Snohomish County WA Home Values For May 2011 [Video]

Snohomish County Real Estate Home Values.

Snohomish County Home PricesSnohomish County Homes Trends and Values.  Learn where the market is  going, what is affecting Snohomish County Home Prices and why.

A class on WA Real Estate Statistics  where we dove into Snohomish County Real Estate Statistics and the  market.  How the  market is being affected by Bank Owned Properties,  Short Sales,  the Economy, etc.  and When did Snohomish County Real  Estate Peak?

Snohomish County graphs and pictures used in this presentation:

Snohomish County Median Price May 2011

 

Snohomish County Supply Inventory

 

Snohomish County Perspective Report

Snohomish County Area Stats

 

Snohomish County Area Stats Part 2

 

Snohomish County WA Home Prices Video:

Anton: . . . Snohomish County real estate statistics. We have a few different things that the office makes for us that we’re going to go through. If you have any questions, just speak up at any time.

So, our first graph that we’re looking at here is the market dynamics, median price for what’s been going on for the last two years. It’s really interesting to look at this, because in the last two years you’ve seen your sold prices drop 20.1%. I know we’re looking at black and white, but that’s the green arrows up here.

Participant: That’s the two year number?

Anton: The two year number for overall Snohomish County.

Participant: Okay.

Anton: For overall Snohomish County. The under-contracts have dropped 21.6%, and then the for sales have dropped 22.8%. Why are the for sales and under-contract higher than the solds?

Participant: You mean why they dropped?

Anton: Yes. Why is that number larger? Why have the for sale properties and the under-contract properties decreased more than the sold properties?

Participant: More product on the market?

Anton: Almost.

Participant: Because they way overpriced them and they haven’t got them at the right price.

Anton: Because they were overpriced and they sat on the market longer.So what it means is the people who were for sale and under contract actually lost money by not pricing their home correctly to start out with, and getting it sold in a timely fashion.

Literally, in this case, the for sale properties right now are approximately, almost at a 3% loss relative to the sold properties. In other words, they’ve been trailing the market down. So if they would have just priced their home correctly in the beginning, they would have gotten more money out of it. Every day they stay on the market, with our market depreciating right now, it’s most likely costing them thousands of dollars each month.

Okay, Toby. Here’s some.

Toby: Thank you.

Anton: Any questions about this right here? Okay. I’m just going to sneak over to the next one. I’m going to go to months of supply, which months of supply is, I believe that’s the third one in your packet

Participant: Which one?

Anton: Months of supply.

Participant: No, it’s second from the last.

Anton: I’m sorry, second from the last. And just the thing that I want to point out that’s most important in the months of supply one, is look at the trend. I realize we’re going off the screen right here. This right here is March of 2010, and look at that, all the way to May. We’ve just seen a consistent downward trend from May of 2010 all the way to May of 2011.

So May of 2010 we had 11.8 months’ worth of supply, and based on these calculations for strictly residential properties, it’s at 4.3 months’ worth of supply.

Months of supply, there are two other ways to think about months of supply. Months of supply means that if no new homes came on the market today, it would take 4.3 months to sell through the rest of the remaining inventory. The other thing to think about here too is that months of supply can also be talked about there are 4.3 sellers for every one buyer. Now with there being 4.3 months’ of supply, what is that telling us about where the market is?

Participant: Seller’s market!

Anton: We are in a seller’s market right now. A neutral market is generally right around six months. Above six months, they say is a buyer’s market. Below six months, so generally five and below, they’re saying is a seller’s market.

We’re seeing this in my own personal business right now. We’re seeing multiple offers on multiple properties. We’re seeing multiple offers on short sales. We’re seeing offers on vacant land. I mean, just things that we haven’t seen in a long time.

Participant: And Anton, this April of 2010, that’s when the doohickey expired, right? First-time homeowner credit?

Participant: Yeah, yeah.

Participant: I didn’t realize that we had shot up that much in between. I mean, it was, like, spontaneous.

Anton: Yes. You basically see first-time home buyer tax credit is in effect, so chewing, chewing, taking away inventory, taking away inventory. Boom! Right after that, we saw a spike in inventory as the first-time home buyer activity dropped off.

Participant: Double. That’s not even just a spike. That’s like double.

Anton: Yeah, it is basically a doubling, because they’re . . .

Participant: Here you go.

Participant: Thank you.

Participant: We are on the second-to-last one that’s in the packet.

Anton: So the one thing to be taking into consideration right now is as you’re looking at your comps, your comps are going to be back here. They’re going to be in areas where there are higher levels of inventory based on when it sold.

