King County Single Family Home Prices. Just a couple of quick graphs tonight. First week in April 2009 compared to first week of each month so far this year. The first graph is $ in thousands, the second graph is median price per square foot.
(required disclosure) Stats are not compiled, posted or verified by NWMLS.
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I find that when you just post the “top” of graphs, and only for a short period of time, it comes across as pretty disingenuous. The first graph makes April look 10 times January, when really, it’s only 10-15% higher.
Also, why not show a year+ of data so people can see “is this a normal seasonal bump” vs. “prices going up”? And how many sales/month did this represent? Are prices down in Feb due to a few really lowball short sales? Or up in April due to more sales in the $2M+ range? One certainly can’t tell from these graphs.
Ardell, many of your posts lately seem like you’re trying to be a cheer leader for the real estate market rather than presenting truly useful data. This is unfortunate since there usually is a lot of good information and discussions here at RCG.
I find that when you just post the “top” of graphs, and only for a short period of time, it comes across as pretty disingenuous. The first graph makes April look 10 times January, when really, it’s only 10-15% higher.
Also, why not show a year+ of data so people can see “is this a normal seasonal bump” vs. “prices going up”? And how many sales/month did this represent? Are prices down in Feb due to a few really lowball short sales? Or up in April due to more sales in the $2M+ range? One certainly can’t tell from these graphs.
Ardell, many of your posts lately seem like you’re trying to be a cheer leader for the real estate market rather than presenting truly useful data. This is unfortunate since there usually is a lot of good information and discussions here at RCG.
Ardell,
As a regular reader of your blog, I am sorry to say but I am disappointed by your posts in last few weeks. As a veteran RE professional you should know that the RE market is cyclical and month over month changes don’t mean much. What really matters are the year over year changes and you still have been posting graphs and stats of month-month changes. You seem to be using those stats to paint a picture that the downtrend is over and things are rosy again. When in fact the YOY numbers are significantly down.
Last year when I started reading your blog because you were the only one who posted entries that seemed to paint a true picture of the market. I don’t know what caused this about turn in your stance but it’s a sad change.
Ardell,
As a regular reader of your blog, I am sorry to say but I am disappointed by your posts in last few weeks. As a veteran RE professional you should know that the RE market is cyclical and month over month changes don’t mean much. What really matters are the year over year changes and you still have been posting graphs and stats of month-month changes. You seem to be using those stats to paint a picture that the downtrend is over and things are rosy again. When in fact the YOY numbers are significantly down.
Last year when I started reading your blog because you were the only one who posted entries that seemed to paint a true picture of the market. I don’t know what caused this about turn in your stance but it’s a sad change.
To both Gene and Waileakid,
Trust me on this one, you probably won’t like it better if I show a graph YOY, as that up 9.625% 2009 from $187 to $205 is way, way, WAY better than the stats from the same period in 2008.
2008 the numbers for the same period went down from $219 to $212, a 3% decrease. that would make the YOY change for the period UP 12.7%.
You both really need to ask yourself why I seem to gain credibility with you when I post down stats and lose it when I post up stats.
If up = cheerleader, well I don’t know what to tell you. That’s really your own personal problem, isn’t it? It is what it is, guys.
Hip hip hooray for the spring upward trend. Now lets just pray that this continues in an upward trend so that we can get the USA back on its feet.
“2008 the numbers for the same period went down from $219 to $212, a 3% decrease. that would make the YOY change for the period UP 12.7%.”
Wow, that’s some stunningly bad math there. If the first week a March last year was $212 and the first week of March this year is $205 that’s a 3.3% YOY decrease not a 12.7% increase. The first week of Febuary comes in at a 14.6% decrease YOY.
To find the YOY change you take the current year’s number and subtract the previous year’s number from it. Then take that result and divide it by the previous years number. In this case: 205 – 212 = -7, then -7 divided by 212 = -.0033.
Joel,
The question asked was:
“is this a normal seasonal bump?”
The answer is no, it is not a “normal seasonal bump” because in the same season in the same months in the same weeks last year, the prices were down not up.
If you want to ask a different question, feel free to do so. But my math is not bad, and specifically answers a question that was raised.
Joel,
The question asked was:
“is this a normal seasonal bump?”
The answer is no, it is not a “normal seasonal bump” because in the same season in the same months in the same weeks last year, the prices were down not up.
If you want to ask a different question, feel free to do so. But my math is not bad, and specifically answers a question that was raised.
Portland Real Estate,
You are not helping matters. Please stop dancing in my post 🙂 You look like the scene in Jerry Maguire when Rod Tidwell becomes conscious and does a victory dance.
The sad reality is that there are some people who are only happy when the news is good, and others who are only happy when the news is bad. I can only hope there is a silent majority who isn’t so vested in the outcome, and appreciates truth and facts without manipulation.
Personally, I’m just trying to find to what extent the stimulus may or may not be helping the market. That is why I am looking at “weeks” vs. full months at present.
The credit was passed on 2/20. It takes 4-6 weeks for a property to close. As we get further away from the date the credit passed, I will stop looking at weeks and go back to looking at months.
It’s kind of like BC and AD only it’s BC and AC, before credit and after credit.
I look at the Dow several times a day…I look at what it’s doing now. Every so often I look at longer periods, but my brain is not such a sieve that all historical data is erased from my brain if I don’t look at it every hour.
YOY is useful sometimes, and I post it sometimes. Right now we need to know how and if the stimulus package is working. If you don’t like the answer that it does seem to be working in the short run, I can’t help you there. That’s a political problem.
The sad reality is that there are some people who are only happy when the news is good, and others who are only happy when the news is bad. I can only hope there is a silent majority who isn’t so vested in the outcome, and appreciates truth and facts without manipulation.
Personally, I’m just trying to find to what extent the stimulus may or may not be helping the market. That is why I am looking at “weeks” vs. full months at present.
The credit was passed on 2/20. It takes 4-6 weeks for a property to close. As we get further away from the date the credit passed, I will stop looking at weeks and go back to looking at months.
It’s kind of like BC and AD only it’s BC and AC, before credit and after credit.
I look at the Dow several times a day…I look at what it’s doing now. Every so often I look at longer periods, but my brain is not such a sieve that all historical data is erased from my brain if I don’t look at it every hour.
YOY is useful sometimes, and I post it sometimes. Right now we need to know how and if the stimulus package is working. If you don’t like the answer that it does seem to be working in the short run, I can’t help you there. That’s a political problem.
I’ll do a follow up post to this one showing a historical data chart, but I need you to get on the same page with what I am looking for. I’m looking to see if the increase is normal seasonal or abnormal. I’m looking at the period influenced by the stimulus package.
So if it makes you happy, I will do the work to compare 1st week in April median price per square foot, to all 1st weeks of all months going back as far as I can, which is likely 2001.
I’m going to make a slight change when I do the new graph. I will still be doing SFH King County, but I’m going to exclude mobile homes. Hope that’s OK with everyone. The results may be sligthtly different than what I posted here.
Remember, when I do SFH, in Seattle that usually includes townhomes and on the Eastside it does not. I can’t change that factor as townhomes in Seattle are most often single family sub-divided lots. On the Eastside they are usually built on jointly owned lots. Just how it is.
