Spring ushers in a period of optimism in the real estate industry. Generally, that’s when buyers and sellers get down to business after six months of market hibernation. It’s when agents bust out with that old cliche: There’s never been a better time to buy. It’s when sellers exhale, sensing that people are placing their faith in real estate.
Judging from February home sales data just out from the Northwest Multiple Listing Service, Seattle’s real estate market is improving. Rising prices, an increase in pending sales, and shrinking inventory make up the troika that economists watch for when they’re looking for signs of improvement.
Well, check out the stats: The median price for a residence (factoring in both houses and condos) in the city rose 3.35 percent to $371,500 from $359,475 this time last year; the median condo price is now $290,500, up 6 percent over last February and the median single-family home is $399,000, up 1.4 percent from this time last year. Across Seattle, pending sales are up 58% year over year. And “active” listings are falling, down 7.26 percent
Matthew Gardner, a local economist, told us he finds the results “encouraging.” (Stay tuned: Tomorrow, he’ll share his regional forecast with us.)
While Seattle looks improved, the suburbs don’t paint the same picture. While pending sales throughout King County rose 62.7% year over year, and active listings fell 9.76% between this February and last, price isn’t picking up. Indeed, the median price of a home in King County fell 1.29% to $343,500. A 1.29% decline isn’t so bad, though, coming off double-digit price reductions that hit the city and county hard this time last year.
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Shocker, a misleading “never better time to buy/sell” piece kicks it off for the real estate nerd.
First off, an increase in the median price of a home sold in a given month does not mean “home prices” are rising — it could just be a change in the mix of what is selling. That is, if higher-priced homes are selling but lower-priced homes are not so that there are a disproportionate # of expensive homes sold, the median sale price could rise even though the prices of each home sold is *less* than it would have been the month before.
Second, you fail to even mention two potentially huge things to happen to the housing market soon: 1) the expiration of the first-time homebuyer tax credit, and 2) the planned end of the Federal Reserve program to try and keep rates down by purchasing mortgage backed securities. The effect of these changes is hard to predict, but it could have a significant downside impact. Worth mentioning if taking an even vaguely balanced view.
Finally, the most recent Case-Shiller index — a more accurate data series that tries to estimate the value of all homes, not just the ones which happened to be sold in a given month — shows that in Seattle, prices were down 7.9% year on year. ( That data covers 12/2009, the most recent info available.)
This isn't reporting or “nerdishness”. It's the kind of BS that's written on the postcards realtors & loan officers mail out every day to promote themselves.
Kent has nice condoes under $125K. Very nice, might buy.
Jane wrote: “It’s when agents bust out with that old cliche: There’s never been a better time to buy.”
How is characterizing a sales pitch as an old cliche boosting the idea that it's true?
Prices going up doesn't mean it's the best time to buy; in summer, houses sell for less, spend longer on the market.
WHERE are the jobs to support prices …?
Um… once all these unemployed people get off their butts, get that better college degree, and get all those stratergerist jobs making critical powerpoints, THEN the housing market will really take off!!
(psst! I heard about this Great book – “Dow 30,000!” – better get in now!)
rmm.
Crap, I had hopes the newest Nerd would be on top of things, but anybody impressed by analysis at the Matt Gardner level is waaay behind the curve – he's our most famous industry shill badly camouflaged as an academic, and worse yet, he's wrong all the time, and doesn't learn from his mistakes. Not knowing that about him, or worse yet, knowing but not caring enough to keep him off Publicola – either way, no more Real Estate Nerd-reading for me.
It's a fair point, but I think the story goes on to be exactly the cliche it admits exists, by discussing only marginal bits of good news in a story that outside the context of this piece is hardly all positive. She misinterprets basic facts (median sale price vs. median home value) and ignores important pieces of information & evidence (Case-Shiller, Fed program & tax credit ending soon), subsuming any shard of critical thinking to a shiny happy positive perspective. It's a real estate promotional puff piece disguised as “reportage”. It's sad.
May be worth revisting the comment thread on your announcement of the RE nerd.
http://www.publicola.net/2010/02/19/real-estate...
