Sales of existing homes in the western U.S. jumped 24% in February compared to year-ago numbers, according to the National Association of Realtors.
Much of that activity is coming from the areas within the 13-state region that were the hardest hit over the last several years - California, Nevada, Arizona. For example, the California Association of Realtors reports that February saw an 83% increase in sales compared to February 2008.
In our local market, sales are down 19% through the first two months of the year.
The difference between the two markets is price. As we have been reporting for some time, the pace of sales is dictated by how well prices match the supply-demand balance.
California has been adjusting downward much longer than our local market. Prices there have gotten back to affordable levels and the buyers are responding. At $247,590, California's median sales price is now 41% lower than a year ago.
In some areas of California prices are harder hit than others. For example, in the Central Valley, prices are off 50%, while in the Palo Alto area they are down just 10%.
Thurston Countys median sales price is $250,000, down just 3% from a year ago. While our prices do not need to correct as much as Californias (during the run-up prices in California escalated far beyond our own), there is still some price adjusting that needs to occur with many homes in all market segments.
Yet because each home is unique, there are well priced homes selling very quickly in every market segment from the lowest to highest prices.
In our recently updated market study through February, we found that the homes that did not require price reductions before selling are going under contract in just 46 days about the same speed experienced during the hot sellers market.
On the other hand, overpriced homes that required at least one price reduction before selling are languishing on the market an average of 196 days. Perhaps the most telling number is that these homes go under contract in just 32 days once reduced to the final asking price. That says something about the need to price right.
The return of sales in the Western U.S. is a sign that the market is still active. Here locally, we see a lot of buyers looking for opportunity. Armed with the lowest interest rates in 50 years, they are ready to act when they see well priced properties.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
Friday, March 27, 2009
Mortgage Rates Drop to Lowest Levels in 50 years
During this week, Rates on 30-year fixed-rate mortgages have dropped to the lowest levels on record. According to Freddie Mac's Weekly Primary Mortgage Market Survey, the average rate for that mortgage type is 4.85% with a 0.7% in fees and points. Visit www.freddiemac.com/pmms/#Historical for more information.With home prices more affordable now than at any time in the past three and a half years, we are seeing a great deal of renewed buyer interest. Nowhere is this more evident than at the lower end of the market. The number of home sales under $200,000 is up 19% from year-ago numbers. Given that housing market recoveries begin at the more affordable price ranges, this news bodes well for the future of our local housing market.
Thursday, March 19, 2009
Good Things Happening Around Our Area
With all the negative news these days it is easy to overlook the great many positive things happening every day in our community - things that bode well for the future vitality of our area.
One of those things is the new Hands On Children's Museum planned for the East Bay Port property.
Click image to enlarge.
The following is an excerpt from today's Olympian editorial about the project (to read the full editorial visit: http://www.theolympian.com/opinion/story/791652-p2.html ):
New children's museum will be great asset
. . . It's hard to look at the schematic drawings and building blueprints (of the new Hands On Children's Museum) without getting excited about this most worthwhile project. A great deal of thought has gone into the planning of the new museum on the shores of southern Puget Sound - planning that will result in an outstanding tourist destination and an incredible asset for the South Sound community.
. . .
A special place
Close your eyes, and you can envision young children squealing with delight as they dash from one attraction to the next, exploring the multiple environmental elements of the outdoor learning center.
And that, if you haven't guessed it already, is the theme of the play area - a place where children can see and learn about the ecology that makes South Sound a special place to live.
From the outdoor space, children, their parents and grandparents will enter the wood-frame museum through a multi-story water tower. The theme of the warehouse-like building is "water and woods" - an important part of our past, our present and our future.
The first two floors will be mostly exhibit space. A cafeteria - with healthful foods only - and small museum store are tucked into one corner on the first floor.
Museum officials are wisely remaking and expanding the museum's most popular exhibits for the new space. Exhibits will focus on healthy lifestyles, water resources, the working waterfront, a wild woods gallery, cooking studio and early learning center, among others. There will be classroom space, room for the museum's 81 - student preschool and a large space for traveling exhibits.
A central staircase will lead to the second floor, where youngsters will be able to take a tubular slide back down to the ground floor.
