It’s time for NWMLS statistics. April is now in the books, traditionally one of the strongest months for home sales.
Here’s the NWMLS press release: Northwest MLS Brokers Report Highest Volume of Pending Sales in Eight Months. I guess “Lowest Volume of April Pending Sales in Nine (plus) Years” didn’t have the same ring. Better to pretend that seasonal improvements == strong market.
Here is your summary along with the usual graphs and other updates.
Here’s your King County SFH summary:
April 2008
Active Listings: up 49% YOY
Pending Sales: down 28% YOY
Median Closed Price*: $448,500 - down 3.6% YOY
Here is the updated Seattle Bubble Spreadsheet, and here’s a copy in Excel 2003 format. Click below for the graphs and the rest of the post.
Here’s the graph of inventory with each year overlaid on the same chart. As you can see, in April we already beat last year’s high point from September, and are now breaking higher into record territory daily.
Sales keep dropping, though the pace slowed slightly from last month’s record year-to-year drop. Most years do not see sales this sluggish until November through January. Regardless of what real estate agents may say about the present market, there simply aren’t many buyers out there right now.
Months of supply (active listings divided by pending sales) held basically steady for the third month in a row, clocking in at 6.2. April marks the eighth straight month of MOS above 6 (considered a buyer’s market).
Again, you can see that the faltering housing market this year is anything but “normal.”
Here’s the supply/demand YOY graph.
Here’s the chart of supply and demand raw numbers:
Here’s the SFH Median YOY change graph.
I’m certain that the local media outlets will focus in on the $9,000 month-to-month increase in the median price, and there will be no shortage of quotes from peppy agents declaring that we have hit the bottom. I will only point out again that with such a small number of sales, the median price is going to be screwed up. When the Case-Shiller data for April comes out in late June, I doubt we’ll see increasing prices. For a more detailed exploration of this phenomenon, read the post Median Price Not Telling the Whole Truth.
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33 responses so far ↓
1
Fripp
// May 5, 2008 at 1:03 pm
Seattle Times headline is “Home Prices Continue Upward Trend.”
Awesome.
http://seattletimes.nwsource.com/html/realestate/2004393511_webhomesales05.html
2
Monk
// May 5, 2008 at 1:09 pm
But the Seattle PI says, “Seattle housing prices continue to fall.”
Seattle PI
Who are we supposed to believe?? I’m so confused…
3
Nathan
// May 5, 2008 at 1:18 pm
And of course, the Times doesn’t have discussion forums to call them on it.
4
Sorin
// May 5, 2008 at 2:09 pm
Thanks for the graphs, Tim. Just looking at the supply and demand: number of pending sales is the lowest it has been at this time of year in at least the past 8 years, and inventory is the highest it has been in at least 8 years.
There is clearly pressure within the industry to try to keep prices inflated and drive demand with the fear of being priced out forever (Escala and the Times article). But, all signs from the yoy numbers are pointing to further price reductions being necessary for the market to stabilize. Seems like this is going to draw out for quite a while yet.
5
Slumlord
// May 5, 2008 at 2:12 pm
We should cut the Times some slack. They’ve got a dying business and need to do whatever it takes to retain their advertisers.
Seriously, outside of the real estate section it is a respectable paper. What would you do in their shoes?
6
jon
// May 5, 2008 at 2:18 pm
Stable RE prices, rising dollar, rally in the stock market, Warren Buffet saying the worst is behind us in the banking industry,… When will it ever end!
7
Chris
// May 5, 2008 at 4:14 pm
I like their comparison of prices since August 2008 but disappointed that there weren’t any fabulous quotes from J. Lennox Scott in the press release. I guess he was too busy looking for the dirty crook that stole his mojo.
8
laxtosnoco
// May 5, 2008 at 4:15 pm
Snohomish County Residential sure is taking a beating. According to the data, closed sales are off 41% from last year, pendings are off 43%, and prices are down nearly 7%. I’d like to see even the Everett Herald spin that data in a positive light.
9
biliruben
// May 5, 2008 at 4:30 pm
What the Christ? Have they always only gone back 9 months on their press releases? It’s convenient being able to censor out the peak and subsequent decline, eh wot?
10
Sandy
// May 5, 2008 at 4:34 pm
Lax–
Homes are becoming more affordable. That’s your positive spin.
11
Scotsman
// May 5, 2008 at 4:56 pm
” quotes from peppy agents ”
OMG, was that a small thrill I felt run up my leg? I love peppy agents!
Just for fun, I like to turn the graphs upside down, squint my eyes a bit,
then shout out in my peppy agent voice:
“Buy now, or be priced out forever!”
12
Joel
// May 5, 2008 at 5:05 pm
Down is the new stable.
