Is spring going to be a Goldilocks housing season for everybody?

Have we arrived at one of those rare Goldilocks moments in real estate, where the market works well for sellers and buyers, strongly favoring neither?

Maybe. Based on the latest national consumer-sentiment survey by mortgage investor Fannie Mae, American consumers appear to think so. They’re more positive about the overall direction of the housing market than they’ve been in nearly a year. Growing numbers think it’s a good time to sell and a good time to buy. They expect their own personal financial situations will improve this year, and they believe that interest rates for home loans will continue to remain relatively affordable.

Housing and mortgage economists tend to agree. As Michael Fratantoni, chief economist of the Mortgage Bankers Association, told me: Six months ago, “I was guardedly optimistic. Now I’m just plain optimistic.” Mark Fleming, chief economist of First American Title Insurance, says: “So far in 2019, we’ve seen mortgage rates decline and wages rise — both trends work to boost home-buying power and fuel greater market potential for home sales, setting the stage for a stronger than expected” season.

Yet some economists warn that things are not necessarily as rosy as Fannie’s consumer survey would suggest. They point to troubling signs: Total home sales on a national basis continue to decline. That pattern historically has been a leading indicator that prices could actually fall during the year ahead, ending years of nonstop appreciation. Plus, houses are taking longer to sell — many owners are having to cut their asking prices. The days of widespread bidding wars are over.

So what’s really going on, and how do you relate it to your own situation, either as a potential buyer or seller? Some hard facts:

●Prices are still rising, but at a slower rate than in recent years past. The median home listing price hit $300,000 last month for the first time ever, a 7 percent jump over the previous year, according to Realtor.com. Fratantoni predicts price increases will moderate to an average of just 4 percent this year, 3 percent next year and 2.5 percent in 2021.

●A notable percentage of sellers’ asking prices are being reduced.

●Interest rates have been a great stimulus and are key to a strong spring. Lower rates are good for buyers, good for sellers. Last fall, average rates for a fixed-rate 30-year mortgage hovered near 5 percent, according to data from investor Freddie Mac. In the first week of April they averaged 4.08 percent. Homeowners and would-be buyers have responded enthusiastically to the lower rates, sending applications soaring by 18.6 percent during the week ending March 29 compared with the week earlier, according to the Mortgage Bankers Association.

●Inventories of available homes for sale continue to rise — meaning more choices for shoppers, according to National Association of Realtors researcher Michael Hyman. Listings nationwide were up by 3.2 percent year-over-year in February. That’s generally a good sign for buyers because it helps keep price pressures down. But homes for sale in the primary entry segment for first-time home buyers — houses priced under $200,000 — dropped by 9 percent year-over-year, according to Realtor.com, while they grew by 11 percent in the upper price brackets over $750,000.

All this is well and good, says Issi Romem, chief economist for realty marketing and data site Trulia, but the reality is that the housing market is in cyclical slowdown mode. Inventories of available homes may be increasing, but part of the reason is that houses are staying on the market unsold for longer times in many areas. The price cuts and longer days-on-market times reveal that significant numbers of “sellers are facing greater difficulties in selling.”

Romem and Trulia Senior Economist Cheryl Young issued a report last week that runs counter to the cheery outlook prevailing in the industry. “[It] is possible,” they say, that “by fall or next year prices might modestly decline.”

What that means is that the Goldilocks theory and perceptions of balance between sellers and buyers may not be quite right.

Advantage: buyers.

Kenneth R. Harney, The Washington Post

Like spring, Seattle’s real estate season is just getting started

A month out from “peak real estate season” in Seattle, and the local market is still not among the hottest in the country.

That is, likely, more than alright for a number of home-buyers, who might’ve been burnt out from last year’s market which seemed to go nowhere but up in median price. But it’s also a bit surprising — and not confined to Seattle, according to a new monthly report from CoreLogic.

According to CoreLogic’s numbers, Washington’s growth in February 2019 for single-family home prices year-over-year was just 4.6%, only marginally more than the national average, 4%. Both those numbers represent something of a cooldown, according to Dr. Frank Nothaft, chief economist for CoreLogic.

“During the first two months of the year, home-price growth continued to decelerate,” Nothaft said in their most recent report. “This is the opposite of what we saw the last two years when price growth accelerated early.”

That doesn’t mean that housing is suddenly cheap, either locally or nationwide; CoreLogic’s report also looked at the top 50 markets based on housing stock. They found 40% were overvalued, 18% were undervalued, and 42% were at value in February 2019.

And according to Nothaft, the peak season is primed for prices to go up even further.

“With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season,” he said in the report. “A strong buying season could lead to a pickup in home-price growth later this year.”

And while Seattle had some other things on its mind in February that might’ve contributed to a cool down, local analysts agree that it’s shaping up to be a good season too.

After all, even with the Snowmageddon, home prices in King, Snohomish and Pierce counties rose significantly, ending the month-over-month declines that started last May. And as CoreLogic notes in their report, Seattle’s market was considered “at value” in February.

“Similar to previous months, prices are moving upwards the most consistently in exurban areas along the Interstate 5 corridor,” James Young, director of the Washington Center for Real Estate Research at the University of Washington, said in the latest Northwest Multiple Listing Service report.

“Look for prices outside the major urban areas to continue rising as the weather improves and the main selling season arrives.”

~Zosha Millman, Seattle P-I

Seattle-area home price cool-down stands out among U.S. cities

The housing market is getting better for buyers across the country, but Seattle’s shifting market continues to stand out compared to other regions.

Since the local market peaked last spring, single-family home prices have fallen twice as fast in the Seattle metro area as in any other region in the country, according to the monthly Case-Shiller home-price index, released Tuesday.

The total drop for the full metro area in that seven-month span, from June to January, totals 6 percent. The typical U.S. city actually saw a slight uptick in home values over that period, but prices dropped about 3 percent in the San Francisco and San Diego regions, and about 1 percent each in Portland and Chicago.

There are a lot of ways to slice the data, though they all show the local market falling behind the national one

On a month-over-month basis, Seattle-area home costs slipped down another 0.3 percent in January, a slightly bigger drop than the national average.

On a year-over-year basis, prices still went up 4.1 percent, but that was slightly less than the national average – the first time that’s happened in seven years.

And even those gains are masked by big differences across the region. As has been the case, prices are growing for low-cost homes typically found in the outer areas of the region like Tacoma, and staying flat in higher-cost places like Seattle.

The index, which covers King, Snohomish and Pierce counties, divides homes into three tiers. For the cheapest group of homes (those priced below $380,000), prices increased 8 percent over the year. But the most expensive ones (homes priced over $605,000), saw prices tick up less than 2 percent, or slightly less than inflation.

In the middle tier, prices grew 4.5 percent.

Overall, the last time the local market was this cool was 2012, back when prices were still bottoming out from the recession.

The cool-down trend is a broad one. The national home-price gain of 4.3 percent over the past year represents the smallest since 2015. Across the 20 metro areas tracked by the index, only Phoenix saw bigger price gains in January than in December. Las Vegas was the only region in the country where price increases topped 7.5 percent.

There are signs that the local market has bottomed out, however. More recently, prices in February grew $45,000 in King County, the most ever for a single month in dollar terms, though that bounceback isn’t yet reflected in the national Case-Shiller data, which lags behind by a month.

The current median cost of a single-family house is $655,000 in King County, $475,000 in Snohomish County and $355,000 in Pierce County. The Pierce County figure is tied for a record high, while King and Snohomish are well below their peaks reached last spring.

~Mike Rosenberg, Seattle Times