NWMLS: King County SFH Prices Hit 0% YOY.

The November market statistics from the NWMLS are here. Ta-da! Public press release and data pdfs have not yet been posted, but I will update the post with a link once they are. Here is the NWMLS press release, with links to the pdf summaries.

Here’s your King County SFH summary:

November 2007
Active Listings: up 41% YOY
Pending Sales: down 26% YOY
Median Closed Price*: $435,000 – 0% CHANGE YOY

So we went from zero-point-nine right down to zero percent. The median price has now dropped month-to-month for four months in a row—which has not happened before as far back as I have data, which is 1993. The median price doesn’t really give us a complete picture of what’s going on, but the direction at this point is pretty telling.

The growth in inventory sped back up slightly, going back above 40%+ YOY growth. Also of particular note was a 17% jump in the number of new listings compared to last November, and a smaller-than-usual decline in total listings from October (down 7% versus 9-12% in recent years).

The total number of sales continued to plummet in November, dropping to 1,476—a level that only three months since 2000 have been lower than (Jan-00, Dec-00, Dec-01). Consequently, the months of supply still stands above that magical number six, at 6.74.

I’ll update this post later tonight with the graphs and the spreadsheet.

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

Here’s the SFH Median YOY change graph so you can see the dramatic trend continuing at the end:

King County SFH YOY Price Change
Click to enlarge

The graphs that I introduced last month (showing the total amount of SFH inventory on the market at the end of each month and the total pending sales for each month, with each year since 2000 overlayed on top of each other) are particularly useful to visually debunk the types of quotes we’re already seeing from real estate agents being quoted in the Seattle Times.

Some sluggishness in sales is to be expected, said Rich Lucas, a real estate agent in the Auburn office of Keller Williams in Auburn office. “The numbers go down in November. That’s just part of a regular season through the holidays,” he said.

Indeed, Thanksgiving week had about half the home sales throughout King County compared to the weeks preceding it, he observed.

So, last month was just like every other November? Really? No, not really.

King County SFH Inventory
Click to enlarge

King County SFH Pending Sales
Click to enlarge

Here’s yet another new one, showing that as far as YOY median price change is concerned, there has not been worse November on record.

King County SFH Pending Sales
Click to enlarge

Check back tomorrow for the news roundup.


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.

58 comments:

  1. 1
    David McManus says:

    Oops

    Dare I say it?

    That puts last month’s median house price is back to where it was the previous November — $435,000 — offering further evidence of sluggish housing demand.

    So YOY is……0%?

    But hey, Seattle is special, what do I know?

  2. 2
    topdog says:

    Trying to back the numbers out of the articles… What’s MOS – 6.72?

  3. 3
    topdog says:

    Also, the median was 435k as early as July ’06, so one could also say that the price is “back to where it was” even earlier.

  4. 4
    The Tim says:

    I hope you guys don’t mind, I moved your comments to this new post, since they didn’t relate to the Forbes post.

  5. 5
    The Tim says:

    Oh, and topdog, MOS refers to “Months of Supply,” which is arrived at by simply dividing the total number of listings on the market at the end of the month (for KingCo SFH that was 9,955) by the total number of pending sales for the month (KingCo SFH = 1,476).

    It is said that 6 is a “balanced market,” while below 6 is a seller’s market, and above is a buyer’s market.

  6. 6

    YOY MEANS “YOU’RE OUT OF YOUR” MIND IF YOU BUY IN NOW?

    Speaking of Forbes, Tim, this is weird….they offerred me a subscription for like 10 cents on the dollar a few days ago.

    Maybe a way to get cheap magazines is bad mouth ’em on blogs….lol

  7. 7
    Brian says:

    Where do you guys go to see what a house sold for? My wife and I had been considering a house for a while, but decided not to buy in this market, but I’m interested to see what price the house actually sold for.

  8. 8
    The Tim says:

    Brian, the information you’re looking for can be found on the King County Parcel Viewer (link on the sidebar under “Resources”). Information on sales gets posted about 30 days after the sale goes through.

  9. 9
    Scotsman says:

    Et tu, Seattle?

    Release the last of the Pink Ponies- if they really love us, they’ll return…..

  10. 10
    CKT says:

    More bad news elsewhere, but it’s especially bleak in Pierce Co.

    SFH + Condos: Down -4.36% YOY
    SFH: Down -3.42% YOY
    Condos: Down -0.73% YOY

    Ugly numbers for sure. Deejayoh, are you still following the foreclosure situation in this area? I imagine things aren’t so hot in the Pierce, given the number of subprime loans there, and that foreclosures tend to increase when prices fall.

