December Stats Preview: Surprise Sales Spike Edition?

With the last month of 2010 behind us, it’s time for another monthly stats preview. Most of the charts below are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

First up, total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Warranty Deeds jumped 35% in King County between November and December. I rather doubt that sales actually spiked that much, but it’s possible. Last year Warranty Deeds fell 5% during the same month. YOY Warranty Deeds were actually up 5%. If there’s not something odd going on behind the scenes with this data, I suspect we’ll see NWMLS-reported SFH closed sales for December bump up to 1,850 or so.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Same story in Snohomish County. Month-over-month bump and a slight YOY increase as well.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Basically flat MOM, but still up over the same month last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Another bump up in bank repossessions, both year-over-year and month-over-month.

Lastly, here’s an approximate guess at where the month-end inventory was, based on our sidebar inventory tracker (powered by Estately):

King County SFH Active Listings

Snohomish County SFH Active Listings

Nothing too shocking here. The usual seasonal inventory clear-out in both counties, but still sitting above where we were a year ago.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

  

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

    I think you’re probably about 400 high on your SFR estimate for King County, but we’ll see. I think you’ll also probably see a slight bump up in median price, but that’s largely because part of the drop for November was the result of late reported sales, IMHO. I don’t think those will have the same impact for December.

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  2. 2
    karl says:

    I see several new listings today that are in reality old listing from last year. Hope this is the year that clears some of the inventory. Prices are starting to moderate slowly.

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  3. 3
    Julie Lyda says:

    If you are interested in the actual trustee deeds and foreclosures filed for Snohomish County for December 2010 – they are available on my blog.

    December dropped off to 119 from 209 the month before – I’ll call that a holiday break because I fully expect them to pop right back up in January.

    http://bit.ly/gjlC3H

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  4. 4
    Scotsman says:

    I just looked at the first and next to last charts, but with sales up and inventory down we should see major price increases soon. This looks like a bottom to me. Where’s Ardell for a little confirmation, or Pfft?

    In other news it looks like we’ll be getting a major arctic blast next week, caused by shifting patterns due to global warming.

    Reality is now like Burger King- you can have it your way!

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  5. 5
    Seattle Buyer says:

    Sales have increased dramatically and prices are going up as well. Particularly on the east side. Check out stats for east side and North King County. Any property that shows well on the east side (Bellevue, Redmond, Sammamish) sells like a hotcake. There are instances of multiple offers as well.. Most folks on this site are negative, but wait until this summer and see what happens. Don’t be surprised if bidding wars break out. We are definitely getting past the bottom here!!

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  6. 6
    Dweezil says:

    RE: Seattle Buyer @ 5
    Bidding wars? Seriously? Only on homes priced to sell which are few and far between.

    What about when the banks get back to foreclosing after putting everything on hold? That is one thing I am waiting on to see a bottom.

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  7. 7
    ARDELL says:

    RE: Scotsman @ 4

    I did my numbers back at year end through New Year’s Day.

    http://www.realtown.com/Ardell/blog/tracking-the-market/2011-home-prices

    We almost went below “my bottom” in October with only $1,000 up from 3/09…but for some crazy reason November and December bounced up. I’ll have to recalculate December in a week or so to capture late postings.

    The oddest thing as noted in my post is that people are over paying for houses again. Part of that was racing to the end of the tax credit, but not all.

    Must be the scare of interest rates rising? Funny thing is after last week’s “scare” they would be up…they went down today. I don’t know what it is, but people bought in multiples in 2010 that I had not seen since 2008. I calculated and color coded the results back to Jan 2006. I’ll have to take that back to 2003 for a broader view.

    But 2010 was much worse than 2009 as to people making smart choices. Laziness? Something in the water? Kool-aid?

    My bottom call should finally break in January of 2011. If not…something’s definitely whacky. So far…I’m still standing, as prices have not yet been lower than my bottom call of 3/09 for King County SFH.

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  8. 8
    Jonness says:

    By Seattle Buyer @ 5:

    Sales have increased dramatically and prices are going up as well. Particularly on the east side.

