“Aware and prepared” buyers help boost Western Washington home sales during June

"Encouraging" seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service (NWMLS). The report shows inventory continues to shrink, pending sales increased more than 19.5% from a year ago, and median prices system-wide are up 4.4% since January.

"The positive movement in our real estate market year over year is really very encouraging," remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, "In anyone's book, that's substantial improvement."

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. "It's encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago," he stated. While the median home price is down approximately 10% from a year ago, median prices have flattened over the past 7 to 9 months, he noted. "This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges," Scott believes.

Pending sales (offers made and accepted) in the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish) rose more than 25 percent in June compared to the same month a year ago.

"There is a definite upsurge in sales activity, from a pending sales perspective and a "lookers becoming buyers" perspective," observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.

Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act. He said the “word” on the $8,000 tax credit has finally reached the streets, as more buyers come in aware, prepared and excited about taking advantage while the advantage is available. (The federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before December 1, 2009.)

Data show some neighborhoods are rebounding faster than others, Sparks observed. "In what appears to be a transitional market, accurate neighborhood information is more critical than ever, so buyers, sellers and their agents really need to do their homework" he emphasized.

Short sales continue to be a drag on prices and source of frustration for brokers and agents, according to Beeson. A National Association of REALTORS® analysis revealed that distressed homes typically sell for 20% less than the normal market price, thereby drawing down the overall median price.

Many pending sales are yet to close because of short sales, which Beeson estimates take twice as long to close as a more conventional transaction. "Many pendings have to be resold because the first buyer tires of waiting for the lender's response."

Beeson also notes the next challenge will be reactions to the next round of foreclosed properties that are expected to come on the market in the next six months. He said there could be another dip in prices, but adds, "I think we've been through the worst."

Right now is a great time to buy. Very rarely do we get the combination of lower prices, high amounts of inventory, anxious sellers willing to deal, and interest rates that are at approximately 50 year lows. This is the very best time to buy we’ve had in years!