King County – Residential
For sale – 8,680 – UP 172
In Escrow – 2,064 – UP 158
Closed month to date – 608 – UP 169
King County – Condo Market
For sale – 3,009 – UP 80
In escrow – 823 – UP 25 – 2.6% of those are contingent contracts
Closed month to date – 204 – UP 60
Next week I’ll have to post both end of month and Sunday night stats plus YOY closings for the month of January.
Single family home market keeping pretty good pace with those closing and going into escrow vs. coming on market. Condos not so good. Hard to believe that with over 3,000 on market, only 18 went into escrow two weeks ago and 25 this past week. If the condos don’t move, the single family market will see the consequences of that come Spring and Summer.
“Statistics not compiled or published by NWMLS.
The NWMLS has a “2007 Statistical Review and Highlights” summary on there Discover Statistics page that shows some pretty good numbers. I don’t know if it is appropriate to post it here, but I go over some of them in my blog at: http://www.theseattlespecialist.com/seattle-real-estate/new-statistics-are-out-and-seattle-is-holding-up
Thanks for the stats Ardell. One thing I’m curious about regarding the condo market in KC, in your expereince is it mainly a market driven by buyers lifestyle choice, their financial means or by investors?
Jim , interresting numbers and breakouts however they are pretty stale compared to the updates Ardell is giving us with these posts that are focused on what is going on now instead of what happened last year.
Hey Ardell – just trying to understand what you are reporting here – the closed to month to date numbers couldn’t go anything but up, right?
I think it’s up since the last time she reported, not YOY.
Looks like the volumes might be even worse this month than December.
I don’t get it. I’m not noticing that much of a change in activity.
biliruben,
Correct. TJ requested that I report the closed to date each week. The UP calculation is to track how well the pendings and closings are keeping pace with incoming inventory each week.
Kary or Jim,
Do you know how many agents and offices there are in King County. I’m trying to calclulate a per office/per agent ratio of sales and pendings. If there are 912 closed residential and condo transactions in all of King County in January, how many would that be per agent/office?
We all know many closings happen at month end, but I’m predicting both segments to be half to 52% fo what they were in 2007, which is shown in the pie charts in my post of January 6, 2008.
These stats do not include vacant land, mulit-family, manufactured homes, etc… One is strictly Residential and the other Condo. I did not remove “double” listings, which will appear when a listing is shown in two areas. I’m assuming that factor will balance itself out since all stats will include that type of duplication.
tj,
If you look more closely at the data in Jim’s post, you will see it is not “stale”, simply geared to market segments that outperformed vs. those that didn’t. By looking at over $1M or over $500,000, appreciation pushed more properties into those categories that would previously have been in lower categories. Hence more sales. Yet I wonder what percentage of the overall market is contained in those handpicked subsegments.
Rather than track that data, I’d rather keep moving forward as I think the 12 month rolling basis of 8/01/06 through 7/31/07 vs 8/01/07 through 7/31/08 will be where “the story” lies.
As to who is buying or not buying the condos, that data differs in various price ranges. You would be surprised how many condos are held as “second residences” by people who visit them infrequently. Many Kirkland condos are “vacation homes” and many Downtown Seattle condos are used “when we go to the theater” and remain vacant much of the time.
My guess is that all condo conversion and new condo sales are not separately noted as sales in the mls. So if more are opting for new vs. resale, it could be skewing the data with most resales showing, but not most new sales. People buying into new projects today that won’t close for a year or more away (highrise buildings) may be where some of the buyers went.
Also, if FSBO sales are on the rise, that could skew the data as well.
Using tax records may be a better check on the market, or at least a “double check” of the data. Not everything is sold through the mls. I wonder how much of the data is skewed by there being more Craig’s list sold property or Zillow sales. Might the mls stats diminish as people afford themselves more and more of “outside the mls” options? Food for thought.
Ardell, I don’t know the number of agents in King County, and I doubt it matters because I’m in King County but sometimes deal with properties in Snohomish and even Pierce (and now even Kitsap). To do what you want to do you’d need to take the entire NWMLS area, and number of agents and sales for the totals.
I agree on the volume concerns. I really doubt FSBO sales are up–if I had to guess they are down far more than NWMLS sales. Maybe real estate agents need to raise the white flag and surrender to the press? They’ve convinced too many people that financing is a thing of the past, when it isn’t and rates are at pretty respectable lows.