  11. 11
    topdog says:

    Is a balanced market 3 mos. or 6 mos? It seems like I heard the 3 mos. figure about a year ago, but now that MOS has crept up people are tossing around the 6 mos. figure. 3 mos. makes a heckuva lot more sense to me…

  12. 12
    [troll] says:

    N srprs hr.

  13. 13
    deejayoh says:

    I love this comment in the Times:

    Some sluggishness in sales is to be expected, said Rich Lucas, a real estate agent in the Auburn office of Keller Williams in Auburn office. “The numbers go down in November. That’s just part of a regular season through the holidays,” he said.

    Indeed, Thanksgiving week had about half the home sales throughout King County compared to the weeks preceding it, he observed.

    That’s right, I forgot. Thanksgiving wasn’t in November last year!

  14. 14
    rose-colored-coolaid says:

    topdog,

    My understanding is that 6 months is considered a balanced market in many places, but that it is only 3 months in Seattle.

  15. 15
    biliruben says:

    It easier for us because most Seattlites are slightly unbalanced to begin with.

  16. 16
    biliruben says:

    Aubrey Cohen had some choice Realtor quotes, but he modified the article before I went back to cut and paste.

    I think he may be becoming a bit gun shy. Doesn’t want to look like a cheerleader. Good for him.

  17. 17
    rentfornow says:

    This can’t be, real estate never goes down.

  18. 18
    M Long says:

    I have a suggestion for a new poll. I would like to know where people are investing their money to take advantage of the dropping housing market. This would be advice that I could actually use.

    1. Gold
    2. Ultrashort ETFs
    3. Foreign Businesses
    4. EUROs

  19. 19
    Chris says:

    #3 for me- strategy has taken a hit of late. Would not like to get into gold at theses prices – I think it will come down as people see inflation is not likely to take off. EU may be cutting rates and is at all time high vs dollar, so would stay away from that for time being

  20. 20
    AndyMiami says:

    The month’s inventory supply number is actual higher when you consider the new construction/developments that are not listed in the multiple listings, and all those who have taken their houses off the market waiting for the spring season, which will be quite a nasty surprise for those who want/need to sell their leveraged homes, as values fall and fall…we have a LONG way to go. The fact that today’s publicity stunt by our fearless leaders freezes mortgages for the few that will qualify for five years indicates quite a long unwinding of the credit/real estate bubble. They know..they are not stupid, but they are fearful of what will happen to our over leveraged households..

  21. 21
    deejayoh says:

    You mean like this one?

    Rob Cockerill and Michele Meyers bought a Broadview house at list price last month and weren’t worried about prices dropping.

    “We’re thinking it’s not going to get any better than this,” Cockerill said. “We’re San Francisco II up here.”

  22. 22
    deejayoh says:

    The above quote was from the PI

    And check this one out from the TNT

    Local price drops can be attributed to homes listed competitively so that they attract buyers and sell, said Coldwell Banker agent Margo Hass Klein.

    Dipping prices aren’t a concern, she said, because they primarily hurt older homeowners who are selling for the last time or those who refinanced and owe more than they can sell for, she said.

    Italics added for emphasis. I sure hope that’s a typo!

  23. 23
    david losh says:

    Sorry, I ask from time to time and never get an answer. Most graphs I look at have a spike in Real Estate pricing from 2005 to 2007 that was, to me, completely unrealistic. I sold my properties and some of the hardened investors I work with sold properties in those two years.
    New construction town houses are still selling for over $400K which just shows there is a sucker born every minute, those units should top out at $325K, up to $475K for a super primo location, condition, and square footage.
    Until we return to the natural progression of pricing of approximately five per cent since 2005 I don’t see a bubble.
    Simply put we should be seeing a return to 2005 pricing, soon.

  24. 24
    SeattleMoose says:

    Oh ye of little faith….Seattle has the secret weapon that will keep gravity from switching back on here….THE ZUNE!!!

    I rest my case.

  25. 25
    Marc says:

    Brian,

    Redfin.com is a good way to see when an MLS-listed house sells. Just type in the address and there you go. You can also type in a non-MLS listed house and use the Past Sales feature to find homes that have sold nearby within the past 3 months, 6 months, or 1,2, or 3 years.

    As for four months of price drops, please allow me to quote the great, Ms. Brittany Spears: Dang y’all!

  26. 26
    CKT says:

    There is also something else to consider. YOY numbers don’t really tell the whole story. Prices were still increasing a whole this summer, and then the house of cards (so to speak) started to fall down.

