There’s some griping around the web about my separating North King County from South King County.
Sold YTD the median home price in North King County is $439,725 vs. $333,325 in South King County.
Sold YTD the median price per square foot in North King County is $217 vs. $169 in South King County.
I think a hundered grand difference, is a big deal. I think a 25% variance is a huge deal. Feel free to disagree.
Let me ask you this. You come to me saying you would like to buy a house for about $350,000 near Microsoft. I might be able to convince you to go to Green Lake or some point just to the other side (Seattle side) of the 520 bridge. Maybe Kenmore or Bothell or Juanita/Finn Hill…possibly Duvall. Maybe buy a townhome vs. a single family home. But would you agree to Federal Way or Auburn? I don’t think so. Pretending that what happens in Redmond influences what happens in Auburn, or vice versa, is of no value to anyone.
Markets are moved by the decision makers, and the decision makers in this market are the buyers of homes. Only home buyers can reset the data. So reporting in the manner that buyers actually make decisions to buy, is important.
If there ever comes a day when the majority of people who want to buy a home give equal consideration to Auburn vs. Redmond, well then they will become one market. Until then, separation is of more value than lumping everything together by County.
You should care about what happens in the market priced over your price range, as a cram down on those home prices will in lagging fashion affect the values in your price range. Knowing how many homes are sold there, and the buildup of unsold inventory there, will give you some predictive data with regard to the impact it will have on YOU. Will 100 houses not selling for over $1.2 million affect your purchase of a home for $350,000? Not likely. Will 2,000 homes not selling for between $600,00 and $800,000 affect the price of your purchase at $550,000? Very likely, yes.
Very, VERY important right now is the affect lower single family home price is having on the townhome and condo markets. Most sellers look at like kind product, and rarely condsider “If someone can buy a single family home for this price, why would they buy my townhome for the same price?” And that is exceptionally important right now for most condo and townhome owners.
I understand that it’s easier to understand data when everything is lumped together, and factoring in the specifics that affect YOUR decision is tedious and a lot of work. But for years people have said that your home purchase decision is one of the most important decisions you make in a lifetime. If you believe that is true, then shouldn’t it be hard vs. easy?
North King County – Additional data (that is not posted, compiled or verified by NWMLS) I hate that required disclosure. Would make more sense to credit them if it WAS regurgitated from their published data. Having to say it isn’t, every time I post data, is annoying but a rule of membership. And it must be in bold lettering. Apologies for the redundancy of having to say that in every data post.
Property sold, including homes, townhomes and condos in North King County for more than $600,000 represents only 19% of all property sold YTD.
Property FOR SALE and NOT sold in that same area as of today shows us that while only 19% of property sold is selling for over $600,000, 40% of what is for sale is priced at over $600,000.
That tells you that under $600,000 is 1,555 divided by 4 or 388 sales a month and 3,604 divided by 388 equals a 9 month supply of inventory in North King county priced at $600,000 or less.
Over $600,000 is 368 divided by 4 month YTD is 92 sales per month. 2,443 for sale divided by 92 sales per month = a 26 month supply of inventory, which is almost 3X worse than the under $600,000 property.
Let’s separate the condos from the single family homes in the under $600,000 market. While the overall absorption rate is a 9 month supply:
for condos under $600,000 the absorption rate is 13 months
for single family the absorption rate is 7 months
For “marketwatchers”, lumping everything together is easier. But if you are looking at real estate blogs for more than party chit chat, if you are trying to get a lot of info before buying or selling real estate, Countywide stats do not tell you the story you need to hear.
If $100,000+ variance in median home price between North King County and South King County means nothing to you, then you are not likely planning to buy or sell real estate.
Can you please post a map that will help us visualize what is included and in north King county?
I agree with your Auburn/Redmond comparison but using 600K as the treshold probably doesn’t tell the true story either.
Since a big chunk of buyers is in the 400K-600K price range, I would love to see those stats. With high pay employers such as Microsoft, Boeing and WaMu laying off I find it hard to believe homes in that price range won’t drop further.
The function I use is not printable. It’s a map search function and is difficult to define it exactly the same every time I do the stats, unless I do them consecutively without altering the map search, which I try to do as much as possible.
Most easily defined, it is everything approximately everything north of Yesler. Hope that helps.
