The charts and graphs will pretty much speak for themselves tonight.
The Median Price Per Square Foot chart above shows medians for each Quarter from 2004 though 2008. You can see the nose dive in prices during the last quarter of 2008. Popped right through 2006 prices into 2005 year end prices. I expect to see prices come up a bit during the higher volume months of 2009, and then trend back down toward year end.
What are “the higher volume months”? See the volume graphs below comparing 2008 with 2002. 2002 was the most stable year, prior to zero down loans coming into fashion in late 2003. There will likely be more late postings for December closings, but the relationship of each piece of the pie is more important than the individual numbers. “stable market” equals larger slices near the bottom of the circle than at the top and a fairly equivalent ratio. We did not have that in 2007, but we did in 2008 and likely will see the same in 2009. 2009 will either be fairly similar to 2008 as to volume, or moving a little closer to 2002 volume. It depends on what happens at the high end of the market.
Current volume is lower than 2002 for two reasons. One – financing is tighter, as 5% down and 10% down was much easier to get in 2002. Two – financing jumbo loans is very difficult right now, and in 2002 only 412 homes sold for over a million dollars. In 2008 there are 2,338 homes asking more than a million dollars, of which 942 sold, 79 are pending and 1,317 are for sale as of tonight.
If we do see 4.5% interest rates, I expect many who can, will buy. But that won’t help the high end as too many people just don’t have the downpayments the lenders are looking for. The year ended up pretty much where I predicted it at $400,000 as to median price, give or take fifty bucks. Volume was a little lower at 15,700 vs. my prediction of 16,500.
Enjoy the graphs…they speak volumes.
Statistics calculated by ARDELL and not compiled or posted by NWMLS (required disclosure)
Houses are now cheaper than they were when I moved to the area.
Hmm, using my uber-economic skills and a ruler for a straight-edge, extrapolating the current trend, it looks like we could be seeing MPPSF under $170 by late spring. And while prices may stabilize during the spring selling season, here’s another possibility: Understanding that the economy is heading for tough times, and not wanting to miss this “last good” opportunity to sell, a flood of new inventory comes to market at steeply discounted prices. We’ve got a bit of a breather here while everyone waits to see what the new administration brings. Once the reality of how ineffective any stimulus will be sets in, sellers will be rushing for the doors and discounting heavily.
The biggest story of 2009 won’t be the second wave of Alt-A defaults. It will be the upper middle class dragging prices. The highest prices will still attract people with money, though not enough of them. The lowest prices will attract people who can use an FHA loan and/or people with 20% down jumping at close to 4.5% interest rates.
It is the middle area that will still be in jumbo loan territory, even with 20% down, that will be the crisis sector of the 2009 real estate market.
The spread between conforming and jumbo rates is far too great. The number of lenders willing to give jumbo loans at any rate are too few. The number of lenders willing to fund a jumbo loan without more than 20% down is higher than people realize.
Truth is, the median price trending down is not so much about home prices going down, as it is about homes in higher prices not selling at all. Prices are down…no question, but the scary numbers are in the vacant properties in jumbo loan territory, with no relief in sight.
Just got off the phone with a reporter, trying to relate what I’m saying here as to the high end, to Seattle specifically. I don’t see Seattle proper being as heavily hit due to the jumbo loan markets, given many if not most homes that fall into that price range are currently occupied. The impact there being more about people who are losing their jobs and leaving the area altogether.
There won’t be enough concentration of those, all in one place, to directly impact prices in Seattle as much as there will be in other areas with more newer construction in the single family home markets. Condos…yes. SFH…not so much. Harder hit will be Kirkland and Bellevue, in that order. Redmond…not so much.
Hi Ardell,
Very succinct and on-target analysis! I appreciate the fact that you’re looking at median price PER SQUARE FOOT instead of using the short-cut and often mis-used median price.
My own analysis to wrap-up the 2008 market, looking forward to 2009, primarily focuses on Bellevue.
All homes over about $750K have been hit the hardest – the vast majority of listings in this segment are substantially overpriced. Since many of these homes exceed $400 per square foot, the median home is a smaller home than it was a few months ago.
After adjusting for the fact that the median home in December was smaller and less luxurious than the median home in January, there is a strong correlation between declining value and price point. For instance, homes under about $500K have experienced an approximate 10% reduction, where properties over $1M have likely seen 20% + reductions in the same period.
While the Median Price per Square Foot is certainly a better index than the Median Price index oft-quoted by the NWMLS and media outlets, neither index tells the whole story.
Thanks again!
Greg,
“the whole story” doesn’t fit into a blog post LOL! The real question is will the lower end benefit by the cram down of pricing at higher levels. Markets generally expand and contract like an accordion, and all market segments will be impacted based on the pressure from the two ends.
I have a question about comps. I was talking to my brother last night and he suggested the following pricing strategy was appropriate.
There are a few condos for sale in the complex where I rent. They are ranging in price from around $250/sqft to $300/sqft. Sales over the past year range from $200/sqft to $300/sqft. He suggested I take the $200/sqft price, knock 10% off for the price drops since that sale, and multiply it by the square feet for the houses on the market to get a price I should offer (if we were interested in buying — which we really aren’t).
Although that price is about 30% less than what the cheapest unit is asking. I don’t see a seller even considering an offer 30% below asking.
Thoughts?
Ardell wrote: “Current volume is lower than 2002 for two reasons. One – financing is tighter, as 5% down and 10% down was much easier to get in 2002. Two – financing jumbo loans is very difficult right now, and in 2002 only 412 homes sold for over a million dollars. ”
Those might be two of the reasons, but there are many others. I think the biggest is people really feel uncertain about the future of the economy. We’re going through what can only be described as a major economic event.
Even if you put the two financing things together they wouldn’t be number one, because that would mean over 50% of the people who would otherwise want to buy couldn’t get financing. Financing is tougher than it was, but not that much tougher than it was.
One other thing. I think there’s somewhat of a multiplier effect on sales. One sale is likely to generate another sale, especially in this market where people may prefer to sell before they buy. So every sale that doesn’t occur for some other reason may mean another sale or sales do not occur.
Alan, you can’t only look at price per square foot. Larger units naturally sell for less per square foot, so you’d have to look only at units of almost the same size to do that.
A seller being willing to go down depends on individual factors, such as how much they paid, how much they owe, how long they’ve been trying to sell, whether they still live there, their financial situation otherwise, and others. Given the right set of circumstances they might come down over 30% off of what they’re asking, but that might be dependent in part on their asking too much in the first place. If they were over priced by 30% that wouldn’t mean a thing.