Kary,
Personally I’m not feeling like it’s slow at all, though inventory sucks like every January. We’re busy looking for the ones that cancelled before year end 🙂
I had six agents call me who were writing offers in the last few days. I think it will pick up if rates stay down. But I’m not hearing from anyone who isn’t “well-heeled”. No first time zero down stacked costs kind of buyers in my mix or in the writings of the agents I’m speaking with. But foreclosures and short sales is definitely in the conversation of some of these buyers. At least two were writing up a short sale or foreclosure for a buyer client. Not sure they’ll close though…. I can’t walk ten feet without hearing “short sale”, but most are flips or bad investor stories, and not homeowners going under.
As to the well-healed comment, I’d agree. They’ve always been able to get credit and they’ve probably been successful enough at something to know that the press is full of it on just about every topic. They know they can get credit if they want to (although they might not know they can get 100% if they want to).
Also, you can’t discount the fact that there are people out there just the opposite of the bubblebloggers. They don’t think Seattle real estate can ever go down. There are actually people out there looking for rentals right now rather than posting on websites.
I feel badly when I correct agents who say real estate always goes up, but really. I’ve even heard consumers say that. Nothing ALWAYS goes up. Why do people say things like that? Do they like kidding themselves?
Well, per the numbers Mack posted here:
http://blog.seattlepi.nwsource.com/realestate/archives/130120.asp#comments
local real estate has been going up since 1978 (unless it went down in 2007, which depends on which number you look at). Since a lot of people don’t remember what happened 4 months ago, I can see how they’d not remember something that last happened over 30 years ago! But that said, the idea that it simply can’t go down is absurd.
“They’ve convinced too many people that financing is a thing of the past, when it isn’t and rates are at pretty respectable lows.”
Although the interest rate certainly affects affordability, it is my opinion that this matters much less than the “creativity” of the loan. The interest rates are currently only really low when you look at boring old FRM. Before last August, these were not the loans that made Seattle homes affordable for most people. You had zero-down, IO, neg-am, ARM, etc. The payment on those products was much less than the payment on a 30 year fixed today, even when the 30 year fixed is at 5.5%.
Therefore, I would suggest that mortgages today are *less* affordable to most people than they were before last August, even when rates generally were a bit higher.
Just a theory..
Kary,
Not true. I have done the stats on that and know that is not the case. Nothing dramatic that hit the papers, but it has not been a staight uphill climb in the Seattle Area since 1978.
SPB,
You are quite correct that the market was fueled with loans at much higher rates, and lots of interest only, than the quoted rates of the day, both then and now. Looking back I’d say that those with money down and traditional financing would have been the ones to have bought anyway, regardless. Those who used exotics would not likely have decided to purchase at all had the exotics not enticed them in that direction.
While I myself used “exotics”, I do recall the day of my divorce back in 2001 or 2002, someone tempting me to purchase property with a 1.5% start rate and stated income when I had no idea of my earning prospects as a single Mom with three teenage girls wreaking havoc day and and day out. I declined and they thought I was “stupid”. I didn’t think it was a fair promise to the lender. There are never guarantees when you are in sales, but I just didn’t think it was a fair promise to the lender at that point.
Yes, I would have made a lot of money had I bought then, but the ends don’t justify the means in my book. My time was better spent at that time helping the girls with the fallout from the divorce best I could, and being there for them. I had to choose between being devoted to my children or a house payment. I chose my children until they were older and am now playing catchup. But I wouldn’t change a thing whether I make it or not.
I made the right choice and the girls learned priorities, and who had their back.
Sorry, it’s early and I’m missing my girls. Can you tell? 🙂
Ardell, I think there were monthly declines, but nothing YOY using December numbers.
And no it wasn’t straight up, there were flat spots.
SeattleProspectiveBuyer, I’m sure that’s part of it too. Personally though I don’t understand those who used those programs the last several years–but then I’m more of a long term buyer (I hate to move) and I remember the rates of the early 80s, so variable rates scare me.
There were also down spots. Seem to me that was in the early eighties if memory serves me. And flat “spots” is an understatement.
Remember my bad attempt at a “price histogram”?
http://www.raincityguide.com/2008/01/08/bellevue-manor-price-histogram/
Those are actual ups and downs apples to apples. and that’s directly across the street from Microsoft…a “better if not best” market segment.
“I remember the rates of the early 80s, so variable rates scare me.”
LOL Kary,
Reminds me of my Aunt Reba who “remembered” the depression. She was still washing and re-using her tin foil into the 1970’s.
