Ryan Francescutti

January housing market stats are out so let’s do a little recap and analysis of housing market activity in North King County. The charts below include statistics for the cities of Shoreline, Lake Forest Park, Kenmore, and the King County part of Bothell. This first graph shows the active homes for sale in light green, the homes under contract (pending) as the red line, and closed sales in blue. You can see quite clearly that the inventory of available homes is the lowest it’s been in a long time. Part of that is due to the time of year and it will be natural for more homes to come on the market as we get closer to spring. But even with the lower inventory, pending sales increased quite dramatically in January. That tells me there is some pent up demand from buyers and they are out there taking advantage of historically low interest rates and lower prices. A relatively small number of sales closed in January but that’s not too unusual because fewer people are making offers in December. The pending sales line should precede closed sales by 1-2 months so it is a leading indicator of sales that will close in February and March.

Now let’s look at prices. The average sales price for this north end of King County last month was $342,000 and $148/sqft. That is down about 10% from January 2011. BUT, I really don’t feel like you can say that all homes lost that much value last year. I believe that a lot this last year’s overall price decline is attributed to the fact that a higher percentage of lower priced homes sold. If you look just at homes priced between $300,000 and $600,000 in this same area, average prices actually increased slightly!

Average consecutive days on market increased to 113 from 102 days in December. But, we were at 139 days last January. And it’s very encouraging to see that the sales price, as a percentage of the listing price, increased to 96% from 94% in December and from 92% last January.

Finally, another measurement of the low inventory is shown in this Months of Inventory chart. We are at only 3.1 months of inventory based on Pending sales. Most of last year was very healthy in the 3.7 to 4.8 range. Getting under 3 months of inventory would basically be a sellers market while 3-6 months is a balanced market and above 6 would be a buyers market. Of course, every price range is different so there is definitely more demand in certain areas and prices than in others.

Real estate markets are extremely local so every house and neighborhood is unique. Use these trends as a guideline, but at the point you are thinking about selling your home, or if you find a new home that you think you want to buy, consult with a Realtor who knows your area who can assess the property, the neighborhood, and your specific situation.

*Statistics not compiled nor published by the NWMLS

Latest NW Multiple Listing Service press release:  “Housing market “healing itself,” numbers are “astoundingly good.” Click here for the full release: http://www.nwrealestate.com/nwrpub/common/news.cfm

Happy New Year! This month, I would like to give a perspective of King County real estate activity over the last 5 years…

If you recall, at the end of 2006 and at the beginning of 2007, the housing market was starting to shudder a bit in other parts of the country, but things were still going pretty strong in the Seattle area. That spring of 2007 was very busy and prices and sales topped out in the middle of that year. The number of sales started to decline after June 2007 but the inventory kept ballooning to new heights until the middle of 2008. Inventory remained elevated through 2009 and most of 2010. Inventory in 2011 actually remained relatively low throughout the entire year and especially as we hit the end of the year.

Looking back to December 2006, we had almost exactly the same amount of active homes for sale as we did last month. But, the number of Pending sales has declined 17% and the number of sold properties has declined 24% since then. While that doesn’t sound great, Pending and Closed sales are up over 2010 levels so the market seems to be trying to find a base.

As far as prices go, in King County we peaked out in July 2007 at an average sales price of $599,000. Average dollar per square foot reached it’s top in May 2007 at $267/sqft. Last month, the average sales price was $392,000 and $175/sqft. That is a decline of a little over 34%. While we are essentially at new lows since the peak, part of the softness in pricing may be seasonal so I would suspect at least a little rebound as we head into spring and summer.

Another interesting market dynamic is to look at the ‘Average Days on Market’ and the ‘Sales Price as a Percentage of the List Price.’ In December 2006, we were averaging 64 days on the market. Last month, it was 99 days, or a 54% increase. Also, in December 2006, sales prices were averaging 97% of the Original List Price. Last month, homes were selling on average at 92% of the Original List Price.

