Supply & Demand Trends Continue, Market Still Tanking

October market statistics from the NWMLS are here.

Public press release and data pdfs have not yet been posted, but I will update the post with a link once they are. Update: Here is the NWMLS press release, with links to the public pdfs.

Here’s your King County SFH summary:

October 2007
Active Listings: up 36.76% YOY
Pending Sales: down 29.88% YOY
Median Closed Price*: $443,950 – up 0.90% YOY

Yes, that’s zero-point-nine percent. The median price dropped month-to-month for the third month in a row—the first time this has happened since before 2000, and only the third time since 1993. But again, let’s not focus too much on the median price, since it is a liar and doesn’t really tell us what’s going on.

The growth in inventory slowed just a little, from the 40%+ YOY growth of the last five months to just under 40% YOY. Expect inventory to continue to decline through December, as it does every year, only to pick back up with a vengence in January.

The total number of sales in October was up slightly from September, as it is most every year. This caused the Months of Supply to drop back slightly from last month, however it still remains in record territory at 6.29.

Update: Here’s the updated Seattle Bubble Spreadsheet, and here’s a copy in Excel 2003 format.

Here’s the supply/demand YOY graph:

King County Supply vs Demand % Change YOY
Click to enlarge

Here’s the chart of supply and demand raw numbers:

King County Supply vs Demand
Click to enlarge

And just because the incredibly steep drop at the end is so dramatic, I’ll bring the SFH Median YOY change graph back this month:

King County SFH YOY Price Change
Click to enlarge

Here’s a new graph for you. It shows the total amount of SFH inventory on the market at the end of each month, with each year since 2000 overlayed on top of each other, so you can more readily compare them.

King County SFH Inventory
Click to enlarge

And here’s the same graph for pending sales:

King County SFH Pending Sales
Click to enlarge

Check back tomorrow for the news roundup. This should be fun…

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.


  1. 1
    deejayoh says:

    Well, we seemed to have cracked the problem of tracking inventory. The source you show now was just about spot on at 10,780 – 37% growth.

  2. 2
    Ken Mott says:

    Seattle Times article states prices dropped.

    “Prices, meanwhile, dropped about 1 percent from a median of $391,300 a year ago to $387,500 in October.”

  3. 3
    david losh says:

    I have a question and observation. Tim, you’ve correctly used the term inventory, rather than supply in this post. My question has been does inventory mean anything compared to supply.
    What I mean is that I talk with at least two sellers per week that want more money for thier property than it’s worth. They are listing the property anyway with another agent, but should that be counted in the supply catagory. If no one, at this point, is dumb enough to over pay for a property, are these over priced homes truly a reflection of supply.
    Simply put, we can all put our houses on the market today for a million dollars, but is that a true image of the market place?

  4. 4
    synthetik says:

    looks like the housing correction is finally here and in full effect… thanks for sticking with it this long Tim!

  5. 5
    The Tim says:

    Ken, the Seattle Times is referring to the SFH + Condo median, which did indeed decline slightly YOY. Also worth noting is the fact that in 15 out of the 30 NWMLS-defined areas in King County, SFH prices were down YOY.

  6. 6
    Scotsman says:

    Ouch! Ain’t gonna be no “dead cat bounce”- that one’s going right through the floor…

  7. 7

    So…in Bellevue for example there were a number of perfectly nice older homes that got purchased, torn down and replaced with a McMansion, which also sold,.
    Doesn’t this also skew the median price comparison?
    Does anybody track the YOY numbers for houses of a certain vintage, so that one is more comparing apples to apples?

  8. 8
    TJ_98370 says:

    looks like the housing correction is finally here and in full effect… thanks for sticking with it this long Tim!

    Yes – the time for validation is at hand! Good job Tim!

  9. 9
    Marc says:


    Your post explaining the problem of median prices pointed out that a spike in the number of sales in the expensive East Side led to a skewed YOY median for July. By the same rationale, isn’t possible that the mortgage meltdown has had a disproportionate impact on expensive home sales (i.e., those requiring jumbo loans) than on less expensive homes (i.e., those only requiring FHA, VA, conforming loans), thereby resulting in another spike that brought down the county wide median?

  10. 10
    The Tim says:

    Marc, that’s entirely possible, and I explicitly addressed this possibility in last month’s NWMLS stats post. That’s why I started adding the gratuitous links back to the Median Price Not Telling the Whole Truth post in these stats posts.

    Of course I’ll be analyzing the regional breakdown data from October in the coming days. Stay tuned for more on whether the opposite effect is being seen today…

  11. 11
    John says:

    No need to get too fancy with the data. When the blood-letting really begins, the squealing will be loud. I am a patient man.

