Sunday Night Stats – Where's the market heading?

Tonight I want to get an idea of where the market is heading as we go into July, as to prices.  I’m going to bulk together some Zip Codes that I personally follow, to have a large enough area to be meaningful, and yet zero in on local at the same time.

I’m getting the data as I am typing, so I have no idea how the numbers will fall.  We’ll find out together.

First Group: 98033, 98052, 98004, 98005, 98007 and 98008 on a combined basis.

Residential:

In January of 2008: median Asking Price of homes sold was $652,450 and the median Sold Price of those same homes was $625,000.  Median days on market of those sold homes was 68 days and 27.66% sold in 30 days or less.  Median Price Per Square Foot = $267.66

Lets jump to May 2008 and see where the market went by that time from the beginning of the year.  Median Asking Price $643,500.  Median Sold Price $630,000.  Median Days on Market 41 and 38.28% sold in 30 days or less.  Median Price Per Square Foot = $272.72

June 2008: median Asking Price $710,000.  median sold price $690,000. Median days on market 61 and 33.58% sold in 30 days or less.  Median Price Per Square Foot = $277.10

July month to date: Median Asking Price $650,000.  median sold price $639,000.  Median days on market 50 and 30.92% sold in 30 days or less.  Median Price Per Square Foot = $253.57.  Median type of house was a 4 bedroom 2 1/2 bath 2,520 sf home.

Some pretty large homes are in escrow with the median square footage of all homes in escrow at 2,660 and a medain price per square foot of $262.20.  Of course that $262.20 is asking price and not sold price, so prices are trending down from July 1 to present.

Let’s compare that to June of 2007: Median Asking Price $699,000.  Median Sold Price $685,000.  Median days on market 21 and 61.09% of homes sold in 30 days or less.  Median Price Per Square Foot = $292.73.  Median type of house was a 4 bedroom 2 1/2 bath 2,340 sf home.

Interesting July stats so far.  The size of home is larger, the price is lower.  More home for less money as I said last week.  Very Interesting.  But the numbers are so different from May and June. Fewer houses sold quickly.  This data is worth tracking week to week, especially as we head into fall.

Second Group Seattle 98115 and 98103 on a combined basis excluding townhomes (townhomes on Eastside automatically not included for the most part, as on The Eastside townhomes are condos and not residential). Trying to keep this apples to apples.

In January of 2008: median Asking Price of homes sold was $540,000 and the median Sold Price of those same homes was $522,500  Median days on market of those sold homes was 51 days and 29.57% sold in 30 days or less.  Median Price Per Square Foot = $253.64

Lets jump to May 2008 and see where the market went by that time from the beginning of the year.  Median Asking Price $595,000.  Median Sold Price $580,000.  Median Days on Market 20 and 61.97% sold in 30 days or less.  Median Price Per Square Foot = $277.51

June 2008: median Asking Price $550,000.  median sold price $546,000. Median days on market 29 and 54,02% sold in 30 days or less.  Median Price Per Square Foot = $265.04

July month to date: Median Asking Price $567,450.  median sold price $553,450.  Median days on market 23 and 56.90% sold in 30 days or less.  Median Price Per Square Foot = $261.67.  Median type of house was a 3 bedroom 1 3/4 bath 2,115 sf home.

Let’s compare that to June of 2007: Median Asking Price $567,000.  Median Sold Price $569,500.  Median days on market 13 and 75.93% of homes sold in 30 days or less.  Median Price Per Square Foot = $273.79.  Median type of house was a 3 bedroom 1 3/4 bath 2,080 sf home.

The median asking price of all pending sales is $535,000 and the median square footage is 2,085.  Looks like better “deals” are in escrow as we speak at $256.59 MPPSF as to ASKING prices with that number to be pared down further as to sold prices.

Stats not compiled or published by NWMLS. (Required disclosure)


Unless someone asks for the regular weekly King County Stats, I’ll post them over on my blog tomorrow.  It’s been a long, back-breaking day for me.  I was more interested in finding out where the market was heading, than posting overall King County since last Sunday.  But I will post them on my blog tomorrow for the benefit of those who have been charting them on Excel Spreadsheets.

Goodnight!

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You can find the regular weekly stats here.

142 thoughts on “Sunday Night Stats – Where's the market heading?