Because I have to have the map reduced in size to incorporate all of each side of King County, I use the Seattle “dot” as the center point dividing North from South. When I blow that up, the dot disappears, so just north (a street or two north of) Yesler, is as close as I can pinpoint it. That puts the I-90 bridge on the south side of the line, West Seattle on the South side of the line and all of Mercer Island and part of Bellevue. So it is not merely segregating “lower priced” areas from higher priced ones.
The map indicates it is positioned due north to due south. The County lines are not on the map, but I have a preset to exclude everything not in King County, so I draw the box large into the adjoining counties, and the preset sorter removes anything that isn’t King County.
It’s more fair than doing a comparison of only “prime” areas against lower price ranges. I could use zip codes, but that would only affect the areas right on the line, and the extra work of that isn’t worth it.
SeaBuyer,
First lets test your theory as to % of buyers. Still using North King County, but combining single family with condos. Since townhomes on Eastside are condos but in Seattle are single family, I don’t want to exclude them for only part of the geographic area being used.
Total sales since the first of the year = 1,892. 51.9% of all of those sales were in the $400,000 and under price range. Slightly more than half. 18.6% were in the $400,000 to $500,000 range and 12.2% were in the $500,000 to $600,000 range.
In my previous post, I broke the stats down into $400,000 and under $400,000 to $800,000, $800,000 to $1.2M and then everything over that. I used the $400,000 break point, as that is the segment where the volume was up. When I moved up to under $500,000, the data was different. I expect that has to do with conforming loan limits, but studying the underlying loans for each home purchase is too tedious to do on a large scale.
$400,000 to $600,000, North King County, Residential + Condo = 1,565 for sale with 395 pending, 572 sold since the first of the year and 3,129 sold last year.
Let’s break out $400,000 to $500,000 and see what % of those totals is accounted for.
$400,000 to $500,000, North King County, Residential + Condo = 905 for sale with 261 pending, 353 sold since the first of the year and 1,910 sold last year.
So $400,000 to $600,000 absorption rate is 572 divided by 4 = 143 a month. 1,565 for sale divided by 143 sold a month = 10.9 months worth of inventory (homes and condos combined)
$400,000 to $500,000 absorption rate is 353 divided by 4 = 88.25. 905 divided by 88.25 is 10.25 months of inventory.
Not much difference as to absorption rate. Nothing like the difference in high end of 5 years of inventory vs. low end of 7 months of inventory as to single family homes that I posted last night.
I still think the $400,000 and under is the most significant factor, given it represents the slight majority. $600,000 and under represents 81% of all sales, or the vast majority. But singling out the $400,000 to $600,000 doesn’t seem to be of value, except for those buying in that price range.
SeaBuyer,
First lets test your theory as to % of buyers. Still using North King County, but combining single family with condos. Since townhomes on Eastside are condos but in Seattle are single family, I don’t want to exclude them for only part of the geographic area being used.
Total sales since the first of the year = 1,892. 51.9% of all of those sales were in the $400,000 and under price range. Slightly more than half. 18.6% were in the $400,000 to $500,000 range and 12.2% were in the $500,000 to $600,000 range.
In my previous post, I broke the stats down into $400,000 and under $400,000 to $800,000, $800,000 to $1.2M and then everything over that. I used the $400,000 break point, as that is the segment where the volume was up. When I moved up to under $500,000, the data was different. I expect that has to do with conforming loan limits, but studying the underlying loans for each home purchase is too tedious to do on a large scale.
$400,000 to $600,000, North King County, Residential + Condo = 1,565 for sale with 395 pending, 572 sold since the first of the year and 3,129 sold last year.
Let’s break out $400,000 to $500,000 and see what % of those totals is accounted for.
$400,000 to $500,000, North King County, Residential + Condo = 905 for sale with 261 pending, 353 sold since the first of the year and 1,910 sold last year.
So $400,000 to $600,000 absorption rate is 572 divided by 4 = 143 a month. 1,565 for sale divided by 143 sold a month = 10.9 months worth of inventory (homes and condos combined)
$400,000 to $500,000 absorption rate is 353 divided by 4 = 88.25. 905 divided by 88.25 is 10.25 months of inventory.
Not much difference as to absorption rate. Nothing like the difference in high end of 5 years of inventory vs. low end of 7 months of inventory as to single family homes that I posted last night.
