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

If nothing else, it made me laugh.

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

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.

http://housing-watch.com/regionview.aspx?city=Seattle

.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

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.

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.

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.

oh Aubrey… you ain’t seen nothin’ yet

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.

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.

“….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:

http://www.rgemonitor.com/blog/roubini/224871/

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

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.

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%)

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.

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…

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?

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

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