The work of this is going to take sometime, but the results will be worth the effort.
There may be an assumption I’m missing here, but what info are the prices in your stats based on? Ie., asking price, agreed upon price when the deal went under contract or the price at close? To me, the real “market price” is what the house actually sells for – not the seller’s asking price.
As an aside, to throw in my 2 cents; I don’t think that the stimulus can really help the Seattle market. When you are looking at pulling the trigger on a $500K home, putting 20% down and then facing a monthly PI+Tax payment than is double what you’d pay in rent for a comparable home, $8000 is “nice” but not enough of a factor to make me run out and buy.
There may be an assumption I’m missing here, but what info are the prices in your stats based on? Ie., asking price, agreed upon price when the deal went under contract or the price at close? To me, the real “market price” is what the house actually sells for – not the seller’s asking price.
As an aside, to throw in my 2 cents; I don’t think that the stimulus can really help the Seattle market. When you are looking at pulling the trigger on a $500K home, putting 20% down and then facing a monthly PI+Tax payment than is double what you’d pay in rent for a comparable home, $8000 is “nice” but not enough of a factor to make me run out and buy.
I can already see that I can go back as far as 02/00 and I have to use the first graph vs. the 2nd one, showing median home price changes vs. price per square foot.
So switch to $414,000 minus $371,000 equals an 11.5% increase in median price 1st week in March 2009 to 1st week in April 2009. We’ll be comparing all months from Feb. 2000 to present to try to find the seasonal pattern and determine if the current stats are a break from seasonal pattern.
Hi Ardell,
It’ll be great if you can post month to month increases as you mentioned in the post. As long as the “stats” are true to the numbers they look genuine. I used to love your posts like this one here: http://www.raincityguide.com/2008/09/08/sunday-night-stats-seattle-real-estate/
Just the plain facts and thats it. That’s the reason I love the stats over as SeattleBubble.com. I doesn’t matter if they post towards a downtrend or a recovery, there is a fixed set of charts that Tim posts and it is constant no matter what. That makes them useful for analysis.
btw, I juct checked and Seattle bubble does have data for month-month changes in prices over at http://seattlebubble.com/blog/downloads/Seattle_Bubble.xlsx
They also have a sheet for demand (pendings) there and it does show that the demand is stabilizing but coming off of historic lows, you kinda expect that don’t you 🙂
Hi Ardell,
It’ll be great if you can post month to month increases as you mentioned in the post. As long as the “stats” are true to the numbers they look genuine. I used to love your posts like this one here: http://www.raincityguide.com/2008/09/08/sunday-night-stats-seattle-real-estate/
Just the plain facts and thats it. That’s the reason I love the stats over as SeattleBubble.com. I doesn’t matter if they post towards a downtrend or a recovery, there is a fixed set of charts that Tim posts and it is constant no matter what. That makes them useful for analysis.
btw, I juct checked and Seattle bubble does have data for month-month changes in prices over at http://seattlebubble.com/blog/downloads/Seattle_Bubble.xlsx
They also have a sheet for demand (pendings) there and it does show that the demand is stabilizing but coming off of historic lows, you kinda expect that don’t you 🙂
WaileaKid,
May I ask that you consider the differences between me and Deejayoh and The Tim? I like Seattle Bubble too, don’t get me wrong, but I am not a parallel universe to them.
I need to see what I need to see every week. The historical is available for those who want to hit “sunday night stats” category or tag and go backwards. Sometimes I want to go all the way back as far as I can go, and sometimes I don’t.
The difference between my posts and Seattle Bubble is I am not posting to blog. The blog is just ancillary. I am doing my work as an agent and finding out what I need to find out. I post that so you can be a fly on the wall watching me work, not to convey any kind of message.
If I have commentary, it is because that is what I want to say to my clients who are reading here, not because I want to be on the front page of the PI. You can watch me work, but you can’t send me off on some tangent that is not about the work I need to do today.
I hope that makes sense. I’m not trying to convince anyone of anything. I’m being a “student of the market” which is part of my job. I use the Dow to factor in macro issues and I spend most of my time on Micro issues. My work is micro as in what should this buyer do today or what should this seller do today.
My topics and data are chosen by what I need to know, not by what I hope to convey. Capish?
Waileakid,
I liked those posts too…but honestly it got awfully redundant and boring for me, and for most readers, to see the same thing week after week with just one more new number.
PLUS I did them at the request of TJ and TJ and I “broke up” several weeks ago 🙂
In “off-season” when I am less busy, I can take on more specific requests. But when specific requests keep me from my work…no can do. I don’t know if every agent is a “student of the market” to the same degree that I am, but I do know the top 5 around the Country in my book do. They are not the most successful, high volume teams. They are real estate nerds like me.
If you understand that I am working in a fishbowl, allowing everyone to watch me work, perhaps that will help you understand me a bit better. Should a seller reduce price, or wait because their price may be right in May? That is a very, very important question for my clients and not a YOY issue. Sometimes I have to be “in the moment”, and this is one of those times.
That said, based on the requests here today, I am going to add several hours of work to my schedule today to produce a new graph. It will help me as well. I just don’t always have the time to do the stats all the way back to February of 2,000, nor do I have the personal need to do so.
Give me a bit of room to do what I need to do. It’s not all about me, but it’s not all about readers either…it’s mostly about my clients.
Waileakid,
I liked those posts too…but honestly it got awfully redundant and boring for me, and for most readers, to see the same thing week after week with just one more new number.
PLUS I did them at the request of TJ and TJ and I “broke up” several weeks ago 🙂
In “off-season” when I am less busy, I can take on more specific requests. But when specific requests keep me from my work…no can do. I don’t know if every agent is a “student of the market” to the same degree that I am, but I do know the top 5 around the Country in my book do. They are not the most successful, high volume teams. They are real estate nerds like me.
If you understand that I am working in a fishbowl, allowing everyone to watch me work, perhaps that will help you understand me a bit better. Should a seller reduce price, or wait because their price may be right in May? That is a very, very important question for my clients and not a YOY issue. Sometimes I have to be “in the moment”, and this is one of those times.
That said, based on the requests here today, I am going to add several hours of work to my schedule today to produce a new graph. It will help me as well. I just don’t always have the time to do the stats all the way back to February of 2,000, nor do I have the personal need to do so.
Give me a bit of room to do what I need to do. It’s not all about me, but it’s not all about readers either…it’s mostly about my clients.
Stillwatching,
Those are closed prices. Last week I had a mix of asking and closed prices and some other factors, but not for King County as a whole. Each week I do things a bit differently. Usually it’s closed prices unless I specifically say “pending or asking” prices.
It’s OK for you to think the stimulus won’t help, as long as you don’t refuse to see it if it actually does. I promise I won’t refuse to see it if it doesn’t 🙂
p.s. As a first time commenter you went to moderation first. That shouldn’t happen again.
I have many more graphs to add to this one on my blog, but posted the main meat for now. I have more numbers going back to 2000 and will be breaking out the segments of 2009 that show wer are in 2006 price levels, up from 2005 price levels.
Hopefully the graph is self explanatory for now. I will be posting all my graphs on my blog first, and will then do a new post here with the most relevant graphs and commentary.