So in other words, don’t underprice your seller’s product today, because there’s less inventory to compete with if you’re looking at something from a few months ago. It would have been harder to sell during that time. There was more competition. Just take that into consideration.

I was asked a question by an REO account that we were interviewing for last week. They said, “What has been your BPO to sales price ratio?” Because they want that to be within 5%. And I said, “We’re actually exceeding 100% right now.”

In other words, our properties were priced slightly less than what the market would bear, and it’s because the inventory has been going away so quickly, our properties have been selling faster and for more money, because they’ve been receiving multiple offers.

We’re hoping that this is a trend, but as we’ll go through and see in some other stats, and in the foreclosure stats we’re going to talk about, this is most likely not a trend. It’s just a good time because there’s a lot of inventory that’s still coming. Any questions?

Okay. We’re going to go to the Putting It into Perspective. The Putting It into Perspective, what this basically does is this is just a breakdown of the price brackets and what’s been selling. This is a good thing to think about, like if you have a seller that’s on the cusp of a certain price bracket, or if you’re doing prospecting or if you are representing buyers. So for instance, when you look at this right here, you’ll see that the $300,000 to $400,000 has the most active inventory at 710 for the month of May.

However, you see that the 160s to 200s had probably the most activity, because that’s only a $40,000 price bracket with almost 159, so almost 160 pendings in the last 30 days. The 200s to 250s also saw a large amount of pendings with 195 pendings in the last 30 days. So basically, there’s the bulk of your sales right there in the last 30 days – 160 to 250.

Another interesting thing to look at, especially when you’re talking to your southern clients, is where are the largest number of expireds? So in the $300,000 to $400,000 price range in Snohomish County, in the last 90 days, you’ve seen 106 expire in that price range, being the largest number there. Of course, in the under 120, you’ve only seen 15 expire, because that’s a very hot commodity.

The category I don’t want to try to sell anything in is the over $1 million. We’ve got 88. One went pending and eight expired, so you had one chance in 88 of selling in May. That means there’s 88 months’ worth of inventory in the over $1 million plus in Snohomish County. You are being annihilated if you are in this price range! I mean, you will give your home away, basically.

Any questions or thoughts in regards to this? Other things to look at would be the average days on market. You can see that for all of these price brackets, every single one of them was like 100 or more days. Another interesting thing to look at over here of course would be the breakdown of the list to sales price ratio, and then the average list price in those brackets.

Yes, sir?

Participant: So last month in April, the only price range that was, list to sales price ratio was 100% was the 160 to 200. Now that has shifted down to like 98%, and then the list to sales price ratio has moved up in price range. What do you think? Is that just because of the lack of inventory maybe in the 250 to 400 range, where they get those competing offers?

Anton: It could have been a lack of inventory. I mean, that’s hard to tell because you’re really only talking about 2%. The thing I
don’t like about how the way our multiple report statistics — and anytime you have the opportunity, please petition the MLS in regards to this — I want them to include closing costs.

Participant: Yeah, no kidding.

Participant: The appraisers have to do that.

Anton: Because the appraisers have to do it. It gives us a clearer representation of value, and it’s more beneficial to everyone. It would give us better statistics on list to sales price ratios and stuff like that, because we don’t know how many of these people actually paid closing costs. For my clients in general, I would say nine out of ten are paying closing costs, and not necessarily a full 3, but I’d say at least 2.5% to 2%.

Participant: Your selling clients?

Anton: My listing clients, yes.

Participant: Right, your listing client.

Anton: And our buyer clients are getting it on the other side too. Are you guys seeing anything different from that?

Participant: Mm-mm.

Anton: Yeah. So I don’t know if that’s a necessarily good representation, but a lack of inventory would be a good explanation for that. If there was a spike in the total number of sales, that would be a good explanation for that. Also, even though interest rates came back down, in May we did see a little bump in interest rates. Anytime you see a quarter to a half a point bump in interest rates, one of the things that you see is
you see buyer activity shoot up, because all of a sudden, they’re looking at their house for $300,000. Boom, it goes up a quarter or a half a point and they realize, “I can no longer qualify for 300. I now qualify for 280.” So activity starts to happen. It’s really one of those ultimate examples of pain versus pleasure. When interest rates are ultra-low, they don’t do anything, and then when they lose out, you see a spike in activity. You can literally see it like one to two weeks later. If you watch interest rates move up and down, you’ll see buyer activity move right after that.

Anything else on this one? Okay.

