The Problem With Pending (Real Estate Pending Home Sales)

 

Pending home sales, in the past, were an accurate indicator used in forecasting real estate sales in the U.S. We had a fairly standardized system of home sales, and while transaction closings could range between a couple of weeks and a couple of months, if a home was "Pending Sale", it was highly likely that it would close.

We've been predicting future home sales for years with great accuracy by planning for the vast majority of these pending sales to close in the next month--not anymore.

With the new crops of distressed properties, short sales, and ever-changing lending guidelines, there's no such thing as a sure sale these days. The percentage of pending sales that actually become closed sales has shrunk dramatically in recent years. Short sales, which can many times last up to 6 months, create a large lag between pending date and closing date. Even worse, my lastest research has shown that less than 20% of buyers who enter into a contract to buy a short sale are actually successful. This means that 80%+ of "pending sales" which are short sales will end up failing. Pending is actually nothing of the sort, in these cases.

Even the increasing percentages of short sale failed transactions can't be predicted with a leading indicator, factoring in their likelihood of failure. There are certain months when, based on a government decree or a financial quarter-end, banks will close a larger percentage of short sales. In other months, they'll ignore their distressed sales altogether as a change in legal requirements or problems with their process are revealed.

The unfortunate answer for the real estate profession is this:
"Pending"is no longer "pending a closing".

Pending now means, "pending a decision on whether or not to close". For now, we should really return to forecasting home sales with the old, less-exciting method. Last month's closed sales are the only statistic that has the accuracy and validity necessary to base our estimates upon. The national banks need to create a simplified, streamlined, and standardized system for closing distressed sales that all agents, sellers, and buyers can follow. At that point, we'll know how long a short sale will take, and how likely it is to actually close.

Until then, many pending home sales just simply aren't pending at all.

Read the full Seattle Waterfront Homes blog.

Sam DeBord is a Realtor®, Managing Broker, and Green-Certified Pro with Washington State Realty, LLC.

Source: Individually compiled NWMLS data. The NWMLS did not compile or publish this information.

 

Sam DeBord

Realtor® | Managing Broker

SeattleHome.com | Washington State Realty, LLC

206-658-3225 cell | 800-883-0712 fax

 

Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors

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Healthy Luxury Real Estate Sales Finish Summer

Luxury real estate sales in Seattle finished up the summer with a slightly slower August but strong overall sales numbers, in comparison with the summer of 2009.

Nineteen homes in the city of Seattle sold for over $1 million last month, with two homes coming in above $2 million. The top sale was a classic, elegant Queen Anne home on Highland Drive with sweeping city views. Its final selling price was $2.745 million.

For the summer (June-August), we saw 84 homes sell for over $1 million, a 29% increase over 2009's 65 sales. In the $2 million + range, we had 9 sales this year, nearly doubling the 5 homes sold in this category last year.

The top sale of the summer was a $6.25 million estate in Denny Blaine. The 8300 sq ft home on Maiden Lane was on the market for nearly a year before selling, but still brought top dollar for the current market.

The late summer slowdown has clearly affected total sales as well as luxury home sales a bit in August. We'll most likely see a bump at the end of September and beginning of October before we move into the winter lull.

Sam DeBord
Realtor® | Managing Broker
SeattleHome.com | Washington State Realty, LLC
ph: 206-658-3225 | email: sam(at)SeattleHome.com
Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors

Source: Individually compiled NWMLS data. The NWMLS did not compile or publish this information.

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August Waterfront Real Estate Sales on The Eastside

Waterfront real estate on the Eastside continued a strong summer season, with six million-dollar-plus sales of waterfront homes in August. Just three such homes were sold in 2009 in the same month.

Waterfront home sales on the Eastside have topped 2009 numbers for more than 6 months straight now, and it seems the trend is likely to continue. Although the overall market has slowed a bit from our strong spring, the sales of luxury and waterfront real estate are still more than double the sales numbers of one year ago.

The only segment missing from the waterfront market on the Eastside this month is the high-end luxury market. Recent sales of $5 million+ aren't outpacing last year as much as the $1MM-$5MM range.

Sales this month were located on Lake Sammamish and Lake Washington in Medina, Bellevue, and Sammamish. We also had a couple of "waterfront access" sales in the Kenmore area.

August 2010 Waterfront Real Estate Sales on the Eastside

Address City Price Beds Baths Sq Ft
1460 W Lake Sammamish Pkwy NE Bellevue $1,250,000 4 3.25 3,450
2103 E Beaver Lake Dr SE Sammamish $1,375,000 4 4.25 3,830
457 E Lake Sammamish Pkwy SE Sammamish $1,425,000 2 2.25 2,400
10315 SE 30th St Bellevue $1,575,000 3 3.25 3,940
2841 Evergreen Pt Rd Medina $2,100,000 3,620
49 Skagit Key Bellevue $2,675,000 3 3.00

 

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Sam DeBord
Realtor® | Managing Broker
SeattleHome.com | Washington State Realty, LLC
ph: 206-658-3225 | email: sam(at)SeattleHome.com
Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors

Source: Individually compiled NWMLS data. The NWMLS did not compile or publish this information.

