David Edwards King County Real Estate

KIRKLAND, WA, July 6, 2009 -"Encouraging" seemed to be a common response from brokers upon reviewing the June activity summaries from Northwest Multiple Listing Service. The report shows inventory continues to shrink, pending sales increased more than 19.5 percent from a year ago, and median prices system-wide are up 4.4 percent since January.

"The positive movement in our real estate market year over year is really very encouraging," remarked Ron G. Sparks, managing vice president of Coldwell Banker Bain. Compared to 12 months ago, the Puget Sound region has nearly 7,000 fewer homes listed for sale, and nearly 1,200 more homes under contract, he noted, adding, "In anyone's book, that's substantial improvement."

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, echoed those comments. "It's encouraging to see that pending sales are at their highest since the credit bubble burst nearly two years ago," he stated. While the median home price is down approximately 10 percent from a year ago, median prices have flattened over the past seven to nine months, he noted. "This is an indication that the $8,000 tax credit is working and the market has reactivated itself in the more affordable and mid price ranges," Scott believes.

Northwest MLS brokers notched 7,733 pending sales of single family homes and condominiums (combined) in their 19-county market area last month. That's a gain of 1,263 transactions from the same month a year ago, for a 19.5 percent increase. Seven counties reported jumps in pending sales of 30 percent or more: Cowlitz, Island, Kitsap, Mason, Pacific, Skagit, and Snohomish, with Kitsap County topping the list with its 55.6 percent increase.

Pending sales (offers made and accepted) in the four-county Puget Sound region (King, Kitsap, Pierce and Snohomish) rose more than 25 percent in June compared to the same month a year ago, increasing from 4,765 transactions to 5,693.

Closed sales and prices still lag a year ago, but prices are edging up since the beginning of the year. Brokers reported 5,146 closed sales of single family homes and condos during June, a dip of 4.3 percent from twelve months ago when they reported 5,379 completed transactions.

Viewed separately, the volume of closed sales of single family homes nearly equaled year-ago totals (4,463 closings last month, down from 4,516 for June 2008). Condo sales were off nearly 21 percent, dropping from 863 closings to 683.

The area-wide median price for last month's closed sales of single family homes and condos combined was $285,000, a drop of 9.5 percent from the year ago figure of $314,900. In the Puget Sound region, the volume of closings nearly matched year-ago totals (3,885 versus 3,908), but prices are down about 10 percent. The median price for last month's completed sales in the four-county area was $305,950; a year ago it was $340,000.

"There is a definite upsurge in sales activity, from a pending sales perspective and a "lookers becoming buyers" perspective," observed NWMLS director Dick Beeson. Agents are reinvigorated that buyers can and will make decisions more today than any other time over the past 12 months, according to Beeson, the broker at Windermere Real Estate/Commencement Associates in Tacoma.

Beeson believes mortgage rates remaining low, declining inventories, and the recent stretch of warm, dry weather helped spur some buyers to act. He said the "word' on the $8,000 tax credit has finally reached the streets, as more buyers come in aware, prepared and excited about taking advantage while the advantage is available. (The federal tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence before December 1, 2009.)

House-hunters will find fewer choices than a year ago. MLS members added 11,410 listings of single family homes and condos to inventory during June, down 13.5 percent from the year-ago total of 13,187.

At month-end there were 34,278 single family homes and 7,039 condominiums offered for sale, for a total of 41,317 listings. That's down 17.6 percent from a year ago when MLS members represented sellers of 50,143 properties.

Buyers continue to look for modestly priced homes, with first-time buyers accounting for about 40 percent of today's market, according to estimates by Beeson.

Although the supply is plentiful with asking prices of current inventory ranging from $24,000 to $32 million, homes at the lower end of the price spectrum tend to be in short supply in some areas. In King County, for example, MLS data indicate less than 9 percent of the inventory of single family homes has an asking price under $250,000.

For condominiums in some submarkets, brokers report projects that "demonstrate their market value" are finding success. Sam Cunningham, managing broker and partner in Realogics Brokerage, which specializes in center city condominiums, believes prices are stabilizing and consumer confidence is improving.

Cunningham reports inventory levels in the downtown Seattle market have been declining for a year and there's no new construction planned. He suggests "timing the market" for buyers may finally have more to do with preferred selection and interest rates than waiting for dramatic price drops.

MLS figures indicate the median sales price for condos that sold in Seattle's downtown core last month was $449,450. That's down about 8 percent from a year ago, but reflects four months of steady increases.

Commenting on the MLS report, Sparks, of Coldwell Banker Bain, remarked, "If there is a downside, it might be that this improvement isn't uniform across the region." As an example, he said his company's Lynnwood office saw year-over-year closed sales increase 144 percent, while the Gig Harbor office reported a meager 4 percent gain.

Data show some neighborhoods are rebounding faster than others, Sparks observed. "In what appears to be a transitional market, accurate neighborhood information is more critical than ever, so buyers, sellers and their agents really need to do their homework" he emphasized.

Short sales continue to be a drag on prices and source of frustration for brokers and agents, according to Beeson. A National Association of REALTORS® analysis revealed that distressed homes typically sell for 20 percent less than the normal market price, thereby drawing down the overall median price.

