The $8,000 Home-Buyer Tax Credit Has Been Extended & Expanded

Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.

The Basic Requirements

You qualify for the tax credit if the:

• Home you’re buying will be your primary residence
• Purchase price isn’t more than $800,000

This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.

What’s Changed?

With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:

• New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
• Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
• Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).

First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.

Bonus Link

You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:

• Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
• Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.

Redfin Partner Agents Arrive in Pierce County & Federal Way!

As promised last month, Redfin just partnered with local agents in Tacoma and Federal Way, South and East Pierce County and Gig Harbor & Key Peninsula to help you buy or sell homes. With Redfin agents focusing on serving the Seattle area, we decided to partner with experienced, local agents in the Tacoma area to bring you even better service. Redfin only partners with agents whom we have carefully chosen to uphold our standards of outstanding customer service, transparency, and better value.

Check out our service area below:

If you buy or sell a home with a Redfin partner, at closing he or she will provide you with a credit equal to 15% of the gross buyer’s-agent commission, usually worth $1,000 – $2,000.

We put our partner agent applicants through the ringer to ensure that you’ll get great service:

• Interviewed in-person by a Redfin market manager
• Completed at least 15 transactions in your area and 5 in the last 12 months
• Gave us email addresses to survey the clients they represented in the last 18 months
• Agreed to survey every new client and publish every review
• Paid based on customer satisfaction; removed from the program for bad reviews

Meet Our Tacoma & Pierce County Agents

	Mary Thompson-Bacho Serving Tacoma, Federal Way, South and East Pierce County Homes Closed: 30+
	Jennifer Hamilton Serving Greater Tacoma and Federal Way Homes Closed: 30+
	Theresa and Pattie Bastian Serving Tacoma, Federal Way, South and East Pierce County Homes Closed: 150+
	Joshua Hall Serving South and East Pierce County Homes Closed: 30+
	Matthew Harber Serving Puyallup, Lakewood, Tacoma and University Place Homes Closed: 20+

Meet Our Gig Harbor & Key Peninsula Agents

Jennie Wetter and Beth Allen are veteran partner agents, but we just added Bryan Hacker.

	Bryan Hacker Serving Gig Harbor & Key Peninsula Homes Closed: 10+
	Jennie Wetter Serving Gig Harbor & Key Peninsula, Poulsbo, Kingston & Bainbridge, Silverdale, Bremerton & Port Orchard Homes Closed: 70+
	Beth Allen Serving Gig Harbor & Key Peninsula, Poulsbo, Kingston & Bainbridge, Silverdale, Bremerton & Port Orchard Homes Closed: 150+

Apply to be a Redfin Partner

Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.

The Market Wrap Up for September

Let’s take at look at the September numbers for King & Snohomish Counties and see how they compare to a year ago.

King County

• 12,912 homes were for sale, down 16% from September 2008
• 2,016 homes sold, up from 1,872 in September 2008
• The median sales price was $349,000, down 8% from September 2008

Snohomish County

• 7,070 homes were for sale, down 23% from September 2008
• 755 homes sold, up from 692 in September 2008
• The median sales price was $282,000, down 11% from September 2008

We get these numbers from the NWMLS.

Dig Deeper Into the Trends

These numbers are for King county. To see what’s happening in your neighborhood, check out our stats & trends pages.

Case-Shiller: Seattle Plateaus While Other Markets Spike

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Starting this month, we will be basing all of the charts in this series of posts on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – August data is released in October).

Here are the basic Case-Shiller stats for the Seattle area* as of August:

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between July and August. Only Cleveland, Las Vegas, Charlotte, and Seattle marked seasonally-adjusted drops month-to-month.

Here’s a look at Seattle’s latest tiered data, back through 2000:

Looking at the seasonally-adjusted Case-Shiller tiered data, the low tier did inch up a bit in August, but the middle and high tier both fell. Given that much of this summer’s “bounce” (more of a plateau here in Seattle) has been attributed to the $8,000 tax credit available only to first-time buyers, it is not surprising to see slightly more strength in the low tier.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

According to a Reuters story from earlier today, Robert Shiller has described the sudden spike seen in many markets this summer as potential “bubble territory.” I agree. As I have discussed on these pages in recent months, the sudden and simultaneous nature of this price uptick does not bear any marks of a return to fundamentals, but instead seems to be driven almost entirely by a mad dash for cheap loans (interest rates in the 5s) and free money ($8k tax credit).

