We continue to see signs of improvement in the housing market and last week showed us a surprising 9.6% increase in new single-family home sales for July. This was their steepest percent rise since 2005. New home sales are now at a 433,000 annual rate, up 31.6% from their January low. Even more significantly, inventory of unsold new homes plummeted to a 7.5 month supply from their 8.5 month level in June. This put inventories at 271,000, down over 52% from their mid-2006 peak, and at their lowest level since 1993. New home sales have now been up 4 months in a row, increasing since March at an annualized rate of more than 121%!
Prior to this good news, the Case-Shiller home price index reported a quarterly rise in prices for the first time in three years. The index also posted its second straight monthly increase, up 1.4% for the 20 metro areas it tracks. The Federal Housing Finance Agency's purchase-only index had home prices up 0.5% in June following a 0.6% rise in May. The FHFA index is up 0.5% for the first six months this year. Agency chief Edward J. DeMarco said: "This is further evidence that prices may be stabilizing for the nation as a whole."
Finally, the Mortgage Bankers Association reported mortgage applications for home purchases were up 1.0% last week over the week before. This was the fourth consecutive weekly gain for home-purchase applications.
Monday, August 31, 2009
Sunday, August 30, 2009
Economic Update
For the first time since April of 2007, the Dow closed in positive territory for eight consecutive days. The winning streak ended Friday with the Dow closing down 36 at 9544.
Inflation remained tame last month, as the Federal Reserve's favorite gauge of inflation; the Core Personal Consumption Expenditure Index, came in at 1.4% year-over-year, the smallest rise since September 2003. The monthly Core PCE was 0.1%, just below June's reading of 0.2%. Inflation is essentially non-existent currently but it will certainly return when the economy picks up.
Contained in the PCE report was data on consumer spending, which revealed an increase for the past three months. Interestingly, the boost appears to be from auto sale increases resulting from the Government's "Cash for Clunkers" program. Until the labor market stabilizes, we may not see a more meaningful pickup in consumer spending.
Next week is a big week for economic reports as FOMC Minutes will be released, ADP Employment Report and on Friday the government payrolls report. There are no Treasury auctions scheduled aside from the usual offerings.
Lock in your purchase or refinance now while rates are still historically low!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Inflation remained tame last month, as the Federal Reserve's favorite gauge of inflation; the Core Personal Consumption Expenditure Index, came in at 1.4% year-over-year, the smallest rise since September 2003. The monthly Core PCE was 0.1%, just below June's reading of 0.2%. Inflation is essentially non-existent currently but it will certainly return when the economy picks up.
Contained in the PCE report was data on consumer spending, which revealed an increase for the past three months. Interestingly, the boost appears to be from auto sale increases resulting from the Government's "Cash for Clunkers" program. Until the labor market stabilizes, we may not see a more meaningful pickup in consumer spending.
Next week is a big week for economic reports as FOMC Minutes will be released, ADP Employment Report and on Friday the government payrolls report. There are no Treasury auctions scheduled aside from the usual offerings.
Lock in your purchase or refinance now while rates are still historically low!
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Tuesday, August 25, 2009
National Real Estate News
Last week began with somewhat tepid housing news, as starts were reported down 1.0% for July. But once again, the decline was all due to a drop in the volatile multi-family part of the market. In fact, single-family starts actually increased 1.7%, gaining for the fifth month in a row and now up 37.3% since February! Likewise, building permits for single-family homes were UP 5.8% for July, gaining for the fourth month in a row! The National Association of Home Builders chimed in with their builders' confidence index at a new high of 18.
We ended the week with existing home sales UP 7.2% in July to a 5.24 million annual rate. This is the fourth month in a row of gains and the biggest one since the mid-1990's. Sales are now HIGHER than a year ago and that's the first time we've seen that since 2005. Since the January low, overall sales are UP 17%. Experts say housing will recover when there's a bottom in sales, a bottom in building and a bottom in prices. Well, sales and starts have now been UP for several months. Some observers estimate national average home prices are at or even below fair value and should therefore bottom by year end, with many areas likely to see prices inch upward very soon.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
We ended the week with existing home sales UP 7.2% in July to a 5.24 million annual rate. This is the fourth month in a row of gains and the biggest one since the mid-1990's. Sales are now HIGHER than a year ago and that's the first time we've seen that since 2005. Since the January low, overall sales are UP 17%. Experts say housing will recover when there's a bottom in sales, a bottom in building and a bottom in prices. Well, sales and starts have now been UP for several months. Some observers estimate national average home prices are at or even below fair value and should therefore bottom by year end, with many areas likely to see prices inch upward very soon.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
Saturday, August 22, 2009
Housing Market Shows Signs of Improvement!
