Market Observers to become Market Participants?

News from NW Multiple Listing Service
FOR IMMEDIATE RELEASE: January 6, 2009

Northwest MLS members expecting “market observers” will become “market participants”

KIRKLAND, Wash. (Jan. 6, 2009) – Frigid temperatures and record snowfall brought home sales to a standstill for several days in December. The unusual weather, when coupled with the expected holiday slowdown, contributed to a 17.6 percent slide in pending sales compared to the same month a year ago, according to figures from Northwest Multiple Listing Service.

“December typically has a slowdown in sales due to the holidays, but the recent snowfall compounded this seasonal slowing,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “On the flip side, we should see deferred buyer activity from December pushed into January,” he remarked.

Surprising some industry observers, inventory showed stability. The number of new listings added to inventory during December (5,430) nearly matched the total from a year ago (5,543). Those figures include single family homes and condos that were added by Northwest MLS members in 19 counties.

At month-end, there were 38,089 active listings in the NWMLS database, slightly fewer than twelve months ago, when members reported 38,440 active listings (down 0.9 percent).

Pending sales, while down 695 transactions (17.6 percent) from a year ago, underscore the “all real estate is local” mantra. System-wide, members tallied 3,255 pending sales last month, which compares to 3,950 sales during December 2007. Grays Harbor County had a 30 percent jump in pending sales and Thurston County reported a 3.8 percent gain in sales, but two smaller counties – Mason and Kittitas – had drops of more than 50 percent. For a broader and deeper perspective, the four-country Puget Sound region saw December sales decline 18.2 percent from a year ago.

Commenting on the latest MLS statistics, Ron Sparks of Coldwell Banker Bain said, “The current numbers certainly reflect market attitude, as many buyers continue to be market observers rather than market participants.” Sparks, who is CBB’s managing vice president, said agents are telling him their motivated buyer clients are simply becoming weary of waiting, and are acknowledging the timing “now seems right to actively search for their next home.”

Prices system-wide were down about 9 percent from a year ago. The median price for December’s closed sales of single family homes and condominiums combined was $285,000. That compares to a year-ago median price of $313,325. Single family home pries fell 11.3 percent (from $326.950 to $290,000), but condo prices increased from a year ago, rising from $252,900 to $263,474, for a 4.2 percent gain.

In King County, the median price for last month’s sales of single family homes (excluding condos) was $403,500, down about 7.2 percent from the year-ago figure of $435,000. Condo prices were nearly unchanged ($288,895 versus the year-ago figure of $290,000 for a decline of 0.38 percent).

On the sellers’ side, Sparks said savvy agents are advising their clients that this market environment demands a very disciplined and realistic approach to pricing. This is particularly true in King County, he noted, where the number of homes on the market continues to slowly increase.

The savvy buyers agent also understands that this highly competitive environment means more quality homes to choose from, and these homes can be bought at a comparative bargain over years past, according to Sparks. “Couple this with interest rates that are now very nearly irresistible and the incentive to home shop grows much stronger,” he remarked.

With mortgage rates tumbling to the lowest level in more than four years, now is a good time to secure a very attractive loan, agreed Mike Welty, a mortgage banker with Guild Mortgage Company in Bellevue. In fact, some lender backlog is already occurring as a result of the low rates, according to Welty.

Now is a great time to buy a home, Welty suggests, citing a number of factors. Among them, he noted home prices in some areas are close to 2004-2005 levels, a first-time home buyer tax credit of up to $7,500, plus the availability of low or no money down programs for many purchasers.

NWMLS director Dick Beeson, expects interest rates will remain in the low 5 percent or high 4 percent range. “This is a stimulus package we can count on and one that works. Banks are finally getting it and so are buyers as they realize their buying power has gone up,” said Beeson, the broker/owner of Windermere/Commencement Associates in Tacoma.

Sparks said many economists are now seeing the bottom of the national real estate market, and the greater Seattle area continues to be mentioned as well-placed to lead that recovery. “While no one can predict the future, I believe we can place reasonable trust and faith in the desirability and overall value of our regions real estate,” he stated, adding, “Thats good news for buyers and sellers alike!”

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 28,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties, mostly in western Washington, plus Grant, Kittitas and Okanogan counties in the central part of the state.

Statistical Summary by Counties: Market Activity Summary – December 2008

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

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