Tag Archives: thurston county

NWMLS brokers report brisk activity, noting “too early to tell” if coronavirus will soften sales

Source: NWMLS

KIRKLAND,Washington (March 5, 2020)

“We’re entering prime time for the real estate market, and more listings are on the way,” stated industry veteran J. Lennox Scott, as he reviewed the latest statistical report from Northwest Multiple Listing Service. MLS figures for February show year-over-year (YOY) gains in new listings, pending sales, closed sales, and prices. Scott, the chairman and CEO of John L. Scott Real Estate,expects a bump-up in inventory during March and April, but said, “We remain virtually sold out in many areas in the more affordable and mid-price ranges.”

Northwest MLS representatives who commented on last month’s activity reported little impact so far from the coronavirus (COVID-19) threat.

“It’s still too early to tell if the broadening effects of the coronavirus will sideline buyers,” said Matthew Gardner, chief economist at Windermere Real Estate. “What we do know is that news of the virus led equity markets sharply lower and this caused mortgage rates to drop significantly. Therefore, the question is whether buyers will put their search on hold until the virus has abated, or if they will decide to move forward so they don’t miss out on near historic low mortgage rates,” he added.

David Maider, broker/owner at Windermere Real Estate/M2 in Everett, agreed with Gardner. “It remains to be seen if the coronavirus scare will have any impact at all on the local real estate market other than to lower interest rates,” he stated.

“While the news is full of COVID-19, the stock market correction, and an unexpected interest rate cut that didn’t impress Wall Street, the Puget Sound region’s real estate market continues to stand strong,” stated Mike Grady, president and COO at Coldwell Banker Bain in Bellevue. “Our agents aren’t yet seeing any impact on open house attendance due to the COVID-19 outbreak. We continue to be bullish on the Puget Sound economy and real estate market.”

“I haven’t noticed any decrease in open house activity or in sellers being reluctant to have buyers view their home,” reported NWMLS director Mike Larson, the designated broker at ALLEN Realtors in Lakewood. “Short term, the coronavirus outbreak has resulted in investors turning to the bond market, which means lower interest rates and more buying power. Long-term, this virus could start to wear on overall consumer confidence, which is never good for real estate markets.”

“Historically low interest rates should help the housing market sustain strong momentum during the coronavirus outbreak,” according to Scott.

Member-brokers added 7,786 new listings to the MLS database during February. That was a jump of nearly25% from the same month a year ago when record snow hindered activity. Compared to January, last month’s inventory improved by 1,269 listings for a gain of nearly 19.5%.

February’s new listings (7,786) were the highest since October, but they fell short of matching demand. Brokers reported 8,355 pending sales (mutually accepted offers) for a YOY gain of more than 21%.

Inventory remained tight. At month end,there were 7,655 active listings in the 23 counties included in the MLS report. That was a 32% drop from the year ago total of 11,275. All but two counties (San Juan and Douglas) reported declines. Thurston County had the largest year-over-year drop, at 45.7%, followed by Snohomish (down 42%) and King (down 40.7%).

There is only 1.45 months of supply area-wide, according to Northwest MLS data. It is even more sparse in the four-county Puget Sound region where there is barely over a month’s supply (1.1 months). Snohomish and Thurston counties had the distinction of having the sparsest inventory, with both areas reporting less than a month (0.93)of supply.

“The Snohomish County housing market continued on a torrent pace during February,” said NWMLS director David Maider. Low inventory, a return to historically low interest rates, and plenty of buyer demand are stimulating the activity, according to Maider, owner/broker at Windermere Real Estate M2 in Everett. In many cases, sellers are receiving multiple offers exceeding the asking price, he added.

“The spring market has arrived,” exclaimed Dean Rebhuhn, owner at Village Homes and Properties in Woodinville. Multiple offers are normal in hot market areas, and many buyers are having pre-inspections before making offers to sellers, according to Rebhuhn. He said buyers are taking advantage of historically low interest rates and low down payment programs such as FHA with 3.5% down, zero down VA, and low down conventional mortgages.

Current listings are attracting brisk activity, stated John Deely, principal managing broker at Coldwell Banker Bain in Seattle. “Almost every new listing has had tremendous showing activity and multiple offers,” he remarked.