    For example SFH in King Co peaked in July. The price for Nov was off 10.6%! That’s a big drop off.

    I have post on my blog with some nifty charts updated with the Nov data from NWMLS. Check it out:

    http://afferentinput.blogspot.com/

  27. 27
    David McManus says:

    This is not an oops, but a Yikes!

    But never in Seattle. We’ve got Boeing and Microsoft.

  28. 28
    Pegasus says:

    Hey Tim,
    Does anyone track SFH rentals? I know we get to read all about how rents will go up because…blah blah blah….but I think the opposite will occur. I track SFH’s for rent in areas that I like to follow on craigslist. South King County. I know it is unscientific but I have done the same thing on houses for sale and searching for “reduced”. That has proven to be very accurate in predicting inventory and pricing. SFH rentals are now experiencing a rapid increase in the amount of listings for rent. I am not talking apartments but single family homes. The strange thing about the increase in listings is the deviation in prices for basically a similar house. It appears that alot of the listings now are priced much higher, to the extent of being ridiculous. Homes that are listing for 1600 are also being listed for 2500-3500 that are basicly the same. I can only attribute this to two things only: many novice home owner landlords are putting their homes up for rent for the first time or alot of unscrupulous real estate agents are posting bogus rentals in an attempt to manipulate the rental market(surprise). Since many of these rentals are MLS it appears that the agents are at fault here. Has anyone else seen this dichotomy in other areas?

  29. 29
    Garth says:

    A Yikes! for this?

    The Northeast corridor, and markets such as Boise, Idaho, along with Denver and Salt Lake City, will experience between 5 percent and 15 percent declines. In the rest of the industrial Midwest and parts of the Mountain and Pacific Northwest, prices will fall more modestly.

  30. 30
    david losh says:

    Seriously, help me out here. If we had double digit appreciation in house values for the past few years don’t we need double digit depreciation in pricing?
    I was thinking about the stock market actually, it’s at 13000. Isn’t that triple the value it was in 1995? That doesn’t seem right to me either if there was in fact a stock market bubble.

  31. 31
    Johnnybigspenda says:

    Tim,

    For the “Monthly King County SFH” graph, you only show from 2000-2007. And on a lot of the other graphs you show from 1994 on. Can you show those earlier years on this graph too? 00-07 was one cycle, its pretty easy to do Michael Moore and show the data you want that proves your point. I’d actually like to see the data starting in the 70’s all the way through 2007… but I don’t know where to find it.

  32. 32
    Mary says:

    Why not add Thurston to your data?

  33. 33
    Wade Young says:

    If folks are saved from foreclosure (albeit a small number will qualify for Paulson aid), the housing market will continue to stumble because houses that should have gone to foreclosure will remain off the market (or on the market at unsaleable prices) when those houses should have gone to sale priced at a level allowing those houses to move. Real estate professionals will suffer because houses that should have sold at adjusted values will for all intents and purposes remain off the market.

  34. 34
    David McManus says:


    A Yikes! for this?

    The Northeast corridor, and markets such as Boise, Idaho, along with Denver and Salt Lake City, will experience between 5 percent and 15 percent declines. In the rest of the industrial Midwest and parts of the Mountain and Pacific Northwest, prices will fall more modestly.

    Yes, Garth. Yikes! I thought prices ONLY went up here. At least that what almost every real estate professional told me and are STILL preaching that garbage. Think of the people that just got suckered in over the past 2-3 years only to realize that their “investment” has less of a return a savings account. Furthermore, being pressured to buy that 1600 sq. ft. sh*tbox that is dropping in value and realizing that you will have to make significant price DECREASES just to move it is becoming a reality check for a lot of people. Walk down your street and you can see front lawns with “For Sale” / “Price Reduced” signs. For the record, I work in Queen Anne and see tons of places like that as well as in my neighborhood in Kenmore/Bothell.

  35. 35
    Displaced Seattlite says:

    I am now truly a displaced Seattlite. My house closed sale in that fateful Thanksgiving week, and I am only renting for some time to come. The drop in SFH is true; started selling this summer, had to drop 20% from the height of pricing (last spring). Luckily, I had not used my house as an ATM machine, and had some equity….good luck to those that do not have that cushion.

  36. 36
    Scotsman says:

    Wow, nice charts! Let’s see, inventory is at a 7 year high for the season, sales are at a seven year low…. I wonder what prices will be doing?

    As an aside, I love the comment about Seattle being San Fran II. Good luck with that!!

  37. 37
    The Tim says:

    Johnnybigspenda, I would love to include such data on my graphs. The problem is that the data simply isn’t available. On the vast majority of my graphs, I’m displaying all the data I have available to me.

