NWMLS: Closed Sales Drop Back Below 1,000 in Jan.

January market stats have been published by the NWMLS. Here’s the NWMLS press release: Northwest MLS members report 28 percent increase in pending sales from year ago. Still focusing on the useless pending sales number. Tsk.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

January 2010 Number MOM YOY Buyers Sellers
Active Listings 7,523 +8.7% -16.5%
Closed Sales 956 -34.6% +41.8%
SAAS (?) 2.33 +17.1% -30.9%
Pending Sales 1,765 +24.9% +52.3%
Months of Supply 4.3 -12.9% -45.1%
Median Price* $375,000 -1.3% -2.0%

Closed sales usually tumble from December to January, but last month’s -34.6% drop was quite a bit higher than the -19.9% average December to January fall from 2001 through 2009. Only in January 2005 did closed sales fall more month-to-month, dropping from 2,813 in December ’04 to 1,677 in January ’05 (-40.4%).

Feel free to download the updated Seattle Bubble Spreadsheet, and here’s a copy in Excel 2003 format.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

More closed sales in January 2010 than 2009, but less than every other year on record.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Lower than 2008, 2009, and 2003. Higher than any other year.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in the following two charts is now represented by closed sales, which have had a consistent definition throughout the decade.

King County Supply vs Demand % Change YOY

The sales spike is falling off almost as fast as it spiked up.

Here’s the chart of supply and demand raw numbers:

King County Supply vs Demand

Starting off 2010 slightly better than 2009, but lower than every other year…

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

King County SFH Prices

Still bobbing along somewhat of a floor there.

Here’s a few news blurbs to hold you over until tomorrow’s reporting roundup.

Seattle Times: Median price of homes in King County drops 2 percent from a year ago January
Seattle P-I: Seattle home prices up for first time since March 2008


About 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.

61 comments:

  1. 1
    patient says:

    Hmmm…the reports of absolute stampedes at open houses with wild bidding wars results in less than 1000 closings and the 2nd worst January on record? Sorry if I remain suspicious of this HOT market or JLS “running start” of the year. Pendings look pretty good but with a less than stellar reliability record I think I’ll wait for the coming closings.

  2. 2
    AMS says:

    RE: patient @ 1 – You know, the market is loaded with a bunch of bad homes. The undesirables. All the good homes are being snapped up. lol. Better offer today, now, as there will never be another good home listed in forever. Never.

    I have been seeing more and more listings that are described as a “fixer” and “short sale.”

    Remember the days when these homes probably would have garnered offers with inspections waived? Oh, maybe that’s why they are short today?

    Remember the days when a new roof just meant borrowing another $20,000 and buying new appliances too? Yesterday.

    “Yesterday, all my troubles seemed so far away.
    Now it looks as though they’re here to stay.”

    Bank Failure Friday is Tomorrow!

  3. 3
    Ross Jordan says:

    Looks like the press release is out:

    “Northwest MLS members report 28 percent increase in pending sales from year ago”

    “The market has definitely picked up, with more interest and action by buyers,” reports Dick Beeson …

    Same old same old.

  4. 4

    LOL

    You bloggers all said it for me :-)

  5. 5
    Everett_Tom says:

    RE: patient @ 1 – No, no.. all that traffic and bidding and stuff will show up later.. like, Feb.. or March.. or something.

    Note: The MLS release is late to the Party, Leanne Finley ALREADY called this. on the SREP blog.

  6. 6
    patient says:

    RE: Everett_Tom @ 5 – Man, why did you have to add that srep link, I feel sick.

  7. 7
    Everett_Tom says:

    RE: patient @ 6 – Sorry. I’ve finally trained myself to keep from posting there.. while Kary is fine talk to talk with (as are a few others), I’ve found chatting with Leanne and/or Mack to be a painful exercise.

    So instead I share the pain over here. Besides, if you can stomach the MLS press release, you can stomach the SREP blog.

  8. 8
    AMS says:

    RE: patient @ 6RE: Everett_Tom @ 7 – We need to start a list of spin claims.

    1. Prices are up, so better buy now before prices go higher.
    2. Prices are down, so better buy now before the buying opportunity is gone.

    => Just buy now.

  9. 9
    Everett_Tom says:

    RE: AMS @ 8 – Bonus points if you get both claims from the same person at two different times….

    Maybe a forum thread to collect them?

