sellers need to be realistic in expectations of the value of their homes,” said Haines, a member of the Northwest MLS board of directors.

The most desirable listings in Snohomish County are still receiving multiple offers, Haines noted, while acknowledging activity is “not as frenzied as a year ago,” due in part to lingering doubts about the future of Boeing and other factors. She said new developments are drawing strong interest and traffic. “In some locations reservation agreements are being taken for homes not yet built with many of these developments already getting close to selling out,” she reported.

Home prices area-wide increased nearly 6.6 percent from a year ago, but dipped from December. The median price for last month’s closed sales of single family homes and condominiums was $255,055, rising from the year-ago figure of $239,300. ). In King County, where nearly one of every four closings occurred, the median sales price was $364,875. That represents an increase of 15.8 percent from the year-ago price of $315,000.

Single family prices (excluding condos) increased from $249,200 to $264,995 (up more than 6.3 percent).

Condo prices surged 14.8 percent, from $169,000 a year ago to $194,000 for last month’s sales.

“Years 2012 and 2013 were fantastic recovery years,” said Scott. “We have now experienced two years of positive price appreciation after the five years of market correction,” he added.

MLS director George Moorhead said recent fluctuations in interest rates and upticks in online activity are noteworthy. “We have all seen interest rates go up and down, but I have not seen such an immediate response from buyers,” he remarked. Moorhead, the branch manager at Bentley Properties in Bothell, also reported a 30 percent increase in online activity in the past few weeks.

Gain expects the rebound to be fueled in part by “repeat move-up buyers” and first-time purchasers. “The first time buyer will return to the marketplace in 2014. With the economy improving they will finally be able to move out of their parents’ homes and when comparing renting verses buying, many will choose homeownership,” he stated.

Brokers point to recent reports of the state’s unemployment rate dropping to 6.6 percent, the lowest in five years, as a positive thrust for home sales, but also cited factors that could hamper activity.

“There are always issues surrounding real estate that erode confidence in the market,” Wilson commented, citing uncertainty on flood insurance. “Until Congress takes action to continue the flood insurance subsidy, people buying in flood-prone areas may suffer sticker shock when they see the premium for coverage,” he believes.

Among other factors brokers mentioned as threats to activity are:  

·        “The volatility of the roller coaster stock market, the new financing and appraisal rules imposed by Dodd/Frank, and fatigue being felt by many buyers who were unsuccessful in purchasing last year.” (Diedre Haines)

·        Rising interest rates and tighter lending requirements. Short sales are waning as buyers encounter long timelines and uncertainties. (George Moorhead)

Mike Grady, president and COO of Coldwell Banker Bain, expects activity to continue picking up until May. “Inventory levels are pretty much the same as they were a year ago. Now we’ll have to wait and see if the sellers come out,” he remarked.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

“Stage is set for another good year” in real estate with year-end gains in inventory, sales, prices

KIRKLAND, Wash. (Jan. 6, 2014) – Brokers with Northwest Multiple Listing Service ended 2013 with the best year-over-year improvement in inventory (up 8.4 percent) and a similar gain in closed sales to buoy confidence heading into the new year. December’s pending sales slipped slightly (down about 1.7 percent) compared to the same month a year ago.

“Positive job growth and the continuation of favorable low interest rates are setting the stage for another good year in real estate,” said J. Lennox Scott.

Friday’s narrow approval of Boeing’s contract proposal for Machinists union members bodes well for members of Northwest Multiple Listing Service and the real estate industry.

Reacting to the vote, MLS board member John Deely said, “The robust and diverse economy of the Pacific Northwest is solidified by Boeing’s continued presence in the Seattle area.” Deely, the principal managing broker at Coldwell Banker Bain in Seattle, said the vote helps secure the region’s position as “the aerospace epicenter of the world with top-notch manufacturing jobs that support the industry.”

Boeing workers and others hoping to buy a home have a bigger selection of homes to consider than house-hunters who were looking twelve months ago – especially in Snohomish County, where the number of active listings is up 43.6 percent.

Northwest MLS members added 4,333 new listings during December, improving on the same period a year ago by 476 listings for a gain of 12.3 percent.   At month end, there were 19,214 active listings in the MLS database, improving on the year-ago supply by 1,496 listings for a gain of 8.4 percent. In Snohomish County, which had the largest jump in supply (43.6 percent), the selection of condos nearly doubled from a year ago, increasing from 172 to 342 listings.