National existing home sales were reported today at 5.24 million, better than the expectations of 5 million. The inventory of unsold homes remained at a 9.4 month supply, the best level in a year but still indicates a huge over-supply.
The housing market continues to show signs of stabilization, and although home prices are not about to move higher, the decline certainly seems to have subsided.
Locally we are seeing the purchase market picking up steam as well. Pending sales are up approximately 23% over last year in the King /Pierce / Snohomish county area.
An increasing number of first time homebuyers are moving into the market to take advantage of record low interest rates along with the $8,000 first time homebuyer tax credit. Only 71 business days remain to close in time to qualify for the tax credit!
The economy is currently in a bottoming process. Fed Chairman Bernanke declared this week that the global recession is officially over. Our current housing opportunities will not last forever. Rates will rise. Housing prices will rise. Tax credits will go away. Will you be the one who capitalized on this amazing opportunity…or missed it?
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
The housing market continues to show signs of stabilization, and although home prices are not about to move higher, the decline certainly seems to have subsided.
Locally we are seeing the purchase market picking up steam as well. Pending sales are up approximately 23% over last year in the King /Pierce / Snohomish county area.
An increasing number of first time homebuyers are moving into the market to take advantage of record low interest rates along with the $8,000 first time homebuyer tax credit. Only 71 business days remain to close in time to qualify for the tax credit!
The economy is currently in a bottoming process. Fed Chairman Bernanke declared this week that the global recession is officially over. Our current housing opportunities will not last forever. Rates will rise. Housing prices will rise. Tax credits will go away. Will you be the one who capitalized on this amazing opportunity…or missed it?
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Monday, August 17, 2009
National Real Estate News
Home prices could be stabilizing. Zillow.com reported the annual decline in home prices in Q2 was smaller than in Q1. Most significantly, this was the first decrease in the rate of annual decline since the fall of 2007. In addition, the volume of home sales rose 3.8% in June.
Unfortunately, foreclosure-related filings grew 7% in July over June, according to RealtyTrac. However, we need to remember that foreclosure activity is concentrated in just a few areas. RealtyTrac reported that for the first six months of this year, 43% of the foreclosure filings occurred in just two states.
Unfortunately, foreclosure-related filings grew 7% in July over June, according to RealtyTrac. However, we need to remember that foreclosure activity is concentrated in just a few areas. RealtyTrac reported that for the first six months of this year, 43% of the foreclosure filings occurred in just two states.
Saturday, August 15, 2009
Fed Statement Could Mean Rates on the Rise
Federal Reserve officials met yesterday and issued a statement saying that their program to purchase $1.25 trillion of mortgage-backed securities will be winding down by the end of year. The Fed is the single largest buyer of mortgage bonds in the market today. The way mortgage companies set their interest rates is by figuring out the price that Fannie Mae and Freddie Mac are willing to pay them for the mortgage. Fannie and Freddie set their price by figuring out what investors on the bond market are willing to pay them for the Mortgage-Backed Securities (mortgage bonds) that they issue. When the Fed stops buying mortgage-backed securities, the demand for these bonds will be much less, and mortgage rates will go higher.
Since the Fed began purchasing mortgage bonds and intervening in the mortgage markets, interest rates on fixed rate mortgages have dropped a full percentage point below where they would be otherwise. A one percent increase in mortgage rates- from 5.25% to 6.25% -would cost an extra $250 per month on a $300,000 30 year mortgage. This is exactly what could happen in 2010 once the Fed stops buying mortgage bonds.
Fed officials have been signaling for some time that their unprecedented interventions in the mortgage markets may come to an end or even be reversed once the economy begins to improve. Homeowners and buyers should really consider acting now to take advantage of this window of opportunity to refinance or buy a home while rates are historically low.