Many pending sales are yet to close because of short sales, which Beeson estimates take twice as long to close as a more conventional transaction. "Many pendings have to be resold because the first buyer tires of waiting for the lender's response."

Beeson also notes the next challenge will be reactions to the next round of foreclosed properties that are expected to come on the market in the next six months. He said there could be another dip in prices, but adds, "I think we've been through the worst."

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes approximately 27,000 brokers and agents. The organization, based in Kirkland, currently serves 19 counties in western and central Washington.

Best Regards!

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
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The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

Secretary Donovan reinstates commitment to REALTORS

The Department of Housing and Urban Development soon will issue guidance enabling FHA-approved lenders to provide short-term "bridge loans" to borrowers who are eligible for a one-time $8,000 first-time homebuyer tax credit. HUD issued an initial mortgagee letter on May 12 outlining a program that enabled borrowers to use tax credit funds toward down-payment and closing costs. This advisory is being revised.

HUD has drafted new language that is expected to be posted any day now, according to sources. HUD secretary Shaun Donovan told the National Association of Realtors on May 12 that FHA approved lenders, nonprofit housing groups, as well as state and local government entities would be permitted to "monetize the tax credit through short-term bridge loans." HUD expects these bridge loans will help more borrowers to become homeowners. The department also wants to prevent lenders from abusing the program by charging FHA first-time homebuyers excessive fees and rates.

Source: Seattle King County Association of REALTORS Broker Update, June 2009

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

Efforts to get the $8,000 first time home buyer credit available to the buyer at closing have stalled at the IRS office. The Governor has signed the legislation that allows the Washington State Housing Finance Commission to make the funds available. Washington REALTORS® have provided the money to guarantee the program and the State Treasurer has asked the IRS to allow tax credit eligible buyers to assign their refunds to the Housing Finance Commission.

To make the program work, there must be a mechanism to ensure that when the borrower receives the $8,000 from the IRS, those funds are dedicated to pay off the bridge loan. Should the IRS refuse to allow "assignment" of the tax credit, we are working on alternatives to make this program available by the end of June. REALTORS® are actively monitoring this issue and will update you as soon as more details are available.

Source: Seattle King County Association of REALTORS Broker Update, June 2009

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

After meeting with REALTORS last week, key Senator introduces legislation to extend tax credit until June 2010 AND make it available to ALL buyers.

Senator Patty Murray has authored language to extend the $8000 First-Time Buyer Federal Tax Credit until June of 2010 and to make the extended tax credit available to all homebuyers until that date. This language also removes the income "cap" for receiving the credit. The current credit is only available to those who have not owned a home within the past three years and is available to purchases that close no later than November 30.

In a meeting with Seattle King County REALTORS® on May 13, 2009, Senator Murray said she favored an extended tax credit for homebuyers. Her attempt to attach this amendment to a supplemental appropriations bill last week failed on a procedural motion. However, sources say her language could remain eligible for consideration by the Senate later this year.

Source: Seattle King County Association of REALTORS Broker Update, June 2009

David J Edwards

Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.

Paul R. La Monica, CNNMoney.com's editor at large wrote an interesting article about the rise in long term treasury bond yields and their impact on interest rates. To read the full article visit http://money.cnn.com/2009/06/08/markets/thebuzz/index.htm.

Here is an excerpt from the article:

"The Fed lowered its key federal funds rate, an overnight bank lending rate, to near zero in December and has kept it there ever since. And the central bank announced in March it would start buying $300 billion in long-term Treasuries to keep long-term rates low, a phenomenon known as "quantitative easing."

The justification is that many believe the only way for the economy to truly get healthier again is for the housing market to get out of its funk. The direction of long-term yields tends to have an effect on mortgage rates.

Some fear that a nascent pickup in housing sales -- despite a continued slide in prices -- could come crashing to a halt if it suddenly become smore costly for people to finance a home purchase.

And according to Bankrate.com, a Web site that tracks lending rates across the country, the average 30 year fixed rate mortgage is now 5.45% up from 5.23% a week ago and a record low of 4.85% in April."

Nonetheless, it's important to note that even if rates go up a full point, they will still be within the average 5% to 6% we were used to during the runup between 2003 and 2006.

It's my belief that rates won't skyrocket much higher. Rates seem to have rebounded because people believe the economy is getting better. If they keep surging, it could slow down our recovery.

David J Edwards
Real Estate Agent & REALTOR
The David J Edwards Team
Keller Williams Realty Southeast Sound
Phone: 425-890-8045
Fax: 425-902-1899
E-Mail: david@davidjedwards.com
Website: http://www.davidjedwards.com
Blogsite: http://www.davidjedwards.com/real-estate-blog.asp
Mobile Site: http://davidjedwards.mofuse.mobi
Community Reports: http://www.topmarketer.net/CSR/CSReport.aspx?CV4GU5KAYOEF
View This Week's Market Conditions Around Your Home: http://www.homeinsight.com/Widget/default.asp?BFBMVVHW4HZT

The David J Edwards Team specializes in Residential Real Estate for buyers and sellers.