Posts filed under ‘Real Estate Statistics’
Vashon Island Real Estate: Should You Buy a Home in ’09?
The housing market and general economy is still falling, yet the National Association of Estate Agents (NAEA) has reported that in December 2008 there was a slight increase in activity with potential buyers and sellers tempted into the market, possibly by successive interest rates. There was a rise in both those looking to buy a house and the number of new properties that came on the market. First time buyers, having been priced out of the market for so long, bought 10.8% of the properties sold. In addition, the average number of sales made per agent held steady in December even though this is traditionally a quiet month. Some agents reported a small rise in house prices which the NAEA suggest may indicate that the rate at which prices are falling had slowed in some areas, rather than that the prices had reached a trough. The number of househunters rose from 186 to 200 and the numbers of properties agents had on the books rose from 87 to 100. The number of sales agreed per agent held steady at 6.
However, in comparison, early in January this year the Financial Times had asked the question “Will 2009 be a year to buy property?” and gathered the views of over 50 economists. Over 60% believed that 2009 would not be a good year to buy property, whilst the remaining economists believed that, particularly towards the end of the year, it could be safe to buy a property. There was an interesting mix of views. On the side that believe 2009 will be a year to buy property the reasons given were that buying real assets such as property would be protection against a decline in currency. Interest rates are expected to remain low throughout the year and by the end of 2009, although lending will remain tough, there may be more credit available particularly if the government steps up its intervention. Some economists believe that the market will have bottomed out by the end of 2009 and some buyers will then be enticed back into the market by the combination of low prices and low interest rates.
For those against the idea of buying property in 2009 the key belief is that property prices will remain simply too high in comparison to earnings and credit availability. Some economists expect property prices to continue to fall into 2010 and bottom out during that year – Capital Economics expects prices to fall a further 20%, Global Insight 15% and JPMorgan 10%. However, one economist predicts that the house price falls will continue into 2014. Factors to support the continued falls are ongoing credit restrictions, still stretched affordability, rising unemployment with muted economic growth, and the negative expectations that the market will continue to fall. And of course, with the recession biting potential buyers may delay buying due to fears of their job security.
As a whole there seems no rush to buy property. The country is in recession, 2009 will see huge rises in unemployment, lending is expected to remain constrained and as a result the demand will be low. Of course some people will have to move house due to personal reasons and the desire for home ownership and the personal benefits that owning your own home can bring. Transactions will therefore continue to trickle, but the idea of buying a property as a good investment i.e. the buy-to-let market, is some way off. However, post-recession and in the years following economic recovery we could see another housing boom due to an undersupply of housing, increasingly affordable property and a new, more secure banking system. During 2009 property sold at auctions and those that are in need of repair and renovation will be sold at very low prices and bargains will be easily found. If you buy in 2009, offer low and assume to hold your property for some time.
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Susy Copus writes about all aspects of the property market. Her work has featured the UK Property Search Engine, Where’s My Property, and Renovate Alerts who find property to renovate. Article Source: http://EzineArticles.com/?expert=Susy_Copus |
The sobering information presented here by Go! Real Estate is intended to help home sellers and buyers with their decisions pertaining to the housing market. We caution readers to bear in mind that the analysis presented by the writer is based on national data and not on Seattle-specific information. Go! Real Estate intends to stay true to its mission to keep our clients and readers fully informed of meaningful trends in the real estate market even though such information may dampen the local housing market in the short term. We believe our long term success and integrity is best served by not sugar-coating the State of the Housing Market to our clients. Call us at (206) 388-3882 for our expert analysis of the Seattle housing market!
December 2008 Real Estate Statistics for King County, WA
December 2008 South King Real Estate Statistics
December 2008 King County Real Estate Statistics
Our friends at Commonwealth Title have compiled a statistical comparison of closed sales on single family homes and condominiums in the Seattle area. Simply open the PDFs for details.
NOTE: there are TWO reports here, one for King and one for South King County
Vashon Island Housing Market News: The State of the Economy
On December 24, 2008, the National Association of Realtors released its report on the surge in mortgage applications and home refinancing applications for the preceding week.
