Sunday Night Stats – Patience is a Virtue

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My focus tonight is on the expectation of sellers to have an offer quickly after listing their property for sale.  I must admit that I am still in a “30 days to offer” mindset as most sellers are.  Truth is, that is not a realistic stance, but I didn’t realize until tonight how unrealistic that is.

In the month of May, considered to be a fairly robust month compared to the previous 6 -9 months, only 16% of all condos sold in 98007 sold in 30 days or less.  Only 29% of all single family homes sold in Issaquah, sold in 30 days or less.  Outperformers such as Redmond had a 45% chance of selling in 30 days or less. 

King County has 7.8 months of inventory.  Not much distintion between condos and single family homes.  yet how many sellers have the patience to wait 7.8 months to sell their home?  At best a seller has less than a 50/50 chance of selling their home in less than 30 days.  Redmond only has 3.8 months of inventory on market as to single family homes. Issaquah is an outperformer as to condos with 61% selling in 30 days or less and only 3.3 months of inventory on market. 

Lots of variations around King County, but be ready to have your home on market for awhile.  No running off for the weekend and “looking at all offers on Monday” this year.  And those of you who did manage to do that, realize how very, very luck you are.

OK, let’s see if we can find a silver lining out there in the clouds.  Seriously, if the sun would come out…things might get a little better in the housing market.  It’s been one gray year…and NO ONE believes it is JUNE!  (Today is my 54/54 birthday BTW…Born in 54 and turning 54.)

May – King County Stats

516 condos sold compared to 959 last may – Down 46% as to volume

$298 median price per square foot – Down from $303 last May

1/1/08 to 5/31/08 – 2,220 condos sold compared to 3,906 for the same period in 2007

That’s down 43% as to volume, so May is not outpacing the year as a whole unless there are a lot of really late postings.  Median price per square foot for the same period is down from $298 to $291. 

Single Family Homes – King County

1,499 sold vs. 2,502 last May – Down 40% as to volume

Median price per square foot $220 – Down from $228 last May

1/1/08 to 5/31/08 – 6,634 sold vs. 10,001 in 07 – Down 33% as to volume

Surprises me that May would be underperforming the five month average here.  Not a good sign.  Lets hope that when we see some better weather around here, we will see some better stats as well.  Real Estate can be very weather driven and this year has really been bad. 

Median Price per Square foot of single family homes since January is the same as May stats at $220 – down from $226 for 1/1/07 to 05/01/07.

There are 11,753 homes for sale right now selling at a rate of 1,499 a month.  There are 3,942 condos for sale selling at a rate of 516 a month.  Basically it would take 7.5 months to sell off what is on market IF the rate of selling stayed the same and nothing new came on market.

So where’s that silver lining I promised you?  There are 2,907 single family homes in escrow today and 938 condos.  Those of you who are off to sign your papers to close escrow, realize how very lucky you are.  And those of you getting ready to put your homes on market, have a great big party if you are one of the lucky ones who gets an offer in less than 30 days.

Stats not compiled or published by NWMLS. (Required disclosure) 

Good agents and how they conduct their business

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I just received a call from John.  John is an excellent agent in that he is low key, no pressure, but very attentive to his client’s needs.  I met John at an Open House at 6806 27th Ave in Bryant.  John was out with his soon to be owner/seller, checking out the competition before pricing and listing his client’s home.

It is very considerate when an agent does this at an Open House, and does not make “an appointment” causing the owner to think it is a buyer coming.  Often owners get angry when an agent calls to “show” and then spend hours cleaning, only to find it is a “preview” by an agent using the property to gauge the pricing for another and competing seller.  Attending the Broker’s Open or a Sunday Open is the correct way to canvass an area to accurately price your next listing.

I just received a call from John.  He was giving me a “heads up” that his new listing at 3165 NE 82nd Street in Wedgwood would be coming on market tomorrow.  What a “good agent” to realize that someone listing a house in a similar price range might have potential buyers for his new listing.  What a “good agent” to take the extra step of remembering all of the agents he met at the Open Houses while canvassing the area to determine the price for his new listing.

We don’t talk about “good agents” enough, so if you happen to stop by the Sunday Open House or the Wednesday Broker’s Open of John’s new listing at 3165 NE 82nd Street, shake his hand for me and say “pleased to meet a good agent” 🙂   I’m doing my own Open House on Sunday, but I’m going to try to stop by on Wednesday.

Honestly, good agents are worth their weight in gold, and knowing who is who in this business is a huge part of what we do for our clients.