  1. Ardell, I did a piece over in P-I land warning the July didn’t look like it was shaping up too well.

    http://blog.seattlepi.nwsource.com/realestate/archives/144455.asp

    I didn’t give too many specifics other than noting that for King County SFR we might give up all the gains of the last three months, and noting that new construction prices seemed to be softening compared to older houses. But then I remembered your piece dealing with pendings, and went back and looked at those, and it was the reverse. New was holding up better than older.

    I was going to wait for the official number to come out to do more, because I suspect we’re going to have great differences in the different areas. Your materials above would seem to indicate that is likely. But there are also other possible explanations, and some possibilities won’t show up in the stats. For example, perhaps the last three months has encouraged investor types, and they’re picking up the cheaper older properties.

  2. Good Morning, Kary. I’m going to do the regular King County Stats as an edit to this post while having my morning coffee. I’ll come over and read your post as soon as I’m done. Maybe even comment 🙂

    I can tell you that one of my “cheaper older” property listings went pending a few days ago.Bellevue. Ardmore. MPPSF in the range noted in my post.

  3. Kary,

    I tried to leave a comment, but I guess I’m not “a registered user” of the PI blog. One thing I did notice when doing the weekly stats this morning is that last week almost double the amount closed as this week. I don’t think that is a normal monthly progression. Looks like agents wrote closing dates that might have been end of June into mid July because of the 4th of July holiday. So June may be understated and July overstated. but that could be typical for June/July stats YOY.

    Another note, one of my Short Sale in Escrow properties (I had the buyer not the seller) fell out of escrow. The owner filed for bankruptcy and that tied up the property. That lends support to my previous theory that that the VERY LOW MPPSF of properties in escrow in King County contains Short Sales that won’t close. Those numbers won’t become real until they contain more REOs than Short Sales.

  4. I keep forgetting about short sales because I refuse to be involved with them. It’s part of my buyer’s agency agreement now.

    As to your short sale, if you want to email me some facts I can look at it for you to see if the deal can be put back together. If it’s a Chapter 13 (or 11) it would probably be easier to do the sale inside bankruptcy than outside. If it’s a Chapter 7 a simple motion should free it from the bankruptcy if both parties still want to proceed. You’ll still need bank approval in Chapter 7, however. But if you are going to try to put it back together, I’d highly recommend form 22 NFW.

  5. Kary,

    Even if you don’t personally do short sales, you can’t “keep forgetting about short sales” as they will impact the market generally. Your clients can be affected by them, even if you don’t personally do them.

    I talked to everyone about “carving the property out”, but the property was no great shakes…the buyer is an investor who wasn’t upset that it wasn’t proceeding, the attorney for the seller said “she’s not getting any money out of it”. The attorney’s comment sounded more like HE might not be getting any money out of it.

    The only way we would have proceeded was if the attorney for the seller saw a benefit to the seller in doing so, and he didn’t seem to give a RA.

  6. By forget about short sales I mean them being a component of pendings. But really, I do have to wonder why people bother. It would have to be a really good bargain to make it worthwhile, and if it’s too good of a bargain a bank in theory wouldn’t okay it. Alternatively, it cold be a rather special piece of property. But short sales are sort of like contingent sales, which aren’t too acceptable in many markets. Contingent sales aren’t acceptable in strong markets (or really weak markets). Short sales aren’t too acceptable in markets where there’s a ton of other inventory.

    I’m not so sure short sale affect the market that much, but when they turn into foreclosures they sure can.

    As to the bankruptcy, it sounds like it’s most likely a Ch 7, and if so, if the debtor isn’t getting anything it would be hard to justify the expense of doing the necessary motions. The right to live in the house the next few months might be more valuable to the debtor than getting the sale done.

  7. 1) The debtor didn’t live in the house and it was never the seller’s principal residence.

    2) The lot was potentially sub-dividable, which made it “a really good bargain” as two lots.

    3) The more short sales there are that don’t close, the more foreclosures there will be. I speak to people in other markets that have fallen greatly. Watching and paying attention to short sales is a way to get in front of what is coming next…for our clients.

  8. I agree that failed short sales will result in foreclosures. The distressed property law will result in even more foreclosures. Between the banks and the legislature, the market has some rather huge enemies. But my subjecting any of my clients to those situations won’t make a dime’s worth of difference. It’s just something we’re going to have to live with.

    BTW, we may get relief from the distressed property law next year. It would be nice if the legislature would tackle the short sale issue too, but I’m not sure whether they have any power over national banks. But it would be nice if a bank sitting on a short sale offer for over 7 days was a consumer protection act violation, etc.