I’m a little bit concerned that by interrupting the natural correction of the housing market, recent government intervention is setting us up for even more pain down the road. I hope I am wrong.

Fortunately, since Seattle seems to have missed out on this summer’s mini-frenzy, we may be avoid the worst of the pain, should it come to that.

*[Case-Shiller defines Seattle as the Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area, which includes all of King, Pierce, and Snohomish counties.]

Redfin Has The Top Three Buyers’ Agents In September

Our Seattle agents had another great month in September!

Of the 2,100+ buyers agents who closed a deal in King & Snohomish Counties, the five of the top seven work at Redfin:

When you work with Redfin, you work with some of the most successful and most active agents in the region. Our agents know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.

These numbers come from the NWMLS, which tracks real estate transactions in Washington state. We ranked buyers’ agents in King & Snohomish Counties first by number of purchases of single-family homes and condominiums in August, then by total dollar amount.

Our Clients Love Our Service

We survey every client and track every transaction in a central customer database. For the surveys we received in September from our clients in the Seattle area:

• 62 clients responded to our customer-satisfaction survey and posted a review online, down from 72 in August.
• 60 of those clients, or 97%, would recommend Redfin to a friend, the same percentage from August.

We ask customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.

Redfin Seattle Service Region Update

We’re making a couple of changes to our western Washington service areas to give most of you access to homes more quickly and offer a better selection of local agents who know your market.

No longer serving Vashon and Route 2 east of Monroe

We’re no longer offering brokerage services to new clients in some of the more rural areas of King and Snohomish counties. The areas affected by the change are Vashon island, the route 2 corridor east of Monroe in Snohomish county, and the far reaches of eastern King county out towards the pass. We’re doing this because for every client we were able to help in these areas, two clients had much longer wait times to see homes in the closer-in cities and towns. So we’ve made the difficult decision to offer the best experience to the most people which unfortunately means no longer being able to serve some outlying areas.

Pierce County and Federal Way transitioning to Redfin Partners

Starting November 4th, Pierce County and Federal Way will be serviced by Redfin Partners. This year we’ve helped over 325 home-buyers in King county, and only 11 home-buyers in Pierce county. We haven’t built the local expertise in Pierce County that we think you deserve, so we’re partnering with a few great agents with established businesses in the greater Tacoma area to improve the service we offer. Our new partners will give you a wider choice of agents, more local expertise, and access to short sale properties and properties priced below $175,000 that Redfin didn’t service with our own agents. Our partners share our commitment to a no-pressure, service-first real estate experience and still offer a 15% commission rebate. Our partners will be live on Redfin.com and available to help new clients in Pierce County on November 4th. For Redfin clients who have been on a home tour with us or made an offer in the past 90 days, we can still take you on home tours until 11/30/09 and help you complete a purchase until the end of 2009. If you’re a current client and you need to schedule a tour after November 1st, just give us a call at 877-973-3346.

Any questions or concerns about our recent and upcoming changes? We’re all ears.

Where Were the Biggest Discounts in August?

Let’s check in on our stats to find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Seattle area (King/Snohomish/Pierce) and sorted it by city.

Methodology
In order to maintain consistency with the automatically generated statistics posted to the Redfin neighborhood pages, we have slightly tweaked the way the statistics are compiled for this post series. First, we complied a list of every sale that took place in the month, calculating each sale’s sale-to-list ratio (based on the final list price). Next, we simply take an average of every individual sale’s sale-to-list ratio to calculate an entire area’s sale-to-list ratio. Any sales that came in with a sale-to-list ratio above 150% or below 50% are excluded from the calculation, and areas with fewer than twenty sales are excluded from the top and bottom ten rankings. Interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate was obviously lower than our last update, but since we tweaked the methodology slightly, unfortunately they’re not really comparable.

Here are the ten areas with the smallest discounts:

In the 35 areas we ranked, the median discount was 2.05%.

