NWMLS, Kirkland, WA, March 5, 2013 – Real estate brokers around Washington state agree today’s market is far different than two years ago, with one industry veteran summing it up by saying key indicators “are in perfect alignment for a spring market to remember.”

On the plus side, closed sales during February jumped more than 9 percent from a year ago and median sales prices are up 13 percent according to new figures from Northwest Multiple Listing Service.

Last month’s pending sales across the 21 counties served by Northwest MLS also increased, but only slightly (1.7 percent) due in part to depleted inventory.

“In my 37 years working in the real estate industry, I have never seen inventory this low,” remarked Diedre Haines, regional managing broker for Coldwell Bank Bain-Snohomish County and a member of the Northwest MLS board of directors.

The number of active listings system-wide is down 29 percent from a year ago, with three counties reporting even more contraction: Snohomish County (-47.7 percent); King County (-45.3 percent); and Clark County (-44.7 percent).

Compounding the shortage is the fact that about one-fourth of the MLS inventory is classified as “distressed,” meaning they are short sales or bank-owned. Such homes are sometimes in need of significant repairs or have prolonged transaction times, which may make them less desirable.

“The market is struggling to provide enough inventory for anxious buyers seeking to take advantage of low interest rates,” reported Dick Beeson, principal managing broker of RE/MAX Professionals in Tacoma. Also, he lamented, considering 25 percent of the selection is distressed, “It leaves some buyers with tough choices.”

Northwest MLS brokers added 7,497 new listings to inventory during February, for a slight increase from a year ago when they added 7,390 single family homes and condominiums to the database.

With the additions during February, the selection at month-end totaled 18,114 active listings. That compares to 25,510 offerings at the same time a year ago for a 29 percent decline.

“Low supply and high demand continue to drive our market,” stated Northwest MLS director John Deely. He said multiple offers are the “rule rather than the exception” for new listings in core urban areas that are priced well. Deely, the principal managing broker at Coldwell Banker Bain in Seattle, noted a new listing in North Seattle recently drew 12 offers and the property was bid almost 10 percent above its listing price.

OB Jacobi, president of Windermere Real Estate Company, noted the month’s supply of homes in King County has dipped to about 1.2 months, well below the six-month threshold that many in the industry consider to be “normal.” Jacobi, who is also on the MLS board of directors, noted supply is at its lowest level since May 2005 during the peak of the housing boom. “The impact of low inventory levels is stiff competition among buyers, often resulting in homes selling for well over asking price,” he remarked. Also, he added, the imbalance also leads to rising median prices.

J. Lennox Scott, chairman and CEO of John L. Scott, Inc., attributes surging sales and prices to several factors, including positive job growth, historically low interest rates and fewer homes being listed. “This restriction of homes for sale is prevalent in the price ranges where more than 90 percent of activity is taking place, causing prices to rise,” he stated.

Area-wide, the median sales price of single family homes and condominiums that sold last month was $247,500. That represents a 3.4 percent gain over the previous month (January) and a 13 percent increase from a year ago. Ten counties reported double-digit year-over-year increases.

For single family homes (excluding condos) the median price was $255,000, up about 11.4 percent from the year-ago figure of $229,000. Homes in King County commanded a median price of $365,000, rising from $308,125 for a year-over-year gain of about 18.5 percent.

Condo prices jumped 22.7 percent area wide (from $150,000 to $184,000) and more than 31 percent in King County, which accounted for nearly two-thirds of the transactions. Condos that sold last month in King County had a median selling price of $210,000; a year ago it was $159,950.

“We have plenty of buyers and desperately need more sellers,” proclaimed Mike Gain, CEO and president of Prudential Northwest Realty Associates. He said open houses are “packed with buyers,” with most of them being serious and ready to buy. Gain also reported inventory in the lowest price ranges is disappearing in all areas. “The recovery in housing is firmly under way,” he stated.

Echoing those comments was Mike Grady, president and COO of Coldwell Banker Bain. “The seller’s market remains strong as demand continues to outweigh supply at unprecedented levels,” he commented. He thinks homeowners may be staying on the sidelines because they are unaware of the potential equity they’re holding. “This trepidation is understandable,” Grady acknowledged, but stressed now is “a great time for homeowners to assess the current value of their homes,” adding “We’re in a far different market than 24 months ago.”

MLS director Deely reported sellers are prioritizing cash offers ahead of those with financing, while many buyers are trying to improve their position by eliminating or minimizing contingencies. For example, he said buyers are conducting pre-inspections “so they can remove their inspection contingencies with a modicum of due diligence.”

Haines, also of Coldwell Banker Bain, said there are fears of an “artificial bubble” being created. “Many of the sales that are occurring are cash buyers, tenants already living in the homes they are buying, investors and investor groups purchasing in bulk,” she explained. Also, she reported, “We are beginning to see an increase in for sale by owner transactions.” Consequently, she noted, many sales are not in the NWMLS database which can skew the numbers of actual sales, a situation that is occurring in other markets as well as here.

Another Northwest MLS director, George Moorhead, said buyers are being very cautious and price sensitive, noting, “We are not seeing the same energy level as we saw in 2012.” Like other MLS officials, Moorhead, the managing broker at Bentley Properties in Bothell, points to inventory (“it’s holding everyone back”) and other factors as restraints on activity.

Previous recessions were brought back with first-time buyers leading the way, Moorhead stated, noting today’s purchasers include move-up buyers who are keeping their homes as rentals. When combined with would-be sellers who are under water and can’t qualify for a short sale or lack savings to cover a loss at closing, inventory lags. According to Moorhead, these scenarios are contributing to “a void which we have not experienced in the past.”

Brokers are downplaying any immediate fallout from the federal government’s budget sequestration on the local housing market:

“The cutback with FHA insured loans will have limited impact on buyers,” predicts Moorhead.
Mike Gain believes cuts at HUD may cause FHA loans to become more difficult but if that really comes to pass people will adjust. “They always do.” He expects other conventional mortgage products will surface. “We always find ways to satisfy our customers’ wants and needs. Closing times may be a bit longer but I expect FHA will continue to be a viable method of financing. The HUD cuts to staff working with distressed property will make that process more difficult. Really a shame since these are the folks who really need the most help and the process has never been easy for them,” he remarked.
“I think it is too soon to say how the sequester will impact our Puget Sound markets,” said Haines.
Beeson said “Sequester may hurt some markets nationally but I think the Northwest is somewhat insulated from the fray. The cuts in FHA employees would be the biggest problem and could cause issues for borrowers.”
Referring to sentiments in Warren Buffet’s annual letter to shareholders, broker Gary O’Leyar said he shares Buffet’s optimism for real estate.

“We’ve had the gas crisis, we’ve had the fiscal cliff crisis, we’ve had the meltdown of banks and the resulting loss of confidence on Wall Street, yet look at the facts,” O’Leyar said. “The real estate market has not only survived, but it has shown marked improvement.” He believes if one source of lending such as HUD/FHA loses funding, another sector will rise up to pick up the slack. “I’m already seeing smaller regional savings & loans, community banks, and credit unions stepping up to aggressively offer home mortgages, which I see as a very positive trend. I’m siding with Warren Buffet whose actions have shown he is very bullish on real estate,” O’Leyar declared.

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.

FOR IMMEDIATE RELEASE: February 5, 2013

Kirkland, WA, February 5, 2013 – Punxsutawney Phil’s prediction of an early spring is showing up in the latest housing activity report from the Northwest Multiple Listing Service. Its statistics for January showed a 14.4 percent year-over-year increase in pending sales and a 23.6 percent jump in closed sales amid a 31.3 percent decline in inventory.

The MLS reported 4,289 closed sales during January, surpassing the year ago total by 820 transactions. Last month’s completed sales of single family homes and condominiums had a median selling price of $239,300. That’s up 11.3 percent from the year-ago figure of $214,990.

Supply has dwindled to less than two months in some counties close to job centers, spurring bidding wars. Some buyers are even resorting to writing “love letters” to win over sellers in these competitive situations. Brokers also report an increasing number of buyers have little or no interest in making offers on short sales.

“I personally have never seen the ratio between active buyers and available inventory in Seattle’s close-in neighborhoods so out of balance,” remarked Mike Skahen, owner/designated broker at Lake & Co. Real Estate in Seattle. Skahen, a real estate professional since 1976, said multiple offers and bids well over the list price are common. “Even homes that were hard to sell for various reasons are being snapped up so those sellers were wise to list,” he added.