Alan,
Do any of the units have view considerations or lowest level partially underground? I need to know if high and low have significant pluses or minuses. Are they all pretty much “like kind” as to postives and negatives?
If you email me which building it is, I can give you a list of those likely to be underwater and/or those who have enough equity to go that low, whether they are for sale or not.
The approach in your situation would not be to wait for somthing to be for sale, it would be to target all owners in the building who have the potential to sell at that price, and send them a letter of intent to purchase. You may flush out the one who will do that…even though they may be aghast today…your letter will likely hang around until the day they may to consider you as an option.
Just shoot me the particulars and I’ll give you the odds of it happening along with a strategy to push things in the right direction.
P.S.
Alan, the one time I did this for someone at fifty cents on the dollar, I renewed the offer every 30 days for nine months. The property never hit the open market, it was never listed for sale.
Kary,
You have your head in the sand as to financing difficulties…you have had your head in the sand for so long in that regard, I am surprised you are still breathing.
Jumbo loan factors will be the significant factor for the market in 2009…perhaps not where you live and work…but overall it will have a significant impact.
Kary,
Look at the volume graphs again. The spread is not 50%. The only missing portion from 2002 to 2008 into 2009 is about financing.
Now if I were comparing 2005 or 2006 volume to 2008 and 2009…you would be correct…but not comparing 2002 to 2008 going forward.
The two financing issues I have named would push volume from 2008 levels to the 2002 level. Hoping for anything beyond that is just daydreaming.
Ardell wrote: “You have your head in the sand as to financing difficulties…you have had your head in the sand for so long in that regard, I am surprised you are still breathing.”
LOL. Where do you get your information? The newspaper the same as average consumer? That’s the silliest thing you’ve ever come back at me with.
Maybe you should try reading a few of Rhonda’s weekly posts.
Ardell wrote: “The two financing issues I have named would push volume from 2008 levels to the 2002 level. Hoping for anything beyond that is just daydreaming.”
Okay, that’s even worse. The entire market can be explained by two financing considerations. Right.
I’ll agree that jumbos is a major factor, but I still wouldn’t put it in the top two in a list of two.
Ardell wrote: “Look at the volume graphs again. The spread is not 50%. ”
Part of the problem is you’re looking at quarterly stats. Paulson made his comments in September, and thus sales were only partially affected in October. The full effect hit in November and December closings.
Volume (King County SFR)
1319 Oct 08
869 Nov 08
929 Dec 08
Sales took a huge fall based on the latest crisis. Financing has not changed that much since October, 08 (especially for sales closing prior to 12/31/08).
Numbers for prior years
Volume (King County SFR)
1901 Dec 06
1340 Dec 07
929 Dec 08
You only need to go back to 06 to find sales over 100% higher than last month (last month thus being less than 50% of 2006).
Anecdotal evidence is never the best, but it’s true that the half dozen homes for sale on my street are all priced between $700K and $1M. All have been for sale for well over a year. The agents I talk with say they aren’t even generating any traffic despite recent staging and other promotional efforts. About half are now vacant. I keep wondering when the owners will realize it would be cheaper to sell, even at a loss, than to continue to hold them.
Scotsman wrote: “… it’s true that the half dozen homes for sale on my street are all priced between $700K and $1M. All have been for sale for well over a year. The agents I talk with say they aren’t even generating any traffic despite recent staging and other promotional efforts. About half are now vacant. I keep wondering when the owners will realize it would be cheaper to sell, even at a loss, than to continue to hold them.”
Ardell wrote: “It is the middle area that will still be in jumbo loan territory, even with 20% down, that will be the crisis sector of the 2009 real estate market.”
The $600K-$1M range is going to be feeling some mighty pain for a considerable period of time. People have lost an enormous amount of down payment money and qualifying for a jumbo is going to remain difficult. Any buyer can see that supply vastly outstrips qualified demand. Further, purchases in this price range are discretionary – most people can get buy with a less expensive home just fine.
Therefore, in this segment, few buyers will make an offer until they see prices that reflect what the buyer perceives to be the bottom. Therefore, this segment is coming down further.
Sellers in this sector will do well to price aggressively now to avoid the rush for the bottom that we’re going to witness. We’ll see another 10% decline in this segment for 2009, perhaps more. When you consider that a lot of the existing inventory is priced 5-15% high, this is going to be very painful for many sellers.
Greg wrote: “People have lost an enormous amount of down payment money and qualifying for a jumbo is going to remain difficult.”
The bigger problem is the former, especially with what’s happened in the stock market. In that price range 20% was practically a minimum down, not because it was required, but because that’s what people in that price range typically did.
If you have your other wealth decrease by 40% (stock market losses), it’s a bit harder to be able to come up with a 20%+ down payment. It’s even harder to feel like doing that. As you say, a lesser house can suit just fine.
Kary said: “Maybe you should try reading a few of Rhonda’s weekly posts.”
I don’t think jumbos have been included in Rhonda’s posts for quite some time. I think the problem with Jumbo loans is being downplayed…not sure why. I hear plenty about it verbally, but see little in print.
I’m hearing 20% down isn’t good enough for a jumbo loan and sources for jumbo loans are getting fewer and fewer. No I didn’t read it in the paper, Kary, and I’m not sure why not.
Now I’m seeing lenders agree to 20% down, but then coming in 20% short on the appraisal. Is that a way for them to limit their exposure and force a higher downpayment.
There’s a lot going on out there that hasn’t hit the paper…
Ardell said: ‘Now I’m seeing lenders agree to 20% down, but then coming in 20% short on the appraisal. Is that a way for them to limit their exposure and force a higher downpayment.”
Greg said: “Therefore, in this segment, few buyers will make an offer until they see prices that reflect what the buyer perceives to be the bottom. Therefore, this segment is coming down further.”
I’ll go out on a limb here and suggest that regardless of what a buyer and seller agree upon in today’s market, lenders see the market coming down more and want to limit their exposure.
An afterthought…
The consequence of lenders limiting their exposure in this way, if that’s happening, is that it creates a self-fulfilling prophecy. In other words, they become their own worst enemy, but worse, they become OUR worst enemy!
Greg,
Funny you mention that. For many, many years in areas that have had lower appreciation, value growth was curtailed by what the lenders would lend. On the East Coast we often counseled sellers that they couldn’t achieve a lot more than the last sales, because it wouldn’t appraise. That held true, and the only whay a seller could sell for more is if the buyer was willing to cover the difference between sale price and appraised value plus downpayment. The downpayment had to be increased, and the appraisers were strict.