    Hey Tim. Let’s take a typical FHA 3.5% down median priced scenario and guess when it goes underwater if bought today. We’ll use the Seattle Case-Shiller as the guide. If it never goes underwater, pffft and Seattle Buyer get to split the jackpot. Each gets $5. :)

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  9. 9
    Jonness says:

    By ARDELL @ 7:

    So far…I’m still standing, as prices have not yet been lower than my bottom call of 3/09 for King County SFH.

    Somethings definitely going on. First 100,000 fish mysteriously float belly up in the river. Then 5000 blackbirds mysteriously drop from the sky. And now it turns out Ardell’s bottom call, that was long since disproven by the Case-Shiller index, is right after all. :)

    Then again, if we use redfin’s King County numbers instead of Ardell’s personally compiled and non-verifiable numbers, it turns out she made yet another bad call. :(

    http://www.redfin.com/city/16163/WA/Seattle

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  10. 10
    ARDELL says:

    RE: Jonness @ 9

    The data is all there, Jonness. Every calculation is spelled out in detail.

    My bottom call has not yet been incorrect. Median home prices for King County homes have not yet been lower than March of 2009. Easy for you to say they have, with no data to support your claim. Some day you will be right…but today’s not the day. .

    Feel free to say it though if it makes you happy. No skin off my nose if you want to make false statements. You obviously get some pleasure out of it, or you wouldn’t do it.

    Case Schiller does not count all homes sold. though their data is very useful for many purposes. They only count homes that have sold and sold again, to note the difference from one sale to the next. They do not count all homes sold. By definition, many of the homes “sold and then sold again” in recent terms are short sales and REOs. So by eliminating all except those that have been resold in their time frame, they are eliminating much of the relevant data from their calculations.

    I have no idea why they don’t want to count all homes sold…but we all know that they do not.

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  11. 11
    Hugh Dominic says:

    RE: ARDELL @ 10 – Ten identical homes sit in a row. One sells to a homeowner for $100k. Nine sell to developers for $100k each, who raze them and spend $300k constructing a new larger home on the lot, which is then up for sale for $500k.

    Thanks to a terrible economy, the whole neighborhood takes a dive. The nine new homes sell for just $250k. The one old, remaining home sells for $50k.

    According to Ardell, the median of recent sales ($250k) represents a huge increase over previous median ($100k) and proves the market is thriving. According to case-shiller, the new homes are omitted because the developers’ invested cash distorts the median and only the 50% drop on the older home is measured.

    Which is more accurate and useful?

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  12. 12
    Hugh Dominic says:

    RE: Hugh Dominic @ 11 – Keep in mind that every developer and the new homeowner lost money.

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  13. 13
    Ben says:

    RE: Hugh Dominic @ 11 – Great example. I’m just floored at the continued denial of some in the face of facts. It says a lot about human psychology, no?

    It is next to impossible to convince someone of anything when their livelihood depends upon them believing the opposite.

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  14. 14
    DrShort says:

    RE: ARDELL @ 10

    Weren’t you saying back on October 26th that prices were now crashing and “hold onto your hats”? You had data then too.

    http://seattlebubble.com/blog/2010/10/26/case-shiller-seattles-home-price-double-dip-begins/#comments

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  15. 15
    One Eyed Man says:

    RE: ARDELL @ 10

    “I have no idea why they don’t want to count all homes sold…but we all know that they do not.”

    You’re too intelligent to be let off the hook when you make a statement like that Ardell. I know you’re busy trying to make a living in a tough economy, but you should go to the S & P site and read the CS Methodology pdf if you don’t know something as basic about the CS Index as why they use “paired sales.” That lack of dilligence makes it appear that you may be more interested in talking smart for marketing purposes rather than being knowledgeable for the benefit of your clients.

    For purposes of clarity in the discussion with Jonness and Ben and assuming I remember the methodology and nature or your (interim) bottom call correctly, it might be beneficial for you to clarify again that you more or less considered you’re bottom call of last year to be a temporary bottom, perhaps in the nature of the first shoulder of a reverse head and shoulders bottom pattern rather than the true ultimate market bottom.