  9. Hmmm…do I bother.

    Kary,

    The bank doesn’t “sit on an offer” they are not the seller. The seller and buyer agree to buy and sell, not the bank. The buyer acknowledges that the “payoff will be short” of what is owed and the seller may not be able to sell. Payoffs are processed as part of escrow. Escrows sometimes don’t close.

    If people and agents would stop thinking the bank is a party in interest who needs to respond in X days…more short sales would close. When short sales DO close, the bank approval is usually the day before closing or only a day or two before closing. Once the payoff is approved…if the buyer and seller have completed all of their “stuff” by then, approval is the LAST thing that happens before a short sale closes.

    It is not the banks who don’t “get it”, it’s everyone else.

  10. Nothing proceeds until the lender consents. You don’t have mutual acceptance until then. Check out Form 22 SS.

    But regardless, when they sit on it for three months, what is gained by anyone? Nothing. Everyone loses. And thus there’s no reason to play the bank’s game. If they want to be incompetent and rude, let them lose. Again, there’s no reason to drag my clients into their mess.

    If a bank announced a “speedy short sale” program, where they promised to be adequately staffed and to have responses in 5 business days, I’d take my clients to see the properties where that bank was at risk losing money. Absent something like that, it’s not worth the risk of wasting my client’s time to get them involved in the bank’s mistake.

  11. “Nothing proceeds until the lender consents. You don’t have mutual acceptance until then. Check out Form 22 SS.”

    Common sense prevails and closes, Kary. Just because the mls wants banks to act “their way” doesn’t make them correct or successful. More and more will fail if they don’t understand the bank’s true position in the sale process.

    Just because agents and agent’s forms make a mess out of it, doesn’t make it the bank’s fault. Time for the industry to let the banks be banks and not sellers…that’s an REO NOT a Short Sale. If it is not a bank owned property you can’t expect it to proceed as if it is, and mls making a “form” doesn’t change that.

    It’s not about banks being “incompetent and rude” it’s about agents trying to push the process beyond the point where it is. If a borrower is not behind on their payments, the process will take much longer.

    Why should a bank agree to a short payoff when there is only one late payment??? THAT is why it could take three months. Many are trying to shove offers of $.70 on the dollar or less down the bank’s throat and then tell the bank to hurry up and bend over. Just because that is easier for the agent, doesn’t make it right. A buyer SHOULD be patient if they are getting a good deal and an agent should not preclude the clients from good deals because the process is a royal pain in the butt.

  12. Ardell, a few months ago I was talking to an agent that had submitted three offers to the bank on her short sale listing. Her client had not made payment for over 6 months. The offers had been in over a month and she wanted to know what the hold up was, so she called the bank. They told her: “You didn’t tell us which offer to consider first!” Idiots!

    But you represented the buyer in your recent situation. Are you telling me that your buyer wasted money doing an inspection rather than wait to see if the bank would accept? Are you telling me that they actually started the loan application process (as opposed to pre-approval), just in case the sale might close within the time allowed by the new lender? That makes no sense. Why should a seller do any of that?

    And the overall premise is rather absurd: It’s not the banks that need to change, it’s everyone else. Well typically when it’s everyone but X that needs to change, it’s really X that needs to change.

    There is no reason banks cannot handle this better, other than the fact that they don’t. And maybe many of them don’t really care because it’s not ultimately them that takes the loss, depending on the type of loan. Perhaps Freddie and Fannie should be processing short sales on their loans, for example. And for those held by investors, maybe a competent entity should be set up to handle short sale negotiations, rather than use the incompetent servicing bank.

    The bottom line is something needs to change, and the change needs to occur on the lender’s side.

  13. Kary,

    Giving a bank three offers is like giving the waitress a watch, a ring and a Canadian penny to pay for your dinner, and then calling her an idiot when she stares at them and walks away.

    You don’t submit “an offer” to a a bank unless the bank is the owner. They don’t care about the offer. They care about the payoff to them. Since the payoff CAN CHANGE during escrow…it ain’t over till the fat lady sings. It’s no different than any other closing, Kary. The lienholders DO NOT look at OFFERS! I don’t care what the “form” created by agents’ attornies says…it don’t make it so. Anyone counseling buyers and sellers that lienholders approve offers is incorrect!

    What if the payoff decreases as a result of the home inspection? You think the bank’s approval means anything up front if the payoff changes by the end?

    In my recent situation there was no inspection and it was a cash offer. In the last one I closed, it was an owner occupant buyer. Everyone “proceeded in good faith”, the lender approved the short payoff the day before closing. It was that approval that released the property to record.

