New home sales jumped 11% in June, well above the level of growth expected by all 63 economists who made predictions. A report today by the Department of Housing and Urban Development details that newly constructed home sales rose to an annualized rate of 384,000. The consensus projection was just 352,000 sales.
Perhaps a show of how low our expectations are, the sales are still 21% off June 2008 numbers. Moreover, the longer term trend shows roughly 950,000 sales per year. So we are still a long way off from more normal times.
Still it is good news as the troubles in home construction has been a big drag on the economy. Therefore, this uptick in activity is a nice signal that we might be trending back in the right direction. The nationwide inventory of unsold new homes dropped to an 8.8 month supply, which is down from 10.2 months in May.
CNNMoney.com quotes Peter Morici, a University of Maryland economics professor, as saying the housing numbers “is really good news. Considering what’s going on in existing home sales, with all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out.”
Housing is a leading economic indicator and much of the news over the past three months is certainly indicating more positive trends.
At the local level, Thurston County home builders have pulled construction levels way back from the peak of the housing boom in 2006. However, our market did not start correcting until 18 months after the rest of the country. That means we still have some adjusting to do.
The standing inventory of platted or preliminarily platted property remains significant. Banks are just now starting to take back tracts of land and will be looking to sell them to builders and developers in the next six to nine months.
What the buyers do with those properties will greatly influence our market for the next three to five years. Based upon today’s market, those properties are worth just a fraction of what was lent on them. If sales are structured at realistic values, much of that land can simply be land-banked to wait for a time that more housing stock is needed.
The temptation will be to start building on those properties soon for risk of losing the entitlements and the investment made to get them. To be sure, there are some plats that could be brought to market now. Some areas in our community are still under-built with certain types of housing, but most areas are way over-served. If builders and the property owners take care in distinguishing those opportunities, we will see a healthy flow of new houses to the market.
Overall, our hope is that the frenzied race to build on any old piece of land, regardless of market need, is laid to rest and that a more sustainable pace of building occurs. The posture of the credit markets and the home builders seems to indicate we are heading in that direction.
Our market is down to a 7.6 month supply of homes for sale. A six month supply is considered balanced. Even though we look better than the rest of the nation as a whole, the market is not completely healthy yet. However, the trend is certainly moving back toward balance and a more sustainable future. That is really good news for our local market.
Monday, July 27, 2009
Thursday, July 23, 2009
Housing Numbers Improve
The National Association of Realtors is reporting that in June existing home sales (which excludes new construction sales) rose for the third straight month. Sales rose to a seasonally adjusted annual rate of 4.89 million units. This represents a 3.6% increase from May.
As housing is a leading economic indicator, the stock market responded positively today to the news. All of the major markets showed sizeable positive gains. While housing is not yet out of the woods, the emerging trends are encouraging.
On the local front, we reported earlier in the month that June home sales were up over last year’s number. That is only the third time in the past 27 months that our local market has experienced a year over year increase. The return of affordability is bringing buyers back.
Establishing a new baseline of affordability has been the roadmap to recovery in other parts of the country. In the hardest hit regions of the country, California, Florida, and Arizona, average prices have returned to affordable levels and that has brought the buyers back in a big way.
Sales in California, for example, shot up 35.2% from May 2008 to May 2009. Homes there were inflated way beyond sustainable levels. Prices are off 30% from a year ago, bringing them back to affordable levels. This in turn has brought the buyers back.
The Pacific Northwest in general, and our area in particular, was about 18 months behind the rest of the nation in the market correction. We are now playing catch up. To the extent a home is priced right, it is selling. When it is overpriced, no matter what price segment the home is in, it is not selling.
Most of the sales are concentrated in the lower price segments, particularly below $250,000. In that category we still see a heavy influence of bank-owned and short sale properties. They accounted for 28% of all sales below $250,000 last month (that number climbs to 53% below $200,000). Those distressed properties are being offered by very motivated sellers who are pricing the home at today’s market values.
We still see the majority of homes, particularly at the upper price ranges, being priced above market value. Price is the one thing that is keeping our market from experiencing more sales. The buyers are out there and are willing to act quickly when they see that value. They are also showing great discipline in avoiding overpriced properties.
