Here are last month's statistics forNorth Tacoma, including downtown and University Place.
Activity picked up last month. 22% more homes
closed in October this year than during the same month last year, but they took nearly three weeks longer to close.
The average sale was down 17% from the same
month a year ago. Sellers accepted about 12% less than their
original asking price.
Tacoma continues to be a buyers' market.
If you'd like the selling details of the home that closed in your neighborhood, just ask. I'll email you the information.
Here are last month's statistics forNorth Tacoma, including downtown and University Place.
Activity spiked last month. 36% more homes closed in August this year than during August last year, and they closed 30 days sooner.
The average sale was down 21% from the same month a year ago. Sellers accepted about 12% less than their original asking price.
Tacoma continues to be a buyers' market, but the trend is moving toward neutral.
Currently 745 single family residences are on the market, three fewer than last month. Listing prices range from $37,000 to $7M. Half the inventory is below the median listing price of $190,000.
If you'd like the selling details of the home that closed in your neighborhood, just ask. I'll email you the information.
Housing affordability will be at its highest in a generation this year.
The affordability index is comprised of median home prices, median family income, and the prevailing mortgage rate. An index of 100 implies that a median income family has just enough income to buy a median priced home. An index of 120 implies that a median income family has 20 percent more income than is necessary to buy a median priced home. The index reached an all-time high (since the data creation in 1970) of 174 in 2010. This year, it looks to surpass 180. The rising affordability is a combination of lower home prices, record low mortgage rates, and a slight rise in family income.
In short, there hasn’t been a better home buying opportunity in 40 years.
However, not all people have the necessary confidence to make a major expenditure like a home purchase in an uncertain economic environment. More importantly, the underwriting standards are overly stringent. Those who are currently able to get conforming mortgages have an average credit score of 760. Under normal underwriting standards (and not the lax underwriting of the bubble years), credit scores would be closer to 720 on conforming mortgages. For FHA mortgages, today’s borrowers have an average credit score of 700, compared to historic FHA borrowers who had an average credit score of 660. If the underwriting standards were just to return to normal then there could be an additional 15 to 20 percent increase in home buying activity.
Banks have plentiful cash reserves but are unwilling to lend. They are blaming the regulators, saying extra cash holding is needed in case of another catastrophic economic event and because the banks are uncertain about future regulatory rules. Under these circumstances any additional attempts by the Federal Reserve to lower interest rates via another third round of Quantitative Easing (QE3) and printing more money would be inconsequential to the housing market. All the while, printing money could pose higher inflation risks in the not-too-distant future. Simply getting the excess cash holdings held by the banks out to the borrowers will be the true, natural stimulus for the economy.
Source: Lawrence Yun, Chief Economist & Senior Vice President, Research, National Association of Realtors
According to David Stiff, chief economist for Fiserve, which provides financial analysis for the financial industry, the chances of the housing market recovering in the near future are slim (see this article from CNNMoney).
But the outook in Tacoma is much, much brighter.
"Stiff said markets that are ripe for a turnaround will be in the Pacific Northwest. The biggest gainer is expected to be Tacoma, Wash., where Fiserv said prices will rise nearly 25% by March 2013. Seattle and Portland's prices are expected to stay flat through next March and then record double-digit gains of just over 10% each over the following 12 months.
"Homes are undervalued in the Northwest," said Stiff, "the economy is diverse and the demographics strong. It has tech, manufacturing and extractive industries (like lumbering and mining) and people are still moving into the area."
If Stiff is correct, then buyers should buy now from sellers who need to sell.
Sellers who can wait can expect more money at closing, but they should of course factor in their mortgage payments and maintenance costs to determine whether a wait is worth it.
A seller who takes "a loss" will be able to purchase another home at lower cost today.
Here are last month's statistics for North Tacoma, including downtown and University Place.
32% fewer homes closed this month than during June last year, and they closed 16 days sooner.
The average sale was down 22% from the same month a year ago. Sellers accepted about 19% less than their original asking price.
Tacoma continues to be a buyers' market, but the trend is moving toward neutral.
Currently 476 single family residences are on the market. Listing prices range from $69,500 to $7M. The average listing price is $397,571, with half the inventory under the median price of $285,000.
