The November NWMLS statistics have been published, and overall they came in pretty close to what I predicted a week ago. Here are the vital statistics for King County, along with my predictions:
[Statistic: Predicted, Actual]
Med. Closed Price (Res): $435,000, $435,000
Med. Closed Price (Condo): $260,000, $272,950
Active Listings (Res): 7,250, 7,040
Pending Sales (Res): 2,000, 1,985
As I expected, last month’s bizarre price spike was erased, as the median closed residential price returned to the level set in June. Active listings and pending sales showed little sign of slowing their respective trends of double-digit YOY percentage change, with listings up 27.7% and sales down 14.2% from November 2005. As usual, the Seattle Bubble Spreadsheet has been updated with these latest numbers.
Here is the YOY % change graph for active listings and pending sales:
The Active Listings curve is becoming just a tad less steep, but interestingly, the downward slope of (averaged) pending sales has been virtually a straight line since late 2003. If either of these trends continue—even at a reduced rate—into next year, we could see a true buyer’s market (6+ MOS) in King County by next November. I’m not necessarily predicting that, but it’s definitely the direction the numbers are headed. Could some unknown influence cause a sudden change in the buying and selling trends? Absolutely. As of right now though, it would seem that economic and psychological pressures will continue to push things in the same direction that you see in the chart above.
Prepare for positive spin and finger-pointing at the weather from our friends in the local media in three, two, one…
(NWMLS, King County Statistical Report, 11.2006)
Update: I’m on a roll with accurate predictions:
Pending sales – transactions signed but uncompleted – were down 11 percent compared with a year earlier.
…
Wet weather and attention given to the mid-term election and the holidays may have affected sales, the MLS said.
…
“We have a little bit of a pause today,” said Chris Pauling, president of Prudential Northwest Realty. But “Jobs and the strong economy are going to keep prices from falling,” he said.
Positive spin? Check. Finger-pointing at the weather? Check. I’m 2 for 2!
Update 2: Here’s the first paragraph of the November numbers article in the Puget Sound Business Journal:
Prices for homes in Western Washington continued to rise, but the number of pending home sales slid, partly because of weather woes.
Boom—2 out of 2 again, right out of the bag! It’s almost too easy!
It’s interesting to look at Inventory in Nov over the past 5 years:
Nov 06: 7,040
Nov 05: 5,512
Nov 04: 5,960
Nov 03: 7,394
Nov 02: 8,240
Nov 01: 8,110
We have substantially more then record setting boom years of 04 and 05. But a lot less the very healthy markets in 01-03.
So current res inventory is 3 less then the mean of the previous five years.
I’m not surprised, are you?
My boring predictions for Dec.
Median: 435k
Active Listings: 5,700
Pending Sales: 1,550
Shug,
Is anyone predicting an overnight bubble pop? I think most of the people on here are predicting a gradual rise of inventory as well as a gradual decrease in prices.
It’s interesting to look at affordability in Q2 over the past 5 years:
Q2-06: 70.4
Q2-05: 87.4
Q2-04: 105.1
Q2-03: 121.3
Q2-02: 104.6
Q2-01: 103.2
We have substantially less affordability than 03. But, you hey, it is a lot closer to the the healthy markets of 01-02 than it is to 03.
Combine this last point to the rock-solid inventory numbers from meshugy’s power post, and I think that the only clear conclusion is another year of 20% is in the bag.
But a lot less the very healthy markets in 01-03.
Again, how was it that the collapsed local job market made the housing market “healthy” in 01 or 02?
Wet weather and attention given to the mid-term election and the holidays may have affected sales, the MLS said.
OMFG!!! What a bunch of a**holes!! I knew it! I friggin’ knew it!! Wet weather and midterm elections? As we say in the mathematical world this ‘number crunching’ is what we call a ‘rectal transformation’… aka pulling b.s. stats straight out of your arse.
Hey, I heard there’s water on Mars! Saweet! I’m sure the Ballard home-buyers will be out in force now!
What nonesense, this just goes to show noboday knows nuttin’ when it comes to causality and the local market, and by looking at that chart Tim, this markets on a one-way rollercoaster to H-E-double-toothpicks…
Again, how was it that the collapsed local job market made the housing market “healthy” in 01 or 02?
Bingo… that’s like saying, “I just lost my job, but my black AmEx just showed… man, we’re rollin’ in it now! Beers on me!”
Again, how was it that the collapsed local job market made the housing market “healthy” in 01 or 02?
Yep. I remember articles in both the Times and P-I in 2001 about new homeowners who found themselves underwater within a year of buying. Do you remember that Shug?
OK I admit it. I want to buy a home in Seattle in the next 6 months. I wish I’d bought one 3 years ago but I didn’t.
Renting and waiting for a “pop” or “soft landing” in the market is getting older.
Am I just getting impatient?
BDChris:
One way to placate yourself is to rent a little nicer place. You will still be way ahead in the end.
Heck, I lived on Lake Washington for 5 years. Had my own dock and beach. Only way I was able to pull that off was to rent. It was 5 years I would not trade for anything.
WORST case scenario is you sit out a flat market. Best case…well you can do your own math on that.
I question the “weather” excuse. At the time I bought, several friends also became first-time homeowners. Interest rates were lower than what they are now, but the affordability index was around 120… It was winter, and we hadn’t seen the sun in over a month — we didn’t even know what colour a room was painted until three weeks after we moved in, the tint was so subtle. Then again, all three couples had lived in Seattle for several years, and we knew what the weather was like. Maybe the houses selling at $435K and above are being sold to moneyed-but-foolish transplants who are skeered of precipitation. Or, what’s on the market are shoddily constructed homes that leak, and somehow, surprisingly, the raindrops falling on people’s heads in the sunroom aren’t leading to sales.
[...] Seattle Bubble: …we could see a true buyer’s market (6+ MOS) in King County by next November. I’m not necessarily predicting that, but it’s definitely the direction the numbers are headed. (12.07.2006) [...]