Looking ahead
It's a standout project, based on an incredible vision and sound business plan. And to think that all of this grew from a group of parents with their museum-without-walls exhibit that they transported from one community event to the next in the late 1980s.
Museum officials conservatively estimate that 200,000 people will visit the $18 million museum in its first year of operation. That includes kids through the doors seven days a week, but also evening parties and entertainment events.
As they draw closer to their fundraising goals, museum supporters - and there are legions of them - will come to the community to ask South Sound residents to capture the vision and contribute to the capital campaign. It's an opportunity community residents won't want to miss.
It's guaranteed that the new Hands On Children's Museum will be a remarkable asset, not just for Olympia, but for the entire region.
One of those things is the new Hands On Children's Museum planned for the East Bay Port property.
Click image to enlarge.
The following is an excerpt from today's Olympian editorial about the project (to read the full editorial visit: http://www.theolympian.com/opinion/story/791652-p2.html ):
New children's museum will be great asset
. . . It's hard to look at the schematic drawings and building blueprints (of the new Hands On Children's Museum) without getting excited about this most worthwhile project. A great deal of thought has gone into the planning of the new museum on the shores of southern Puget Sound - planning that will result in an outstanding tourist destination and an incredible asset for the South Sound community.
. . .
A special place
Close your eyes, and you can envision young children squealing with delight as they dash from one attraction to the next, exploring the multiple environmental elements of the outdoor learning center.
And that, if you haven't guessed it already, is the theme of the play area - a place where children can see and learn about the ecology that makes South Sound a special place to live.
From the outdoor space, children, their parents and grandparents will enter the wood-frame museum through a multi-story water tower. The theme of the warehouse-like building is "water and woods" - an important part of our past, our present and our future.
The first two floors will be mostly exhibit space. A cafeteria - with healthful foods only - and small museum store are tucked into one corner on the first floor.
Museum officials are wisely remaking and expanding the museum's most popular exhibits for the new space. Exhibits will focus on healthy lifestyles, water resources, the working waterfront, a wild woods gallery, cooking studio and early learning center, among others. There will be classroom space, room for the museum's 81 - student preschool and a large space for traveling exhibits.
A central staircase will lead to the second floor, where youngsters will be able to take a tubular slide back down to the ground floor.
Looking ahead
It's a standout project, based on an incredible vision and sound business plan. And to think that all of this grew from a group of parents with their museum-without-walls exhibit that they transported from one community event to the next in the late 1980s.
Museum officials conservatively estimate that 200,000 people will visit the $18 million museum in its first year of operation. That includes kids through the doors seven days a week, but also evening parties and entertainment events.
As they draw closer to their fundraising goals, museum supporters - and there are legions of them - will come to the community to ask South Sound residents to capture the vision and contribute to the capital campaign. It's an opportunity community residents won't want to miss.
It's guaranteed that the new Hands On Children's Museum will be a remarkable asset, not just for Olympia, but for the entire region.
Wednesday, March 18, 2009
Unexpected surge in Initial Construction of U.S. Homes
This news report just in from Real Trends
"Initial construction of U.S. homes unexpectedly surged in February, according to a government report released Tuesday. Housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January, according to the Commerce Department. Economists were expecting housing starts to decline to 450,000, according to consensus estimates compiled by Briefing.com.
"Applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. Economists were expecting permits to fall to 500,000."Source: CNNMoney.com
Our commentary about this story and new construction in Thurston County:
The jump in construction activity around the country is one of many signs that the nation's housing market is starting to improve in many regions. Most of the hardest hit states have been down for several years now. As those markets retreated, so did the level of construction activity. As prices came back to earth, more and more inventory was gobbled up. Sales in California this year are up 100% over last year due to the increase in affordability.To be sure, one month does not a trend make. There is still a lot of oversupply in most regions of the country. However, as prices become more affordable, the trends show that the buyers come back. Getting back to these sustainable levels of price appreciation is an important step in the long-term health of the housing market.Locally, housing starts are still down considerably from last year, but that is just fine. The amount of inventory grew to levels well beyond that supported by demand. Many builders have reduced pricing and eased up on building to bring better balance back to that segment of the market.