I know you thought I had found my rose colored glasses, but after you see all of the data, you will see that the picture is much rosier than I presented here in this post last night. I was trying to downplay it; not cheerlead it.
But, as they say, you asked for it 🙂
http://www.realtown.com/Ardell/blog/tracking-the-market/seattle-real-estate-2009
The 413 number for Apirl 2009 is calcuated for the 6 days of April. Is this correct ?
Clivet,
All of the numbers are from the first to the seventh of the month for all months and all years in the graph in the link I have to study the numbers a bit more, but need a break. I’ve been workinb on this between client conversations all day long.
The only difference between the numbers in the link and the numbers in the post causing the very slight differences in price, is the fact that I excluded houseboats and manufactured homes in the more detailed version. Also more sales were posted for April in the time between last night and while I was gathering the info during the day today
Someone can post a sale that closed in April 4, tomorrow. So the numbers shift a bit for quite some time after the period has ended.
I will add more detail explaining that graph after I eat dinner.
Clivet,
All of the numbers are from the first to the seventh of the month for all months and all years in the graph in the link I have to study the numbers a bit more, but need a break. I’ve been workinb on this between client conversations all day long.
The only difference between the numbers in the link and the numbers in the post causing the very slight differences in price, is the fact that I excluded houseboats and manufactured homes in the more detailed version. Also more sales were posted for April in the time between last night and while I was gathering the info during the day today
Someone can post a sale that closed in April 4, tomorrow. So the numbers shift a bit for quite some time after the period has ended.
I will add more detail explaining that graph after I eat dinner.
Does the first week of the month have some sort of significance? How close does the first week of the month correspond to the final months numbers? These seem like small slices which introduces too much error to be very useful. Even monthly changes can have a decent amount of error, with four+ times more data.
The significance of the first week of the month is that I am trying to determine the impact, if any, of the $8,000 Homebuyer Credit. More correctly, it has been my contention that the period just prior to that credit being passed was pushed down by the fact that people were waiting for the credit. Kind of a “false bottom” created by exterior influence.
Since the credit passed on Feb 20 or so, No Feb closings would apply as to after credit impact. It takes 30 to 45 days for a contract to close, as the norm. So the first signs of the credit would likely be the first week in April. Technically March 20 to March 31 would also have some, Especially people who already had the house picked out and possibly in offer stage, but were waiting for the credit to pass to finalize the contract.
While I didn’t pick 1st week for this reason, I do like the fact that most people who close in the first week tend to be people who are not stretching their cash to the limit. People who make wise decisions and wait to buy until they really have their act together. Reason being, you need more cash to close in the first week of the month than you do in any other week of a month, unless you are a cash buyer. But again, I didn’t pick 1st week for this reason.
b,
As we get further past the passing of the stimulus package date, I will re-do the numbers with monthly stats. I’m just trying to keep my finger on the pulse.
Before I continue with the stats, can anyone help me with the “it’s only spring bounce” comments I see around the internet? Most appreciation seems to happen in that period every year, historically. Are we to pretend there are no 2nd and 3rd quarters? What does “of course…it’s to be expected…it’s spring bounce” mean? To the person buying at that price, it certainly is not a factor to be waived away as totally irrelevant.
Would appreciate you input on that topic, so I can better understand what people mean by that. And when does “spring bounce” end? Prices peaked in July of 2007, was July of 2007 part of “spring bounce? In 2006, the market bounced up until November, was the first part of that rise “only spring bounce”. I don’t get this “only” thing.
Like comment #1 saying it’s “only a 10-15% higher”. Isn’t that a lot vs an “only”? If we went down 12% in a year, isn’t up 10% to 15% in a month or two more than “only”?
Just trying to figure out where people are coming from.
Before I continue with the stats, can anyone help me with the “it’s only spring bounce” comments I see around the internet? Most appreciation seems to happen in that period every year, historically. Are we to pretend there are no 2nd and 3rd quarters? What does “of course…it’s to be expected…it’s spring bounce” mean? To the person buying at that price, it certainly is not a factor to be waived away as totally irrelevant.
Would appreciate you input on that topic, so I can better understand what people mean by that. And when does “spring bounce” end? Prices peaked in July of 2007, was July of 2007 part of “spring bounce? In 2006, the market bounced up until November, was the first part of that rise “only spring bounce”. I don’t get this “only” thing.
Like comment #1 saying it’s “only a 10-15% higher”. Isn’t that a lot vs an “only”? If we went down 12% in a year, isn’t up 10% to 15% in a month or two more than “only”?
Just trying to figure out where people are coming from.
I don’t think its possible to clearly see the effect of this tax credit without a scientific survey of people who closed before and after it maybe being the closest thing. If it was something like a $300k credit, it would probably have a large and obvious impact. When you are getting down to what is basically 1-2% or even less of the median home price it becomes really impossible to infer anything with such a high-error method.
b,
When it was almost $15,000, it did stop a lot of people in their tracks that were going to buy anyway. So those people stepping out and back into the market could be the influence. We’ll know if the market moves differently shortly, within the next 60 days. I expect it to be a little of each. Some regular spring bounce and some pent up waiting for the credit people. We’ll know a lot more as each week passes. It’s an unfolding story that we can only see a week at a time for now.
I’m surprised to see the numbers moving out of 2005 levels and into 2006 levels this quickly. It could be an aberration, but as you can see from previous years in the graph in the comment link, previous aberrations were a signal of something coming.
The year started off at Feb 2005 level and landed at April 2006 pretty quickly. If we are still at or back there come end of June, that will be a significant change. But it could move like 2008 did in the blue line with the big blue circles. Never saw that March value again.
The purple 2005 line surprised me a bit. I tried to go back to an old post I did with full month numbers, but Dustin adding the second sidebar on the right forced the graph into a smaller space and knocked out the color code, so I can no longer see which year is what. I’ll have to do it again from scratch, but will likely wait until end of April numbers are all in.
You would be surprised how many people care more about getting $8,000 and the monthly payment, than the price of the home.
Re: spring bounce
From 2000 to 2008, the median KC SFH was up in March over the Jan/Feb average every year ranging from 2 – 7%. The average increase was 4%. The Mar/Apr average over Jan/Feb was similar (also 4%). So there’s a past pattern of increased prices in the spring. This was even true last year when the market was declining. Many RE pros saw it as a sign of the bottom (see Beeson, Richard).
Here’s a list of how each month of the year related to the average of the monthly medians for the year (2000-2008):
Jan 0.94
Feb 0.95
Mar 0.99
Apr 1.00
May 1.01
Jun 1.03
Jul 1.03
Aug 1.02
Sep 1.01
Oct 1.00
Nov 1.00
Dec 1.01
It suggests prices climb from Jan to Jun/Jul and then begin to subside for the remainder of the year. The numbers are skewed somewhat since we’ve been in increasing markets up till 2007. But 2007 showed this behavior even more:
Jan 0.95
Feb 0.95
Mar 1.00
Apr 1.03
May 1.03
Jun 1.04
Jul 1.06
Aug 1.05
Sep 0.99
Oct 0.98
Nov 0.96
Dec 0.96
Even when you just eyeball the MLS data for the past 8 years, it’s clear that prices seem to rise each spring and into the summer. In an upward market, it may just look like prices are flat the second half of the year. In a declining market, they fall pretty rapidly.
hmmm but 2007 was not about spring bounce. It was about a crash of prices when they peaked caused by the mortgage meltdown. Looking at the graphs without analysis of the factors that created the price swings, does not seem of value to me. Removing the why…well, why would someone do that?