  10. 10
    DrShort says:

    There’s some interesting differences in price and volume change by geographical area. Seattle in-city is up 4% on price and up 50% on volume. SW King County is down 11% on price and flat on volume. The desirable places are holding on or even going up a little. The less desirable areas are still dropping.

    Might just be one month, but this isn’t typical for the past 2 years.

  11. 11
    DrShort says:

    Regarding the big drop in closed sales from Dec to Jan. My guess is that’s a result of a lot of people wanting to close in December so they can claim the tax credit on 2009 taxes rather than 2010.

  12. 12
    Whidbey says:

    Leanne Finley is the bane of South Whidbey. She shut the local online forum down single-handedly with her stupid relentless growth-growth-growth fighty comments and her desire to see south Whidbey Island turn into Lynnwood, mainly because she owns a few chunks of property which would probably be suitable for a walmart or three. You can see more of her drivel on the local newspaper’s comments section as “business owner”. She’s plain nuts.

  13. 13
    Eastside Real Estate Agent says:

    That listing doesnt show the sales that were not reported. Sales are up and the prices will soon follow by this Summer. Buy now or be priced out forever.

  14. 14
    Jillayne says:

    Everett_Tom, aren’t you my SREP sponsor? I need your help. Please talk me out of posting a comment on that linked post. Thank you in advance.

  15. 15
    AMS says:

    RE: Jillayne @ 14 – I have been enjoying your CR posts today!

  16. 16
    Jillayne says:

    AMS,
    473 comments would be a little hard for me to read every day. As it is, I’ve done hardly any real work between 4PM and now but I love talking to the commenters. They crack me up. And it’s keeping me away from getting drawn in to the vortex on SREP and feeling my brain cells die one at a time. Though I do enjoy Kary’s posts. That boy will do great things one day.

  17. 17

    RE: Jillayne @ 16
    And who could’ve guessed your vast musical knowledge?

  18. 18
    EconE says:

    I’m a little tired of Leannes attitude over at SREP also.

    Here’s your public records to shut her up.

    http://www5.kingcounty.gov/kcgisreports/property_report.aspx?PIN=9523101695

    http://146.129.54.93:8193/imgcache/OPR20080307001088-1-5.pdf

    1991 Purchase Price : $100k
    2007 Final Debt: : $638k

  19. 19
    BillE says:

    RE: EconE @ 18

    Oh snap!

  20. 20
    shawn says:

    RE: softwarengineer @ 4 – not that knowing the meaning of words you use matters, but bloggers are people who run a blog, posters are people who reply to bloggers’ articles.

    Nonetheless, I am beginning to find that Realtors are the real optimists. I mean things can be as bad as all heck, and there they are saying, “things are great”. Not to mention, with all the bashing they are getting, they hang in there and are still trying to help us out chanting “buy now before you miss out.” Where else can we get such optimistic help in these trying times? Use car sales lots?

  21. 21
    BillE says:

    Part of me wishes I wouldn’t have clicked on the SREP blog. These were enough to make me ill.
    “I don’t know what’s going to happen, but I do know that buying today at these great interest rates is a payment-wise a smarter decision than buying tomorrow and getting a lower price but a higher interst rate.”

    and

    “Buying a home is a firm belief in yourself and your own abilities to put down roots and grow. It is good to see more people believing in their own ability to grow.”

    What a load of BS.

  22. 22
    AMS says:

    RE: DrShort @ 10 – We are not sure that the mix of homes did change. I am still of the opinion (based on unscientific personal observation, which is in large part based on convenience sampling) that homes are going down in value, but the average selling price is not going down as fast, or in this case increasing. It’s a matter of getting more home for the same cash. The paired sale data of CS attempts to minimize this problem.

  23. 23
    Herman says:

    Hey, even at these low volumes, my quick math shows that about $20 million in Realtor fees were generated in King County last month. That will pay for a lot of cheerleading.

  24. 24
    Everett_Tom says:

    By Jillayne @ 14:

    Everett_Tom, aren’t you my SREP sponsor? I need your help. Please talk me out of posting a comment on that linked post. Thank you in advance.

    Yea. I guess that makes me a bad sponsor. Sorry about that, I’ll try harder :)

    How does it go again? … accept the things I cannot change….?

    Just keep enjoying your CR success.

    Should you still feel the urge to post, look back at the threads where you gave into that urge… and ask.. is there any way you’ll get that wasted part of your life back?

