March Case-Schiller Index: Seattle up 1.7% for the month

The feel of the rising tide of real estate just didn’t seem real until validated by the Standards & Poors / Case-Shiller Index.

This morning’s release shows that home values were up 1.7% over February, stopping a seven-month slide and coming within 1.3% of last March’s 132.97. With the strong demand in the market recently, it’s possible that next month’s C-SI will show a year-over-year gain for the first time since December 2007.

Locally, inventory is still low. A “balanced” market is considered to have an inventory level equal to the number of solds and pendings for the previous six months; currently, Seattle has a third of that inventory.

Nationwide, the index slid ever-so-slightly, from 134.14 to 134.10.

Seven of the twenty cities have shown year-over-year gains. Nationwide, the index is down 1.9%.

For more information, visit http://www.standardandpoors.com/

Homes today: more affordable than at any time since when?

Home values in King, Snohomish, and Pierce counties, as measured by the Case-Shiller Index, are down 30% from the peak in July 2007. This is hardly an all-time low; they’re at about the same level they were at in 2004, which was a time of then-record price highs.

Mortgage rates are at their lowest level since the Truman administration, and that’s having a profound effect on affordability.

Put record-low mortgage rates together with today’s home prices, and you’ve got monthly payments that are their lowest since the 1990s!

At the peak of the market, a niceSeattlehome might cost $500,000. With a 6.5% interest rate, a minimum-down buyer would have $3050 mortgage payment.

Today, that home might cost $400,000, and with interest rates under 4%, the monthly payment goes down to $1815 a month:

	2012	2007	2004	1999	1998
House Price	$400,000	$500,000	$400,000	$293,000	$269,000
Loan Amount	$386,000	$482,500	$386,000	$282,745	$259,585
Interest Rate	3.9%	6.5%	6.0%	7.6%	7.0%
Monthly Payment	$1,815	$3,050	$2,314	$1,996	$1,727

You could look at this from a point of view that today’s buyers are spending 40% less on their mortgages than just five years ago; you can also look at it that today’s buyers have a third more purchasing power than in the past:

	2012	2007	2004	1999	1998
Purchasing Power	$400,000	$297,586	$313,726	$266,395	$282,721
Loan Amount	$386,000	$287,171	$302,746	$257,071	$272,826
Interest Rate	3.9%	6.5%	6.0%	7.6%	7.0%
Monthly Payment	$1,815	$1,815	$1,815	$1,815	$1,815

Either way – the combination of record-low interest rates and bottom-of-the-market prices are making homes much more affordable than at any time in the last dozen years.

We are actively looking to help first-time homebuyers – and move-up homebuyers – take advantage of this market. If you know of someone thinking of buying, we can help them make sound and wise choices in today’s marketplace.

Move-up homebuyers who may be discouraged by the currently low values – take heart; you’ll more than make up for it on the buying end!

Seattle Market On Fire!

A quick look at recent Seattle sales shows that 39% of contracts in the past month were for homes on the market for ten days or less, indicating many multiple-offer situations and more than a few bidding wars.

 

 

Surprisingly, February Case-Shiller Does Not Show Gain

With all of the local reports of multiple-offer situations and bidding wars in the Seattle area, the most recent Case-Shiller Index came in with a surprising one-point drop to 128.99, the lowest level since April 2004.

Three markets, Phoenix, San Diego, and Miami saw gains, but nationwide, the numbers were similar to Seattle.

 

January Case-Schiller Index: Down 1 from December.

The latest Case-Schiller Index showed that Seattle-area home values were down 1% from December, 4% from last January, pretty much mirroring the nation.

At 130.03, the index shows that values are 30% higher than January 1, 2000. However, the current level is equal to that of May 2004.

Seattle-area real estate has experienced a turn-around over the past couple of months, which we expect to show up in the March and April May C/S-I. Inventory levels around the sound are at extreme lows – some areas have under six weeks’ inventory – which has led to numerous bidding wars.

http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-

Multiple Offers Go Wild as Inventory Evaporates

Twelve offers on a bank-owned property in a Shoreline subdivision near Innis Arden, list price $450,000. A stack of offers on a Wedgwoood house listed at $550,000 that reportedly drove the price into the sixes. Open house counts in the sixties and seventies and more.

629 Seattle house listings went pending in the last 30 days, with 1081 left on the market – less than a two month supply. 245 condos went pending in the same period, leaving 654 on the market, about a ten-week supply.

Why? We don’t know. The market usually heats up at the beginning of the year, carrying into the spring, but this is something we haven’t seen in years.

One pressure on buyers is from the FHA, which will be increasing the amount of up-front mortgage insurance from 1% of the loan to 1.75% on April 1st.

Interest rates are at amazing lows – basically, a good borrower can qualify – at 28% debt-to-income ratio – for a loan that’s almost five times their annual income.

 

Lack of inventory shocks Seattle buyers into bidding wars!

A common measure of a balanced market is when there is about six months’ worth of inventory – the number of active listings is equal to the previous six months’ sales total.

Well, the market is seriously unbalanced today, as a quick check of the Northwest Multiple Listing Service (NWMLS) shows that the inventory is under three months’ supply.

Almost thirty percent of homes currently under contract took ten days or less, indicating a frenzy that hasn’t been seen since the summer of 2007. While we cannot determine what percentage of properties received multiple offers, the median market time for the rest is 45 days.

There have been several reports of open house traffic in the 50s and 70s; one agent with a listing near Green Lake arranged to have a colleague assist them on open houses both this Saturday and Sunday because, “with this kind of traffic, if you’re the only agent, you can’t even talk to anybody.”

Agents have been racing to broker’s opens, as well. The Green Lake property drew over thirty agents – without food or other inducements – to last Wednesday’s premiere.

We want to stress that we compiled the data from the NWMLS server, and that they are in no way responsible for its accuracy. We also excluded listings that require third-party approval, such as short sales.