Fishing season is officially open!

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To this title you might ask, “which salmon is available?”  Well, I’m not really talking about fish with scales and fins here.  What we’ve noticed over the past month is that the fishing with low offers is getting pretty common in a lot of price ranges.  These occurred in neighborhoods ranging all over the area too including Greenwood, Phinney Ridge (x2), Bellevue (Bridle Trails), and Mercer Island.

Some of these properties I can understand the desire of investors to lowball and get a bargain.  One of these homes I had listed was already priced to be a good value for the neighborhood so my clients completely ignored some extremely low all cash offers from an investor because they weren’t THAT motivated to sell – meaning, we’d only been on market for about 30 days.  Now, 2 years ago being on market that period of time would have made some people nervous but, realistically, most homes take longer than just a few hours to sell or even just a couple of weeks. So, we ignored the first 2 ridiculous offers and another one came along (still low). We put forward a counter with a very small price change and the buyers took it. WAKE UP CALL!  We’re not in a buyer’s market in the Puget Sound region.  We’re in a balanced market.

What I’ve noticed in talking with all of the agents submitting offers for these various listings I have is that they’ve all bought into their client’s mindset of thinking that “it’s a buyer’s market” and they should be able to really drop prices via their offers. But the agents aren’t helping their clients by doing the work associated with helping “sell” those offers.

Yes, there are some sellers out there that are still hanging on and desperately wishing for the days of the high flying markets we had for 5+ years, but reality is kicking in for most and the scales are becoming more balanced.  This isn’t the rust belt where the economy has sunk and houses have sunk lower.  If you’re a listing agent you had better be able to justify your pricing.  And, if you’re a buyer’s agent you should do the same for your offer.  One lowball offer we received my partner went back and asked the guy to submit his comps that supported the offer.  The agent’s reply was, “well, I don’t have any, it’s just what they wanted to offer.”  Our client almost completely ignored their offer except for some details we pointed out that led us to believe they’d accept a counteroffer with a minor price change – and it worked.

Another listing had an agent providing comps but they just solidified my client’s view that our pricing was right on. We did go ahead and submit a counter with a faster closing date and some small concessions that we expect will be accepted.

I will admit though that with a couple of my buyer clients, who are not in a hurry to buy, we’re doing some of this offer roulette.  We submitted an offer on a MI house for about $100k less than asking price but we also put forward our pricing analysis and comps that supported the price point.  The house had had several large price drops based on other agent feedback as well and it was definitely a cosmetic fixer.  It might have worked out for my clients except that the house got another offer the same day – it was still a very low offer but not as low as ours so the seller started negotiating with them.  But, that’s okay because my clients are willing to wait for the right deal for them.  This house was going to need roughly $200-400k in updates over time so from a cost perspective the price we offered was what they were willing to spend knowing the costs they’d incur later.

Having watched the low offers come in for one of our listings my client provided the impetus for this post by saying in an email, “well, it looks like fishing season is officially open!”  I’m glad that she’s got a good head on her shoulders and a good sense of humor too.  These are the clients you really enjoy working with especially when you can have sensible discourse with regard to your work together, market conditions, strategy, and more.

Happy fishing! 

Is your offer "a secret" to be kept?

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Many buyers are under the erroneous perception that their offer is “a secret” and that in a multiple offer situation, their offer cannot be revealed to other participants.

While many agents may say “I would never…”, reality is that they DO in one form or another in some cases.  The real question is CAN they do it…and not WILL they do it.  Often the seller will counter the most qualified buyer with the higher price of another offer from a less qualified buyer.  Technically they didn’t “reveal” your “offer”, but they used your price as the counter price to a different buyer.  Same difference really, isn’t it?

“Hey, No Fair!” is something we hear often from the buyers caught in multiple offers.  Reality is that the seller does NOT have to be “fair” to all of the buyers, nor does the agent for the seller.  P.S.  If you are thinking that this post is not relevant as we are “in a buyer’s market”…think again.  At least half of my recent dealings in the last 60 days have been multiple offer situations.  The good houses are getting multiple offers,  “good” often translates into best floorplan, best condition, turnkey, move-in ready, needs little or no work…and not best “value” or a “bargain” in need of repairs or updates.

Here are a couple of ways that your offer is “revealed” in a multiple offer situation.  Often it’s more like a guessing game.  Buyer Agent says “If I bring you an offer of less than asking price, does it have a chance.”  Agent for Seller laughs and says, “Hey, I have FOUR OFFERS!, what do you think?”.  Even if all four offers WERE under the asking price (not likely), the agent may still respond in this manner.  Buyer Agent says, “If I cap at $950,000 will that put us “in the running?”  Agent answers “Yes, but more offers may come in, so no guarantees.”  Well at least you found it it was likely more than the ones in hand…maybe.  No guarantees.