Now we’re going to the Snohomish County Statistical Report. I apologize; I know these numbers are really small. But basically, when we’re looking at overall Snohomish County, we saw the total number of sales, when we compared May of 2011 to May of 2010, go down by 4.1%.

Year-to-date, our total number of sales for the county are down 8.1%. The average price in Snohomish County, when we compare May to May, is now 12.4%. The average price year-to-date is down 11.8%. The median price is down 13.5%, and then the year-to-date median is down 13%, with days on market increasing, May to May, 14%, and year-to-date 13.2%. It’s very interesting to see this dynamic.

Simple economics should tell us this stuff isn’t happening because you have less supply. But prices are still depreciating, and days on market are going up. I mean, that’s just a really weird phenomenon. I think the reason for it specifically is based on the growing number of bank-owned/REO properties that are taking a larger portion of these sales. So when I pulled the numbers a week ago, 38.87% of all the sales – and I didn’t bring this – in Snohomish County were bank-owned properties last month in May. 38.87%.

Short sales only represented, I think it was 11.2%, and when we’re done, I’ll make sure and e-mail that stat to all of you guys, too, because these were just homemade ones. So if you look at that . . .

Participant: Are you sure it was 11?

Anton: I think it was 11.2%, if I remember correctly. If you look at that, that’s almost 50% of your market was a distress sale. That’s why, with inventory decreasing, you’re still seeing lower prices, because you’re talking about the most motivated sellers on the market.

Most motivated sellers on the market, for everyone’s information, in order, number one is a bank, because they don’t have one mortgage, they have thousands. Number two is most likely a builder. He or she probably doesn’t have one mortgage. He or she probably has 10 or 20. The third most motivated seller is most likely someone who’s experienced some type of distress – loss of job, decrease of income, death, divorce. They may or may not be a short sale. Then, of course, your traditional sellers would then rank last.

So if you’ve got an equity seller, “Mr. and Mrs. Seller, what are you going to do to compete with those very motivated people in today’s market?”

The other way to look at this, too, that’s a percent a month. So you are losing, when we’re talking about the average price, approximately a percent a month. The average price for Snohomish County, in May, 2011, was $271,363. That means every month that a seller does not sell their home, it is costing them $2,700. Make sense?

Participant: Just off their purchase price.

Anton: Just off their purchase price.

Participant: That’s not any payments they’re making and everything else.

Anton: That doesn’t include payments. That doesn’t include maintenance.

Participant: Taxes.

Anton: Exactly, exactly. The other thing that I find interesting that we have to point out here is that the median has depreciated more than the average. Why would the median have depreciated more than the average, and what’s the difference between average and median?

Participant: Median is the direct middle, right? Average is the averaging of all properties.

Anton: Median is the middle, and average is the sum of all the properties divided by the total.

Participant: So the median’s going down because we’re having more properties that are priced lower on the market.

Participant: The ones that are selling are first-time home buyers in lower-end properties.

Anton: Yes. It also means that the more expensive homes are depreciating faster than the homes below the median price, as you can clearly see on the previous slide with the one home out of 88 over $1 million had sold.

My favorite, literally, right out here on Tahlequah, on the good old saltwater, there was a property that was on the market for $1.4 million that just sold a month and a half ago for $720,000. So they sat there for a year and they said, “Well, we’re never going to get this. Let’s just go for a realistic price,” which was, what is that? That’s $700,000 less than what they’d originally listed it for.

To move into each one, just to bang through the rest of these cities. The City of Snohomish, you’re seeing sales actually up in the City of Snohomish by 15.9%. You see the May to May price depreciate by 10.5% and the year-to-date average price down by 13.1%.

Scooting into Bothell, Bothell has seen a very large decrease in their sales, at 22.5%, with their year-to-date sales down 11.2%. The average price in Bothell is down 7.9% when you compare May to May, and year-to-date, 7.3%. Why would the area of Bothell have depreciated less than overall Snohomish County?

Participant: More sales, right?

Participant: You mean depreciated more?

Anton: No, depreciate less. Bothell depreciated 7.9%, and Snohomish County depreciated 12.4%. Probably a good explanation would be they have a higher average price. There’s a higher median income. They’re closer to job centers, things like that.

Participant: A lot closer to Seattle.

Anton: Closer to Seattle. It’s one of the things that we’ve noticed on our team, our buyers are definitely considered more. What is my commute, because gas is almost $4 a gallon? So where do I have to go to? People seem to be scooting closer to job centers, which would make places like Bothell more desirable; which makes places like Lake Stevens more beat-up.