Deely described open house activity as “above average.” More than 400 buyers previewed four listings in the past 10 days. A north King County property in the $600,000 price range that was on the market for a week with an offer review on Tuesday had eight offers at $100,000 over the asking price, according to Deely, a member of the Northwest MLS board of directors.

“Ultra-tight inventory is terrific news for sellers, but it creates challenges for buyers, especially move-up buyers who are selling and buying in the same market,” said Larson. “Buyers who need to sell before they buy a different home are experiencing the very real dilemma of either being a contingent buyer, which no seller will even remotely consider, or of possibly being temporarily homeless if their home sells quickly and they can’t find a replacement,” he explained, adding, “Having a broker who can help navigate that terrain is super important.

”Frank Wilson, branch managing broker at John L. Scott in Poulsbo, said buyers’ pent-up demand continues to grow despite “turmoil in the marketplace, stocks riding a roller coaster, falling mortgage interest rates and shrinking inventory.” He noted buyers in Kitsap County have little to choose from with YOY inventory being down about 30%. “At any given open house there is heavy traffic and most new listings that are correctly priced are receiving multiple offers,” Wilson remarked.

Due to the housing shortage in Kitsap County, Wilson said some buyers are turning to alternatives, such as buying land and moving a mobile home onto it or purchasing land with the intent to build a home. “New construction cannot go up fast enough and unless it is already permitted, there would be two years’ worth of studies and permitting before any nails are driven.

”Grady reported similar demand in other areas. “Agents in our Kent Station office recently reported putting homes on the market and receiving multiple offers within three days,” he reported. At a Bellevue listing, more than two dozen couples attended an open house this past weekend.

Brokers say the supply-demand imbalance is contributing to rising prices.

The Northwest MLS report shows the median price system-wide for the 5,265 homes and condos that sold in February rose 9.34% from a year ago, from $407,000 to $445,000. Thirteen counties reported double-digit increases, while four counties had price drops.

“Skagit County continues to outperform, along with other areas immediately outside the Greater Seattle area,”noted James Young, director of the Washington Center for Real Estate Research. Prices in Skagit jumped nearly 27.8%. He also mentioned Kittitas, where prices surged 21.9%. “Price movements now are more like the spring season –it looks like the groundhog was right, spring came early!

”Young also described Kitsap and Thurston counties as outperformers in the Puget Sound region, noting prices rose 16.9% and 13.1%respectively. “This is consistent with recent activity in perimeter areas as home buyers seek value,” he suggested.

Grady said,“While we don’t have a crystal ball for these uncertain times, I continue to believe the indicators and information I’m hearing from agents on the ground support that our market will continue strong.” He believes 2020 will rival 2017 with similar short days on market, tight inventory and in many markets, a return to multiple offers.

Nationally, an editor with realtor.com reported the U.S. housing market is already feeling the effects of what could soon be declared a pandemic. “The already sluggish luxury real estate market has depended in recent years on an injection of Chinese buyers,”wrote Clare Trapasso in her report on coronavirus fears and possible impacts on real estate. She found that fewer Chinese buyers who account for a “significant chunk”of luxury buyers are touring properties in the U.S., thanks in part to the temporary travel ban enacted to prevent the spread of the virus.

“China has been the most important source of foreign demand for real estate,” says Lawrence Yun, chief economist at the National Association of Realtors®. Wealthy Chinese buyers often purchase luxury properties, such as high-rise condos, in California and New York. “The upper-end market can expect to be softer as a result.

“Northwest Multiple Listing Service is a not-for-profit, member-owned organization that facilitates cooperation among its member real estate firms. With more than 2,300 member firm offices and 30,000 brokers across Washington state, NWMLS(www.nwmls.com)is the largest full-service MLS in the Northwest. While based in Kirkland, Washington, its service area spans 23 counties and it operates 20 local service centers. ###For more news, visit nwmls.com and select “News & Information,” (includes latest press release, statistics and Northwest REporter),plus the NWMLSMedia Kit.