P.S. the big difference between us and the rest of the Country, and CA specifically, is the period from 1998 through 2005 in that price histogram. Most had a huge upswing from 1998, that Seattle Area did not. That’s why we didn’t have the same correction period. 7 UP – 3-5 down – Greenspan’s philosophy, didn’t apply here because we didn’t go straight up from 1998 through 2005.
Kary –
You have to remember that unless appreciation beat inflation in those years by some meaningful amount then prices decreased. As to the loans, most of those people should not have been buying a house at all in the first place. I know this is the case here in California, they were selling $800k homes to migrant workers (one story in the paper) or Quiznos workers (another story). This kind of insane lending is why the bubble occurred everywhere, people who could actually affording an $800k house had to outbid someone who worked at Quiznos. The same is true up in Seattle, people who could actually affording a $400k house were having to compete with people who could actually affording a $150k house but had a $400k loan.
b, yes that’s true, but you’d have done better holding real estate than cash during those years. And you’ve have done really well holding real estate that was encumbered. During periods of inflation it’s good to owe money, because you pay it back with money that’s worth less.
Ardell, as to the variable rate thing, I don’t know when the differential lessened, but the difference between a variable and fixed is so small it’s not worth any risk at this point, IMHO.
Kary,
Wasn’t a comment about variable vs. fixed. Just reminded me of Aunt Reba for some reason. I have the same reaction to REITS.
“P.S. the big difference between us and the rest of the Country, and CA specifically, is the period from 1998 through 2005 in that price histogram. Most had a huge upswing from 1998, that Seattle Area did not?” -Ardell
Seattle yearly appreciation 97-05 from the S&P C-S Index.
97 11.31%
98 10.10%
99 9.16%
00 6.79%
01 4.54%
02 4.12%
03 7.06%
04 11.44%
05 18.46%
Seattle was one of the top performing housing markets in the country in the late 90’s, and also in 04 and 05. In no year did prices gain at a rate less than inflation. It wasn’t a one year boom. At the peak in July of 07 prices were 2.57 times higher than they were in January 97.
Seattle’s 00, 01, 02, 03, and 04 is MINISCULE compared to the markets that are being hit the hardest, such as San Diego, L.A. Beaches amd Miami. Markets more than doubled and some tripled from 1998 through the end of 2005.
Be bored, be dumb, be whatever you like. I stand by my stats and statements. Seattle did not see the same appreciation levels from 1998 through 2005 that the areas who started getting hit in 2005 (when we were appreciating at full steam) experienced.
I know from personal experience. A Property I bought in 2001 for $545,000 in Manhattan Beach sold for $1.3 million without a kitchen or bath or any remodel of any kind by 2006. It went from $390,000 in 1999 to $1.3 million in 2006.
Makes that 4.14% to 4.54% look pretty damned week regardless of all that “keeping up with inflation” mumbo jumbo.
Put 714 Manhattan Beach Blvd. into a 10 year history on Zillow if you doubt me. If you doubt me as to it’s improvements…I owned it so I know it was in original condition since 1991 at the time it sold for $1.3 million.
Greenspan hit it right on the head when he said 1998 to 2005, seven year upswing, equals a 3-5 year correction period. Those that had the highest upswing during that period, experienced the declines exactly when Greenspan said they would.
Bored – if you apply your Seattle statistics to that same property starting at $390,000 it would be worth $857,110 rather than the $1,300,000 value. Do the math. Seattle did not appreciate anywhere near the level from 98 through 05 of areas experiencing the correction since 2005. The correction is only back to $1,250,000 according to Zillow and $1,100,000 according to my calculations. Not turning around yet 2 years into the 3-5 year correction phase. I think it will hit $990.000 before it turns back up.
I think it’s great that everyone is watching the market, just don’t mis-report it to some private agenda.
“I think it’s great that everyone is watching the market, just don’t mis-report it to some private agenda.”
Irony alert!
For clarification purposes Ardell, what did you even mean to imply by your statement? I can only think of two things..
A) Seattle was late to the appreciation party and therefore is late to the correction party.
B) Seattle did not experience the same level of appreciation and therefore will not experience the same level of correction.
“Markets more than doubled and some tripled from 1998 through the end of 2005.
I believe the graphs on this site are accurate (and please if anyone knows they’re not, please let me know):
http://mysite.verizon.net/vodkajim/housingbubble/
Using the links at the bottom you can compare various cities. Compare Phoenix, San Diego, Las Vegas and Miami to Seattle and you’ll see a bit of a difference.
Oooh two more.
Home prices in Vegas and Phoenix from 1/90 to 11/07 as compared to Seattle.