    Giving a bank an offer is like a buyer insisting that a seller approve the offer he submitted on a napkin. Is the seller “an idiot” for not wanting to sign the napkin, Kary?

    “Well typically when it’s everyone but X that needs to change, it’s really X that needs to change.”

    If everyone wants to give the waitress their watch to pay for their dinner instead of money, the waitress does not need to change her desire to want real money. The person who led everyone to believe they could pay with their watch is the one who needs to change. The forms do not match reality.

    The offer is not subject to bank approval. Rather, the seller is not able to convey the property (at the end) without bank approval of the short payoff. The short payoff is never a solid number until very near the end. The price has to be low enough, and the property wanted enough, for the buyer to risk the cost of an inspection and appraisal up front.

    You don’t step into the ring if you are going to jump out crying when you take your first punch.

  14. Leanne,

    It’s a “forced registration” site. It’s not “too hard” to register. It’s like a website that forces you to register to view property. People who support free flow of information do not support “forced registration” sites.

    Most do request an email address to prevent spam, but not a date of birth, zip code, etc…

    It’s like Costco vs. Safeway. They better have something worth registering for that can’t be gotten somewhere else for less.

    I read the post…the only commenters are you, Kary and Mack. That’s what happens when you have “forced registration”.

  15. Kary,

    You never saw a house that said “all offers by X and buyers should have a “pre-inspection” during the hot market? Don’t act like the industry never expected a buyer to shell out for an inspection in order to “maybe” get a property.

    I think my understanding of short sales comes under the category of “it takes one to know one”. I worked in a bank for as long as I’ve sold real estate. 19.6 years at a bank; 18.1 years in real estate.

    Since when do the parties receiving payoffs on ANY real estate transaction look at offers? When the payoff isn’t “short” they don’t see the offer…why should a short sale be any different? The “offer” is of no value to someone looking for a payoff. And FAST RESPONSE being mandatory is a joke. If someone owes you $400,000 and you only want to give them $300,000…how fast are YOU going to bend over?

    Like parents tell their kids all the time…the fast answer is NO!

  16. P.S. Kary…in multiple offers…did you ever see a buyer waive an inspection or do a pre-inspection? Agents and buyers did it every day. The shoe is now on the other foot.

    Why should the bank agree to an unknown payoff? Makes absolutely NO SENSE.

    Seller: Hello Mr. Bank. I owe you $400,000. I want to pay you less than that. Is that OK?

    Bank: How much less?

    Seller: Here’s three offers on the property.

    Bank: How much less?

    Seller: Here’s three offers on the property.

    Bank: How much less?

    Seller: Well, if the first mortgage doesn’t add anything to the costs by starting a foreclosure process and if the buyer agrees to the inspection then maybe it would be $75,000 less.

    Bank: When you know with a degree of absolute certainty HOW MUCH LESS, get back to us.

    That’s how a short sale works…in a nutshell.

  17. Ardell, the bank would be told what the other bank is owed, assuming the listing agent is doing their job. The bank would also be told estimated closing costs. That doesn’t explain why the banks sit on their butts for months not responding. Try again to support the banks’ dealings with short sales.

  18. “This paragraph says a lot. The bank’s attitude to short sales is very old school. You apparently are an alumni of such a school. The banks’ way of thinking (and yours) will hurt them significantly. They (and you) are stuck in the past.”

    A dog is a dog, a cat is a cat and a bank is a bank. It’s not “old school” for a dog not to be a cat and it’s not old school for a bank not to be in the real estate business…not yet anyway 🙂

  19. “You’re kidding, right? They have to see it to know whether they’ll accept it.”

    Wrong…wrong and double wrong. They need to see their payoff…not “an offer”, and that payoff can’t change from the time they approve it to the day of closing. So time of offer is not usually the time for “approval”. They approve an amount recieved…not “an offer”. It’s just a bunch of meaningless paper to them if there are 2 years of condo fees not paid and the first payoff changes and…

    Approval is part of the ESCROW process NOT part of the OFFER process. You need to open escrow and “proceed in good faith” and do your buyer and seller stuff BEFORE final bank approval.

  20. “That doesn’t explain why the banks sit on their butts for months not responding. Try again to support the banks’ dealings with short sales.”