    I have to give you credit that based upon the median it appears your call was reasonably accurate. However, I prefer the use of the CS Index (rather than changes in median) for that type of analysis and I have a personal prejudice in favor of fundamentals over technical analysis so even assuming that your call was something more than coincidence, I have a personal prejudice against what I recall as being the analytical framework you used to make it.

    I guess that’s a convoluted way of saying I agree with some of the substative points in Jonness’ criticism even if I disagree with the somewhat curt and “in your face” adversarial tone in which he expressed himself.

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  16. 16
    One Eyed Man says:

    The reference in Comment 15 to Ben should have been to Hugh Dominic.

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  17. 17

    By ARDELL @ 10:

    Case Schiller does not count all homes sold. though their data is very useful for many purposes. They only count homes that have sold and sold again, to note the difference from one sale to the next. They do not count all homes sold. By definition, many of the homes “sold and then sold again” in recent terms are short sales and REOs. So by eliminating all except those that have been resold in their time frame, they are eliminating much of the relevant data from their calculations.

    I have no idea why they don’t want to count all homes sold…but we all know that they do not.

    This is not quite right. They don’t include every paired sale. If the recent sales price is either too high or too low, they exclude the pair. Their decisions on what is too high or too low affects their results.

    BTW, I suspect that they probably also exclude paired sales where the earlier sale was too old (e.g. 1978), because they don’t have enough other data on whether to include or exclude it.

    As to why they don’t include every sale (as opposed to every paired sale), it’s because they do not come up with a dollar number, but instead an index number. The first time the house sells there would be no value to assign it–nothing to complete the pairing.

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  18. 18

    Lots of Good Opinions Blogged Today

    May I interject a truce statement. I see Seattle’s housing market as fallen into a large hole, with little hope of not sinking deeper. Even month to month “baby step” improvements upward mean practically nothing IMO, when the sink hole sucked you down 200 feet.

    Here’s a good example from Detroit that mirrors my philosophy:

    Today’s “lipstick on the pig” news:

    “…U.S. sales of General Motors cars and trucks rose 6.3 percent last year as a strong lineup of new models helped the company make a comeback from its 2009 bankruptcy….”

    http://finance.yahoo.com/news/GM-2010-sales-rise-63-percent-apf-2090368129.html?x=0&sec=topStories&pos=main&asset=&ccode=

    Now let’s back up a year:

    “…General Motors posted a 6% drop in December U.S. sales on Jan. 5, bringing total 2009 sales down 30%….”

    http://www.industryweek.com/articles/gm_sales_down_30_in_2009_20755.aspx

    And backup one more year:

    U.S. automaker General Motors announced today that worldwide sales of GM vehicles fell 10.8% in 2008, making Toyota Motor Corp. now the world leader in auto sales.

    http://www.carbuyersnotebook.com/gm-vehicle-sales-down-by-10-in-2008/

    I’d add that the last couple decades were devistating shrinking years for GM, making a 2010 6% growth a complete joke.

    Now today’s Seattle RE news:

    “…The foreclosure crisis intensified across a majority of large U.S. metropolitan areas this summer, with Seattle and Chicago – cities outside of the states that have shouldered the worst of the housing downturn – seeing a sharp increase in foreclosure warnings….”

    http://www.komonews.com/news/local/106060698.html

    Yes Bubblebrains, Seattle made top city honors in the nation for foreclosure anomalies. It looks like we’ve hit bottom alright [In more ways than one ;-)].

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  19. 19

    By DrShort @ 14:

    RE: ARDELL @ 10

    Weren’t you saying back on October 26th that prices were now crashing and “hold onto your hats”? You had data then too.

    http://seattlebubble.com/blog/2010/10/26/case-shiller-seattles-home-price-double-dip-begins/#comments

    I particularly like comment 58 in that thread. ;-)

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  20. 20
    deejayoh says:

    RE: ARDELL @ 10RE: Jonness @ 9

    Ardell is talking about King County median. Your link is for Seattle $/sq ft. Case Shiller measures what is basically a three-county areal.

    Apples, oranges, and bananas.

    I do find the Redfin $/sqft trend info to be useful though. Median is a lousy way to measure the trend IMO.