I say the why is the stimulus package, both the affect it had on the market before it passed and the effect it did and will have after it was passed.
I remember when interest rates went up 1% temporarily caused by Desert Storm. Why would someone not want to know the why of that and think the market was just acting whacky for no good reason?
hmmm but 2007 was not about spring bounce. It was about a crash of prices when they peaked caused by the mortgage meltdown. Looking at the graphs without analysis of the factors that created the price swings, does not seem of value to me. Removing the why…well, why would someone do that?
I say the why is the stimulus package, both the affect it had on the market before it passed and the effect it did and will have after it was passed.
I remember when interest rates went up 1% temporarily caused by Desert Storm. Why would someone not want to know the why of that and think the market was just acting whacky for no good reason?
that should read 2008…sorry. I forget we’re in 2009 now.
2007 showed a “spring bounce” too. Mar/Apr were up considerably over Jan/Feb
January-07 $429,495
February-07 $429,925
March-07 $454,950
April-07 $465,000
May-07 $469,000
June-07 $470,000
July-07 $481,000
August-07 $477,345
September-07 $450,000
October-07 $443,950
November-07 $435,000
December-07 $435,000
that should read 2008…sorry. I forget we’re in 2009 now.
2007 showed a “spring bounce” too. Mar/Apr were up considerably over Jan/Feb
January-07 $429,495
February-07 $429,925
March-07 $454,950
April-07 $465,000
May-07 $469,000
June-07 $470,000
July-07 $481,000
August-07 $477,345
September-07 $450,000
October-07 $443,950
November-07 $435,000
December-07 $435,000
Here’s another way to look at it.
This is the average of the Month to Month prices changes from 2000 to 2008. March and April are the months with the highest average gain over the prior months:
Jan -1.0%
Feb 1.1%
Mar 2.9%
Apr 2.0%
May 0.1%
Jun 1.7%
Jul 0.4%
Aug -0.9%
Sep -0.5%
Oct -1.1%
Nov 0.9%
Dec 0.3%
Here’s another way to look at it.
This is the average of the Month to Month prices changes from 2000 to 2008. March and April are the months with the highest average gain over the prior months:
Jan -1.0%
Feb 1.1%
Mar 2.9%
Apr 2.0%
May 0.1%
Jun 1.7%
Jul 0.4%
Aug -0.9%
Sep -0.5%
Oct -1.1%
Nov 0.9%
Dec 0.3%
My opinion on the cause…
The seasonality on home prices is a result of the changing percentage of new vs. stale listings on the market at different times of the year.
The spring months bring a flood of new listings. These tend to be of higher quality than the stale listings still on the market in Nov/Dec. The best houses get sold quickly and that causes the median price to rise. As you get to June/July, the new listing slow down and the mix of inventory swings back to being stale. By Oct/Nov/Dec you have stale listings and the desperate left in the market and the median prices fall.
The MLS data doesn’t play this out very well, but I think that’s due to their definition of a “new” listing is rather broad (includes relistings?).
My opinion on the cause…
The seasonality on home prices is a result of the changing percentage of new vs. stale listings on the market at different times of the year.
The spring months bring a flood of new listings. These tend to be of higher quality than the stale listings still on the market in Nov/Dec. The best houses get sold quickly and that causes the median price to rise. As you get to June/July, the new listing slow down and the mix of inventory swings back to being stale. By Oct/Nov/Dec you have stale listings and the desperate left in the market and the median prices fall.
The MLS data doesn’t play this out very well, but I think that’s due to their definition of a “new” listing is rather broad (includes relistings?).
Dr. Short,
But doesn’t that also mean that when a property doubles in value, most of that appreciation happened in the bounce period of a few years combined? How does spring bounce not affect home prices long term?
I agree with your “new on market” assesssment to some extent, and that is why you see the % sold in less than 30 days increasing and why I watch that number.
But I have also seen people and builders raise their prices in January over what they were asking in November and December, and get those new higher prices. It happened again and again during the up market.
I wrote a post once about a house with a huge flooding problem that we passed on after inspection when water came in during the inspection into the family foom. They took that house off market and brought it back in January and sold it for more money than my clients had it in escrow for.
So I know that even some “dogs” get sold for more money in Spring, than they garner in 4th Quarter.
That’s why when Cautious Buyer said “I’ll wait until May when prices are lower, back in October or so, I advised against that unless he was willing to wait until 4th quarter 2009. Typically 4th quarter is always lower, and it’s not always about different houses. The same houses sometimes sell higher in the 1st Quarter.
I agree with your “new on market” assesssment to some extent, and that is why you see the % sold in less than 30 days increasing and why I watch that number.
But I have also seen people and builders raise their prices in January over what they were asking in November and December, and get those new higher prices. It happened again and again during the up market.
I wrote a post once about a house with a huge flooding problem that we passed on after inspection when water came in during the inspection into the family foom. They took that house off market and brought it back in January and sold it for more money than my clients had it in escrow for.
So I know that even some “dogs” get sold for more money in Spring, than they garner in 4th Quarter.
That’s why when Cautious Buyer said “I’ll wait until May when prices are lower, back in October or so, I advised against that unless he was willing to wait until 4th quarter 2009. Typically 4th quarter is always lower, and it’s not always about different houses. The same houses sometimes sell higher in the 1st Quarter.
Dr. Short,
What I have seen more often is that more expensive houses sell down the chain in August and September. As each lower end property sells and that seller buys…making the later season before 4th quarter often the one with the highest prices.
Yes, almost all of the appreciation occurs in the Feb – June months (based on 2000 – 2008 data). The other months are basically flat — even in boom years. If someone thought prices would be lower in the spring, they must have felt the market was in such a decline that the normal seasonal appreciation couldn’t overcome it. And through March, that appears to be correct.
There’s probably more buyers in the spring months also and maybe that explains why some properties can fetch a higher price in those months than in Dec. But, on the aggregate, that doesn’t appear to be happening.
Here’s what you get when add across the month to month changes from 2000 – 2008. It’s pretty clear which months bring the appreciation. It doesn’t add up to the gains we’ve had because it’s not compounding, but you get the idea:
Jan -9.23%
Feb 8.93%
Mar 22.89%
Apr 18.83%
May -1.97%
Jun 16.70%
Jul 3.49%
Aug -3.40%
Sep -8.14%
Oct -9.76%
Nov 8.26%
Dec 2.07%
A think the spring bounce would act to reset where the market was at. In Sep a person buying or selling could look at the comps from the months before and see a new, higher market price. I think we could see the same happen on the way down too. The tighter appraisal rules will make it hard to make a sharp turn around, IMO. Appraisers won’t let a sale go through if they think it’s too high based on very recent comps.
Yes, almost all of the appreciation occurs in the Feb – June months (based on 2000 – 2008 data). The other months are basically flat — even in boom years. If someone thought prices would be lower in the spring, they must have felt the market was in such a decline that the normal seasonal appreciation couldn’t overcome it. And through March, that appears to be correct.
