Tag Archives: markets

Slower Market Means Homebuyers Have “Newfound ability to negotiate”

SOURCE: NWMLS

KIRKLAND, Washington (November 6, 2018) – Seven months of steadily rising housing inventory
reversed course in October when Northwest Multiple Listing Service brokers added the fewest new
listings since February, according to a new report. MLS members believe the onset of wintry weather and
transition to the holiday season are factors, but suggested the slower pace also signals improving
conditions for house-hunters.

“After months of inventory growth that more than quadrupled the number of homes buyers have to
choose from, things got back on a seasonal track with new listings and total supply falling in October,”
said Robert Wasser, a director with Northwest MLS, when comparing those metrics with September.
“Buyers are catching on to their newfound ability to negotiate. For the first time since 2012, closed sales
system-wide rose from September to October,” noted Wasser, a branch manager with Windermere Real
Estate in Bellevue.

Northwest MLS members added 8,865 new listings to inventory last month in the 23 counties it
encompasses, down from September’s volume of 10,458, but up 4.7 percent from the year-ago total of
8,466 new listings. Compared to September, last month’s number of total active listings shrunk nearly 6.7
percent, but year-over-year inventory rose 33.2 percent, from 13,680 to 18,223 offerings.

Brokers generally welcomed the bump-up in inventory.

Real estate veteran Mike Grady, the president and COO of Coldwell Banker Bain, commented on the
current “win-win” conditions. “We’re entering that time of year when historically the market slows a bit
as we head into the holidays. Buyers continue to see an improving market compared to last year with the
inventory increasingly to 2.4 months of supply in King County, compared to the year-ago figure of less
than a month (0.98),” he stated.

Area-wide there is nearly 2.3 months of inventory, slipping from more than 2.5 months in September, and
improving on the year-ago figure of about 1.5 months of supply.

The year-over-year gains in supply, while notable, are still “way off from a balanced market that provides
five to six months of inventory,” Grady remarked, adding, “Contrary to recent media reports, the sky is
not falling,” he emphasized, pointing to rising prices and strong jobs reports as factors for a positive
outlook. (The State Employment Security Department reported Washington gained 4,500 jobs in
September.)

“Home prices in King County are up nearly 8.6 percent year over year, so we’re still experiencing
significant appreciation,” Grady stated. Given continued reports of hiring by companies in the Puget
Sound region and recent increases in inventory, he expects homebuyers will continue entering the market,
adding, “And sellers can still expect to get good prices — all this without the frenzy. A win-win,” he
proclaimed.

A Decade Low in Housing Affordability Won’t Kill the Real Estate Boom

Source: Dr. Steve Sjuggerud, Stansberry Research

I’ve spent years urging anyone who would listen to buy a house…

Folks didn’t want to hear that story back in 2011, when I first began pounding the table. Investors were scared. Nobody wanted to buy.

That’s why housing was such a great deal, though. It was dirt-cheap and hitting all-time levels of affordability.

Plenty has changed since then…

U.S. home prices have steadily climbed, and housing affordability has fallen as a result.

Today, housing affordability is at a decade low. But as I’ll show, that doesn’t mean the boom is dead.

Let me explain…

The idea of housing affordability is simple. When someone buys a home, he doesn’t worry so much about the purchase price… He worries about the monthly payment. If he can afford the payment, he can afford the house.

The monthly payment includes a few numbers… namely the home’s price and the interest rate. Compare that with the person’s income, and you know how affordable (or not) a home would be.

Importantly, these numbers are similar for a lot of folks. So the National Association of Realtors uses median home prices, median income, and mortgage rates to build an overall measure of housing affordability in America.

This indicator tells us if housing is cheap, expensive, or somewhere in between.

Again, things have changed since I first began urging readers to buy real estate. Housing affordability is now at a 10-year low. Take a look…

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A high affordability number indicates housing is cheap… signaling a great time to buy. A low number indicates an expensive market, where folks will have to stretch to buy.

You can see that housing is getting less affordable. It recently fell to affordability levels not seen since 2008. But that doesn’t tell the full story.

