Also, because I was looking at a very limited type of property for each area, and not just all sales within a given area, I couldn’t look at just one month. As it was for Skyway I only had 4 transactions over 4.5 months.

http://blog.seattlepi.nwsource.com/realestate/archives/164212.asp#extended

I used east Bellevue instead of Kirkland.

1. 2 bed 1 bath built before 1950 in Skyway.
2. 4 bedroom 2+ bath built after 1980 but before 2000 in some part of Kirkland.
3. Something in Clyde Hill.
4. 2006-2007 house built in Kent (or maybe Snohomish).

If someone has some other ideas, I might through them in.

If you are only referring to the short-term, then yes, I think you may have a point.

http://online.wsj.com/article/SB123673662900091009.html#articleTabs%3Darticle

In King County in January and Febuary the following are the unofficial stats over $1,000,000:

Volume 18 & 34
Mean 1512k & 1898k
Median 1150k & 1323k
Max price 3675k & 5300k

So the volume almost doubled, and prices improved with that increase.

As to the overall market, the median for pendings in King County (both with and without STI) is just under $350k last I looked. And contrary to Ardell’s claims, the volumes are not up significantly, but she’s reporting on SFR and condo, while I’m only looking at SRF. It’s possible the $8,000 credit is having an effect in the condo market, but it doesn’t seem to be in the SRF market. Anyway, that’s a significant difference from the February median, and thus would tend to indicate probably at least two months of declining medians.

RE: Ray Pepper @ 6 –

Thank you for the link. The second link inside talks about Bakersfield. $579K for a house in Bakersfield, that is now worth $300K. .

I discount talk of houses outside the area because it’s hard to verify what the facts are about them. Like perhaps the one in South Park discussed above, or the $600,000 condo that Elizabeth Rhodes put on the front page of the Times last year, even though the story was considerably different than the story she told (due apparently to lack of research).

But just as with Case-Shiller they have the various tiers you can look at to get more information, with the median you can also look at the mean, and the difference between the mean and median. For example, the difference tells you that the higher end did better in February relative to January.

Thank you for the link. The second link inside talks about Bakersfield. $579K for a house in Bakersfield, that is now worth $300K.

I haven’t been to Florida or California in a while, but the numbers seem right. Now that people have bought at lower prices what will they do with the houses? A real second wave I think is going to be investors who jumped in on really “good” deals that are stuck, just like banks being stuck with foreclosures.

Due to the low volume of closed sales in individual neighborhoods, the median price tends to fluctuate more than it does county-wide.

and

Does a median price drop of 50% off or more in a neighborhood mean that most houses in that neighborhood have had their values drop 50%? Probably not.

In addition to starting the post off by downplaying the significance of the median price by referring to it as merely

a reasonably accurate measure of the general direction and magnitude.

Also I still put an asterisk next to the median price in every month’s main NWMLS update post back to the post I wrote in August 2007 titled Median Price Not Telling the Whole Truth. I meant to add it in this post, but forgot since I wrote most of the post offline last night and was rushed this morning during my brief time online before I headed back home from TX.

So I guess I don’t see where you’re coming from. I am still downplaying the median, and especially when we’re looking at such a small sample of sales. I just thought it was interesting enough to share.

http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL5308552.html

Angie, you can look up all the home sales yourself at Redfin. Just do a search of all closed sales for the past year in that neighborhood. It will bring up a list of all of them that you can download into excel and chart away to your heart’s content

FWIW, I looked at the $ per sqft chart for each neighborhood and they were off in the range of 25-30%

I’m too lazy to look them all up, but Mercer Island, in July of 2007, had 40 sales. The lowest price home was 642,500 and the highest was 5,600,000. 23 of those homes cost one million dollars or more.
In February 2008, there were 4 sales. The lowest price was 380,000 dollars ( and had major fire damage) and the highest was 1,100,000 dollars. Only one of those homes was a million dollars or more.

You can justify a lot of beiefs with statistics. As someone pointed out here a while ago, the median is a liar.
February is always slower than July, and you’re not really comparing like houses.
But it does suggest to me that the very expensive homes, which usually tend to be on the market longer, are barely selling at all right now.

Some houses are up to 70% off.

http://www.redfin.com/WA/Seattle/712-S-Trenton-St-98108/home/476969

It appears that the banks treat them like “hot potatoes”.

No riots today.

I guess 70% off doesn’t mean the end of the world as some may attest to.

Assuming that’s a reference to my comments, what I wrote was:

Re: 80%-off-peak*.
…
*If you truly believe that prices will fall this far, you’d be well-served to spend all your money on canned food and shotgun shells, because society as we know it will collapse.
…
I offer you a running bet of one box of shotgun shells and one case of yellow cling peaches (halves, in light syrup) that if the C-S index sinks to 80% off peak that there will be mass public rioting (let’s define this as reasonable-person-subjectively more severe than Detroit 1967) in at least five U.S. cities within 1 year of that date. If C-S is net-positive for any 24-month period without sinking to 80% off peak, we will consider the decline to have ended, and I will be declared the winner.

Comparing the two gives you a nearly 1:1 ratio of ideas expressed to misrepresentations about my position (one house != many houses, much less the market as a whole, 70% != 80%, and “the end of the world” != riots). And that ignores not only the questions Kary raised about the house, but also that it appears from the photos that the house has recently been destroyed, making the old sale price and the current asking price not directly comparable.

If you’re going to goof on my comments, go ahead. It’s only the internet and my name isn’t really Fran Tarkenton, either. But if you can’t do it without fudging things your way, then don’t do it.

Kary @ 20–indeed, not subprime. I’ll bet that will have a disproportionately big effect at the entry level buyer.