13
Ira Sacharoff
// May 5, 2008 at 5:08 pm
“Seriously, outside of the real estate section it is a respectable paper. What would you do in their shoes?”
At the very least run better comics.
The P-I and the Times are both bleeding badly, yet the P-I isn’t quite so over the top real estate industry puppet…I think Aubrey Cohen at least tries to present various viewpoints.
And the P-I runs Zippy The Pinhead.
P-I … 2, Times… 0
14
Nickle
// May 5, 2008 at 5:20 pm
yet again excellent work.
I just have to comment that all these statistics are ‘worse’ for homeowners if you factor in inflation. Inflation is so ramped this year that YOY inflation is approx. 10% loss in the USD. Meaning even if you bought a home in 2007 (no fees or interest for the purpose of this argument) and were able to resell it for the exact same value, you lost significant value.
Many economists believe that inflation will only get worse. I just point this out because these charts on SB are a great resource for understanding what is happening short term, but not exact measurements.
In the same breath, has anyone seen an updated chart for this INFLATION ADJUSTED housing price graph?
http://www.1stmillionat33.com/posts/06-09-12/house_his.gif
15
laxtosnoco
// May 5, 2008 at 5:20 pm
Sandy said: “Homes are becoming more affordable. That’s your positive spin.”
That’s true, but it’s less fun to read than a comment that references mojo or open house traffic.
The Sno Co. residential volumes are what really surprised me compared to KC. I didn’t live here last April, but does the transaction volume FEEL like it’s down nearly 50% for SFH?
16
Slumlord
// May 5, 2008 at 5:31 pm
I don’t want to apologize for one-sided reporting, or even stupid comics. Like many people, I lament the decline of newspaper journalism. Solving a revenue problem by placing advertising in the guise of information is short-sited. Surely, this approach will cost the Times readers in the long run. I agree that the PI has more reality in its coverage of Real Estate.
Another view is to ask, “What point is having a Seattle Bubble if The Tim cannot use Elizabeth Rhodes as his foil”?
17
S-Crow
// May 5, 2008 at 6:08 pm
Laxtosnoco,
Does it feel off in Sno. Co.? Absolutely. There are some very frustrated sellers out there and very frustrated small builders. Some are doing everything in the arsenal including price drops, but to no avail. I’ve seen some 2005 prices on 2005 new construction.
I’m hearing another round of layoffs at local title offices.
The idea of seeing the bottom in our region is premature. One has to understand that this is only the 1st Spring in our regional correction to work through inventory and experiencing price drops. A 41% drop in sales (regardless of industry) is one heck of a change.
Has anyone in Sno. Co noticed all the commerical real estate for lease signs cropping up?
18
Sandy
// May 5, 2008 at 6:34 pm
Lax–short answer, yes, it feels like it’s down about 50% YOY. I see it in lots of ways…way fewer sales posting in the areas where I work, way more inventory, way more general nervousness. We never used to have agents calling for feedback on their listings, now, you usually get a call within 1 day.
SCrow–Actually, commercial here in the Muk seems okay. By which I mean, no worse than usual–we always have lots of For Lease signs but there hasn’t been much of an increase. Most of the stuff for lease now is just dregs–the stuff you wonder why anyone ever built it. But, the pace of commercial development has been relatively slow here so maybe we don’t have quite the problems that they have in other areas of the county.
South Everett and downtown Everett seem to be doing okay too. Actually, downtown Everett seems to be doing really well as far as commercial. I think it depends where you are in the county though.
19
Chaina
// May 5, 2008 at 9:41 pm
So what do you guys have to say about this year being the year when pending sales actually increased from March to April. The only year when this happend was 2003 which was the beginning of the crazy upward swing in home prices.
Does it mean that the sales are picking up? Are people who have been long waiting have given up and are entering the market?
The YOY ptice change also seems to be forming a trough at the bottom.
20
Scotsman
// May 5, 2008 at 10:05 pm
I saw that change in the sales graph too. What it suggests to me is that sales were much flatter than usual in February, but in March some of those potential February buyers jumped off the fence and bought. The overall rise remains much flatter than usual though, suggesting that the market just isn’t going to be very responsive this year. April and May will tell the rest of the story, we’ll just have to wait and see. This isn’t any bottom though. We’ll have a bottom when inventory starts to drop and absorption rates return to historical norms.
21
AndyMiami
// May 5, 2008 at 10:29 pm
It’s as simple as that Tom Hanks/Forrest Gump…and the YOY numbers are just simply part of the trend..
April 2008
Active Listings: up 49% YOY
Pending Sales: down 28% YOY
Median Closed Price*: $448,500 - down 3.6% YOY
The Seattle mainstream media is on mushrooms…maybe they should be..
For all of the “nation” we are in the fourth inning…for Seattle, the second inning against Boston….
