KIRKLAND, WA. (Feb. 4, 2009) – Pending sales during January jumped from the same month a year ago in eight of the 19 counties in the Northwest Multiple Listing Service area. Last month's pending sales outgained December's weather-hampered activity by nearly 1,100 transactions, prompting one MLS director to report "We're starting to feel the train building up steam." The latest report from Northwest MLS shows inventory is shrinking and prices in most areas are below year-ago levels.
NWMLS members tallied 4,353 pending sales of single family homes and condominiums area-wide during January, up from December's total of 3,255, but down about 3.3 percent from a year ago when sellers accepted 4,499 offers. Sales surged more than 26 percent in both Pacific and Pierce counties, according to the new figures from Northwest MLS. Cowlitz, Grays Harbor, Kitsap, and Okanogan counties also experienced double-digit gains in pending sales compared with a year ago.
Pending sales of single family homes, which accounted for about 86 percent of last month's residential volume, increased about 1.2 percent from a year ago. Condo activity remained sluggish: area-wide sales dropped more than 24 percent from twelve months ago.
"The market seems to be gaining momentum, and buyers seem to be feeling more confident," reports Northwest MLS director Meribeth Hutchings. Agents are more optimistic and banks are getting more realistic on pricing bank-owned homes and bank-controlled homes (short sales), which is helping move that inventory, she stated. "The sooner we can eliminate that inventory, the sooner we will get back to a healthy market," says Hutchings, the broker/owner of Windermere Real Estate/Lake Stevens, Inc.
NWMLS brokers reported year-over-year drops in both the number of new listings added to inventory during January, and in the total inventory at month end. Members added 10,713 new listings, nearly 2,500 fewer than a year ago, for a decline of nearly 19 percent. At month end, there were 38,171 active listings in the MLS system, about 8 percent fewer than the year-ago total of 41,498. Thirteen counties reported shrinkage in inventory.
"Home buyers in Pierce and Kitsap are starting to recognize the opportunities that exist for first-time buyers and those looking to buy a home in the more affordable price ranges," said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. "These areas were the first to feel the housing market adjustment, so it's natural that they would lead the road to recovery," he added.
MLS director Dick Beeson, broker/owner of Windermere/Commencement Associates in Tacoma, agreed. He estimates one in four pending sales in Pierce County last month were short sales (a sale in which the proceeds are less than the balance owed on a loan; such sales are typical to prevent foreclosure). Beeson attributes the uptick in pending sales to short sales along with low interest rates and a buyer pool that's "finally waking up to the excellent values in the marketplace.
"There's no question that buyers are being educated and coached by agents in how to craft offers within lender approved guidelines that garner good price values along with seller concessions for closing costs and needed repairs to the property," according to Beeson. Given the pent-up demand, he believes passage of a stimulus package with key elements for housing would spur a housing rebound.Members reported fewer closed sales in January compared to a year ago, reflecting the slower pace of sales during the last few months of 2008. Prices area-wide slipped about 13.7 percent from a year ago.
Viewed separately, condo prices were unchanged from a year ago. Condos that sold last month had median selling price of $250,000, which compares to a price of $249,950 for sales that closed during the same month a year ago. In King County, which accounts for about two-thirds of the MLS condo sales, prices increased 3.4 percent, rising from $270,500 to $279,750.
"It's pretty clear that the real estate train came to a complete stop over the past few months," acknowledges NWMLS Pat Grimm, owner/broker of Windermere Real Estate/Capitol Hill, Inc. "The good news is that the train was moving pretty fast before and now people have an opportunity to get aboard." Affordability is the key, according to Grimm. "With interest rates and prices down, dream properties are within reach again and we're starting to feel the train building up steam."
Working in buyers' favor are historically low interest rates and a large percentage of homes that fall beneath the conforming loan limit of $506,000 and therefore qualify for low interest loans backed by the Federal Housing Administration. "This makes homes in this market very appealing to first-time buyers," noted Lennox Scott.
Officials from the National Association of Realtors® say "significant uncertainty" still clouds the housing market despite improved affordability conditions. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers," stated Lawrence Yun, NAR chief economist.
"The market is fragile given the economic backdrop," declared NAR president Charles McMillan. The Dallas-Fort Worth broker emphasized additional steps are needed to meaningfully drawn down inventory and stabilize home prices.
Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 28,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties in western and central Washington.
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