  12. 12
    Shawn says:

    I believe this drop in prices is directly correlated to the current shortage of pink ponys. Until home sellers can offer pink ponys to prospective buyers, this free fall will just get worse.

  13. 13
    CKT says:

    Some of you may know that I have been obsessed with Pierce Co condos, which is ironic given that I live in a house in South Sno Co. My obsession, though, is based on my belief that Pierce Co condos represent the segment of our local market that is most bubbly.

    Unfortunately, NWMLS has not updated the publicly available stats on their page yet. But I checked the Tacoma New Tribune for the latest numbers, and sure enough they did not disappoint. Pierce Co condos are down -7.5% YOY! That is a huge drop, and clearly the bottom has fallen out on this market. Where it stops remains to be seen.

  14. 14
    The Tim says:

    CKT, what do you want to know about Pierce County Condos? I have all the NWMLS data. Here’s the summary:

    Listings: 1,628 (+57.8%)
    Pending Sales: 92 (-32.4%)
    Closed Sales: 91 (-22.2%)
    Median Closed Price: $203,950 (-7.5%)
    Average Time On Market (closed sales): 89 days (+61.8%)

  15. 15
    Mark L says:

    You guys seem to have it all wrong. Didn’t you hear the radio ad this morning on KIRO 710? Seattle home prices are still rising. What matters is your local market, not the national trends. Interest rates are low. Now is the time to buy. The radio ad was paid for by King/Sno/Pierce association of Realtors. Remember, not every real estate agent is a realtor. Look for the big R.

  16. 16
    Greg says:

    A friend of mine just bought a townhome on capitol hill/first hill after the builder dropped the price $100k in two months. It was first listed at $490k, and he got it for $390. Yes, it is a time to wait…

  17. 17
    aetakeo says:

    Could y’all tell Vancouver, Canada? Our numbers suggest we’re still convinced “it’s different here”, and our median SFH price is now slightly above $700K for a median income of $56K.

    With the new power of the Canadian dollar, it has now become more affordable for my family to purchase in MANHATTAN. And, tho’ I love Vancouver, it is really not New York.

  18. 18


    “….The bloodbath in credit and financial markets will continue and sharply worsen
    Nouriel Roubini | Nov 05, 2007
    It is now clear that the delusional hope that the severe credit and liquidity crunch that hit US and global financial markets would ease has been shattered by the events of the last few weeks. This credit crunch is getting much worse and its financial and real fallout will be severe.

    The amount of losses that financial institutions have already recognized – $20 billion – is just the very tip of the iceberg of much larger losses that will end up in the hundreds of billions of dollars. At stake – in subprime alone – is about a trillion of sub-prime related RMBS and hundreds of billions of mortgage related CDOs. But calling this crisis a sub-prime meltdown is ludicrous as by now the contagion has seriously spread to near prime and prime mortgages….”

    The rest of the URL:


    I know, Seattle is immune from the buffoons running our banks, ask Washington Mutual.

  19. 19
    Mike2 says:

    What I’ve been finding is that even after prices go into decline, people are still pretty optimistic about the housing market in their neighborhood – at least on the surface.

    The other thing I’ve discovered out East is that the communities of new immigrants and non-english speakers have been absolutely saturated with destructive loans. If you haven’t driven through one of these neighborhoods littered with “$500K” foreclosures it’s hard to grasp exactly how much devastation there really is.

    Seattle’s demographics are different, but from what I have heard immigrant communities everywhere are suffering the same problems.

  20. 20
    rose-colored-ghoulaid says:

    Yes, it’s well documented that the Pink Ponies are continuing their northward migration. Attracted by the loonies’ strength, wave after unyielding pink wave of ponies crash upon Vancouver. Across the board, Canadians are asking themselves when this pink plague will end, but those in Vancouver are especially puzzled. All the news outlets had confirmed that Seattle’s ‘specialness’ would contain the ponies movement. Sadly, this was just not so.

    Border security is being stepped up, but Canada is finding it difficult to get US support. It appears the US government would just as soon see the ponies leave. “For being neon pink and surrounded by rainbows, these buggers are terribly sneaky. Apparently, they can fly over the border at an altitude lower than our RADAR is capable of detecting,” said mountee Skip Johnson.

  21. 21
    CKT says:

    Thanks, the Tim! I primarily follow just median price, but lately I’ve been trying to track months of supply as well. Of course, I really don’t have time to any of this, but I do it anyway! These numbers help.