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Since the Fed began purchasing mortgage bonds and intervening in the mortgage markets, interest rates on fixed rate mortgages have dropped a full percentage point below where they would be otherwise. A one percent increase in mortgage rates- from 5.25% to 6.25% -would cost an extra $250 per month on a $300,000 30 year mortgage. This is exactly what could happen in 2010 once the Fed stops buying mortgage bonds.
Fed officials have been signaling for some time that their unprecedented interventions in the mortgage markets may come to an end or even be reversed once the economy begins to improve. Homeowners and buyers should really consider acting now to take advantage of this window of opportunity to refinance or buy a home while rates are historically low.
~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com
Thursday, August 13, 2009
National Real Estate News
We got another positive housing report last week, this time with Pending Home Sales shooting up a surprising 3.6% after a mere 0.7% was expected by the experts. This makes five consecutive months of gains for Pending Home Sales and that's the first time that's happened since July 2003. Low mortgage interest rates and affordable home prices are what's moving things upward.
The affordability is amazing. The median existing home price in June was $181,600. But a family earning the median income – $60,700 – could actually afford a home costing $289,100. With 20% down, they would spend about 25% of their gross income on the mortgage payment! And rates dropped again last week, keeping things very affordable indeed.
The Wall Street Journal reported inventories of homes for sale fell again in many U.S. cities last month. In 28 major metro areas, the supply of homes for sale at the end of July was down 2.5% from June, including single-family homes, condominiums and town houses. This compares to an average drop for July of just 1.0% over the last 25 years. Compared to July 2008, inventory in these 28 metros was down a whopping 27%!
The affordability is amazing. The median existing home price in June was $181,600. But a family earning the median income – $60,700 – could actually afford a home costing $289,100. With 20% down, they would spend about 25% of their gross income on the mortgage payment! And rates dropped again last week, keeping things very affordable indeed.
The Wall Street Journal reported inventories of homes for sale fell again in many U.S. cities last month. In 28 major metro areas, the supply of homes for sale at the end of July was down 2.5% from June, including single-family homes, condominiums and town houses. This compares to an average drop for July of just 1.0% over the last 25 years. Compared to July 2008, inventory in these 28 metros was down a whopping 27%!
Wednesday, August 12, 2009
Snohomish County Statistics - July, 2009
Current Residential & Condo listings - 5,659 (down 24.13% from last year)
New listings taken this month - 1,711
Pending sales this month - 1,164 (up 31.82% from last year)
Percent of listings that sold this month - 20.57%
Median closed sales price - July ‘08, $332,500
Median closed sales price - July ‘09, $292,000
Rate of appreciation = -12.18%
~ Courtesy of NWMLS
New listings taken this month - 1,711
Pending sales this month - 1,164 (up 31.82% from last year)
Percent of listings that sold this month - 20.57%
Median closed sales price - July ‘08, $332,500
Median closed sales price - July ‘09, $292,000
Rate of appreciation = -12.18%
~ Courtesy of NWMLS
King County Statistics - July, 2009
Current Residential & Condo listings - 13,589 (down 16.70% from last year)
New listings taken this month - 4,261
Pending sales this month - 2,777 (up 17.42% from last year)
Percent of listings that sold this month - 20.44%
Median closed sales price - July ‘08, $401,500
Median closed sales price - July ‘09, $350,000
Rate of appreciation = -12.83%
~ Courtesy of NWMLS
New listings taken this month - 4,261
Pending sales this month - 2,777 (up 17.42% from last year)
Percent of listings that sold this month - 20.44%
Median closed sales price - July ‘08, $401,500
Median closed sales price - July ‘09, $350,000
Rate of appreciation = -12.83%
~ Courtesy of NWMLS
Eastside Statistics - July, 2009
Current Residential & Condo listings - 5,190 (down 10.64% from last year)
New listings taken this month - 1,465
Pending sales this month - 872 (up 19.45% from last year)
Percent of listings that sold this month - 16.80%
Median closed sales price - July ‘08, $525,000
Median closed sales price - July ‘09, $458,750
Rate of appreciation = -12.62%
~ Courtesy of NWMLS
New listings taken this month - 1,465
Pending sales this month - 872 (up 19.45% from last year)
Percent of listings that sold this month - 16.80%
Median closed sales price - July ‘08, $525,000
Median closed sales price - July ‘09, $458,750
Rate of appreciation = -12.62%
~ Courtesy of NWMLS
Friday, August 7, 2009
Is Housing Still Overvalued?
