Let’s have a look at December market statistics from the NWMLS.
Here’s the NWMLS press release: Northwest MLS members expecting "market observers" will become "market participants"
Frigid temperatures and record snowfall brought home sales to a standstill for several days in December. The unusual weather, when coupled with the expected holiday slowdown, contributed to a 17.6 percent slide in pending sales compared to the same month a year ago, according to figures from Northwest Multiple Listing Service.
“December typically has a slowdown in sales due to the holidays, but the recent snowfall compounded this seasonal slowing,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “On the flip side, we should see deferred buyer activity from December pushed into January,” he remarked.
Accurately predicting the spin of real estate “professionals” has become so easy it’s hardly even fun anymore.
Here’s your King County SFH summary:
December 2008
Active Listings: up 6% YOY
Pending Sales: down 16% YOY
Median Closed Price*: $403,500 – down 7.2% YOY
Surprisingly, closed sales in December were actually up month-to-month from November, but still didn’t break the 1k mark. At 929 closed sales, December 2008 is easily the slowest December in modern records, and is the second-slowest month overall.
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.
This year’s drop from November to December was slightly less pronounced than last year. However, there was not enough of a difference to really draw any conclusions.
Whoops. Had to adjust the scale for this chart, as there had not previously been a month with fewer than 1,000 pending sales. But don’t worry, I’m sure now there’s all sorts of “pent-up demand” for January.
Here’s the supply/demand YOY graph.
Slight increase on the sales side, but still languishing in the -15% to -20% range. The increase in the YOY inventory stat was the first such move since February.
Here’s the chart of supply and demand raw numbers:
Months of Supply for December jumped up yet again, reaching yet another all-time high of 9.56. Yowza. If we keep this up, we’ll hit a full year of supply by summer.
Here’s the median home price YOY change graph:
Is the rate of price declines finally reaching a bottom, or is the mix of sales that make up the very few closed sales each of the recent months just changing toward more expensive homes? We’ll probably have to wait for the December Case-Shiller data to really be sure.
And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.
December 2008 King County median SFH price: $403,500.
December 2005 King County median SFH price: $393,000.
Here are the news blurbs from the Times and P-I. Check back tomorrow for the full reporting roundup.
Seattle Times: Median home price in King County tops $400,000 again in December
Seattle P-I: County house value up from November
vince M. » Jan 6, 2009 at 1:00 pm
as someone who is looking in the west seattle area, I have noticed listings sitting for months on end with these hyper inflated price tags of yester-year. I think that realtors have to share in this responsibility and it is funny to me, that the CEO John L. Scott is telling the world that all is well and that the cool aid is right over here in happy sunny land. You nailed it on the head Tim and I am happy I found this site, I think it’s high time the “Real Estate Professionals” get a clue.
Ira Sacharoff » Jan 6, 2009 at 1:56 pm
A few of us have a clue. I sold a house, representing a buyer for a house in West Seattle a few months ago that was priced much lower than it could have been, and it went quickly. That particular listing agent works hard to convince sellers to price their homes low so they can sell, but you’re right, and it’s not just in West Seattle.
I think it’s a combination of BS on the part of the agents (” Sure, I can sell your house for this much”) and the sellers themselves who can’t/won’t accept the reality that times have changes and are convinced that someone will pay 600,000 dollars for their fixer.
Fripp » Jan 6, 2009 at 2:13 pm
I plan on eventually buying in West Seattle as well. It seems like sellers here have been more stubborn but in the last month or so prices appear to be coming down. Lots more new listings with asking prices less than or equal to the last sales price. Still a ways to go but at least things are finally moving.
Magnolia44 » Jan 6, 2009 at 2:16 pm
Nothing like a stat that does not go the tim’s way so he gets cynical. Too funny I was looking through older posts and someone. Mentioned the owner of this site does not even pay rent but lives free. Is this true?
So how can tim even have the battlecry for renters when he is not one of them? Was the website really just a good idea since none existed at the time and The Tim could really care less about ever buying or renting for that matter but has gained support as one of the “ones who wants lower housing”. Makes you wonder…. Congrats Tim you have a decent site and make a little coin from it but I am starting to think you have no skin in this game on either side but this website and views.
great business idea not sure how long it lasts but entreprenurial none the less I give u kudos for that. Oh and you seem to be pretty good at excel too.
The Tim » Jan 6, 2009 at 2:20 pm
Magnolia44 @ 4,
1) I don’t get what you’re referring to when you say “a stat that does not go the tim’s way.” What stat “didn’t go my way,” and what is “my way,” anyway?