Here’s the bonus graph, showing the discount off the original list price:

Looks like there are definitely still some sellers out there that are overestimating the current moderate strength in the market when they first list their house.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 3,267 sales we tracked in the 1-month period, 691 homes sold for 5% or more off the asking price, while 102 homes sold for 5% or more above the asking price.

Case-Shiller: Simultaneous Summer Surge Skips Seattle

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – July data is released in September).

Here are the basic Case-Shiller stats for the Seattle area* as of July:

Seventeen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between June and July. Only Las Vegas, Seattle, and Detroit continued to mark seasonally-adjusted drops month-to-month.

While most other markets around the country have been experiencing a sharp uptick in prices as measured by the Case-Shiller index this summer, all that Seattle has managed to eek out has been a plateau. My personal guess is that many other markets had almost completed their natural correction before the various stimulus programs went into effect. Meanwhile, since Seattle was basically the last market to begin the home price correction, we still had a ways to go, so there is more resistance to prices increasing here just yet.

This theory is fairly evident in the chart below, in which you can see Seattle continuing to rise as other markets stalled out in 2005, moving from the bottom of the pack to the fourth-highest between late 2008 and earlier this year. Relative to other markets, it would seem we still have a ways yet to correct.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

I suppose this summer could be called the summer of the sudden surge or the summer of the massive desperate government intervention. Either way, the result has been increasing prices in most markets over the past few months. Potentially good news if you’re trying to sell your house, but not especially encouraging if you’re hoping to buy, but prices had not yet come down quite into your reasonable range yet. Whether the $8,000 first-time homebuyer tax credit expires or not, I think this winter will be interesting.

Here’s the flip side of the peak decline chart, the Great Summer Bounce of Aught-Nine:

Seattle’s exclusion from the party is especially evident in that chart.

Remember: All real estate is local. Except of course when the federal government throws billions of dollars into the market, I suppose. Then we get a nationwide sample of the best recovery that $700 billion plus $787 billion can buy!

*[Case-Shiller defines Seattle as the Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area, which includes all of King, Pierce, and Snohomish counties.]

Brix and Gallery Condo Auction Results

This past Sunday a number of our agents attended the Brix and Gallery auction at the Grand Hyatt. We wanted to share the results with all of you because if you’re in the market for a condo, especially in the neighborhoods close to downtown, you should definitely take a look at the results from the auction and consider these prices when thinking about current market values.

Brix had all 36 condos sell that they auctioned off

• Spreadsheet of the results [xlsx]*
• 68 minutes
• ~200 bidders
• $344 to $500/sq. ft. Average $409
• 63% to 81% of “previous list”. Average 70%
• $235k to $471k
• Redfin stats for Capitol Hill:
  • Aug median list: $405k
  • Aug median list $/sq. ft.: $418
  • Jun sold: 46
  • Jun median sold: $336k
  • Jun median sold $/sq. ft.: $390

Gallery had all 44 condos sell that they auctioned off

• Spreadsheet of the results [xlsx]*
• 90 minutes
• ~250 bidders
• $309 to $565/sq. ft. Average $439
• 58% to 81% of “previous list”. Average 68%
• $243k to $735k
• Redfin stats for Belltown:
  • Aug median list: $397k
  • Aug median list $/sq. ft.: $491
  • Jun sold: 24
  • Jun median sold: $358k
  • Jun median sold $/sq. ft.: $450

Overall everyone we talked to thought the units sold for a lot more than they expected. Though looking at the results some folks did get a good deal. I suspect Schnizter will be very happy with how things turned out.

*Big thanks to Corey, Chelsea, Earnest and Dave at Redfin Seattle who were a big help in assembling the spreadsheet.

More auction coverage at:

• Urbnlivn’s auction wrap-up
• Brix Auction Results 30% Average Discount – Good discussion in the comments
• Did the Brix and Gallery Auction Buyers Get a Good Deal?
• Seattle Condos and Lofts

September City/Neighborhood Price Reductions

It’s been a while since we had a look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 95 cities/towns we ranked in the greater Seattle area this month, 61 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 52.1%.

Getting a little more granular, let’s look at the top ten neighborhoods for price reductions:

Of the 109 neighborhoods we ranked this month, 47 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 47.7%.

Download the full spreadsheet to check where your neighborhood came in.