  25. 25
    shawn says:

    RE: BillE @ 21 – I agree it is BS, but I see no other option. The smart Realtor will see that “most” of the public now knows that RE is not something one should get into to make money. Hence the “appeal to fear” fallacy (though it worked in the past) is a lost cause. As a result, Realtors need to “appeal to emotion”, to focus on the intangibles to make a sale.

  26. 26
    anonymous says:

    RE: EconE @ 18 – Very clever of her. She walks away from this place with $538,000 profit, now she is free to post away with her SREP cohorts on how it is immoral for anyone else to let their place get foreclosed instead of cashing out your retirement to keep paying the bank on your losing asset.

  27. 27
    AMS says:

    RE: Herman @ 23 – Although the pie might have increased from last year, the pie is still much smaller than a few years ago.

    Since the sales are discrete, many REALTORs are going without any sales. My guess is that the top sellers are not impacted as much. I guess those can continue the “life is great” path, even if the deals get more difficult.

  28. 28
    patient says:

    RE: anonymous @ 26 – I’ve avoided commenting on this so far since just the thought of that many of my friends has lost their jobs and I and my kids will pay higher taxes for decades so that people like Leanne can blow half a million bucks they haven’t earned and don’t need to pay back is so revolting that it ruins my day. Time to try to ignore that I ever saw those records…

  29. 29
    AMS says:

    RE: patient @ 28 – Those $500k amounts add up to millions in executive bonuses, billions in bailouts, etc.

  30. 30

    I’ve finally had a chance to look at the numbers, and once again it’s the pendings I find the most interesting. Just like last month the median pending number is way below the median sold number, but it is up about $5,000 from last month. But the number of pendings is 1,765, which is well above the number of sold. While there are some seasonal factors to consider, I think that does show there are still a lot more short sales going pending compared to closing, and that the pending numbers are still relatively worthless.

    What I can’t figure out is where these short sale buyers are coming from. Most consumers really are not interested in them, so that leaves investors. Maybe each investor is making an offer on 10 properties hoping one will actually close?

  31. 31
    patient says:

    RE: AMS @ 29 – Thanks AMS, that reminder makes me feel much better…

  32. 32

    By AMS @ 22:

    RE: DrShort @ 10 – We are not sure that the mix of homes did change. I am still of the opinion (based on unscientific personal observation, which is in large part based on convenience sampling) that homes are going down in value, but the average selling price is not going down as fast, or in this case increasing. It’s a matter of getting more home for the same cash. The paired sale data of CS attempts to minimize this problem.

    If you just look at square footage, the numbers are relatively the same. My unofficial numbers show that the mean square footage increased less than 20 square feet, and the median dropped just over 50 square feet. Both those are fairly insignificant. If there’s a change in the mix, however, it might be as to the areas the property is located.

    As to my prior post, my unofficial count of short sales is they were less than 10% of sales and bank owned properties just over 15%.

    Numbers from NWMLS sources but not compiled or guaranteed by the NWMLS.

  33. 33
    AMS says:

    RE: Kary L. Krismer @ 32 – It could be that high value per square foot is now being bought in the same area for a much lower value per square foot with similar gross dollars being spent.

    (In other words, even in the same area, a similar sized home in a better location may be purchased for the same gross dollars.)

  34. 34

    One thing I have noticed is the houses have been cleaned/fixed up more, so they’re probably in better condition overall. C-S can’t account for that either. It took the sellers (or seller’s agents) a while to learn that condition matters.

    I was in one neighborhood where two houses under $250,000 were staged, and one of the two was really nicely staged. Like what you’d see in a house listed at 3-4 times as much.

  35. 35
    AMS says:

    RE: patient @ 31 – Just think of it this way: If you are old enough, you won’t have to pay much back. lol.

    This does remind me, however, that there are a lot of senior citizens out there that have very high levels of credit card debt. There was the time when the applications were arriving without any income requirements. Just sign here. I suspect that in many cases the total value future free cash from income, mainly from social security or pensions, is lower than the total of the debt. The ones with the reverse mortgages written at the top? They are golden!

  36. 36
    AMS says:

    RE: Kary L. Krismer @ 34 – Let’s talk rate of decay versus rate of repair. CS assumes that rate of decay is approximately equal to rate of repair. When I say CS assumes, not explicitly, but I have not seen a correction factor for sudden or vast improvement in condition. Today I think the rate of decay is greater than the rate of repair. However, this will take a few years to show up in any significant way. Your thoughts?