Lena Maul, a new member of the Northwest MLS board of directors, and the designated broker/owner at Windermere/North in Lynnwood, agreed now is a good time for sellers to list. “Sellers who are considering a spring or summer listing may want to consider listing now as demand is outweighing supply,” she noted, adding, “This has given well priced sellers the advantage with the benefit of quick sales and multiple offers.”

With multiple offers on the rise, buyers are seeking an edge as they vie for a desirable home. Brokers are reporting an increase in the use of heartfelt letters from would-be owners who want to distinguish themselves and forge an emotional bond with the sellers.

Maul recalled a successful letter-writing effort last month by one of her office’s clients. Those buyers, who were using FHA financing, wrote a letter introducing themselves to the seller and explaining why they liked the home so much. After reviewing 13 offers, including one from an all-cash investor, the seller chose the letter-writer’s offer.

“Buyers should not forget the human element of appealing to a seller in this multiple offer market,” Maul emphasized, adding, “You just never know who is on the other side of a transaction and what might be important to them. In this case, selling their home to an owner occupant who appreciated special features of their home versus an investor sealed the deal, not cash.”

Brokers in the 21 counties served by Northwest MLS added 7,096 new listings to inventory during January. That total was just slightly more than the number of pending sales (7,016) that members reported last month and brought the total number of active listings at month end to 18,008.

Only two counties, Mason and Ferry, reported an increase in inventory last month compared to a year ago. The sharpest drops occurred in Snohomish County (down more than 51 percent) and King County (down nearly 48 percent). Both those counties have less than a two-month supply of homes for sale.

“Kitsap County is starting its spring market early this year,” reports Northwest MLS director Frank Wilson. It has 3.35 months of supply. Pending sales (mutually accepted offers) rose 23 percent in that market last month compared to a year ago, while closed sales surged nearly 40 percent. Prices in Kitsap jumped 32 percent, second only to Grays Harbor County where year-over-year prices jumped more than 54 percent.

“Often we don’t see momentum to really begin building until mid February to the first part of March. This year, I think due to the already low inventory and the continued low interest rates, the market feels like it started mid January” noted Wilson, the managing broker at John L. Scott’s Poulsbo’s branch.

Despite imbalance between supply and demand, Wilson said more and more buyers are opting not to purchase short sale homes because of the uncertainty involved. “It’s not uncommon for a lender to choose at the last minute to foreclose on a property instead of approving a short sale. When this happens it leaves the buyer high and dry with 2-to-4 months of time invested, only to have to start the process all over again,” he stated. That can leave them at a disadvantage considering the current pace of sales.

Sixty percent of homes close to job centers are selling within the first 30 days of being listed – twice the average rate, according to figures compiled by John L. Scott Real Estate. J. Lennox Scott, that company’s chairman and CEO, said extremely favorable market conditions have brought a surge of local home buyers into the market. Historically low interest rates and a shortage of inventory are creating an environment for multiple offer situations, he added.

Only two counties (Grays Harbor and Kittitas) reported a drop in pending sales last month compared to the same period a year ago, while 16 counties notched double-digit gains. The MLS attributes part of the improvement in sales to last month’s milder weather compared to January 2012 when a major snowstorm walloped the region. Nevertheless, even when compared to several previous years, pending sales were robust.

Northwest MLS members reported 5,548 pending sales during January in the four-county region (King, Snohomish, Pierce and Kitsap). That total surpassed the previous high for the month of January, which was logged in 2005 when members reported 5,426 pending sales.

Even though buyers are flocking to newly listed homes, sellers must be smart about pricing, emphasized George Moorhead, branch manager at Bentley Properties. “In my area, a home that comes on the market that is well priced for the area, style and condition is usually under contract within a few days,” Moorhead said, but he also noted homes that have been on the market for more than 20 days are subject to price reductions.

Moorhead, who is also a member of the Northwest MLS board of directors, said the current market defies basic economics for supply and demand. “Interesting factors include sellers who are still holding back for myriad reasons. Some do not have the confidence or equity to put their home in front of buyers, and that is creating even more pent-up demand.”