    I wrote a whole post on that, Kary. It’s really quite simple. A lady emailed me a couple of weeks ago about “doing a short sale”. I asked how many payments she was behind. She said NONE. That type of short sale will take months. Why would the bank agree to less in 7 days if she is current on her payments at present???

    Try to understand it from the bank’s side instead of calling the bank employees “idiots”. They are NOT idiots. They really and truly are not.

  21. Part of a short sale involves demonstrating that the owner can’t make payments. Just stopping payments won’t demonstrate that. The situation you describe was one that simply wasn’t a situation where a short sale would be likely (absent committing fraud).

  22. I’m enjoying the discussion, Kary, but have too many balls in the air at the moment to continue. Have a 6 p.m. appointment. I have head of too many short sales that are being “worked” by 3rd parties for WAY below market value. Aren’t the banks better off to foreclose and sell slightly under market value than taking these $.50 on the dollar offers? I saw instructions that also circumvented the BPO to “convince” the bank to take the lower offer. There are many scammers out there and middlemen making tons of money at the bank’s expense. There are also many situations where long is necessary.

    Your 7 day mandatory response comment made no sense to me…from the standpoint of a bank. Was that 7 bank business days or calendar days 🙂

  23. The scammers are a problem. I heard of one service where you list the property through an agent, if it doesn’t sell in two months they’ll buy it but continue to market it, if they can find someone to pay more and the bank approves their sale they pocket the difference. Sounds like bank fraud to be the way it was described.

    But look at it this way. If you want to recover the most you can on property, would you tell your seller to not respond to offers for 3 months? That banks do that means they get less money. And it also means these third party scammers pop up and rip them off even more. If they could just fund the departments dealing with these things they’d make better decisions and bring in more money. In another thread I said they could pay attorneys $300 an hour to make decisions for them, and probably still net more money. That should be their goal. Not setting up a system where there are few buyers and lower prices.

  24. Interesting back and forth.

    I am concluding financing on a purchase of a short sale, and it was certainly hard on everyone’s nerves. It was one of the harder kinds of short sales, with a 1st and 2nd lien holder, different lenders, and both losing a ton of cash.

    We waited 3 months to get BOTH approvals, then had to close in big hurry, because one approval was about to expire.

    I assume the banks have a responsibility to their shareholders to manage the asset, and get as much as they think they can out of it. If that includes sitting on it, hoping for a better offer, than that’s what we should expect. If the bank decides it’s better to continue to get the payments out of the existing owner, then why shouldn’t they?

    I mean, c’mon, if it was you that loaned the money, what would you do? If you owned a piece of the bank, what would you want them to do?

    I would also assume that there had better be a good story about why the current borrower (and seller)cannot continue with the payments (divorce, illness, job loss), for there to be much of a chance of it getting approved.

    The alarming part was in finding out what the lenders REALLY think the property is worth!

    Learned a bunch, glad it’s almost over. Can’t wait for the next one, but I sure won’t count my egg before it hatches 🙂 !

  25. Roger wrote: “I assume the banks have a responsibility to their shareholders to manage the asset, and get as much as they think they can out of it. If that includes sitting on it, hoping for a better offer, than that’s what we should expect. If the bank decides it’s better to continue to get the payments out of the existing owner, then why shouldn’t they?”

    The thing is, the system they use doesn’t get them more, it gets them less. And they aren’t typically collecting payments while the process goes on, so things like taxes and even insurance might be accruing, causing further losses.

    Not having foreclosures is good for everyone, assuming that foreclosure is the likely result absent a short sale, and assuming that the price the bank gets exceeds what they would eventually get if there were a foreclosure. And by being good for everyone, I include the FDIC, Freddie and Fannie.

    BTW, just by coincidence I received a legal brief today that indicated that the states can’t control national banks through the consumer protection act. That’s up to the Controller of the Currency, if the author of the brief is correct.

  26. I don’t really know if stalling short sales gets them more or less money: I assume (perhaps wrongly) that is something that department managers running the bank would monitor closely, and adjust if possible.

    I would also assume, if they are managing their staff and assets properly, that if quickly executing short sales makes more money than any other alternative, they would do so, if possible.

    Maybe it is a ramp-up problem: Sometimes. businesses cannot ramp up production quick enough to maximize opportunity.

    Either way, it’s not something that we (Realtors, loan originators, media pundit wannabees) can control, but it is always better to be forewarned of the difficulties, and plan accordingly.

  27. I think the problem is the banks let go many of their highly skilled (and highly paid) back-office underwriters that you need to work through things like short-sales. The emphasis on AUSs and streamlined, quick turn-around loan approvals that the banks used to cut costs over the last decade or so means that there aren’t many people around at the banks the know their way around a loan file anymore.

