NWMLS: Inventory Level, Sales UP, Prices Down

Time for September market statistics from the NWMLS.

The NWMLS press release will be posted at this link when it goes up.

Here is your summary along with the usual graphs and other updates.

Here’s your King County SFH summary:

September 2008
Active Listings: up 5% YOY
Pending Sales: up 15% YOY
Median Closed Price*: $415,000 – down 7.8% 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.

King County SFH Inventory
Click to enlarge

No big surprise here. Inventory has been pretty level since May, and continued the pattern in September, but still came in slightly above last year’s peak (which was a record high at the time).

King County SFH Pending Sales
Click to enlarge

Pending sales are the real shock this month. Every other year on record, sales have dropped off significantly from August to September, but this year they actually slightly increased.

What’s going on here? Have a significant number of buyers decided that the bottom must be in, and now is the time to buy? Are people trying to jump in for some “security” before the economy fully melts down? Is the NWMLS monkeying with the numbers? (I doubt that one, but it is possible.)

The odd movement in the pending sales statistic threw quite a wrench in the supply / demand graphs. Here’s the supply/demand YOY graph.

King County Supply vs Demand % Change YOY
Click to enlarge

In a single month, the pending sales YOY statistic shot from -16% to +15%. Wild. That’s the biggest 1-month change in this particular statistic in the history of the data I have available (back to 2000).

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

King County Supply vs Demand
Click to enlarge

The sales bump even looks weird on this one. Where every single other year has seen the decline into the winter sales season begin in September, 2008 sticks out like a sore thumb.

Perhaps we have finally found the floor for King County SFH sales? No matter how bad things get, there will always be 1,700 or so people trying to buy a home? I think it’s still too early to be calling any kind of bottom based on a single month statistic. We’ll see in the coming months whether this was a strange anomoly or the start of a recovery in sales.

Of course, the slight uptick in sales did not keep the median price from dropping about $9,000 in a month. Even so, the YOY change did bump up slightly from last month, since last year the median fell over $27,000 from August to September.

King County SFH YOY Price Change
Click to enlarge

Here’s the bonus graph from last month, comparing King County SFH prices each month for every year back to 1994.

King County SFH Prices
Click to enlarge

It looks like it is quite possibly on track to fall below 2005 prices by the end of the year.

Here are the news blurbs from the Times and P-I. Check back tomorrow for the full reporting roundup.

Seattle Times: Median house, condo prices down in September
Seattle P-I: Local housing market stabilizes

  

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.

109 comments:

  1. 1
    The Tim says:

    My favorite quote from the P-I article:

    “More buyers are getting off the fence,” said Mike Skahen, owner/broker of Lake & Company Real Estate, in Seattle. “I’m convinced that as the national financial crisis subsides and with Seattle’s good economy, buyers who have been waiting for the bottom will return and wish they had bought now.”

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  2. 2
    shannon says:

    These pending sales….I wonder if they are pending upon a sale of their own house. That would make a big difference as to the success of the “pending” turning into a complete sale

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  3. 3
    waitingforseattletocool says:

    The Tim,

    Does the fact that MLS now shows ACTIVE-STI as PENDING skew the results year-over-year?

    When I was tracking this, generally the PENDING sales at the end of a month would be about 3x the number of ACTIVE-STI.

    Rate this comment: Thumb up 0

  4. 4
    Timber says:

    Is there some sort of real estate law that requires in every article a quote saying this is one of the best times to buy a house right right now. People that say this stupid quotes should have to pay whatever publication they are in money for advertising. Also in other news 6 out of 10 Americans see a depression as likely not a “recession” (which we still are not officially in yet) but a “DEPRESSION”

    http://biz.yahoo.com/cnnm/081006/100608_depression_poll.html

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  5. 5
    Alan says:

    Last August-to-September was worse than this August-to-September.

    Wasn’t last September when the financial mess first hit the fan?

    Rate this comment: Thumb up 0

  6. 6
    Mike says:

    Do not trust the pending sales figures as some of the pending sales are short sales waiting for price approval from the lender. So some of the pending sales numbers from the MLS could go down, giving a false reading on the amount of actual closed sales and their respective prices.

    Rate this comment: Thumb up 0

  7. 7
    Alan says:

    real-estate agents found a hope in a 4 percent year-over-year increase in the number of total pending house and condo sales

    Pendings are sometimes taking a long time to close. They may be counting some of those pendings for a second time. What has the pending/sold relationship looked like recently?

    Rate this comment: Thumb up 0

  8. 8
    The Tim says:

    waitingforseattletocool @ 3,

    I was told by folks with MLS access that the STI change did not affect the end-of-month statistics.

    Alan @ 7,

    The pending to closed ratio is really noisy on a monthly basis. It cleans up considerably when you look at it per quarter, as I did in this August post. However, since I offset closed sales by a month to generate that graph, I can’t post an update to it until next month’s NWMLS statistics come out.

    August + September closed vs. July + August pendings are down over 18% though, a new low.

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  9. 9
    David McManus says:

    When the heck is CDOM going to show up on Redfin?!?

    Rate this comment: Thumb up 0

  10. 10
    wvh says:

    Hi, I really appreciate what you’re doing here. I apologize if this has been brought up before, but I am wondering if you’ve considered redesigning your charts to minimize “chartjunk”. They would be much more readable if, for example, you used a flat, light background. Also, imagine how much easier it would be to figure out the King County Home Prices chart if the year labels were on the right side, next to the lines they correspond to, and printed in the same color.

