King County Home Sales for the last 8 years, the only time July volume was higher than June homes sold was in 2003. That 2008 is lower than 2007 is old news. The good news is that the relationship of sales month to month is following a predictable pattern and a normal relationship.King County Home Prices
King County Home Prices June and July
Same as to prices. Even in the boom years, the relationship of prices from June to July was pretty much the same as it is now. Prices are running slightly above where they were this time of year in 2006.
Both of the above graphs are for King County Residential (not condo). The question isn’t whether or not August will be down, but whether it will be down in a normal relationship to June and July.
The text is centering and I can’t stop it 🙂 Since it’s almost 1 a.m., I will do the regular weekly stats in the morning and post a link here. I was more interested in end of July stats. A few more will trickle in for months, so I’d say July was not a bad month overall.
Stats not compiled or published by NWMLS (required disclosure)
Sorry, was having some formatting problems with that post. Hopefully you can tell from the column relationships that July sales volume and prices are as good as expected, and even slightly better than expected. 2008 is lower than 2007, but the market isn’t going to hell in a handbasket Volume and prices are following a consistent and predictable pattern.
I think we are going to start seeing Inventory decreasing as well. Many are quitting early this year and not waiting for the traditional “Thanksgiving Day Surrender”. I’ll track that in the morning.
I know you’re really into SF pricing, but the mean and median were both higher in July than June for 2006 and 2007 (although one of those was only $50.00 higher). I don’t have the numbers recorded further back than that, and don’t care enough to look them up.
Kary,
In the normal cycle of real estate, people should be trading up to some degree from smaller houses sold in April May to bigger and pricier houses sold in June and July. If you don’t adjust for price per square foot, when someone sells a townhome for $450,000 and buys a single family home in the next month for $650,000, it will look like prices went up.
Median pricing through July would be expected to be up. August and September are usually big months for downsizers, who sell their homes to the trade up buyers and buy something cheaper. But I’ve seen a lot of people looking who can’t buy down until their home (in Woodinville) is sold. I’ve run into at least 4 people in the last 30 days talking about buying down “when their home in Woodinville sells”.
I’m going to run some market breakdowns today.
Ardell –
I can see that June/July sales and pricing are indicative of normal seasonal patterns. Makes sense, and I think your charts show this very well, but I think when I saw “signs of stability” in the title of your post I was anticipating something else. The year over year drops are pretty severe. My (admittedly) small window on the market in 2002 – based on buying a place on Mercer Island – was that things were pretty slow at that time. Your chart shows volumes 1/3 off the pace of that market.
Yes, volume has been way off the pace, but the media has focused more on price.
But in addition, some areas have had volume hold up really well (or do worse than average), at least when compared to 2007 (I have no idea on individual areas compared to 2002). And some have had prices actually increase (or fall more than average) when compared to the peak in 2007. I think a good description would be to say the market it very choppy.
“And some have had prices actually increase…when compared to the peak in 2007.”
I think you need to back up those words with a for instance, Kary.
Hi Deejayoh,
YOY drop is getting very NSS, and this may be the last month you will be able to repeat that same story 12 times. My theory is volume dropped one time, all at once, and then stabilized to normal market fluctuations.
I’m working on a new graph to wrap up what I’ve been saying for many months. Seattle is not a lagging market, the drop is mortgage meltdown oriented, and not a lagging market to what was happening in the rest of the Country prior to that time. The entire Country will suffer from the 2nd leg of the downturn with none escaping it, but we will never experience the first leg of the downturn.
Give me 20 minutes or so to see if my theory holds water.
Mean and median up YOY in July for areas 120, 300, 550 and 710
Mean up YOY in July for area 380, 520, 540 and 715.
You should have questioned the volume claim. Only one area (360) has equal volume to last year, and none exceeded last year (YOY). That’s a first this year, I think. At least I’ve not noticed that.
Ardell wrote: “YOY drop is getting very NSS, and this may be the last month you will be able to repeat that same story 12 times.”
Just think, in less than 4 months the YOY comparison will be to $435,000. We’ve known for a long time that the July comparision of $481,000 would be tough.
Ardell, the mid-month numbers are looking even worse than last month (both volume and price). Is there a hang over from 4th of July typically? Or are all those low pendings starting to finally close? Something else?
“You should have questioned the volume claim.”
I’ve seen pockets and areas that are not down as to volume. Redmond and Bellevue have sections that sell just as well as they did in past history, but prices are not holding.
If Price Per Square Foot is not up, then mean and median is just about higher priced homes selling generally and lower priced ones floundering due to financing issues.
Have you actually seen someone selling a house for more money than they paid for it in 2007 or late 2006, without a substantial remodel?
“Ardell, the mid-month numbers are looking even worse than last month (both volume and price). Is there a hang over from 4th of July typically? Or are all those low pendings starting to finally close? Something else?”
I’m working on a graph comparing current to “typical” to support my claims of stability. The patterms from Novermber 07 to present are fairly typical as to volume.
Markets “anticipate” change. So finding stability as to volume is key to predicting future market conditions. What we experienced was like a plane dropping in altitude at a startling rate, but then leveling off and flying at that altitude. The remaining question is how will that stable but much lower volume affect pricing. That depends on how many sellers can remove their signs and forget about selling, and how many can’t.
If only 3 of 10 houses can sell, if 7 forget about trying to sell, prices can stabilize. If 8 of the 10 still must sell, then they will compete as to price causing repeated and continuing price drops. It really is all in the hands of the sellers at this point. We can’t conjure up more buyers…so the only way for prices to stabilize is to have a more equal number of sellers and buyers. The only way to do that is for more sellers to rent instead of selling or stay instead of moving.
“Ardell, the mid-month numbers are looking even worse than last month (both volume and price). Is there a hang over from 4th of July typically?”
Kary, not sure if you’re talking about pendings or closings. If Pendings, then yes, there is usually a substantial drop in closings from August to September, so August pendings should start dropping. by a pretty substantial rate.
Typically the lowest month for closings is January, and by far the lowest. The month that killed us this year was February. Usually there is a much high volume in February vs. January. Not so in 2008.
Ardell, I was talking about closing. The mid-month numbers are way down again. Until last month I’d not seen that in the past (but I’ve only been looking at mid-month closings since this year, so I don’t know if there’s some odd seasonal factor to them).
As to your claims about SF, I still don’t buy into it, because SF numbers are also affected by the size of the unit sold. The bigger the house, the less per square foot, all other things being equal So there is no number that isn’t affected by the size of the unit sold. That being the case, when means and medians are both up in an area, that is evidence that prices are up.