    The trend in King County is pretty clear and March 2009 was actually a mini-peak by that measure

    http://www.redfin.com/county/118/WA/King-County

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  21. 21
    Daniel says:

    By ARDELL @ 10:

    RE: Jonness @ 9
    I have no idea why they don’t want to count all homes sold…but we all know that they do not.

    I personally would never do any business with a real estate professional either not knowing or not understanding such rather basic things. If you take your business seriously I strongly suggest you read that Case Shiller methodology.

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  22. 22

    RE: deejayoh @ 20 – Time flies, so I don’t remember what the status was of the tax credit in March, 2009 (or actually January and February of 2009), but assuming it was in effect, there would likely be a considerably different mix between then and November, 2010, so the nominal $50 increase in median between the two points is likely a significant decrease.

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  23. 23
    The Tim says:

    RE: Hugh Dominic @ 11, One Eyed Man @ 15, Daniel @ 21 – I can’t help but recall the 2007 conversation in which Ardell told me:

    Some day we’ll have to meet for coffee, so I can teach you how to read the stats. … You really should take the time to understand the stats better. You have a lot of readers.

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  24. 24

    RE: Kary L. Krismer @ 22 – BTW, although it’s impossible to precisely match the NWMLS stats, my quick search indicated that the average size increased about 150 feet and the median size increased about 100 feet. That’s less significant than I was expecting.

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

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  25. 25
    ARDELL says:

    RE: DrShort @ 14RE: deejayoh @ 20

    Yes. As I said in my Jan 1, 2011 post:

    “When the market took the full amount of my expected 4th Quarter hit in October, I was prepared to be wrong about that 5% down call for the 4th quarter. But…the market popped back in November and December to make the 5% call “spot on”. Prices went from $395,000 3Q to $375,000 4Q (see quarterly graph picture third down above), exactly 5% and still above the March 2009 “bottom”.

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  26. 26

    RE: ARDELL @ 25 – I’ll again ask the question I asked you in post 58 of the earlier thread linked above: How is this at all relevant to anyone considering buying or selling a house? You flip and flop so often from positive to negative and back again that it’s meaningless because the time-frame for holding a house is much longer (and the costs of sale being more significant than the differences in values between your changes in position).

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  27. 27

    RE: Kary L. Krismer @ 26 – For the benefit of others, here’s the prior post:

    By Kary L. Krismer @ 58:

    By ARDELL @ 55:
    My advice made front page news in early 2009….and that news is still accurate today. I’d say that’s a “golly” good track record..

    I would agree it’s good to change based on new information, but what isn’t good is to change and then deny your prior position.

    Your year 2007 prediction: http://raincityguide.com/2007/02/06/ardell-on-where-is-the-2007-market-heading/ (February 2007, things will remain rosy like the past, but not quite as strong. 5 months before the peak.)

    Here’s where you suddenly turn bearish: http://raincityguide.com/2008/04/17/seattle-real-estate-2008/ (April 2008, 9 months after the peak. Not bad on the $400,000 guess, but it took a near complete collapse of the economy to get there! I wish you would have warned us about the near complete collapse of the economy!).

    Here’s where you called the bottom: http://raincityguide.com/2009/02/07/were-at-bottom/ (February 2009).

    I suppose that was good advice for buyers since Case Shiller was at 152 then and 146 now. Median 375k then, 379k now. The rate of decrease did flatten out, but now you’re outlook is negative again!

    So how many of your buyers bought based on your February 2009 advice that we were at the bottom, but have sold since then so that your prediction is now irrelevant to them? Or let’s go back further. How many of your clients bought based on your February 2007 advice, that everything was still rosy, but have sold so that now your current projection is irrelevant to them?

    I just don’t see that you’re doing anyone any favors by making these predictions. Home ownership is typically of too long of a time frame, where too many things can intervene (e.g. the financial crisis in late 2008), and there are too high of transaction costs. It’s not something you can just jump in and out of. I continue to believe people should buy primarily based on their abilities, needs and desires, and if they are concerned about future values they would make their own determination and not rely on that of a real estate agent.

