Northwest MLS brokers say housing market in Washington state indicates recovery

The Northwest Multiple Listing Service released the following market update today:

K IRKLAND, Wash. (March 4, 2010) – Northwest Multiple Listing Service members reported strong gains in home sales during February, with brokers pointing to several encouraging signs for a busy spring season. Improving consumer confidence and a looming deadline for homebuyer tax credits are helping to boost activity, according to NWMLS officials.

“We are entering what is traditionally our busiest home selling season,” said NWMLS director OB Jacobi, general manager of Windermere Real Estate Company. “With the first job increase since 2008 and closed sales in King County up about 45 percent, there is every indication that our market is in recovery,” he added. Jacobi reported “significant traffic” at open houses, which he attributes to the first-time homebuyer tax credit and rising consumer confidence.

Pending sales (offers made and accepted, but not yet closed) jumped nearly 45 percent last month compared to a year ago, marking the 11th straight month of month-over-month increases. Twelve of the 21 counties in the MLS market area reported double-digit gains in pending sales, led by San Juan County (up 85.7 percent), Snohomish County (up nearly 71 percent) and King County (up nearly 63 percent).

Closed sales also outperformed year-ago totals, rising 33.5 percent. Members tallied 3,214 completed transactions last month, up from the 2,407 closed sales for February 2009.

Prices, while showing signs of stabilizing, still lagged year-ago figures. Area-wide, the median price for last month’s closed sales of single family homes and condominiums (combined) was $260,000, down about 6.5 percent from a year ago. The median price for single family homes (excluding condos) dipped 4.6 percent, while condo prices declined nearly 9 percent.

In the four-county Puget Sound region, the median price for single family homes that sold and closed last month was $297,000, down about 2.6 percent from the year-ago figure of $305,000. Condo prices in the area fell 7.7 percent, from the year-ago selling price of $253,000 to $233,500 for last month’s sales.

MLS members added 10,663 new listings to inventory last month, bringing the total number of active listings in the system to 36,350. That total is down 7.5 percent from the same month a year ago, creating a more balanced market that favors neither buyers nor sellers.

Move-up buyers are accounting for some of the surge in activity. Brokers credit the combination of a $6,500 tax incentive for qualified repeat buyers and thawing jumbo loan market as factors in spurring activity for this segment.

“Over the past 90 days there has been a buildup of positive momentum in the housing market and we continue to see evidence that the tax credit extension/expansion is working,” remarked J. Lennox Scott, chairman and CEO of John L. Scott, Inc.

Scott noted higher priced areas, such as Mercer Island, Redmond, and Issaquah, are seeing an uptick in home sales – suggesting more move-up buyers are engaging in the market. “Historically low interest rates continue to be a motivating factor which when combined with the tax credit give buyers a significant purchasing power advantage,” he commented.

Interest rates on jumbo loans (more than $567,500 in King, Snohomish and Pierce counties) fell to 5.79 percent on a 30-year fixed-rate loan in the past few weeks. That’s a five-year low, according to Informa Research Services, whose clients include the nation’s top 25 banks.

Noting the peak real estate season is approaching, MLS director Meribeth Hutchings, pointed to several encouraging signs. “Homes are more affordable, mortgage rates are at all-time lows, and employment in the state appears to be on the rise,” said Hutchings, the broker at Windermere Real Estate/Lake Stevens. “All signs point to a strong spring,” she added.

Earlier in the week, the state Employment Security Department reported the state’s economy “picked up some steam in January,” adding an estimated 12,400 jobs the first monthly gain since November 2008.

NWMLS Dick Beeson, broker/owner of Windermere Real Estate/Commencement Associates in Tacoma, attributes the lift in activity to lower prices and a hopeful jobs picture. He said the price point of new listings in some areas is 10-to-15 percent lower than the asking price of new listings added at this time a year ago, which is opening up opportunities for more buyers.

“The plethora of shorts sales and foreclosures has diluted the price point of many homes that are selling, making appraisals more challenging,” Beeson reported. He believes the tax credit has “helped only marginally.” The real potential of a recovered housing market, according to Beeson, will come with new employment for many displaced workers. Recent employment gains and reports of rising consumer confidence are encouraging, he noted.

“We can see and hear the rumblings of pent-up demand from buyers,” Beeson commented, adding he expects spring and summer sales to outpace last year because there are such good price values in the market. He said they are reminding buyers of the possibility of rising mortgage interest rates due to the Federal Reserve’s plan to stop buying mortgages by the end of March.

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in western and central Washington. Ferry and Clallam counties are now included in the monthly statistical reports.