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

I may be crazy, but it seems like the housing market has performed better in the first half of this year than our weather! The steadily improving market in our area over the last several months is very encouraging and the positive trend continued in June. Here are a few statistics based on the general data for King and Snohomish Counties.

Inventory has remained low. As of the end of June, active homes for sale increased only 2.6% from May and they are down 18% from last June. Pending sales increased nearly 5% from May and are up 60% from last June! Closed sales rose 6.8% from May and while they are down 7.8% from last June, we were still closing sales that were benefited by the tax credit last year at this time.

Prices are up! Average sales prices jumped up 4.4% to $404,000 in June– that is still down 6.5% from a year ago. Similarly, the average square foot price popped up 4.8% to $183/sqft in June– that is down 5.3% from last year. Average days on market decreased slightly to 97 days which is about the same as last year. And continuing the low inventory theme, we are at only 4 months of inventory based on pending sales, the lowest since April 2010.

I am cautiously optimistic about the rest of the year. There are still plenty of “macro” events to deal with such as persistently high unemployment, budget troubles, etc. But, there are many underlying factors supporting the housing market as well such as low inventory, low interest rates, and favorable rent to purchase ratios.

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Stats are out for May and momentum is indeed continuing to increase. For King and Snohomish Counties combined, active listings are up a very modest 0.8% from April and down over 16% from last May 2010. Pending sales are up 13.6% from April and up a whopping 67.5% from last May. Of course we had the tax credit last year which stipulated that you needed to be under contract on a purchase by the end of April, so it is no surprise that pending sales fell off a cliff last May. Closed sales increased 2.4% from April and that is off over 11% from last year. Regardless, it’s nice to see a consistent uptrend in pending sales and closed sales this year. And given that new listings are only trickling in, that makes for a fairly balanced market since there is not a huge overhang of supply.

The average sales price in May was $388,000 and $175/sqft for King and Snohomish Counties combined. That is pretty flat compared to April, but down between 6% and 11% from last May. For your reference, average prices when looking at just King County were $436,000 and $191/sqft. And for just Snohomish County, the average price was $275,000 and $134/sqft. Looking at the combined data for the two counties gives a pretty good idea for average home values in the north King and south Snohomish county cities such as Lake Forest Park, Kenmore, Shoreline, Edmonds, and Bothell.

Days on market decreased to 104 from 111 in April, and on average homes are selling at 93% of the Original Listing Price. Of course, if you are priced right and presented well to begin with, your market time will be much shorter and your sales price will be much closer to the asking price.

Finally, as I mentioned in the first paragraph, inventory is remaining relatively low and that is further confirmed when you look at a Months of Inventory chart. Looking at it based on Pending sales, we are now down to only 3.8 months of inventory which is as low as it was right before the tax credit ended last year and even as low as parts of 2006 and early 2007 when market activity was still doing quite well. Needless to say, I believe this is very positive for the market going forward and for the chances of a solid bottom being formed in home prices.

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