    Edward Tufte has excellent advice on how to maximize information on a page while minimizing extraneous stuff, so you might look him up for some good examples.

    Thanks very much for this site!

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  11. 11
    Alan says:

    I think offsetting pending to sales by a month makes sense. Most of the data that makes sense takes time to develop. Pendings are a quick way to get a general feel for the market, however I theorize that pendings today have a different flavor from pendings a year ago.

    Maybe ‘new pendings’ would be better:
    1. Add all of the times properties chance from active to pending.
    2. Subtract all of the times properties change from pending to active.

    Any agents with MLS access want to take a crack at getting that number?

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  12. 12
    The Tim says:

    wvh,

    Thanks for the input. I’ll consider your suggestions.

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  13. 13
    Mike2 says:

    Scarry. The Tim is starting to sound suspiciously like a certian local Realtor.

    I believe it is, then we will not see a repeat performance in the last quarter of 2008 as to median home values. Instead we will see the brown line trending down toward 2005 prices.

    Or is it the other way around?

    http://www.raincityguide.com/2008/10/06/sunday-night-stats-on-monday-morning-2/

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  14. 14
    pending sale says:

    I’m one with a pending sale but I have personal circumstances that don’t apply statistically.

    However, I’m wondering if the increase is because sellers are finally realizing that the bottom ISN’T coming anytime soon and they need to price aggressively to unload it while they still can.

    Personally, I’m waiting to close on an REO that’s much better than I had ever hoped several months ago. Maybe people are spending the same amount of money they had budgeted but getting a much better house. It would be interesting to see data on the percentage difference on average of the sold price vs appraised value over time.

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  15. 15

    PENDING SALES ANOMALY

    Not to worry Tim, your supply and demand and price trends charts are all showing way too much supply and clearly more price decrease trending. Couple this good news for home buyers with an increase in end of year 30 yr fixed to a projected 6.3% [by the way, it was like as low as 5.7% when pending sales spiked]; and the realitor’s bottom out projection holds as much water as the bailout.

    Even interest rate cuts by the feds to buoy up the banks, don’t always show up in the 30 yr fixed rates for mainstreet.

    Let the 6+% 30 yr fixed affect pending sales in coming months, my guess is this was just an anomaly to buy in quick before the down payment was inadequate to qualify for the higher interest loan at current household incomes.

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  16. 16
    Jillayne says:

    Thanks Tim. Would love to see a graph overlay of foreclosures in King, Sno, Pierce (Notice of Trustee Sale Filings) compared with home sales prices.

    Also something I thought about this morning: I wonder if the announcement regarding Countrywide will effect some of these homes on the market listed as short sales to be taken off the market and turned into a loan modification.

    Perhaps a nominal amount may have Countrywide as their underlying lender.

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  17. 17
    Jonny says:

    5-6% is not a rational lending rate in this environment anyway. i expect 7-8% and higher in the coming months.

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  18. 18
    The Tim says:

    Jillayne, your (graphing) wish is my command:

    Don’t have RealtyTrac foreclosure info for Sept. yet, but I’m on their press release list now, so as soon as it’s out I’ll be updating that chart with a post here.

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  19. 19

    DOWNWARD STOCK TRENDS AND SEATTLE REAL ESTATE PRICES ARE LIKE TWEEDLE DEE AND TWEEDLE DUM

    They have to be. Eventually, lots of money from the stock market [or losses recently] either ends up in real estate or the stock market losses cause the real estate market to dry up too. Its a logical assumption no one can argue.

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  20. 20
    Russell says:

    I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes. The vast majority worked very hard to come up with the down payment so they could achieve home ownership. They were not buying a home to flip or turn a quick profit. You all seem so gleeful at every downturn

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  21. 21
    Sniglet says:

    Could the official sales be impacted in any way by homes going through foreclosure? When a bank “buys” back a home at a foreclosure sale does that get recorded as an official “sale”?

    If so, then I suppose its possible the increasing sales could be partly attributed to a wave of foreclosed homes in the process of being “bought” by the banks that own the mortgages.

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  22. 22
    Gene says:

    Speaking of mortgage rates – I had two realtors tell me this weekend that “better buy now, because rates look like they will be going up, so you don’t save anything by waiting” (these were probably the 5th and 6th realtors to mention this in the last couple of months).

    Of course I would rather buy when rates are higher and prices lower, assuming an about equal payment. Why? Because I have a better chance of being able to re-fi at a lower rate in the future, which has the potential to save a lot of money in the long run. They really didn’t have much of an answer to that…

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  23. 23
    wakeup says:

    >I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes

    a lot of people here are just sour grape. They waited for the crash very very long and still cannot get the price when they started wishing for crash.

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  24. 24
    anony says:

    RE 20 “I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes. ”

    I doubt most people take pleasure in neighbors losing equity. Some take pleasure in thousands of people no longer being priced out of homeownership. Those losing equity have the same house they did before and the same, or better, mortgage. Why should we be sad about more people being able to afford homes just because a paper number for current owners gets lower?

    When prices were soaring did you ask why people were taking such pleasure in others being priced out of homes?

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  25. 25
    Timber says:

    #23 The crash is just beginning my friend.

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  26. 26
    deejayoh says:

    I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes

    And your example of this is ________? I read all the comments today. I don’t see anyone claiming they are happy about their neighbors losing money.

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  27. 27
    Thomas B. says:

    @20

    I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes. The vast majority worked very hard to come up with the down payment so they could achieve home ownership.