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  28. 28
    ARDELL says:

    RE: The Tim @ 23

    That’s more about the oddity of Seattle Area reportings with regard to basement, garage and unfinished square feet than “you” or me. You declined my offer to meet so you could see the data inside the mls. I was only trying to be helpful. Sorry you took it the wrong way. I can’t give you my codes, so I thought it would be educational for you see inside the mls window at where the data was coming from. Garbage In; Garbage Out, as they say.

    Seattle is one of the only areas that treats basements as part of the overall square footage which makes Price Per Square Foot an unreliable data point when doing a large geographic area.

    Two identical houses in Queen Anne are showing a 29% variance in price per square foot because one is not counting the unfinished 600 sf basement and the other is. Same with townhomes and split entries where many are including the garage in the square footage.

    Regardless of what the rules are, too many agents show garages and unfinished basements as square footage for PPSF to be apples to apples.

    Even finished basements by appraisal standards should not be counted equal on a PPSF basis to above ground square feet.

    At the end of the day, all methods are not entirely accurate and the stats have to be corrected or interpreted in some way, and collaboration on best way is always better than squabbling over who is “right” or “wrong”.

    In housing communities with no basements and all two story houses with the bedrooms up, this is not an issue. But King County Housing has a majority of housing factors that do not fit that description.

    Counting a 2,500 sf 2 story house built in 2004 the same as a 2,500 split entry home where the lower level is finished and includes the garage, will always skew the data.

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  29. 29
    ARDELL says:

    RE: Kary L. Krismer @ 27

    Kary,

    Your experience may vary, but my clients usually need to make decisions within a 12 month to 18 months time frame. No one can predict what will happen 10 years out. But most buyers and sellers of homes expect the agent to give solid advice regarding the time frame during which they have determined to be their time frame to act within. That is often 3 to 6 months.

    Any way you slice it the market has been flat for the last two years. Even Case Schiller only shows an overall 3% movement of 22% down to 25% down during that period. That pushes the main criteria to whether or not each house is good for the client and a good deal, and not a significant market trend up or down.

    Yes In late 2007 and early 2008 I told people to wait until the downward slide of 20% or so finished sliding. In early 2009 I told them the slide had stopped and the market DID move up from there. You might not think that is helpful, but my clients did and do.

    The average person who wants to buy a house is not looking for absolutes and a 3% to 5% movement this way or that should always be expected. That’s why it is “a market”. It never stays constant.

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  30. 30
    ARDELL says:

    RE: Daniel @ 21

    Case Schiller is helpful, but not the be all end all for sure. I don’t believe every word in the Bible as “accurate” either. I gather information from all sources with no particular bias as to what I “want” the result to be.

    My job is to help people make wise decisions considering the information available. I would never use Case Schiller as the sole or primary source of data. If a County is “down” 22%, that often means one area is down 35% and another 10% to 12% so that the County “average” is 22%. For most buyers and sellers of homes, using County averages does not serve them well.

    Good to know, yes. But treating it as “gospel” when you have all of the data you need to develop other models, just doesn’t make a lot of sense.

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  31. 31
    Daniel says:

    RE: ARDELL @ 30

    All besides the point. The simple fact that you either do not know or do not understand the CS methodology is a red flag for me. Would you trust someone unable to read to teach English classes?

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  32. 32

    By ARDELL @ 29:

    Your experience may vary, but my clients usually need to make decisions within a 12 month to 18 months time frame. No one can predict what will happen 10 years out. But most buyers and sellers of homes expect the agent to give solid advice regarding the time frame during which they have determined to be their time frame to act within. That is often 3 to 6 months.

    Any way you slice it the market has been flat for the last two years. Even Case Schiller only shows an overall 3% movement of 22% down to 25% down during that period. That pushes the main criteria to whether or not each house is good for the client and a good deal, and not a significant market trend up or down..

    I would tend to agree, so again I would ask of what value are your calls on where the market is headed. As you note, it’s been relatively flat for almost two years, so all your up/down calls have been not very useful, to put it mildly.

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  33. 33
    Scotsman says:

    Let’s keep it simple. I don’t care how you measure it- it will be lower in 2 years. The number of employed people will be down, both nationally and regionally. Interest rates will be up, over supply will still exist and may have grown, indirect income and proerty taxes will be higher, pension contributions will be higher and payouts lower, more of the middle to upper level jobs will have been outsourced, more adult children living at home, more people working part time or under employed in low paying service jobs. Essentials like gas, heat, food will take an increasing bite out of paychecks. Home prices will continue to drop lower and lower.