I still think the $400,000 and under is the most significant factor, given it represents the slight majority. $600,000 and under represents 81% of all sales, or the vast majority. But singling out the $400,000 to $600,000 doesn’t seem to be of value, except for those buying in that price range.
SeaBuyer,
Pay attention to FHA loan limits in your area. That will be a significant value factor. Even if you have 20% down, you have to watch the resale affect of others using FHA loans with only 3.5% down, so keep that loan limit in mind as to eventual “buyer pool” on resale.
SeaBuyer,
Pay attention to FHA loan limits in your area. That will be a significant value factor. Even if you have 20% down, you have to watch the resale affect of others using FHA loans with only 3.5% down, so keep that loan limit in mind as to eventual “buyer pool” on resale.
Ardell:
Bellevue folks (S of I-90) aren’t gonna like being lumped with Auburn and Federal Way!
I’m sure there’s plenty of razzing going on north of the line. 🙂
It is interesting though. I just saw a quite nice tri-level in Auburn (if you can trust the pictures), go for $136K and it only required a $100 down payment.
Obviously, it’s the exception to the rule, but there are unique possibilities out there.
The other thing we are seeing is an extreme shortgage of comps above the $500K line, for those that want to refi.
As always, it is informative to see your analysis laid out.
Roger,
You know what they say…you have to draw the line somewhere 🙂
Seriously though, the decrease in median price for homes in Bellevue below that line is almost double that of Redmond 98052. The line isn’t necessarily drawn exactly at 98006, but I think it pretty much works out that way.
Comparing YTD median sold price with the same period YOY:
98006 is down 20%
98052 is down 11%
98007 and 98008 down 15%
98004 down 16%
Of note, condo prices in 98004 are virtually unchanged as to YOY sold median price. Amazing. In 98006, condo prices are down only 3%, but volume is down 57% vs. 98004 down 34%.
Bellevue in it’s entirety is not “a market”. Closer to Redmond moves more like Redmond and closer to Renton moves more like Renton. Just is.
I mention that because the 20% decrease in sold prices may have a lot to do with the 98006 sellers’ asking prices being higher than last year’s median sold price. The median asking price of homes in 98006 is 7% HIGHER than last year’s sold price in the first 4 months of 2008. Conversely 98007 and 98008 are showing median asking prices at 5% LOWER than last year’s first 4 months median sold price. Redmond median asking price of homes not sold is slightly less than last year’s sold prices for the same period as current YTD.
98006 hanging on to high asking prices, defying any sense of logic, could be contributing to that 20% decline in prices.
The median sold price YTD in 98006 is $480,000 but the median asking price of homes not sold is $650,000. Huge variance.
Hmmm. I think this is more about proximity than it is North vs. South. Seattle/Bellevue doesn’t sit in the geographical center of King County, but rather in the northwest corner of the county. So really I think what you are seeing is based on distance from employers. Which is basically what you were getting at but maybe not stated exactly that way? Snohomish county markets certainly seem to work that way.
Sandy,
Mostly what I’m getting at is given the huge variance in median price above and below that line, ($100,000+) looking at the County as a whole and melding the two, is a disservice to most homebuyers and sellers.
Looking at too small of an area as comparison when making decisions, is a huge mistake. Looking at too large of an area is also a mistake.
Given the tools we have to work with, cutting the county in half using downtown Seattle as the definition of north vs. south (of downtown Seattle), appears to be the best answer for stat postings. County data is readily available in many places. Per zip code and per city is available in many places. North vs. South we all KNOW is an issue, so a stab at defining it with some conformity is of value.
If someone in an area of 20% down prices, is using a median for the whole county to price, they are overpricing. If someone in an 11% down area is using median price for the whole county to price, they are underpricing.
I am seeing evidence that this is happening, on both sides of that coin. Consequently pointing out those “errors” is of value both to those who are overpricing and those who are underpricing.
P.S. Sandy,
Don’t think it’s “distance to employers” because just south of downtown is not a further distance from employers than just north of downtown.
I’ll test that.
Current median sold price Seattle only south of Downtown into Beacon Hill gives me a median sold price YTD for residential of $351,000.
Going the same distance north of downtown, Seattle only again, gives me a median sold price YTD of $477,500.