Using traditional standards (20% down, loan no more than 3X annual income) a $200K house will require $40K down and 53K/year income. That’s an awfully big fraction of yearly salary to put together on 53K/year.

20% down is not traditional. PMI has been around since at least 1978, and FHA since the 1930s.

Using traditional standards (20% down, loan no more than 3X annual income) a $200K house will require $40K down and 53K/year income. That’s an awfully big fraction of yearly salary to put together on 53K/year.

Seemed questionable to me also.

If people in the jumbo loan end of the market are having as hard a time gettting loans as the low-end first-time-buyer cohort, I’d say that this bodes most poorly for the high-end markets.

The lower price areas are not having any problem with loans. Loans are readily available–just not subprime.

Jumbo loans are much harder to come by these days… out of the banks our company works with, just a couple were offering them and the rates were unattractive. (2-3 points higher than conforming). In fact, often times I’ve not priced jumbos when I do the “Friday Rate Post”.

I’d say that if three of the four hardest-falling areas are sky-high costly, that belies the idea of “happens at the bottom”.

If people in the jumbo loan end of the market are having as hard a time gettting loans as the low-end first-time-buyer cohort, I’d say that this bodes most poorly for the high-end markets. If you’re well-heeled you can always find a less expensive place to live if you want to buy but encounter hurdles… but if you’re barely making the cut, those hurdles mean you’re out of luck entirely.

http://www.redfin.com/WA/Seattle/712-S-Trenton-St-98108/home/476969

It appears that the banks treat them like “hot potatoes”.

No riots today.

I guess 70% off doesn’t mean the end of the world as some may attest to.

Anyone who has a home worth buying is hanging on to what they have. No one likes to sell at the low point in the market unless they have to. Add to that, no one has the stomach to take out a jumbo loan right now, and it’s no wonder that home prices are down.

Feeling somewhat decent that I bought a home in Phinney. We seem to be losing value at a slower rate than other Seattle neighborhoods (but it just might be a longer fall to the same bottom point).

For Mercer Island and Bellevue the change probably is largely a reflection of the difficulties getting large loans.

Do you think it is a matter of difficulty getting a loan, or simply unwillingness to take on that albatross in a declining market/uncertain economy?

I suspect there are plenty of people who can qualify for a loan who are just choosing to wait. You don’t get wealthy enough to buy a million dollar house by investing in a bunch of declining assets.

You know, the one’s telling us the bottom will be like 2005 prices. Hey, the fun could go on and on; perhaps we’re headed for 1935 prices…LOL

In July 2007 at the peak of the market, 23 homes were sold. The median price was 399,000 dollars. The lowest price home was 257,000 dollars and the highest was 704,000 dollars.

In February 2009, 7 homes were sold. The median price was 198,000 dollars. The lowest price home was 160,000 dollars and the highest was 549,000 dollars.

The low volume of February was certainly a factor, but it seems to me to bear out that thoery that the less expensive areas started dropping earlier , the “it begins at the bottom” school.
A lot of area 360 homes are lower tier, and they’ve fallen hard. A house at the end of my block has been for sale since the summer, in the Earlington neighborhood near the Renton city limits. It was first listed at 400,000 dollars, and has been completely redone with all the requisite stainless appliances and granite countertops…60’s brick home in good shape. It’s now for sale for 249,000 dollars.
I went to the open house when it was first listed, and I thought it was insanely overpriced and I mentioned to my wife that the sellers weren’t going to get anywhere close to 400,000 dollars for that house.
Either the sellers or the listing agent thought they were in Bellevue, or they were completely deluded, or they didn’t really want to sell the house.
What would have happened if the sellers first listed that house at 340,000 dollars last summer?
It probably would have sold.

This really only says one thing to me. The people like my cousin, who make $150K a year or so, can no longer buy $800,000 homes with 5% down an a teaser interest-only introductory rate of 3%.

Seattle is surprised to discover that its citizens fall along a fairly normal income distribution curve. Yes, it’s true,Elizabeth, there just aren’t as many people making big incomes as there are over-priced homes. Especially now that the fairytale financing has disappeared in a puff of Pink Pony Dung….. uh, sorry, make that “dust.”

This video explains nicely how few people understand what “market value” means.

BTW – anybody else got a comment on the sucker rally happening on Wall Street right now? Some people are about to make a killing shorting bank stocks.

“They promised us they would not sell for under market value!”

“Thats not fair”

http://www.youtube.com/watch?v=10WoQZKZkNs&feature=related

Median is an important number, but this is one of the few areas where I agree a bit with Ardell–you need to look at how square footage changed too. On the way down median has hidden some of the declines because people are buying larger houses, meaning the decline per square foot is even higher than the drop in median would indicate. But none of these measures are as good as a CMA or appraisal of your particular type of house in your particular neighborhood.

I’d add you often see large movements in the prices of the various areas for the NWMLS, so seeing 50% down when overall it’s down about 20% isn’t terribly surprising.

I gotta keep you honest here, man: when the median price kept going skyhigh, your tone was one of complete discredit of that measure… and now that it is going down, that tone has changed.

But it is definitely more likely that houses in such neighborhoods have dropped in price considerably more than those in neighborhoods with only a 20% drop

I don’t think that is a globally true statement. I suspect the issue Jon points out – low volume, no really expensive homes are selling – is a big contributor. Some of your biggest droppers are also the most expensive neighborhoods

That being said, we’re still only talking a median price of sales and this doesn’t reflect overall house prices. It’s a snapshot of ‘current’ buying and indicative of what’s selling in any neighborhood. The expensive houses aren’t selling as much so you’re only left with the lower end houses being sold. No one has much appetite for a jumbo type loan, IF they can even get one and that, too, may be the real issue here. Eventually, if no one can get financing for the more expensive houses then those prices will have to come down much more if selling is the objective.