    So they stall while the competent few work through these things in ways that should have been done on the front-end before approval, and you see huge backlogs.

  28. Reducing your potential market by 80% reduces prices. As I asked Ardell, would you have a seller sit on an offer for 90 days? Would any real estate firm announce a policy that their agents wouldn’t respond to offers for 90 days? Banks haven’t exactly announced this as a policy, but it’s what people expect, because it’s apparently what often happens. And that reduces their pool of buyers, which reduces price.

    Banks do it the way they do because it doesn’t affect anyone’s pay if they bring in less money and they think they are the ones in power.

  29. Bili, I’m sure staffing is a problem. But the stakes are huge. They could probably easily pick up $10,000 more on each transaction if they were properly staffed. And each employee could probably work several transactions a day.

  30. “I think the problem is the banks let go many of their highly skilled (and highly paid) back-office underwriters that you need to work through things like short-sales.”

    Bili (and Kary),

    A bank is a series of departments with staff and department heads. When a loan is 31 days late, you don’t get anyone with authority involved with “the file”. Johnny-almost-minimum-wage-guy gets to call the 31 days late person. He has no authority to approve a short sale.

    Just because the seller is ready to do a short sale at 31 days late, doesn’t put the file in “the short sale department” at the bank.

    Banks can’t think about foreclosure or short sale until an owner is 3 to 4 months late on their payments. Can you imagine a world where banks were even considering foreclosure of a person’s home at one payment behind? Would you really want that?

    So the person with authority is still there at the bank, they weren’t let go, they just don’t SEE the file until it is late 90 or more days. That is why a short sale that is started when a person isn’t even late yet will take a long time. One payment behind…takes 90 days. 4 payments behind could be quick as “the file” is IN the department with authority to approve short sales.

    Think about it logically and I think you will see why the # of months the seller is behind in their payment factors into how long it will take to complete the short sale. Not all short sales are created equal. Some people want to short sale BEFORE their credit is damaged…not a good strategy and rarely will they be able to pull that off.

  31. Kary,

    How much is owed is not the factor that controls how long a short sale will take. The listing agent knowing how much is owed doesn’t help anything. How many payments behind the seller is, is the key factor.

  32. What the bank will get paid is the key factor. And what they think property is worth. And what they think they’d get if they foreclose (and when they’d get it).

    How many payments they’re behind is practically irrelevant. Their ability to pay is relevant.

  33. You talk about “the bank” like he’s a person. That’s like saying the President can come over for coffee and solve the world’s problems in a few minutes. A bit of a fairytale.

  34. Well if “the bank” can’t have people that make rational decisions for them, then they shouldn’t be doing short sales at all. They should just tell people they’re going to foreclose unless they bring the loan current or pay it off prior to foreclosure.

    Banks do have people that can made decisions. I used to deal with them all the time as an attorney. It’s probably why I don’t want to deal with banks now. Sometimes they have restrictions on what they can do, especially where they are just servicing the loan. I remember one time I had a hard time getting a bank to accept a large payment on a loan that was in default, but that wasn’t enough to bring the loan current. I was going to file the debtor into Chapter 13, and didn’t want to pay a 6% trustee commission on the payment. In that case it was a small bank (currently called Homestreet Bank), and I was able to convince them to take the money. If it had been Bank of America (Seafirst???) that probably would have been impossible.

  35. Kary,

    Banks DO have people who can make rational decisions. It’s just that what is rational from your side of the equation may not be rational from theirs.

    Think of it this way:

    Joe Bank Employee: “Boss, there’s someone on the phone that wants us to take $300,000 as a payoff on a $400,000 loan.

    Boss: “How far are they behind in their payments?

    Joe Bank Employee: “They are 1payment late by 5 days”

    Boss: “Stop wasting my time and get back to work”.

    The biggest thing that people need to get is that the file doesn’t GO to the short sale department…until it is “a sale”. So thinking the bank looks at offers is where everything goes completely sideways.

    How can it possibly be in the “short sale” department if you didn’t open escrow yet and it’s not “a sale” until you get bank approval from the “short sale” department?

    Same with REO. You can’t treat the bank like the owner and contact the REO department, if it is a loan current in payments. Often the REO and Short Sale people are not in the same building…maybe not even in the sme state as the REO and short sale departments.