People in Seattle are so clueless..it’s sad…people who buy now are automatically broke,,,unless you have lots of cash and hopefully in another currency…WAKE UP
22
Garth
// May 5, 2008 at 10:49 pm
Ever since they were invented in the early nineties to solve the s&l disaster these CDO and SIV things were as good as cash. In july / august of this year many of them became nearly worthless or impossible to sell, which is basically the same thing. So much mortgage funding was bundled into these vehicles, it has to have a pretty big impact of some kind everywhere houses are sold. Comparatively to vegas or san diego or whatever bubble city of your choice (most of which were off substantially before july) the impact has been more muted here so far. I thought it would be a much bigger factor here by now.
I am pretty confidant that the total number of transactions overall is going to stay down by some relatively fixed amount for quite a while as no doc, subprime, 100% financing with cash back for closing, easy flipping, small highly leveraged investors, people with arms on the property ladder and contractors who constantly rob peter to pay paul are no longer able to get any financing and are likely to lose any short term financing they do have. These types of transactions are now the pets.com of real estate, and after the foreclosures are sold they are not coming back.
23
Jonny
// May 5, 2008 at 11:16 pm
BUY NOW OR BE PRICED OUT FOREVER!!!
oh. sorry. i’ve got the chart upside down. never mind.
24
deepcgi
// May 6, 2008 at 12:47 am
The housing crash is global in nature. It’s too wide spread for local activity to counteract it. There will always be areas that are hotter than others, but I believe there will be enough pain spread across the first world that, unless inter-bank derivative activity becomes unexpectedly hostile, the dollar will be able to hold its own against other foreign currencies. If Americans keep consuming as if they were still rich with equity, this downturn could take years more to bottom out. I just don’t know where they will find a new get rich quick scheme to inflate - unless it is precious metals. There is no rudder to turn this ship. The boomers have all their savings in equity, which means they have to sell to collect. Hopes of moving continually to bigger and better real estate is a lost dream for most, but until they realize it, we’ll not hit bottom. Late in 2010 at the earliest. Don’t be surprised if the median house costs the same in 2030 as it does today.
25
BubbleBuyer
// May 6, 2008 at 8:50 am
Interesting housing piece in today’s Wall Street Journal Op Ed section…”The Housing Crisis Is Over”
http://online.wsj.com/article/SB121003604494869449.html?mod=opinion_main_commentaries
26
softwarengineer
// May 6, 2008 at 9:35 am
CHANNEL 13 SAID -8 YOY TODAY
That figure applies to Seattle area and sounds way too low too.
27
Ira Sacharoff
// May 6, 2008 at 11:18 am
Software Engineer,
The peak prices in the Seattle area were July ‘07, much later than most of the country. We were still going up as much of the country was tanking, causing some to say that we were immune, which proved to be complete BS.
Overall, i think we are down about 8% from July’s peak, but since prices were still escalating in May and June of ‘07. I think the April YOY figure is closer to -2 0r -3.
By the time the July figures come out, we may be down around 10% YOY.
28
johnnybigspenda
// May 6, 2008 at 9:16 pm
That WSJ article was intteresting… can anyone speak to this comment that the artcile made:
“Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won’t stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.”
29
Gordon
// May 6, 2008 at 9:43 pm
I see one sign of “good” market news (good to those trying to sell, at least) — while the real number of pending sales is clearly WAY off recent years’ levels, there was an increase in the number of pendings between March and April. Only the second time in nine years when velocity of sales increased during this time in the market (the other year was 2003, with a very slight increase). With all years showing larger increases b/w April and May it will be interesting to see if the pace continues to pick up.
30
biliruben
// May 6, 2008 at 10:39 pm
It’s just referring to new housing, I think. That’s been falling because the builders, of necessity, have been slashing prices.
The dude completely ignored the existing home inventory, which is at record levels with little sign of clearing. 4-5 million, I think.
As a consequence, the article and it’s premise are crap.
31
b
// May 7, 2008 at 12:27 am
You can safely ignore the opinion piece in the WSJ saying the crisis is over. The writer’s hedge fund holds large positions in most financials and home builders. He is just talking his book. Of course the crisis is over, he needs another yacht.
32
johnnybigspenda
// May 8, 2008 at 4:00 pm
Nickle.. inflation actually makes the debt that you owe, worth less… so yes, your house is not worth as much in real dollars, but you also bought the place in 200X dollar… so eventually, if inflation continues, your $300K mortgage will seem like $100K.
33
Case-Shiller: Thrilling Spring Bounce in the NW | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
// Jun 24, 2008 at 10:09 am
[...] you may recall, a few months ago the NWMLS statistics for April showed a slight increase in prices (+2.0%) month-to-month. Well, the April Case-Shiller Home Price [...]
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