Despite a decade low for affordability, we’re now right at the long-term average. Check it out…

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It’s true that the easy money in real estate might be behind us. But affordability hasn’t completely dried up.

We are clearly in the late innings of this boom. The great deals are getting harder to find, but certain markets still have plenty of value remaining.

I’ve personally put a large chunk of my net worth into Florida real estate. I’ve sold some of those properties for big profits… but I’ve been able to find new deals too.

So while affordability is down, I remain bullish on U.S. housing. We’re still near the long-term average for affordability in U.S. housing. And folks can still make money in U.S. real estate.

If you’re looking to put money to work, buying a house is still a solid deal today.

Brokers Seeing “Simple Economic Recipe For a Softening Housing Market”

Source: NWMLS

KIRKLAND, Washington (July 5, 2018) – Home buyers around many parts of Washington state had
more choices and less competition during June, prompting some industry leaders to comment on “a
feeling of change in the market.”

“Inventory is up and demand has dropped,” reported Robert Wasser, an officer with the board of directors
at Northwest Multiple Listing Service. That combination is “a pretty simple economic recipe for a
softening market,” he added in commenting on the latest MLS statistics.

Figures for June show a 5.2 percent improvement in the number of active listings system-wide, coupled
with drops in the volume of pending sales (down 8.4 percent) and closed sales (down .07 percent)
compared with a year ago. Despite the shift of some indicators favoring buyers, prices area-wide
continued to rise, increasing more than 10 percent from twelve months ago.

“There was a feeling of change in the market this June and the numbers supported that feeling,” remarked
John Deely, principal managing broker at Coldwell Banker Bain. He noted many brokers also reported an
increase in properties going past their offer review date, more price reductions, and an increase in reverse
prospecting (a tool that allows the listing broker to view a list of brokers with potential buyers for that
listing). “We’re also experiencing a decrease in multiple offers and the number of buyers participating in
multiple offers,” added Deely.

Northwest MLS brokers added 13,153 new listings to inventory during June, a drop from both a year ago
when they added 13,658, and from May when 14,524 new listings were added. With new listings
outgaining sales, total inventory as measured by active listings and months of supply improved.

At month end, Northwest MLS reported 15,234 active listings and 1.5 months of supply. Inventory of
single family homes and condos reached its highest level since October. The supply of active listings in
King County surged 47 percent from a year ago, boosting the months of supply to just under 1.3 months –
the highest level since September 2016 when there was 1.37 months of supply.

“Although still a quick response market, with more new listings coming on the market during the summer
months, we experienced dispersed buyer energy due to the greater availability and selection,” stated J.
Lennox Scott, chairman and CEO of John L. Scott Real Estate. He estimates sales activity is off 15-to-20
percent for each new listing’s first 30 days on the market. “Now through October will be the best time of
year for homebuyers,” he remarked.

“Sellers are becoming more active in the market as they sense buyers pulling back,” suggested George
Moorhead, designated broker and owner at Bentley Properties. Improving supply, a marked increase in
expired or cancelled listings, and market times almost doubling are factors he mentioned when describing
the market as “more than just lackluster” with summer showing no sign of improvement.

Home Prices: Boom Continues, but Leveling Out Needed

Source: RISMedia

The boom is continuing for home prices, with a gain in March of 6.5 percent, according to the S&P CoreLogic/Case-Shiller Indices.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), rose 6.5 percent year-over-year, an increase from 6.4 percent in February. The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 6.8 percent year-over-year, which is comparable to February. Month-over-month, both the 10-City Composite and the 20-City composite rose, 0.9 percent and 1 percent, respectively.

“The home price increases continue, with the National Index rising at 6.5 percent per year,” says David M. Blitzer, chairman and managing director of the S&P Dow Jones Indices Index Committee.

“Looking across various national statistics on sales of new or existing homes, permits for new construction, and financing terms, two figures that stand out are rapidly rising home prices and low inventories of existing homes for sale,” Blitzer says. “Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s before the housing boom and bust.