Mortgage Applications
· The Mortgage Loan Application Index, a measure of mortgage loan application volume, rose 48 percent from a week earlier to the level of 1245. Refinance applications surged 62.6 percent in one week. Purchase applications increased 10.6 percent.
Comment: While the application volume surged in the wake of federal government industry bailout activity, the actual numbers of loans issued has NOT been reported. The actual loans issued are expected to be constrained significantly by more rigorous lending standards adopted by lenders. NARs believes that a surge in applications represents a step toward home price stabilization. However, the nexus between applications and prices is attenuated. A better indicator of market stabilization will be an actual correlation between applications and loans made.
Personal Income and Consumption
· Personal income fell more than expected, a decline of 0.2% in November, after increasing 1% in October.
· Consumption fell 0.6% after falling 1% the prior month. Consumer spending is the driver of economic growth. It accounts for more than two-thirds of the nation’s gross domestic product. Deteriorating economic conditions, including the recent credit crunch, have squeezed consumer credit, leaving them with less to spend on retail goods.
· The savings rate rose to 2.8% in November, the largest level since May when the tax rebate lifted income.
Comment: As indicated by the NARs data, personal income fell less than spending, meaning that consumers are saving money, a significant factor in consumer capacity to finance home purchases. The U.S. Commerce Department’s Bureau of Economic Analysis reported that the 2.8% savings rate represents an increase of 0.4% over October’s data. Savings data represents a solid note of improvement in consumer economic fundamentals.
A difficulty, as noted by the December 30 Seattle Times, is that banks are also saving to build up their capital as a protection against losses, meaning that federal bailout money is not being passed along to consumers and is not effectively stabilizing the housing market.
More to come . . .
Statistical data, unless other wise noted, is subject to the copyright of the National Association of REALTORS®, and reprinted with permission. Comments and analysis are provided by Go! Real Estate.
Vashon Island Housing Market News: Fresh Economic Analysis
The National Association of Realtors released its analysis of Standard&Poor’s Case-Shiller Index of home prices on December 30, which is an index of 20 major U.S. cities and shows an 18% drop nationally from October 2007 to October 2008. As we have noted in previous articles here, the national figures do not accurately reflect the micro-home markets which are critical to an analysis of local home sales. The strengths of Seattle’s housing market relative to the national market have been discussed in other articles here. However, the S&P figures are useful; as general indices of trends.
The corresponding NAR Existing Home Sales (EHS) report issued last month showed a yearly decline of 11.3 percent over the same October time period. It is important to note that the Case-Shiller Index coverage of 20 major U.S. cities is somewhat biased toward markets that have suffered the most in this economic crisis, while the NAR index is a true national survey. Further, Case-Shiller weights higher-priced homes which tends to skew their results. The NAR index covers all sectors of the market. Readers should be aware of the biases of the indices before basing investment decisions on the reports. The two indices are useful to the extent that they specifically identify the price sector in which an interested buyer or seller may be interested.
By way of a caveat emptor, Case-Shiller reports a monthly drop in prices between September and October of -2.2 percent; the corresponding NAR number was -4.2 percent. However, both numbers are relatively meaningless—changes in market mix, yearly purchasing patterns, and index timing render monthly comparisons of very limited accuracy in terms of reporting actual experience or predicting future trends.
Finally, as food for thought, the NAR report forecasts that Gross Domestic Product in the fourth quarter of 2008 will be down -5.8%, and that 2009 will begin the first quarter with a GDP decline of -2.0%. The NAR forecasts that the unemployment rate by mid-2009 will be 8.2%. The NAR predicts that the average 30-year fixed mortgage rate by mid-2009 will be 5.2%.
Statistical information is subject to the copyright of the National Association of REALTORS®, and reprinted with permission. Analysis is provided by Go Real Estate.
The National Association of Realtors released its analysis of Standard&Poor’s Case-Shiller Index of home prices on December 30, which is an index of 20 major U.S. cities and shows an 18% drop nationally from October 2007 to October 2008. As we have noted in previous articles here, the national figures do not accurately reflect the micro-home markets which are critical to an analysis of local home sales. The strengths of Seattle’s housing market relative to the national market have been discussed in other articles here. However, the S&P figures are useful; as general indices of trends.Vashon Island Homes for Sale: Beware of Market Reports
Cindy Zetts of the Seattle Times Real Estate Section provides an important perspective on the plethora of home sale market analyses that are flooding the newspapers. She writes of three such reports that were published during Thanksgiving week, each purporting to signal trends in the market.
