With home sales and prices down, November was "terrible" for the Puget Sound real-estate market.
November was a month marked by much economic uncertainty, but one thing is now certain. With home sales and prices down, it was not the month when the slumping real-estate market turned a corner. Far from it.
The median price of single-family houses in King County fell 9.2 percent from the previous November, to $395,000, the Northwest Multiple Listing Service reported Thursday.
That marks the second straight month below $400,000, a threshold not previously breached in more than two years.
Additionally, 21 percent fewer houses in the county sold last month than a year earlier, proof that buyers weren’t rushing to investigate the bargains that real-estate pros say are out there.
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These trends were repeated throughout the four-county Central Puget Sound region.
The dark, rainy preholiday months rarely have strong home sales, and last month’s news — much of it negative — didn’t help buoy the consumer confidence that’s crucial for big-ticket purchases.
Plenty of bad news
Starbucks reported a 97 percent drop in fourth-quarter profit. Several Puget Sound-area counties suffered massive flooding, the state announced a $5 billion hole in its two-year budget, Boeing hinted at layoffs next year and Washington Mutual said big job cuts were a certainty.
Mike Skahen, owner broker of Lake & Co., candidly termed this November “terrible.”
“I’m surprised the buyers have been good as they have been,” Skahen said.
“There’s so much uncertainty out there that buyers don’t know what’s going to happen,” he said.
At Re/Max Northwest Realtors, President Gary Hackney called November “more or less a quiet month,” in part because “many of us are afraid to spend money.”
On the bright side, gas prices dropped, the Federal Housing Administration announced plans to help homeowners facing foreclosure renegotiate their mortgages and the national election heralded a change of direction.
“It didn’t matter who you voted for,” noted J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Both candidates ran on a platform of change.”
Buffeted by good and bad news, Skahen said home sales now are much like the stock market: wobbly.
Indeed, some neighborhoods did relatively well in November, while others did markedly worse.
In Federal Way and Dash Point, for example, the median house price dropped just 1.1 percent last month, compared with the previous November.
In West Bellevue, the price dropped 28.3 percent.
The Northwest Multiple Listing Service doesn’t analyze the reasons neighborhood prices fluctuate, but it’s possible the differences in these drops reflect the difference in home prices.
The owners of more expensive homes — think West Bellevue — may have to aggressively manage their prices to make moving worth it to their buyers, who are almost always current homeowners.
On the other hand, less expensive homes, like those in Federal Way, commonly sell to first-time buyers.
Those who have good credit, jobs and a down payment are able to buy without any obstacles. The more of them out home-shopping, the firmer prices will be.
According to a Windermere analysis, 26 percent of King County’s single-family home sales finalized in November sold for under $300,000. That compares with 13.7 percent a year earlier.
Falling rates may help
Realtors and others are cautiously optimistic that falling mortgage rates will revive home sales.
Earlier this week, the interest rate for conforming conventional loans was 5 percent, said Rich Bennion, executive vice president of HomeStreet Bank. Those are loans backed by Fannie Mae or Freddie Mac for amounts up to $417,000.
Slightly higher rates were available for jumbo conforming loans up to $567,500.
There are indications rates could go even lower, Bennion said.
“We’re hopeful this could be another part of the tonic the housing market needs, because housing affordability is a function of price and financing,” Bennion said.
Elizabeth Rhodes: email@example.com