“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” says Blitzer. “Compared to the price gains of the last boom in the early 2000s, things are calmer today.”

“The solid gain in home prices of 6.5 percent in March added roughly $150 billion to housing wealth during the month,” said Lawrence Yun, chief economist at the National Association of REALTORS® (NAR), in a statement. “The continuing run-up in home prices above the pace of income growth is simply not sustainable. From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent, while the average wage rate has grown by only 14 percent. Rising interest rates also do not help with affordability; therefore, more supply is needed to level out home prices. Homebuilding will be the key as to how the housing market performs in the upcoming years.”

The complete data for the 20 markets measured by S&P:

Atlanta, Ga.
Month-Over-Month (MoM): 0.8%
Year-Over-Year (YoY): 6.2%

Boston, Mass.
MoM: 1.2%
YoY: 5.8%

Charlotte, N.C.
MoM: 1%
YoY: 6.2%

Chicago, Ill.
MoM: 1.1%
YoY: 2.8%

Cleveland, Ohio
MoM: 0.3%
YoY: 4.6%

Dallas, Texas
MoM: 0.7%
YoY: 5.8%

Denver, Colo.
MoM: 1.4%
YoY: 8.6%

Detroit, Mich.
MoM: 1.1%
YoY: 7.9%

Las Vegas, Nev.
MoM: 1.5%
YoY: 12.4%

Los Angeles, Calif.
MoM: 0.9%
YoY: 8.1%

Miami, Fla.
MoM: 0.7%
YoY: 5%

Minneapolis, Minn.
MoM: 1.7%
YoY: 6.1%

New York, N.Y.
MoM: 0.1%
YoY: 5.2%

Phoenix, Ariz.
MoM: 0.9%
YoY: 6.8%

Portland, Ore.
MoM: 1%
YoY: 6.7%

San Diego, Calif.
MoM: 1%
YoY: 7.7%

San Francisco, Calif.
MoM: 2.1%
YoY: 11.3%

Seattle, Wash.
MoM: 2.8%
YoY: 13%

Tampa, Fla.
MoM: 0.6%
YoY: 7.5%

Washington, D.C.
MoM: 1.1%
YoY: 3%

Confidence in Housing at New Peak

Source: Suzanne De Vita RISMedia

Confidence in housing is at a new peak, with enthusiasm among sellers soaring, according to the April Fannie Mae Home Purchase Sentiment Index® (HPSI). At 91.7, the Index plowed through its previous record, climbing 3.4 percentage points month-over-month and five points year-over-year.

“The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home-buying season,” says Doug Duncan, chief economist and senior vice president at Fannie Mae.

What is driving the lift? Americans are optimistic about their prospects for selling, with 45 percent believing now is ideal to list—a high point since the start of the survey. By the same token, almost half (49 percent) of Americans believe home prices will rise—conditions that, for sellers, translate to an upper hand.

Confidence can dissipate, however, if inventory remains sparse, according to Duncan.

“High home prices and good economic conditions helped push the share of Americans who think it’s a good time to sell to a fresh record-high; however, the upward trend in the good-time-to-sell share seen since last spring has done little to release more for-sale inventory,” Duncan says. “The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales.”

Despite constrained inventory, sales are strengthening, with both existing and pending sales squeezing out wins in March, the National Association of REALTORS® (NAR) reported—and, according to the Commerce Department, new-home sales tracked up.

The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).

Existing-Home Sales Strengthen

Source: RISMedia

Building on February’s gains—and for the second time this year—existing-home sales have strengthened, the National Association of REALTORS® (NAR) reports. March sales increased 1.1 percent to 5.6 million, but they were down 1.2 percent from the prior year. Inventory increased, as well: 5.7 percent to 1.67 million, but 7.2 percent lower than the prior year.

“Robust gains last month in the Northeast and Midwest—a reversal from the weather-impacted declines seen in February—helped overall sales activity rise to its strongest pace since last November at 5.72 million,” says Lawrence Yun, chief economist at NAR. “The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year-ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford.”