Seattle 3.21x
Phoenix 2.92x
Las Vegas 2.68x
Those graphs appear to be accurate though they haven’t been updated since early spring.
Hi Bored,
Can you tell me why you’re going back to 1990? Your quote of mine specified a period from 1998. If you have to change the criteria to be “correct” by adding eight more years to the equation, I guess that makes me correct.
Your Greenspan quotes from 2006 are obviously not what I am referring to regarding his prediction of what would happen, and did happen, in most of the Country beginning in 2005. He made that prediction prior to 2005. My recollection is that is came out as an advisory to appraisers in 2004 to be wary of over-appraising property given a correction was likely coming. Unfortunately they did not heed his advices.
My comparison has to be accurate, because I used YOUR numbers for Seattle for 1998 to 2005 without questioning them.
Compare San Diego or most of Southern CA for 2005 and 2006 and 2007 and you will see the “point” of my original statement and why Seattle didn’t go the way of Southern California at that time.
Kary,
Yes, that data does prove out my statement and thank you. I have to reconfigure the data as the graphs have different dollar amounts on the axis. I’ll try to convert them into one graph for all cities with different colored lines for the various markets, even if I have to draw it 🙂
Bored, 1990 to 2007 is practically irrelevant. Too many things can change over that amount of time. It’s the large gains over 4 years are so that are problematic.
Also, I’m not familiar at all with LV (I haven’t been there since I was about 10), but Phoenix has a lot more land to develop. It’s a huge city that doesn’t have a huge feel because it’s so open. Seattle, in contrast, with all of its water is more constrained as to growth. Adding 100,000 people to Seattle will raise prices a lot more than adding 100,000 people to Phoenix (and that’s been true since before 1990).
Also, you have to look at the jobs created. Seattle since 1990 has had jobs create by Microsoft, Amazon, Starbucks and countless other successful companies. In contrast, DHL moved some operations to Phoenix because labor is cheap there, and you mail off rebate requests to Phoenix. I really doubt the people opening those envelopes are in the home buying mode. I also really doubt that I’ll ever receive a check on the rebate I just sent in to Staples. 😀
Ardell, maybe you could contact the owner of the site and get them to graph the cities on one graph. It probably wouldn’t be that tough for them (although it would be better if they would do it with just nominal data for each city–the inflation adjusted on the same graph would make the graph too difficult to read).
Kary,
According to Greenspan, the longest sustained upswing in history is 7-8 years followed by a 3-5 year correction phase. He predicted the downturn of 2005 in 2004 for markets that started up significantly in 1998. We weren’t one of them.
I want to isolate the years starting at the upswing to see which followed that pattern. It isn’t so much how much they went up as how many years in succession they went up.
Ardell, please reply to post 30. Also, please supply a link to where your Greenspan quote comes from, I don’t completely doubt it exists, but would like to read it in context for my own amusement and thus far my search has come up empty.
In regards to my choice of 1990 to 2007, I chose it because it’s the -widest- range of reliable data available, no cherry picking possible. And your choice of 98-05 was made because?
You’ll also notice that I pointed out that between 98-05 Seattle prices appreciated 2.5 percentage points less than ‘doubling’ (C-S Data), an appreciation rate which you implied in your original ‘statement’ as inconsequential compared to other markets, which is at best, is disingenuous. Read every statement I wrote, I never argued that California markets appreciated less during the arbitrary time period you selected, which I might note according to Kary is too long by four years and therefore “practically irrelevant”. (Thanks KLK!)
I think it’s great that everyone is watching the market, just don’t mis-report it to some private agenda.
Bored,
I read it in 2004, and not on the internet. I read it as a quote in an appraisal advisory.
If you look at the data for Seattle in Kary’s link by Downloading the data that formulated the graphs, you will see that 1990 through 1998 was not a sustained upswing pretty much anywhere, including Seattle. Many ups and downs during that period. It simply does not apply. It’s like wanting to talk about the times of double digit interests rates or the Great Depression. Great topics, but simply not what I was referring to in the first place.
Seattle simply has not had the same appreciation history as the cities that turned down in 2006. Not sure why you want to argue that point, since it’s obviously true. The entire Country has noticed that Seattle was in fact different. I thought the rationale for why would be of interest and not sure why you want to make a Federal Case of it when it is so obviously correct.
As to your 30, it’s A.
Bored wrote: “In regards to my choice of 1990 to 2007, I chose it because it’s the -widest- range of reliable data available, no cherry picking possible. And your choice of 98-05 was made because?
