King County pending home sales drop as incentive peters out
King County closed home sales in June reached the highest monthly total since mid-2007 — but pending sales were down sharply from their level a year ago.
Seattle Times business reporter
Was June a good month for King County home sales? That depends on which numbers you pay attention to.
The good: Buyers closed on 1,879 houses last month, according to statistics released Tuesday by the Northwest Multiple Listing Service. It was the largest monthly total since August 2007, and 13.5 percent more closings than the number recorded last June.
The not-so-good: Pending sales — offers accepted by sellers that haven't yet closed — fell 26 percent in June from the same month last year. It was the second month of year-over-year declines after 12 straight monthly gains.
In other words, more sales came out of the pipeline, but fewer went in. The pattern was the same for King County condos and Snohomish County single-family homes.
Real-estate agents and other observers attributed the trend primarily to the expiration two months ago of federal tax credits for home buyers. They had to sign contracts with sellers by April 30 to qualify for the tax savings, and many rushed to do so. Many of those deals closed in May and June.
But now, "that incentive's no longer there," said broker Gary DeRosa, who heads Zip Realty's Seattle Metro team.
Since the credits expired, he said, "we have a lot of clients searching, but there doesn't seem to be a sense of urgency right now."
Mike Skahen, owner/broker at Lake & Co. Realty in North Seattle, agreed. "The tax credit gave us a boost," he said, "and now that it's expired, the pending sales are reacting to that."
People who make their living selling real estate could take some solace in a slight — 0.8 percent — increase in pending single-family home sales in King County between May and June. May was the first month the tax credits weren't available.
"We're talking about a relatively stable level of activity," said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. "It's just lower than it was with the [tax-credit] stimulus."
Prices in King County also seem to be stabilizing, he said: The median price of houses that sold in June was $383,000, the listing service reported, down 3 percent from June 2009 but the highest figure for any month since last July.
The median condo price in June was $242,000, down 2.8 percent from the same month last year.
Tim Ellis, who publishes the Seattlebubble.com real-estate blog, said he was surprised June median prices weren't higher, considering the surge in demand touched off by the tax credits.
"I think June is the calm before the storm," Ellis said in an e-mail."We're going to see a huge drop in closed sales next month, and as the demand evaporates I expect prices to follow not far behind."
Real-estate clearinghouse and database Zillow.com said in a separate report Tuesday that, as of the end of June, 29 percent of all sellers with homes listed in King, Snohomish and Pierce counties had cut their asking prices at least once, a higher percentage than for the nation as a whole.
Both prices and sales activity over the next few months "really depend on what's happening with the overall economy," Crellin said. But record low mortgage-interest rates "can do nothing but help," he added.
Skahen, the broker, agreed. "It's really not a bad market right now," he said.
But DeRosa said many prospective buyers seem to have become accustomed to low rates, and aren't rushing to take advantage of them. "People are being very choosy," he said. "It's taking a lot more time to do each transaction than it did six months ago."
Among King County neighborhoods, North King County (Shoreline, Lake Forest Park, Kenmore) experienced the biggest year-over-year drop in pending sales in June, 49 percent. North King County and Southeast King County saw the biggest increases in closed sales, nearly 30 percent.
Closed sales in Seattle fell 6 percent, according to the listing service, while all other parts of the county saw double-digit increases. The in-city decline was due entirely to steep drops in sales in neighborhoods north of the Lake Washington Ship Canal.
Skahen, whose office is in Green Lake, said he had no explanation for those numbers. His firm's sales were up year-over-year in June, he said.
Such close-in Seattle neighborhoods as Capitol Hill, Madison Park, Queen Anne and Magnolia were among the areas where pending sales experienced the smallest declines last month.
That may be because those neighborhoods are more expensive and fewer sales were motivated by the tax credits, Skahen said.
Eric Pryne: 206-464-2231 or email@example.com