Currently, inventory is at a 3.6-month supply. Existing homes averaged a brisk 30 days on market in March, four days less than the prior year. All told, 50 percent of homes sold were on the market for less than one month.

“REALTORS® throughout the country are seeing the seasonal ramp-up in buyer demand this spring, but without the commensurate increase in new listings coming onto the market,” Yun says. “As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.”

The metropolitan areas with the fewest days on market and most realtor.com® views in March, according to realtor.com’s Market Hotness Index, were San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; Midland, Texas; and San Jose-Sunnyvale-Santa Clara, Calif.

The median existing-home price for all house types (single-family, condo, co-op and townhome) was $250,400, a 5.8 percent increase from the prior year. The median price of an existing single-family home was $252,100, while the median price for an existing condo was $236,100.

Existing-home sales in the single-family space came in at 4.99 million in March, a 0.6 percent increase from 4.96 million in February, but a 1 percent decrease from 5.04 million the prior year. Existing-condo and -co-op sales came in at 610,000, a 5.2 percent increase from February, but a 3.2 percent decrease from the prior year.

Twenty percent of existing-home sales in March were all-cash, with 15 percent by individual investors. Four percent were distressed.

Two of the country’s major regions had higher sales, rising 5.7 percent to 1.29 million in the Midwest, with a8 median price of $192,200, and 6.3 percent to 680,000 in the Northeast, with a median price of $270,600. The South and West had reduced sales, falling 0.4 percent to 2.4 million in the South, with a median price of $222,400, and 3.1 percent to 1.23 million in the West, with a median price of $377,100.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets, especially those out West,” says Yun.

First-time homebuyers comprised 30 percent of existing-home sales in March, up from 29 percent February.

“First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range,” says NAR President Elizabeth Mendenhall. “Supply conditions improve in higher-up price brackets, which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search.”

According to Keller Williams Chief Economist Ruben Gonzalez, existing-home sales are on a familiar track.

“We continue to forecast that existing-home sales in 2018 will be at or slightly below 2017 sales,” says Gonzalez. “If inventory conditions remain restrictive, we also expect to continue to see home price appreciation accelerate. Based on data and anecdotal evidence, the most restrictive inventory conditions currently exist for entry-level housing, and this is also where we anticipate the most acceleration in home price appreciation.”

For more information, please visit www.nar.realtor.

Home buyers, sellers feel “looming pressure” but Western Washington market stays strong

Source: NWMLS

KIRKLAND, Washington (March 6, 2018) – Interest rates are creeping up, inventory is still squeezed, and
some feared revised tax laws would have a chilling effect on home sales, but Northwest Multiple Listing
Service leaders say the local market remains competitive.

“It seemed like there would have been a chilling effect on the real estate market at the start of 2018 with the
newly revised tax laws limiting mortgage interest deductions,” suggested Gary O’Leyar, designated broker
and owner at Berkshire Hathaway HomeServices Signature Properties. “Not only did the revisions not have
a chilling effect, if anything, the local market has been even hotter and more competitive than last year at
this time,” he added in commenting on new MLS numbers summarizing February activity.

Northwest MLS figures for last month show a slight year-over-year decrease (about 2.8 percent) in overall
pending sales, a likely consequence of inventory being down nearly 12.9 percent. Other key indicators of
the market – new listings, closed sales, and selling prices – all showed gains in February compared to 12
months ago.

The just-released report from Northwest MLS shows 7,980 pending sales last month, down from the
year-ago volume of 8,209 mutually accepted offers for single family homes and condos. Thirteen of the 23
counties in the report had more pending sales than at this time last year.

Closed sales outgained last year’s volume, 5,548 to 5,358, for an increase of nearly 3.6 percent. Median
prices on those sales surged almost 14.8 percent area-wide, rising from the year ago figure of $335,515 to
last month’s price of $385,000.

