Housing Activity Still Slower Than Year Ago, But Showing Some Signs of Reviving

News from NW Multiple Listing Service

FOR IMMEDIATE RELEASE: November 6, 2007

October 2007 Recaps
October 2007 King County Breakouts
October 2007 Snohomish Breakouts

KIRKLAND, Wash. (Nov. 6, 2007) – Pending sales perked up around Western Washington in October, reversing four months of month-to-month declines, according to new figures from Northwest Multiple Listing Service (NWMLS). The report also shows some slowing in both listing activity and price appreciation.

Brokers reported 6,127 pending sales (offers made and accepted, but not yet closed) across the 19 counties served by Northwest MLS. That total includes 379 more transactions than September (a 6.6 percent gain), but still lagged activity of a year ago. Compared to the same month a year ago, October’s pending sales were down about 28 percent.

MLS members added 11,785 new listings to inventory – the fewest number since February when they added 11,333 new listings. With those additions, there were 47,381 active listings of single family homes and condominiums in the MLS system, about 31 percent more than a year ago.

The current selection includes 40,252 single family homes with an area-wide median asking price of $375,000 and 7,129 condominiums, listed at a median price of $289,900.

Prices for sales that were completed during October were essentially unchanged from a year ago, but closer examination shows wide variation among the 19 counties. Seven counties had slight drops (most less than 2 percent) and five counties had double-digit price gains compared to 12 months ago. For the four-county Puget Sound region, prices for last month’s closed sales of single family homes and condominiums combined rose about 1.3 percent from a year ago, increasing to $344,250 from $339,950.

NWMLS director Joe Spencer, president of John L. Scott, Inc. described current conditions as the “Buy Zone” and “the perfect buyer’s market.” Looking at the housing market graphically over the past 25 years, it’s evident there are periods when conditions make it the perfect time to buy a home, he explained. “The numbers show the housing market typically has a six to seven year boom, followed by a two year decline. This decline represents an ideal opportunity to buy because homes can be purchased at a premium value – and that’s exactly what we’re experiencing in the Puget Sound region,” Spencer stated. Combine this with low interest rates and a healthy supply of homes to choose from and you have yourself the perfect buyer’s market,” he added.

Mike Welty of Liberty Financial Group in Bellevue said he is seeing the return of the jumbo product, better pricing and greater flexibility. (In general, jumbo loans are for $417,000 or more.) Rates are still very good, he noted, even as the industry has returned to more prudent underwriting and scrutiny. “Equity, income and good credit are still necessary to get the most favorable terms for a mortgage,” Welty added. Acknowledging some industry associates are complaining about the lack of available mortgage products, he said “We have greater flexibility and a broader range of mortgage products” than he has seen in his first 20 years in the business. “A qualified buyer can get a great deal today,” he emphasized.

Despite slower activity, brokers remain optimistic, citing steady population growth, job creation and a demand for median-priced homes near job centers that outstrips supplies as factors that are contributing to the area’s relatively strong and stable real estate market.

“The market is stabilizing in South Sound and buyer confidence is shoring up,” said NWMLS director Dick Beeson, broker/owner of Windermere Real Estate/Commencement Associates in Tacoma. He reports brisk traffic at open houses as more buyers are realizing the bottom of the market may be here and not likely to continue much longer.

NWMLS figures show pending sales in Pierce County increased 8.2 percent last month compared to September. During the same timeframe, the selection shrunk, with 242 fewer listings offered for sale (a drop of about 2.8 percent) at month-end compared to September. “Buyers need to take advantage of the market right now,” Beeson suggests, adding he believes it is poised for a rebound.

Mike Skahen, owner/broker of Lake & Co. Real Estate in Seattle, also detected improving activity. “The past couple of months we’ve noticed a definite slowing in buyer activity,” he observed, attributing the slowdown to negative press, fallout from the subprime mortgage crisis and difficulty in obtaining jumbo loans. However, he remarked, “In just the past two weeks there’s been a noticeable increase in sales and several listings that have been on the market for months have sold, so I think buyers are realizing they’ve waited long enough and are trying to take advantage of negotiable sellers and buy before the holidays.”

Skahen, a member of the NWMLS board of directors, also noted people need to buy and sell houses due to life changes so they can only wait so long. “The current sales statistics really reflect a return to a more normal market,” he commented, adding, ” Seattle’s economy is too strong for this [slowdown] to last long.”

Another MLS director, Kathy Estey, echoed that optimism. “This is a time of opportunity. There is an abundant selection so instead of having to ‘settle’ for a home buyers can actually find homes that meet most of their requirements,” she believes.

Estey, the broker at the Bellevue Downtown office of John L. Scott Real Estate, also urged sellers to seriously consider the first offer they receive, suggesting waiting may only result in lower offers. “Testing” the market may not be a viable option with so many competing homes on the market, she said. Only serious, motivated sellers should put their homes on the market, according to Estey who suggests those who aren’t serious could risk economic damage by being rejected by the marketplace and creating a negative stigma for their home.

Northwest Multiple Listing Service, based in Kirkland, is the largest full-service MLS in the Northwest. The MLS is owned by its member brokers and 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.

Statistical Summary by Counties: Market Activity Summary for October 2007

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(totals include King, Snohomish, Pierce & Kitsap counties)

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