Let’s check in on March market statistics from the NWMLS. When it’s posted the NWMLS press release will be here, along with links to this month’s overview pdfs.
Update: The press release has been posted: Brokers report signs of improvement in “real-time” housing market
Pending sales around Western Washington for the month of March reached the highest level in six months, according to the latest figures from Northwest Multiple Listing Service.
Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25 percent, rising from 4,559 transactions to 5,701. Last month’s volume was down 5.6 percent when compared to twelve months ago, but it was the highest monthly total since September when brokers reported 5,982 pending sales.
You know there still isn’t much actual good news out there when they continue to resort to month-over-month comparisons.
Here’s your King County SFH summary:
March 2009
Active Listings: down 9% YOY
Pending Sales: down 2% YOY
Closed Sales: down 36% YOY
Months of Supply: 5.7
Median Closed Price*: $363,850 – down 17.3% YOY
Sales jumped up in March, as they do every year in the spring. Prices continue to drop like a rock, and meanwhile, county-wide months of supply dropped back below 6.0 for the first time in a year and a half.
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.
Inventory growth flattened out in March compared to last year, a trend that most observers have seen coming for some time. Here’s the pattern we have seen in other markets once home prices begin dropping in earnest: 1) Inventory drops. 2) Sales pick up. 3) Prices keep falling.
Pending sales took a sharper increase in March than they did last year, rising almost to the 2008 level.
Closed sales stayed about the same compared to last year. It will be interesting to see if March’s big spike in pendings translates into a jump in April closings, which are usually relatively flat compared to March.
Here’s the supply/demand YOY graph.
Both curves following the trends they have been setting over the last few months. Nothing too surprising.
Here’s the chart of supply and demand raw numbers:
March’s flat inventory sticks out as somewhat unusual on this chart. If prices keep dropping, I suspect this will be a fairly flat year overall for inventory as more buyers are able to get into the market at reasonable price points.
Here’s the median home price YOY change graph:
Whoops, had to adjust the vertical scale on this one. March’s 17.3% drop blasted the previous low out of the water, so to speak.
And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.
March 2009 King County median SFH price: $363,850.
March 2005 King County median SFH price: $362,000.
$30,000 more off the median and we’ll be bumping into 2004 pricing.
I’ll update this post with news blurbs from the Times and P-I when they become available. As usual, check back tomorrow for the full reporting roundup.
Seattle Times: March home sales, prices continue to decline compared with a year ago in King County
In the last chart, it’s interesting that in two months we’ve gone from tracking 2006 prices to tracking 2005 prices.
I’m sure this little bit of news will add fuel to the fire in the coming months:
“A ban on foreclosure sales and evictions from houses owned by mortgage giants Fannie Mae and Freddie Mac, which began as a high-profile effort just before the holidays to keep people in their homes as the government tried to come up with homeowner rescue plans, is over.”
http://washingtonindependent.com/37160/fannie-freddie-quietly-lift-moratorium-on-foreclosures?ref=patrick.net
The big disparity between closed and pending sales continues. I don’t think short sales taking a longer to close is enough to explain the difference. Clearly deals are falling apart at a mich higher rate for some reason.
Well, the inventory numbers are not surprising to me. The market is starting to clear as prices find a new equilibrium. I expect we will top out at 10-11k this year
that is a pretty good jump in Pendings – at least on a % basis. But in reality it is only 500 sales – and as you have pointed out before, many of them are not closing
oh – and by the way – good job on leading the pack on local real estate reporting! Nothing in either of the local papers yet…
RE: deejayoh @ 5 – Thanks. I assume the local papers are awaiting the official spin from the NWMLS. Their press release does not appear to have been posted yet, either. But the data was posted, so I ran with it.
Here’s your spin preview:
“… housing sales increase as people snap up deals!”
“… low interest rates and a renewed excitement in the Real Estate market saw more people looking to buy homes!”
“… sales increases signal some buyers’ return to the market!”
“… with interest rates at an all-time-low, now’s the time to look for deals on housing!”
“… low prices and interest rates make previously unaffordable houses attractive to new buyers!”
Scotsman, I’m surprised the foreclosure moratorium expiration hasn’t received more press. Some Realtors that handle REO sales are getting excited in anticipation of the new supply. In addition to the moratorium ending, there is talk that the GSE’s will start unloading backlogged REO towards the middle of April.
If this is true, expect sales volume to rise even more in april/may as prices fall.
“March’s flat inventory sticks out as somewhat unusual on this chart. If prices keep dropping, I suspect this will be a fairly flat year overall for inventory as more buyers are able to get into the market at reasonable price points.”
Is this really the reason to the flat inventory, that more homes are selling? Does anyone have the numbers of net homes added to the inventory for each month this year ( Added minus delisted )? Just to be sure we are not jumping to conclusions. I wouldn’t be surprised if the real reason to the flat inventory is less listed homes.