So no, it’s not about proximity to employers.
Ardell:
“The median asking price of homes in 98006 is 7% HIGHER than last year’s sold price in the first 4 months of 2008.”
That is a relevant statistic, especially when compared against other roughly equivalent Eastside area.
I have seen some seriously overpriced listings in my area, (yes, it’s south of the line), you wonder why they even bother putting up a sign.
In Seattle, it’s all about schools, and the overall walking appeal of one neighborhood vs another.
Ardell:
“The median asking price of homes in 98006 is 7% HIGHER than last year’s sold price in the first 4 months of 2008.”
That is a relevant statistic, especially when compared against other roughly equivalent Eastside area.
I have seen some seriously overpriced listings in my area, (yes, it’s south of the line), you wonder why they even bother putting up a sign.
In Seattle, it’s all about schools, and the overall walking appeal of one neighborhood vs another.
The fallacy in your comment is “other roughly equivalent eastside area”. They are not roughly equivalent, and until the seller’s “get” that they are not as “special” as they think they are…their values will plummet more than they have to…as they are now.
I don’t want to be mean, but sometimes being “nice” is very unkind. When you continue to let people make mistakes that cause more damage than good…that is not “kind”.
Ardell,
We’ve been thinking along the same line today. I just finished up breaking down the homes sold in Snohomish Co. by every 100K. Most of the homes sold are in the $200 – $300K range followed by $300 – $400K. Over $500K is almost non-existent. I think tomorrow I’ll break it down by area and then by active listings to get absorption rates as well as I agree that will add more to the story. I’m wondering if I should break it down by city or by MLS area.
Graphs for Snohomish County are here:
http://snohomishcountymarketstatistics.blogspot.com/
Julie,
Never, ever, never, never use mls area codes. It makes the public think they need to buy a secret decoder ring, and they can’t find the store that sells them.
LOL – you’re too funny.
Julie,
I like your info on month to month Notice of Default and foreclosure stats.
“Bellevue in it’s entirety is not “a market
Thinking about Homes,
My point of view can’t be “dated” or 10 years old…I’ve only lived in the Seattle area since early 2004 🙂 How about moves more like Issaquah? I’ll give you that.
“I noticed that while pending sales continue to rise in King County, closed sales are not keeping up. Why do you think that is happening”
Depends what you call “pending”.
King County Pendings:
Total right now = 3,697 – I wouldn’t count all of these as “real”
Went pending since 3/1/09 – 3,304
Went pending since 4/1/09 – 2,682
Went Pending since 4/15/09 – 1,913
527 are asking for back up offers
1,172 are still haggling over the inspection, or waiting for lienholder approval to do the inspection.
Closed since April 1 – 1,415
110 pendings have the word “lienholder” in the agent remarks
777 pendings have the words “short sale” in the agent remarks
590 have the word “subject” as in subject to (lease, lienholder approval)
Other considerations:
Due to longer processing times, offers are not closing within 30 days the way they used to, even under the best of circumstances. So pendings in a 30 day period are no longer an accurate prediction of monthly closed sales. Add 2 weeks, so 6 instead of 4 reduces closed volume by 1/3rd.
2682 – 33% = 1,782 plus some % of stale listings…
Closed sales are not going to “keep up” with pendings for all of the above reasons. More will fall apart on inspection.
Management of inspection negotiation is CRUCIAL, moreso than initial price negotiations. Mis-management and emotion during the inspection phase is accounting for a lot of fallout. I can’t tell how much, but it is the one place where sellers can focus on improving stickiness of escrow.
Thinking about Homes,
My point of view can’t be “dated” or 10 years old…I’ve only lived in the Seattle area since early 2004 🙂 How about moves more like Issaquah? I’ll give you that.
“I noticed that while pending sales continue to rise in King County, closed sales are not keeping up. Why do you think that is happening”
Depends what you call “pending”.
King County Pendings:
Total right now = 3,697 – I wouldn’t count all of these as “real”
Went pending since 3/1/09 – 3,304
Went pending since 4/1/09 – 2,682
Went Pending since 4/15/09 – 1,913
527 are asking for back up offers
1,172 are still haggling over the inspection, or waiting for lienholder approval to do the inspection.
