"Inventory is having an impact on prices"

Posted by The Tim on June 6th, 2006 at 8:46 AM · 31 Comments

It looks like the "spring selling season" didn’t pull Olympia out of its slump:

This year’s larger inventory of South Sound homes for sale might be keeping homes on the market longer and slowing prices down.

For the past four months, it has taken longer for homes to sell compared with last year. And for the first time in May, the gains in year-to-year median sales prices took a noticeable drop, according to Olympic Multiple Listing Service data.

Regardless, the number of Thurston County homes sold in May was 15 percent higher than last year, leaving the number of homes sold up 9 percent from January through May this year.

Current active listings in Thurston County are about 1,277 homes, up from 879 the same time last year, the listing service reported Monday. New homes that have come onto the market are responsible for much of the increase in listings.

"Inventory is having an impact on prices," said Jerry Wilkins, manager of the listing service.

I love how they give the sales figure in percentage and the inventory as an absolute number. It makes them much harder to compare that way. FYI, the figures provided translate to a 45 percent increase in inventory. Directly comparing the 45 percent inventory increase to the 15 percent sales increase makes it a little harder to be stubbornly optimistic.

I also love how these real estate enthusiast types can admit that things are slowing down, but still phrase it in an extremely positive way:

Future monthly median increases might not top 20 percent, Wilkins said.

Aww.

(Jim Szymanski, The Olympian, 06.06.2006)

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31 responses so far ↓

1 Anonymous // Jun 6, 2006 at 9:30 am

Wow, anyone notice the spectacular drop in homebuilder stocks today? 5-7% drops across the board.

KBH, LEN, DHI, TOL all down sharply.

Good thing house prices can only go up.
2 meshugy // Jun 6, 2006 at 9:43 am

One interesting thing about those stats is that there has been a big drop off in low end homes (sales of houses under $200K are down 51%). But a huge increase in sales of higher end homes (sales of homes over $400K are up a whopping 158%).

See: Residential Statistical Information for Thurston County
3 Seattlenobubblebob // Jun 6, 2006 at 10:12 am

Thanks Meshugy-

And there you have it class. One of the reasons median prices are “up”–low end home sales lagging upper end. Don’t be fooled.

The cheerleaders (NAR) are having a hard time watching their team get their rears kicked.

Can you believe NAR chief economist David Lereah today essentially calling out the Fed to keep rates where they are? He needs to resign.

Check out theSeattle PI Real Estate Professionals Blog –trying to put a positive spin on things. Evidently Seattle has a big moat around it, keeping inflation in check and housing prices continuing on an upward trend, forever.
4 biliruben // Jun 6, 2006 at 10:18 am

This could be due to new and fairly new, low end condos going in bringing the median down.

If you look at the detailed PDF, it looks like there was a large spike in condos on the market, and they aren’t selling.
5 biliruben // Jun 6, 2006 at 10:23 am

Looking at the data, it looks like there were two condo projects completed recently, one high-end (~500K) and one low-end (<200K).

That would skew the statistics.

As an aside, who in the right mind would pay more than half a mil for a condo in Thurston County?
6 biliruben // Jun 6, 2006 at 10:25 am

Also it looks like there were a couple montrous housing tracts selling huge numbers of new houses.
7 The Tim // Jun 6, 2006 at 10:33 am

Seattlenobubblebob,

I would have mentioned the Seattle P-I RE Pros. post, but it’s just a rehash of a story we covered here a week and a half ago.

Yawn.
8 Christina // Jun 6, 2006 at 12:37 pm

Recent Money Magazine article: Affluent Americans Sour on Real Estate

I wonder if any Realtors, you know, the ones focusing on the “markets that really matter,” are paying attention…

oh wait, Seattle/Bellevue/Tacoma is different. Like the dot-com economy was different.
9 meshugy // Jun 6, 2006 at 12:52 pm

Northwest MLS Reports Growing Inventory, Rising Prices and Highest Sales Volume in 8 Months
10 Christina // Jun 6, 2006 at 1:02 pm

re: typo in Northwest MLS Reports article

Ah, I know now why people tailgate me and try to squish their megavehicles in to share my lane with me on my work commute — I’m passing through IRKLAND!
11 meshugy // Jun 6, 2006 at 1:06 pm

Wow…the Median Price res/condo for Seattle went up $5K in one month…it’s now at $415K (was $410 last month).

The Median price for Area 710 (Laurelhurst) went up a whopping $30K in one month! From $400K to $430K.

See: Breakouts - KING COUNTY SECTORS - Northwest Multiple Listing Service MAY 2006
12 Anonymous // Jun 6, 2006 at 1:26 pm

I didn’t know where to post this…so I’m assuming everyone here is aware of this blog (http://seattlemetrorealestate.blogspot.com/) whose purpose is “designed to counterbalance the hysteria and hype found on seattlebubble.blogspot.com with actual facts.”

I’ve looked through some of actual “facts” and while a number is a number, there are some liberties being taken on the interpretation side of things. Maybe this should be a regular post here.
13 biliruben // Jun 6, 2006 at 1:34 pm

But what about Ballard, ‘Shugy!?!