It’s no secret that housing prices have declined dramatically in many parts of the country. Yet some people are still arguing that prices still have a long way to fall before they become affordable. Are they right?
Data compiled through the Housing Affordability Index (HAI), an index created by the National Association of Realtors® shows that owning a home today is 59.48% more affordable than it was in 2006, although the median home prices have only fallen by about 18.1% over that same time frame. Why the huge difference? Mortgage rates are lower today than they were in 2006! This means that an 80% mortgage based on today's interest rates and home values is much more affordable than an 80% mortgage based on 2006 interest rates and home values.
Therefore, housing could actually become less affordable even if house prices decline slightly from their current levels! This is because mortgage rates could increase, driving up your monthly payments and the costs of owning that home over time. Further, once house prices stabilize and/or go up, mortgage rates will likely be higher as well due to less government intervention in the mortgage markets. This will significantly drive down the affordability index. So, if affordability is your measurement, housing is NOT overvalued. In fact, housing might even be dramatically undervalued based on these measurements of historical affordability!
~ Courtesy of Wendy Charles, CMPS, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321
Data compiled through the Housing Affordability Index (HAI), an index created by the National Association of Realtors® shows that owning a home today is 59.48% more affordable than it was in 2006, although the median home prices have only fallen by about 18.1% over that same time frame. Why the huge difference? Mortgage rates are lower today than they were in 2006! This means that an 80% mortgage based on today's interest rates and home values is much more affordable than an 80% mortgage based on 2006 interest rates and home values.
Therefore, housing could actually become less affordable even if house prices decline slightly from their current levels! This is because mortgage rates could increase, driving up your monthly payments and the costs of owning that home over time. Further, once house prices stabilize and/or go up, mortgage rates will likely be higher as well due to less government intervention in the mortgage markets. This will significantly drive down the affordability index. So, if affordability is your measurement, housing is NOT overvalued. In fact, housing might even be dramatically undervalued based on these measurements of historical affordability!
~ Courtesy of Wendy Charles, CMPS, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321
Thursday, August 6, 2009
Northwest MLS brokers say housing market is recovering, but still "spongy"
Most numbers are "moving in the right direction," close-in Seattle neighborhoods are definitely coming to life and move-up buyers are re-entering the market were among observations by brokers when asked to comment on the latest activity report from Northwest Multiple Listing Service (NWMLS).
The report shows July's pending sales increased from a year ago, as did closed sales, and inventory continues to shrink. Prices on sales that closed during July still lagged figures of a year-ago (down about 10 percent area-wide) and NWMLS members said last month's record-setting temperatures "absolutely impacted showings and sales."
July's unseasonably hot weather curtailed activity for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying it was just too hot.
"The hot July weather aside, the variable results we saw in July reflect what we'd typically expect from a recovering housing market – a few steps forward for some areas, a step back in others," said Ron G. Sparks, managing vice president of Coldwell Banker Bain. Whereas comparisons to a year ago reflect some substantial gains, on a month to month basis we're probably going to experience some "spongy" results for a while, he explained.
For example, brokers reported 7,279 pending sales (mutual acceptance of a purchase and sale agreement) last month, up from the year-ago total of 6,350 sales for a 14.6 percent gain. Compared with June, the volume slipped about 5.9 percent, dropping from 7,733 to 7,279 transactions.
In the four-county Puget Sound region (King, Kitsap, Pierce, and Snohomish), July's pending sales of single family homes and condominiums jumped 21.2 percent from twelve months ago, but dipped 6.9 percent from the previous month. Nonetheless, last month's 5,551 pending sales for the region marked the second-highest monthly total since August 2007.
Pending sales of condos (excluding single family homes) rose nearly 12.5 percent last month from a year ago. That continued June's modest gain of 1.3 percent, when 22 months of negative year-over-year comparisons ended. Last month's increase was the first double-digit gain since February 2007. "I'm excited to see the continued increase of pending sales because these figures are the lead predictor of buyer behavior," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "The rise of pending sales over the past few months is the best indication we have of what's to come and I am encouraged by what we're seeing," he added.
Brokers say first-time buyers who are motivated by a looming deadline for the tax credit are propelling activity. "There seems to finally be a feeling of urgency to take advantage of this program before it goes away," remarked NWMLS director Meribeth Hutchings, broker/owner of Windermere Real Estate/ Lake Stevens.