This was during the previous recession when I started in real estate. Then I moved to California and prices were going up fast and everything was appraising. I thought it was “a CA thing”.
As I’ve said many time, the more things change…the more they are back to the way they used to be when I started in real estate. The lenders are running for cover, and I don’t think anyone blames them. They are cutting equity lines for both people and business. They are cautiously providing mortgages on their own terms, without regard to the marketplace.
Yes Greg, I do think the pressures on prices to be lower are all around us, for those who are paying attention. And those pressures are not necessarily coming from the buyers alone.
Greg wrote: “The consequence of lenders limiting their exposure in this way, if that’s happening, is that it creates a self-fulfilling prophecy. In other words, they become their own worst enemy, but worse, they become OUR worst enemy!”
There are a number of instances where they are just that.
The one I go off on all the time is short sales. Their own ineptitude directly reduces the amount of money they receive. It should be criminal (since many loans are government guaranteed).
Another example is pressure on developers to sell. The prices on new construction is forcing down the rest of the market in many areas. At least that one makes some logical sense–because the ultimate lenders on the new construction are not likely to be the ultimate lenders on the other houses in the neighborhood.
The best example ironically is not an example at all! That would be the change from zero down. I’d guess if you looked at the statistics, zero down wasn’t necessarily the best indicator of predicting defaults. It was loose lending standards. The problem was zero down was based largely on 80/20s, and the switch made to 100% loans with PMI was made only after the stuff hit the fan. But I suspect the PMI folks were in no mood to start insuring large quantities of 100% loans in a declining market. That would be like only selling medical insurance to pregnant women, or car insurance during a snow storm. If 100% loans with PMI had been used for the past 5-10 years, then I suspect we’d still have 100% loans with PMI today. But since they weren’t, the PMI entities are not in a position to do that, which leaves us with FHA and 3.5% down.
Ardell wrote: “Yes Greg, I do think the pressures on prices to be lower are all around us, for those who are paying attention. And those pressures are not necessarily coming from the buyers alone.”
No one is saying that they are. But that’s a lot different than saying there are only two problems with the market (two things causing reduced volume) and they’re both related to financing.
You’ve spent a lot of time referencing jumbos, which I’ve admitted is a problem. But you still haven’t supported your other statement that 5 and 10 percent down loans are harder to get than in 2005. That’s somewhat of an ambiguous statement, but 3.5% loans are not that hard to get. $50,000 of income might not get you as high a loan amount, but the loans themselves are not in short supply. To me a loan that is hard to get is just that–hard to get no matter what your situation. I think we’ll see that in commercial, where they don’t have Freddie, Fannie or FHA.
Ardell, check out the sales closed in King County this month so far. Very unusual.
I forget if I mentioned it here, but the pendings fell below the solds again last month, but the month to date stuff is even below that (and very low volume). As I mentioned before, typically more expensive stuff closes at the beginning of the month.
Kary,
One of the reasons I point out these two crucial points that will impact values far and wide, is because the impact of these is not readily apparent. The average seller of a $450,000 home is not looking at the market above them, and not recognizing the downward pressure that can affect them. Even after it happens, they are more likely to say wtf? and not realize how markets outside of their blinder view, impacted them.
As professionals and bloggers, we bring to the table that which is not at the forefront. If there is butter on the table and you pass it along to the other people at the table…well I guess you could call that being of service. But he who brought the cranberry sauce to go with the turkey for the first time…added value.
It’s like Rivertrail. Prices were running in the $450,000 range, and if you only look at Rivertrail you will never, ever find why the prices dropped, given it is and likely always will be a very popular community. Supply and demand is not what caused the prices to recede. It was the prices of the freestanding properties in the next over community coming down toward $450,000, that caused the attached homes to drop.
It’s like the other balls on the pool table all moving while you are concentrating on one. That has no impact on you immediately…but could cause you to lose the game by the time it’s over.
That you downplay the impact of financing woes, will cause you to be blind sided by the outcome. Seeing the handwriting on the wall, and invoking predictive powers by extrapolating the present into it’s likely ultimate consequence, is not your bag. We get that. What I don’t get is why you don’t want it to be my bag.
Sorry…moving into song…”It’s your thing…do what you want to do…I can’t tell you…who to sock it to.” Who sang that?
I feel these two things will have a dramatic impact beyond simply connecting the dots. The ripple effect will be of enormous consequence in Kirkland speciific for sure, and far beyond. You can choose, after the dust settles and the impact has taken place, to pretend that no one could have seen it coming.
I can see the train coming and I can hear the train coming. Now I’m trying to figure out if it’s going to hit a tree and only harm those ON the train, or if it’s going to hit a hospital and cause immense damage to many innocent bystanders, who have already been injured. Will what happens in Kirkland, influence Redmond? Will what happens in Kirkland influence Bellevue? To what extent will what is NOT happening in Issaquah move into South Bellevue?
Markets are interconnected, the issues we discuss here will have far reaching consequences. To downplay the consequence of financing woes that are coming down the pike, more and moreso every day, getting worse vs. better every day, is begging to be blindsided when it reaches tsunami proportions. It is our job to see it…before it gets here.
Ardell: “Will what happens in Kirkland, influence Redmond? Will what happens in Kirkland influence Bellevue? To what extent will what is NOT happening in Issaquah move into South Bellevue?”
For the buyer that only cares about Redmond, they could care less about what happens in Kirkland. I just don’t run across many buyers that are 100% focused on a given market.
For instance, at least 50% of my Issaquah buyers over the years “settled” for Issaquah over Bellevue or Redmond because they wanted a bigger or newer home more than they wanted convenience. For these buyers (and for that matter, other buyers that settle for outlying areas to buy more home,) price and value are absolutely core to the decision process.
There is a herd mentality about pricing based on prevailing list prices in a given area. List prices are meaningless – the spread in sale values between one area an another are almost always consistent, though as the gas prices were headed upward the economics started to favor closer-in locations.
Herd mentality in pricing almost always explains why one area, such as Issaquah now, will tend to soften over other areas. A lot of agents don’t get it, because they tend to focus on neighborhood market data. Sellers generally look at the 2-3 closest homes nearby, and conclude that the their list price should be in the same range. Agents need to help their sellers to understand regional pricing issues as well as local ones.
To wrap up, I had a listing a few years ago in Kennydale. While the surrounding market was moving at a reasonable pace, Kennydale was DEAD. My seller, as usual, wanted to set his price close to the neighboring homes, and after 60 days (back when that was a long time) of that he became more receptive to listening why nothing was selling in Kennydale.
