The national housing market had some bad news at the end of 2012 and some good news however for 2013. The Commerce Department reported that home sales fell 7.3% in December 2012 from November 2012. But housing analysts who looked past the headlines see a lot of reasons for optimism in some more positive long-range trends for 2013 and 2014.“The market is 52% as strong as it was prior to the 2008 crash,” according to a housing index created by online real estate marketplace Trulia. For it’s monthly Housing Barometer, Trulia crunches three indicators: U S Census construction data, National Realtors Association existing home sales, and the delinquency and foreclosure t=rates from mortgage-data firm Lender Processing Services. And while 52% is a bad score on an exam, 52% is the highest score the real estate market has seen since the real estate boom.Economics Professor Mark Perry of the University of Michigan-Flint said: “There are almost no housing indicators showing weakness. Construction starts hit a 54-month high in December 2012, reaching 954,000 on an annualized rate, a 37% jump over last year. U S existing sales rose more than 9% to 4.65 million in 2012, their highest annual level in 5 years. And the combined delinquency and foreclosure rate is at its lowest level in 4 years, according to LPS.”Chief economist, David Crowe, for the National Association of Home Builders (NAHB) says: “People are also remodeling their homes with renewed vigor, suggesting homeowners believe that house prices will continue to raise.” Earlier in the week the NAHB said it’s Remodeling Market Index reached 55 in the final quarter of 2012, the highest reading since 2004. Any reading over 50 shows that remodeling is growing.Seattle’s Real Estate Market is right in line with the national trends and in some area well ahead of the trends. Inventory is very low on both sides of the lake. Looking at Seattle’s (core Seattle neighborhoods), numbers right now, today, there are a total of 773 homes and condos that are currently active, 944 homes and condos are Pending, and 496 that closed in the last 30 days. On the Eastside as of today there are 1141 Active Listings, 1469 Pendings, and 613 properties that have closed in the last 30 days.That’s a very strong market in Seattle and the Eastside. Although the total numbers of sales are still about 15% below where there were in 2007, we are in a very strong sellers market right now. Springtime historically is when we see most sellers putting their homes on the market however and over the next few months we should see a little more inventory but most likely not at the level that will balance out the market. Lenders are still pretty stingy with who they give loans to but the number of qualified buyers increased by about 15% from 2011 to 2012, and buyers are gaining more confidence that the real estate market in Seattle has stabilized and prices have started to increase. Prices in the greater Seattle Real Estate Market increased by about 5% in 2012, but most of that increased was felt in the second half of the year. We could see another 10% increase in home prices by the end of 2013.
David Bell's Real Estate Blog
Stay tuned to David's blog for updates on the Seattle Real Estate market, as well as other information from David's experience as a Seattle Realtor.
David regularly appears on the Brashenomics Radio Show Wednesdays at 3pm on 1150 KKNW and occasionally on other radio shows around the region. Click here to view his previous radio appearances.
As a native in Seattle, and selling real estate for over 22 years, I feel being a neighborhood expert is one of my strengths as an agent. In this video I shot as part of a promotion with KOMO News for the Magnolia neighborhood, I outline my approach to real estate and also why I feel it's important for real estate agents to be honest and forthcoming with their clients. The core philosopy of my business is to give my clients the best service possible, that's why I've named my business "Seattle's Best Real Estate."
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NATIONAL HOMES SALES REPORTS FOR 2012
WASHINGTON (February 21, 2013) - Existing-home sales edged up in January, while a seller's market is developing and home prices continue to rise steadily above year-ago levels, according to the National Association of Realtors®. Sales rose in every region but the West, which is the region most constrained by limited inventory.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.4 percent to a seasonally adjusted annual rate of 4.92 million in January from a downwardly revised 4.90 million in December, and are 9.1 percent above the 4.51 million-unit pace in January 2012.
Lawrence Yun, NAR chief economist, said tight inventory is a major factor in the market. "Buyer traffic is continuing to pick up, while seller traffic is holding steady," he said. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."
Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2 month supply at the current sales pace, down from 4.5 months in December, and is the lowest housing supply since April 2005 when it was also 4.2 months.
Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply. Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
"We expect a seasonal rise of inventory this spring (2013), but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth," Yun explained.
In a earlier article: NAR Chief Economist Lawrence Yun said in his national press conference in Washington to release the association’s latest sales figures says inventory shortages are cropping up in markets across the country. Although that’s good for home price gains in the short-term, in the long-term it’s a negative that reflects weak home construction by builders. Ideally, supply growth will increase to provide a healthy counterbalance to demand so prices can rise at a sustainable pace.
In any case, due to the steady price gains homeowners have seen, total home owner equity has risen by $760 billion as of October 2012. Should home prices rise 5 percent for the year (2012), equity gains could reach $1 trillion by year’s end, a healthy development for the economy, Yun says.
In this Brashenomics radio segment, joins the show and discusses how home prices around Seattle are getting artificially inflated because of the high demand for real estate.
In this installation of Brashenomics, I compare the local Seattle real estate market in 2011 and 2012 to provide a birds-eye view of what the housing market looks like, and point out some key factors that the local media seem to miss.