There’s probably more buyers in the spring months also and maybe that explains why some properties can fetch a higher price in those months than in Dec. But, on the aggregate, that doesn’t appear to be happening.
Here’s what you get when add across the month to month changes from 2000 – 2008. It’s pretty clear which months bring the appreciation. It doesn’t add up to the gains we’ve had because it’s not compounding, but you get the idea:
Jan -9.23%
Feb 8.93%
Mar 22.89%
Apr 18.83%
May -1.97%
Jun 16.70%
Jul 3.49%
Aug -3.40%
Sep -8.14%
Oct -9.76%
Nov 8.26%
Dec 2.07%
A think the spring bounce would act to reset where the market was at. In Sep a person buying or selling could look at the comps from the months before and see a new, higher market price. I think we could see the same happen on the way down too. The tighter appraisal rules will make it hard to make a sharp turn around, IMO. Appraisers won’t let a sale go through if they think it’s too high based on very recent comps.
Dr. Short.
It’s hard for me to follow your numbers as they are not $$$. A year that ends higher than when it started, is significant to me and I can’t follow that in your %s.
I appreciate the information, but Dec. .93 can be significantly higher price than Jan .96 of th same year. Seems odd to look at the numbers the way that you do.
Dr. Short.
It’s hard for me to follow your numbers as they are not $$$. A year that ends higher than when it started, is significant to me and I can’t follow that in your %s.
I appreciate the information, but Dec. .93 can be significantly higher price than Jan .96 of th same year. Seems odd to look at the numbers the way that you do.
So then, why do people say “oh, that’s only spring bounce” as if we’re not allowed to talk about up in March, or April?
Dr. Short,
We can pretty much write off the first quarter of 2009 to be of no value for tracking or prediction purposes. I could predict the volume that would be sold in 2008 by this time last year, and came in pretty darned close. And I predicted pretty much to the penny what prices would be in December.
But this year, 4/1 is really like 1/1 in other years. I think it’s going to be a season that starts late and ends late. I think there will be people scrambling in October to find something and close by end of November, unless they extend the time for the credit past before 12/1/2009.
Dr. Short,
Will you be happy if prices go up, preventing more foreclosures in the future? If not, why not? If prices get back to mid to late 2006 levels, that could be a significant number of people being able to sell without having to sell as a short sale. Is that good or bad in your opinion?
Ardell –
I am curious since you seem to be putting a lot of stock in the tax credit juicing the market around here. Do you anticipate that demand will fall in the future to compensate for the “stealing” of demand occurring by the tax credit? What I mean is that this credit is designed to push fence sitters, who are future demand if they stay on the fence. If this tax credit is really effecting behavior enough, then it would be logical to assume future demand will be lower than it would be to compensate.
The good/bad is a hard question to answer. On a personal level, I’d like to buy sooner rather than later. I’ve been renting for the last year, and it’s really not my cup of tea. One of my biggest hobbies is improving where I live, so I’d like to feel safe buying soon. Some days it feels relatively safe. Other days, not so much. I’d like to buy, but more than that, I don’t want to lose my down payment I’ve worked so hard to get.
The larger point of “rising prices would help those from short sale/foreclosure” is hard because as prices drop, people who could have never afforded a home in this area now have that opportunity. Two years ago, I would ask myself how a new college grad could ever buy a house or condo in the city. Now it’s much more in reach. Some will win, others will lose. Whose to say which side is more important?
I have a friend in the Sacramento area who bought a house in 2005 for $600K. It’s now worth about $300K. I don’t know how he gets out of that situation without a short sale and I feel really bad for him.
I realize the numbers are kind of hard to follow. It’s hard to measure the spring bounce when the data is for years when there was a natural 6 – 7% appreciation going on. So I made deviations from the average of the years median prices. But I think the point I was trying to make is that in the recent past, the Feb – June months is where you saw the price gains. That reset prices to a higher level and then prices were flat until the following Feb. Things aren’t following that path now. Why is up for debate.
The good/bad is a hard question to answer. On a personal level, I’d like to buy sooner rather than later. I’ve been renting for the last year, and it’s really not my cup of tea. One of my biggest hobbies is improving where I live, so I’d like to feel safe buying soon. Some days it feels relatively safe. Other days, not so much. I’d like to buy, but more than that, I don’t want to lose my down payment I’ve worked so hard to get.
The larger point of “rising prices would help those from short sale/foreclosure” is hard because as prices drop, people who could have never afforded a home in this area now have that opportunity. Two years ago, I would ask myself how a new college grad could ever buy a house or condo in the city. Now it’s much more in reach. Some will win, others will lose. Whose to say which side is more important?
I have a friend in the Sacramento area who bought a house in 2005 for $600K. It’s now worth about $300K. I don’t know how he gets out of that situation without a short sale and I feel really bad for him.
I realize the numbers are kind of hard to follow. It’s hard to measure the spring bounce when the data is for years when there was a natural 6 – 7% appreciation going on. So I made deviations from the average of the years median prices. But I think the point I was trying to make is that in the recent past, the Feb – June months is where you saw the price gains. That reset prices to a higher level and then prices were flat until the following Feb. Things aren’t following that path now. Why is up for debate.
b,
I primarily base how I look at things on how I see them playing out on the street. I know I have 3 closings in April, and I know it’s been a long time since I’ve had 3 closings in one month. I also see people taking their short sales off maket, opting for the “making home affordable” program, reducing bargain priced inventory. The stimulus package is not only a credit.
I see jumbo loan programs up to $900,000 with 15% down…a loosening of credit. I see banks with new construction loans offering mortgages of less than 4% to help them sell. It’s not all about the $8,000 credit. I see state bond loans with $10,000 downpayment assistance and reduced rates for PMI and major tax benefits for first time buyers. Lots of stimulus and incentives for people who have at least 5% down. I see the perception that everyone needs 20% down fading, I see more FHA loans with 3.5% down.
I see the credit making it reasonable for people to buy a bank owned property that needs work, as the $8,000 will give them a new roof, or other things the neglected home needs. Since they need most of their money for downpayment and closing costs, that extra $8,000 allows them to buy a single family home at the cheapest of prices, without fear that they won’t have money to fix something that breaks. It’s a reserve position that gives them comfort in their purchase.
I would expect volume to get back to 2002 levels, before zero down financing took hold. That’s a whole lot of room for up. To some extent I think we have no where to go but up as to volume and % sold in less than 30 days, given how unbelieveably low they went early this year.
I think this spike will wane…but doesn’t it have to? A 10% increase in that short a time has to be an aberration to some extent. But I clearly can see 2009 going up as much as 2008 went down, roughly 12%, maybe more.
Are you talking about what will happen after 12/1/09 when the credit goes away?
b,
I primarily base how I look at things on how I see them playing out on the street. I know I have 3 closings in April, and I know it’s been a long time since I’ve had 3 closings in one month. I also see people taking their short sales off maket, opting for the “making home affordable” program, reducing bargain priced inventory. The stimulus package is not only a credit.
I see jumbo loan programs up to $900,000 with 15% down…a loosening of credit. I see banks with new construction loans offering mortgages of less than 4% to help them sell. It’s not all about the $8,000 credit. I see state bond loans with $10,000 downpayment assistance and reduced rates for PMI and major tax benefits for first time buyers. Lots of stimulus and incentives for people who have at least 5% down. I see the perception that everyone needs 20% down fading, I see more FHA loans with 3.5% down.