  22. 22
    happy renter says:

    I love the PI headline: Home prices down again — is it time to buy?

    oh Aubrey… you ain’t seen nothin’ yet

  23. 23
    on topic says:

    The Tim,

    can you make a SFH Median YOY change graph for other cities as well?

    unrelatedly, the condo situation must be pretty bad if SFH is +.9% and SFH plus Condos is -1% and condos only represent around 1/4 of the market.

    i’d bet you could use condos as a leading indicator for markets, since their prices seem to be more volatile.

  24. 24
    WestSideBilly says:

    Ira wrote “Does anybody track the YOY numbers for houses of a certain vintage, so that one is more comparing apples to apples?”

    I’m pretty sure that Case-Shiller tracks only resales of existing homes, in order to avoid the skewing of market shifts as you discussed.

  25. 25
    Alan says:

    If no one, at this point, is dumb enough to over pay for a property, are these over priced homes truly a reflection of supply.

    Some houses will be overvaled. Some houses will be undervalued. They all count towards supply. Inventory will tend to skew toward overvalued houses since the undervalued homes tend to sell more quickly.

    Simply put, we can all put our houses on the market today for a million dollars, but is that a true image of the market place?

    We can’t put all of the houses in the Puget Sound area on the market because we don’t own them all. Listing a house implies a desire and intent to sell. Maybe there are a few people listing their properties at rates they know the market will not meet, but they also know they are mostly wasting their time for a bit of fun. I think those people are few and far between.

    The group that is truely interested in selling but has an unrealistically high estimation of the property should count as inventory as long as they are at the negotiation table.

  26. 26
    on topic says:

    don’t forget about inflation.

    .9% growth in price in paper dollars = -2% growth in real dollars, more if you think the CPI is ridiculous.

    against the gold standard, house values have fallen precipitously

  27. 27
    patient says:

    deejayoh made an excellent post regarding the distribution of houses sold by price segment in August http://seattlebubble.com/blog/2007/08/19/more-median-price-musings/
    It sure would be interresting to see an update of those graphs to see if the “high-end” scewing that was observed at that time might have turned to a “low-end” scewing due to jumbo issues or not.

  28. 28
    patient says:

    It might just be temporary and the inventory is still out of whack but the YoY median listing price at housing Watch is now very close to the median closed price reported by the NWMLS


  29. 29
    Marc says:

    Can one of you math whizzes explain to me why the YOY median sales price of condos and SFHs for area 700 (Queen Anne/Magnolia) shows a decline of 2.29%, but the Condo-only break out shows a 21.29% price increase and the SFH-only breakout shows a 14.04% price increase. I thought two positives equal a negative.

  30. 30
    Marc says:

    Sorry, that should’ve read “two positives equal a positive.”

  31. 31
    The Tim says:

    Marc, here’s an example of how that’s possible:

    Year 1
    Group 1: 5, 5, 5, 6, 7, 7, 7
    Median: 6
    Group 2: 8, 8, 8, 8, 8, 9, 10, 10, 10, 10, 10
    Median: 9
    Overall Median: 8

    Year 2:
    Group 1: 5, 5, 5, 5, 6, 7, 7, 7, 7, 7, 7
    Median: 7 (+)
    Group 2: 8, 8, 8, 10, 10, 10, 10
    Median: 10 (+)
    Overall Median: 7.5 (-)

    Basically, it’s because the mix of condos/SFH sold has changed. In October 2006, the mix was 27% condos, 73% SFH. In October 2007, it was 30% condo, 70% SFH.

    That’s my theory anyway.

  32. 32
    Marc says:

    Right. Well, so much for my conspiracy theory!

    I suppose this further illustrates the limited utility of median prices.

  33. 33
    TJ_98370 says:

    King Co Res+Condo Median YoY -0.97%
    Pierce Co. Res+Condo Median YoY -1.42%
    Kitsap Co. Res+Condo Median YoY +0.82%
    Kitsap Res+Condo stats skewed by 53.5% increase in median condo sales price (17 condo sales for Oct 07).

  34. 34
  35. 35
    aetakeo says:

    Thanks for the intel, rose-colored -ghoulaid.

    If nothing else, it made me laugh.

  36. 36
    Sauce for the goose says:

    “against the gold standard, house values have fallen precipitously”

    Yippee, against the gold standard, my mortgage obligation has fallen precipitously.

  37. 37
    Brian says:

    Is there more detailed data for particular neighborhoods? I wonder how Wallingford might compare to Northgate, for instance. Is the correction hitting county-wide, or are some neighborhoods escaping it?

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