  38. 38
    seattle says:

    There definitely is a spike in inventory. But people are still buying. As long as job market stays up, prices will not come down too badly.

  39. 39
    waitingforseattletocool says:

    A local appraisor has data on website going back to 1992

    http://www.alanpope.com/charts.htm

  40. 40
    Jonny says:

    “Homes that are listing for 1600 are also being listed for 2500-3500 that are basicly the same.”

    Anyone who has lived in Seattle for any amount of time knows that prices vary wildly here. You can get cheap places if you look around. It’s still possible to get rooms in a shared house for $300-400/mo and you can still get a 1BR apartment for $600-700/mo. You just have to be willing to shop more. If you are willing to shop around, rents have not risen significantly in Seattle in the last decade.

  41. 41
    Jonny says:

    Well at least not compared with housing prices.

  42. 42
    Jonny says:

    those charts are pretty scary looking. the supply/demand divergence is really rapid.

    i wonder if it’s possible that we will see a hard, fast crash instead of the predicted slow, many-year grind. the end of that YOY price chart is a pretty steep cliff. seems like a panic is at least possible now.

    i’d be super interested in looking at similar data from previous housing crashes.

  43. 43
    CKT says:

    I love it how the real estate industrial complex is just chalking it up to nothing more than November blues, as if median prices drop nearly 11% in five months every year!

    Here is a link to a figure from my blog that shows the change in price from July to Nov within a given year since 2002.

    http://bp0.blogger.com/_JY-rIL8plNM/R1ippF_Ko0I/AAAAAAAAABo/EpYXTO65j3k/s1600-h/nominal+prices+Nov+07.jpg

    There’s nothing normal about what we’re seeing.

  44. 44
    TheDexter says:

    Yes, 6 is a balanced market. Seattle stands at 5.88 for the time being. I don’t see how an unchanged median price means the sky is falling. But then, even that information is wrong. 2007 came in @ 6.7% increase for Seattle and is still a great place to live. Don’t hold your breath about Armageddon.

  45. 45
    what goes up comes down says:

    TheDexter — I think you have been outside a little too long — because you are all wet.

    But since your livelihood is based on convincing people to keep buying it is no surprise you keep pushing the same crap.

  46. 46
    Buceri says:

    You know the sky is falling when real estate agents leave their BS in this blog.

  47. 47
    Wm Swanson says:

    The Dexter likes to blow smoke up his @ss.

  48. 48
    Anti-Dexter says:

    Like my mom used to tell me as a young boy Dex; wish in this hand and shit in the other and see which one fills up quicker.

  49. 49
    AndyMiami says:

    With regard to the comment that Seattle is San Francisco II, please read the following from Hank Greenberg’s blog yesterday…

    One final thought. How can any of this get repaired unless home values stabilize? And how will that happen? In Northern California, a household income of $90,000 per year could legitimately pay the minimum monthly payment on an Option ARM on a million home for the past several years. Most Option ARMs allowed zero to 5% down. Therefore, given the average income of the Bay Area, most families could buy that million dollar home. A home seller had a vast pool of available buyers.

    Now, with all the exotic programs gone, a household income of $175,000 is needed to buy that same home, which is about 10% of the Bay Area households. And, inventories are up 500%. So, in a nutshell we have 90% fewer qualified buyers for five-times the number of homes. To get housing moving again in Northern California, either all the exotic programs must come back, everyone must get a 100% raise or home prices have to fall 50%. None, except the last sound remotely possible.

    What I am telling you is not speculation. I sold BILLIONs of these very loans over the past five years. I saw the borrowers we considered ‘prime’. I always wondered ‘what WILL happen when these things adjust is values don’t go up 10% per year’.

    here is the link

    http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/#comment-12228

  50. 50
    notabull says:

    “Yes, 6 is a balanced market. Seattle stands at 5.88 for the time being. I don’t see how an unchanged median price means the sky is falling. But then, even that information is wrong. 2007 came in @ 6.7% increase for Seattle and is still a great place to live. Don’t hold your breath about Armageddon.”

    Picking cherries is fun.

    Prices are down 10% from July. YOY prices are even because we’re on the other side of the mountain, heading down. Look at the *trend*.

    Seattle *is* a great place to live, and hardly anybody (even on this site) is holding their breath for Armageddon, or waiting for the sky to fall. Instead, we’re patiently watching price declines, credit contraction, underwriting sanity returning, and other metrics that show that prices are heading down. To what level, I don’t know.

