February housing activity yields “reason for optimism”

Housing activity during February continued to reflect the downside of distressed properties with fewer sales and lower prices than a year ago. Nevertheless, there are reasons for optimism when taking a closer look at the numbers in the latest report from Northwest Multiple Listing Service.

Area wide pending sales for February were off 9.2% from a year ago but up 11% from January. Because normal sellers are reluctant to compete against the depressed prices of short sales and foreclosures, the number of new listings coming on the market was down 27% from this time last year. Due to the lack of good inventory, the non-distressed homes on the market that are priced appropriately and in good condition are drawing multiple offers.

I myself have been the recipient of this as both a buyer’s agent and listing agent. A 3 way multiple offer on a home in a close-in Bellevue neighborhood drew 3 competing offers recently even though it had been on the market since last October. Even with multiple offers however, buyer’s were still reluctant to pay full price. As a listing agent, I did receive multiple full price offers on a new listing that we took the time to prepare for sale and priced competitively. So the news is not all bad.

Prices however are not likely recover; in King County, the median selling price for last month’s sales was $320,000, down about 6.8% from a year ago. Distressed properties accounted for 37% of single family home sales in King County in February as compared to 30 % a year ago; mostly due to sales from bank owned properties that drag on home prices. In one analysis, if you take out the distressed sales for February, the median home price jumped to $390,000.

On a positive note, last week’s announcement of The Boeing Company’s win on the Air Force tanker contract which is supposed to bring 11,000 direct and indirect jobs to the area and this week’s news from the state Employment Security Department that February marked Washington’s strongest month of job growth in more than three years, and several positive earnings reports from local corporations are all encouraging indicators for the housing market as we head into the time that is usually a strong selling season.

Please contact me if you have any specific questions or comments!