    I don’t know where to begin with this. People that bought a home for the value of having a home don’t care about equity loss in the short-term, only flippers care. People that bought during the bubble, I have less sympathy for, since the bubble clearly existed as far back as 2005. They took the risk, now they are paying for it. They should have known that the prices were at a speculative level and that there may be a back up in prices. No one should feel sorry for those people.

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  28. 28
    mosko says:

    One thing that could have contributed to the unusual uptick in pending sales is the end of the FHA down payment assistance program. The deadline was Oct 1st.

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  29. 29
    Tyler says:

    @ Gene

    I am looking forward to people actually thinking about *buying* something, instead of how much it costs to just service the debt. i.e., I am glad that the credit crunch happened before people started to accept a 40-year mortgage as a valid way of “owning” a home. We may as well have gone to 100-year leases.

    When the interest rates are at a more traditional level, then at least the value of the asset (home) isn’t skewed.

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  30. 30
    Alan says:

    a lot of people here are just sour grape. They waited for the crash very very long and still cannot get the price when they started wishing for crash.

    Actually, prices are pretty close to where they were when I moved here a little over two years ago. I have saved so much money renting compared to throwing away much more interest on an overpriced mortgage.

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  31. 31
    Steve Tytler says:

    I know you guys get tired of me saying “I told you so,” but I’m going to do it again …

    I posted on here a few weeks ago that we would see a “mini housing boom” this Fall for the following reasons:

    1) Mortgage Interest rates have come down

    2) Housing prices are down

    3) September and October are always strong home buying months.

    Home buyers are simply taking advantage of low housing prices while mortgage rates are low.

    A lot people expect mortgage rates to increase due to the “credit crunch” so now is a good time to get the best of both worlds: low home prices and low interest rates.

    But note that I also said that the “mini housing boom” would increase the number of sales but NOT home prices. That’s because there is still too much housing inventory to swing from a “Buyer’s Market” to a “Seller’s Market.” I still think we are several years away from the next Seller’s Market.

    If you are buying a home to live in and plan to keep it for at least 7-10 years (if not, you should NOT buy a house!) now is not a bad time to buy.

    Most people do not treating housing like the stock market, they are not waiting for the “bottom of the maket” to buy a house. They want a nice place to live that they can afford. And with both home prices and mortgage rates down to their lowest levels of the year, homes are more affordable now than they have been in the past couple of years.

    So it’s just common sense.

    Steve Tytler
    Everett Herald Real Estate Columnist

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  32. 32
    Sniglet says:

    Steve,

    Do you know if bank purchases of foreclosed homes are counted as “sales” by MLS?

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  33. 33
    mukoh says:

    Pending sales in Las Vegas are up 80% BTW.

    Rate this comment: Thumb up 0

  34. 34
    mukoh says:

    Sniglet,
    Bank sales are only reflected in the NWMLS data if they were listed and bought by someone as a short sale, or bought from the bank REO portfolio while they were listed.
    House is taken off the market the day off foreclosure, because the bank is not buying it. The bank is taking over the title.

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  35. 35
    deejayoh says:

    a lot of people here are just sour grape. They waited for the crash very very long and still cannot get the price when they started wishing for crash.

    Actually, prices are pretty close to where they were when I moved here a little over two years ago. I have saved so much money renting compared to throwing away much more interest on an overpriced mortgage.

    I backed out of buying a townhome in Aug 06, and instead rented a nicer townhome a few blocks away. the “zestimate” for that property is $60k less than what I had it under contract for. And my rent is about $1,600 less a month than what I would have paid for PITI. So, I figure I am net ahead about $85k in the last 2 years.

    “Sour Grape”? Hardly!

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  36. 36
    david losh says:

    Steve, please give it a rest. Blah blah blah, the school season sets a certain number of sales after the end of the summer price reductions blah blah blah.
    You have never brought to the table anything more than the most remedial market timing scenarios, give it a rest, please. Go peddle your mortgages. I’m sure people are salivating over 6%+ 30 year fixed mortgages, because there is a sucker born every minute.
    I could go on about the market place but:

    Once again in a day when bad news could have carried us away this Tim guy changed topics enough to stay on focus, it is after all a Seattle Bubble.

    Give the guy the credit he is due by contributing the $10. It’s a very little amount for what you get here. Please check the upper right hand corner of this web site.

    I spent the night reading Real Estate blogs from around the country while watching the Asian Market reactions to the bail out. It’s amazing the number of blogs that just miss the point. This blog has provided timely information in a more equal way than most overly monitored sites. That makes this a good thing worth your contribution.

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  37. 37
    alex says:

    @20: I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes.

    The only joy here is that something I wish to buy just became more affordable to me. Anyone should be able to relate to that feeling.

    But perhaps you really meant to ask “why are you all taking pleasure in a macro-economic movement that might result in the loss of your own job?”. That’s a question that many here seem to turn away from…

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  38. 38

    […] Seattle Bubble: NWMLS Inventory Level, Sales UP, Prices Down […]

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  39. 39
    Jillayne says:

    @mosko, “One thing that could have contributed to the unusual uptick in pending sales is the end of the FHA down payment assistance program. The deadline was Oct 1st.”

    Yes, this could be part of the upswing in pending sales. I heard a LOT about that all during the last few weeks of Sept. By far and away, the majority of Realtors I interact with are very slow.

    In a class, of, say 40 agents, maybe 2 or 3 are reporting that they are busy writing transactions.

    This makes me wonder what Oct will look like.

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  40. 40
    jonness says:

    “Have a significant number of buyers decided that the bottom must be in, and now is the time to buy?”

    Yes, and there’s a term for such folks–financially inept. We are nowhere near the bottom. If you enjoy losing huge sums of money, now is a great time to buy a house in Seattle.

    It is all about the fundamentals, and the fundamentals do not support current home prices in Seattle, or the rest of Washington state for that matter. End of story.

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  41. 41
    richie says:

    I do not trust NWMLS’ statistics. Realtors must stay upbeat to lull buyers. Gone are Alt-A, subprime mortgages and any forms of easy money. It is virtually impossible that the housing market can be robust.

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  42. 42
    david losh says:

    I went out and came back to thirteen e-mails, one of which asks why I would pick on Steve. My problem, and it is a personal problem, is that the mortgage, or credit industry in general is very slow to see what’s happened to the global economy. In a nut shell let me ask the question:

    How can you write a mortgage today, at today’s prices, when the value is obviously on it”s way down? I know you can, and a buyer can buy at what ever price they chose, but since the mortgage backed security market is in jeapordy how could any bank, lender, Financial Institution create an instrument on an asset that they know is decreasing in value? Isn’t that the problem? Assets don’t back the mortgage? Isn’t that ultimately what is stalling the credit market?

    Writing down Asset values? Isn’t that the write down?

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  43. 43
    richie says:

    Steve Tytler:

    Not so fast! Alt-A mortgages like roadside bombs that can explode at any moments. Plenty of mortgages written in King’s county are Alt-A. WaMu went under, so did Alt-A mortgages. I don’t need a rocket scientist to tell me that when the balloons pop, it will have detrimental effects to the housing market.

    Here is an example:

    http://www.redfin.com/WA/Seattle/6019-Mckinley-Pl-N-98103/home/305804

    This house was sold on December 15, 1998 for $275,000 and $789,000 on November 17, 2004. I believe that the owner financed the house through an Alt-A mortgage. When the payment was reset in late 2007, he could not afford the new payment. The house then was on the market for as low as $699,000 but no takers. It was bought for $531,251 at the courthouse auction on August 1, 2008. The new investor is trying to unload the house for $699,950. So far, not so good.

    .

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  44. 44
    Alan says:

    David, I could see them doing that if there is 20% down payment being brought to the table, but I don’t understand why 3% down loans are available from FHA.

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  45. 45
    mukoh says:

    Alan,
    First time home buyers have always had 3% down through FHA. Its nothing new.

    Rate this comment: Thumb up 0

  46. 46
    jonness says:

    “I am curious why you all take such pleasure in your neighbors losing substantial equity in their homes. The vast majority worked very hard to come up with the down payment so they could achieve home ownership.”

    It’s because these people bought houses that weren’t worth the price they paid. Do you seriously believe that we should pay twice as much as a homes are worth in order to bail our neighbors out of their poor decisions to buy overvalued homes? That’s not fair to us.

    But this game isn’t about fair. And it isn’t about Santa Clause coming down our chimneys and giving us all presents for being nice people. It’s about economic fundamentals. In order to play the game fruitfully, you have to get out of the emotional state and use information and logic. When it comes to economics, sense of entitlement won’t get you very far.

    I didn’t invent the game or its rules. I’m simply observing and trying to do the best I can just like all the others. And IMO, doing the best means using your brain as opposed to allowing it to use you. If this situation is teaching anybody anything, it should be that we are ultimately responsible for the consequences of the choices we make. Thus, it is extremely important to make wise choices.

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  47. 47
    Joel says:

    The vast majority worked very hard to come up with the down payment so they could achieve home ownership.

    At first I didn’t believe this statement, but then I looked at my friends’ Xbox Live accounts and saw this.

    Rate this comment: Thumb up 0

  48. 48
    Ray Pepper says:

    http://www.youtube.com/watch?v=aRn5-LQCg2s

    Reading Steve’s ” I Told You So ” prediction’s makes me feel like Peter.

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  49. 49
    LoneLibertarian says:

    Sour grapes?

    My money was in (now out) of the stock market during the housing price increases. It is hardly sour grapes that I “could not afford” to buy a house.

    Rather I CHOSE not to buy a house because the fundamentals were wack and I did not want to be tied into an illiquid depreciating asset. When everyone was saying “we are going to be priced out forever” it was clear that something was wrong.

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  50. 50
    renli3d says:

    We are nowhere near the bottom. If you enjoy losing huge sums of money, now is a great time to buy a house in Seattle.

    Jonness, I agree, now is nowhere near the bottom. However, I disagree that now is not a great time to buy a house in Seattle. I just purchased a house and got a great deal. I was able to purchase a huge 3060 sq/ft rambler on .38 acres that backs up to a greenbelt with a creek and no close neighbors in a brand new, very safe and quiet development for $360K which eventually was lowered to 347K after the seller paid closing costs and my rebate from 500 Realty (Btw, Ray really is great to work with). Ray introduced me to a local mortgage lender that gave me a fixed loan at 5.5%, 0 points.

    The quality of the house is amazing with 400 amps of power w/generator system, old growth timber framing/beams, hardwood floors, in-wall cat5 & speaker wiring, heat pump system, air filtration system, vaulted ceilings with recessed lights and ceiling fans, and the most unique, beautiful kitchen I’ve personally seen. In fact, the entire house had been recently remodeled. My building inspector told me the house was the Taj Mahal when it was built in 1974. Cost per square foot is $113.40, which bubble or not is a great price.

    I agree, Jonness, that buying a house and paying inflated bubble prices is unwise. The beauty of this market is that everyone knows the market is tanking and so buyers are far and few. I had a great time looking at houses without worrying about competition from other buyers, getting outbid and feeling the pressure to close immediately. It was so nice that I know I would rather pay a little more on the house and avoid the whole competition hassle! Fortunately I avoided the hassle and even paid less for the house than I originally planned.

    Knowing that whatever I purchased would drop in value by 50K or more, I offered a price that factored in the drop. This is key – if you can buy a house today for around the same price you would be able to get it for in the future, do it. That’s what Ray Pepper calls a “gem”!

    After reading this blog religiously since the start and renting while waiting for the market to crash I am so happy to be able to own my own home, and the house of my dreams at that. I plan on living at the house for the rest of my life.

    The benefits of owning your own home are more than tangible.

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  51. 51
    david losh says:

    The 20% down is a hoax and swindle. First of all I have very few times put a down payment on a house, I think twice. The 20% down is an emotional hook for the buyer. The bank thinks a buyer will not walk away from a 20% down payment.
    There is also the mortgage insurance which with a second of 20% as a down allowed you to avoid. 20% is a lending institution arbitrary number, it means nothing. You save the money in a bank to give to a bank so the bank feels better about giving you a loan on an over priced piece of poop.

    Let me be kind. This blog has pointed out that Real Estate prices are at least 20% over priced. Heck, Real Estate appreciated 17% in one year before the, uh, the, uh, correction. So what does 20% have to do with anything other than the banks think some one won’t walk away from 20%, in this market it could be $60,000 or $80,000.

    $60K to $80K in the bank was at 3% interest, now that equity is gone, vanished, in the span of a year from now. You lose the money, plus interest. As some people here have pointed out if you had that cash you could make better deals.

    The bank wins.

    Now about the mortgage person creating the loan, they have no liability. A Real Estate agent has a liability in a Real Estate transaction. A mortgage rep, no matter how nice, or claims to work in the best interest of the borrower, has no liability. They make the loans and move on.

    In today’s market place it’s completely irresponsible to the borrower, and the people who purchase the securities backed by those assets.

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  52. 52
    Dave Lincoln says:

    Re Thomas B’s comment:

    “They should have known that the prices were at a speculative level and that there may be a back up in prices. No one should feel sorry for those people.”

    Kind of, but let me state it simpler: Whether anyone knows anything about current economic conditions of the country, what the past should teach, or not, I say: They should not have bought houses that were not worth the money the seller is asking!

    I know that sounds simplistic, but look, you’re buying the materials/construction and the land. That’s what you’re paying for, unless you are an invester, aka, “fllipper” (not to be confused with the cute dolphin who, as far as I know, has never taking part in the wrecking of the US economy)

    As far as the construction and materials go, what’s the deal, were the 2007 Mexicans that much better than the 2001 Mexicans? Is the sheathing going back to plywood, and the 2 x 4’s reverting to being 1 3/4 ” x 3 3/4″ as some type of 60’s retro movement? (BTW 1/4 in. more on depth, when the 2×4 is used as a beam, means more than you might think (Moment of Inertia goes cube with the beam-depth, for the real engineers out there).)

    OK, as for the land, that gets back to thousands of comments I’ve read, saying basically, is Seattle that much of a better place than in 2001 to make your lot worth double what it was worth then? I know about the pink ponies, but I am not in lust with them like some of the Seattlelites – you know, not that there is anything wrong with that (of course not!)

    So, it comes down to flippers, most of which actually were doing the best for themselves, but should not complain to .gov now and greedy people who know dang well that the house they are buying is not truly worth near what they pay, and lastly, I guess, stupid people. All of them need to learn a lesson, so they may do the right thing next time.

    You cannot learn these lessons under Socialism, and I really think govt. bureaucrats don”t want people too. Smart people scare the crap out of Socialists.

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  53. 53
    Markor says:

    jonness: If this situation is teaching anybody anything, it should be that we are ultimately responsible for the consequences of the choices we make. Thus, it is extremely important to make wise choices.

    This situation is also teaching us that if you don’t make wise choices, the rich will take you for everything you’re worth. There’s going to be a million seniors applying for that Wal-Mart greeter job.

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  54. 54
    Ray Pepper says:

    WOW, thanks for the plug. It was a pleasure working with you! I still have the mud in my wheel welds. You are the 5th Buyer from the Bubble and to that we Thank Tim for this forum. Hope to see you at The T Dome Home Show this week or Seattle Home Show next week. I have 2 NEW shirts for you!

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  55. 55
    Dave Lincoln says:

    Oh, and I’ve got to agree with David Losh. Steve, T. you are as pompous as they come. You didn’t tell me anything that I either didn’t know or you didn’t know. All your 3 points about Sept./Oct were arrived at via rectal extraction. That is not a good way to do bidness, my pompous friend.

    The Tim and ~ 2/3 of the commenters have got most of the big story right in the past, but you are just blowing smoke about your theories for the next few months or anything else specific – this is not science at all, it is psychology at work, which is not very predictable on this scale. The theories are nice to read, but for every one there is another that predicts the opposite.

    DON’T BUY A HOUSE UNLESS IT IS WORTH WHAT YOU ARE PAYING. It’s called “realty”, so think “reality”.

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  56. 56
    Dave Lincoln says:

    “Hope to see you at The T Dome Home Show this week or Seattle Home Show next week. I have 2 NEW shirts for you!”

    Ray, can’t make it, I have plans to clean my sewer line that whole time. Save me a shirt!

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  57. 57
    Markor says:

    renli3d: Jonness, I agree, now is nowhere near the bottom. However, I disagree that now is not a great time to buy a house in Seattle. I just purchased a house and got a great deal. …

    Congrats on your purchase! You went in with eyes wide open and facts in hand. You raise good points. I’ve been keeping watch on my target area; so far there haven’t been any great deals (instead most sellers are highly delusional, pricing way above comps that aren’t selling), but I agree it’s possible, and it would be nice to have no other bidders.

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  58. 58
    Ray Pepper says:

    Clean a sewer line?? Two weeks in a row? You better change your diet and your priorities.

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  59. 59
    mikal says:

    I think Ray is rnl3d and is plugging himself. David Losh, you have completely lost your mind. Anyone buying a house or stocks right now is nuts.

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  60. 60
    Dave Lincoln says:

    More like, I’d do anything not to go to the home show. That was just a joke, and I know you are a good-humored guy. But, you are probably right about my diet – too much pony jerky, bad for the colon.

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  61. 61
    Ray Pepper says:

    Dave I smell what your cooking! It was funny. Come on Mikal…Plugging myself? ………Your a pretty kinky guy aren’t ya!

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  62. 62
    Dave Lincoln says:

    OK, let’s keep it clean fellows, mmkay? I did, pretty much.

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  63. 63
    buyStocks says:

    David,
    If we had only approved loans with the traditional 20% down, couldn’t we have avoided the housing bubble. If we allow less down again at a later date, won’t we just create another bubble?

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  64. 64

    “Ray, can’t make it, I have plans to clean my sewer line that whole time. Save me a shirt!”

    But there’s no better shirt to wear while cleaning a sewer line than a 500 Realty shirt.

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  65. 65
    mikal says:

    That shirt would also be good if you are short TP.

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  66. 66
    Ray Pepper says:

    LOL………….Sad but true………………. I have about 10 of the shirts that I keep with me all the time and I was camping once and…………………………………………………

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  67. 67
    Seeker says:

    Why would anyone buy a house now? House prices will be much lower than what it is now in 09 and best case scenario will be stable entire 2010. Soon we will see median Kirkland/Bellevue home(no condo) price will be again around 350k. Anyone willing to have L Washington view will be needing to pay the 650k premium (instead of 900k or more)!!

    We buyers should just sit back, relax and enjoy the price reductions.

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  68. 68
    Demersus says:

    Russell @ 20; I don’t take glee in learning that people are loosing hard earned money. What I take satisfaction in is the fact that our economy is finally coming back to reality. If you’re making $75K/year, you have no business buying a half million dollar home. And you certainly don’t deserve my tax money to bail you out if you did.

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  69. 69
    Matthew says:

    Wow, I’m looking at the charts but I’m failing to see a “mini housing boom” anywhere in the data. Month-Month looks pretty flat to me (for both inventory and sales) and October 2007 was pretty dismal so a small YOY bounce in pending sales (when we also have an increase in listings) really doesn’t seem like a “mini housing boom” to me. Small bounce, yes. Mini boom, not so much.

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  70. 70

    July 2007 marked Seattle’s price peak. But inventories had been rising for a while, and sales were down, yet prices continued to rise. This led some “experts” to proclaim that house prices would never fall again, but some of us saw that a sustained rise in inventory and a sustained slowing in sales could only lead to lower prices.
    Now we’ve seen a rise in pending sales, and inventory seems to have stabilized. It very well be an anamoly, the real estate market just works that way, but what if we did see several more months or increased pending sales and inventories that either remained stable or dropped?

    I don’t see that as likely…I think we’ll see dropping prices til next summer at least, but aren’t rising pending sales and stable or dropping inventories an indicator of something?

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  71. 71
    patient says:

    Falling prices under volume is seen as sales pressure and a weakening market price wise. Rising prices under volume is a sign of strength. At least in the stock market.

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  72. 72
    george says:

    Sounds like a few buyers jumped in before the financial crisis struck. How many of them are having second thoughts today?

    It’s a Great Time to Buy™ if you think demand for housing in Seattle will not be affected by the US recession and global economic downturn…

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  73. 73
    Buceri says:

    Tim:

    I don’t see the % off peak graph.

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  74. 74
    The Tim says:

    Buceri,

    I usually only post that one with the Case-Shiller data. The latest one is in this post from September 30.

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  75. 75
    david losh says:

    “the world’s leading central banks will cut interest rates soon” Taken from Rueters

    You can’t borrow your way out of debt.

    The problem I have with mortgage people today is that they are creating loans today backed by assets that seem to be declining in value. The interest rates make no difference to the value of the asset.

    The entire financial market is collapsing because loan representatives are in the field convincing people that they can qualify for a mortgage. So what?

    You talk about Real Estate agents, but you people seem to give loan representatives a free pass here.

    I’ve read here several times about how responsible it is to save up for a down payment. Why? The lender is lending on an asset. Cars are one thing, dealers can come take a car. Properties would need to sell for the value lent. That’s just not happening

    When we talk about Real Estate Owned properties they are wholey and totally over priced. They have less value than is owed. Once the market stopped appreciating those assets became worth less.

    Still today aside from the cheer leaders of Real Estate mortgage reps are saying it’s a great time to refinance. You should refinance your ARM before it’s too late and yes, you will be priced out forever.

    This is not business as usual. People need to pay off what they owe. Paying fees for a mortgage makes no sense. Lenders should be paying borrowers to get them to buy those crappy loans on an over priced asset.

    Generating more loans today is irresponsible when the tax payers are paying billions of dollars to cover the bets of the loans made in the past.

    It has abosolutely nothing to do with the ability to pay, it has everything to do with the value of the asset.

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  76. 76
    Guy Noir says:

    Tim,

    At this point, I would attribute the rise in pendings to DAP (down payment assistance) going away.

    “Relitters” all across the country were plugging the DAP over the last couple of months before it went away. It would seem that many took the bait and were “hooked”.

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  77. 77
    CostcoMike says:

    @31

    “Most people do not treating housing like the stock market”

    As a columnist I would expect you to double check grammer and spelling. I wonder if you double check your predictions and data?
    I have been reading this blog for almost a year now and this is my first post. I couldn’t help but comment.

    I can’t say when the bottom will hit but I don’t think we are there quite yet.

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  78. 78
    mukoh says:

    People are asking why would anyone be buying?
    Its not if you are buying it is what are you buying. There is good values out there, however hard they are to find for people. That rambler scenario sounds awesome though.

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  79. 79
    EconE says:

    No…no good values out there yet.

    Every bubble area that has busted had it’s share of knife catchers.

    Wait for the Option-ARM resets. No loan modifications for those schlubs.

    Buy from a bank…not from a builder or a homeowner (of less than 10 years.)

    That rambler scenario sounds like a coached shilling.

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  80. 80
    renli3d says:

    That rambler scenario sounds like a coached shilling.

    Hello EconE,

    I’m not familiar with that term, what is a coached schilling?

    Here is the mls number of the house I purchased: 28096288.

    Since it’s no longer listed I’m not sure how you would pull it up.

    Personally, I hope home prices drop considerably to the 250K median level or lower. It is what’s best for society as a whole; families should not need to stretch to purchase an average home. Families need to be able to fund their retirements and childrens’ education and I feel lower home prices would increase our quality of life.

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  81. 81
    richie says:

    Reli3D post 50:

    Where did you find a good deal like that? Is it quite a distance from downtown Seattle. I have been looking houses in 103, 105, 115 109 and 119 areas over the last 12 months. I checked the listings often. I have never found a 3450 square-feet house for $360,000.

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  82. 82
    Everett_Tom says:

    using Google’s cache pages you can still find info on this house, it certainly lines up with everything renli3d has claimed…

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  83. 83
    EconE says:

    Everett Tom…I see the google cache of the MLS listing but I still see inconsistencies in the story….and lots of “realtor speak”

    I was able to purchase a huge 3060 sq/ft rambler on .38 acres that backs up to a greenbelt with a creek and no close neighbors in a brand new, very safe and quiet development

    doesn’t really jive with this statement…

    My building inspector told me the house was the Taj Mahal when it was built in 1974.

    ‘nuf said

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  84. 84
    deejayoh says:

    It’s in Kent…

    Does that qualify as Seattle?

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  85. 85
    Everett_Tom says:

    Everett Tom…I see the google cache of the MLS listing but I still see inconsistencies in the story….and lots of “realtor speak”

    I was able to purchase a huge 3060 sq/ft rambler on .38 acres that backs up to a greenbelt with a creek and no close neighbors in a brand new, very safe and quiet development

    doesn’t really jive with this statement…

    My building inspector told me the house was the Taj Mahal when it was built in 1974.

    ‘nuf said

    I see your point..

    When I looked it up, I saw the bunch of new townhomes that had popped up nearby, and took those for what he meant.

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  86. 86
    renli3d says:

    Ah, easy to explain. My house was built in 1974. It was originally on a six acre parcel. Before I purchased the house it was subdivided and a brand new community is being built around my original house. So my statement about the house being in a new development still holds true. Every house built around mine will be brand new. I hope that clears it up.

    Richie, my house isn’t 3450 sq/ft, and it is in north Kent (Garrison Creek, next to Panther Lake). I work in downtown Seattle and the commute isn’t bad at all. It’s not technically Seattle but I include Kent in the greater Seattle area. If you’re currently looking at homes don’t set your price filter for homes under your max price. For example, if you’re looking at 350K homes, don’t set your max price in Redfin to 350K. What you should do is set it much higher, say $425K and find a house you like that may be listed at 400K, or 425K and offer $350K instead. That’s what I did and it worked for me.

    Boy, you guys are tough. All I wanted was to suggest that you can get a relatively good deal today if you offer to buy a home for what it will be worth further down in the down cycle.

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  87. 87
    mukoh says:

    EconE,
    I thought today the exact same things that they were talking about were the Option Arm Resets? And actually modyfying them to paypable levels.
    Just look at the latest settlement with BofA and Washington state and other states.

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  88. 88
    EconE says:

    Fair enough explanation renli3d. My bad.

    Still don’t think it’s a good value (IMO) and the basement shouldn’t be counted as square footage regardless of whether it is finished or not. Again…JMO.

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  89. 89
    mukoh says:

    renli3d,
    There are no good deals out there. As long as EconE and DJ say so then it is all a farse, and the sale of that listing is not real. Its all realtors, you know those guys in Lexuses driving around fudging statistics. So stop the BS.

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  90. 90
    EconE says:

    Show me the money Mukoh. Foreclosures still seem to be rising.

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  91. 91
    mukoh says:

    EconE,
    I don’t buy homes, accept on rare occasions when they are in multi family zones.
    As far as commercial deals, not going to show you anything. Its however a ripe pickin time.

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  92. 92
    renli3d says:

    the basement shouldn’t be counted as square footage regardless of whether it is finished or not.

    EconE, not even a daylight basement? :P

    Rate this comment: Thumb up 0

  93. 93
    mukoh says:

    I think a basement should count if it has a bathroom.

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  94. 94
    mukoh says:

    EconE,
    One notable commercial property I am buying for future apartments, is 2.5 acres, at same price it was purchased for in 1997. Bank unloading their REOs.

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  95. 95
    EconE says:

    Mukoh…

    You have a different interest in RE than most of the posters here. I don’t doubt that you find properties that suit your investment strategies. Many of the posters are looking for in-city from what it appears and are not looking for “investment” properties, and as far as I am concerned, I don’t think that they will ever get what they are looking for at “investment” prices as there are plenty of professionals that do this for a living that will beat them to the “fixer” with character and good bones…especially the ones the have been owned for a long time and haven’t been HELOC’d to death. Obviously, I can’t follow every area like a hawk. I specialize in Downtown condominiums myself. The quality level for the $psf for the condos that have sold in the last 3-6 months is much higher than it was in 2007 yet isn’t reflected in the median. Some hefty losses, both realized and unrealized are being incurred by the plethora of flippers.

    I highly doubt that even yourself would pay 500k + 500 Homeowners dues + property taxes for a unit that you could only rent for 1800/mo. And rents on the high end stuff here downtown are actually down in every building that I have followed. And I follow many of them.

    Renli3d…

    I guess I can let you pass with a daylight basement. ;^) Your place looks pretty tranquil. If it works for you….more power to you. I’m curious about the “dream kitchen” however…kitchens and bathrooms sell a house these days. Is the built in Fridge Sub-Zero or Viking? Gas cooking? Granite or Carrara Marble counters? Solid Wood Cabinetry?

    Just funnin’ with ya.

    We live in two completely different markets (SFR in Kent vs Downtown Seattle/SLU condos) and there is much more denial with the sellers of their $500-$1000 psf condos that are continuing to grow like mushrooms in the downtown/SLU area…well…many areas. Your area has obviously reached a much greater level of sanity than my neck of the woods with regards to asking prices.

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  96. 96
    EconE says:

    BTW…anyone else seeing the nosedive the NIKKEI is taking? WOW! it’s like they are in a race with the DJIA and they were waaaaaay higher than we ever were.

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  97. 97
    b says:

    DJIA down 1k tomorrow? I think without some sort of shock and awe announcement, the 401k rush to the exists might give us a circuit breaker day this week.

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  98. 98
    Buceri says:

    Fed cut rate by 1/2 point at about 7AM eastern. Dow futures are up.

    Like Steven Colbert said: “this is not a collapse; we still have over 9000 points to go!!!”

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  99. 99
    Matthew says:

    Anyone who thought they were going to let the shorts back into the market today without some sort of action is insane.

    Another stick save attempt by Bernanke, but it’s not going to work, I bet the rally fades by the afternoon or tomorrow.

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  100. 100

    […] Time was, the problem with real estate was too many listings, at unrealistic prices. But with home-owners anxious to sell before the holiday season, we recently saw the average cumulative price drop exceed 10%. And with almost no new listings entering the market, across the markets we cover the number of homes for sale has actually decreased, by about 3% since August. In some places, transaction volumes increased. […]

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  101. 101
    mukoh says:

    EconE,
    I agree with you.
    I myself looked at a condo for my folks retirement, and was quite frankly amused at 1200 Sq Ft for $650k + $.50 per Sq Ft of HOA. Which came out to be a joke. Granted that condo sold no units period.

    I however do not agree that buying anything right now is a bad thing. It all depends on what a person is buying. If they are buying a home 20% off the current market, and understand that the reality is it can go down 10-20% more, then they are making an educated decision.
    If it is someone helocing their house to 100% of value and barely makng payments, that is a risky and reckless behavior.

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  102. 102

    […] Locally, the NWMLS reports Pending Sales up 4.1% from Year Ago, Total Inventory Unchanged, while Seattle Bubble recaps King County SFH  pendings to be up 15% from same time last […]

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  103. 103

    Tim:

    Good graphs!

    The tone is factual and cool…why do people think you are a rock throwing maniac?

    You seem a bit more visionary these days…

    Do all of your stats use the median SFR price, rather than the median home price (which would include condos), and why?

    I ask, because many of the historical stats I have researched use median home price.

    Hopefully you’ve already answered this a few times, and can give me a canned response.

    Thanks!

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  104. 104
    The Tim says:

    Roger,

    Yes, the primary charts I post are based on King County SFH median. As to why I do not include condos, I point you to this post: Seattle Bubble Stats: Where are the Condos?

    Also note that King County condo data is available in the spreadsheets I link to each month, I just don’t post graphs on them.

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  105. 105

    […] It’s far worse for the real estate market, as shown by plummeting prices and rising inventories in Seattle. […]

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  106. 106
    Jillayne says:

    Hey Tim,

    I’m using your graph in the classroom tomorrow with a big “from SeattleBubble.com” at the bottom.

    Thank you for the graph!

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  107. 107
    The Tim says:

    My pleasure. Thank you!

    Rate this comment: Thumb up 0

  108. 108

    […] interesting snippet that’s outside of the usual data I include in this monthly post. Despite last month’s significant bump in pending sales (up 15% YOY), closed sales this month failed to experience a […]

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  109. 109

    […] pending sales stats increasingly more useless as a measure of market health. So pending sales were up 15% year-over-year in September. Does that really mean much if 20% of those sales never actually close (vs. just 7% the year […]

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