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Seattle Luxury Real Estate Finishing Up Strong Summer Sales

 

Sales of luxury real estate in Seattle have been strong all summer long, and continue to outpace 2009's sales of luxury homes in a big way. July had 31 sales of homes over $1 million and 5 home sales over $2 million. This is in comparison to last July's sales of 23 and 2 homes, respectively. Sales in the summer of 2010 have repeatedly outperformed 2009 by 30%-50% in the $1 million-and-up range.

Sales in the $2 million and up range are up 200% vs. last year, with 18 home sales reported in this range between April and July. While prices have taken a hit on many high-end homes, many sellers of luxury real estate have made realistic price adjustments on their listings and have gotten this market moving back in the right direction.

With the expiration of the tax credit, we've seen a large dip in total sales nationwide, but that affects the luxury real estate market much less than other market segments, as the tax credits are very small inducements at these prices. The greater economy and employment markets will continue to weigh on the luxury market, but it seems that luxury bargain hunters are starting to come out of the woodwork.

Current Listings:
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Have a question about a specific home, or real estate in general? Give me a call or send me an email any time:

Sam DeBord
Realtor® | Managing Broker
SeattleHome.com | Washington State Realty, LLC
ph: 206-658-3225 | email: sam(at)SeattleHome.com
Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors

Source: Individually compiled NWMLS data. The NWMLS did not compile or publish this information.

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Seattle Home Prices To Rise 25.5% by 2014: Report

Moody's and Fiserv (Case-Shiller Indices) recently studied the most likely housing markets to lead the real estate recovery in the U.S. Washington state came out number 1, with particular attention to the Puget Sound region. Seattle was forecast to have a bullish 25.5% increase in prices over the next 4 years.

The group estimates that housing prices will rise significantly through 2014, and Washington's real estate market will be the strongest in the nation. Despite some recent dreary real estate news, Fiserv's chief economist sees the future as bright for Washington and the greater Seattle metro:

A housing market rebound seems tenuous following the expiration of the home buyer tax credit, and consumer confidence remains weak due to lackluster employment, but David Stiff, chief economist at Fiserv, says the bottom is near. Home prices in the U.S. have declined 29.5 percent over the past four years, according to the Fiserv Case-Shiller Indexes. Stiff says prices should form a trough early next year, when median prices will be down an estimated 32.9 percent from the 2006 peak.

…

Top 10 Housing Markets That Will Be Strongest by 2014

1. Washington
Biggest home price increase projected in 2014: Bremerton-Silverdale metro

Forecast 4-year price increase: 44.7 percent
Current median price: $245,000
Prices to reach trough in: 2010 Q1
Median family income: $69,900
Population: 240,860

The Bremerton-Silverdale area, on Puget Sound's Kitsap Peninsula, has the highest growth forecast of all MSAs in the country, with prices expected to jump 44.7 percent by 2014, according to Fiserv. Cathy Doney, general manger for Reid Real Estate in Silverdale, says the waterfront community has benefited from government employment, which has helped sustain the job market, and attracted buyers looking to live close to Seattle at a lower cost. Washington's second-strongest market is Tacoma, with a growth rate expected to be 33.1 percent. Prices in the Seattle area are expected to grow 25.5 percent by 2014.

Index used to calculate historical home price changes: Case-Shiller

 

Full Article 

 

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Sam DeBord is a Realtor and Managing Real Estate Broker with SeattleHome.com, a division of Washington State Realty, LLC. He is a member of the Seattle-King County Association of Realtors and a Green-Certified Pro. The NWMLS did not compile or publish this information.

Have a question about this waterfront home, or Seattle real estate in general?
Sam can be contacted at (206) 658-3225 or Sam(at)SeattleHome.com.  

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Waterfront Home Sales on The Eastside Surge, Then Slow a Bit

Waterfront real estate sales this summer on the Eastside have been far stronger than in 2009. June sales were particularly outstanding, with July showing a slight downturn which wasn't unexpected after the early summer burst, matching the rest of the market in Greate Seattle.

Thirteen significant Eastside waterfront home sales on Lake Washington and Lake Sammamish closed in June, and four more lakefront sales closed this July. Compare that to 2009 which had just 7 similar sales in June and 3 in July. So far, the summer of 2010 is turning out to be a boon to waterfront buyers, as a portion of the selling market is getting realistic about the correction in luxury and real estate prices. Many waterfront homes have now been priced at a level that fits the current market, and transactions are moving forward at a better pace than the past two years.

The most recent sales were a $1.6 million home on Lake Sammamish waterfront in Sammamish, a $1.782 million protected waterfront home on South Bellevue's canals in Newport Shores, a $1.8 million West of Market lakefront home in Kirkland, and a $5.5 million waterfront estate in exclusive Hunts Point.

Address City Price Beds Baths Sq Ft
July 2010 Sales
2029 E Lake Sammamish Pkwy NE Sammamish $1,600,000 3 2.5 4,299
26 Columbia Key Bellevue $1,782,000 4 2.5 3,970
1433 10th St W Kirkland $1,800,000 3 1.5 1,610
4224 Hunts Point Rd Hunts Point $5,500,000 4 3.5 4,030

June 2010 Sales
4011 E Lk. Sammamish Shore Lane SE Sammamish $815,000 2 2.25 1,770
1727 E Beaver Lake Drive SE Sammamish $950,000 4 2.5 3,380
3268 W Lake Sammamish Pkwy SE Bellevue $1,245,000 4 3.5 4,090
2120 W Lake Sammamish Pkwy NE Redmond $1,395,000 3 2.75 3,720
13253 Holmes Point Dr NE Kirkland $1,700,000 4 2.5 2,520
273 E Lake Sammamish Shore Lane NE Sammamish $1,795,000 4 3.25 3,950
161 E Lake Sammamish Shore Lane NE Sammamish $1,950,000 5 3.25 3,750
1721 E Lake Sammamish Place SE Sammamish $2,000,000 4 4 4,800
4129 E Lake Sammamish Pkwy SE Sammamish $2,305,000 3 3.75 4,183
2401 Killarney Wy SE Bellevue $3,266,050 3 3.75 3,380
3257 Hunts Point Rd Hunts Point $3,900,000 4 3.25 5,022
9455 Lake Washington Blvd NE Bellevue $4,283,000 5 3.5 4,600
9010 NE 47 St Yarrow Point $4,600,000 3 4 3,670
9441 Lake Washington Blvd NE Bellevue $4,900,000 3 3.5 6,590

Current Listings:
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Sam DeBord is a Realtor and Managing Real Estate Broker with SeattleHome.com, a division of Washington State Realty, LLC. He is a member of the Seattle-King County Association of Realtors and a Green-Certified Pro. The NWMLS did not compile or publish this information.

Have a question about this waterfront home, or Seattle real estate in general?
Sam can be contacted at (206) 658-3225 or Sam(at)SeattleHome.com.  

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Strong Seattle Waterfront Real Estate Sales Continue In July

 

Waterfront real estate sales in Seattle maintained an even keel in July, as the general real estate market continued to push along through a slow economy. July waterfront home sales in Seattle matched the eight homes sold in June, with two sales being high-end floating homes and the remainder of the sales being traditional single family homes. These numbers are a large increase over the same period last year.

The least expensive waterfront home sales in July were at the extreme ends of Seattle, with a Bryn Mawr home on the South end of the city selling for $650k, and a Cedar Park home on the North end that sold for $700k. Our Lake Union floating home sales closed at $740k in Westlake, and $1.242 million in Eastlake.

At the top end of the waterfront real estate sales were a home in Denny Blaine that sold for $2.15 million, and a waterfront estate in Leschi that closed at $2.625 million.

Overall, the waterfront real estate market continues to outpace 2009's sales numbers by leaps and bounds. July of 2009 had just two waterfront home sales, part of a dismal year of waterfront and luxury home purchases. While sales of these homes are often at discounted prices, the total number of sales month after month continue to strengthen the base of the luxury market and increase confidence for buyers.

June 2010 Seattle Waterfront Home Sales
Address City Sold Price Beds Baths Sq Ft
2401 N Northlake Wy #9-E Seattle $249,138 1 1.5 620
2915 Harris Place S Seattle $400,000 3 2.5 1,910
3415 Sound View Dr W Seattle $575,000 4 3 2,800
9645 50th Ave SW Seattle $1,100,000 3 1.5 2,490
3736 W Commodore Way Seattle $1,350,000 5 2.75 3,930
2481 Perkins Lane W Seattle $1,600,000 2 1.75 2,520
11045 Arroyo Beach Place SW Seattle $2,200,000 3 3.5 3,050
4408 55th Ave NE Seattle $2,500,000 6 3.75 5,450

July 2010 Seattle Waterfront Home Sales
Address City Sold Price Beds Baths Sq Ft
11016 Rainier Ave S Seattle $650,000 2 1.75 1,600
12322 Riviera Place NE Seattle $700,000 4 1.5 1,970
2770 Westlake Ave N #6 Seattle $740,000 2 1.75 1,151
8452 Island Dr S Seattle $810,000 3 2.5 2,390
2600 Fairview Ave E #8 Seattle $1,242,500 3 2.25 2,000
2444 NW Blue Ridge Dr Seattle $1,335,000 4 2.25 3,800
1616 Lake Washington Blvd. Seattle $2,150,000 2 2.5 2,730
1108 Lakeside Ave S Seattle $2,625,000 4 3.25 3,680

Current Listings:
Seattle Homes For Sale
Seattle Waterfront Homes
Seattle Houseboats and Floating Homes

Sam DeBord is a Realtor and Managing Real Estate Broker with SeattleHome.com, a division of Washington State Realty, LLC. He is a member of the Seattle-King County Association of Realtors and a Green-Certified Pro. The NWMLS did not compile or publish this information.

Have a question about a waterfront home, or Seattle real estate in general?
Sam can be contacted at (206) 658-3225 or Sam(at)SeattleHome.com.  

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