The good trend for our market is that more sellers understand the current environment and are pricing to it. At the start of the year, only 71% of sellers over-priced their home, meaning that they required at least one price reduction before selling. In June that number dropped to 60%. This figure is extremely important for sellers because overpriced homes are on the market an average of 203 days. Last month, homes that were priced at market averaged just 28 days on market.
Click image to enlarge.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
As housing is a leading economic indicator, the stock market responded positively today to the news. All of the major markets showed sizeable positive gains. While housing is not yet out of the woods, the emerging trends are encouraging.
On the local front, we reported earlier in the month that June home sales were up over last year’s number. That is only the third time in the past 27 months that our local market has experienced a year over year increase. The return of affordability is bringing buyers back.
Establishing a new baseline of affordability has been the roadmap to recovery in other parts of the country. In the hardest hit regions of the country, California, Florida, and Arizona, average prices have returned to affordable levels and that has brought the buyers back in a big way.
Sales in California, for example, shot up 35.2% from May 2008 to May 2009. Homes there were inflated way beyond sustainable levels. Prices are off 30% from a year ago, bringing them back to affordable levels. This in turn has brought the buyers back.
The Pacific Northwest in general, and our area in particular, was about 18 months behind the rest of the nation in the market correction. We are now playing catch up. To the extent a home is priced right, it is selling. When it is overpriced, no matter what price segment the home is in, it is not selling.
Most of the sales are concentrated in the lower price segments, particularly below $250,000. In that category we still see a heavy influence of bank-owned and short sale properties. They accounted for 28% of all sales below $250,000 last month (that number climbs to 53% below $200,000). Those distressed properties are being offered by very motivated sellers who are pricing the home at today’s market values.
We still see the majority of homes, particularly at the upper price ranges, being priced above market value. Price is the one thing that is keeping our market from experiencing more sales. The buyers are out there and are willing to act quickly when they see that value. They are also showing great discipline in avoiding overpriced properties.
The good trend for our market is that more sellers understand the current environment and are pricing to it. At the start of the year, only 71% of sellers over-priced their home, meaning that they required at least one price reduction before selling. In June that number dropped to 60%. This figure is extremely important for sellers because overpriced homes are on the market an average of 203 days. Last month, homes that were priced at market averaged just 28 days on market.
Click image to enlarge.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
Friday, July 17, 2009
Buyers Act Now to Get Tax Credit
You probably know by now about the $8,000 first-time home buyer tax credit. You may also know that it expires soon.
Some form of the credit has been available for over a year now, but it is going away soon. To qualify, buyers must close on a home by November 30, 2009. While that date may seem far off, it is actually right upon us when you consider the timeline involved in buying a home.
The typical buyer spends six weeks searching for a home. That buyer then spends a few days negotiating and reaching an agreement with the seller. From that point to closing usually runs another 4 to 6 weeks. All together, the process takes about three months. The tax credit is only available for the next four months.
So now may be the time to start shopping for a home if you or someone you know is a first-time home buyer (and remember that a “first-time buyer” includes someone who has not owned for the past three years).
We are seeing a great many people take advantage of the credit. The tax credit, today’s reductions in home prices and great mortgage rates have all combined to create levels of affordability not seen since 2003.
For more information on the tax credit see our February 18, 2009 and June 3, 2009 blog posts.
Some form of the credit has been available for over a year now, but it is going away soon. To qualify, buyers must close on a home by November 30, 2009. While that date may seem far off, it is actually right upon us when you consider the timeline involved in buying a home.
The typical buyer spends six weeks searching for a home. That buyer then spends a few days negotiating and reaching an agreement with the seller. From that point to closing usually runs another 4 to 6 weeks. All together, the process takes about three months. The tax credit is only available for the next four months.
So now may be the time to start shopping for a home if you or someone you know is a first-time home buyer (and remember that a “first-time buyer” includes someone who has not owned for the past three years).
We are seeing a great many people take advantage of the credit. The tax credit, today’s reductions in home prices and great mortgage rates have all combined to create levels of affordability not seen since 2003.
For more information on the tax credit see our February 18, 2009 and June 3, 2009 blog posts.
Tuesday, July 14, 2009
Affordability, Interest Rates Drive Buyer Interest
In the following story, published today by REAL Trends, we see confirmed what we experience every day in our local housing market – buyers are responding to the tremendous affordability that many of today’s homes offer. For related stories on our local market see our postings on May 11, 2009 and June 26, 2009.