Closed since April 1 – 1,415
110 pendings have the word “lienholder” in the agent remarks
777 pendings have the words “short sale” in the agent remarks
590 have the word “subject” as in subject to (lease, lienholder approval)
Other considerations:
Due to longer processing times, offers are not closing within 30 days the way they used to, even under the best of circumstances. So pendings in a 30 day period are no longer an accurate prediction of monthly closed sales. Add 2 weeks, so 6 instead of 4 reduces closed volume by 1/3rd.
2682 – 33% = 1,782 plus some % of stale listings…
Closed sales are not going to “keep up” with pendings for all of the above reasons. More will fall apart on inspection.
Management of inspection negotiation is CRUCIAL, moreso than initial price negotiations. Mis-management and emotion during the inspection phase is accounting for a lot of fallout. I can’t tell how much, but it is the one place where sellers can focus on improving stickiness of escrow.
P.S. There is also an increase in the Google keyword search on my blog for inspection issues (I don’t do stats for RCG). That is not “king county” or even local. But when I see the stats reflecting more questions from people in the inspection phase via Google keyword searches, I know that many escrows around the country are falling out on inspection issues.
Short sale buyers that do inspection after lienholder approval are more likely to fall apart, than those that require inspection be done in a normal timeframe. I don’t know why any buyer would want to wait 2 months for lienholder approval, and then find out they don’t want the house after all because of inspection issues. Often the lienholder approval is “as-is”. Same with bank-owned. It’s a killer when a contract is in escrow for 2-3 months waiting for lienholder approval, only to fall apart on inspection.
On normal sales, sellers often get pushed to their bottom line on price at time of initial offer, and have nothing left to give at inspection time. Another cause of pending fallout. Never agree to a price thinking “not a penny more”…you’ll lose it on inspection phase.
Some people put offers in on more than one short sale at once. So 3 pendings can equal 1 actual buyer.
Ardell:
I was thinking they’d be roughly equivalent for my needs…good schools, lots of single family homes, equi-distant to job centers (with the notable exception of MS campus), similar amenities.
That’s not the same as what the market as a whole needs, of course.
You are right about the longer processing times to complete a loan, increasing pendings. It seems like every lender has a backlog right now, even those that usually do not.
There is an unusual volume of refis, a decent amount of purchase volume, every file is full doc, and they all get carefully reviewed in underwriting.
It’s back to the future, all over again.
Ardell:
I was thinking they’d be roughly equivalent for my needs…good schools, lots of single family homes, equi-distant to job centers (with the notable exception of MS campus), similar amenities.
That’s not the same as what the market as a whole needs, of course.
You are right about the longer processing times to complete a loan, increasing pendings. It seems like every lender has a backlog right now, even those that usually do not.
There is an unusual volume of refis, a decent amount of purchase volume, every file is full doc, and they all get carefully reviewed in underwriting.
It’s back to the future, all over again.
Roger,
All good reasons…just watch the pricing. Sold vs. not sold is a good indicator. Look at comps, not just price reductions or other “for sale” property.
I tried using longer escrow periods to accommodate longer pocessing times, but doesn’t seem to help. Either 45 days is not enough…or they simply put it on the bottom of the pile because of the long close date.
FYI… My Bothell (residential resales only) study shows days from Pending STI to Closed last 6 months: Non-Distressed 24 days – Short Sales= 44 days, Bank Owned= 33 days.
Ardell:
You are right about that…all of the underwriting depts seem to be working a triage system. “We’ll get it out just in the nick of time, sort of…”
This business is not for the easily rattled…at any step of the way.
In this market we are definitely the glue that holds everything together. I remember saying that in the early nineties as well. 2 of my last four closings would not have made it to the end, if I wasn’t good at juggling all the emotions that were flying around. Kim says I have the patience of a Saint.
Sometimes part of the value of an agent is so the buyers and sellers can vent at us vs. the other party in the transaction. How many times do we talk a party off the “tell them to shove it up their…” position, so the transaction moves forward.
Sometimes a tiny thing can cause an escrow to go sideways, just because everyone’s nerves are frazzled by the time they make or get an offer, in this market.
Empathy is a key ingredient to make it to closing.
In this market we are definitely the glue that holds everything together. I remember saying that in the early nineties as well. 2 of my last four closings would not have made it to the end, if I wasn’t good at juggling all the emotions that were flying around. Kim says I have the patience of a Saint.