Does anyone have a link to the mls map codes to show me which code is Ballard!

I’m desperate. Please help. ;)
14 meshugy // Jun 6, 2006 at 1:42 pm

Ballard was THE most active market in Seattle this month:

Ballard (area 705) had the most new inventory of any part of Seattle (YOY inventory was up 20% in Ballard). But YOY pending sales rose 23% making Ballard the most active market in Seattle.
15 Christina // Jun 6, 2006 at 1:52 pm

Just for my curiosity, meshugy, which Seattle areas are represented by the sector codes 380 (the highest % change in closed sales) and 701 (the lowest % change in closed sales)?
16 The Tim // Jun 6, 2006 at 1:54 pm

Christina,

Here is a map of the MLS areas, courtesy of the Seattle Times.
17 concerned renter // Jun 6, 2006 at 1:57 pm

May data
18 biliruben // Jun 6, 2006 at 2:02 pm

What’s that? That can’t be the right map.

That shows that houses in Ballard actually DECLINED YOY!

There must be something faulty. Housing only goes up.
19 meshugy // Jun 6, 2006 at 2:05 pm

Hi Christina,

Area 380 is SE Seattle…I think 701 is Belltown.

See this Map:

map
20 The Tim // Jun 6, 2006 at 2:05 pm

No, you’re looking at region 700, which is Queen Anne. 705 contains Ballard (although not only Ballard, also Greenlake).
21 meshugy // Jun 6, 2006 at 2:08 pm

That shows that houses in Ballard actually DECLINED YOY!

Bili…take another look. Ballard had 14.89% appreciation
22 biliruben // Jun 6, 2006 at 2:08 pm

Phew. I was worried there for a second.

Thanks, for catching that before I finished dialing my realtor, Tim.
23 biliruben // Jun 6, 2006 at 2:12 pm

Just messin’ with ya, ‘Shugy. You know I love ya.

My area (720) blew yours out of the water, btw. Neener neener.
24 Christina // Jun 6, 2006 at 2:14 pm

Tim @ 01:54 pm

Thank you! My area is still frisky at selling, but (yawn) apparently not one of the “areas that matter”; i.e., one can still buy a housing unit (including condominiums) here for four times a median household (owner-occupied)’s income.

Source: NexTag®
25 meshugy // Jun 6, 2006 at 2:20 pm

My area (720) blew yours out of the water, btw. Neener neener.

You’re joking, right?

Bothell had a 26% increase in inventory and an 11% drop in sales. YOY appreciation was huge though: 27%…congrats!

Keep in mind the Bothell market is about a 1/4 the size of Ballard.
26 biliruben // Jun 6, 2006 at 2:26 pm

No congrats necessary, Meshugy.

We are surfing on the top of a huge bubble. Any numbers we see are purely illusary froth.

I full expect to see any of these fantastical gains smashed into the surf. Maybe we’ll miss the rocks and just get some sand up our nose, maybe not.

Unless of course I bail out, turn my board down the back side of the wave and sell now, which I won’t.

2001 prices in 2010, adjusting for inflation.
27 Christina // Jun 6, 2006 at 2:29 pm

2001 prices in 2010, adjusting for inflation.

There’s my cue to do some ju-jitsu budget chops and maybe buy some gold, and pick up some home renovation skills for the Five Year Plan.

Or maybe I’ll just start driving around the foreclosure properties before they go on auction at the County Courthouse.
28 realistic realtor // Jun 6, 2006 at 5:00 pm

biliruben, here’s the MLS areas for Seattle:

140 - West Seattle
380 - Central - E of MLK, S of I-90
385 - Central - S of I-90 btwn MLK and Duwamish River
390 - North Central - N of I-90 to the ship canal, E of Lake Union, SLU E of Fairview
700 - Queen Anne & Magnolia, SLU W of Fairview
701 - DT, Belltown, Pioneer Sq, ID.
705 - NW Seattle - N of ship canal to 145th, W of I-5
710 - NE Seattle - N of ship canal to 145th, E of I-5
29 biliruben // Jun 7, 2006 at 7:06 am

Thanks, RR. That map is a bit hard to read.
30 realistic realtor // Jun 7, 2006 at 8:51 am

I’m not with the big W, but this will be easier to understand. Look at this search page

From top to bottom:
#2 is MLS Area 705
#6 is MLS Area 710
#3 is MLS Area 700
#7 is MLS Area 390
#11 is MLS Area 701
#4 is MLS Area 140
#8 is MLS Area 385
#9 is MLS Area 380
31 realistic realtor // Jun 7, 2006 at 8:55 am

I’m not with the big W, but this will be easier to understand. Look at this image from Windermere

From top to bottom:
#2 is MLS Area 705
#6 is MLS Area 710
#3 is MLS Area 700
#7 is MLS Area 390
#11 is MLS Area 701
#4 is MLS Area 140
#8 is MLS Area 385
#9 is MLS Area 380

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