I see the credit making it reasonable for people to buy a bank owned property that needs work, as the $8,000 will give them a new roof, or other things the neglected home needs. Since they need most of their money for downpayment and closing costs, that extra $8,000 allows them to buy a single family home at the cheapest of prices, without fear that they won’t have money to fix something that breaks. It’s a reserve position that gives them comfort in their purchase.
I would expect volume to get back to 2002 levels, before zero down financing took hold. That’s a whole lot of room for up. To some extent I think we have no where to go but up as to volume and % sold in less than 30 days, given how unbelieveably low they went early this year.
I think this spike will wane…but doesn’t it have to? A 10% increase in that short a time has to be an aberration to some extent. But I clearly can see 2009 going up as much as 2008 went down, roughly 12%, maybe more.
Are you talking about what will happen after 12/1/09 when the credit goes away?
What I am saying is that the credits effect is not to create demand, its just to nudge existing demand. It is stealing future demand by doing this, its too small to move someone who was never planning on buying a home to suddenly run out and get one.
Dr. Short,
I totally understand not wanting to lose your downpayment. I think buying new has risk of depreciation, the same as a car, in a flat market. I think anyone buying for a year or two is going to be in trouble anyway you slice it. I wish more end users were getting bargains, and fewer investors.
I have a very happy couple closing this week on a house at 35% under peak pricing…35% under what the previous owner paid for it. It’s bank owned. I’m very happy for them. They are very, very happy. They were worried about losing their Earnest Money, because on a bank owned there are some scary addendums 🙂 But they didn’t worry for a second about losing their downpayment, which is only 5%.
Did they buy to get the credit? No. But when we knew the roof needed to be replaced in 5 years if not sooner, that credit became the new roof. Made life simpler.
Yes, the why is up for debate. But I don’t look at stats to find answers, I look at stats to test the answers I get out on the street. I won’t post an up stat if what I am seeing all around me says it’s a false indicator.
Lots of people who buy homes stay in them for a long, long time. Worrying about what will happen 12 months out is wrong thinking, because anyone thinking they may sell within 3 years, shouldn’t be buying a house at all.
I highly recommend that you buy “close in” to something. Buy a location and a lifestyle, not just a property that you like. Lowest price sometimes means wrong location, not always, but often. Buy the best area you can afford, not just the best house you can afford. Paying for high end finishes that will be outdated by the time you sell, is dangerous.
There are many more worries about losing your downpayment besides timing the market.
Dr. Short,
I totally understand not wanting to lose your downpayment. I think buying new has risk of depreciation, the same as a car, in a flat market. I think anyone buying for a year or two is going to be in trouble anyway you slice it. I wish more end users were getting bargains, and fewer investors.
I have a very happy couple closing this week on a house at 35% under peak pricing…35% under what the previous owner paid for it. It’s bank owned. I’m very happy for them. They are very, very happy. They were worried about losing their Earnest Money, because on a bank owned there are some scary addendums 🙂 But they didn’t worry for a second about losing their downpayment, which is only 5%.
Did they buy to get the credit? No. But when we knew the roof needed to be replaced in 5 years if not sooner, that credit became the new roof. Made life simpler.
Yes, the why is up for debate. But I don’t look at stats to find answers, I look at stats to test the answers I get out on the street. I won’t post an up stat if what I am seeing all around me says it’s a false indicator.
Lots of people who buy homes stay in them for a long, long time. Worrying about what will happen 12 months out is wrong thinking, because anyone thinking they may sell within 3 years, shouldn’t be buying a house at all.
I highly recommend that you buy “close in” to something. Buy a location and a lifestyle, not just a property that you like. Lowest price sometimes means wrong location, not always, but often. Buy the best area you can afford, not just the best house you can afford. Paying for high end finishes that will be outdated by the time you sell, is dangerous.
There are many more worries about losing your downpayment besides timing the market.
b,
I agree. The credit does not make people buy who weren’t thinking of buying already.
But what I am seeing is a lot of family’s getting fed up with a guy with an excel spreadsheet waiting for bottom, while they are fearful. While they have to move from one rental to another, switch schools, not decorate and upgrade their surroundings. There’s a price to be paid for waiting, and often it is the wives and children who suffer. When they get fed up, it’s time to get off the fence. For their sake, I hope I’m right.
For the person who bought in July of 2007…well that ‘s like the guy who bought a Dow Index fund at 14,000. I don’t wish for prices to “get back” to normal. I don’t wish for people to be talked into buying to get a credit or anything else. I only want people who really want to own vs rent to stop being afraid to do that. I want people to read Who Moved My Cheese and answer “what would you do if you were not afraid?” 🙂
I don’t see any reason why volume should be so much lower than before zero down financing started. Do you? Volume should get back to at least almost normal.
Dr. Short,
The last paragraph of comment 27, is that 2008? It looks to flat for 2007. I’ll make the corrections if you tell me what you need changed.
Ardell –
There is a huge reason it should be lower, the economy is in much worse shape. Have you seen the WA unemployment figures lately? Wage cuts are increasing (I know of people in tech who have been hit by this), economic output is dramatically slowing, etc. If all was sunny, it would make sense for us to get back to pre-bubble levels and thats that. It is not, and I think you’d have to go back to the late 70’s/early 80’s for comparison, not 2002/2003.
Wasn’t the population lesser in the late 70s, early 80s? I have no way to know what volume was then to answer that. Do you? How many homes sold in 1978?
Based on my normal calculations for predicting volume, the annual volume should be 10,000 SFH vs 15720 in 2008. If the number comes in at or very close to that number, it screws my bottom theory. If the number is higher than that and closer to last year’s volume vs. 10,000, then we likely have seen bottom already.
Curious about your last comment Ardell. First quarter “closed” volume in 2009 came in almost 40% under 2008 volume. So in order to equal 2008 volume, the last three quarters of 2009 will have to be ~11% higher than the same quarters in 2008.
Given that March Pendings – while up from February – were still down 2% from what we saw in 2008 – it’s going to take quite a turn around on volume. There are really only 8 months of “unknown”
Also, why are you choosing 2008 as your benchmark year – given that prices were off about 15%? Volume in 2008 was a third lower than pre-boom years like 2000-2003.
Just eyeballing the numbers – I’d think 20k might be a more reasonable benchmark for volume, so I’m interested in hearing your logic.
Deejayoh,
Good questions. First let’s establish I am talking about SFH King County Volume which was 15,720 for ” Residential” closed transactions 01/01/08 to 12/31/08. Given the lending issues and value issues for condos, I’m not touching condo predictions with a ten foot pole these days.
