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

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”.

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.

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.

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.

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.

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.

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

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

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.

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.

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.

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

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

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.

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.

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.

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

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/

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!

I rest my case.

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!

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.”

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

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

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

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!

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.

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