The data was extremely clear-cut. Kennydale pricing was 8-12% high, versus neighboring markets, than historic sales prices had been versus neighboring markets. We dropped the price 10% and it sold in a few weeks. It took a while, but others followed, and eventually the herd moved toward the appropriate pricing level for the market.
What I see is a lot of overpriced inventory – and a strong correlation between active markets and appropriate pricing.
Kary,
I don’t understand why you think month to date activity is “very unusual”. Looks more “as expected” to me.
Greg,
To add to what you said, the value of being able to convince a seller in a timely fashion, of what is coming vs. what’s behind them, is in a down market they get less in 60 days.
“Testing the market” for 60 days in a market that is moving up is of some value. Often the market comes up to meet you. But in a down market…you’re leaving money on the table every time.
Exactly.
I think most sellers realize that time is not on their side in the current market. Sellers need to ask:
“How should I price my home to sell it quickly, but not leave money on the table?”
The discussion invariably leads to the question of “How long will it take to sell my home?” The answers are easy: “Priced to high, you will NEVER sell your home. Priced to market, it will sell within a few months.”
I’m working up an analysis about market times. In this case, I’m looking at time to sell after the final list price is set (either initial list price or last price reduction.) I’m looking at Eastside under $1M. Judging by this data, market times are actually quite brief – the majority sell in less than 30 days, and virtually all sell within 60 days. Those homes toward the longer range of the spectrum average higher price concessions.
Greg,
Still, in a moving market right price is often a moving target, and hard to pinpoint. Testing the market will always be part of what we do. Problem is when we know after 10 days where to go next…but dragging the seller there takes too long…or never happens.
We don’t want to get to right price too early, if that means leaving money on the table. With so few buyers out there, the danger of leaving money on the table is too great with that strategy.
I’m a bit nauseous this morning from emails saying “here’s an article with good news you can USE!” I want to scream “use” to what purpose?…to convince someone of what?
I am so sick of the arm twisitin mentality of the majority in this industry. Putting our heads together to figure out and be the experts, is of so much more value than handing each other scripts and talking points. I’m about fed up. I’m just about totally fed up.
Excellent point about testing the market.
The good news is that for most homes in the area, 30-60 days is ample testing before moving testing the next level. The bad news is that the cost of 30-60 days may exceed the value of the test.
10 to 14 days, Greg…the shorter the better.
Ardell wrote: “I don’t understand why you think month to date activity is “very unusual
Kary,
Of course the median price is lower. The median price is lower because the top half of the market isn’t moving. The MIX changed.
Go back to 2002, after the dot-com crash and 9/11. Median prices were rising, but real prices for the upper half were in retreat, while those under about $600K were just holding steady. Why? The MIX changed. A lot of homes in the $600K to $1.5M range were being sold – at discounts.
At that time, the NWMLS was out beating the drum about our appreciating market, and what was really happening was a lot of dot-com wealth was being sold at a discount. We had a lot of overpriced inventory in those days too, since everyone thought their home had appreciated 10% (due to media hype) when in fact they hadn’t.
Greg, what I’m referring to is the median for 1/1/09 to date. It’s taken a dramatic drop, which is unusual. I don’t recall ever seeing this before, but I might not have checked at the beginning of last year. January might be different.
Typically the intra-month sales figures early in the month are much higher than what they end up being at the end of the month. That’s something Ardell an I discussed a week or two ago.
Kary wrote:
“The prices on new construction is forcing down the rest of the market in many areas.”
it’s not the new construction that is forcing down prices. It’s the new construction that is first forced to lower their prices to what the market accepts due to carrying costs while the existing homes sellers refuse to accept the new reality.
Regarding low median being unusual I’m not the least surprised if it is really low what I am very surprised about was that the median held up so well last year all they way through December since unattractive Jumbo pricing and high downpayment requirements for jumbos can hardly be new for 2009? Anyone care to take a stab at why the median held up so relatively well when home values obviously are dropping as seen by the case shiller data. If the median drops less than Case Shiller it should most likely indicate that the high end is doing better than the low end, no?
“Anyone care to take a stab at why the median held up so relatively well when home values obviously are dropping as seen by the case shiller data.”
Case-Shiller is down only about 10% from peak (end of October–latest available), while the NWMLS median for King County is down about 18% (end of December) and was down about 20% (end of November). So Case Shiller is doing better than the median, not worse.
BTW, the peak for both was July, 07
Hi Kary,
I understand you’re referring to MTD 1/09. My point is, if you dig into the numbers, the mix has changed versus prior months. Ardell is spot on about the weakness in jumbo mortage activity, as that has served to reduce the number of sales in that price range, affecting mix. The mix change accounts for the reduction.
The silver lining in all of that is that the actual value of homes below the jumbo-mortgage range are faring much better than the statistics show, because the statistics rely on medians, which change with mix.
“it’s not the new construction that is forcing down prices. It’s the new construction that is first forced to lower their prices to what the market accepts due to carrying costs while the existing homes sellers refuse to accept the new reality.”
But in more normal markets, the resales don’t need to worry about what new construction is going for. It will be higher!
Also I’d add that the hardest hit areas are often the areas with the most new construction. Over-supply forcing prices down.
Greg wrote: “I understand you’re referring to MTD 1/09. My point is, if you dig into the numbers, the mix has changed versus prior months. Ardell is spot on about the weakness in jumbo mortage activity, as that has served to reduce the number of sales in that price range, affecting mix. The mix change accounts for the reduction.”
You think the mix for January 09 has changed significantly from December 08 because of jumbos? Maybe I do have my head in the sand. Did something happen in the last 30-45 days on jumbos that I didn’t hear about?
I think it’s more likely the small sample and/or the first time home buyer delaying closing until after the first of the year to deduct points.
Kary, wasn’t the nwmls reporting something like a 7.5% YoY drop from Dec. 2007 to Dec. 2008 and the Case-Shiller for October was something like a 10% YoY drop?
I very strongly suspect that Case-Shiller YoY for Dec. 2008 will be more than a 7.5% YoY drop. This is what I’m curious about since it would reflect a likelyhood of high-end outperforming low-end.
tj, I’ll let you do the math.
C-S December 07 184.88 and 170.47 in October 08 (latest available).
NWMLS 435k in December 07, 403.5k in December 08 and 392k in October 08.