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one-in-ten of today's home owners say they have delayed selling their home due to those same market conditions, according to the new national Realtor.com® Homeownership Survey. Based on the Realtor.com survey, affordability is clearly driving more than two-thirds (65.2%) of potential buyers back into today's housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they're interested in buying in the near future. An additional 15.5 percent said they're motivated to buy soon because they think prices are as low as they will go, and another 15.5 percent said they're motivated to buy before interest rates rise. For 14.6 percent of first time homebuyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.
“Distressed sales of foreclosures and short sales, which constitute nearly half of all existing home sales today, are not universally popular with buyers. Two-thirds of those surveyed (66.3%) said they are not likely to consider buying a foreclosure in the future. However, if sellers were willing to pay closing costs, 23.9 percent would be motivated to purchase foreclosures, and 19.5 percent said they would buy a foreclosure if there was a higher level of certainty related to home repairs required to make the home "move-in" ready.
“Current fear of foreclosure has lessened since the last Realtor.com Homeownership Survey in March 2009, when 52.5 percent of respondents expressed concern that they or someone they know may face foreclosure in the next 6-12 months. In this latest survey, the number of home owners concerned about foreclosure dropped 8.7 percent compared to March 2009, and the number of owners feeling "not very concerned" or "not concerned at all" increased by 8.4 percent combined in the past three months.”
“Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one-in-ten of today's home owners say they have delayed selling their home due to those same market conditions, according to the new national Realtor.com® Homeownership Survey. Based on the Realtor.com survey, affordability is clearly driving more than two-thirds (65.2%) of potential buyers back into today's housing market. Nearly one of five prospective buyers (19.6%) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they're interested in buying in the near future. An additional 15.5 percent said they're motivated to buy soon because they think prices are as low as they will go, and another 15.5 percent said they're motivated to buy before interest rates rise. For 14.6 percent of first time homebuyers, the Federal $8,000 tax credit is the impetus to purchase a new home in the future.
“Distressed sales of foreclosures and short sales, which constitute nearly half of all existing home sales today, are not universally popular with buyers. Two-thirds of those surveyed (66.3%) said they are not likely to consider buying a foreclosure in the future. However, if sellers were willing to pay closing costs, 23.9 percent would be motivated to purchase foreclosures, and 19.5 percent said they would buy a foreclosure if there was a higher level of certainty related to home repairs required to make the home "move-in" ready.
“Current fear of foreclosure has lessened since the last Realtor.com Homeownership Survey in March 2009, when 52.5 percent of respondents expressed concern that they or someone they know may face foreclosure in the next 6-12 months. In this latest survey, the number of home owners concerned about foreclosure dropped 8.7 percent compared to March 2009, and the number of owners feeling "not very concerned" or "not concerned at all" increased by 8.4 percent combined in the past three months.”
Monday, July 13, 2009
Coldwell Banker’s Thurston County homes featured in Times Square
Since last fall, Coldwell Banker has led the real estate industry in the movement to place content in consumer-friendly fashion on mobile devices, such as the iPhone, Blackberry, and other smart phones.
For those consumers that like to use this technology, they will find the best optimized real estate website for those devices. The site is specifically designed to fit smaller screens to make searching on the go much easier.
To help promote Coldwell Banker’s mobile website technology, the company is running an interactive billboard in New York’s Times Square. The billboard allows viewers to pull property listings from a particular area by texting the zip code and the word “homes” to 30241.
The photos below show some of our local listings that have been featured on the billboard.
Click image to enlarge.
A great many clients are now using smart phone technology in their daily lives. Coldwell Banker’s advancements in this area is just another example of the company’s commitment to deliver the tools consumers want along with the experienced real estate professionals they need.
Click on this link to YouTube to view more about this story.
Wednesday, July 8, 2009
Avoiding Loan Scams
With a great many homeowners around the country facing the prospect of foreclosure, the stage is set for scam artists to prey on these distressed people. In response to loan scams flaring up around the country, a national bankers association is offering tips to consumers to help avoid foreclosure relief scams.