Massive Thurston County tax increase proposed for $300 million new courthouse scheme

Thurston County Commissioner and former Thurston County Sheriff Gary Edwards was the lone vote against the massive tax increase

Last week, at the Thurston County Commissioner meeting held at Rochester Middle School, the Thurston County Commissioners, by a vote of two to one approved a massive 39.5% property tax increase to be placed on the April, 2020 ballot for Thurston County (see Board Agenda here – Item 6a). In theory, this tax increase is for a new courthouse project that has been pushed for many years by Thurston County staff, Thurston County judges, and various other special interests. However, in the rush to build a new $300 million (or more) courthouse in the City of Olympia, a lot of questionable steps have been taken, special interests are lining up for their payoffs, and the taxpayers of Thurston County are put far last on the priority list. If you didn’t know this – don’t worry, you are not alone– neither does 64% of the rest of Thurston County according to a recent taxpayer funded survey (see summarized report here, supporting docs here and here).
Independant Commissioner John Hutching’s vote to support the major tax increase was a disappointment to most of his supporters

Independent Commissioner Gary Edwards made an impassioned and well-reasoned speech against the proposal last week. Unfortunately, he was the lone dissenting vote against staff’s proposal. Most observers predicted that recently elected Democrat Commissioner Tye “the High Tax Guy” Menser would support the tax increase because he supports most tax increases. Menser has repeatedly admitted he is a protégé of former Commissioners Sandra Romero and Valenzuela who were also part of the max tax crew in Thurston County. However, it was Independant Commissioner John Hutchings vote to support the tax proposal which disappointed most people, particularly those who voted him into office. It now seems likely that this vote (along with a few notable others) have doomed his reelection chances in 2020. His political career is now in clear jeopardy. Few supporters of Hutchings voted for him so he could ramp up their property taxes for more unnecessary building fiascos in Thurston County.
Tye “The High Tax Guy” Menser was narrowly elected Thurston County Commissioner in 2018, and has been pushing for bloating government at every opportunity – regardless of the cost
Democrat Thurston County Commissioner Tye Menser
A massive tax increase and no guarantees

Several disturbing details surrounding this recent proposed tax increase have come to light. These should concern all who live, pay taxes, and vote in Thurston County. For example:
Thurston County Manager Ramiro Chavez at Commissioner meeting April 30, 2019 in Rochester, Washington

Normally, capital projects like buildings and new facilities are financed through a tax mechanism called “Revenue Backed Bonds.” Read more about these funding mechanisms in state law at RCW 39.46.150 & RCW 39.46.160. These are a predictable method of ensuring that the funding exists for the life of the bonded debt, and it dedicates the funds so that they can’t be diverted to other uses. However, under Washington State’s constitution, this type of debt requires a 60% voter approval. This is due to the fact that future generations are burdened by this decision to increase debt and this higher threshold was chosen to ensure that the projects being proposed are widely supported by the community. Thurston County Manager Ramiro Chavez admitted this would be the normal path to financing a massive building project like this, but staff had determined that 60% of the voters of Thurston County would never support this size of a tax increase. Therefore, staff wanted to push a financing method without this risky 60% voter approval hurdle. Instead, staff wanted to push “General Obligation Bonds” which only have a 50% voter approval threshold (See RCW 84 for state law on property taxes)

Secondly, supporters of this proposed new courthouse admitted, repeatedly during the April 23, 2019 public hearing, that the vote for the proposed tax increase should be held on any special election date EXCEPT during the November 5, 2019 general election date so that fewer voters would participate. Supporters of the tax were demanding this explicitly because they admitted the majority of voters in Thurston County probably wouldn’t support this tax increase. These comments were largely directed at this author’s earlier comments at the same hearing that if the Commissioners were going to put this tax increase on the ballot they should give the largest number of voters the chance to vote on it in November. Supporters of this tax increase are terrified that a large number of voters would vote to reject this proposal. I can’t blame tax supporters for wanting to hide from the voters because they probably would lose at the ballot box if the voters of Thurston County realize what this boondoggle really is. (From a policy standpoint, this is why I’ve always recommended eliminating the special election dates in Washington state law, and instead put all proposed tax increase votes on the November ballot. Making this policy change would reduce the special interest gaming of the current special election system).
This seems to be Thurston County’s staff approach to decision making