  37. 37
    patient says:

    RE: Kary L. Krismer @ 30RE: Kary L. Krismer @ 30
    “Maybe each investor is making an offer on 10 properties hoping one will actually close?”

    When I brought up this possibility last year it was strongly rejected by Greg P. I think or possibly Ardell. They claimed that an offer is an agreement that can’t be broken easily so the notion that some buyers made offers on several properties without the intention of buying all of them was out of the question.

  38. 38
    AMS says:

    RE: patient @ 37 – It is my understanding that the penalty for not buying can be very little. The seller cannot force the buyer to buy, but the buyer can force the seller to sell as agreed.

  39. 39
    LA Relo says:

    By AMS @ 8:

    RE: patient @ 6RE: Everett_Tom @ 7 – We need to start a list of spin claims.

    1. Prices are up, so better buy now before prices go higher.
    2. Prices are down, so better buy now before the buying opportunity is gone.

    => Just buy now.

    You laugh. Back in 2006 the NAR came out with this ad (click me).

    Pending sales are nothing. That’s like saying the economy is in full recovery because more people are at Southcenter this week.

    I won’t call a bottom until the NAR sees actual good numbers like a 20 metro area rise in the CSI, doesn’t spin it into better news, and instead predicts the downturn will continue.

    In short when the NAR says don’t buy, it’s time to buy.

  40. 40
    AMS says:

    RE: LA Relo @ 39 – “It’s a great time to buy or sell a home.”

    Please all me to translate this into:

    “It’s a great time to go long or short.”

    Or, the bookie always makes out, it does not matter which way you bet.

    I do find contrarian investment theory to be very interesting.

  41. 41

    RE: AMS @ 36 – What C-S does is throws out the pair if it shows too much of an increase or decrease in price relative to other pairs. They assume that it went up do to a remodel or down due to deferred maintenance.

    This issue is similar to one of my complaints about appraisers. They really don’t have enough of a valuation change based on condition. No maybe that’s appropriate if they’re appraising for a loan, because who knows what condition the property will be in if there’s a default.

  42. 42

    By AMS @ 38:

    RE: patient @ 37 – It is my understanding that the penalty for not buying can be very little. The seller cannot force the buyer to buy, but the buyer can force the seller to sell as agreed.

    Often the inspection contingency would allow the buyer an out. I wouldn’t rely on that as an absolute though, and thus I don’t think making multiple offers on short sales is a good practice. That’s a different issue though than whether it’s occurring.

  43. 43

    RE: AMS @ 40 – Maybe Realtors would be more popular if the saying was: “It’s always a good time to get long.”

  44. 44
    patient says:

    RE: AMS @ 38 – I thought so as well but that was not what I was told. I was told that when a transaction reaches pending status the contratual obligation of the buyer is such that walking away from the deal comes with severe penalties unless it’s due to clauses included in the contract pertaining to inspections etc.

  45. 45
    patient says:

    RE: Kary L. Krismer @ 42 – “That’s a different issue though than whether it’s occurring” I fully agree but your collegues certainly didn’t.

  46. 46
    AMS says:

    RE: Kary L. Krismer @ 41 – CS excludes those that are statistically outside of the norm.

    If we have new massive amounts of repair and maintenance being performed, maybe based on home equity loans, high maintenance is the norm.

    For example, while homes in the Detroit market might be excluded because of fire damage or extensive remodeling, I am going to suggest that the general economic conditions in the Detroit area suggest that homes are being repaired at a lower rate than in Seattle area.

    For example, let’s start both cities out at 100. Now let’s repair homes in the Seattle area and defer maintenance in the Detroit area. If the index remains at 100 in both market, the Seattle area is a better buy. CS has no adjustment for wide-spread changes in condition (in other words, CS has no adjustment for the rate of repair versus the rate of decay).

  47. 47
    patient says:

    RE: patient @ 45 – Then again, Greg also expected 2009 pendings and closings to balance out, that it was just a bit of an increased delay…

  48. 48
    AMS says:

    RE: patient @ 44 – Maybe someone will suggest the penalty for a buyer walking away at closing.

  49. 49
    AMS says:

    RE: Kary L. Krismer @ 43 – “If you don’t like it, the REALTOR is not doing it right.”