Sometimes part of the value of an agent is so the buyers and sellers can vent at us vs. the other party in the transaction. How many times do we talk a party off the “tell them to shove it up their…” position, so the transaction moves forward.
Sometimes a tiny thing can cause an escrow to go sideways, just because everyone’s nerves are frazzled by the time they make or get an offer, in this market.
Empathy is a key ingredient to make it to closing.
Julie,
I did one of those bank-owned Bothell closings. The dates show shorter than they really are, because the bank doesn’t sign off until you are pretty far along into the process. You start processing with verbal approval well in advance of the date showing as pending in the mls.
Some of the short sales are also not showing pending until they have lienholder approval, particulary those where they seller doesn’t sign until the seller has lienholder approval.
Ardell… you are right about that. The last short sale I did took 4 months to close, so my short sale number should just be thrown out. It’s not reality. Plus agents had no clue or guideline in the past as when to change the status, like they do now. Do you think agents are still holding back on changing the status, even though they have an offer? I wonder how some are handling this situation.
Julie,
I think your reality is a lot more “real” than the stats. Regardless of what the mls says, many lienholders REQUIRE that the listing stay active so they can get more offers than the one accepted by the seller, and try to get a better price. “pending backup” removes the listing from the public sites. They really should bring back STI, but they won’t.
There is a HUGE disconnect between the mls info and reality as to short sales and bank owned property. The averages you derived from that source are clearly not reality, and I think we both know that from our first hand experiences.
Removing the listing from the public view because one offer is in hand may be a local mandate, but even that is “subject to lienholder approval”, whether we like it or not.
I would be careful of posting data that you know is suspect.
There is a geographic barrier just south of Bellevue that is created by May Creek Park, the Newcastle Golf Club, Couger Mnt Park, Squak Mountain Park, and Tiger Mountain Forest.
There are only 4 main “bridges” across that geographic barrier: 405, Coal Creek Parkway, Renton Issaquah Rd, and Issaquah Hobard Rd.
Comparing North KC and South KC is like comparing North Austin and South Austin (which are separated by a lake with around four bridges).
Alan,
I noticed a change after the big snow a couple years back, and also when the gas prices went over $4.00. We’ve had some rough weather the last couple of years, for Seattle Area. When people had to walk home up some steep hills, they started rethinking the benefit of “new and cheaper” vs. closer in. Caused a bit of a shift that was gradual and not easily noticed.
I also heard a lot of complaints from people in Sammamish about wanting to be in homes with more natural light and closer to walkable neighborhoods and shops. Many didn’t, because they couldn’t sell their homes there to buy at affordable prices closer in.
I don’t know any County in the five major areas I have worked, where the whole County is a cohesive price or driven by the same factors. Whether you break it North and South, or by areas most people consider living in as options one to another, using County stats is not worthwhile for most buyers or sellers.
For instance, if Redmond gets cheaper, it hurts Woodinville. If Kirkland gets cheaper it hurts Juanita and Finn Hill. But if Federal Way gets cheaper it doesn’t hurt Bellevue. Not all markets push against one another, and knowing which factors affect your objective (vs. King County stats) is important for every buyer and seller to consider and know.
Alan:
The “bridges” or arterials you mention are relevant, especially since Coal Creak Pkwy, that links Renton Highlands and Factoria, has been closed almost one year to add capacity.
They should finish that up in a few months. More of a benefit to Renton Highlands than to 98006.
Ardell, have you noticed any trends regarding preference for more square footage? Seems like that might be a consumer trend to follow, as I believe it has steadily increased for 20 some yrs, but may be following a new paradigm.
A bit off topic, I know…, and you probably have no shortage of ideas to write about.
Alan:
The “bridges” or arterials you mention are relevant, especially since Coal Creak Pkwy, that links Renton Highlands and Factoria, has been closed almost one year to add capacity.
They should finish that up in a few months. More of a benefit to Renton Highlands than to 98006.
Ardell, have you noticed any trends regarding preference for more square footage? Seems like that might be a consumer trend to follow, as I believe it has steadily increased for 20 some yrs, but may be following a new paradigm.
A bit off topic, I know…, and you probably have no shortage of ideas to write about.
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