The reason agents don’t reveal the other offers before the seller picks one is because they WANT you to go AS HIGH AS YOU WILL GO, and that is their job as the agent for the seller.  NOT because they CAN’T tell you.

When an agent reveals that there are multiple offers, that is also called a “Notice of FINAL and BEST”.  You bring your Final and Best Offer.  NO the seller does NOT have to counter you and rarely do multiple offer situations give you a “counter” or “second try at it”.  YES, the seller’s agent can pick up the phone while considering the multiple offers, call the Buyer Agent who has the buyer with the best credentials and give them a price at which their offer would be accepted and tell them to re-write, right now, and bring a new offer at a better price to the house.

Can the agent for the seller by-pass an offer merely because the buyer does not have an agent?  Yes.  The seller can take the offer price from an unrepresented buyer and counter a represented buyer with the same offer price.  If the seller and the seller’s agent prefer that the best and most competent agent be on the other side of the table during escrow, that is a considerable factor.  Often the seller and the seller’s agent will choose based on the competence of the Buyer’s Agent.  So everything the Buyer’s Agent has said to the Listing Agent WILL be part of the consideration, and having NO agent will also be a factor in determining which offer to select.

OK, now everyone say “NO FAIR!” in unison.  Quite right.  When the seller and seller’s agent are looking out for the seller’s best interest, they are often NOT fair to all or even any of the buyers who are submitting offers.  Don’t be lulled into the idea that you will get a second chance to make an offer.  Don’t be lulled into the idea that other buyers “CAN’T” be told what your offer is.  Don’t expect a seller to “be fair” to you while he is doing his best not to “leave any money on the table”.

Best offer wins.  Often the best offer is cultivated by “shopping” the offers on the table until the best offer is formed…and not the best offer “as submitted”.  If anyone thinks it is “illegal” for an agent for the seller to reveal your offer to another potential buyer…quote me the law that prevents that from happening. 

Rarely, if ever, do agents reveal another offer by physically showing it to another agent BEFORE the seller makes a decision.  Rarely do they reveal another offer in writing.  Rarely do they reveal it in a voice mail message.  Most often these things happen verbally and “off record”…like a whisper in an ear as most secrets are revealed.  So your agent being available by phone during the time the offers are being presented, could mean the difference between your getting the house and your not getting the house.  Often what we do to earn our commission is be available…at the right time…with little or no notice…just in case we are needed.

So when you decide not to have an agent, know that may hurt you in a multiple offer situation.  And when you are choosing an agent, understand that how your agent conducts themselves with and in front of the agent for the seller…can make or break your deal…and your heart.  So pick an agent that is trustworthy.  One that YOU trust…and one that the other agent will trust to help you close, rather than to “get out” of, the transaction.  If an agent makes it very clear to you “that they can help you get out of this”…they may be sending that signal to the other agent as well.  No seller wants a buyer who is looking for “an out”.

I have had agents bring offers, in mulitple offer situations, tell me “I hope this one works.  I’ve submitted 7 offers for these buyers and they cancelled on home inspection EVERY time!”.  When the Buyer Agent “vents” to the Agent for the Seller…what are they thinking?…but that’s another post.  For now, know that your offer CAN be revealed, used, shopped and utilized to the seller’s best advantage.

Distressed Property Law

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There has been a lot of confusion, anger and fear surrounding the new Distressed Property Law. I’m not going to jump on the bandwagon and do a critical analysis of the law, tearing apart each section.  The WA Assoc of Realtors has put their educational seminar online for free here for all of us.  Instead of all the ranting and raving taking place on other blogs attacking this law, feel free to pause and re-live these foreclosure rescue scam case studies from  2004, 2005, 2006  and 2007 which may help us better understand the reasons why we have this new law.

At the height of the bubble run up in 2005, there were hundreds of people attending foreclosure auctions, planning on making millions in real estate, usually after attending a get-rich-quick seminar.  Even today, the get-rich-quick hucksters are still luring in the same type of person who thinks there’s a magic diet pill that will help you lose those last ten pounds, and who thinks there’s still a way to make six figures with no experience, or in the case of this company, $2,000 per hour.

Readers on this blog and elsewhere have been highly critical of our state lawmakers for being reactionary and passing laws only after they would have done any good.  In this case, our legislature has tried to be pro-active and place boundaries around “distressed property transactions.