2) Yes, I am open about the fact that my current living situation is as a caretaker, so the only rent I pay is the money I spend on upkeep. Have I paid rent in the past? Of course. Do I want to buy a home in the (hopefully not-too-distant) future? You bet. However, I don’t really see how any of that is relevant to a data-based discussion about the housing market and the merits of renting or buying.
Scotsman » Jan 6, 2009 at 2:36 pm
You’re right, Mag44- The Tim has been totally discredited. How can anyone who doesn’t own a home, or even rent a home, know anything about real estate, finance, economics, or… plumbing?!? And now he has been proven wrong about this whole “real estate bubble” thing. Median prices have bottomed and are on their way up. In DECEMBER, of all months!
If he doesn’t buy now, he’ll be priced out forever, the ultimate revenge. Heh, heh, heh.
Alan » Jan 6, 2009 at 2:44 pm
But the low inventory isn’t blamed on the snow delaying new listings.
I predict we will see deferred seller activity from December pushed into January.
Magnolia44 » Jan 6, 2009 at 2:51 pm
The tim
Being a care taker is a noble thing to do so I can’t fault you for that, just noticed your situation a person posted in a post the other day.
The cynical part was the comment about the slight up tick in median price, I am sure if it went the other day we would have been bombarded with the charts and graphs on peak to trough etc but I guess u have a month off.
I thought I would return some of the favor with my somewhat smart a** post.
BanteringBear » Jan 6, 2009 at 3:19 pm
I find it humorous that those bitter about price drops, such as Magnolia44, assume that everyone taking an objective stance and merely discussing the facts is “one who wants lower housing”. Many of us have absolutely no intention of purchasing anything in the near term, and are simply calling a spade a spade. If I were looking out for my own personal finances, a continued skyrocketing of prices would do nothing but benefit me in the short term. But I’m smart enough to know that the nonsense of the past decade had to stop, and for the benefit of society as a whole.
mark » Jan 6, 2009 at 3:28 pm
Difficult to believe prices have bottomed when layoffs are accelerating and credit is still restricted to the very best credit scores. The high inventory and low sales tell us there has not been meaningful improvement.
We should not be surprised to see a pause in the downward spiral. There are no longer bank failures on a weekly basis, so some fear has been removed. However, the recession continues and job losses may grind on for many months. Also, alt-a loan resets continue for up to 2 more years, adding to inventory/foreclosures and reducing the pool of qualified buyers.
mark » Jan 6, 2009 at 3:46 pm
I would add my comment — to believe prices are heading back up, we need a mechanism that explains how:
New buyers entering the market? It used to be Seattle prices were revved up by sellers of more expensive homes moving up from California. No more. CA and other major markets are in a world of hurt, having lost incredible amounts of equity/wealth and turning 1/5 mortgages upside down.
Easier credit terms creating more qualified buyers? Nope. Nothing to explain here.
Stock market wealth? Nope. That’s all evaporated.
Foreign investors? Nope. Their economies are all in recession too, and they invest in NY/LA.
More high-paying local jobs? Well, Wamu is gone with 3000 jobs. Microsoft is laying off. Boeing hasn’t built a single dreamliner yet. The state government is broke. Who’s adding jobs? No company has a stronger balance sheet than Microsoft. If they are laying off, bet that everybody will as well.
Lower rates? Yes and no. According to knowledgeable folks like Mr. Mortgage, very few borrowers are qualifying for the lowest rates. But for the few remaining buyers with sterling credit and enough of a down payment, yes, this lowers their cost.
Civil Servant » Jan 6, 2009 at 3:57 pm
Magnolia44, prices ticked up a bit in April too and then resumed their downward trend. Trends are more useful than data points, I think most of us believe. We are not ignoring the almost 2.2% month-to-month median price increase — yes, it sure did happen — we’re just not inclined to make any decisions or conclusions based on it.
DavidB » Jan 6, 2009 at 4:19 pm
An uptick in prices from one month to the next is meaningless because of seasonality and other factors. Year of year comparisons to the same month are the only way to compare apples to apples. The trend remains to be downward for prices when you compare each month to the prior year.
It’s been quite a while since there’s been any improvement in year over year data
bidingmytime » Jan 6, 2009 at 4:35 pm
I don’t understand why you people have trouble understanding the impact of weather. We in Seattle are entitled to a never ending supply of “desirable climate.” When you define “desirable” as cloudy, chilly, and humid with constant drizzle, snow or even sunny days are forces to be reckoned with. I for one spent the last three weeks cowering under my bed sheets- begging my family not to look outside lest they come to believe that snow could be fun.
TheHulk » Jan 6, 2009 at 4:44 pm
Also note that median prices can be significantly distorted by sales volume. A single million dollar house sold that month will suddenly bump up the 1000 odd other houses sold by a cool 1000 bucks each.