Actually no need for those numbers with less closed and pendings compared to last year, it sounds clear that the reason is less listings, no?
While the price in other locations kept on falling long after inventory peaked, they had a much higher MOS at the peak than Seattle. With Seattle already at 6 MOS, it will be interesting to see how sale price responds here. The last few weeks have already seen asking prices rise in many locations, while Seattle is flat.
By drshort @ 3:
We are certainly seeing that here in eastern WA as well. Perhaps half of all pending sales are falling through.
By Joe @ 7:
What about “every market is different” ? Can’t wait to hear that tonight during the NCAA championship game.
By The Tim @ 6:
Tim, I’d love to see each time these stats come available, you preempt the NWMLS press release, sort of a prediction of how they’ll spin the numbers. It could be a lot of fun to guess which stats they’ll tout as proof of a market turn around. Just an idea.
Edit: kinda like what Groundhogday did, except with specific stats.
By TheMightyQuinn @ 14:
RE: TheMightyQuinn @ 14 –
And make sure that you stress how open house traffic is simply AMAZING!!!!
By Chris @ 15:
To me, high open house volume indicates the potential buyers aren’t seriously looking. If they were, they’d have an agent and be viewing homes with them.
As a skier, I can tell you that the slope of the YOY % change in median price is unskiable. Uh Huh. We’re talking free-fall, baby. I just hope there’s a soft powdery bottom when we land.
Sorry, all this sunshine is making me delirious. Maybe I’ll go look at some houses! Or not. Maybe a boat. Yeah, boats are REALLY cheap right now for some reason…
By DrShort @ 16:
They seem to have given up on open houses in our neck of the woods. Apparently no one even shows up for a afternoon diversion.
Pending sales on Seattle condos are down 43% YOY. Combine that with a large unlisted inventory of units and I wouldn’t be surprised if there were 20+ months of supply.
The press release says “Brokers report signs of improvement in ‘real-time’ housing market.” Improvement, eh? From their 4-county chart, March ‘09 pending sales were the lowest March shown. More than last month? Yes. More than last March? No. More than March in any of the last ten years? No.
Wow, I just looked at the Snohomish County Breakout. Pending SFH sales were up 5% YOY. Closed SFH sales were DOWN 40%. Doh!
Humor me: where are those $360k houses? I live in Bothell, WA and commute to downtown Bellevue, WA….are there any $360k SFHs along my commute? My guess of the median asking price is closer to $500k.
Suggestion: Tim, would it be interesting to track avg asking price vs. avg selling price? This would show the divergence in the market…
By Scotsman @ 17:
Love it. I’m in the market for a boat. Was at the boat show in Tacoma yesterday. Maybe 20 “buyers” in the whole Dome looking. While I enjoy that I’ll save 10k+ on the boat I want, it was depressing to see salesmen and small business owners not making any sales.
I’m thinking I’ll just hold out a couple more months on a boat. Typically, late spring is not a good time to buy a boat, but I’m thinking it’ll give give prices more time to drop. Maybe I’ll get a 27′ instead of a 24′.
I haven’t read all the comments here, but my take is the median for King County is slightly less than what I expected, the volume about what I expected, and the pending median well above what I expected. I’m not nearly as pessimistic for the April numbers as I was given the pending numbers. it’s now a toss up on up or down, where before it was almost certainly down.
Volume on the pendings is also good, which I was expecting, but it will be interesting to see how that relates to sales in April compared to April 2008.
This is really not as horrible as some of you are trying to make it out to be. We already knew it would be down, so no surprise there. But the pendings are showing really positive news, assuming you’re not taking a short in the market type position.
RE: DrShort @ 19 – The condo market has baffled me. I expected it to turn south a long time ago., so I wouldn’t be surprised if it’s finally happening.
Upon further reflection, a couple of other points.
The mean took a huge drop. The difference between the mean and median is now under $60,000, which is the lowest I’ve noted, going back to December 2005.
The percentage increase of sales over February is huge, being almost 50%. I’d guess that’s a record.
The median pending also increased. That would be at least some sign of a bottom.
I don’t like the idea of support and resistance for real estate prices (as opposed to stock prices where I accept the idea), but maybe $350,000 is a support point for real estate? A psychological level which attracts buyers, sort of like how gas at $2.25 doesn’t look so bad now.
By Kary L. Krismer @ 24:
On this path down 24% from our July 07 peak, there’s been several up months in terms of pricing and I would certainly expect more regardless of where the bottom is at. The drop in interest rates certainly must have pulled some buyers off the fence. I question whether there is a sustained group of buyers behind those who’ve just jumped in.
