The latest edition of Sound Housing Quarterly—the subscription-based sister product to Seattle Bubble—has been published. As the name implies, Sound Housing Quarterly is journal of the Puget Sound residential real estate market, published four times a year.
Provides a concise picture of overall market conditions.
Cleaner, more printable charts.
All the recent data compiled in a single package.
If that sounds like something you or someone you know would benefit from, head over to the website at HousingQuarterly.com to download a free preview of the current issue and to learn more about what Sound Housing Quarterly is and how to subscribe or purchase a single issue.
Here’s a brief preview of the type of charts that are included in Sound Housing Quarterly:
If you are involved in the Puget Sound housing market in any way, as a home buyer, a home seller, a real estate agent, or a real estate investor—Sound Housing Quarterly is written with you in mind.
This 40-page publication provides an overview of a variety of factors affecting the Puget Sound housing market, as well as a detailed look at county-by-county conditions, and a forecast for where the market is headed in the coming months.
I enjoy providing Seattle Bubble free of charge as a service to the community, but I recognize that the format here can sometimes be intimidating, making it difficult to get a good handle on the overall market picture without reading along every day. That’s why I created Sound Housing Quarterly. Please take a few minutes to check it out, and consider subscribing. Thanks!
Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.
First up is the straight graph of the index from January 2000 through February 2009.
All three tiers dropped again in February, but in a reversal from last month, the high tier fell the slowest, dropping just 0.6% month-to-month. The low tier has rewound to April 2005, the middle tier to June 2005, and the high tier to June 2005.
Here’s a chart of the year-over-year change in the index from January 2003 through February 2009.
The low tier inched closer to matching its October 2005 +19.6% performance but in opposite magnitude. The high tier actually improved slightly from a year-over-year basis, for the first time since March 2006. The low tier again kept its title for largest YOY decline, with the high and middle tiers swapping places. Here’s where the tiers sit YOY as of February – Low: -18.1%, Med: -14.9%, Hi: -14.6%.
Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.
What’s interesting is that the decline softened somewhat month-to-month for the high and low tiers, but continued at roughly the same rate for the middle tier. It will be interesting to see if this is just a one-month outlier or the beginning of some sort of pattern.
Here is your open thread for the mid-week on April 29th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
I received an email tip from a reader that Vulcan’s Rollin Street Flats, a 197-unit condo building in South Lake Union is officially going apartment.
Just four days ago, the Seattle Times reported that Vulcan had “pushed back the start of closings on its nearly finished Rollin Street Flats project.”
An email being sent to buyers who had pre-sale agreements at Rollin indicates that Rollin Street was only 25% pre-sold, well below 70% threshold required for Fannie Mae backing (the threshold was previously 51%, and was raised to 70% on March 1):
Market conditions tell us we will not achieve the required minimum 50% pre‐sales in a short timeframe. As a result, we have decided to convert Rollin Street into a rental apartment building. We will refund your earnest money deposit (currently safely held in an escrow account) and any deposits you made for upgrade finish options.
We had expected to be able to communicate this decision earlier, but the process of getting permission from our construction lender took much longer than we had hoped.
I have an email out to Vulcan for confirmation on this, and will update this post if/when I hear back from them.
Down 1.5% January to February. Down 15.4% YOY. Down 20.9% from the July 2007 peak
Last year prices fell 0.97% from January to February and year-over-year prices were down 2.70%.
Here’s the usual graph, with L.A. & San Diego offset from Seattle & Portland by 17 months. Portland extended its streak to three months of turning in a smaller YOY loss than Seattle. The YOY declines in Los Angeles and San Diego both continued the upward trends that began with November’s data.
Note: This graph is not intended to be predictive. It is for entertainment purposes only.
Here’s the graph of all twenty Case-Shiller-tracked cities:
In February, eight of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops than Seattle (the same number as December and January). Dallas at -4.5%, Denver at -5.7%, Boston at -7.2%, Cleveland at -8.5%, Charlotte at -9.4%, New York at -10.2%, Portland at -14.4%, and Atlanta at -15.2%. As usual, Phoenix had the largest year-over-year drop, with prices falling 35% in a single year again.
Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.
In the nineteen months since the price peak in Seattle prices have declined just shy of 21%. Seattle’s price decline this far from the peak was just slightly larger than what was seen in Tampa. Only Miami, Las Vegas, and Los Angeles had declined further this far after their respective peaks.
Here’s the “rewind” chart. The horizontal range is selected to go back just far enough to find the last time that Seattle’s HPI was as low as it is now. This gives us a clean visual of just how far back prices have retreated in terms of months.
Seattle’s Case-Shiller value for February 2009 of 152.12 came in just above its June 2005 value of 151.79. Prices have now “rewound” nearly four years.
Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.
Increasingly-famous economist and housing market sage Robert Shiller spoke in Seattle this morning at a business breakfast downtown and this afternoon at Seattle Pacific University. Mr. Shiller’s presentations focused on the role that psychology plays in economic markets, a topic that he explores with co-author George Akerlof in their recent book Animal Spirits.
The morning session consisted of roughly thirty minutes of prepared remarks given to a crowd of about 1,400 local business leaders and people with ties to SPU. The afternoon session was about an hour long, and was more interactive event at a smaller venue with the capacity to seat only a few hundred. After giving a condensed version of the same presentation from the breakfast, the floor was opened for a question-and-answer session.
Dr. Shiller’s primary thesis is that economic markets are strongly influenced by psychology that seems rational to individuals, but on the whole is “collective madness.”
He referred to the notion that prevailed during the housing bubble that home prices never go down as laughable, and said that the ideas that housing is an “amazing investment” and that you can be “priced out” are not supported by the data.
One amusing part of the afternoon session was a story Dr. Shiller related about a localized Los Angeles housing bubble in 1885. In describing the mentality in 1885 Los Angeles, he said that people thought “Los Angeles is special!” He also quoted from an article in the LA Times which was published during the aftermath of the collapse in 1886:
We Californians have learned something. And that is that home prices can’t just go up forever—they have to be supported by something. Never again will Californians make this mistake.
Regarding government bailouts, Dr. Shiller likened the economy to a sinking ship (specifically the Titanic), saying that “we just have to try something,” and “I give them credit for trying.” [Update: As I understood him, Dr. Shiller was proposing that we “try something” not to re-inflate the bubble, but rather to soften the blow of the bursting bubble, and to prevent the opposite of “irrational exuberance” from driving the nation and the world into a massive over-correction that could last for decades.] He also suggested that more should be done to prevent foreclosures, due to the psychological impact of losing one’s home.
After the afternoon session, Ray Pepper (500 Realty) and I were discussing the psychological implications and the moral hazard inherent in mortgage principal reductions, which Dr. Shiller seemed to be promoting. Ray asked Dr. Shiller about this, and he responded that “I’m not a fan of it in the long run, but maybe in the immediate crisis, because people are in trouble.” His ideal solution would be something he calls a “continuous workout mortgage,” where a workout (principal write-down) is pre-specified and priced into the mortgage from the start (a concept described in more detail in his book The Subprime Solution).
Although he declined to give any specific forecasts, the feeling I got from his comments were that Dr. Shiller believes home prices will return to their long-term, inflation-adjusted historical levels, both nationwide and even here in Seattle.
For anyone interested in hearing the entire afternoon lecture, you can listen to it right here:
If anyone would like to hear the morning lecture, I have a recording of that as well, but the quality is relatively poor due to it being such a large room. Let me know and I will post a link in the comments.
