One of the biggest misconceptions about the Seattle area housing market is that it gets much busier during the summer.  In reality, from a sales standpoint things typically heat up the most in the spring (usually starting earlier than even spring sellers expect), slow down starting in June, perk up again during the fall, and then drop off more dramatically as we approach Thanksgiving and Christmas.

The last few years have been anything but typical, but the graph below (2006 to 2010, with my notations in red) still shows what the typical pending sales and sold trends look like.

The year 2006 was pretty typical around Seattle, even though much of the rest of the country was beginning to take a hit in the housing market.  The red line above shows pending sales peaking in May and dropping off throughout the summer, with a slight perk in August and October.

August of 2007 was the start of the big slide for local sales, and happened to coincide with the summer market.  The year of 2008 was hardly typical but still shows pending sales dropping in July and August.  During the late summer of 2009 sales were boosted by the home buyer tax credit that had a November 30 deadline, and in 2010 you can see that the extended tax credit had a positive effect on what would already have been a typical spring surge.

Bottom line?  Since the home buyer tax credit spurred demand in the spring and ended just when we typically would be experiencing a summer slowdown in sales, expect housing numbers over the next few months to show a more dramatic decline than usual.  What happens in the fall, when we usually experience an upsurge in home buyer activity, will be interesting to see and may say more about the true state of the housing market. 

Note to summer sellers:  There is the danger of pricing based on spring numbers (understandably) as you approach a summer market.  Keep in mind what kind of housing demand shift you’re likely to experience.

Note to future spring sellers:  I usually recommend starting about four weeks earlier than you probably plan to, since many home buyers who decide to make a home purchase get ready very early in the year.  (A colleague of mine once sent out a great postcard to her clients with the tagline ‘Those Tulips Are Costing You Thousands!”, meaning that sellers who wait for spring flowers to make their home pretty are likely to miss pent up demand from potential home buyers who got pre-approved shortly after the New Year.)

I’ve added some really nice ‘Before and After’ shots to the Home Staging Photo Gallery page, and also (this is embarrassing) fixed the slideshow so that photos of my friend Butch Vision flipping upside down in his kayak in the middle of the Grand Canyon didn’t arbitrarily pop up during the show.

(Whoops. )

Although, as one of my clients pointed out, those were nicely symbolic of the Seattle housing market.

I also updated my ‘About’ page – the stuff I had on there before seemed really stilted, now it’s much more the way I would normally talk to a client.  Funny the things we put ourselves through when we try to get across to people online.

King County just introduced new regulations requiring all sellers of properties with onsite sewage systems to have their on-site septic system inspected by a King County Licensed On-Site System Maintainer (OSM). The inspection must be completed and a copy of the report must be given to both the buyer and Public Health before the transfer of title.

This applies to any transaction for which mutual acceptance occurred after January 19, 2009.

If you’re thinking that people typically already had septic inspection prior to selling a home, you’re right.  One of the main differences is that the seller now needs to pick an inspector from the King County Licensed On-Site System Maintainer list, and the inspection goes not just to the buyers but also to Public Health.

Here’s a link to the main information page about the new regulations:

http://www.kingcounty.gov/healthservices/health/ehs/wastewater.aspx

And here’s the page that has the link to the list of King County Licensed OSMs:

http://www.kingcounty.gov/healthservices/health/ehs/wastewater/realestate/sellers.aspx

I’ve had good results with Earthwise Excavations (Postema Enterprises) – 425-486-1664.

By the way, don’t forget!  Regardless of who inspects, it’s important to get them to test the drainfield performance if at all possible, with a drawdown test or some other method applicable to that specific type of septic system.

Appraisals that used to be ordered and completed within a week are taking two weeks or more these days, which means that a typical closing time is changing from 30 to more like 45 days. Just something for you buyers and sellers to keep in mind when planning ahead and deciding on contract terms.

I just posted a new page on this website with forty ‘Before and After Home Staging’ photos of my listings, you can click on the photo to the left to check it out.

‘Home staging’ is the easy way to describe it, but in reality these homes were transformed through preparation (mainly de-cluttering and creating flow), good photos (either by me with a 24mm camera, or by a professional), and photo editing after the fact, since most interior photos still turn out too dark.

I seriously believe that preparing and marketing a home this way boosts its value BEFORE it gets listed, helps it sell more quickly and for a higher price – I’ve seen this many times over the years.

Please check out the before and after staging photos, I’d love to hear get your feedback.

Here are some stats showing Seattle and Eastside real estate activity through July 2008.  The following graph shows the total days on market (CDOM) for houses and condos in King County, beginning in May 2007.  As you can see, average listing time before a sale has nearly doubled during that time.

The triangles show that the percentage of sales price compared to original listing price has dropped from 99% to 94%.

The following graph shows the months of housing inventory remaining during the same time period.

The change from 3.3 in May 2007 to 8.6 in July 2008 doesn’t mean that there are 2.5 more homes on the market, since the remaining months of housing inventory evaluator is based also on the number of pending and closed sales in any given month.

For example, in May of 2007 there were 11,188 homes for sale, 3670 pending sales and 3420 closed sales.  In July 2008 there were 16,643 homes for sale, 2248 pending sales and 1931 closed sales.

Prediction:  We’ve had the typical summer slowdown along with some downbeat housing news over the past six weeks, so I expect the August numbers (which reflect closings of homes that went off market in July) to be even weaker.  However, I’d love to be wrong.   Those stats are due out in mid-September. 

Here are two graphs that show some interesting trends in King County home sales over the past year, from April 2007 through June 2008.  It’s also an example of how easy it is for a graph to not tell the whole story.

Both are for King County houses and condos, new and resale.  Pink columns show the average days on market.  The triangles show the percentage of the original listing price that the home actually sold for.

As you can see, the number of days a home stays on market before selling has increased significantly since summer of 2007, when the Seattle and Eastside housing markets started to shift downward.  The percent of asking price received also dropped from 99% to 95%.

Compare that to the graph below, which uses exactly the same data except that it shows cumulative days on market.  This includes time on market due to re-lists (I believe it’s a 90 day window before previous listings no longer count), and therefore is a more accurate reflection of the time it took a home to sell.

Both show the same overall trend, but the second graph gives a better representation of the market.

Those are the latest numbers available through Trendgraphix for now.  I expect the August closing numbers to reflect a pretty slow July market.  That being said, I’ve still seen a few homes go off market in a day or two, but they’ve been priced extremely aggressively in order to sell quickly.

At a recent office meeting our broker pointed out that he’s hearing more and more about scams involving people preying on homeowners in foreclosure.

One of the methods is for someone to approach a homeowner who is facing foreclosure, and make an arrangement in which the owner signs their home over to them via a quit claim deed.  The expectation is that this person will take over the payments and the owner will lease the home for an affordable amount, with the option to purchase it back in the future.

Instead, the new owner charges an exorbitant amount for the new lease, or worse, simply sells the property.  Most home mortgages also have a clause stating that if you transfer your property to someone else the entire balance of the loan may be due immediately.  If a homeowner is in pre-foreclosure, violating this clause may invalidate the normal waiting time frames and speed up the foreclosure process.

Bottom line?  Homeowners facing foreclosure should call their lender directly!  (The lender, not any intermediary collection service.)

This HUD page also offers some good tips on avoiding foreclosure.