In an effort to keep agents and their clients focused on the time remaining for the $8,000 tax credit opportunity, Sparks said his company has a clock prominently displayed on its internal website that ticks down the days, minutes and seconds until the midnight deadline on Nov. 30. He also commented on the secondary benefits of the credit. "My daughter just closed on her first home, and she intends on using the tax credit for household items she'll need as a new homeowner. She's excited to buy her first lawn mower…good for her, good for housing, and good for the economy," he stated.
Commenting on the tax credit, NWMLS director Dick Beeson said first time homebuyers are "getting it. All they talk about is the $8,000 tax credit and how good interest rates are."
Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, said with the exception of prices, the numbers are all moving in the right direction. "Inventory is adjusting down, even though it is summer, pending sales are moving up, and even more importantly, closed sales are above last year." Those numbers are a sign of a "modest, modest recovery," according to the 30-year veteran of the real estate profession.
NWMLS members added 11,481 new listings to inventory during July, 1,612 fewer than during the same month a year ago. At month end, there were 42,310 active listings of single family homes and condominiums in the MLS database, down 18 percent from a year ago. Twelve of the 19 counties in the MLS reported double-digit shrinkage in inventory.
MLS brokers reported a system-wide total of 5,527 closed sales for the month of July, an increase of 256 transactions from a year ago for a 4.9 percent gain. The median selling price for those closings was $279,000, down 10 percent from the year-ago price of $310,000. Among the 19 counties served by NWMLS, the price changes from a year ago ranged from a 25.1 percent increase in Okanogan County to a 17.8 percent decline in Cowlitz County.
For the four-county Puget Sound region, the median selling price for last month's completed sales of single family homes (excluding condos) was $314,000, about 13.5 percent less than the year-ago price of $363,000.
"After almost two years of relative calm, the close-in Seattle neighborhoods have definitely come to life in a major way," remarked Mike Skahen, owner/broker at Lake & Co. Real Estate, Inc., in Seattle and a member of the NWMLS board of directors. He described open house traffic as "very strong" with a typical home drawing 20 to 50 buyers.
Multiple offers are once again becoming common on well-priced quality listings, according to Skahen. Although noticeable during the past few months for homes priced under $450,000, he said there are now instances of competition at higher price ranges. A recent listing of a Wallingford bungalow priced at $550,000 drew eight offers, which Skahen said is a "good indication the trade up buyers have finally decided that prices have bottomed out, so after waiting too long they are now competing for fewer listings."
Skahen also said the tax credit has created such strong demand for starter homes that those sellers now realize they actually gain more by trading up in this market because they save more on their trade-up home and there is good demand for the home they're selling.
On a cautionary note, Skahen said there is very likely to be a shortage of homes and townhouses in some Seattle neighborhoods by next year. "New construction has almost ground to a halt because builders can't get prices that even cover construction costs," he reported.
Hutchings, whose office is in Snohomish County, said they're also seeing move up buyers re-entering the market. "They understand even if their current home has lost value, their new home will also offer them a greater savings. That, along with low interest rates, make it a great time to buy up," she emphasized.
Beeson said the transition from a buyers' market to a sellers' market is occurring in, "of all places," the foreclosure market. "Banks are pricing many homes slightly under market value and watching multiple offers come in, bidding up the price. What a change that is," he exclaimed, while noting he hopes the next wave of foreclosure homes coming on the market later this year will finally flush out the remaining inventory and "we'll get back to a more normal market."
~ Courtesy of NWMLS
The report shows July's pending sales increased from a year ago, as did closed sales, and inventory continues to shrink. Prices on sales that closed during July still lagged figures of a year-ago (down about 10 percent area-wide) and NWMLS members said last month's record-setting temperatures "absolutely impacted showings and sales."
July's unseasonably hot weather curtailed activity for several showings and open houses, as brokers and agents said buyers and sellers postponed tours, saying it was just too hot.
"The hot July weather aside, the variable results we saw in July reflect what we'd typically expect from a recovering housing market – a few steps forward for some areas, a step back in others," said Ron G. Sparks, managing vice president of Coldwell Banker Bain. Whereas comparisons to a year ago reflect some substantial gains, on a month to month basis we're probably going to experience some "spongy" results for a while, he explained.