I’m not using 2008 as my benchmark year. I am saying I predicted volume in 2008 in April of 2008. I didn’t use 2008 at all as the benchmark now or at that time.
http://www.raincityguide.com/2008/04/17/seattle-real-estate-2008/
Here’s the benchmark I used in this post from Jan of 2008. See the first graph, and my opening statement that I tested the benchmark against 2005, 2006 and 2007 for consistency, before applying it in 2008. I’m starting from the same benchmark point for 2009 prediction as I did from 2008 prediction, BUT adjusting very differently now than I did then.
http://www.realtown.com/Ardell/blog/tracking-the-market/seattle-real-estate-2006
On April 17, 2008 I predicted 2008 volume at 16,500 as follows. First quarter volume of 3,635 divided by the benchmark of 20% equals 18,175. I then downgraded to 16,500 in the prediction based on my then opinion that volume would be a higher % in the 1st quarter than in the benchmark years. I also added 1,000 at the end so I didn’t tick off or scare too many agents 🙂 so my calculation came out at 15,500 prediction vs. 15,742 actual.
The basic rule of thumb I use is 45% 1st Quarter + 4th Quarter and 55% for 2nd and 3rd Quarters. Then I apply my hands on adjustment based on what I see happening so far as of April, and other factors.
Everything I do right now goes back to my “bottom call” and my premise that the 1st Quarter was artificially impacted by the “wait for stimulus package” consumer of that time. So unlike last year, instead of downgrading the 1st Quarter for my prediction of declining volume, I am doing the reverse.
With me so far?
Deejayoh,
Good questions. First let’s establish I am talking about SFH King County Volume which was 15,720 for ” Residential” closed transactions 01/01/08 to 12/31/08. Given the lending issues and value issues for condos, I’m not touching condo predictions with a ten foot pole these days.
I’m not using 2008 as my benchmark year. I am saying I predicted volume in 2008 in April of 2008. I didn’t use 2008 at all as the benchmark now or at that time.
http://www.raincityguide.com/2008/04/17/seattle-real-estate-2008/
Here’s the benchmark I used in this post from Jan of 2008. See the first graph, and my opening statement that I tested the benchmark against 2005, 2006 and 2007 for consistency, before applying it in 2008. I’m starting from the same benchmark point for 2009 prediction as I did from 2008 prediction, BUT adjusting very differently now than I did then.
http://www.realtown.com/Ardell/blog/tracking-the-market/seattle-real-estate-2006
On April 17, 2008 I predicted 2008 volume at 16,500 as follows. First quarter volume of 3,635 divided by the benchmark of 20% equals 18,175. I then downgraded to 16,500 in the prediction based on my then opinion that volume would be a higher % in the 1st quarter than in the benchmark years. I also added 1,000 at the end so I didn’t tick off or scare too many agents 🙂 so my calculation came out at 15,500 prediction vs. 15,742 actual.
The basic rule of thumb I use is 45% 1st Quarter + 4th Quarter and 55% for 2nd and 3rd Quarters. Then I apply my hands on adjustment based on what I see happening so far as of April, and other factors.
Everything I do right now goes back to my “bottom call” and my premise that the 1st Quarter was artificially impacted by the “wait for stimulus package” consumer of that time. So unlike last year, instead of downgrading the 1st Quarter for my prediction of declining volume, I am doing the reverse.
With me so far?
Ardell –
You also predicted a bottom in volume last April as well. But besides that, are you saying your methodology is to take what your model gives you (18500), hand modify it by an arbitrary amount (15500?), then modify it again by another arbitrary amount to make the first arbitrary amount less scary in your blog post?
I am curious, what does your arbitrary model say volume will be if the first quarter was not really impacted by the “wait for the stimulus package” consumer?
b,
You said: “You also predicted a bottom in volume last April as well.”
Not sure what you mean by that. I clearly would not have called “april” a bottom in volume, since I downgraded my 2008 volume prediction based on anticipated decreased volume. I’ll have to read the post after I get back from my signing appointment, or you can put that quote in the comments here and I’ll address it later.
You asked: “are you saying your methodology is to take what your model gives you (18500), hand modify it by an arbitrary amount (15500?), then modify it again by another arbitrary amount to make the first arbitrary amount less scary in your blog post?”
Depends what you call “arbitrary”. If you are asking if I use a pure formula year in and year out regardless of current factors, of course I do not do that. A computer program can do that. Why would anyone expect an agent to do that? Clearly one would expect an agent to take what they know from years of experience, and most recent and current experience, and apply it as part of the end result. The final part is to round up or down, I would think anyone would do that when making a prediction. Last year I rounded up a bit as the stark reality of the difference was almost too much to swallow. I chose to err on the side of reasonable difference. Everyone chooses to err on one side or the other when rounding.
In my business I err on the side of client advantage when doing estimates. Predictions and estimates are never an exact science. Intuitive interpretation is applied to the end formula result and then rounded out.
Still, I have to stand by the 16,500 I posted and say 15,742 was close enough, and closer than if you applied my pure formula without experience and intuitive variance of any kind.
As to your last question, I may wait until April 17, the day I did last year’s prediction post. Maybe I’ll answer it tonight. Waiting to hear from Deejayoh first.
P.S. b…your tone feels a bit on the attack side. Are we having a conversation, or are you applying a level of flame there. I’m more than happy to have a discussion with anyone, but your little skull and crossbones avataar makes you seem like someone who is just tring to cause problems. An honest response to that question would be appreciated. I don’t want to read to much into that skull and crossbones thing, if it is unwarranted.
OK, so first quarter this year is 2,303 SFH in KingCo. If I take your starting calc for last year’s forecast, I divide that by 20% and I get 11,515.
That means you need about 1,300 additional units of growth per quarter for your “hands on” adjustment vs. that model to hit last years number, right?
I understand we should see some pick up in the pace (can’t stay this low forever!) but I don’t know that there will be that much. I’m guessing 12-13k sales is where we end up.
But your estimate for last year was pretty good. thanks for linking back to that.
OK, so first quarter this year is 2,303 SFH in KingCo. If I take your starting calc for last year’s forecast, I divide that by 20% and I get 11,515.
That means you need about 1,300 additional units of growth per quarter for your “hands on” adjustment vs. that model to hit last years number, right?
I understand we should see some pick up in the pace (can’t stay this low forever!) but I don’t know that there will be that much. I’m guessing 12-13k sales is where we end up.
But your estimate for last year was pretty good. thanks for linking back to that.
deejayoh,
1st Quarter 2009 as of right now is 2,180 closed 1/1/09 to 3/31/09 Residential King County, not 2,303. Not sure where your numbers come from but that’s the number right now.
Remember, the formula I use is 1st + 4th = 45% and 2nd + 3rd = 55%. The 20% was only in that one year in the graph, the formula comes from more than one year. So “20% 1st Quarter” is not a given for every year.
Let’s go back to 2001 and see what the breakdown was prior to subprime and bubble:
Total 2001 – 22,415 –
1st Quarter – 4,662 = 20.7%
4th Quarter – 4,963 = 22.1%
Let’s call that 43% for 1 + 4 and 57% for 2nd + 3rd.
Before I continue, and because I have an appointment soon, can you tell me what this means?
“That means you need about 1,300 additional units of growth per quarter for your “hands on
deejayoh,
1st Quarter 2009 as of right now is 2,180 closed 1/1/09 to 3/31/09 Residential King County, not 2,303. Not sure where your numbers come from but that’s the number right now.
Remember, the formula I use is 1st + 4th = 45% and 2nd + 3rd = 55%. The 20% was only in that one year in the graph, the formula comes from more than one year. So “20% 1st Quarter” is not a given for every year.
