Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

117 responses to “NWMLS: Huge Gap Opening Between Pending and Closed Sales”

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  1. Kary L. Krismer

    RE: The Tim @ 99 – What it does show is that there are more atypical sales compared to past years. That’s useful, but not as useful as the NWMLS actually requiring those listings to be specifically identified.

    It sort of reminds me of Aubrey’s article entitled something to the effect: “Agents Learning To Do Short Sales.” My thought was that previously it wasn’t really necessary for agents to learn that because they were a small part of the market, so only a few did. Well it’s sort of the same with the NWMLS and short sales/bank owned. Previously it wasn’t necessary to specifically identify them because they were such a small part of the market.

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  2. patient

    RE: The Tim @ 99

    If it something I have learnt by watching the market the last years it is that there is no need to for a month or two advanced notice of market conditions, especially if the notice isn’t reliable. You are much better served to look at closed sales and Case Shiller than to base any decisions or plans on pendings or median sale prices. Kary, the reason that there is no discussion about the median price is that it’s really not that interresting outside the agent community. So what if a few more expensive or cheaper homes sells one month. It says nothing about what people care about the value and price direction of homes. If half the homes that sells are above $300k or $400k isn’t interresting to me. If it moves to say to $100k or $800k it is more interresting. Case Shiller on the other hand is always interresting.

    iIheard the following on the radio yesterday from a large news outlet. “Prices in North Seattle shot up with 53% between March and April and 35% on the Eastside.” talk about horrible repoting. I didn’t know if I should laugh or cry. Real estate reporting is a total mess, Seatle Bubble excluded of course.

    For agents I understand that median is of outmost interrest since it’s as close to a community salary level you can get. If median moves up the agent community income moves up.

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  3. deejayoh

    Interesting stats from Zillow today via Aubrey’s blog at the PI

    Seattle-area home values in the first quarter were down 14.5 percent from a year earlier, to $311,022, for a total decline of 19.0 percent from the 2007 peak, Zillow reported. It said 13.9 percent of transactions over the past 12 months were foreclosures and 12.3 percent of sales were short sales, where lenders agree to accept less than the mortgage balance because a home is worth less than the amount owed

    So if 26.2% of the volume in the past year was “distressed”, and I would bet that figure is higher more recently than it was at the beginning of the period.

    Based on that assumption I’d hazard a guess that in March/April ~20% of the pendings are short sales. So what portion of those will really close?

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  4. Kary L. Krismer

    RE: deejayoh @ 103 – I don’t think Zillow really has a way of determining what percentage of sales are short sales.

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  5. deejayoh

    RE: Kary L. Krismer @ 104 – I bet they do. They have stats on sales prices and mortgage amounts that they are pulling from county records. So if they compare sales price to previous mortgage, then short sales are where it sold for less than the mortgage amount.

    Are you suggesting they are just making it up?

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  6. Kary L. Krismer

    I just ran a search of current pendings for all properties, short sales and bank owned (King County SFR)

    Approximate Median and Mean:

    All properties 360 and 458

    Short Sales 329 and 418

    Bank Owned 235 and 282 (Great marketing guys!)

    All properties exc. SS and BO 365 and 466

    Data from NWMLS sources and not guaranteed. It also fluctuates a lot from day to day, and the indicated short sales and bank owned are probably only a fraction of the real number at this point in time given the new rule is only a few days old.

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  7. Kary L. Krismer

    RE: deejayoh @ 105 – All they would have is original mortgages amounts, and for HELOCs they’d have absolutely no idea what was owing.

    About the only way they’d know current balances for certain would be if there was a recorded Notice of Trustee’s sale.

    Also, I’d exclude from short sales properties where the owner has the funds to pay off the bank. There’s no way they could know that either.

    Finally, they wouldn’t know closing costs.

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  8. Greg Perry

    RE: Kary L. Krismer @ 107

    Not to mention, that some of the mortgages that appear on sources like Realist and others who offer reports have old dead mortgages on them. In my mind, they would have to have a title company or someone on staff to verify encumberances.

    Also reverse mortgages appear for the full amount. For instance, I just had an estate sale that showed the mortgage at 250k when they really owed under 100k. On the surface, this house looked like it would be short.

