Zillow has posted their latest quarterly home value reports.
Their charts for the Seattle area include a graph of the percentage of homes sold at a loss (approaching 30%) as well as a chart showing the percentage of recent buyers with negative equity (over 50% of 2007 buyers).
Interesting stuff from Zillow as usual.
You can also find additional news coverage of Zillow’s report at the Seattle Times and at Aubrey Cohen’s blog.
No need to worry Seattle isn’t as bad as other places, therefore that means things are okay right?
KLK’s comments about how to define a recession are worth the trip over to Aubrey’s blog. Anyone else notice how much time he seems to have to post anywhere and everywhere in the blog-o-sphere? Except Seattle Bubble, of course – he probably still claims he has never heard of the site
I want Kary to sire my pink pony.
According to Zillow it seems like 20% of sold homes are foreclosures. There are indications that King Co. will have similar number of Notice of Trustee Sales as closed sales for the month of January. Can you say Kaaaliifoorniiia.
YOU’RE RIGHT DEEJAYOH
KLK seems to talk out of both sides of his mouth and his opinions are wishy washy….if he blogged here, it would drive us SB bloggers to ask him to clarify his stand and he’d have none of that.
Hades, he should run for office….lol
I like this line from KLK:
“Any argument that prices wouldn’t fall here was absurd,…”
I love Zillow! Will you hurry up and complete your merger with ZIPR. GOOD LORD! Lets get the message to the masses!
FYI .. we have found that the Zillow “zestimates” for individual home values are wildly inaccurate, usually too high but sometimes too low, rarely do they match (or come very close to) the actual appraised value of the home.
But the overall trend info is probably fairly accurate.
And I like the fact that they also back up my previous predictions of home values falling 10-20% by the end of 2008 compared to the 2007 peak values — you know I can’t resist slipping that in every chance I can get. LOL!
Appraisals are becoming a HUGE problem in the mortgage industry because there are so few sales. When the appraisers can’t find comps within the last 6-12 months some lenders simply refuse to make the loan because they have no way of knowing the true value of the home.
Nationally, vacancies are increasing:
“Feb. 3 (Bloomberg) — A record 19 million U.S. houses stood empty at the end of 2008 as banks seized homes faster than they could sell them and prices continued to fall.
The fourth quarter’s all-time high was 6.7 percent above a year ago when 17.8 million properties were vacant, the U.S. Census Bureau said in a report today. The vacancy rate, the share of empty homes for sale, rose to 2.9 percent in the last quarter, the most in data that goes back to 1956.”
Can Seattle be far behind this trend?
Rents will be coming down, rent based prices will be coming down, pink ponies will be looking for greener pastures.
Appraisals are becoming a HUGE problem in the mortgage industry because there are so few sales. When the appraisers can’t find comps within the last 6-12 months some lenders simply refuse to make the loan because they have no way of knowing the true value of the home.
Steve’s comment is quite interesting. Homes themselves are becoming toxic, with no way to mark to market, just like the financing that backs them. This turns into a positive feedback loop, since loan availability then goes down, which in turn further retards sales volume.
IMO the 50% statistics on people who bought in 2007 is way off. I believe in every property that I have seen that was 2007 there is at least 90% of them behind in what they paid for.
Some good charts/data on the Zillow site – thanks for the pointing them out Tim.
But maybe the best chart is on the Seattle Times site – “Buyers holding the upper hand”. Clearly shows how declining prices have affected people who bought in 2008,7 and 6.
As the rollback in prices continues, and we continue to get coverage like this, I wonder if more people will start to get nervous and try to jump in the market and sell.
Looking at the charts, if I had bought in 2003-4 or even 2002 I would be starting to get nervous.
Thanks for the link, Tim!
I’ve been following the Edmonds market for a while now, and this confirms what I’ve been seeing (that prices are dropping a little more slowly there). I’m sure they will catch up, though, b/c they still seem really high.