Vashon and Seattle home sellers are well-advised to read deeply and with some skepticism the conflicting reports of the state of the local housing market. For example, one report cited by Zetts is a national report which does not break out Seattle market data. In fact, Seattle’s housing market has performed BETTER than the national statistics for home sales and has trailed the rest of the country in the number of foreclosures. A second report cited by Zetts lumps Seattle’s housing market statistics together with California, Nevada and Arizona. In fact, the economies of each of these States is unique and bears little relevance to the many localized factors which affect the Seattle market. Finally, Zetts cites a national report which is based in changes in average, not median prices. Such data is easily skewed by extreme highs and lows in the data set and renders the conclusions of the report useless to local home sellers.
Take for example the front page article in the November 28 edition of the Seattle Post-Intelligencer trumpeting that commerical property are facing a mortgage meltdown. Commercial property has long been viewed as an indicator and precursor of trends in the local housing market. A Seattle reader might be tempted to read the article as a comment on the local commercial property market. However, close reading of the alarming article shows that it was actually pulled off the Associated Press, based in Washington, DC, recites analyses of commercial data in Michigan, Georgia, California, New York and Texas.
While this article bears notice for the prudent Seattle market participant, it is untouched by specific data pertaining to the Seattle market. In this writer’s view, it would be a travesty for the headline to adversely influence local market decisions with more Seattle-specific analysis.
Ms. Zetts has performed a timely service to Seattle area home sellers in cautioning against accepting the conclusions of these reports as a basis for making home sales or purchasing decisions. The consumers best bet is to consult with local experts with a finger on the pulse of the local housing market.
Vashon Housing Statistics: Year-to-Date October 2008
Year-to-date October 2008
New single family homes units sold in October 2008 up 3% from September 2008
New Single Family Homes (vs. Year- to date 2007)
Average sale price: $652,714, off 2%
Median sale price: $530,303, off 4%
New homes represent 18% of volume and 15% of units recorded
2,035 sold vs. 3,177 last year, off 36% volume: off 37% to $1.3 billion
Average $/SF: $247.18, off 5% (49% of sales with data)
Best range: $500,001 – $600,000 with 31.1 per month
Next best range: $750,000 – $1,000,000, with absorption of 30.5 monthly
Best lot range: $200,001 – $300,000, with absorption of 8.6 per month, off 47%
Subdivisions (vs. 2007)
The average lot sold for $222,905, off 17%
Half the lots sold for more than $198,333 (median), unchanged
29.4 sold per month vs. 84 last year , off 65%
Average lot represents 34.2% of the average priced new home
The median is 37.4% of the median priced new home
Attached unit sales off 13% in October 2008 from September 2008
Attached (vs. Year- to date 2007) includes condos, commons and town/row homes
Average sale price: $362,267, up 2%
Median sale price: $315,000, unchanged
33% (2,000 units) of sales are new
6,135 sold vs. 11,429 last year, off 46%; volume: off 45% to $2.2 billion
Average existing $/SF: up 2% to $320.42 new: $321.21, off 3%, (61% w/data)
Range with best sales, existing: $300,001 – $350,000, with 55.1 per month
Range with best sales, new: $300,001 – $350,000, with 32.1 monthly
Projection
Relative inventory increased to 9.3 months, a buyers’ market. Prices will remain soft.
With unemployment rising, potential home buyers have become more cautious as
have lenders. Foreclosures will rise with short sales lowering prices.
