Thurston County Pending Sales Rise Again Closed Sales Fall a Bit

The Thurston County housing market continues to show mixed signals, but the most important number, pending home sales, is trending in the right direction.

The number of closed home sales in July 2009 was down 6% from a year ago, logging 282 sales versus 301 in July of 2008. After June sales posted only the third year-over-year increase in two and a half years, it is disappointing to see fewer sales in July.

However, a more important indicator of the market’s future performance is pending home sales. Pending sales are contracts that are accepted by a seller but have not yet closed. They represent the most current activity and show how active buyers are in the market. Thurston County pending sales increased 14.7% in July, jumping from 339 in July 2008 to 389 this year.

We are now seeing a trend emerge as monthly pending sales continue to best last year’s numbers. This is a good sign that buyers are active in this market. They are jumping back in as prices have become more affordable, helped by low interest rates and tax incentives for first-time buyers.

The difference in the performance of closed and pending sales is primarily due to the fact that many sales are simply taking longer to close. Short sales, where the net proceeds to the seller will not cover the outstanding debt on the property, are taking 60 to 90 days to close as the buyer and seller must wait for the bank to approve the sale.

Another factor in the difference is that many of the pending short sales never become closed sales because either the bank does not approve the sale or the buyer loses patience waiting for bank approval. Short sales account for at least 10% of our area’s pending sales activity.

The biggest influence in our market’s overall performance, however, continues to be price. To the extent a home is priced well it is selling. Year to date, our area’s average sales price is $264,851, which is down slightly more than 8% from a year ago and 12% off the peak a couple of years ago.

Depending upon location, condition, and amenities, some homes are requiring far more than an 8% reduction, while others are fairing better than the average. Because each house is unique, each has its own pricing story.

As we have reported in the past, that drop is simply bringing us back to our market’s historic trend line for price appreciation. While our market is not out of the woods yet, its path to recovery has been much less severe than some of the hardest hit places in the country.

Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.