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The sky is falling! March 26, 2007

Posted by W. Keoki McCarthy in market conditions, real estate.
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There is a lot of negative information in the news lately about the real estate market.  You here stories of how foreclosures are rising, or that we are on a bubble that is about to burst.  The truth is, it is hard to make generalizations like that about about real estate because it is very localized.  If you have been wondering what has been happening in the northwest and the greater Seattle area, now is your chance to read about it.  I am posting an update by the Northwest Multiple Listing Service.  In this update they discuss the actual numbers compared with last year and show that our market has not felt alot of the negative impact that some of the other parts of the country have felt.

KIRKLAND, Wash. (Mar. 7, 2007) – February housing activity began to show signs of a rejuvenating market, according to observations from brokers and the latest numbers from Northwest Multiple Listing Service.  Figures for February show system-wide gains in both pending sales (offers made and accepted, but not yet closed) and sales prices compared to a year ago. Results were mixed among the 19 counties in the MLS service area, but together they reported a 4.8 percent increase in year-over-year pending sales for February.

Prices for last month’s closed sales of single-family homes and condominiums jumped 14.4 percent from twelve months ago. The median price for last month’s completed transactions was $324,000. That was $40,800 more than at this time last year.

The condominium market shows continued strength, with pending sales rising 13.7 percent from a year ago. Prices for condo sales that closed last month were 20 percent higher than twelve months ago.

Inventory also rose from year-ago levels, climbing more than 40 percent, but brokers are not convinced the buildup means a tilt to a buyer’s market. In many counties, the month’s supply ratio is less than five months (a supply of six months or greater is generally considered to be a buyer’s market).

In King County there is currently a 2.6 month’s supply of single family homes and only about a two month’s supply of condominiums (see chart).

NWMLS director Ken Bacon, the broker at Windermere Real Estate in Redmond, said the market is changing from one that slightly favored sellers to a strong seller’s market. “We are now seeing multiple offers on many of our listings,” he reports, adding second quarter inventory will not be able to keep pace with demand. As a result, Bacon said they have resumed training agents on both buyer and seller strategies in multiple offer situations.

“Housing sales in February continue to show signs of regeneration—especially in the more affordable price ranges and in neighborhoods that are close to the job centers in Seattle and Bellevue,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He expects the activity in the more affordable markets will cause a “chain reaction of sales up the price points in the coming months.”

MLS members notched 8,043 pending sales last month, up from 7,673 a year ago and the largest volume since October. Condo sales surged 13.7 percent from a year ago.

“The news is good and getting better,” commented NWMLS director Dick Beeson, the broker/owner at Windermere Real Estate/Commencement Associates in Tacoma. He said the market is settling in, adding “it is as balanced as I have seen since 2000.”

Inventory continues to build in Pierce County, Beeson reported, with condos accounting for a growing share of inventory in Pierce County. Condo listings are up 66 percent from a year ago, while prices for condos that sold there last month rose 19.5 percent. For last month’s closed sales of single family homes in Pierce County, prices rose 12.5 percent.

Beeson noted buyers are waiting to see what’s new on the market, but then are paying close to list price. His office reports lighter traffic at open houses, but attributes it to growing numbers of buyers who shop online for preliminary information before touring.

Last month’s closed sales lagged year-ago totals, reflecting the slower activity during the past few months when the region was battered by flooding, windstorms and snow.

Prices on last month’s completed transactions showed considerable variation, ranging from double-digit gains (in eight counties) to double-digit declines (in two counties).

Mason County reported a 23 percent jump in the sales price of single family home sales (excluding condominiums) last month, the highest percentage increase among the 19 counties in the MLS system. Homes in that county fetched a median selling price of $192,400. That compares to a median sales price of almost $430,000 for single family home sales that closed in King County last month, where prices were up 9.4 percent.

Condominium prices in King County jumped 24.6 percent from a year ago. The median sales prices for last month’s closed sales was $285,250, which compares to the year-ago figure of $228,950. Area-wide, the median price for condos that sold last month was $252,000, up $42,000 (20 percent) from a year ago.

Low interest rates and job growth will continue to sustain a healthy housing economy throughout the Puget Sound region, according to Lennox Scott.

Northwest Multiple Listing Service is the largest full-service MLS in the Northwest. Based in Kirkland and owned by its member brokers, it currently encompasses nearly 2,100 companies with more than 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.

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