Customer Service:
Year-to-date October 2008
Residential sales volume for October 2008 decreased 9% from September 2008
All Sales (vs. Year- to date 2007)
Residential sales volume: off 42% to $9.7 billion
Residential transactions: off 41% to 19,726
Mobile home sales on land: off 48% to $33 million
Plexes (2-5 units) sales: off 57% to $165 million
Land sales: off 74% to $236 million
Commercial volume: off 66% to $2.5 billion
Average residence: $489,591, off 2%
Existing home transactions sold decreased 12% in October 2008 from September 2008
Existing Home Sales (vs. Year- to date 2007)
Units sold: off 38%; volume: off 41% to $5.9 billion
11,133 units sold this year vs. 17,908
Average price off 5% to $532,699
Half homes (median) sold for less than $429,500, off 4%
Average $/SF for homes sold at $278.04 (all sales), off 7%
Best range: $300,001 – $350,000, with 137.3 monthly
Second best absorption rate: $500,001 – $600,000, with 127.9 per month
11.7 acreage parcels sold monthly, off 66%; average price: $231,367 off 28% from last year
Acreage Sales (vs. 2007)
55.8 per month existing homes sold, off 44%, average price: $734,800, off 11%
Median price for existing homes: $581,000, off 8%
5.3 new homes sold monthly, off 45%, average price: $997,782, up 2%
Median price for new homes: $807,000, up 27%
The $/SF for existing homes: $295.92, off 16%; new: $250.22, off 18% (57% w/data)
Average lot sizes, for existing homes: 3.7 acres, up 13%; new: 3.2 acres, off 47%
The average price per acre for acreage lot sales: $88,058, off 21%
September residential recorded transactions were 23% fewer than last September.
Source: Commonwealth Land Title Company of Puget Sound, LLC
Vashon Real Estate: Market Trends
RealtyTrac’s foreclosure numbers for Octobergrew dramatically, more that tripling in King County from September and the previous October. Specifically, 935 homes in King County were issued Notices of Trustee Sale. Compare the numbers to September 2008 (260) and October 2007 (282). The good news, however, is that the rate of increase is below the national rate. RealtyTrac suggests that Seattle may be seeing larger increases recently because the foreclosure surge in the region started later than the majority of the country.
October Home Sales
Seattle Region Vashon
Closed Sales 10/2007 1659 6
Closed Sales 10/2008 1319 4
Per cent change -20.5% -33.3%
Median Price 10/2007 $443,950 $547,500
Median price 10/2008 $392,000 $476,250
Per cent change -11.7% -13.0%
Vashon Island Real Estate: State of the Market
The Seattle Times Real Estate Section for November 9, 2008, contained two sobering articles about the continuing perturbations in the national housing market. The first article, A Realty Reality Check, written by Ylan Q. Mui of the Washington Post, discussed the impact of Consumer Fear in the face of the current economic turmoil. The second article, Bargains Help Cut Housing Glut, written by James R. Hagerty of the Wall Street Journal, discussed the impact of purchases of foreclosed homes by investors hunting for distressed properties. Taken together, these articles offer sound wisdom to both sellers and buyers on Vashon Island.
The thesis of Mui’s article is that the palpable fear of homesellers that they are losing enormous amounts of home equity if they put their home on the market today, and the corollary fear of buyers that the market has not bottomed out and that they can expect deeper price cuts if they wait it out, has caused the market to freeze. Even though reports suggest that banks are now making mortgage loans available to qualified buyers, demand for mortgages has declined.
Mui writes that psychologists are ranking the emotional angst on a par with the stress of divorce and even death. Behavioral economist Rom Brafman calls the condition “loss aversion,” that is, when FEAR of action creates a stagnant economy. The condition is insidious. It works like this: if the median price of houses were to fall slightly, a few more homes would sell; but, if the median price would rise by the same amount, home buyers would drastically cut back on their willingness to purchase a home.
For example, a 2001 study of the Boston housing market found that sellers who expected to take a loss on selling their condominiums set prices HIGHER than did their competitors, effectively pricing themselves out of the market. By the same token, buyers can also take themselves out of the market with inflated views of their purchasing power in a distressed market, passing by reasonably priced homes on a gamble that a sweeter deal is around the corner.
Consider this emotional analysis with Hagerty’s article concerning the emerging investment market in distressed properties, investors snapping up properties to turn into rental units. The effect is an apparent decline in the amount if inventory on the market which consumers might mistake for a turn in the traditional market.
The mistake is that these sales are not traditional transactions between homeowners and buyers, and they are not spread across the board of available inventory. These transactions are between investors and banks which have foreclosed on properties and are in all liklihood selling the properties at some loss.