In February we reported that going forward the supply picture looks even better. Permits issued for new homes have dropped 54% from the peak in 2006. That year, 2,386 permits were issued throughout the county. In 2008, only 1,194 permits were issued. This drop in construction will be one of the factors that helps bring us back to a place of more normal, sustainable price appreciation.
In fact, we are seeing a lot of the new construction inventory being absorbed, with 28% of the home sales falling in the new construction category. Home prices are more affordable now that at any time during the past five years, and that is bringing up the level of demand in our market. The moderation of supply combined with the current pricing trends should lead to continued market improvement as the year moves on.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
"Initial construction of U.S. homes unexpectedly surged in February, according to a government report released Tuesday. Housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January, according to the Commerce Department. Economists were expecting housing starts to decline to 450,000, according to consensus estimates compiled by Briefing.com.
"Applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. Economists were expecting permits to fall to 500,000."Source: CNNMoney.com
Our commentary about this story and new construction in Thurston County:
The jump in construction activity around the country is one of many signs that the nation's housing market is starting to improve in many regions. Most of the hardest hit states have been down for several years now. As those markets retreated, so did the level of construction activity. As prices came back to earth, more and more inventory was gobbled up. Sales in California this year are up 100% over last year due to the increase in affordability.To be sure, one month does not a trend make. There is still a lot of oversupply in most regions of the country. However, as prices become more affordable, the trends show that the buyers come back. Getting back to these sustainable levels of price appreciation is an important step in the long-term health of the housing market.Locally, housing starts are still down considerably from last year, but that is just fine. The amount of inventory grew to levels well beyond that supported by demand. Many builders have reduced pricing and eased up on building to bring better balance back to that segment of the market.
In February we reported that going forward the supply picture looks even better. Permits issued for new homes have dropped 54% from the peak in 2006. That year, 2,386 permits were issued throughout the county. In 2008, only 1,194 permits were issued. This drop in construction will be one of the factors that helps bring us back to a place of more normal, sustainable price appreciation.
In fact, we are seeing a lot of the new construction inventory being absorbed, with 28% of the home sales falling in the new construction category. Home prices are more affordable now that at any time during the past five years, and that is bringing up the level of demand in our market. The moderation of supply combined with the current pricing trends should lead to continued market improvement as the year moves on.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
Thursday, March 5, 2009
FHA Loan Limits Raised to Assist more Buyers
Loan limits for FHA loans have been raised back to levels that will make more of a difference in our market area. Loan limits vary county by county. The new loan limits are:
Thurston County $361,250
Grays Harbor County $271,050
Mason County $310,000
Lewis County $271,050
Pierce County $567,500
The limits were reduced by a significant amount at the start of 2009. Thurston County, for example, had a $293,250 limit. Those lower limits certainly took away one of the more popular lending options for a significant segment of the market.
FHA loans are government guaranteed loans that offer a lower down payment than many conventional loan programs. Unlike the subprime loans that contributed to some of the financials problems in the country, the FHA program comes with solid underwriting standards that give assurance to both the lender and borrower that they are on sturdier ground.
By lifting the FHA loan limits back to 2008 levels, more buyers in 2009 will be able to put this great program to work for them. One local lender reported that in 2008, they closed 180% more FHA loans than had been closed in 2007. This represents a good trend as the market moved away from subprime and riskier loans to more solid loans.
If you have questions about the FHA loan program, we'd be happy to refer you to a number of qualified lenders to assist you.
Thurston County $361,250
Grays Harbor County $271,050
Mason County $310,000
Lewis County $271,050
Pierce County $567,500
The limits were reduced by a significant amount at the start of 2009. Thurston County, for example, had a $293,250 limit. Those lower limits certainly took away one of the more popular lending options for a significant segment of the market.
FHA loans are government guaranteed loans that offer a lower down payment than many conventional loan programs. Unlike the subprime loans that contributed to some of the financials problems in the country, the FHA program comes with solid underwriting standards that give assurance to both the lender and borrower that they are on sturdier ground.
By lifting the FHA loan limits back to 2008 levels, more buyers in 2009 will be able to put this great program to work for them. One local lender reported that in 2008, they closed 180% more FHA loans than had been closed in 2007. This represents a good trend as the market moved away from subprime and riskier loans to more solid loans.
If you have questions about the FHA loan program, we'd be happy to refer you to a number of qualified lenders to assist you.
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