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.

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

This month, I would like to narrow down and analyze and recap the housing market for September in NW King County- namely the cities of Lake Forest Park, Kenmore, and Shoreline. The charts below show the market trend for residential properties in these cities in the sub-$1million price range.

Low inventory has been a problem in many Seattle neighborhoods and it is becoming a factor north of Seattle as well. Active homes for sale decreased 5.3% from August and that is down over 30% from last year! Pending sales (homes under contract but not yet closed) are up 8.8% from August and up 32% from last year! Interestingly, closed sales are up 12% from last year but down 23% from August. I interpret all this to mean that activity is strong, but there are some factors slowing up the actual closing process, such as getting lender approvals on short sales and bank owned properties…

In fact, I did a quick search of homes in this area that are currently pending or have recently closed in the past 60 days. Out of the current 120 homes pending sale, 60 (or 50%) are bank owned properties (20) or short sales (40). Of the approximately 99 homes that have closed sales in the last 60 days, 75 are non-distressed sales! Only 24 sales were bank owned (19) or short sales (5). So, if you potentially want to get that “deal of a lifetime” on a distressed property, just know that you will need some serious patience and be willing to wait and go through the agony of getting lender approval. On the other hand, if your timing isn’t as flexible, or if you are willing to pay a little bit more to avoid an ulcer, you may want to have your Realtor only search for non-distressed sales (that may also be great deals) so that your chances of closing on time are significantly higher.

With that side note out of the way, let’s get back to the stats… Average sales prices in NW King County are actually up slighty from August and from last year to $353,000, but holding pretty flat on a dollar per square foot measure at $160/sqft. Keep in mind that this sample size is not very big when looking at a smaller area like this so the price data does bounce around quite a bit. If you look at all of King and Snohomish counties combined, you’ll see that the average sales price is $380,000 and $170/sqft. Essentially, prices have been pretty flat for all of 2011.

Days on market also bounces around quite a bit but September’s average was 74 days. That number has been hovering in the low 90’s when looking at all of King and Snohomish counties. The Sales Price as a Percentage of the Original Listing Price climbed back up slightly to 94%. And finally, the Months of Inventory based on Pending Sales decreased to 3.1 months. That is the lowest inventory this area has seen since it got there briefly when the tax credit hit in early 2010. Before that, it was 2007 when the market was still finishing its upswing.

In conclusion, Seattle neighborhoods have had the lowest inventory most of this year and now it seems that the north end is catching up to that trend. Combine a competitive market with the affordability of well located cities like Lake Forest Park, Kenmore, and Shoreline, and you have the making of a busy market through the end of the year. Oh, and did I mention the record low mortgage rates…

Latest NWMLS Press release: September activity reflects “healthy activity, positive trends”: http://ow.ly/6QPYt

Stats are out for August and low inventory is still the theme… For King and Snohomish counties combined, active listings are down 2.4% from July and they are down 24% from August 2010. Meanwhile, pending sales increased 13% from July and are 47% higher than last year. Closed sales rose 5.4% from July and they are up 32% over last year.

Prices softened slightly since July to an average of $386,000 and $176/sqft. Again, this is an average between the two counties so this is pretty representative of prices in the north King and south Snohomish counties. Prices in Seattle will generally be higher and prices in Everett, for example, will average lower.

Average days on market are holding steady in the low 90’s and the sold price as a percentage of the original list price, is also holding steady at 93%. Finally, the evidence of low inventory also shows up in the Months of Inventory chart which is at a recent low at only 4 months.

At the beginning of last month, the stock market was having a wild ride. It has calmed down slightly, but with that turmoil, mortgage rates have remained very low. We are hovering right around an average of 4% for a 30 year fixed rate. So, we have low rates which is great for buyers, and we have low inventory, which is great for sellers. All in all, I see a very balanced market so there is really no excuse not to join in. 😉

August ranks as this year’s best month for pending and closed sales around WA. Latest news release from the NWMLS: http://ow.ly/6ng3e

Price appreciation heading to the Pacific NW in the next couple of years??? http://ow.ly/61lwk

On a day that the stock market has plunged over 6%, let’s look at how the housing market has performed as of the end of July. Of course, selling or buying a house is not as easy as pushing a button, like it is to buy or sell a share of a stock. It moves much more slowly and therefore the trends can’t change and whipsaw you quite as quickly. That’s probably a good thing since it makes a home buyer or seller evaluate their decisions for the long haul, not just the next few months, days, or minutes!

Anyway, on to the action in July… New inventory for King and Snohomish counties still remains subdued. Active listings are down 1.5% from June and they are down 22% from last August. Pending sales are up 6.6% from June and up a stellar 50% from last year. Closed sales did decrease 18% from June but they are still up 16% from July 2010.

Sales prices have softened slightly from June to an average of $392,000 and $180/sqft. That is 8-12% lower than last July. Average days on market came down from 97 days in June to 92 days in July, which is about the same as last year. And again the inventory is staying low at about 4.1 months based on Pending Sales.

While stock market volatility is never a good thing, at least it should help to keep mortgage interest rates historically low for a while longer. But, how much consumer confidence is affected and if/how the turmoil carries over to the housing market, remains to be seen. Two things are for sure, money is cheap to borrow right now, and real estate as an asset seems a whole lot less volatile and likely a safer investment in the long run.

“Classic good news, bad news story” for the housing market in the Seattle area. Latest news release from the NWMLS: http://ow.ly/5Vy7V