It's a great time to sell your house — nationally. Unfortunately, that sentiment doesn't extend to Seattle, where inventory is low and prices high.
Another recovery milestone comes with the University of Michigan consumer sentiment survey showing more Americans feel better about selling a house than buying one. This is the first time since April 2006 that this level has been reached.
“The more that prices rise, the more that sellers should have the opinion that it’s a good time to sell, especially relative to buying,” Ralph McLaughlin, chief economist at Trulia, told the Wall Street Journal. “Aside from prices, there are some pretty fundamental obstacles that home buyers are facing in the market: first and foremost is inventory.”
Nationwide, housing starts fell 4.7 percent in September. This yardstick is a long way from its pre-recession peak — not surprising considering the subprime-goosed 2000s were unsustainable. But it’s also lower than at this time in an expansion going back decades. Some economists blame the slow recovery, low household formation and baby boomers who downsize and leave existing homes on the market. Stagnant wages for most are another problem. Also, inventories left from the popping of the housing bubble remain large, often bank owned from foreclosures. None of this inspires confidence in builders.
Seattle, of course, is an outlier to the Michigan sentiment. As my colleague Mike Rosenberg explained in a recent story, area homeowners are holding onto their houses longer. Our ranking tied with San Francisco in this situation, with owners waiting 10.2 years before selling. That’s almost double the rate from 10 years earlier. Only homeowners in Boston, San Jose, Providence, R.I., and Hartford, Conn., held on longer, in metro areas of more than 1 million.
Why? One big reason is that while owners might enjoy a big profit from selling, they still couldn’t afford to replace their home with another, particularly in the most desirable locations. The hot housing market cuts both ways. New listings coming on the market in Seattle have been very low for several years. Also, few single-family houses are being built in the city.
For the Seattle-Tacoma-Bellevue metro area, housing starts totaled 1,808 in September. The trend line isn’t bad since 2014 — but many of these are condos. Only 843 single-family permits were issued in September for the metro area, lower than any non-recession period since at least the 1980s. On an annualized growth trend, the situation looks a little better, but not enough to keep up with rising population.
Today’s Econ Haiku:
Xi said to Donald
Let us divide up the world
China shop, meet bull