Among the four Puget Sound area counties, Snohomish had the largest year-over-year price increase at 18.8
percent. Its countywide median price for February’s sales spiked to $460,000 from $387,250, but that is
$130,000 below the $590,000 median price for transactions that closed in King County last month.
For single family homes (excluding condos), prices rose 13.7 percent overall, from $343,000 to $390,000.
Within King County, the median price was $649,950, with three areas (Mercer Island, Bellevue west of
I-405, and Kirkland-Bridle Trails) reporting median prices of more than $1 million for single family homes.
“As was the case the last two years, home values spiked in February, thanks to a cyclical low point in
supply,” commented Robert Wasser, owner/broker at Prospera Real Estate. Prices are now back around the
peak levels of last summer, and cyclically speaking, are headed for additional increases until summer
arrives,” commented Wasser, a board member at Northwest MLS.

Brokers added 7,284 new listings of single family homes and condos during February, an improvement of
nearly 6.4 percent from a year ago when they added 6,848 new listings. Like many months during 2017, last
month’s pending sales (7,980) outgained new listings (7,284), keeping inventory depleted in many areas.

Home buyers still competing for sparse inventory in Western Washington, driving up prices – especially for sought-after condominiums

Source: NWMLS

KIRKLAND, Washington (February 5, 2018) – “The Seattle area real estate market hasn’t skipped a beat
with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the
latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight
year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of
inventory.

Deely, the principal managing broker at Coldwell Banker Bain in Seattle and a board member at Northwest
MLS, noted a shift in the ratio of pending sales to new listings in King County.
Member brokers added 6,805 new listings of single family homes and condominiums to the system-wide
database last month for a gain of about 4.6 percent from a year ago. During the same period, they reported
7,820 pending sales. In King County, the number of new listings outgained pending sales for the first time
since September:

 

“Sellers that have put their properties on the market early this year have less competition and are seeing
multiple offers. Open houses are experiencing heavy traffic with hundreds of potential buyers attending,”
reported Deely.

For the MLS overall, last month’s 7,820 pending sales marked a slight increase compared to January 2017
when members reported 7,724 mutually accepted offers, a gain in of 1.24 percent. Not all areas reported
increases. Of 23 counties served by Northwest MLS, eight counties, including three in the Puget Sound
region (King, Kitsap and Snohomish), reported fewer pending sales than a year ago. In King County, where
acute inventory shortages exist in many neighborhoods, pending sales dropped 7.5 percent and closings
dropped 18.5 percent.

“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the
ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB
Jacobi, the president of Windermere Real Estate.

With January’s additions, the number of total active listings at month end stood at 8,037 homes and condos,
down nearly 17.6 percent from a year ago when the selection totaled 9,750 listings. Measured by months of
supply, there was only about 1.5 months overall, well below the 4-to-6 month level many industry experts
use as a gauge of a balanced market.

NWMLS 2017 Statistical Report on Pacific Northwest Real Estate Activity

Source: NWMLS

The NWMLS 2017 Annual Statistical Report is now available. Highlights include:

  • Closed Sales: Northwest MLS brokers reported 99,345 closed sales valued at more than $46.5 billion.
  • Median price: In 2017, the median price for closed sales of single family homes and condos system-wide was $370,000. By county, the median ranged from $133,000 in Ferry Co. to $562,000 in King Co.
  • New listings: MLS members added 114,297 new listings during the year, a slight gain (+1,040) over 2016.
  • Months of supply: Inventory, as measured by months of supply, was well below the level of a “balanced market” all year, with less than one month of supply near many urban job centers.
  • New construction: Newly-built homes accounted for about 19 percent of sales during 2017. The median price for new construction single family homes was $475,000; for new condos it was $552,900 (new condos in downtown Seattle fetched more than $1.2 million)
  • View the comprehensive 2017 Statistical Review & Highlights Report (39 pages)

Brokers may view NWMLS data one hour before it is published to the NWMLS website and released to subscribers or the media. Please do not share the report with the media until officially released by NWMLS.

 

Thank you,
Northwest Multiple Listing Service

11430 NE 120th St, Kirkland, WA 98034

425-820-9200