Starting 4/1, appraisals got a lot more strict on FHA loans and buyers with limited down payments will find it harder to close.
http://mortgagedfuture.com/why-it-just-became-more-difficult-to-get-an-fha-loan-declining-markets/
RE: Scotsman @ 2 –
Great Link..thank you….It was so quiet I missed it ………but then again I was on vacation.
When the first and second wave of layoffs expire on their unemployment benefits…i wonder how much faster this housing slide will accelerate…
Just to keep some things in perspective, let’s revisit some of the quotes from last spring’s MLS releases (ie, 17% ago):
“In March (2008), the real estate market is set to get its mojo back,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “We’re already seeing the momentum build as more and more buyers realize what a great time it is to buy a home thanks to low interest rates, healthy inventory, and a strong local economy,” he added.
—-
“The atmosphere is definitely changing, Haines commented, noting agents reported more than 100 visitors to an open house a few weekends ago at a new housing development in Mill Creek.
—-
“The year over year price decrease the press is reporting is old news,” Deasy suggested, noting that price correction happened in August and September of 2007.
—-
NWMLS director Dick Beeson believes the local market has “reached bottom – or pretty darn close.” Even though inventory continues to grow, Beeson acknowledged, “so does optimism among buyers, sellers and agents.”
RE: DrShort @ 29 –
Good job- love the quotes!
OK now, one more time- but put your hearts into it this time around!
/Snark off? ;-)
” Brokers report signs of improvement in “real-time” housing market”
what a joke.
We are SOOOOOOOO far from a bottom, and any discussion along those lines is absurd. Even markets way ahead of us in the crash and burn category are still headed down, destined for a fantastic overshoot. Unemployment is still shooting way up, the state government is whacking jobs and programs, Boeing will start to feel the impact later this year… We are experiencing a credit bust of proportions that none of us have ever experienced. In that context, a little blip in the spring sales hardly even counts as a head fake. A few knife catchers will extend their hands, just as they did in San Diego, San Fran, etc…, and as in those cities a few knife catchers will lose their hands in the process.
BTW = I’m personally responsible for 3 pending sales. All three are short sales and will take 90 – 150 days to close (and yes, I won’t close on more than one of them, obviously, if any).
Apart from my three, short sales are everywhere., and many have ‘pending’ lowball offers. don’t expect a big uptick in closed sales next month if I represent the trend. :).
It appears that SFH median price on East Side inched up from 485K(Feb) to 504.5K(March) MoM.
My upper limit to purchase is $350k. I estimate that I am in the upper 20-30th percentile of earners. 350k probably is a “support price” for people in my earning bracket.
As far as houses for $350k between Bothell and Bellevue:
http://www.redfin.com/WA/Kirkland/11642-NE-92nd-St-98033/home/464619
http://www.redfin.com/WA/Kirkland/10230-NE-110th-St-98033/home/461612
http://www.redfin.com/WA/Kirkland/11104-NE-116th-St-98034/home/456902
http://www.redfin.com/WA/Kirkland/11211-NE-140th-St-98034/home/459315
http://www.redfin.com/WA/Kirkland/14025-127th-Pl-NE-98034/home/453366
http://www.redfin.com/WA/Kirkland/14011-109th-Ave-NE-98034/home/458818
http://www.redfin.com/WA/Bothell/11013-NE-149th-St-98011/home/459148
http://www.redfin.com/WA/Woodinville/15618-125th-Pl-NE-98072/home/456347
http://www.redfin.com/WA/Woodinville/12635-NE-157th-St-98072/home/452987
http://www.redfin.com/WA/Bothell/14040-102nd-Pl-NE-98011/home/457818
http://www.redfin.com/WA/Kirkland/10205-NE-139th-St-98034/home/456466
Granted there aren’t many and the ones that exist aren’t very desireable, but there are more now than there were a few months ago.
RE: Sammamish Renter @ 35 – That’s not surprising. There are four NWMLS areas that are down less than 25k. But area 520 (which not surprisingly is Bellevue west of 405) is down about 500K, YOY, both mean and median. There is a lot of variation, both YOY and MOM.
RE: DrShort @ 30 – Fantastic quotes!
“Mojo”, “Optimism”, and “Atmosphere”…….certainly the data points I look for when considering dumping a big chunk of my life savings into an asset. What a bunch of tools.
RE: The Tim @ 6 –
Turns out the Seattle TImes headline reports huge price drops as great news:
Double-digit price declines making homes more affordable, attracting first-time buyers.
I’ve been as critical of the coverage as anyone, but that’s a kind of progress. We’re now beyond the denial phase, but still a long way from capitulation.
I think the only way out of this mess for the government + homeowners is rampant inflation
So your house goes from King County median of $350K ->$800K
But you have $150K in groceries in your fridge…
I believe actual prices will eventually begin to rise; nominally, they will fall
I’m realizing that all this money supply growth is going to be a problem
Whats the case for hording cash; at this rate, everyone will be living in million dollar shacks
Am I far off; or do folks here think inflation is not going to play a role, very shortly….?