Skahen, a past chairman of the Northwest MLS board, said it seems like two houses are selling for every new listing coming on the market. “Buyers keep getting more desperate,” he reported, adding “It will be interesting to see if sellers start jumping in after the weather improves in March,” as is the usual pattern.

Skahen also noted buyers who purchased one or two years ago have seen at least a 10-to15 percent appreciation in their value. “Amazon hiring is having a huge impact, especially around Ballard, Queen Anne and Capitol Hill,” he commented.

Yet another positive indicator of the state’s housing market recovery came from the National Association of Home Builders and its NAHB/First American Improving Markets Index (IMI). Six markets in Washington appeared on the list, the largest number since that gauge was created in September 2011. The IMI is based on six consecutive months of improvement in housing permits, employment and house prices.

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.

With such a shortage of inventory, it’s hard to believe that this one will stick around for long. Located in the super cute and hip Columbia City neighborhood of Seattle. This home is in a great location, not to mention it’s super cute! http://www.cbbain.com/Homes/WA/Seattle/4407-Letitia-Ave-S-98118/383712

Chase Bank is aggressively pursuing short sales as an alternative to foreclosure. By clicking HERE, you will be taken to the Chase Bank Homeowner center where you can download the Short Sale Informational Packet.

Download this packet and call Blair Stacks to initiate the short sale process with Chase Bank.

This link is good for loans serviced by:
JP Morgan Chase Short Sale, Chase Home Loan, Chase Manhattan Mortgage.

A wonderful documentary on Mid-Century Modern architectur in Seattle. I love the history behind these beautiful homes and buildings.

From my vantage point as a real estate broker, this is an exceptional time to buy real estate in our area. Why? As I tell my clients, there are three main factors:

Home prices. Over the past few years, home prices in Western Washington have for the most part decreased. If there is a property you’ve had your eye on, it’s a good bet that right now you’ll get a quality home at a good price.

Mortgage rates. Because interest rates remain exceptionally low, you may well have the ability to purchase your dream home with more affordable monthly payments than you could in the past.

The rental market. In much of our region rental vacancies are at their lowest rates in years; low vacancy rates generally translate to higher rents. If you’re a renter, chances are you may now be able to purchase a home and spend the same or less on your monthly payment than you do currently on rent. Or, if you’re an investor looking to purchase a rental property, now might be as advantageous a time as any to do so.

These factors add up to a healthier buyer’s market than we’ve seen in years. This may mean more competition for you as you search for your perfect home. To help my clients prepare to become homebuyers, I like to share the following tips:

Make sure to get pre-qualified for a home loan soon so that you’re in position to take advantage of today’s rates before they go up.

Begin your search for the right home and get a jump on the market by registering for My Home Planner on CBBain.com, which sends you email updates of homes recently listed on the Northwest Multiple Listing Service. Once we’ve had a chance to discuss your specific needs and parameters for a new home, I can easily sign you up for this and forward you login information.

You can also use My Home Planner to look at recent sold home prices to compare what homes are selling for in your neighborhoods of interest.

I’m always happy to assist you as you determine whether now is the right time to become a home buyer. So contact me today, and without obligation!

Coldwell Banker Bain is having a company wide contest for all of us real estate agents, with a thousand dollar grand prize! The idea is to make a YouTube video describing how and why you’re going to utilize Video in your business plan. This is my first ever YouTube video for real estate! The bloopers are pretty funny too!

Yesterday, I listed this beautiful Tudor home in the Mount Baker neighborhood. The house was pushed out to the MLS at around noon and by the end of the day we already had 7 showings, with a second scheduled for this morning!

We’ll be open on Sunday, November 13th from 1 to 4 if you want to see if for yourself!

3300 S Mt. Baker Blvd, Seattle, WA 98144 – MLS 293250

Did you know…

That HUD publishes an annual table of Fair Market Rents? These numbers are used by HUD to determine the maximum rent allowed in subsidized housing and do not necessarily reflect average rents. The tables do, however, give interesting information about historical rents and trends. Data is given by metropolitan areas as well as by county. Here’s a sample from www.huduser.org/portal/datasets/fmr.html.