Which gets to the most disturbing aspect of this proposed tax increase. The tax increase itself legally has nothing to do with building anything at all. While it is being sold as a funding mechanism for some undefined courthouse project (nobody yet knows the true cost – $250 million? $300 million?), the actual legal language of the tax increase doesn’t require Thurston County to build anything with these funds. At first staff contested this fact, but when confronted by citizen Jon Petit with the actual language of the very proposal staff was pushing on the county commissioners, Thurston County Manager Ramiro Chavez was forced to admit Mr. Petit was correct. There is no obligation that Thurston County build anything. The only legal guarantee is if the voters are suckered into approving this scheme, they will be paying much higher property taxes.
Thurston County staff want to increase the burden on local taxpayers

Another policy impact of this tax proposal, if passed by the voters, is the fact that General Obligation Bonds take funds from the general budget of Thurston County. While this tax proposal is an increase of 39.5% over the existing rate of general obligation funds, it also means that if the staff of Thurston County start down the project path to build this building and they go over budget (a common occurrence in Thurston County), those increased tax dollars will be extracted and diverted from services like the sheriff’s office. It is a near certainty that taxpayers in Thurston County would be blackmailed into even higher tax increases in the near future to pay for the mistakes and the predictable budget fiasco of this undefined “new courthouse” project.
City of Olympia Mayor Cheryl Shelby (D)

Finally, most disturbingly, based on the testimony of the Mayor of Olympia, Cheryl Shelby at the April 23rd public hearing, some type of “partnership” arrangement has been hatched for the undefined courthouse boondoggle (and the taxpayers already have paid $200,000 for this “partnership” according to minutes from the August 14, 2018 commissioner meeting minutes (linked here see item 5a. Note Item 5b was the $300,000 cost of this draft feasibility report linked here) This is terrifying to anyone who has bothered to pay attention to local government in Thurston County. The only Thurston County local government with a worse track record and has demonstrated even more incompetence in building projects and financial mismanagement than Thurston County itself is the City of Olympia. Their bloated, overbudget City Hall (true cost of $52 million) was just the most glaring example, but they also like to give away multi-million dollar buildings for free (to organizations where councilmember spouses work), spend $350,000 on one-stall restrooms, and generally waste taxpayer funds on homeless camps and other fiascos.
The City of Olympia’s investment in Homeless Drug Addict Camps has helped add local flavor to the downtown city experience near the proposed courthouse location

Conveniently, the theoretical location of this “new courthouse” in downtown Olympia will also help the City of Olympia attempt to escape the consequences of their impactful planning policies which have managed to chase businesses away from downtown as fast as business leases expire. Local political “leaders” believe this Thurston County courthouse project might help mask the urban decay and postpone any local political reckoning for the failures of the past and current Olympia City Council. Thurston County voters have every reason to be concerned. In the recent survey – Thurston County voters were almost five times more concerned about the proposed courthouse costs and taxes than they were about any other issue related to this proposed scheme.
Thurston County – A history of building fiascos
Thurston County legal counsel Elizabeth Petrich at the hearing April 30, 2019. Her legal advice has helped Thurston County lose many lawsuits including the record setting $12 million jury verdict against Thurston County in the Maytown case.

Thurston County has a long and colorful history of incompetence, failure, and waste when it comes to building government facilities of any kind. Some have attributed these repeated failures to the planning department, which is often plagued with scandal and questionable leadership. A general government staff infection seems to exist in Thurston County upper management. Some of these failures have also been due to poor political leadership which has afflicted the county on a frequent basis over the years. Another theory involves concerns over the undue influence of special interests who always profit from these decisions like the architecture company and other vendors who stand to profit greatly from the mistakes of Thurston County staff. These special interests also appear to have great influence over the decision making at the staff level and tend to control and direct staff to do their bidding. Conveniently, this bidding always results in hefty sums of taxpayer cash which always end up with these special interests. Regardless of the theory, the result has often been the same –

Let’s look at just a few of the more recent examples:
Former Thurston County Commisioners Romero, Wolfe and Valenzula deserve to be recognized for all they achieved.
Don Krupp, former Thurston County Manager (now county manager in Clackamas County, Oregon)

Thurston County’s jail fiasco made state-wide news for half a decade as the brand new $61 million jail that was rejected by the voters, built by Commissioners Romero, Valenzuela, and Wolfe anyway (under the direction of former Thurston County Manager Don Krupp), and then sat empty for five years because nobody bothered to plan a budget to operate the facility. We’ve written about this fiasco over the years (see here, here, and here). Like most failures of Thurston County “planning,” this one began as an effort to circumvent the voters. A failed effort to build a $102 million jail/justice center was soundly rejected by Thurston County voters in 2004 (see election results here – 61% opposed). An effort to impose a different excise tax was also rejected later. As is frequently the case, Thurston County planning staff was certain they knew best and they colluded with the old Commission, put the debt on future generations by taking out more general obligation bonds without a vote of the people and then built the jail anyway.
While it was empty 5 years, it is finally being used.

Of course, they didn’t call it a “jail,” but instead used the Orwellian term “Accountability and Restitution Center” or “ARC” for short. Once the jail was completed, it sat empty for five years, costing the county $250,000 or more in annual maintenance costs while the county struggled to find some money to run the facility. It wasn’t until the failed Democrat incumbents Valenzuela, Romero and Wolfe were replaced by Independent Commissioners Blake, Edwards, and Hutchings that the empty jail was finally put to use.
3400 building in Thurston County – Thurston County spent $8 million and 18 years to reduce the value of this empty building from $4 million to $2 million

Another classic example of Thurston County’s planning incompetence was the sad saga of the 3400 building (read more written at the time here). This embarrassment existed for many years as another monument to local government incompetence and failure in Thurston County. Originally a commercial fish cannery purchased by Thurston County in 1998 for $3.4 million with the expectation it could be turned into a jail. Those expectations were dashed by reality (nobody at the time bothered to verify whether it could be converted to this use), and Thurston County gradually squandered over $8 million on this empty building. After 18 years during which time the 3400 building sat mostly unused and empty, the brilliant staff of Thurston County found ways to destroy the value even further by giving away the parking lot for a homeless camp project called Camp Quixote, and then finally dumping the failed money pit for a fraction of the purchase cost 18 years earlier.
The last time the Thurston County Courthouse was located in downtown Olympia, it was in this building which was vacated by Thurston County in 1978. (Wikipedia Commons)
Thurston County always seems to need a new courthouse.
Thurston County Treasurer Jeff Gadman bragged at the public hearing on April 23, 2019 about how much the current courthouse facility has been allowed to degrade with staff’s lack of maintenance.

The current Thurston County Courthouse was built in 1978. A casual review of newspaper articles from that era along with a review of archives demonstrates that the promises made to taxpayers back then remain identical to the promises made today for the “new” courthouse in downtown Olympia. The Thurston County Commissioners and planning staff in the 1970s promised that the new courthouse would be energy efficient, have plenty of parking, be sustainable long term, and have the ability and room to expand to accommodate future needs. Staff promised to maintain the facility. Many of those promises went unfilled – particularly the parking plans and building maintenance. However, the need to escape the problems of downtown Olympia like traffic, parking, and other related issues were real to the citizens of the community at the time.

In my next article on this subject, I plan to discuss better alternatives than this proposed fiasco. The biased process used to get this pre-determined outcome also merits more attention. Additionally, the special interests pushing this boondoggle for their own selfish ends, regardless of the harm inflicted on the community should be closely examined and studied.

Based on a 1975 Environmental Impact Statement, which this author found in the state archives, the Thurston County Commissioners at that time were defensive about the public criticism of the high costs for “marble palaces” and they were moving forward with the project regardless. It is worth noting, every Thurston County Commissioner who voted for the proposed courthouse project at the time were removed from office by the voters at the next election. History has a tendency to repeat itself and both Commissioner Tye “the big tax guy” Menser, and Commissioner Hutchings should take note.

Unfortunately, if this massive tax increase is approved, nobody will remember today’s politicians who hurt us, but the taxpayers, including tens of thousands yet unborn will still be paying for it.