    They
    would have to have sophisticated systems to have any kind of accuracy from county records. Maybe they do!?

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  9. Kary L. Krismer

    RE: Greg Perry @ 108 – You can determine whether deeds of trust have been reconveyed in most instances, but it’s time consuming. Sometimes they are not reconveyed of record, and there it would likely appear to be a short sale even if it wasn’t.

    This would mainly be an issue where people have refinanced a lot.

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  10. Angie

    By deejayoh @ 103:

    So if 26.2% of the volume in the past year was “distressed”, and I would bet that figure is higher more recently than it was at the beginning of the period.

    Over in the forums Ira graciously pulled out some numbers (from yesterday? the day before?) about how many listings had the new “short sale” or “REO” tags in the MLS database. Roughly 10% of the single family houses listed in King County had those designations (980 out of ca. 9800)–which is quite a bit lower than that 26% number.

    Wonder if that’s a sign of things to come going forward…Though as I recall Ira thought that this was an undercount since the tags are relatively new and may not be applied to all relevant listings.

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  11. Ira Sacharoff

    RE: Angie @ 110
    It’s only been since April 29th? that agents were required to check boxes marked REO or Short Sale when inputting listings. They were also required to change any listings already on the NWMLS but not listed that way. So yes, I think the actual figure is probably a lot higher. Previously I would look for the words ” subject to lien holder approval” to find short sales, and I suspect there are still listings out there with those words in the agent remarks but not checked off in the proper box.

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  12. EconE

    By Angie @ 110:

    By deejayoh @ 103:
    So if 26.2% of the volume in the past year was “distressed”, and I would bet that figure is higher more recently than it was at the beginning of the period.

    Over in the forums Ira graciously pulled out some numbers (from yesterday? the day before?) about how many listings had the new “short sale” or “REO” tags in the MLS database. Roughly 10% of the single family houses listed in King County had those designations (980 out of ca. 9800)–which is quite a bit lower than that 26% number.

    Wonder if that’s a sign of things to come going forward…Though as I recall Ira thought that this was an undercount since the tags are relatively new and may not be applied to all relevant listings.

    I believe Deejayoh was referring to the percentage of transactions, not listings as Ira pulled up.

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  13. S-Crow

    Greg & Kary @108 & 109:

    Yep, you can probably guess correctly most of the time if a home is going to be a short sale, but unless the owner provides you with a recent mortgage statement, it’s tough to know. Obviously, the other way is to have a payoff statement ordered via escrow or the owner.

    With regards to reconveyances… actually they are pretty quick. Just plug in the recording number into the county system and any associated documents tied to the DOT will show: recon’s, substi. of trustee, assignments etc…

    Reconveyances that are not done according to RESPA can hold up sales and refi’s (AND THEY ARE) because 1) companies have gone belly up 2) a change in servicers creates long delays or 3) private DOT’s are NEVER reconveyed because the parties don’t know that it has to be done to clear title. We’ve actually done courtesy reconveyances for agents who’s sellers have old DOT’s showing on title creating problems (like if the original note holder is long dead and it was never released).

    Come work in escrow. Fun fun fun.

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  14. deejayoh

    RE: EconE @ 112 – yes, that is correct. Zillow was reporting transactions.

    and I don’t believe that most foreclosures involve the MLS so the 10% number is comparable only to the 12.3% zillow reported as short sales. That is pretty close.

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  15. Kary L. Krismer

    By S-Crow @ 113:

    Greg & Kary @108 & 109:

    With regards to reconveyances… actually they are pretty quick. Just plug in the recording number into the county system and any associated documents tied to the DOT will show: recon’s, substi. of trustee, assignments etc…

    It’s quick for each DOT, but when you’re talking 1004 sales and each property perhaps having four DOTs since the selling owner bought, that woudln’t be quick.

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  16. Kary L. Krismer

    RE: deejayoh @ 114 – They could determine the number of foreclosures relatively easy, or a pretty close number.

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  17. Seattle Bubble • NWMLS: Closed Sales Finally Break Back Above 2,000

    [...] we finally know: Greg Perry’s 2009 prediction was just 3 years too [...]

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