I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this..I refuse to believe this…I refuse to believe this…
say it 10000 times like Obama and the price will go up!
Yes we can!
Are you drinking? Try that post again, but s..l..o..w..l..y this time! ;-)
It seems pretty clear that housing deflation is here and will take a significant toll. Does anyone else get the feeling that the policy makers response is a$$ backwards? ie. trying to spur lending, reduce mortgage rates, tax credits to support housing prices is a big mistake. Kind of like trickle down bailouts. It’s pretty clear that falling prices is the only sure fire way to increase sales and get back to a normal housing market. Getting to a more fundamentally sound price level and market will be painful no matter what.
While I’m not the bailout type, If there is going to be a bailout, rather than giving the money to lending institutions, principal reductions make more sense than other loan modifications. The goal should be to get prices down to a fundamentally sound level with as little collateral damage as possible, not to support a bubble level. Let’s make sure that those principal reductions are for people who actually live in the home, and is based on the ORIGINAL financing. (I’ve read too many sob stories that when you look further reveal multiple refinancings to take out money to buy cars, vacations, pay down debt etc). Of course then continue with strict lending standards. Those who took money out for toys will need to repay or lose the house.
History has shown that over the long run, housing prices always go up. If you plan to be in your home for a thousand years or more, the declines over the next few decades are immaterial, making this a great time to buy.
I love it.
That is a great point. Big picture guy.
Herman,
Very good point that had until now escaped me: in the long run, the houses we buy now will almost certainly be worth more after we are dead.
Getting my checkbook….
I am very interested in your ideas. Can I subscribe to your newsletter? :p
Scotsman just for your slowness as usual will repeat.
In my statistics of the markets that I W a t c h. At least 90% N i n e t y percent are below their purchase price in 2007 two th ou s a nd seven. Would you like me to take you back to Pre-K days? I bet those are just still bright in your mind.
Yup, you’re drinking.
Why do I get a “whoops, you caught us in the middle of a server migration” message every time I try to go to this site from home, yet from my office and from a proxy, it works fine? WTF? Tim, do you have my IP blocked according to some clever program that tries to frustrate the user indefinitely as opposed to just telling them they’re blocked???
I switched the DNS records over from HostGator (the old host) to a new host (MediaTemple) way back at 2AM the morning of January 24th—over 10 days ago. By now the change should have taken effect across the whole internet, but apparently there are still some service providers out there that have not had their records updated.
The server migration message was placed on the old host to prevent people from leaving comments on the old and new servers simultaneously, which would result in two different versions of comment threads existing.
I highly recommend you call tech support for your service provider. Tell them you’re trying to access a website whose DNS records were updated over a week ago, and are still being sent to the old server. Obviously the first level tech support won’t be able to do jack, but I would hope that someone in the upper levels would be able to put in some sort of work order for their nameservers to be refreshed or something.
Good luck, and sorry!
[...] Bubble just posted about the recent numbers out from Zillow. Zillow’s analysis found that 29 percent of homes in [...]
Classic!
In case anyone is wondering, I still hold to my “20cents by 2010″ prediction. Seattle isn’t immune, and at the rate Barry, Harry, and Nan are going, I might be too bullish.
“History has shown that over the long run, housing prices always go up. If you plan to be in your home for a thousand years or more, the declines over the next few decades are immaterial, making this a great time to buy.”
But due to global warming, if you buy a waterfront home, you’ll still be seriously underwater.
Well played!
Negative equity is not the same thing as the house being worth less than it was in 2007. It’s very possible for 90% of the houses purchased in 2007 to be worth less than they were when purchased. It’s also possible for 40% of those people to have a combination of down payment and drop in price that still leaves the buyer above water in equity. As prices continue to drop, that 50% number will rise.
Just waiting for the free market fundamentalists to come out of the woodwork and point out that if someone is willing to pay the agreed-to price, then by definition that IS the market value.
Anyone? Scotsman? Put those big bad economist credentials to work, baby.