Finally, after a wild ride up in late 2008 into 2009, the inventory of active homes for sale has come back down to pre-crisis levels. In December 2006, there was 3.1 months of inventory and last month there was 4.2 months of inventory. I can’t stress enough how important a modest amount of homes for sale is for a healthy market. It’s good old fashioned supply and demand. In the boom years in 2005/2006, there was a ton of demand and very little supply, and then in the bust years, there was huge supply but little demand. Now we are back to modest supply and modest demand which I think is a perfect recipe for securing a base from which prices and activity can grow.

January has started off with a bang with busy open houses and buyers resolving to get off the fence. I expect this to be a busy spring and another decent year overall with a slight increase in activity over 2011 and even a slight increase in prices. That’s just a best guess on my part but I think the housing market now has the wind at its back given that we have a slightly better economy and job market and there is the desire for politicians to “not rock the boat” in an election year. Top that off with a little inflation and I believe the market will be in better shape come 2013.

*Statistics not compiled nor published by the NWMLS

When we think of selling a home, the services a REALTOR® can provide usually seem worth the cost of their
commission, but what about as a buyer? What can a REALTOR® do for you as a home buyer, and is the commission
worth the services they can provide?  Remember, even though the commission is usually paid by the seller, hiring a REALTOR® as a buyer’s agent means your interests will be represented and protected.

Here are five great reasons you should hire a REALTOR® when you are in the market for a new home!

• REALTORS® Can Help You Determine Your Budget—With a few simple pieces of information, a REALTOR® can help you pre-determine what kind of budget you may be looking at for your new home, and can match you with potential lenders that are right for you.

• REALTORS® Have Access To Resources You Don’t—While a lot of real estate listings are available online, there are still
  resources and listings that are only available through a REALTOR®.  If you are looking for something very specific, having their insider knowledge may be crucial to finding that perfect home.

• REALTORS® Can Read Between The Lines Of Listings—There are a lot of catchy phrases that often appear in home listings, and your agent can tell you what they really mean.

• REALTORS® Increase Your Negotiating Power—A REALTOR® can not only increase your ability to negotiate things like price, they can also give you advice on things like contingency contracts and required paperwork.

• A REALTOR® Can Help You Navigate Through The Closing Process—The closing process can be a complicated process, and a REALTOR® can make sure all the details are addressed and that you are making a good financial investment.

Purchasing a home is a huge financial investment, and having a professional REALTOR® looking after your interests through the process is very important.

See below for charts and stats for the housing market as of the end of November for King and Snohomish Counties combined. As it often happens this time of year, the inventory of available homes is decreasing steadily. There are actually 25% fewer homes for sale this year than there were last year. However, sales are holding up nicely– pending sales are up 19% and closed sales are up nearly 26% from last year.

Prices did take a dip in October, as I mentioned last month, but so far they are holding pretty steady in that same range. The Average sales price is $361,000 and $166/sqft for the two counties combined. Days on market bumped up a little to 97 days, from 92. And months of inventory is holding pretty firm around 5 months, based on closed sales. That indicates a fairly balanced market.

To summarize the housing market right now in our area: Inventory is tight, prices are down slightly from earlier in the year but holding steady, and interest rates are still very, very low. I still see the lower price ranges being most active even as we head into the new year, but there are great deals at higher price ranges so it’s a perfect time to “move up” if you can afford to do so.

At the beginning of January, I will do full year recap and provide stats to show how the market has changed over the last 5+ years.

Happy Holidays and Happy New Year!

Latest NW Multiple Listing Service press release: “Home sales outpace number of new listings for first time in five years.” Click here for the full release:  http://www.nwrealestate.com/nwrpub/common/news.cfm

December is a great month to cozy things up at home.  The brighter and warmer a house looks and feels, the happier you will be.  Here are a few tips to make your house as cheery as possible as we head toward the shortest day of the year!

