Monthly Archives: June 2015

Thurston County News Release

Thurston County Residents,

I want to alert you to two issues here.   First, later this year, Thurston County will roll out its new Habitat Conservation Plan (HCP) for the entire county.  You can read about it here:   http://www.co.thurston.wa.us/planning/hcp/hcp-home.htm   The HCP will increase the buffers around critical habitat and impose new restrictions on property with prairie soils, gopher habitat, oak trees, water infiltration areas, so called “wetlands”, shore lands, and more.

Second, Thurston County is in the process of taking control of the Deschutes River drainage, the aquifers that adjoin the Deschutes River, and the Capitol Lake estuary.  For those of you who live in the Deschutes River drainage, remember the questionnaire you got several weeks ago?  That is part of the plan, brought to you courtesy of the Sustainable Thurston Plan.

We are developing some long term strategies on these issues and as we learn more we will let you know.  As an individual, one of the most important things you can do is share this information with your friends. 

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News Release

FOR IMMEDIATE RELEASE: June 12, 2015
SUBJECT: Thurston Region to Develop a Climate Adaptation Plan
CONTACT: Lon Wyrick
Executive Director, TRPC
OLYMPIA, Wash. — How will the Thurston Region prepare for possible changes to the magnitude or frequency of climate-related events such as drought, flooding, sea-level rise, or wildfire?
Over the next few years, local and Tribal government organizations, non-profits, and educational institutions will work together to develop a Climate Adaptation Plan for the Thurston Region. We will explore questions such as:
What roads will be most vulnerable to flooding under changing climate conditions, and what steps can we take now to lower the risks?
Are there areas of the county where there might not be enough water to maintain stream flows to support fish and other aquatic species, farming, and household and business water uses under changing climate conditions?
What are the economic implications – to the natural and the built environment – of a changing climate?
In short, how can we adapt to climate-induced changes, yet continue to thrive ecologically, socially, and economically?
The National Estuary Program (NEP) Watershed Protection and Restoration Program – which focuses on improving watershed management and land use decisions in the Puget Sound Region – will fund the $250,000 planning effort.
The Thurston Regional Planning Council – a 21-member intergovernmental board comprised of local government jurisdictions within Thurston County – will facilitate plan development. The Regional Council will convene a wide range of partners, including Thurston County, local cities, Tribes, Nisqually River Council, LOTT Clean Water Alliance, Port of Olympia, The Evergreen State College, Olympia School District, Earth Economics, Thurston Conservation District, Thurston Economic Development Council, Thurston Climate Action Team, Puget Sound Energy and emergency service providers. Work will begin in September 2015, with plenty of opportunities for the public and other partners to participate.
The Regional Council determined this project’s importance as a follow-up action of the Sustainable Thurston project. For more information, visit www.trpc.org/ClimateAdaptationPlan.

___________________________________
Sarah Selstrom, Administrative Assistant
Thurston Regional Planning Council
2424 Heritage Court SW, Suite A
Olympia, WA 98502
Phone: (360) 956-7575
Fax: (360) 956-7815
Website: www.trpc.org

 

Northwest MLS brokers Say Home Buyers Are Sprinting, But Sellers Are Stalling

Source: NWMLS

KIRKLAND, Washington (June 4, 2015) – Home buyers are in “full sprint” mode while sellers are stalling,
according to brokers from Northwest Multiple Listing Service. As a result, MLS members are juggling
severe inventory shortages and multiple offers in many Seattle neighborhoods and beyond.

MLS figures for May show double-digit drops in inventory compared to a year ago and double-digit gains
in both sales and prices. Commenting on the numbers, Northwest MLS director Dick Beeson said “The
crush between the lack of inventory and desperate buyers may soon generate the next TV reality show! The
stressed market is exhausting everyone in its path, with no relief in sight.”

Last month’s volume of 11,425 pending sales across the 23 counties in the latest report nearly matched the
number of new listings added to the database (11,862). At month end, the total number of active listings
stood at 19,515, a drop of more than 18 percent from a year ago when members reported 23,917 active
listings. Only two counties (Douglas and Ferry) reported year-over-year gains in inventory.

George Moorhead, another director with Northwest MLS, said multiple offers are commonplace for
well-priced homes in desirable areas. “We are definitely feeling the squeeze on inventory levels with sellers
holding off until they can find a home,” commented Moorhead, the designated broker and owner at Bentley
Properties.