We have not heard of too many of these scams being run in the Thurston County area, but consumers should nevertheless be on guard against illegitimate offers for relief against foreclosure. Thurston County has not experienced nearly the volume of foreclosures seen in the hardest hit regions of the country, primarily in 5 states, California, Arizona, Nevada, Florida and Michigan. Since the beginning of April, the county has averaged 36 foreclosure filings per week.
The following news release from The Independent Community Bankers of America, offers some useful tips to guard against these scams:
Washington, D.C. (July 7, 2009) — The Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks are arming consumers with information to help protect themselves against loan scams.
“Many Americans are being targeted by scams that promise to help them avoid foreclosure or refinance their existing mortgage to a lower rate,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “It’s essential that homeowners be vigilant and protect themselves against these scams so that they don’t wind up in an even worse financial situation.”
Consumers who are having financial troubles should contact their mortgage lender immediately. By doing so, they are less likely to be taken in by loan scams, which are almost always unsolicited phone calls, e-mails or letters. Knowing the warning signs is key. ICBA and community banks across the country encourage consumers to be wary of any company that does the following:
We have not heard of too many of these scams being run in the Thurston County area, but consumers should nevertheless be on guard against illegitimate offers for relief against foreclosure. Thurston County has not experienced nearly the volume of foreclosures seen in the hardest hit regions of the country, primarily in 5 states, California, Arizona, Nevada, Florida and Michigan. Since the beginning of April, the county has averaged 36 foreclosure filings per week.
The following news release from The Independent Community Bankers of America, offers some useful tips to guard against these scams:
Washington, D.C. (July 7, 2009) — The Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks are arming consumers with information to help protect themselves against loan scams.
“Many Americans are being targeted by scams that promise to help them avoid foreclosure or refinance their existing mortgage to a lower rate,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “It’s essential that homeowners be vigilant and protect themselves against these scams so that they don’t wind up in an even worse financial situation.”
Consumers who are having financial troubles should contact their mortgage lender immediately. By doing so, they are less likely to be taken in by loan scams, which are almost always unsolicited phone calls, e-mails or letters. Knowing the warning signs is key. ICBA and community banks across the country encourage consumers to be wary of any company that does the following:
- Guarantees to stop the foreclosure process—no matter what your circumstances.
- Instructs you to not contact your lender, lawyer or credit or housing counselor.
- Collects a fee before providing you with any services.
- Accepts payment only by cashier’s check or wire transfer.
- Encourages you to lease your home so you can buy it back over time.
- Tells you to make your mortgage payments directly to them, rather than your lender.
- Tells you to transfer your property deed or title to them.
- Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
- Offers to fill out paperwork for you.
- Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.
If consumers think they have been the victim of a loan scam, they should contact their state attorney general’s office to file a complaint and learn the next steps to repair any damage incurred as a result of the scam. For additional tips, consumers can also check the following resources:
- Federal Deposit Insurance Corporation
- Federal Reserve
- Federal Trade Commission
- Office of the Comptroller of the Currency
“Any community bank customer who is having problems with a mortgage should visit a local community bank for more information about legitimate programs and loan options available to them,” said Menzies.
Tuesday, July 7, 2009
Significant Signs of Market Improvement in June
The housing numbers for June shows significant improvement in the local market. Over the past several months we’ve witnessed improvements in a couple of key categories. Inventory levels have been down and pending sales have been on the rise.
Until now, however, closed sales lagged 2008 figures by a significant margin. Through May of 2009 homes sales were off 24% from the same period a year ago. In June, however, closed sales are up from a year ago.
While the increase is not huge, 303 sales this year vs. 299 last year, it is just the third time in the last 29 months that a current month has bested the prior year’s figure. The others were January 2009 and February 2007.
The biggest reason for the uptick is price. Buyers are seeing the values and they are acting on it. The county’s average sales price year to date is now $262,460, down 9% from the year ago when prices averaged $288,854.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
Until now, however, closed sales lagged 2008 figures by a significant margin. Through May of 2009 homes sales were off 24% from the same period a year ago. In June, however, closed sales are up from a year ago.
While the increase is not huge, 303 sales this year vs. 299 last year, it is just the third time in the last 29 months that a current month has bested the prior year’s figure. The others were January 2009 and February 2007.
The biggest reason for the uptick is price. Buyers are seeing the values and they are acting on it. The county’s average sales price year to date is now $262,460, down 9% from the year ago when prices averaged $288,854.
Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.
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