The numbers I gave was from the peak.Going from the peak, all the way back to December 2005, the biggest difference between the two seems to be about 7%. (Edit: By 7% I mean for example that CS would be 97% of peak and NWMLS 90% of peak).
Kary wrote: “Did something happen in the last 30-45 days on jumbos that I didn’t hear about?”
Exactly my point, what’s the difference between Dec08 and Jan09 when it comes to high-end? Wasn”t it just as difficult and expensive in December to get a jumbo? The surprise is not that it is crashing now (if it is), the surprise is that it didn’t crash already last year.
You are correct Kary but it’s not from peak I’m curious about since it makes sense it’s December 08. Why did high-end likely outperform low-end in Dec 08? And why is it now so different in Jan 09? It seems like we are equally surprised about that.
In late 07, early 08 it was my feeling that lack of sales in the very low end was holding up the median. People in the lower income brackets of potential house buyers assumed they couldn’t get credit based on the news reports. So yes, the mix can affect things.
The thing is, when you add the 20% down onto the top of the conventional jumbo amount, you’re well above median.
You’re right, jumbo-market tightening likely doesn’t explain all of the drop.
A lot of would-be move-up buyers are in “wait and see” mode though, which is taking demand out of the upper tier. The timing seems about right to me – buyers in process in September may have elected to finish the deal, but there isn’t a strong supply of new ones behind them. Especially for upper tier homes where the purchase is a discretionary one, I would expect a rather sudden drop off in demand given the current economy.
Kary,
I think you may have missed this in my comment #3:
“It will be the upper middle class dragging prices. The highest prices will still attract people with money, though not enough of them. The lowest prices will attract people who can use an FHA loan and/or people with 20% down jumping at close to 4.5% interest rates.”
The highest end will still sell, and when it does sell in small spurts, will affect the median. It’s the upper middle group that’s creating the crisis, under the radar.
“The thing is, when you add the 20% down onto the top of the conventional jumbo amount, you’re well above median.”
This is a good point. The median can fluctuate quite a lot within the non jumbo range without saying much of either low-end or high-end if most sales are concentrated around the median. The bottom line is that median is a crappy measure of the market. It’s a pity that Case-shiller isn’t available for smaller areas than combined counties.
Kary said “The thing is, when you add the 20% down onto the top of the conventional jumbo amount, you’re well above median.”
My point exactly. That’s the part of the market that has slowed considerably, so the mix has shifted to lower-priced homes. So we’re seeing a compounded effect from softening prices combined with a mix change – serving to give the median price a double whammy. The good news for the lower end is that the move in the median overstates how much the market has actually moved in their price point.
However, if downward pressure on upper-tier homes persists, it will creep into lower price points as well.
tj wrote: “The bottom line is that median is a crappy measure of the market.”
I don’t think the mean is any better. For the most part it’s been tracking along in similar fashion.
I don’t think any county-wide index does much good in a county the size of King County.
Note: Pentagon Federal Credit Union was the only jumbo loan I saw when spot checking recent closings.
The issue isn’t necessarily that there aren’t jumbo loans, but that the pricing makes them an unwanted loan with a 3 point spread. Basically saying yes, but the penalty is severe…too high for most people too swallow.
Pentagon Federal Credit Union has been known to have no rate differential from conforming to jumbo. Not sure how long that will be true, but it was a couple of years back, and judging from what I am seeing on the recorded closings, may be true now.
tj said: “The bottom line is that median is a crappy measure of the market. It’s a pity that Case-shiller isn’t available for smaller areas than combined counties.”
Unfortunately, the Case-Shiller data is subject to the the same mix changes that we find with other indexes. I wonder if anyone knows whether their data relies on medians or averages – I couldn’t learn enough about their methodology on this page that describes it:
http://tinyurl.com/a4wlv6
I would imagine the Case-Schiller methodology simply examines monthly sales, pairs those sales with prior sales, and calculates an average or median price change for the index. Unless they have some way of normalizing for mix changes, it’s fraught with the same problems that we’re seeing in other data using median prices.
Whether statistics come in the form of medians or averages, they merely provide another set of data that must be combined with other data to understand the exact nature of the market.
The median is only a crappy measure because so many people cite it as some form of absolute measure of market direction.
Maybe we should use gross dollar volume. By my calculations it peaked in June, 2007 at over 1.5 Trillion (King County SFR) and was under .5 Trillion last month.
What’s that tell us? (Besides the fact that the state & King County are losing out on about 2.7% of a trillion dollars every month in revenue.)
Greg,
As agents, we never use median to track anything…but people like to have a gauge of most any kind. Being in the dark is not a fun place to be when making one of the most important decisions in your life.
The median is not meaningless…it is just one of many factors.
Kary,
Blogging is not about “us” it’s about “them”. Something someone buying or selling a house can use as a guide regarding trends. Medians, absorption rates…all better than just the other houses in the neighborhood. Buyers in particular need to gauge what is coming…lower prices? Higher prices?
Medians going down is not necessary the best, but median price per square foot does tell us something. It may not tell you how to value this particular house today…but it is at least a word of caution aimed in the right direction.
I showed a few houses this morning. One was $200,000 overpriced. One was $70,000 overpriced. I didn’t use a median to figure it out. But knowing which direction the market is heading in given price ranges, IS part of the equation.
Greg: “they merely provide another set of data that must be combined with other data to understand the exact nature of the market.”
BINGO! Kary, you always look for the 20 things I use to come to a conclusion…it’s a BLOG! A blog gives people of interest some persective beyond how they normally view houses and the market. They read many blog posts to come to various conclusions.
If we could fit everything we do, and how we approach it ,into one blog post, well, we all know that isn’t possible.
Greg,
Maybe I’m not seeing it. Is “gross dollar volume” going to tell someone buying or selling a house…anything? I don’t see it.
Mean, median, median per square foot is all just a measure of market strength. It doesn’t mean much, if anything so someone with a 3 bedroom. 2.5 bath home in Bellevue. Their house might go up when all three of those other ones went down.
Gross dollar volume is also a measure of market strength.
Greg,
Case Shiller is not affected by the mix of homes because it doesn’t extract data from last month’s means, medians or anything like that. The methodology is discussed here.
http://www2.standardandpoors.com/spf/pdf/index/SP_CS_Home_Price_Indices_Factsheet.pdf
Kary has pointed out many times that it is too long coming and large an area to use to set a list or offer price on a particular home, but it is the best tool I know of to gauge whether homes increased or decreased in price over any particular time period.
Gross dollar volume has very little, if anything, to do with home value.