So, moving down to Lake Stevens, Lake Stevens has seen a 19.8% decrease in the total number of sales, year-to-date, 27.9%. The average price in Lake Stevens was down 21.7% when you compare May to May. So that’s probably just a fluke, because they probably saw a lot of lower-priced sales, because when you look at the year-to-date, the year-to-date is only down 11.7%. So most likely what happened in May in Lake Stevens was you had a lot of homes below the median sell. You had more homes below the median sell, which caused that kind of downward spike, but the overall trend year-to-date is more a mirroring of the county. Does that make sense?

Participant: Is that because the banks released them at the year and they found that sales finally hit?

Anton: Don’t know. I mean, literally we would have to go to Lake Stevens and pull all the inventory specifically to be able to answer that question.

The City of Lynnwood saw actually something pretty similar. Their units down 5.4%, and then the average price showing a 17.2% decrease when you compare May of 2011 to May of 2010. However, the year-to-date is more reflective of the overall county at 12.3%.

What it could be doing, too, when you see a large drop like that, it could either be an anomaly or it could be the start of a new trend. So, in other words, Lake Stevens and Lynnwood could both be starting to depreciate faster than the overall market. So as you’re doing your CMAs for your buyers, as you’re doing BPOs for your clients, you want to make sure that the area that you’re specifically in, what is that neighborhood doing? Because if the overall city has been depreciating faster in May than it did for the rest of the year, is that a trend, or is that just a one-month thing? And is it specific to the neighborhood in which they’re looking? Because you’ll find neighborhoods that have price stabilization inside of them too, and you’ll find ones that are of course rapidly depreciating.

To finish it off, the City of Everett, sales are down 2.6%. The average price, when you compare May of 2011 to May of 2010, down 6.2%, and year-to-date down 13.6%.

Good old Marysville, that’s really interesting. Overall county, down in total number of sales, every other city that we have on our graph, down in total number of sales. But Marysville, and this is actually Area 770 in the MLS, so 770 is this side of Highway 9, up through Arlington, Marysville, and then out to Stanwood. Just so you guys know. So that includes the Arlington and Stanwood areas, but you’ve seen in north Snohomish County, Area 770, a 14.1% increase in the number of sales. Year-to-date, sales have been approximately flat, probably an indication of affordability. The further that you move away from those job centers and that Seattle hub, the more affordable it becomes. So maybe the Marysville-Arlington-Stanwood area are becoming attractive based on their pricing. Average price down 9% from May of 2011 to May of 2010, and then year-to-date average price down 13.4%.

Participant: Plus the Strawberry Festival probably helped some.

Anton: Sure; and we sold a lot of homes because of the Strawberry Festival.

Participant: Those haven’t closed yet, Todd. I thought it was because of our office. Good agents in our office.

Anton: It’s because our market center is number one in the area. I love it!

Okay. I’m going to go to page 2 of this one. Page 2, for the residential statistics: so, overall Snohomish County, you’re seeing 5.5 months’ worth of inventory. The reason this number is different than the other one is this is residential and condo. The other one is just residential. Just FYI.

Participant: Say that one more time now?

Anton: The market dynamics data that I showed you was just residential.

Participant: Okay.

Anton: This is anything that’s residential, so this would also include condo.

So 5.5 months’ worth of supply in overall Snohomish County, which is still the exact same downward trend that we’ve been seeing for the last 12 months. The City of Lynnwood, you’re seeing 4.7 months’ worth of supply. Marysville 5.4 months. Monroe 5 months. City of Everett, 4.9. Lake Stevens, 7.8, and the City of Snohomish, 6.9 months’ worth of supply. Any thoughts?

Participant: Well, it’s interesting to me, it’s now a seller’s market, basically is what they’re saying.

Anton: Yes, except for Lake Stevens and Snohomish.

Participant: Yeah, and I’m getting a lot of viewings on overpriced listing, but once they come out and see it, they realize, I mean, it’s a nice place but the point is that people are out looking.

Anton: Yes.

Participant: But the inventory’s out there looking, so they’re raising up and looking at things that they wouldn’t normally look at.

Anton: Good.

Participant: Yeah.

Anton: Well, that’s what we want to see. We want to see price stabilization happening. Based on the numbers and the next stats that we’re going to show about foreclosures, I would still say that we are probably one to two years away from the bottom. And then after that, you’ll probably see not much forced appreciation. I would expect to see 2015, somewhere in there, maybe back to 2% appreciation, and slowly kind of climb out of this. My reasoning for that is . . .

 

PLEASE FEEL FREE TO LEAVE ANY QUESTIONS OR COMMENTS! 🙂

 

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