If you'd like the selling details of the home that closed in your neighborhood, just ask. I'll email you the information.
Here are last month's statistics for North, Central, and South Tacoma.
27% fewer homes closed this month than during May last year, and they closed 12 days sooner.
The average sale was down 18% from the same month a year ago. Sellers accepted about nine percent less than their original asking price.
Tacoma continues to be a buyers' market, but the trend is moving toward neutral. Compared to last month, the numbers show an improvement in the market.
Currently 291 single family residences are on the market. Listing prices range from $109,500 to $7M. The average listing price is $413,400, with half the inventory under the median price of $275,000.
If you'd like the selling details of the home that closed in your neighborhood, just ask. I'll email you the information.
So many of us giggled nervously as we thankfully avoided the end of the world a couple of weeks ago. But judging by the continued “end of the world” type coverage the Case-Schiller housing study got this week, maybe we are nearing the end.
Yes. I am joking, but I am amazed at the attention this report gets. It covers 20 markets, yes only 20, and that is just one of its many flaws. Yet many consider it “the be-all-and-end-all” economic indicator that defines our entire national housing picture. As we know, all real estate is local, and it is unfortunate that the reporting on a 20-city “national” index can have such a jarring impact on otherwise rational people.
Look at some of the headlines the other day:
“Home prices at lowest point since 2006 bust” “Home values continue downward churn” “No relief in sight’ for falling home prices”
And even in paradise – Maui- the front page headline in the paper screamed “Crash Spreads.” And Maui isn’t one of the 20 markets. In fact the nearest market covered is San Diego, a mere 2500 miles away!
Shawn Daly, an agent with Coldwell Banker Residential Brokerage in Evanston, Illinois, had to calm down two skittish buyers this week.
One, who is currently working in Iraq, had initially placed on offer of $450,000 on a lakefront Chicago condo. The sellers countered with a price of $525,000. But after seeing Case-Schiller inspired headlines on the web, Shawn’s client emailed him to ask that he lower his offering price by $50,000. Shawn explained that the sellers did not agree with his first offer so if he went lower he wouldn’t get the home. The buyer calmed down and agreed.
Shawn correctly pointed that the Case-Schiller Home Price Indices are meaningless to individual buyers who are looking at specific houses, on specific streets, in specific neighborhoods.
Then yesterday, Shawn met another client for a tour of potential homes. They hardly said hello without telling Shawn they were more nervous than ever after seeing the report on the news.
You have a right to be nervous, but I can’t say this enough. Now is the smartest time to buy a home if you have the lifestyle reason, financial stability and viability to do so.
And it’s all about “Triple I…P”. Inventory, Interest rates, Incentives and Pricing. Start with inventory, because most communities have seen a rise in the amount of homes on the market, you have more choices. Interest rates for mortgages remain at near-historic lows and have actually trended down over the last 7 weeks, with Freddie Mac reporting 30-year fixed rates now averaging 4.55%. Incentives are the tax advantages to home ownership. And of course, there are prices. Prices are down from mid-decade highs, but in many, many markets are showing stability, slight declines or even increases. Home affordability remains near record levels and the price-to-value proposition in most markets is extremely compelling.
If you are interested in buying a home, you owe it to yourself to contact a real estate agent ( I know one) in the community you are interested in. Look at homes, do a rent vs. buy analysis, explore what is available in your price range.
Don’t just take my word for it. Do your homework.
You might just be surprised that the end of the world isn’t here yet … at least until next month’s report.
Last week an article appeared in The News Tribune titled “Home Sales on Decline in Pierce County”. Although a cursory look at statistics would suggest that to be true, an understanding of the real estate market in Pierce County demonstrates the headline to be far from true.
Mr. Boone stated that sales were off 4.3% compared to last year. The reality is that nearly 28% of that year’s pending sales were reported in the first quarter of 2010. The previous 5 year normal was 24% of annual sales are reported in the first quarter. The cause of the increase was a consequence of the tax credits, which literally borrowed buyers from later in the year; buyers who hastened their decision to buy and as a result there were more sales earlier in the year than is typical. The consequential 4.3% reduction was miniscule when viewed through an annual sales perspective and in light of the tax credits.