    It’s like going to Nordstrom’s and trying to buy shoes in the underwear department and acting like the salesman is “an idiot” because he doesn’t have any shoes to sell you.

    Or going to “Macy’s Men’s Store” and trying to buy a dress and saying “idiot store doesn’t have a women’s dress department, what kind of stupid Macy’s is this!”

    I think it’s called “barking up the wrong tree”.

    What really floors me are the agents who will never take a dime less in commission, who freak out when the bank wants to pay THEM less…and then complain when the bank doesn’t take less FASTER.

    I think you know why they didn’t want to take a big payment. They were at “write off” or already “wrote it off” and wanted to be done with that one. Accepting a payment puts them back at square one in the process, and they have to weigh the future duplication of cost of reprocessing back through the system.

    It’s like re-opening an Estate because someone found a small asset to be divided among 23 heirs. Sometimes the rational decision is not to re-open a can of worms.

  36. …it’s like not accepting a partial rent check from a tenant who is always late. Sometimes it’s better to get a new tenant, and proceed with the eviction process, and NOT accept money due them. I’m sure you’ve seen that done by “an idiot landlord” who won’t accept a partial rent check that doesn’t bring the account up to current.

    I’m sure if you look outside of your side of the fence…the decisions may look a bit more rational.

  37. No it’s because it messes with their foreclosure. They don’t want to risk that. Absent an active foreclosure they would accept the payment. I understand the reason for the way they act.

    But a large bank won’t be flexible enough to make a rational decision. They’ll just stick with the standard procedure (assuming you can even locate a real person to talk to with some decision making ability).

  38. I think you meant “Yes, because it messes with their foreclosure” the same way it messes with the eviction.

    Think of it this way, Kary. If middlemen are scraping gobs of money from in between one buyer and another in the short sale process, then the bank left all that money “on the table” in the short sale process with the first buyer. The first buyer is often the middleman who is squeezing the bank and locating “a real person to talk to with some decision making ability.” to sell it for less than the middleman can sell it to the second buyer.

    Banks are clearly getting burned by someone convincing them the place is only worth the short pay offer price of $300,000, and then turning around in a matter of days and re-selling the same house for $400,000 and pocketing the profit. A good reason for banks to take a step back and stop believing anyone about what the house is “really worth”.

  39. I meant–“No, you’re wrong.” The reason they were reluctant to accept the money was that they might have to restart the foreclosure. So I had to convince them of two things. 1. The threat of bankruptcy was more than just a threat. 2. That they were better off taking more than 4 months of payments where the foreclosure process takes 4 months.

    As to the rest of the post, those problems exist only because the banks are so bad at doing short sales. And that probably gets back to the staffing issues. Taking three months to make a decision is a symptom of the problem. It’s not the only symptom, but it does show a serious problem.

  40. Wow Kary, you don’t even agree when we agree! “they might have to restart the foreclosure process” is the same as “we might have to restart the eviction process”.

    Until you agree that taking three months if someone isn’t even late yet is different than taking three months when someone is 5 months behind in payments…we’ll just have to agree to disagree.

    Personally I think banks should let them sell it, but hold on to the judgment against them until it is paid in full. Let them get out from under and reduce their expenses, but keep taking payments against the debt instead of forgiving it entirely.

  41. Getting back to what I wrote in post #1, when I checked again this morning and the median had shot up quite a bit from when I looked last. That’s somewhat unusual, but I guess it’s an unusual month.

    It looks like it will probably be below last month, but not necessarily nearly as low as I thought (Jan-Mar levels).

    But we’ll just have to wait and see.

  42. There’s also one in Covington listed at $312,990 that is showing as sold for $3,425,000.00.

    There is a real sale of just under $9,500,000.00 that is by far the highest sale of the year, that closed in July.

  43. It DID affect the median, Kary. I did the median with and without the $37,500,000.000 error, and the median went back to $440,000 ($4,000 pop up-not “pennies or $100”) which is $12,000 less than June’s median price and $2,300 less than May’s median price. So I don’t know where you are seeing it “shoot up”.

  44. Do you even know how a median is calculated? One transaction only moves the median one transaction. At this point in the month the mid-range transactions are not $4,000 apart. One transaction probably affects the median $0.00 at this point in time, but at most $100.00.

    $1.
    $10.
    $100.

    $10 is the median. $37 is the mean.

    $1.
    $10.
    $10,000,000.

    $10 is the median. $3,333,337 is the mean.