MLS figures for May show supply has dwindled to about 1.2 months in King County and 1.6 months in
Snohomish County. Several neighborhoods near Seattle’s job centers have less than a month of supply.
For the MLS service area overall, there is about 2.4 months of supply – well below the 4-to-6 month figure
used by many industry watchers as an indicator of a balanced market. About half the counties reported less
than four months of supply.

Beeson, the principal managing broker at RE/MAX Professionals in Tacoma, noted supply in Pierce
County has slipped to record lows, at just over 2 months. For sellers, there may be little solace. When they
decide to sell they’ll need a replacement home “which may or may not be there,” he explained.

Pending sales jumped more than 10 percent in May compared to the same month a year ago, rising from
10,373 mutually accepted offers to 11,425. Last month’s pendings rose slightly from April’s total of
11,384. For the Central Puget Sound region encompassing King, Kitsap, Pierce and Snohomish counties,
the MLS recorded 8,620 pending sales – the highest total for the month of May in at least 15 years.

J. Lennox Scott, chairman and CEO of John L. Scott, Inc. called 2015 “the best start ever for sales activity.”
Citing MLS figures, he noted cumulative pending home sales in the four-county Puget Sound area for the
first five months of the year are outpacing the previous record year of 2005. “This time,” he emphasized,
“the housing market is built on a strong foundation of qualified buyers.”

House Prices Continue to Increase in April

Source: RISMedia

U.S home prices continued their upward climb in April, with CoreLogic reporting a 2.7 percent monthly advance, moving the year-on-year gain up to 6.8 percent. This forward motion represents 38 months of consecutive year-over-year increases in home prices. While spring is typically the setting for a strong market, the data provider speculates that low inventories and growing sales may
be the culprit of rocketing prices.

“Old-fashioned supply and demand, fueled by historically low mortgage ratees and improving consumer finances and confidence, continue to push home prices up”, says Corelogic CEO and president Anand Nallathambi.

New Home Sales To Surge By 30%

Source: Denise Lones The Lones Group

I have been reporting on new home sales for years and track this facet of the market with a great deal of interest as a Master in Residential Marketing through the NAHB. I find the new home market to be a strong barometer of what is happening with the market as a whole.

A stat released by the Census Bureau caught my eye this week – new home sales rose 26% from one year ago during the same time in April to 517,000 sales – the third highest month of activity in eight years. The numbers would have easily reached higher but couldn’t because there just wasn’t enough inventory to sell.

The national median price of these new homes was just under $300,000, almost 10% above last year’s price. From a national perspective this is a healthy increase due in part to the lack of inventory and the demand for new homes.

The challenge that occurs in a market that lacks new home inventory is that new homes will sell for significantly higher than resale, creating a big gap between new and resale.  This is not healthy for the market. We should be adding inventory of 1.2 million per year!

We simply need more new home inventory. We are still only at about half of the production of new home sales as we were a decade ago. The total US housing starts for single family residences increased to 733,000 in April which is only 14.7% above April of last year.

The new home construction industry was hit very hard during the recession and we have yet to recover to where we need to, which will continue to put pressure on the resale market.  However, due to the lack of new home sales inventory there is no concern over new home over-production.  Basically speaking, at this point in the market, if it is built it is it going to be consumed.  Yes, if you build it…they will come.

Builders have had a very hard time getting loans to ramp up building which is one of the causes of the inventory shortage.  Lenders need to make more new construction loans or there needs to be better financial regulations to allow banks to make more new construction loans.

The good news for those builders who have the financing to get their projects above ground is they are going to sell.  The demand is there, the supply is not, this is a formula for higher sales prices and lower market time.

The challenge is that buyers are noticing that new home prices have surged.  With new home sales only reaching half of what they were a decade ago the demand continues to outweigh the supply.  Buyers who want new construction will pay a premium in today’s inventory tight new home market.

With new home construction reaching this new shortage crisis I estimate that new home sales prices in high demand regions could rise by 30%  in 2015 – YES, I SAID 30% – and I estimate there will be another 30% in 2016!

The perfect storm of inventory shortage and demand for new homes is just too strong and the prices will reflect this shortage.  This is one of the most aggressive predictions I have ever made but I have been talking about new construction shortages for five years and I knew this day would come.

Today is that day!

You can read the entire press release from the Census Bureau here. Information on Housing Starts can be seen here.