In fact, I project that gross dollar volume will pick up at some point – when the prices come down to the point that buyers enter the market in force.
What happens to gross dollar volume when the number of transactions doubles, and price falls 10%? Is that day coming in 2009? It isn’t hard to imagine.
Cautious Buyer–Case Shiller needs to deal with the mix in some way. From memory I think they try to divide houses into three different price ranges. But beyond that, they have to do something because not every house they review will fit with every other house.
Take two houses that sold in December 2005 and December 2008. If one went up 20% and one went up 15%, they’d need to deal with that somehow to come up with a single index number.
Also for any given month there’s going to be a different mix of areas sold. They have to account for that somehow.
It’s just like looking at comps, where not all the data fits neatly. Case Shiller does throw out some comps that don’t fit sufficiently well, but not every sale is going to indicate the same percentage increase from a prior point in time.
If I were involved in selling real estate I would want to know about gross dollar volume, because it is likely linearly related to total brokerage/agent revenues for the particular area and time period.
As a buyer though, not so much.
CB, re 66 I’m not so sure it matters, unless you’re always an “average” agent month in and month out. It’s your own book of business that matters. A higher number might make it easier to get business, but that would also attract in more agents over the long term.
From the Case-Schiller methodology link on comment 63:
“Each sale price is considered a data point. When
a specific home is resold, months or years later, the new sale
price is matched to the home’s fi rst sale price. These two
data points are called a “sale pair.
Kary, read the link. Case Shiller gathers data when an individual home sells twice, years apart, discounts those that had major renovations or damages, and compiles these “sales pairs” into a larger index. That is why the data from Case Shiller doesn’t come in dollar values, but rather in a number indexed to 100 in 2000.
Take one house that sold in 2005 and again in 2008. If the 2008 price is higher, you could say the house increased in price. If all 1000 houses with a similar situation in the same region did the same thing, you could say that prices increased in that region from 2005 to 2008. That is basically what Case Shiller does, but with much more math.
Greg, Case Shiller doesn’t need to normalize for a mix change because the mix change doesn’t affect the case shiller data. It measures data for the same house, sold twice. It does provide the index for lower, middle and higher priced tiers though, if you are talking about seeing whether high end is performing better than low end, but having more houses sell in the lower tier will not artificially lower the index number for the higher tier, because it is not taking a mean or median of home prices.
Your proprietary way is probably great for pricing an individual home. Case Shiller is only trying to tell what is happened with prices in Seattle metropolitan area, or wherever, over a given period of time.
Cautious Buyer, you’re right!
The fact that Case-Schiller stratifies the data into three tiers probably solves most of the problems with mix changes. Good observation.
To me as well the Case-Shiller index is by far the best measure out there and it is absolutely useful as part of the info used for decisions and predictions, way better than the median though it would still be nice if it was possible to not only dive into tiers but also into some what smaller geographic areas. Not to small since that can also be misleading but divisions like Seattle proper, The Eastside etc would have been cool.
Sill, these methods are all looking at homes that have sold. The greatest impact in the last 90 to 120 days is more about the homes that are not selling, vs. the price points of homes that do sell.
When I started in real estate, getting to be one of the top 3 on market, was the name of the game. We saw that kick in back in October, and I have talked about this before.
When 3 of every 10 homes sell, it is the listing agent’s job to push and pull on the specific factors (price and condition) until any buyer looking at homes in that price range would determine that this one is #1, #2 or #3. With any luck, #3 will move to the #1 spot as #1 and #2 sell off…but as you move further into the year, a new on market could keep bumping you back to #4. #4 equalling “not sold”.
Absorption rate was over three years in some sectors when I did those stats a week or so ago. Three years does not mean it will take three years to sell. Three years mean the whole price tier will go through a major shift in pricing, inluding more than it’s fair share of foreclosures and bank owned sales.
When someone can buy a million dollar house for $650,000…when the market includes many million dollar homes that can be had for $650,000, those currently “worth” $650,000 will be “worth” what? Not $650,000.
When the homes are vacant or soon to be vacant and the market place is flooded with “absolutely must sell” homes…there will be another rude awakening.
Sorry Kary, I think I misread your post at 65. I agree that Case Shiller will somehow average percent price change of homes of different appreciations/depreciations in the same area and tier, and it won’t differentiate between Seattle and Bellevue, for example, since it just reports the “Seattle Metropolitan Area”. I suspect there aren’t enough sale pairs to get meaningful results if they went all the way down to neighborhoods.
Ardell, I agree. The junky houses I looked at at first (because they were the only ones in my price range) are still not selling and the comps, which are coming down as well, are all nicer houses with few obvious problems. A couple years ago, even the junky houses were selling.
The sold houses, which are the ones showing up in the statistics, represent the best. If you could get a median (or case shiller:)) value of all the houses out there it would probably be a lot lower.
CB,
I would add “the cheapest”. What are selling are the best houses and the best deals, though I am seeing some seemingly great deals go begging in the jumbo loan territory of $850,000ish. Homes that would clearly have sold for $100,000 to $200,000 more 18 months ago…sitting…empty. Even brand new ones in decent locations.
Double yellow line street, almost no yard, things people overlooked in the past are now total deal killers.
Ardell, I’m seeing the same thing in the non-jumbo price range. That’s why I don’t think it’s just the jumbo thing.
Getting back to the market strength mean, median, Case Shiller discussion, it really is irrelevant. Take for example the NWMLS mean–it went up slightly in December, and had median pendings slightly above median closed in November. But I know plenty of neighborhoods that didn’t see any small bounce like that. They continued downward. Presumably that means there were other neighborhoods that did better (unless that was entirely mix related).
The point is, you cannot use any of these market strength indicators to try to judge what your neighborhood is doing. For that you need to actually look at what’s happening in your neighborhood. And if you want to know what your house is doing, you need to look at similar houses in your neighborhood.
“…you need to look at similar houses in your neighborhood.”
There are not enough sales of like kind property to use this as the primary rule of thumb. To do so would be looking too far back in time, in most areas.
Also, a buyer looking at “comps”, in this market going back six months, will surely be overpaying.
That would depend on the neighborhood. In more modern neighborhoods it wouldn’t be a problem typically because the houses are very similar. And if there is a problem you could expand the geographic area. Some areas might need only a 1/4 mile radius and some a 2 mile radius (or larger) to get enough recent comps.