S-Crow » Jan 6, 2009 at 5:03 pm
Had a recent sale in my neighborhood. $1.6 Cash. Another, sold around $850K (a very very good buy for land (5 acres) and sq. ft (around 5500-6000), not to mention a finished outbuilding/barn with finished living quarters, etc….
Several homes (most) have sat for months in all price ranges on my hill. How does this impact the median? Spikes up. Is the market fundamentally sound and coming around? Not in my opinion.
Financing:
It is very important that readership here understand that financing IS readily available for those with suspect credit or other non-conventional loan candidates. It is called FHA. Our office is closing a good mix of FHA and Conventional transactions (refinances). We do have purchases but for the most part I’ve almost forgot what they looked like.
There are cases where people are bringing cash to close in refinance transactions.
That is the report from the trenches in the front lines.
kfhoz » Jan 6, 2009 at 5:40 pm
Hulk, I think that median price is the break point in count of houses sold. Half of the houses sold are above the median and half are below the median. The spread in houses does not really matter (so long as there are enough data points right near the median) Hence one million dollar house, above the median price, just “cancels” out one house priced below the median, just like any other house priced over the median.
Only if it were the mean or average would one million dollar house affect the statistic disproportionately.
deejayoh » Jan 6, 2009 at 5:54 pm
Less than 1000 homes sold last month. It is really easy to distort the median when the sales volume is about a quarter what it was in the average month during the boom. If you want a realistic measure of what is happening to prices go check what is happening to the average $/sqft over at Radarlogic.com
jon » Jan 6, 2009 at 6:08 pm
The RadarLogic report shows a big drop for October, when the NWMLS data for King SFH dropped from $415K in Sep 08 to $392K in Oct. Since then NWMLS has shown 2 months of increase in SFH: first to $395K in Nov, and then $403K in Dec.
The $/sq ft is interesting in that San Diego is $205 and Seattle is $198.
David Losh » Jan 6, 2009 at 6:32 pm
Holy Cow!
Price per square foot changes between the size of the home. Houses under 1000 sell for a higher price per square foot, new construction is tied to the type of construction, and much larger homes sell for a lower price per square foot. New construction is taking the biggest hit on price per square foot as builders unload.
I don’t care what Tim’s living situation is; he provided a forum. Many things asserted here are wrong or way out of touch with Real Estate buying or selling, but the discussion is first rate.
Thomas B. » Jan 6, 2009 at 6:32 pm
Wow… more outright lying by a “Real Estate Professional”. I guess they don’t follow their code of conduct.
Article 12
REALTORS shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.
Article 15
REALTORS shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. (Amended 1/92)
The Tim » Jan 6, 2009 at 6:53 pm
Magnolia44 @ 8,
See the little asterisk next to “Median Closed Price” in the post? That’s been a regular part of the monthly stats post for over a year. As Deejayoh @ 18 said, with such low sales volume, the median is especially susceptible to erroneous fluctuations from month to month that don’t really tell us much about the actual present value of homes.
I’ve been pointing this out the entire time that prices have been on the decline. My comment about the newspapers was more a commentary on their tendency to latch onto a misleading surface statistic and trumpet it as the most newsworthy aspect of a story.
The Tim » Jan 6, 2009 at 7:17 pm
Doh. Did I say I’d update the post at 4:00? I guess I meant 7:00. Sorry for the delay.
mukoh » Jan 6, 2009 at 7:30 pm
S-Crow is correct from the front lines, mortgages that are originated however right now are typical of 199-2003. 80% of them are FHA.
At least what I have seen from my friend who manages a branch.
Crashcadia » Jan 6, 2009 at 7:31 pm
I also blame the bad weather for the sale of Puget Sound Energy to Foreign Investors.
http://www.thenewstribune.com/business/story/581321.html
More and more of our infrastructure will be sold off to Foreign entities.
We will pay a tithe to the king of a foreign land to warm our homes.
We will pay tolls to foreign kings to travel what once was our land.
We will not be able drown our sorrows in our own beer.
http://www.babeled.com/2008/07/15/anheuser-busch-and-budweiser-sold-to-inbev-no-longer-an-american-icon/
Jonness » Jan 6, 2009 at 8:03 pm
“Too funny I was looking through older posts and someone. Mentioned the owner of this site does not even pay rent but lives free. Is this true?”
That can’t seriously be criticism? Tim is practicing what he preaches and living as frugally as possible while he socks money away during by far the greatest deflationary period in our lifetimes. That’s not laughable; that’s brilliant! If saving money while renting is thought to be a smart way to live right now, then figuring out how to live practically rent free is nothing less than genius. Contrast Tim’s gameplan to the guy who financed a house in 2007 along with a couple of new gas guzzlers, and you’ll quickly see what I mean.