You’ll also notice that I pointed out that between 98-05 Seattle prices appreciated 2.5 percentage points less than ‘doubling’ (C-S Data), an appreciation rate which you implied in your original ’statement’ as inconsequential compared to other markets, which is at best, is disingenuous.”
Bored, I think you’re confusing Ardell and myself. I’m not sure I ever made a reference to 1998. For future reference, Ardell has a lot more hair than me (you’ll have to see my picture on the P-I blog to understand that if it’s not obvious).
As to 98-05, a 100% appreciation rate would be under 10%, which is the level that causes me mild concern. To be clear, under 10% is okay (especially when you factor in inflation), between 10-15% causes concern, and over 15% is a danger signal. I think I’ve indicated such beliefs for many months either here or on the P-I blog.
My hope is that the fixes to help the cities that did turn down after 2005 will likewise support our market, even though we didn’t need the same fixes to the same degree. That could prevent our experiencing any major consequences at all.
I will assume you are one of those who wants to see home prices drop to $.30 on the dollar. I’m just not with you on that. Only very small minded people would wish Armegeddon to befall everyone, so that they can benefit from such an event. It’s like wishing all the hot guys would die of the plague so you can get a shot at a hot woman 🙂
I often disagree with Ardell, and for #30 I’d say B.
Ardell wrote: “It’s like wishing all the hot guys would die of the plague so you can get a shot at a hot woman.”
You think small Ardell. If you’re going to think along those lines, think last guy on earth! 😀
Ardell wrote: “Seattle simply has not had the same appreciation history as the cities that turned down in 2006. Not sure why you want to argue that point, since it’s obviously true. The entire Country has noticed that Seattle was in fact different. I thought the rationale for why would be of interest and not sure why you want to make a Federal Case of it when it is so obviously correct.”
More to the point, Seattle hasn’t had the wild swings that other cities have had–both up and down.
Trying to claim real estate is national is absurd. As I posted somewhere here, I think the next NWMLS numbers will show that real estate prices aren’t even county wide! Specifically, I think Auburn and Federal Way will show huge drops, and parts of the Eastside will show significant increase (median prices YOY–but volume will be down in almost every area).
Kary,
If and when we have a sustained upswing for as long a period of time, we would not necessarily be immune to economic principles.
I agree with your last paragraph in the post above mine on all counts.
What’s wrong with the paragraph above it? 😉
Carrying the second paragraph further, there isn’t even a single market within the city limits of Seattle. There isn’t even a single market within the NWMLS areas that are within Seattle.
Kary,
I would say finding a condo for David in May of 2005 at $100,000 and being able to sell it for him today for $200,000 is a “wild swing” for sure. I’d say finding that 4 plex in Ballard in 2004 for Jerrle for $590,000 and selling for him last summer for $855,000, was a pretty wild swing. I’d say finding that condo for Travis for $130,000 in summer of 2004 and selling it for him for $207,500 in summer of 2006 was a pretty wild swing.
I can see these wild swings in the properties my clients buy and sell. So I can’t agree that Seattle has no wild swing activity. None of these were flips with money invested into the properties to any degree. Just market valuation swings.
I realize that my clients do not necessarily represent “a market” and each of these is in a completely different area. But clearly had they lost as much as they gained, it would be major news. Luckily that didn’t happen, but one would have to guess that if they could gain as much as they did, they could also have lost as much as they did…no?
Actually, I’d say the condo market locally has been subject to gains at rates high enough to cause concern. I was addressing SFR before. They are two different markets. I really hate it when the papers use the stats that mix SFR and condo together. That really doesn’t tell you much.
At the second half of 2006, Snohomish condos were perhaps the hottest thing around here. The end of 2007, possibly one of the worst. But overall condos in this area have held up surprisingly well, despite the strong gains, which is why I don’t try to predict where things will head.
And multi-family–the valuations those are crazy (although perhaps not at the 4-plex level). If you owned an apartment house, it was a potential condo conversion not matter where it was located or what it looked like. And it gets priced accordingly.
Kary,
Thanks for pointing that out. The first example I gave was a one bedroom condo. The second a townhome in bellevue that is technically SFR but operates like a condo. The 4-plex sold at lot value and was torn down for new townhomes.
I’ll have to check SFH examples, though none come to mind so doubt there are major swing stories. Great Observation!!! You’ve got my brain turning…not that it ever stops. Turning in a different direction may be more appropriate. Things that make you go hmmmmmmmmm…
One way to look at this is if a market goes up fast, it means it’s more volatile. If a market if more volatile, it can go down fast too–that’s what being volatile means.