    The sky is not falling, but it is decreasing in altitude at a slow and predictable pace towards the earth. It will settle at a reasonable point that will not destroy the world. It was too high anyway.

  51. 51
    Garth says:

    David McManus,

    The less then 5% decine in housing prices by the end of the “seattle bubble” predicted by that article does little to validate your point. Someone who purchased 2-3 years ago is still way ahead of a savings account. Those who did not purchase in a bidding war in the last year are probably still doing about as well as a savings account.

    When presented with your argument that their home is a s**tbox they were pressured to buy with the risk of a 5% decline in value mentioned in that article, I’m not sure many people will be persuaded about the horror of the bubble.

  52. 52
    James says:

    The YOY is zero AND the MOS is greater than 6 months. Can we now say the bubble is officially popped? The Seattle Case-Shiller for November will likely validate this. Or since C-S is a better measure, is it officially popped when it is zero?

  53. 53
    on topic says:

    don’t forget that the YOY numbers are in paper dollars, not real dollars. adjusted for inflation, money sitting in a house is shrinking.

    and then there is opportunity cost. even the safest investments will return an 3%.

    this should go without saying, but having a highly leveraged investment in a stagnant or depreciating asset with high transaction costs is always a bad idea. it will never work out well. you lose on the loan interest, you lose on the asset value, and you lose on the transaction.

    before this is done, people will pay a premium to be able to rent instead of being forced to own.

  54. 54
    Markor says:

    “this should go without saying, but having a highly leveraged investment in a stagnant or depreciating asset with high transaction costs is always a bad idea. it will never work out well. you lose on the loan interest, you lose on the asset value, and you lose on the transaction.”

    That’s what some friends of mine thought when they bought a house in Bellevue at a peak of the market in the 90s, for 200K.

  55. 55
    Anti-Dexter says:

    Well, Markor, I really don’t think we can see much more housing appreciate in the span of about a generation at this point, so the statement holds true, regardless of the past forture of your friends.

  56. 56
    MrRational says:

    Did anyone else notice that even though KC as a whole saw its median dip a little bit, that every region within KC saw theirs increase YOY (with the exception of SW KC)? Seattle and the Eastside were up 3.3% and 1.3% YOY, respectively.

    What’s more, in October the median YOY change for Seattle was 0% and for the Eastside was -4.1%. So, looks like things improved YOY for these regions significantly over the past month.

    Also, comparing our levels of inventory in November to say November of last year or even November of 1999 is pretty useless by itself. You should really be looking at the inventory as a percentage of the total housing stock. If the same % of people on average are trying to sell their home each year then we would expect the levels of inventory to increase every year simply as a result of their being more people and more housing units. Therefore, it would be really interesting to see the % of total housing stock that is up for sale as compared to previous years. I think this would give a clearer picture of what’s going on with inventory.

  57. 57
    WestSideBilly says:

    The less then 5% decine in housing prices by the end of the “seattle bubble” predicted by that article does little to validate your point. Someone who purchased 2-3 years ago is still way ahead of a savings account. Those who did not purchase in a bidding war in the last year are probably still doing about as well as a savings account.

    This, of course, assumes that they are able to sell the house for it’s paper “value”.

  58. 58
    Apotheosis says:

    Based on traditional property valuation and loan approval measures as show below, the median single family home (free-standing, stick built; condos and such tripe don’t count) with no money down and 7% interest should be worth $231,782.85 in this area. The median closing price for such homes this Nov. was $435,000.00, an overvaluation of 87.68%! Is it time to buy or time to save for more realistic valuations? It’s time to get real about what your homes are really worth. Yes, its unfortunate you got suckered into the pyramid scheme of Seattle real estate, but you should have done your homework first and taken a realistic attitude. Many people are going to learn a costly lesson. Prices can and do come down. If only we had learned from the lessons of Japan we might have avoided the upcoming pain and massive losses homeowners will be forced to shoulder.

    Source Info:
    ____________________
    The median income for a household in the county was $53,157, and the median income for a family was $66,035. Males had a median income of $45,802 versus $34,321 for females.

    http://en.wikipedia.org/wiki/King_County,_Washington

    November 2007
    Active Listings: up 41% YOY
    Pending Sales: down 26% YOY
    Median Closed Price*: $435,000 – 0% CHANGE YOY

    http://seattlebubble.com/blog/2007/12/06/nwmls-king-county-sfh-prices-hit-zero-percent-yoy/

    Maximum Affordability Ratios for Different Rates & Down Payments

    DownPmt Rate 7%
    0% 3.51
    10% 3.86
    20% 4.21

    http://www.benengebreth.org/archives/2005/06/housing_priceto.php

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