    Your erroneous large transactions would only affect the median at all assuming it was actually a below median transaction reported as an above median transaction. Reporting a $500,000 transaction as $5,000,000 would not affect the median at all, because it’s over the median either way. The median would remain the same.

  45. BTW, I think it moved more than $4,000, but I don’t remember the figure. But that it went up so much simply means a lot of transactions were closing over say $440,000 (your figure). More were closing over that figure than under that figure. They could have all been $440,001 and the result would have been the same.

  46. “Do you even know how a median is calculated?”

    Don’t be silly, Kary. Do you really think I hand calculate the median? I hit the stats button in the mls.

    The numbers changed since yesterday but median is still down from June by $12,000.

    What did you mean by “the median had “shot up”. It looks the same to me. as it was for the last couple of weeks. Did you mean it “shot up” in June?

  47. I meant do you know how to calculate the median? Based on your comments you don’t know what a median is, because the transactions you mentioned would not affect it significantly, as I explained above. I know you don’t tally the 1,200+ transactions yourself and come up with a number. Your comments clearly indicated you’re confusing mean and median.

    When I looked at it back when I did post #1 above, and wrote my piece over in P-I land, it was significantly lower than today (more than $4,000 lower). Specifically I’m talking about July sales of King County SFR.

  48. I’m not confusing mean and median as the mls doesn’t give me a mean. Maybe they are confusing mean and median 🙂

    Many sales will post in the next 10 days, likely adding 10% to the total of home’s sold…so let’s shelve the discussion until then.

    There are always variances between reality and the stats. Lots caused by duplicate postings in two different areas. I can only rely on the variances to be consistently inaccurate over time, to some degree, since I am looking for up and down trends more than statistical accuracy.

    Until the mls requires listings be shown ONLY ONCE…accuracy is not achievable. I would move to using tax records, but it would take too long.

  49. When you hit “statistics” it doesn’t give you a mean? That’s odd because it does for me.

    Right now the unofficial number is $440,000 for the median (which hasn’t changed in a day even though a few sales have been added because there are a lot of sales that closed at $440,000), and $571,436 for the mean. That’s on 1,294 sales entered into the system (for the non-agents, the rules allow agents 3 days to enter their sales.)

  50. Well the $37,500,000 sale has been corrected. The new unofficial, non-guaranteed numbers are median of $400,500, mean of $542,185, and sales 1312. So it went up by $500 after correcting the errors and adding a couple dozen sales.

  51. No it went down by $3,500 after correcting the errors. It was showing as $444,000 before the correction and $400,500 after the correction, but the $500 UP difference from what I stated yesterday is likely due to the many more sales that have posted since yesterday and even since this morning.

    By the time we stop back and forthing on this it will be time for Sunday Night Stats again 🙂

  52. It’s been bouncing around a bit all day (I’ve never looked at it so many times in one day). The highest I saw today was $441,500, and that was after the change of the erroneous listing.

    The numbers I posted above are accurate. It was $440,000 before the correction, and $440,500 after the correction.

    You obviously don’t know what the median is if you think one transaction changing from above to below median is going to change the result by $4,000 on over 1,200 sales.

  53. LOL…the view I use is median and it absolutely said $444,000 before the correction. I should have taken a picture…but then I’m not used to being called a liar, so taking pictures shouldn’t be necessary. I know what I saw, Kary. You are obviously looking at a different time or place. There’s no way to go back a couple of days…so please stop calling me a liar or stupid. I’m not either.

  54. I said it was jumping around. It very well could have been at $444,000 at some point.

    But the point is one transaction moving from above the median to below the median isn’t going to affect the median much, if at all, when there are over 1,200 transactions in the group, and over 100 entered today alone. The number entered today is why it was jumping around so much. This one changing from $37,500,000 to $375,000 didn’t change the median any more than any of the other 100+ transactions today. That’s the nature of medians. It did change the mean more than any of them, however.

  55. Now we can just wait for Sunday Night Stats AND the real numbers for July. I’ve never understood exactly why the real numbers never seem to exactly match the live system. Maybe they’re better at taking out duplicate listings? But sometimes the volume is slightly greater, not slightly less.

  56. Why do you call them the “real” numbers”? Just like a witness who is not available to be cross-examined, numbers that you can not validate and explain are not of value to me. The “real” numbers to me, validate what’s happening on the street. Like the home I recently visited that can’t seem to sell for even $100,000 less than the owner paid 12 months ago. Paid $750,000…just reduced to $650,000, still not sold.

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