Bill Blanchard

Seattle Case-Shiller Numbers:

You all know I love the Case SHiller index. The numbers reported Tuesday are pointing once again to a recovery in the Seattle housing market. Thou prices are down about 12% over the last year; they have only dropped about 2% since February and have remained flat since March.

Nationally, the index points to a 3% increase since March.

For over a year the housing market locally has be dominated by people who ‘need' to sell or buy because of job or life change. People who ‘want' to move have remained on the sidelines. Most have been hoping their values will climb back to peak levels.

We have just started to see people who ‘want ‘to move coming back into the market. Some are motivated by the low interest rates but all have them have come to terms with the perceived loss in their home value.

But they have found great values available in the market.

Last year I predicted that home values would level off in May and I'm pleased to see that they have.

Baring any major event, I see the Seattle hocusing market continue to rebound with homes in the upper price ranges starting to move as attitudes change and money for jumbo loans mimics conventional loans.

Months of Inventory for the Eastside Based on Pending sales:

Good news as U.S. mortgage applications surged last week. Demand rose to its highest level since late-May. Consumers take advantage of the lowest interest rates in months, data from an industry group showed on Wednesday.

Home refinancing loans still dominated demand, the trend for applications to buy a home, a tentative early indicator of sales, hit its highest level since early January.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Sept 4 increased 17.0 percent to 648.3, the highest level since the week ended May 29.

Also the Bellevue, Kirkland, Redmond Markets remain strong as sales continue to climb and prices remain low with short sales and foreclosures setting the bar very low.

Months of inventory for Bellevue, Kirkland Redmond:

NEW NWMLS NUMBERS CAME OUT TODAY

This graph shows the reduction of all new construction inventory on the Eastside. As you can see the trend continues to level off. The analysis predict this shortage will put a new type of pressure on the housing market:

A third or more of home buyers want new. With fewer new homes, slightly used homes or recently renovated homes will demand a higher asking price.

However, if you look at this chart (New Construction Eastside under $500K) you see the trend moving up slightly. This reflects the fact that builders are creating a lower price product to meet the demand of market place.

And finally, when we look at New Construction Eastside over $500K you see even the higher priced inventory is being absorbed.

This graph shows the reduction of new construction inventory on the Eastside. As you can see the trend is leveling off at about eights months of inventory based on pending sales. Just about every trend is showing a leveling off over the last three months.

Even the Case Shiller index has leveled off over the last three months. This takes us back to prices around June of 2005: (Index over last 12 months)

There was a dramatic increase in the prices of homes sold vs the for sale price. This probably reflects the increase sales in higher price ranges finally selling.

All these trends point to the fact the market has corrected itself. Baring any major incident, it is safe to jump into the market without the fear of loosing value like you would when you buy a new car.

Every buyer I work with today wants a deal. I think the entire market is a deal. We still see that most of the inventory is created by people who need to sell. The foreclosures, short sales, and relocations are setting the price bar very low.

Rumors where flying and people where making plans for years anticipating the wave of new Google employees. Hundreds would move into town and into the corporate center in Kirkland. (See my blog from earlier) When the economic climate changed so did Goggle's plans. The migration of high tech, high paid new home buyers fizzled.

Now Microsoft to the rescue. Enter the partnership with Yahoo, 400 Yahoo employees will be hired by Microsoft. No one is sure where these people will move to... but we d know that Microsoft has reworked its relocation department.

The real estate company that had an exclusive relocation arrangement with Microsoft for years is now out and new agents at new companies have been selected to help with the new migration.

Let's hope that more people search for homes locally with Yahoo than did with Google.