Fix it up: The light fixtures in your home are a reflection of your personal style and taste.  Adding additional fixtures or replacing ones that aren’t your favorites can be a fun and creative way to brighten up your home!

Candlescaping: Candles are generally inexpensive and are extremely versatile.  Adding various candle arrangements to different rooms in your home will instantly create an atmosphere of warmth and style.  Get creative!  You might also favor scented candles to add a pleasant aroma to different areas of the house.

Mirror, mirror, on the wall: Mirrors not only create the illusion that your rooms are even more spacious than they already are, they also reflect light!  Make your house warm and cozy by adding a few inexpensive mirrors in hallways, bedrooms, and living spaces.

Light the way: Lighting isn’t just for indoor decorating—it’s also a valuable addition to the exterior of your home. Line your walkway or garden with cost-efficient solar light fixtures (no electricity needed!) to create a brilliant nighttime landscape outside your home.

Open up: During daytime hours, keep your draperies and window coverings open.  This will not only allow your home to absorb heat, but it will brighten up the winter days that you spend at home.

October ended on a spooky note and I’m not just talking about Halloween… It’s been clear for a while that inventory levels have been decreasing steadily since summer. That’s not unusual given the time of year. What is a little unusual is that the average sales price (for all of King and Snohomish Counties combined) took a bit of a hit last month by decreasing 5% since September to $358,000. That is down 12.5% from last October and is the lowest level since the downtrend began. However, on a dollar per square foot measurement, prices actually held steady at $169/sqft. Demand has been fairly strong in “affordable” price ranges and the lack of inventory could have suggested that prices might have been pushed up a little, instead of down.

One major factor that may have put downward pressure on prices is that the loan limit for conventional financing dropped back down to $506,000 from $567,500 on October 1st. So those wanting a mortgage over $506k now need to find and qualify for a higher rate jumbo mortgage. Another factor affecting average prices in King and Snohomish Counties could be that at the low end of the market, there are a good number of bank owned homes and short sales that are cutting prices aggressively to get them sold. Investors are scooping some of these homes up because they can be rented for a positive cash flow immediately. And first time buyers are getting in the market because they can buy some homes for a lower monthly payment than paying rent on a comparable home.

So, I’ll keep an eye on things and update you on November’s numbers in early December. We’ll see if October was just an anomaly or whether it is the precursor to something more significant. My hunch is that we will see a nice little pop back up in activity and even prices as we head into the new year, but I don’t have a crystal ball. I just tell it like it is.

November is a great month—the holidays are fast approaching, we get to visit more often with family and friends, and colder weather makes us feel like getting cozy in our homes.  Since you’ll want to keep warm in the coming months, here is a list of tips for you that will help you to save money on your energy bill, while still staying warm and cozy!

Set the timer: Program your thermostat to reach lower temperatures while you’re sleeping or out of the house.  This simple action can save you a lot of money—and will ensure that your house stays at a comfortable temperature at all times.

Open and shut: During daytime hours, keep your blinds, draperies and other window coverings open.  This will enable your home to absorb the warm afternoon sunshine and will effectively add heat to the entire house.  Close all window coverings at
night to keep the heat in!

Insulation time: If you have a window or two that feels drafty no matter what you do, consider installing tight, insulating shades to those particular windows.  You’ll be surprised what a little bit of extra insulation can accomplish!

Light a fire: A fireplace is an easy solution to add extra heat to your home without adding to your energy bill.  Capable of warming the entire room, you and your family can relax at home while keeping the thermostat at a lower temperature.

No leaks allowed: Check doors and windows for drafts and places where air might escape.  Weatherizing windows and doors is a simple task that you can perform; your local home improvement warehouse will have all of the materials you need.

Stay warm!

Latest NW Multiple Listing Service press release: “Housing activity during October shows mixed results
with sales up, prices down, buyers still hesitant” http://www.nwrealestate.com/nwrpub/common/news.html