Can you have a place on this site that I can throw these out there from time to time.

BEHOLD!

It also tracks Case Shiller very closely

So The Tim, do you personally think Seattle will continue to track San Diego pretty close with a 17m lag as it has the last years or do you predict a significant deviation in say the next two years?

I suspect the lag factor will continue, with respect to the direction of prices, though at some point I expect the magnitude of price changes to deviate again, since Seattle (arguably) does not have as far to fall from the bubble peaks as SoCal.

Disclaimer: Not a data-based prognostication or prediction—just an off-the-cuff opinion.

1) I agree, but unfortunately median price is the best indicator the NWMLS publishes. Without direct access to the NWMLS database, I can’t get my hands on anything better.

Of course, the Case-Shiller index does a great job of accounting for size, and I post regular updates whenever they release their new data. Their one downside is that the index for Seattle covers a huge area, all of King, Snohomish, and Pierce, which brings me to…

2) This is the problem I am attempting to address with my regular neighborhood breakdown posts. If there’s something more specific you’d like to know that I could include in that post series, just let me know.

3) The earliest mention I can find/recall of the California lag on this site is from the October 18, 2006 post: “Local Prices Are Not Headed Backward,” in which I quoted following from the Everett Herald:

It used to be a popular notion among local real estate agents that the Northwest housing market lagged behind the California market by about six months.

A few days later on October 20 I said:

Since real estate trends in the Northwest are said to lag California by six months to a year,

Note that I did not claim this theory to be my own at any point. In February of 2007 I investigated this theory using the Case-Shiller data, and determined that on the way up, Seattle appeared to lag San Diego by roughly a year, but again never made the claim that this meant Seattle would “behave just like those markets.” From that post:

So what’s the conclusion? During the recent unprecedented run-up in home prices, price growth in Seattle has lagged the nation as a whole by roughly six months, and San Diego by approximately a year. Both of these measures have shown real price declines in the past year, despite many positive factors (such as job growth, low unemployment, good interest rates, etc.).

Therefore, a reasonable person would conclude that there is a very real possibility that Seattle will also experience price declines in the coming year.

A few months later in June 2007 I did a more precise assessment of the data and determined the 17 to 18 month number. From that post:

Those curves sure look similar to me (note: “similar” not “identical”).

And of course, every time I’ve posted the 17-month delay graph lately, I have followed it with qualifiers like “for entertainment purposes only” and “not intended to be predictive.”

When it comes to mentions of Seattle’s market lagging behind California, you seem to have constructed a picture in your head of what was said on this blog that does not quite match reality.

1. The biggest problem with using median home prices as a measure of the market is that it does not control for median sizes of the homes being sold. If foreclosures are disproportionately affecting the bottom end of the market, the the fall of median home prices could be partly attributable to a fall in the median size/quality of homes being sold.

2. The bubble burst has not only not been uniform across counties and states. It is also not uniform within counties. This lack of uniformity is captured in the “ring of fire” phenomenon. It seems misleading to lump data about Woodinville & Issaquah in with data about Greenlake & Ballard.

3. I still have seen no explanation for Tim’s theory that Seattle lags the Los Angeles & San Diego markets by 17 months. The implication is that Seattle will behave just like those markets, but on a 17 month delay. The problem with this prediction is that technical analysis (mapping market inflection points onto each other) is not theory. This fallacy is evident in Tim’s creeping predictions. When Tim first started talking about the Seattle lag, it was 6 months. Then it was 8 months. Then it was 12. Then it was 13. Now it is 17. So while the market prices have definitely taken a hit and are likely to decline some more, there appears to be no reason to believe that things will get as bad in Seattle as they are in the country’s worst hit areas.

Don’t get me wrong, I think we have some more pain & agony ahead, especially if Seattle’s net loses of jobs in the recession get into the 1000s. Rising interest rates will also continue to take a bite out of home values. But it seems relevant to test some of the more negative theories of the market with the same rigor as the positive theories.

http://seattletimes.nwsource.com/html/localnews/2008286550_foreclose20.html

I have been tracking the ratio of pending to closed sales, but the series is incredibly noisy on a month-to-month basis. Here’s the last update from August, showing that 16% of pending sales never closed in the second quarter. I plan to do an update to that post with third quarter data once closed data comes out for October.

Considering how important foreclosures are to price movements, I think it would be interesting to see monthly foreclosure data.