G4George » Jan 6, 2009 at 8:09 pm
The real estate talking heads should probably be careful what they ask for and what they say is happening.
It may sound like a contradiction but signs of stabilization could be a disaster for them if the supply/demand equilibrium has not been reached. Getting people to believe that the market has bottomed is dangerous because it is a one dimensional economic view point and the unseen (multi-dimensional) consequences could make things even worse. Let me explain ….
If people believe the market has stabilized they will return to the market. The problem is that despite it sounding like an oxymoron the demand is more likely to be on the supply (seller) side. Lots of sellers are sitting on the sideline; they would like to sell but are waiting for things to get better. There â€potential’ sellers will come back to the market a lot quicker than the buyers. Buyers due to other macroeconomic factors will not be able to return as quickly as the sellers.
If one thing is going to drive the market lower it will be an inventory glut caused by sellers rushing to list their house because they think the bottom has been reached when the supply/demand equilibrium is still some way off.
As I have said before Realtors need to help get prices to the bottom ASAP in their own selfish self interest so both buyers and sellers can interact in a balanced market and volume can return. Price stabilization, especially short term stabilization, will not create volume and that (volume) is what realtors need to earn a living.
shawn » Jan 6, 2009 at 9:51 pm
I almost bought a home, but then it snowed; so, I put it off till January.I hope there are no traffic jams in January or I might not buy till February. And if there are any indications of flooding, well then I might just wait till summer.
Robert » Jan 7, 2009 at 3:29 am
Shawn – What if the summer is too hot? Will you wait for things to cool down in the fall? And what if there is a bit too much drizzle in the fall?
monkey » Jan 7, 2009 at 7:47 am
Realtors always say NOW is good time to buy (since the housing market downturn) so they can earn their income. Buyers always say WAIT till good time to buy (so they can save money & get the bottom). Sellers always SAY my house worth more than that (wait for the right time and maybe the right buyer???).
At the end, who is making money.
The Tim » Jan 7, 2009 at 10:02 am
Sorry, the reporting roundup is going to be posted a bit late as well. I should be back in the office by around noon and hope to have it posted before 1:00.
Plymster » Jan 7, 2009 at 12:35 pm
Darn it, Tim! We’re not paying you to give us excuses about why your late. In fact, we’re not paying you at all, so don’t sweat it. Besides which, I didn’t realize you had a deadline here.
Your good analysis and reporting is well worth the wait.
Rob Jellinghaus » Jan 7, 2009 at 10:28 pm
Buyers moving up from CA? Yep, that’s us. Only thing is, we almost got crushed like a bug in CA. We bought in Nov. 2002 (3br, 1300sf) for $385,000. In Concord, in the bubble-devastated East Bay area near SF.
We went on market in early March 2008, for $479,000. Home across the street went up as a short sale four days later, for $469,000. We said, holy "chocolate", we’ve got to move and move fast. Dropped our price to $449,000 the next day. Three days later we had an offer for $425,000 with 10% down and no contingent sale. We took it.
So we dropped our price by $54,000 in seven days in order to sell in that market. And this was nine months ago! Zillow *now* zestimates that house at $369,000. If we hadn’t sold when we did we would have been close to losing every penny of our equity (such as it was). Thank God we didn’t refinance it…
Now we’re here, renting, and waiting. The absolute earliest we would even think about buying something is fall of 2010. Looking at the charts here, it seems plain as day that just about all the gain in prices since 2001 or so has been pure unjustified bubble. If prices revert to 2001 levels, it will mean another 25% or so drop in prices. Which seems totally conceivable; the house we’re renting now (6514 113th Ave. NE, Kirkland) was Zestimated at $754,000 in the middle of 2007. Seven months ago: $700,000. Now: $600,000. 2001 value: $400,000. I see no reason it shouldn’t drop to around $450,000 over the next two years. And THAT will be the time to buy — when the local Case-Shiller curves have flattened out for three months running.
Ray Pepper » Jan 8, 2009 at 8:53 am
Welcome Rob. I’m from San Jose and moved here when I was 19. I’m 42 now. If you can make it here 3-4 years you will stay. Most friends and familiy who moved here from Bay Area and Tahoe bailed in 1st 3 years.
Good Luck and may I suggest:
Dicks
Pagliacci
Jasmine Grill
and an abundance of Thai restaurants
Matthew Gardner Predictions vs. Reality | Seattle Sandbox — Seattle Bubble Testbed » Feb 3, 2009 at 4:55 pm
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