NWMLS to Allow Brokerages to share more Data

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The Northwest Multiple Listing Service has announced policy changes that will allow brokerages to display more information on their websites. This means that if brokerages choose to, people will be able to see the length of time a property has been on the market, referred to as days-on-market (DOM), as well as cumulative-days-on-market (CDOM), along with the listing price adjustment history. The NWMLS will only allow the DOM to be shown if the CDOM is also displayed in order to insure that consumers are not mislead.

Another change for brokerages is that they now have access to three download feeds instead of just two. This could be significant for brokerages that want more options and vendors to choose from to manage their data feeds for property searches, which they make available to agents and the public.

Sunday Night Stats

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Not a huge movement, but fewer condos for sale, meaning they are selling a bit faster than they are coming on market, for a change.  Fewer in escrow than last week, but that’s normal for the last week in the month as more escrows close out in that week.  Won’t be doing true month end stats until next week, as there will be end of month closings posting during this week.

King County Condos

Active Listings: 3,911 DOWN 42 – median price $324,999 – MPPSF $320 – DOM 59

In Escrow: 944 – DOWN 28 – median price $299,925 – MPPSF $300 – DOM 51

Sold YTD : 2141 – UP 127- median list price $289,950 – median sold price $285,000 – median PPSF $290 – DOM 47

I did a quick check on May closings.  While all are not posted, May sales prices were up both as to median price and MPPSF at $290,000 and $293.  Likely won’t take the YTD numbers up much, but one would expect “high season” sales to be a bit more as to price than 1st quarter sales…and they are.  I’m putting one on at $273 per square foot in Issaquah this week, hoping for shorter days on market than the King County median of 47.

King County Residential

Single family homes are not selling at a higher rate than they are coming on market as the condos are.  I would expect to see that change in June and July.  The number in escrow is down, but again that is because more move from in escrow to closed in the last week of a month, than in other weeks.

In Escrow: 2,879 – DOWN 54 – median asking price $448,950 – DOM 45 – MPPSF $212

SOLD YTD: 6,547 –  UP 380 – median sold price $440,000 – DOM 50 – MPPSF $221

May sale prices are up at $447,000, but no change for MPPSF

I do the Actives last for Residential, as I can’t run stats when volume is over 10,000 units

Actively for sale 11,612- UP 33 – MPPSF <$800,000 is $220 – MPPSF >$800,000 is $339

If distressed properties start selling more and more outside of the mls and less and less via the mls, we will have to check these numbers against the tax record data.  In fact it will be a good idea at the end of June to compare the first two quarters mls figures with County Stats.

I’m still seeing multiple offers on the best properties.  People expecting the best properties in the best areas to sell at bargain prices are disappointed.  It’s not that kind of buyer’s market.  It’s not really a buyer’s market at all…it’s just not a seller’s market. Distressed properties ARE a bargain, but not the best homes in the best areas.  The date for that to change is usually around October 15th.

Stats not compiled or published by NWMLS. (Required disclosure)

 

8 New Seattle Neighborhood Blogs Added to Neighborhood Round-Up

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Since my last Neighborhood Round-Up, we have 8 new Neighborhood blogs added to the Rain City Guide Blogroll.  When I go through the existing blogroll reading the neighborhood blogs, I am always looking at their blogrolls to find new ones to add to RCG.  Two weeks ago I emailed Dustin the most recent ones I found, and he added them…did ya notice? 

So I want to introduce our 8 new Neighborhood blogs, please welcome….

Over at My Ballard , the struggle to FREE Ballard from 101 years of oppression is being marked with a free prize at Archie McPhee…just say the Secret Word!   

Moving to Southeast Seattle, The Rainier Valley Post announces all (it’s quite a list!) the fresh goodness now at the Columbia City Farmers Market.  

Central District News reports that a CD P-Patch will soon be growing from a vacant lot. 

 A Tree Grows in Capitol Hill…8 Block Walk is worried about a favorite Pocket Park tree. 

How to bike to work from an island…photo essay from Surrounded By Water: A Mercer Island Blog 

At The South Lake you can make your mark on a poll…”Do you pay to ride the S.L.U.T.?” 

cap to the hill reveals a secret place…joe’s bar…to spend some time.  

inBelltown …well, “it’s currently down while we undergo maintenance.  We’ll be back online soon!”…is missing it’s RCG debut! 

New Seattle Neighborhood Blogs….  Welcome to the Rain City Guide Blogroll!