First - First Time Homebuyer Tax Credit:

If you know someone who is thinking about it, tell them to get moving! The credit, which is really a straight $8,000 rebate, only applies to purchases closed and recorded by November 30, which means they need to have a signed contract in escrow by October 15 to expect to be closed by the end of November. Just 30 days to arrange financing and find the right house is cutting it a little short already :-)

Second - Real Estate Market Statistics:

The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/King County area over the past 3+ years, for single-family homes and for condominiums. The volume of residential sales continues to be higher than a year ago, median prices seem to be holding in the $375,000 - $380,000 range, and the number of homes available in the mid to lower prices ranges is dropping significantly. Months-Supply, a key measure of market health, has (good news) stayed below the magic balance point of 6 months, and the under-$700,000 sales are doing even better. Total residential inventory is below both 2007 and 2008 levels. Buyers today are seeing their smorgasbord of choices diminish rapidly, and are going to have to start honing their decision-making skills again. Here’s the charts for the current stats: (Required disclaimer: Statistics not compiled or published by the Northwest Multiple Listing Service)

         Residential Sales Charts         Condominium Sales Charts

The number of sales transactions closed continues to run well above year-ago levels for single-family homes. People are definitely getting off the fence and starting to buy again, and they are flattening the growth in inventory of houses for sale. The Months-Supply measure of residential inventory, i.e. houses for sale, is down dramatically from 6 months ago, and staying down – although that good news is mostly still in the under-$700,000 part of the price range. The rise in condominium inventory seems to be blunted too, now holding at levels below those of a year ago, and condominium Months-Supply is down nicely as well. Median condominium prices seem to be holding steady at about the $250,000 level. This ‘prices holding steady’ is a good thing - it means sellers are not having to compete by lowering their price below market, and buyers are not having to compete by paying a premium to get the house they want – it’s a good balanced market.

The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/King County area over the past 3+ years, for single-family homes and for condominiums. The volume of residential sales continues to be higher than a year ago, median prices seem to be holding in the $375,000 - $380,000 range, and the number of homes available in the lower prices ranges is dropping significantly. Months-Supply, a key measure of market health, has (good news) stayed below the magic balance point of 6 months, and the lower price ranges are doing even better. Total residential inventory is below both 2007 and 2008 levels. Buyers today are seeing their smorgasbord of choices diminish rapidly, and are going to have to start honing their decision-making skills again. There is quite a bit of good news in terms of number of new purchase transactions completed, and the large Pending backlog discussed a couple of months ago is down significantly. Here’s the charts for the current stats: (Required disclaimer: Statistics not compiled or published by the Northwest Multiple Listing Service).

        Residential Sales Charts              Condominium Sales Charts

The number of sales transactions closed continues to run well above year-ago levels for single-family homes. People are definitely getting off the fence and starting to buy again, and they are flattening the growth in inventory of houses for sale. The Months-Supply measure of residential inventory, i.e. houses for sale, is down dramatically from 6 months ago, and staying down – although that good news is mostly still in the lower part of the price range. The rise in condominium inventory seems to be blunted too, now holding at levels below those of a year ago, and condominium Months-Supply is down nicely as well. Median condominium prices seem to be holding steady at about the $250,000 level. This ‘prices holding steady’ is a good thing - it means sellers are not having to compete by lowering their price below market, and buyers are not having to compete by paying a premium to get the house they want – it’s a good balanced market.

Third – Food For Thought:

The High End Still Isn’t Moving – The Months-Supply Breakpoint

For all that we have made a lot of progress in our housing market, most of that progress has been in the low to middle price range. A couple of months ago we talked a bit about how Months Supply suddenly jumped from about 6 months in the low and middle price range to about 15 months or more on the higher end. The break point seemed to be in the $600,000 – 800,000 range. Recently a friend of mine who lives in east Bellevue asked me to figure out if there really is a fairly sharp break point in that Months Supply curve that might be useful to Buyers and Sellers who are working in that price range. So being a registered data junkie, I decided to give it a try. The charts below suggest that there really is a fairly pronounced break in market, and it does seem consistent with my earlier analysis of the King County market overall.

        The Months-Supply Breakpoint

The conclusion: there really does seem to be a pretty sharp break at about the $750,000 area. Why is that? My only useful speculation is that is about the price point for maximum conventional mortgage (i.e. good interest rates) of $567,500 + 20% down = $709,000 purchase price. A possible explanation is that buyers start choking when they have to come up with more than about $150,000 - $200,000 down, or they have to look at loans costing a full point more – there’s a lot of difference between the payments on a 5.5% conventional loan and a 6.5% jumbo loan. At that level of down payment, the market is probably mostly move-up buyers, not first time buyers, but there still seems to be a limit on how far they are willing (or are allowed) to stretch these days. So the break point may strongly affected by the transition from good rates to significantly higher rates. Seems to make sense. Other ideas welcome :-)

The under-6 months supply at the lower end of the market might reflect the extra boost from that First Time Homebuyer Tax Credit - if that program goes away as expected, that end of the market might slow up a bit.

Fourth – News You Can Use:

The Reiling Team website has a link on it for up-to-the-minute traffic and commute information – the live DOT freeway traffic maps and DOT project status report, updated frequently. And also a link for current weather report and forecast – mostly good news these days.  If you’ve got an out-of-state friend who’s thinking about moving to Seattle, here’s a great link for them. And if you want a direct search link for Seattle homes for sale, here it is.

Fifth - and Last: