The discussion at this year’s D.A. Davidson Financial Services conference in Seattle was tinged with a fair share of optimism about the real estate market, something not seen in recent years.  Speaker Stan Humphries, Zillow’s chief economist, took on the real estate market and is potential turnaround.

From the Puget Sound Business Journal:

“The good news is that the crisis of confidence may be coming to an end, said Humphries, delivering the kind of forecast that can make a banker’s heart flutter.
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He said that in 2012, housing values should bottom out. Nationally, home values have declined 25 percent from their peak in 2007, before the Great Recession. They fell more in greater Seattle, where home values have dropped 34 percent since the 2007 peak.
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But the decline of home values has slowed, and Humphries said it should hit bottom this year. And there are eager buyers, especially those who are investors, those buying a second home and retirees. There is a sign that investors are snapping up bargains among foreclosed homes, with one out of five home sales going to investors. One in three home sales are “cash buys,” typically from retirees who are selling one home and buying another in a place where the are retiring.”

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More good news for the Seattle housing market was released this week, with King County and Seattle home prices showing significant increases year-over-year.  Home sales were on the rise as well, with increasing numbers even as inventory numbers continue to be tight.

Seattle home prices increased 10.4% in April as compared to the same month in 2011, while King County median home prices were up 3% in the same time period.  King County home sales were 15% higher than in April of 2011, and total sales in the city of Seattle were up 8%.  The vast majority of the market is seeing significant improvements and increasing seller strength, while the greatest gains have been in Seattle and the close-in Eastside.

Far more buyers are participating in multiple-offer transactions this year, as total inventory of Greater Seattle homes for sale is down 38% in the past year, one of the biggest drops we’ve seen in at least a decade.  Spring selling season feels a lot like it did five or six years ago, with many aggressive buyers, with the big difference being the lack of quality homes available for sale.

From the Seattle Times:

More homebuyers chased slim pickings in King County last month, sending house prices to their highest level since December 2010.

The median price of single-family homes sold last month was $360,000, up 9 percent from March and nearly 3 percent from April 2011, according to statistics released Thursday by the Northwest Multiple Listing Service. It was the second month-over-month gain in median price.

There were 1,769 houses sold in King County last month, 15 percent more than a year earlier.

“We’re at the beginning of the prime selling season, so to see this sort of strength coming out … this is very good news for the industry,” said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies.

Rock-bottom mortgage rates and improving employment have set the stage for a stronger spring homebuying season than a year ago, but what’s on every broker’s lips is inventory.

Inventory — the number of houses listed for sale — slid for the ninth month in a row, down 38 percent from a year ago. In April 2010, there were almost twice as many listings.

“The very tight inventory of homes available for sale coupled with the stabilizing prices are probably going to convince some sellers that it’s now safe to come back into the marketplace,” Crellin said.

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The National Association of Realtors’ Nationwide Open House begins this weekend, April 28 and 29, 2012.  With inventories of homes for sale down nationwide, the growing success of the program could only be hampered by the shrinking number of homes available to show.

The Nationwide Open House was credited with organizing thousands of open houses in its initial years, reaching a peak in 2011 of 7,000 open homes in Washington state on the same weekend.  Numbers nationwide topped 350,000 open houses, and as the program has continued to gain credibility from Realtors and recognition from consumers, those numbers are expected to continue to grow.

Search All Greater Seattle Open Houses

The big difference this year is the changing marketplace, as buyers have gained more confidence, and many analysts are pointing to a real estate recovery based on current statistics.  The number of homes available for sale in the Greater Seattle market, for example, has declined 30%-40% in the past year, depending on whose research is used.  Any number in that range indicates a significantly tighter market which strengthens sellers’ positions and allows prices to stabilize.  Buyers in Washington and across the country have been pushing home prices upward in recent months, a trend not seen in years.

As of today, there are 2,400 open houses registered on the NWMLS for this weekend.  Based on experience, there are usually one or two unregistered open houses for every one that is registered on the MLS.  Adding in late Friday schedulers and the numerous other MLS organizations throughout Washington State, we’re likely to see anywhere from 5,000 to 10,000 open houses held in the state this weekend.

Affordability is at an all-time high, interest rates are at an all-time low.  You’ve heard this before.  Today, prices have stabilized and are beginning to rise in many cities.  Get out and see some homes this weekend.

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Earlier this year NAR reported housing affordability conditions reached the highest level since record-keeping began in 1970.  The housing affordability index is based on the relationship between the median home price, median family income and the average mortgage interest rate. The index reached 206.1 in January, the first time the index broke the 200 mark.

According to NAR’s 2011 Profile of Home Buyers and Sellers 45 percent of all buyers used open houses as a source in their home search process. This figure suggests the value of open houses even in the Internet era. In addition, buyers in the Northeast region are significantly more likely to use open houses, followed by those in the Midwest region. Women are more likely to use open houses than men, as are buyers who were not born in the U.S. or whose primary language is not English. Older buyers rely more on open houses than younger buyers, and buyers with higher incomes are also more likely to visit open houses.

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Nine Bellevue waterfront homes were sold in March, a significant jump versus the four homes that were sold in February.  While we seasonally see Spring waterfront sales pick up, the increase has been markedly more significant in Seattle and on the Eastside this year, as compared to years past.

The increase of 125% month-over-month was supported by just a couple of waterfront condo sales, near downtown and Meydenbauer Bay.  The waterfront houses were spread evenly between Lake Sammamish and Lake Washington, with the top sales on both lakes between $1.8 and $3.0 million.  With five total sales over $1 million, the waterfront sales in Bellevue are showing a healthy trend moving toward summer.

Bellevue Waterfront Homes Sold, March 2012

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Waterfront home sales in Seattle were up 57% from February to March, with the seasonal rise in sales being bolstered by an even stronger rise in home buyers’ confidence in the market.  Eleven Seattle waterfront homes were sold last month, with the top prices reaching $1.5 million for a waterfront condo in Madison Park and $1.95 million for a waterfront home in Laurelhurst.

Waterfront condo sales had been significantly diminished during the real estate downturn, but they’re now a major component of the sales numbers in this growing market.  Eight of the eleven waterfront homes sold this past month were condos, from Rainier Beach to Magnolia, Ballard, and Alki.

Just one floating home was included in March’s waterfront sales stats, a $950,000 floating home in Eastlake’s Mallard Cove neighborhood.  The home had been on the market for less than two months.  Many more properties are selling in short order this Spring, including the $1.5 million Madison park condo, which sold in just 17 days.

Seattle Waterfront Homes Sold, March 2012

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The inventory of homes available for sale in the U.S. dropped drastically over the past year, with 21 percent fewer homes available today as compared to the same month in 2011.  With lower inventory and stabilizing home prices nationwide, the necessary elements of a real estate recovery seem to be coalescing.

Inventory in the Greater Seattle real estate market has dropped almost 40 percent in the same time period, a staggering number.  With effectively four of every ten homes available last year now off the market, buyers are seeing an increasingly tight market and much more competition for new listings across Seattle and King County.

From Realtor Mag:

The nationwide inventory of residential homes for-sale dropped 21 percent in March compared to a year ago, according to newly released housing data from Realtor.com, tracking 146 metro markets.

In fact, all 146 markets posted a drop in their inventory, except for two — Hartford, Conn., and Philadelphia.

The nationwide median list price in March also saw improvement, increasing more than 5 percent last month compared to last year at this time.

The housing picture is much different than last year at this time, when inventory was up 26 percent and list prices were down 4.81 percent.

“If the market continues to hold its own, 2012 could well mark the beginning of a broad-based housing recovery,” according to Realtor.com.

The metros that posted the biggest drops in listings of for-sale homes in the last year are:

1. Oakland, Calif.: -51.91 percent year-over-year drop in total listings

2. Bakersfield, Calif.: -50.35 percent

3. Phoenix-Mesa, Ariz.: -48 percent

4. Fresno, Calif.: -45.56 percent

5. Miami: -42.34 percent

6. Fort Lauderdale, Fla.: -39.66 percent

7. Seattle-Bellevue-Everett, Wash.: -39.38 percent

8. Atlanta: -39.26 percent

9. Orlando: -39 percent

10. Portland-Vancouver, Ore.-Wash.: -38.79 percent

11. Tampa-St. Petersburg-Clearwater, Fla.: -37.35 percent

12. Stockton-Lodi, Calif.: -36.18 percent

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

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As we approach the 2012 tax day deadline of April 17, the National Association of Realtors posted a nice reminder of the tax benefits of owning a home.  More than just the comfort and stability of owning a home, ownership provides significant financial benefits.

From Realtor Mag:

With the April 17 tax deadline less than a week away, your clients still have time to take advantage of the valuable tax benefits home ownership affords. The National Association of REALTORS®’ consumer site, HouseLogic.com, can help.

“Our government encourages home ownership because it benefits families, communities, and our nation’s economy; home ownership is an investment in our collective futures,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “HouseLogic.com helps home owners identify the benefits that will save them money today and plan ahead for future savings, as well.”

HouseLogic.com provides tips and tools for home owners, and devotes an entire section of its site to tax incentives for the home. NAR members can check out A Home Owner’s Guide to Taxes to find helpful articles they can pass along to their clients, such as 10 Easy Mistakes Home Owners Make on their Taxes, 12 Tough Questions (and Answers) About Home Office Deductions, and 6 Deduction Traps and How to Avoid Them that provide consumers with a wealth of information to ensure they get the maximum return to which they’re entitled.

Tax benefits that encourage home ownership include the mortgage interest deduction, deductions for property taxes, and tax credits for energy-efficient remodeling projects and heating and cooling systems.

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USA Today released a story this week documenting the faster start to the housing market this year and the increase in home selling nationwide.  Home sales were up 9% for the country in February, a significant increase over the same time last year.  Home prices are expected to remain flat across most of the county, one of the ever-increasing signs of the market recovery under way.

Four out of ten metropolitan areas will actually see home prices increase, and the Seattle area is likely to be one of those because of our tremendous lack of inventory in the city.  Home sales have been brisk for new listings and prices have increased in some parts of Seattle already this year.

From USA Today:

The spring season typically runs March through June but may have started early this year because of unseasonably warm weather.

While last year was dismal for existing home sales, this year is looking better. Existing home sales in February were up 9% from the same time a year ago, as was the Pending Home Sale Index, which reflects signed contracts leading to sales, says the National Association of Realtors.

Meanwhile, Realtors’ confidence in the single-family home market is the highest in four years, according to a late February NAR survey of 4,300 agents. Coldwell Banker says its website’s traffic was up 47% in February from last year.

This spring season “will be the best in four or five years,” says economist Paul Dales of Capital Economics.

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MSN’s most recent real estate article studied the housing markets in the U.S. with the tightest inventories and fastest growing demand.  Seattle and Portland were near the top of that list, with Portland taking the #2 spot and Seattle at #3.

As was stated in the article, for these select cities, “listings are practically evaporating as they come on the market”.  The inventory of home for sale in Seattle is down 36% year-over-year.  Effectively, one out of every three homes available  last year is gone this year, leaving the increasing pool of home buyers to fight over the 2/3 of homes that are left.  While there are certainly still some overpriced homes that sit on the market for longer terms, we’re seeing a staggering number of homes that are sold in the first two weeks on the market, especially in first time home buyer price ranges and close in to the major metros of Seattle, Bellevue, Kirkland, and Redmond.

From the article:

“‘If (a buyer) is not there the first day a home comes on the market, it’s gone,” Brownlow says. Indeed, Brownlow says he recently had someone make an offer on a condo in Portland’s downtown area without even seeing it.

Portland’s neighbor to the north, Seattle, is also getting highly competitive, as 36% of the inventory has melted off the market, according to data from Realtor.com. (Realtor.com is an MSN Real Estate partner.)

“There’s not an awful lot out there for sale,” says Niels Brownlow, a broker with Coldwell Banker Barbara Sue Seal in Portland — especially, he says, on the lower end, as investors and first-time buyers vie for bargains.

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The competitive environment has already begun to nudge prices up in some coveted Seattle neighborhoods such as Ballard and Queen Anne.

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This scarcity — and rising prices in half of the markets that Fleming’s firm studies — should urge banks and other sellers to list more properties in coming months as the selling season and temperatures heat up. “This will bring people off the sidelines,” Fleming says.

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According to the payroll index at PayScale.com, Seattle saw the largest increase in overall salaries in the U.S. this past year.  As reported by the Puget Sound Business Journal, the 3.2% increase in year-over-year wages for the greater Seattle metropolitan area claimed the top growth of the year, followed by Houston, Philadelphia, St. Louis, and Dallas.

Following positive news on Seattle leading a resurgence of new construction in the U.S., continually shrinking inventories of homes for sale, increasing numbers of multiple-offer purchases, and rising prices in some sought-after neighborhoods, there are a plethora of new signs pointing to a healthier economy and real estate market in the Seattle area.

From the PSBJ article:

Despite being beat out by Austin, Texas, earlier this year for technology startup salaries, Seattle saw 3.2 percent overall salary growth, compared to 1.4 percent salary growth nationwide.

This is a significant increase over last year’s PayScale report, which found the region up only 0.7 percent between the first quarters of 2010 and 2011. It’s also a marked improvement over the 2009/2010 index, which showed Seattle salaries dropping by 2 percent.

This year, Seattle was followed by the Houston, Texas, area, with 2.7 percent growth, and Philadelphia with 1.8 percent.

Nationally, salaries in the IT, media and telecommunications industries grew by 1.5 percent. Construction salaries were also up, by 1.8 percent – the most growth the industry has seen since 2009. Food-service salaries, meanwhile, were down.

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Source: NWMLS Data – This information was not compiled or published by the Northwest Multiple Listing Service