This is exactly the kind of piece that many (including me) specifically wanted to *avoid*.
Per Seattle Bubble, this Matthew Gardner fellow made a 2009 forecast that included:
* Jobs will lead housing out of the mire
* Foreclosure activity will continue to slow
Spot on!
Does Seattle's “real estate market” include only sales prices and inventory shrinkage? The true market that impacts actual people also includes how many more people are losing their homes due to foreclosure, how many condos are sitting around out there or being leased or turned into high-priced apartments, how many people have given up trying to sell their houses and are renting them out, and exactly what's happening with rentals: prices/availability up or down, higher/lower demands by landlords on renters. I could not care less whether the average home price is $370K insteaad of $350K. I want to know what's happening with people. If you're trying to sell your house or buy one, you go to your agent/broker to find out what the “market” is, not Publicola.
Well, at least they didn't hire The Tim.
If Jane doesn't show a little more depth and insight down the road (and unlike those here, I won't judge by the first post), I would heavily court Jillayne Schlicke, formerly of Rain City Guide. That site jumped the shark, and I believe she decided she could not longer ethically write for them.
She writes her own blog, but perhaps you could try to talk her into it. She is the goddess of Seattle area RE in my mind, and teaches ethics courses and other good stuff. You could not do better then Jillayne.
So much is left to the imagination. This only covers the press release.
Man, for a second, I thought it was like 2006 or something
and lived in Florida.
Jane, you failed to mention that you are just talking about
Residential Real Estate:
1. Shadow inventory: Homes AND rentals. Fear it.
2. About 10% of the homes in sayWa! are in some state delinquency
or foreclosure.
3. About 25% national average near/at or below negativity equity
4. Crazy ass unemployment and underemployment
5. Government cheese for MBS and mortgages. Also, Who Moved
My Cheese when those tax creds expire.
6. What's your day job? Perhaps, some conflict of interest?
7. High vacancy in rental units and lower rents. Yeah, deflation, baby!
8. Commercial RE…just in Seattle, 7 million empty sqft of office space
and whole mess of trouble.
9. Local and community banks in Wash. Holy smokes. Talk about
unbalance in Construction and CRE loans. Adios Viking, Citibank,
Anchor, and some others.
Please, Seriously. Be my guest and you go ahead first.
But hey, Seattle is going to sell some munis soon, for some major CIP or whatnot. Good times.
Enjoy Kent…..
Come on, people. Tell her how you really feel. Don't go easy on her just because it's her first day.
Hey, you guys brought Dan on board for urban planning, why not jut co-opt the best local source at Seattle Bubble?
..I'd second Jillayne though. Don't know her personally but she knows the mortgage market well (but may be too specialized for a broader set of issues, don't know her breadth of knowledge)
This uptick is a dead cat bounce. Note that the sales and price rise have been for existing housing, not new housing. Note also that the rise coincides with the tax credit, which is ending. Without repeating more points brought up on this thread, I have to say that the RE cheerleading fits nicely with the trend of other kinds of cheerleading; like the Mike McGinn Bubble of 2009. How's that working out for you guys?
Please, get a real finance reporter, with a real economic background, that knows how to engage in critical thinking, and not just swallow what the WSJ, Bloomberg, and NWMLS says. The interwebs are full of good writers.
“Well, at least they didn't hire The Tim.”
Hey, what's that supposed to mean?
Here's the link to that post for anyone who is curious: Matthew Gardner Predictions vs. Reality.
Heh.
Just ribbin' you, Tim.
You know I love you man, but your commentary may be a bit, um…, dry for the likes of publicola. Sarcasm only gets you so far.
Ferkin' A, The Tim. I shoulda hat-tipped you – you've been fact-checking the Gardner Media Machine from the get go.
Likewise, apologies for omitting the link. Your fab work at seattlebubble deserves more recognition
Dead Cat Bounce would be such a great name for a band…
Personally, I hope it's not true. Sorry, homeowners. But it'd be sad if that's as long as the window lasts for people like me to ever buy in this city.
Well is it only in Seattle..Its pretty much the same everywhere
I planned that i would buy a small house and that made my wife happy. But with the price rising my salary does not… so now what ?