For example, brokers reported 7,279 pending sales (mutual acceptance of a purchase and sale agreement) last month, up from the year-ago total of 6,350 sales for a 14.6 percent gain. Compared with June, the volume slipped about 5.9 percent, dropping from 7,733 to 7,279 transactions.
In the four-county Puget Sound region (King, Kitsap, Pierce, and Snohomish), July's pending sales of single family homes and condominiums jumped 21.2 percent from twelve months ago, but dipped 6.9 percent from the previous month. Nonetheless, last month's 5,551 pending sales for the region marked the second-highest monthly total since August 2007.
Pending sales of condos (excluding single family homes) rose nearly 12.5 percent last month from a year ago. That continued June's modest gain of 1.3 percent, when 22 months of negative year-over-year comparisons ended. Last month's increase was the first double-digit gain since February 2007. "I'm excited to see the continued increase of pending sales because these figures are the lead predictor of buyer behavior," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "The rise of pending sales over the past few months is the best indication we have of what's to come and I am encouraged by what we're seeing," he added.
Brokers say first-time buyers who are motivated by a looming deadline for the tax credit are propelling activity. "There seems to finally be a feeling of urgency to take advantage of this program before it goes away," remarked NWMLS director Meribeth Hutchings, broker/owner of Windermere Real Estate/ Lake Stevens.
In an effort to keep agents and their clients focused on the time remaining for the $8,000 tax credit opportunity, Sparks said his company has a clock prominently displayed on its internal website that ticks down the days, minutes and seconds until the midnight deadline on Nov. 30. He also commented on the secondary benefits of the credit. "My daughter just closed on her first home, and she intends on using the tax credit for household items she'll need as a new homeowner. She's excited to buy her first lawn mower…good for her, good for housing, and good for the economy," he stated.
Commenting on the tax credit, NWMLS director Dick Beeson said first time homebuyers are "getting it. All they talk about is the $8,000 tax credit and how good interest rates are."
Beeson, the broker/owner of Windermere Commencement Associates in Tacoma, said with the exception of prices, the numbers are all moving in the right direction. "Inventory is adjusting down, even though it is summer, pending sales are moving up, and even more importantly, closed sales are above last year." Those numbers are a sign of a "modest, modest recovery," according to the 30-year veteran of the real estate profession.
NWMLS members added 11,481 new listings to inventory during July, 1,612 fewer than during the same month a year ago. At month end, there were 42,310 active listings of single family homes and condominiums in the MLS database, down 18 percent from a year ago. Twelve of the 19 counties in the MLS reported double-digit shrinkage in inventory.
MLS brokers reported a system-wide total of 5,527 closed sales for the month of July, an increase of 256 transactions from a year ago for a 4.9 percent gain. The median selling price for those closings was $279,000, down 10 percent from the year-ago price of $310,000. Among the 19 counties served by NWMLS, the price changes from a year ago ranged from a 25.1 percent increase in Okanogan County to a 17.8 percent decline in Cowlitz County.
For the four-county Puget Sound region, the median selling price for last month's completed sales of single family homes (excluding condos) was $314,000, about 13.5 percent less than the year-ago price of $363,000.
"After almost two years of relative calm, the close-in Seattle neighborhoods have definitely come to life in a major way," remarked Mike Skahen, owner/broker at Lake & Co. Real Estate, Inc., in Seattle and a member of the NWMLS board of directors. He described open house traffic as "very strong" with a typical home drawing 20 to 50 buyers.
Multiple offers are once again becoming common on well-priced quality listings, according to Skahen. Although noticeable during the past few months for homes priced under $450,000, he said there are now instances of competition at higher price ranges. A recent listing of a Wallingford bungalow priced at $550,000 drew eight offers, which Skahen said is a "good indication the trade up buyers have finally decided that prices have bottomed out, so after waiting too long they are now competing for fewer listings."
Skahen also said the tax credit has created such strong demand for starter homes that those sellers now realize they actually gain more by trading up in this market because they save more on their trade-up home and there is good demand for the home they're selling.
On a cautionary note, Skahen said there is very likely to be a shortage of homes and townhouses in some Seattle neighborhoods by next year. "New construction has almost ground to a halt because builders can't get prices that even cover construction costs," he reported.