  50. 50

    By patient @ 44:

    RE: AMS @ 38 – I thought so as well but that was not what I was told. I was told that when a transaction reaches pending status the contratual obligation of the buyer is such that walking away from the deal comes with severe penalties unless it’s due to clauses included in the contract pertaining to inspections etc.

    What was Subject to Inspection became Pending Inspection, and thus as I understand it, properties under inspection became part of the pendings.

  51. 51

    By AMS @ 48:

    RE: patient @ 44 – Maybe someone will suggest the penalty for a buyer walking away at closing.

    Once the inspection and financing contingencies are removed (and any others), the penalty would be loss of the earnest money, assuming the contract was written in a typical manner.

  52. 52
    AMS says:

    RE: Kary L. Krismer @ 51 – Reminds me of the guy who accepted a “really attractive offer” with $1 in earnest money. Yes, he did get to keep the $1.

  53. 53
    AMS says:

    RE: patient @ 31 – I’m sorry, maybe a little DM will make you feel better:

    http://www.youtube.com/watch?v=1t-gK-9EIq4

    “The grabbing hands, grab all they can
    all for themselves, after all
    It’s a competitive world
    Everything counts in large amounts.”

  54. 54
    patient says:

    By Kary L. Krismer @ 51:

    By AMS @ 48:

    RE: patient @ 44 – Maybe someone will suggest the penalty for a buyer walking away at closing.

    Once the inspection and financing contingencies are removed (and any others), the penalty would be loss of the earnest money, assuming the contract was written in a typical manner.

    Do you know if the earnest money amount in average is similar to that of non short sales? Perhaps a short sell buyer is less willing to part with a larger sum of money due to the time it takes until he gets it back? Or that the buyers who intend to make offers on several short sales only offers earnest money in the amounts AMS refered to? It’s not illegal to make an offer with 25c earnest money is it?

  55. 55
    AMS says:

    RE: patient @ 54 – The chance that an offer is accepted goes down with lower earnest money, or at least it should.

    If I am a seller, I want to see enough earnest money so that I am not that disappointed if the deal falls apart. If two equal offers come in, but one has significantly more earnest money, then the one with more earnest money will garner my attention.

    If I am a buyer, I want to make an offer with the lowest possible earnest money that I can get away with.

    This is all a matter of risk management.

  56. 56

    RE: patient @ 54 – One thing you could do it make it so that the earnest money isn’t deposited until after the removal of the inspection contingency. We typically do that anyway just so we don’t get into some sort of a fight over a small amount of money. We once had a seller balk at returning the earnest money when our buyers backed out over some make-shift work in an addition over the garage and a truss there that was showing some odd signs of stress. They didn’t have a leg to stand on, but it would have been a PITA to have to try to deal with an interpleader action.

  57. 57
    patient says:

    RE: Kary L. Krismer @ 56 – Makes sense and perhaps short sale sellers (banks) and some short sale buyers ( investors) changes what is usually normal? If you for example as an investor offer the bank 100% cash payment together with $500 earnest money it might trump a borderline credit score 98% financing with $3000 earnest money offer?

  58. 58

    RE: patient @ 57 – Thinking about it, with the standard short sale addendum, the earnest money might not be due until the bank accepts. I’d have to look at it.

  59. 59

    LA Relo said “In short when the NAR says don’t buy, it’s time to buy.”

    That would have to be a sure sign of the apocalypse.

  60. 60
    Everett_Tom says:

    By Ira Sacharoff @ 59:

    LA Relo said “In short when the NAR says don’t buy, it’s time to buy.”

    That would have to be a sure sign of the apocalypse.

    Or that NAR had switched to reverse psychology…

  61. 61
    LA Relo says:

    By Everett_Tom @ 60:

    By Ira Sacharoff @ 59:

    LA Relo said “In short when the NAR says don’t buy, it’s time to buy.”

    That would have to be a sure sign of the apocalypse.

    Or that NAR had switched to reverse psychology…

    No doubt. A while back on another blog someone posted a project someone else was working on that aligned timelines from this housing cycle and the previous one.

    Near what proved to be the bottom real estate industry pros were skeptical of the good news.

    Sentiment’s not something you can quantify, but that NAR ad came out summer of 2006, I can’t help but wonder if at the bottom advice will be to wait.

    Think of all the wrong statements we’ve heard. There was the “soft landing”, Bernanke’s claim of no more than $50 billion in subprime losses, Jim Cramer’s “300 days to a housing recession”, that’s all that come to mind at the moment.

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