I’m just worried; all this saving, waiting for prices to fall, and no real place to park the cash (where it will retain value)..
From the Times article:
and
Coincidence? hmmm. Wonder what % of sales short/FC account for elsewhere in KingCo. Anyone know?
By AmazedR @ 22:
This baffled me at first as well, half of the SFHs sold in King Co. ~500 homes were purchased below $360k. To me that sounds like half of the homes sold in King co. was sold outside the main population areas in King Co., Seattle proper and the Eastside. That sounds like a really unhealthy market, which is of course no surprise when you see the crazy asking prices in these areas.
RE: Shameer @ 1 –
The next psychological support level is a harder one to break, though: the gap between 2004 and 2005 prices is so huge!
“We’re now beyond the denial phase, but still a long way from capitulation.”
Anyone care to speculate on why http://www.housingtracker.net/ is reporting a rapid increase in asking prices in the West? (except Seattle, which is as usual is flat)
“Some Realtors that handle REO sales are getting excited in anticipation of the new supply. In addition to the moratorium ending, there is talk that the GSE’s will start unloading backlogged REO towards the middle of April.”
Nasty prediction:
By no means can the market be allowed to clear. I suspect the game plan is to let taxpayers (via bailouts) and the Fed printing presses pay the banks’ and GSEs’ carrying costs to hold all that shadow inventory off the market so that it can be released a bit at a time. While we’re at it, we’ll make them whole for any units that fall apart in the meantime. Just lie, deny, delay, and drag the bust out over 10 years or so, so it doesn’t look as bad as it really is. Sort of the way a kid surreptitiously smears those cranberries that he doesn’t like all over his plate to make it look like he ate them, so he can be excused from the table.
By Andy @ 40:
We’ve been over this point many times: unless the Fed can create wage inflation, rising consumer prices will only make housing LESS affordable. Hence devaluation of the dollar will not likely reflate home prices.
RE: jon @ 44 –
Interesting point. I usually think housingtracker.net is kind of crap, but I checked over at Altos Research too and saw the same phenomenon for many california markets
I wonder if they haven’t make some change in the way that Foreclosures are listed. Or maybe it is just a spring thing.
RE: deejayoh @ 47 –
Same thing can be seen on Redfin:
San Diego House $/sqft:
San Francisco House $/sqft:
I like Rich Toscano’s commentary on this phenomenon:
well. very interesting when you compare list price with selling price, isn’t it….
Alt-A resets begin in CA.
http://housingcorrection.com/sandiegoredfinstats.gif
Also interesting how the slopes of both curves break hard at the same point in time, but in opposite directions. Prices falling faster? I’ll just ask more!
Evidence of desperation in the face of cognitive dissonance.
RE: Andy @ 40 – andy I’m in your camp. With the start of recovery I can envision rapid price inflation without rapid wage inflation. In other words, the dollar weakens and Americans as a group become poorer. My hedge for this scenario is some TIPS and lots of hard assets. (energy, food, metals, commodities)
TIPS kind of suck because they are dollar denominated bonds, and the .gov cooks the CPI to underreport inflation. (the .gov has a lot of expenses like Medicaid that are pegged to it’s CPI)
But if the rest of world economy kicks in then demand for commodities will rise even as the dollar and us assets decline.
At least a few of the houses I monitor on Zillow have had their Zestimates spike up within the last three weeks or a month or so, even when Zillow doesn’t list any new comps that would seem to account for this (and even when said Zestimates are hilarious in the context of the not-so-fresh listings in the same neighborhoods/areas). I wonder whether the newly inflated asking prices play a role here.
Herman how do you have rapid inflation with high unemployment i.e. less dollars trying to purchase the same number of commodities? That seems impossible to me. For instance concerning RE if you have no buyers where does the price go — UP?
By Scotsman @ 51:
As Jesse Livermore said, they refused to swallow a spoonful of medicine when they had the chance, so they shall now undergo a full amputation – without anesthetic.
By what goes up must come down @ 54:
Google stagflation.
given the wage arbitrage opportunities possible now that were not in the 1970s, the prospects for runaway inflation seem poor. However, I agree inflation could rise as the cost of imported goods rises via a devalued dollar, and that unemployment could rise in tandem, so I think that technically constitutes stagflation. Is there a defined threshold for increases in unemployment and/or inflation that defines stagflation?
Yes. To be clear, I’m thinking stagflation. Expansionary monetary policy, coupled with poor economic growth.
By Flotown @ 57:
I don’t think so. Technically zero growth and .1% inflation for a quarter would be stagflation, but that’s not what anyone is thinking of when they use the term. I think at a minimum you’d need a prolonged period of significant inflation, of the type where inflation was basically out of control–something at a level we haven’t seen for about 20 years.