Consider. A quarterly Wall Street Journal report on data from 28 cities shows that the glut in homes listed for sale is shrinking. The Census Bureau reported that seasonally adjusted new home sales were down 33% from September 2007. The National Association of Realtors reports that sales of previously occupied homes edged up 1.4% in September relative to 2007. Further, housing analysts caution that many homes that aren’t currently listed for sale may hit the market within the next few years.
Factor in evidence that many sellers have taken their homes off the market to try to wait out the storm, and intend to re-list their properties when they perceive the market has strengthened . . . which will swell the market dramatically down the road. This future glut will continue to depress prices!
As we all know, the general economic news is getting worse. Selective bailouts by the current administration do not seem to stem the tide of market shift.
What is a home seller or buyer to make of this data and the perception that the purchase or sale of property is a fearful event?
First, be cognizant of the role fear is playing in the market and remove it from your decision making calculus. Second, view the purchase of a home as a long term investment, similar to the approach a prudent investor takes in the stock market. This advice applies to a home seller who is moving on to a new property. Third, be aware of the impending increased glut in the market as more foreclosures arise AND as sellers decide to relist their homes out of necessity or a perception that the market is correcting.
Finally, homesellers and real estate professionals must take a cold hard look at today’s market, not the artificial market of yesterday that was fueled by sub-prime lending. A realistic home price today should be set through consultation with an experienced professional who is deeply aware of local market trends.
Celia Chen, director housing economics at Moody’s Economy.com, expects a further drop of 14% before prices bottom out in the second half of 2009. Be aware that the market will not bottom out or recover at the same time for all regions of the country and for all sectors of the housing market.
Vashon Island: Local Mortgage Rates
The Seattle Times reports a slight uptick in 30-year fixed, 15-year fixed and 1 year ARM rates for the month of October 2008.
Vashon Real Estate: Home Prices
The Seattle Times reported on November 2, 2008, that 4 out of 10 Seattle area homes have had their asking price discounted in response to the state of the current housing market. According to Zip Realty, a national real-estate brokerage which analyzed housing trends for the past three months, most cuts were in the 1 to 5% range. The deepest cuts were on Mercer Island where homes sold for 91.8 per cent of their asking price. Zip Realty provides no analysis for the price discounts. However, fundamental economic theory suggests that the supply/demand ratio still favors buyers in the current market. With Federal financial action, intended to strengthen the availability of mortgage lending, beginning to trickle down to local lenders, it is difficult to forecast how long theis buyers’ market will endure.
Zip Realty found that the percentage of Seattle area homes subject to price reductions has increased 2.9% compared with the same period in 2007. Zip also discovered that Seattle has experienced one of the largest inventory increases among major metropolitan areas, 8.8 % more than the same period in 2007.
Factors to consider in setting a home sale price include:
- whether your home is in top shape for sale, as buyers know there are competitive deal available
- the availability of similar homes in the neighborhood creates price competition
- local foreclosures depress the price of other for-sale homes
- and, the biggest reason, sellers initially list a house too high, which knocks a seller out of the window of opportunity for first-time listings
September Jump in Existing Home Sales
The National Association of Realtors reports that sales of existing homes (i.e., not band new homes) rose 5.5% in September. This increase is the first in over a year and supports the opinion of analysts that the home sale market financial crisis is reaching equilibrium.
Note also that foreclosure filings in King County fell 42% from August filings, and 13% from September 2007, as reported by Realty Trac. The significance is that fewer distressed properties are available to buyers with cash searching for a bargain.
Consumers should be aware that some mortgage lenders are open to renegotiating and modifying the terms of loans, and even freezing interest rates for a specific period of time. The terms are subject to the specific lender involved and consumer willingness to enter into negotiation. New State laws are helping to reduce mortgage foreclosures . . . tho mortgage counselors are seeing more troubled borrowers. Be aware that it takes a lot of persistence to accomplish a modification.
For more information, check out Solid Ground, a non-profit housing counselor, certified by HUD. Solid Ground currently offer mortgage intervention packages to consumers. Email Solid Ground at housingcounseling@solid-ground.org to request a packet.
August 2008 King County Real Estate Statistics
08-08 King County Real Estate Statistics
By clicking the link above you’ll open a very informative PDF that provides valuable market data. Use the information it provides to help you determine the timing of your next move!