Kary, the thing is that I’m not committed to any particular neighborhood. If the neighborhood 5 miles away is much cheaper, I can go there. If the Case Shiller index for the whole Seattle area went down, then it probably does mean my situation is better (excluding the whole layoffs happening everywhere thing). Of course, if I were trying to sell a particular house or make an offer on one, Case Shiller might not be the main tool I’d use.
Also, it is useful in judging the validity of numbers people are putting out. There are those real estate cheerleaders that make a habit of putting out numbers indicating Seattle or King Co. or whatever hasn’t gone down much. I can compare those to a mathematically rigorous index to see if they are full of it or not. Surely there would be more people trying to doctor the numbers if there weren’t less biased national indexes keeping them honest.
Ardell,
Would you say that the required discount for something like almost no yard or a busy street was less 18 months ago than it is now?
Kary,
Depends on how you define “recent”. Looking in August/September is no longer “recent”. Volume after that is so low…finding 3 comps is difficult.
CB,
Clearly the answer is yes, but more often than not these days, they are not selling at all. So how much less is yet to be determined.
Cautious Buyer,
#80 is a good question.
Generally speaking, the adjustments I’ve been using determine property value have changed very little in absolute terms. For instance, if traffic noise was a $25K problem for a property before, I would assume it’s still worth about $25K. In percentage terms, however, the problem is more significant.
However, some issues have more elastic price curves – views would be among them. The $1.2 M home with the $200K view may now only be worth $800K with a $150K view.
Assets are more elastic than liabilities, though I never really thought about it much until you asked the question. I’ll be curious to see what others think.
Adrell wrote: “Depends on how you define “recent
CB, if you’re not concerned about neighborhood, and only concerned about price (e.g. resale isn’t a concern), then of all the published data probably the NWMLS area data would be the best. You can have C-S and NWMLS King County go up, and some areas go down. Of course, there’s typically a reason for that.
But more realistically speaking, DavidB over in P-I land is very interested in Magnolia. The C-S and King County NWMLS numbers are really of little use for him. He’d be much better off with the NWMLS area 700 numbers, and even better off with a trapezoid search that specifically defined the part of Magnolia he was interested in.
I think the fairy dusts sprinkled in the eyes of home buyers are now slowly wearing off and when it does people will wonder how in the world they could think that the mossy rambler from the 60s could be worth $500k. Likewise how a home with no yard 20 miles from work centras with no view could sell for $800k just because it has a 3 car garage, stainless steel appliances and granite tops. It’s pure insanity and people will eventaully realize it. The change is coming and nothing can really stop it.
tj, I think there are a lot of neighborhoods that will do very poorly relative to other neighborhoods, not matter what the market does (with the possible exception of turning very hot). I should say developments, but houses in neighborhoods with crappy 2000-2008 developments will be drug down too.
In talking to buyers today, they know they have a lot of choice, and for many the newer developments don’t seem to be that choice.
Kary, the choice is dependent on many factors and you can make almost anything the choice of the buyer with the right incentives. It’s just that many developments has the factors totally wrong with price being the number one problem. A rotten rambler in Bellevue or Kirkland can very well be the choice of a handy family with remodeling plans if the price is right. $500k is not right, far from right. Small yards and big homes in the outer suburbs can also be unloaded but $800k is not the right price. Both the rambler and the McMansion probably need a about 50% price reduction to become someones choice. It will take a while for that to happen and it will be painful but for pricing to become more inline with value is the only way the market can recover in terms of volume.
“In talking to buyers today, they know they have a lot of choice, and for many the newer developments don’t seem to be that choice.”
I don’t agree when it comes to new construction…which still seems to have the edge, often due to expanded financing options not readily available in resale markets.
“I don’t agree when it comes to new construction…which still seems to have the edge, often due to expanded financing options not readily available in resale markets.”
And that is the other problem. Most people just can’t afford the $700k and upwards homes without “financing options”. And my guess is that fewer and fewer will be attracted by those options as prices keep falling which they will due to the low volume that can buy even with the options. At some stage people will likely just say: Let’s wait until we don’t need the optional financing anymore. There are always exceptions but it’s the masses that sets the trend.
tj,
I agree, but as I was going through deeper drilling down issues, I find I have more inside knowledge that skews the data.
I’ve been tracking the best crappy rambler near Microsoft 🙂 but I know it has a $7,000 problem that is not readily apparent to “the naked eye”. It would have sold for $525,000 or so, not too long ago. But problems are pushing much harder on price than ever before. I expect it will sell for around $400,000…maybe the high $300,000s.
In response to CB, I went back to a “busy road” house, but there were many concessions in what appears to be the “sold” price. What is more telling in this area that has averaged 15 to 20 sales a year in the past, is there are NO pendings. Those for sale have been on 285 days, 175 days and 135 days.
The longest on market has had a 7% price reduction but after reduction is asking 1.58 times assessed value! This is a neighborhood selling at 1.14 times assessed value. It says it’s “like new”, but only has 3 interior shots that look far from “like new”. If it really has that many upgrades…why only 3 interior photos? So looks like at best this one is more than $100,000 overpriced, even after reductions. You’d think one would be closer to “real” by 285 days on market.
They have tons of equity, so the reason isn’t they “can’t” go lower. Asking prices is 2.5X what they paid for it 5.5 years ago.
For this house, using comps, X assessed value and % of appreciation from time of purchase, the best of the three methods is X assessed value. Different houses will respond differently to the various methods I use on a regular basis. The purchase price doesn’t seem “average” for the date purchased, so no more than 1.24 times assessed value seems more reasonable in this case. But if they don’t get more and better photos in….it likely just won’t sell at all.
Sorry, I went off on a tangent there…but that’s how I value. If one method doesn’t make sense…I switch methods. The house is vacant, so it will either end up as a rental or I would expect to see this price down at least $70,000 as to asking before it sells, with added price pressure during negotiation and inspection to closer to $100,000 under current asking price.
If one of my clients were interested in it…first I’d go see it and determine if the photos are just not reflective of what it really is. Unless something surprisingly good appeared in person vs. the internet…I would recommend just walking away.
If I were the seller’s agent I’d recommend renting it out. How much did they lose in rent in those 285 days? At what they paid and what they owe…it would provide substantial cash flow for the owner. It’s that or reduce the price by $70,000.
So whether I were the seller’s agent or the buyer’s agent…most likely the recommendation = not sold at all. Better everyone face up to that and move on to the cash flow scenario. Maybe the “buyer” could rent it for a year or so, and then see if the buyer and seller can get closer to a price “that is a good deal for everyone”.
tj,
The evidence is anectodal. Financing options in one case equalled 10% down and a very low interest rate (well under 5%), and the buyer weighing waiting to save an additional 10% down vs. buying now. Understanding the price is likely higher than they would pay without the financing incentives, they opted to buy now for personal reasons. Wife wants it and wants to start a family in their long term home, was the deciding factor.