If the sales activity in 2011 follows a more normal path and the new sales reported in 2011 through March equal the typical 24% of the total year’s sales, we are positioned for the best year since 2006!
Take a look at the math… There were 3125 single-family pending home sales reported by the NWMLS in the first 3 months of 2011. If that represents 24% of the anticipated sales for 2011 it would suggest that over 13,000 homes will sell in 2011… That’s an increase of over 10% in sales activity compared to 2010 – Now that’s a measurable change and with no false support by tax credits!
Thanks to Bob Call, the Principal Managing Broker for the South Sound Region. Bob’s office is in the Tacoma Branch of CB Bain on Bridgeport Way.
Don't forget to set your clocks an hour ahead this Saturday before you turn in.
If you or a friend are still waiting for something to happen before you get serious about buying your next home, consider the following facts:
You can't buy a home without funds. Most of us don't have the price of a home in liquid assets, so we turn to lenders for help. When we borrow money from a lender, we have to pay for it--think of it as rent. The rent we pay depends on the mortgage rate and the length of the loan. When rates go up, the rent for the money goes up.
Fact: 30-year fixed mortgages are around 5% today.
Fact: No one can guarantee that the rates will stay this low. Today's 5% may be tomorrow's 6.125%.
Fact: A single percentage increase in mortgage "rent" results in either a higher monthly payment or a reduction in your buying power.
For example: At today's rates a $400,000 loan would result in a monthly payment of $2147 (before taxes and insurance). A 1% increase in rates would raise the monthly payment to $2398 (or reduce the price you could afford by 10%).
As I posted on March 2nd, Tacoma sales prices in February were 16% lower than they were in February of last year. If you're looking in North Tacoma, you'll find that the median price (half the homes on the market are listed above the median, half below) of the 278 homes on the market is $264,000. That means 139 homes are available for under $264,000!
Not to put too fine a point on it, if you or your friend are waiting for prices to drop, either on a home or the rent for a mortgage, you are probably making a mistake. If you're serious about buying, now is the time to get pre-qualified with a lender.
Once you know what you can afford, beat the other buyers attracted by these low prices and rates. Historically, the market heats up right about now--Daylight Saving Time.
While there were nearly a quarter fewer transactions during the fourth quarter this year (compared to the same period in 2009), the indications are that we are continuing to improve. Transactions closed faster, the average sales price increased by 10%, and sellers conceded only eight percent less than their original asking price.
Tacoma is moving away from a strong buyer's market toward a neutral market. Inventory is strong, interest rates are still very low, and sellers are willing to negotiate.
If you are interested in the selling details of the home that sold in your neighborhood, just email me. I'll be happy to send them to you.
The numbers through the first three quarters of 2010 are ahead of those in 2009. This is a heartening sign that the Tacoma market is on the upswing.
It is still a buyer's market, which means that buyers have many choices at historically low interest rates. Sellers looking to downsize or move up are buyers, too, so even if they sell at less than they had hoped, they are able to buy for less.
As always, if you have any questions or would like detailed information, just send me an email.
unless you plan to stay in it for five years. But if you can, you can expect to get equity and more. The economic tide here is beginning to come in.
Closed Transactions August 1-7
Here are this week's stats for North, Central, and South Tacoma. Closing activity was slower than last year at this time but ahead of the previous ten days.
The average sale price was up 20% over last year's average.
Sellers thinking of moving up would do well to realize that if they sell low they can also buy low. Lower taxes, smaller mortgages. And there are buyers out there who want your home!
If you'd like the selling details of the home that closed in your neighborhood, just ask.
An experiment to see if a real estate blog can make you smile just for a second.
Here are this week's stats for North, Central, and South Tacoma. Once again closing activity was less than last year at this time.
Selling time (from the date of the original listing to the time of signed purchase and sale agreement) was about the same. Average sales price slipped very slightly. Buyers still offering less than sellers would like.
Sellers thinking of moving up would do well to realize that if they sell low they can also buy low. Smaller taxes, smaller mortgages. And there are buyers out there who want your home!
If you'd like the selling details of the home that closed in your neighborhood, just ask.