We sold this Lacey Washington home in less than 15 days in the month of December, a normally quiet market for real estate but robust this year.

Pending sales activity during December was mixed around the 21 counties in the MLS service area, with 11 counties showing increases in mutually accepted offers and the other 10 having fewer pending sales than the same month a year ago.  An imbalance between supply and demand could be crimping sales in some areas. As we head into 2014, we will be starting the year with a shortage or low inventory.

Brokers notched 5,710 closed sales last month, improving on the previous year by 443 transactions for a gain of 8.4 percent. During 2013, Northwest MLS members tallied 75,517 closed sales system-wide. That total outgains the previous year’s volume of 64,624 closings for an increase of nearly 16.9 percent.

 “The luxury market will continue to see an increase in sales activity and home values in 2014,” Deely proclaimed. “This market will be driven by pent up demand and by the owners of trophy properties who are confident that values have returned to acceptable levels,” he added.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 21,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

September/October 2013 Market Pulse: Interest rate hikes and rising home prices are taking a toll on sales

July saw a monthly dip in pending sales nationally, though the rate was above one-year-ago figures for the 27th straight month. Higher prices are affecting the availability of FHA financing in some areas. And some areas are seeing higher mortgage and flood insurance premiums. On the plus side, households are jumping into the market to buy before rates and prices rise further. All trend lines are from July 2012 to July 2013.

Existing-home sales is a seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences. Pending home sales is an index that measures -housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year. Price indicates the national median. Inventory measures the number of existing homes on the market at the end of the month. 

Buyer and seller traffic, current conditions, six-month expectations, and time on market derive from a monthly REALTOR® Confidence Index. Results for July are based on 3,342 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Some data may be revised from previous issues.  Information from the National Association of REALTORS September/October 2013

Four Reasons Why Home Sales Are Looking Healthy

  At first glance, Wednesday’s report that sales of existing homes gained by just 0.6% in April, after adjusting for seasonal factors, seems unremarkable.

But the modest gain understates what was a relatively solid report. Sales were up by 9.7% from one year ago to an annual rate of 4.97 million, which was the highest level since November 2009, according to the National Association of Realtors. (To be sure, home sales have stayed within a narrow band between 4.9 million and 4.97 million units for the last six months).

Here are four reasons why Wednesday’s report is a sign of progress for housing:

1. Sales have increased from their year-earlier levels even though there are significantly fewer homes for sale. The 2.16 million homes for sale in April was 13.6% below last year’s level. So far, significant price gains over the past year haven’t slowed sales, partly because low interest rates have allowed buyers to swallow higher prices without seeing much gain, if any, in their monthly payment.

2. Sales of non-distressed homes are picking up. Around 18% of sales in April were a foreclosure or a short sale, down from 28% one year ago. Big drops in the availability of foreclosures and other short sales haven’t yet produced declines in reported sales volumes, which means home buyers are increasing their purchases of non-distressed homes.

In California, home sales fell by 4% in April from one year earlier, according to real-estate data firm PropertyRadar, but this headline masks big changes. Distressed-property sales fell by 39.4% from a year earlier, while sales of non-distressed homes rose by 36.6%. When or whether the non-distressed component can offset the decline in the distressed component will be an important milestone in a housing recovery.

3. The number of homes for sale jumped by 11.9% in April from March. Much of this is seasonal—more people tend to list their homes for sale in April. After taking into account these seasonal factors, inventories were up by 1.8%, according to Jed Kolko, chief economist at Trulia TRLA +6.35%. While inventories are up 22% so far this year, they’re up by 4% after seasonal adjustments, according to Mr. Kolko.

Many real-estate agents have said that sales volume has been limited by the lack of supply. By the same token, the fact that demand has outstripped supply also goes a long way to explain why prices are rising by around 10% from their year-earlier levels. Rising inventory should ultimately slow some of the price rally while boosting sales volumes, helping to restore equilibrium in the housing market.

4. Homes are selling faster. Half of all homes that sold in April were on the market for 46 days, down from 62 days in March and 83 days one year ago, according to the National Association of Realtors. A separate analysis of 22 markets by Redfin, the tech-powered real estate brokerage, showed that 20% of homes went under contract in just one week in April, and one third of all homes were under contract in two weeks. The share of homes that went under contract in two weeks increased by 39% from one year ago.

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