In some cases I am seeing buyers “bamboozled” by new construction offices. They get trapped in the “upgrade” game. Once they start “shopping” with the builder upgrade credit for wood floors and countertops and fancy refrigerators…they lose sight of the overall value of the home itself. It’s like someone handed them thousands of dollars to go shopping…it’s a worm on a hook…a carrot on a stick…and it works.
Bamboozled meaning shifting the focus from should I buy this house at all to “which of these countertops do you want”. Once you are picking cabinets and countertops…the ability to pull away altogether decreases. I’ve seen it time again and have had to literally drag clients out of the upgrade show room and back to the realities of the lot and house itself.
There’s a reason new construction offices often “assign you a buyer’s agent” that will push you through the system vs. pull you back to reality.
Kary in 85
Do you really think that case is more reasonable? Would most people interested in Magnolia would find Queen Anne or Ballard completely unacceptable, even if they became much cheaper? The person would rather have a smaller busy road house in the one part of Magnolia they are interested in if they could get a nicer place in Queen Anne for the same price? Why?
CB, they could look at all three places, but the individual data on each would be more valuable than countywide or three county data. But some people would just want Magnolia.
Ardell, I’m sure the “Bamboozled” thing happens all the time and that it is very effective especially for first timers or unprepared buyers. I’m guilty myself of having falling for it when buying other stuff, once you go into the “select options” mode you are hooked if you don’t have a set plan that you stick to. The difference is though that I would never go unprepared and without a plan into a +$50k purchase, ever. Most of what seems important to have when you browse around options you will never miss if you opt out of it but human nature is hard to resist.
Kary,
Of course people will look closer into the areas that interest them before purchasing. The countywide or three county data obviously isn’t meant to price out particular neighborhoods. The neighborhoods are all related though. The countywide data can be used to tell you that overall prices are higher than they should be, or that prices are indeed dropping. Unless there is some mitigating factor, you would expect prices in most neighborhoods to drop at about the same time, because Queen Anne would drag down Magnolia or vice versa.
tj,
I like the word “bamboozled”, because the person who gets excited is complicit in the end result…moreso than if they were “swindled” 🙂
The biggest problem I am seeing with new construction at present, is first time buyers want an agent the day after it is too late to get one.
It is dangerous to only target one area, because price pressures are not equal and simultaneous, but are inter-related. Often people assume they can’t afford X neighborhood, and only look in Y neighborhood. Meanwhile the prices in X have gone down more than Y.
Premium factors, as Greg pointed out with the view premium, are often hit the hardest in a weak market. Y neighborhood will eventually go down also, but the premium neighborhoods will often go down first.
Someone buying where there are no views, for example, may not be looking in the view areas. But once a view premium is knocked down by $400,000, the neighborhood without the view will likewise go down…but much later.
Market prices are all like a big puzzle and are inter-related. They do not change simultaneeously, but in domino fashion. Even if you know for sure that you want to live in this “trapezoid”, you have to follow the prices in a much broader area to see change coming.
Between those three, yes I would guess they’d move closely in unison. But King County is a big county. Just over a year ago the south end of the county was doing very poorly in comparison to anything north of say Renton.
For December, 6 of 30 NWMLS areas for King County had higher means than the prior year, but the overall mean was down roughly 8%. 8 of the 30 medians were higher, but I noticed one down about 20%, while overall it was down maybe 7%. Given that, what use is the county wide data?
Kary,
If you still want to think any area went up, while others went down…no data will be of use to you. NO area is up.
There are two types of buyers. Those that focus on one area exclusively, and those that are open to multiple areas.
Among those that are open to multiple areas, they generally start the search in the preferred area. If they can afford something they like, the search is over. If they aren’t happy with it, they become open to another area.
One of my clients recently wanted a townhome in Queen Anne, but realized they probably would settle for Capitol Hill. We eliminated Queen Anne almost immediately, and Capitol Hill left them financially stretched to find something they liked.
We expanded the search to Ballard, Fremont, and Green Lake. This buyer was looking for convenience to DT, and we found Fremont to offer enough attractive inventory that met their needs. So, Fremont was the solution.
Incidentally, at the time, Capitol Hill was cutting prices, and Fremont wasn’t. Fremont sales were very slow – we brought data along with our offer to show that Fremont was overpriced vs. the other areas we were looking at, and ended up getting a huge concession. The herd mentality pricing in Fremont started to shift downward in response to the fact that other neighborhoods had become more competitive.
I guess the moral to that story is that when an area becomes overpriced, it doesn’t mean that you can’t buy a home in the area for the market price. There are always sellers that are motivated, that will respond to good analysis.
Greg, that reminds me of my best friend back in Sweden, he is one of the wealthiest guys in the county due to…drum roll…real estate! He inhereted a company that’s been in the family for 4 generations which was first a construction company but is today a holder of a massive amount of paid off commercial and multi-family properties. Anyway, his mantra is “There is always some poor desperate $#$@” when he is looking to buy anything costly incl. property, vehicles etc,etc. But for us who don’t wheel and deal on a daily basis with unlimited resources and do just a few large purchases in a lifetime we prefer to have a wide selection when buying. I’m sure you can find that desperate seller today and make a good deal but it will take time and you will be left with one or a few options, better to wait until the majority of object moves into your prefered price range if that is the way the market is going so you get more choices.
tj, I suppose on one extreme there are buyers like your friend back in Sweden – they negotiate for sport.
When working with buyers, if I find that the home they want happens to be overpriced, I go to bat for them and bring data. Some sellers respond, some don’t. Whether a seller will respond to information has little to do with the price of the neighborhood. They are either open to facts, or they aren’t.
I should probably add that any home 5% overpriced or more is probably the home of a seller that isn’t interested in facts.
I guess you could say there are also two types of sellers! 🙂
“If you still want to think any area went up, while others went down…no data will be of use to you. NO area is up.”
That would be a change in mix issue, but I’m just referencing what the NWMLS reports.
But let’s see. That must mean that that King County is down more than what the NMWLS stats indicate. But the NWMLS stats indicate King County is down more than Case Shiller. But Case Shiller includes three counties, the two additional ones being down more than King, per the NWMLS.
Which basically gets back to my prior point. If you want to know what your house did, you can’t rely on any of this. You need neighborhood stats of comparable properties.