Hutchings, whose office is in Snohomish County, said they're also seeing move up buyers re-entering the market. "They understand even if their current home has lost value, their new home will also offer them a greater savings. That, along with low interest rates, make it a great time to buy up," she emphasized.
Beeson said the transition from a buyers' market to a sellers' market is occurring in, "of all places," the foreclosure market. "Banks are pricing many homes slightly under market value and watching multiple offers come in, bidding up the price. What a change that is," he exclaimed, while noting he hopes the next wave of foreclosure homes coming on the market later this year will finally flush out the remaining inventory and "we'll get back to a more normal market."
~ Courtesy of NWMLS
Tuesday, August 4, 2009
National Real Estate News
Last Monday we heard the good news that New Home Sales blasted UP 11% in June, their largest one-month gain in almost nine years! The annual rate of 384,000 came in higher than any of the 63 economists making a forecast predicted. After bottoming in January, new home sales are UP 17%, while existing home sales are UP 9%. New home inventory figures were even better, down to 8.8 months from their 12.4 month high in January. Experts now say some growth in home construction should begin later this year. And remember, new home sales are still well below their long-term trend of around 950,000 per year, so they should continue to move up for the next few years.
But here's our favorite news of all. Tuesday the Case-Shiller index reported US home prices rose in May on a month-to-month basis for the first time since July 2006. Prices were up an average of 0.5%, thanks to increases in 13 of the 20 selected cities in their index. So, this most pessimistic of the home price indexes is finally showing that prices may be turning around! Excellent. Finally, loan workouts done in the HOPE NOW alliance were up by 25% for June, exceeding the number of foreclosure starts for the first time since April.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
But here's our favorite news of all. Tuesday the Case-Shiller index reported US home prices rose in May on a month-to-month basis for the first time since July 2006. Prices were up an average of 0.5%, thanks to increases in 13 of the 20 selected cities in their index. So, this most pessimistic of the home price indexes is finally showing that prices may be turning around! Excellent. Finally, loan workouts done in the HOPE NOW alliance were up by 25% for June, exceeding the number of foreclosure starts for the first time since April.
~ Courtesy of Chuck Chrobak, Golf Savings Bank, CChrobak@GolfSavingsBank.com, 425.330.9657
Saturday, August 1, 2009
Factors Influencing Mortgage Rates
Rates moved lower at the end of this week as traders were pleasantly surprised by foreign participation in Thursday’s Treasury Auction. It used to be the economic reports were the most
dominant factor impacting the direction of mortgage rates. However, this has changed in the past few months with a tremendous increase in the size of government auctions of Treasury Bonds. This added supply weighs on all bonds which includes mortgage bonds and causes interest rates to rise. While this week’s Treasury Auction went well and rates went down, there is another huge Auction scheduled for August 11,12, 13th. The size of this auction will be announced on August 5th and will likely cause volatility for mortgage rates as a result.
Another factor influencing rates this week was the announcement of the GDP numbers which fell 1% last quarter. This is the fourth straight quarter that GDP has fallen, which is the first time this has occurred since the government began keeping records in 1947.
Finally, consumer spending, which accounts for two thirds of the US economic activity, dropped by 1.2% in the 2nd quarter after it had improved by .6% the previous quarter.
All of this data is good news for home buyers as rates remain historically low.
~ Courtesy of Wendy Charles, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321
dominant factor impacting the direction of mortgage rates. However, this has changed in the past few months with a tremendous increase in the size of government auctions of Treasury Bonds. This added supply weighs on all bonds which includes mortgage bonds and causes interest rates to rise. While this week’s Treasury Auction went well and rates went down, there is another huge Auction scheduled for August 11,12, 13th. The size of this auction will be announced on August 5th and will likely cause volatility for mortgage rates as a result.
Another factor influencing rates this week was the announcement of the GDP numbers which fell 1% last quarter. This is the fourth straight quarter that GDP has fallen, which is the first time this has occurred since the government began keeping records in 1947.
Finally, consumer spending, which accounts for two thirds of the US economic activity, dropped by 1.2% in the 2nd quarter after it had improved by .6% the previous quarter.
All of this data is good news for home buyers as rates remain historically low.
~ Courtesy of Wendy Charles, LoanCentral LLC, WendyC@LoanCentral.com, 425.468.9321
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