Let’s go back to 2001 and see what the breakdown was prior to subprime and bubble:
Total 2001 – 22,415 –
1st Quarter – 4,662 = 20.7%
4th Quarter – 4,963 = 22.1%
Let’s call that 43% for 1 + 4 and 57% for 2nd + 3rd.
Before I continue, and because I have an appointment soon, can you tell me what this means?
“That means you need about 1,300 additional units of growth per quarter for your “hands on
yes, I was reacting to this comment:
so I thought you were saying if we are close to 15k, we’ve hit bottom vs. being closer to 10k
Thanks deejayoh,
I was just commenting without doing the full math of a “prediction” there. So now we know where I stand on the 10,000 side of that comment. The number right now is 10,900 to be updated for any late postings of 1st Quarter closings. “higher than that and closer to last year’s…” is not a prediction and too wide of a spread. I try to pin that down better for you.
My appointment is in 7 minutes over at Starbucks in Park Place. Thanks for answering. I’ll check this again when I get back.
deejayoh,
Not sure I would use the exact method to predict 2009 that I did to predict 2008. While I was pleased with the degree of accuracy of that method last year, I’m not sure using 1st Quarter as the benchmark is appropriate in 2009. As you may know, this year as opposed to last year I am looking more at weekly vs. monthly stats.
I will do a prediction post similar to the one I did last year on April 17th as my Sunday Night Stats post. In the meantime, I will be doing the underlying data on my blog while I am determining my chosen prediction method for 2009.
It is important to me that I clearly identify whether or not the stimulus package is impacting the stats, as I need to get a feel for what may happen when the stimulus package drops off.
What level of sales would you need to see to credit the stimulus package for the improvement? Would sales have to be higher than last year for you to feel there had been an effect?
deejayoh,
Not sure I would use the exact method to predict 2009 that I did to predict 2008. While I was pleased with the degree of accuracy of that method last year, I’m not sure using 1st Quarter as the benchmark is appropriate in 2009. As you may know, this year as opposed to last year I am looking more at weekly vs. monthly stats.
I will do a prediction post similar to the one I did last year on April 17th as my Sunday Night Stats post. In the meantime, I will be doing the underlying data on my blog while I am determining my chosen prediction method for 2009.
It is important to me that I clearly identify whether or not the stimulus package is impacting the stats, as I need to get a feel for what may happen when the stimulus package drops off.
What level of sales would you need to see to credit the stimulus package for the improvement? Would sales have to be higher than last year for you to feel there had been an effect?
I look forward to your post.
As far as the stimulus package goes – I’m not sure I think you need to attribute a specific impact to that. I suspect it will bring a few buyers off the fence at the margin in the short term, but the impact will be fairly short lived. In other words, I would expect a bump – then a drop off. That’s the nature of promotions. Check out google trends for the term “$8000 tax credit”. I realize that isn’t the “whole stimulus”, but it gives a sense of people’s attention span.
In any case, I think that to see the market stabilize, sales need to climb back into the 20k per year range – whereas I think we’ll end up in the 12-13k range this year. My $0.02 – and probably worth just as much ;^)
Deejayoh,
1) I think a lengthening of the season will be another sign that the stimulus is as least in part responsible. Will the cutoff of 11/30/09 as to closing to be eligible for the credit, boost sales between 9/1 and 11/30? That is why I’m leaning against using “Quarterly” for 2009 and coming up with a different method. December closings aren’t eligible for the credit, unless we see an extension of the deadline before that time.
2) My concern about the whole “getting over 20,000” thing, especially as I go back in years for prediction purposes, is the “double listed” crackdown. I can’t pinpoint when the mls got tougher on agents trying to show a property in two zones at once, causing double postings. Some of the decline is likely attributable to that, and how much is a big guess. What if 22,000 was really 19,000? The only way for me to know for sure is to separate it into zones and do same zone comparisons. A property listed in 2 zones will show as two closings.
In order for December “no credit” month to be separate, I think I’m going to have to run my numbers as month to month vs quarter to quarter. I don’t see any way around that. Do you?
I very much appreciate your $.02 BTW. Don’t sell yourself short 🙂 In many ways I value your opinion more than The Tim’s.
Few questions and comments on this data:
1) What percentage of homes sold from Jan-Apr 2009 are foreclosures and short sales? What percentage of the above graphs are attributed to those numbers?
2) $ Per sq. ft. makes sense only if you are comparing apples to apples, i.e. similarly sized homes sold across months. $ per sq. ft for a 1500 sq.ft. SFH or Condo will always be more than that for a 2,500 sq.ft. SFH. Do you have that data?
3) Hitting a bottom cannot be defined by inventory alone, i.e. number of SFH’s sold in a year. I hope you are factoring in median price drops YOY. March 2009 numbers already show that your Feb prediction may not quite hold.
Overall, it’s easy to draw graphs to support your theory that “February was the bottom” but MLS numbers that came out yesterday show a decline to March 2005 pricing levels – what do you have to say to that?
http://www.nwrealestate.com/nwrpub/common/news.cfm
http://seattletimes.nwsource.com/html/businesstechnology/2008995228_webhomesales07.html
I like your blog, but I’d like to see some solid reasoning behind the data rather than just one-way graphs trying to prop up real estate and prove that the stimulus package is working.
Few questions and comments on this data:
1) What percentage of homes sold from Jan-Apr 2009 are foreclosures and short sales? What percentage of the above graphs are attributed to those numbers?
2) $ Per sq. ft. makes sense only if you are comparing apples to apples, i.e. similarly sized homes sold across months. $ per sq. ft for a 1500 sq.ft. SFH or Condo will always be more than that for a 2,500 sq.ft. SFH. Do you have that data?
3) Hitting a bottom cannot be defined by inventory alone, i.e. number of SFH’s sold in a year. I hope you are factoring in median price drops YOY. March 2009 numbers already show that your Feb prediction may not quite hold.
Overall, it’s easy to draw graphs to support your theory that “February was the bottom” but MLS numbers that came out yesterday show a decline to March 2005 pricing levels – what do you have to say to that?
http://www.nwrealestate.com/nwrpub/common/news.cfm
http://seattletimes.nwsource.com/html/businesstechnology/2008995228_webhomesales07.html
I like your blog, but I’d like to see some solid reasoning behind the data rather than just one-way graphs trying to prop up real estate and prove that the stimulus package is working.
freestyler,
Foreclosures are not sold via the mls, so I would think none. If the bank takes it back at the foreclosure and sells it as a bank owned property after the foreclosure, then it is in those numbers.
There is no way to separate short sales and bank owned properties except to identify them one by one by hand. I do that when I do a smaller geographic area, but could never it it for the whole county.
Last Sunday or the week before I did that type of report for certain zip codes. If you hit the tag Sunday Night Stats at the bottom of the post, you will get all kinds of data going back to 2000 in postings since early 2008.
It sounds like you may be a new reader. Each of my posts are not all inclusive. You would have to track back a bit through older posts tagged Sunday Night stats to get a better feel for why I am posting this one at this time. I have been blogging for over three years. Each post is not all inclusive and sometimes a continuing story, as this one is.
Thank you for reading, but it’s somewhat like coming in in the middle of a movie and asking how it started 🙂
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