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  34. 34
    Ben says:

    Are there any Seattle Bubble fans who read the Florida, Nevada, or Arizona blogs a few years ago? Did local realtors torture and cherrypick data all the way down in the hopes of denial transforming to recovery?

    I just shake my head in gobsmacked wonder of the spectacle before me…..

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  35. 35
    ARDELL says:

    RE: Daniel @ 31

    I agree that you should set your parameters and stick with them. The courage of your convictions is a rare and valued virtue.

    Much better minds than I have similar feelings as mine with regard to Case Schiller

    http://bit.ly/gscTyO

    If you had seen as many total scams in those “recent turnover” homes as I have, you would likely agree that “recent transfer” is not necessarily a good parameter for Bellevue homes in particular. Issaquah yes; Bellevue no.

    Understanding when and when not to apply information is as important, and usually more important, than simply “having it”.

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  36. 36
    ARDELL says:

    RE: Daniel @ 31

    http://blog.redfin.com/washingtondc/2010/12/case-shiller_home_prices_dipped_across_the_board_in_october.html

    The third graph down in that link confirms my findings that no major city, including Seattle, is or has been lower than 3/09 to date. So not sure why there is a misperception that Case Schiller is saying something contrary to what I have said for the last 2 to 3 years to present. Vegas seems to be the only exception, but it is a unique “major city” for sure.

    The only difference between Case Schiller and I has been the lag time. I called the October info on October 26th and they called it in December for October. Most people prefer their data in “real time” vs hindsight.

    YMMV

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  37. 37
    The Tim says:

    By ARDELL @ 36:

    …no major city, including Seattle, is or has been lower than 3/09 to date.

    Plainly false.

    Six markets – Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices started to fall in 2006 and 2007.

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  38. 38
    ARDELL says:

    RE: The Tim @ 37

    Just looking at the graph there on Redfin showing Case Schiller Data in the link. Clearly true Tim. Not that I care much about Vegas or DC…but the many colored graph is not hard to read.

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  39. 39

    RE: Scotsman @ 33

    Yes Scotsman

    I’d Add

    Even the cognitive skilled jobs are disappearring or being squeezed to death by insourcing workers into America to replace our legal/current citizens’ jobs.

    In tomorrow’s future I predict it will take a 4 year degree to get jobs HS graduates used to control, as overpopulation squeezes dry a scarce job market, especially at the current 400K new unemployment applicants per week…which a lion’s share of MSM now calls “good improvement news”….LOL

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  40. 40
    ARDELL says:

    RE: The Tim @ 37

    Did a quick crop of the relevant time frame for you for easier viewing

    http://www.realtown.com/Ardell/blog/for-the-tim-at-seattle-bubble

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  41. 41
    Jonness says:

    By deejayoh @ 20:

    RE: ARDELL @ 10RE: Jonness @ 9

    Ardell is talking about King County median. Your link is for Seattle $/sq ft. Case Shiller measures what is basically a three-county areal.

    Apples, oranges, and bananas.

    I do find the Redfin $/sqft trend info to be useful though. Median is a lousy way to measure the trend IMO.

    The trend in King County is pretty clear and March 2009 was actually a mini-peak by that measure

    http://www.redfin.com/county/118/WA/King-County

    Thanks for pointing this out, you are absolutely correct.

    I agree median is a lousy way to measure, which is why I supplied the $/sqft numbers. Linking to “Seattle only” data gives Ardell the extreme benefit of the doubt by only including the strongest area of King County (the special zone).

    Keep in mind, in Ardell’s original bottom call, she didn’t specify she was talking about King County only; thus, King County only is completely irrelevant IMO. She is only specifying this now that the cherry picked MLS data appears to validate her whack bottom call. Thus, the fact that even the strongest “real” data set exposes her call as being incorrect is meaningful. When we move on to King County, her call borders on the ridiculous. Being that her original call was non-specific, I think we can agree the Case Shiller should be used as the system of record, as that’s the most universally agreed upon data source due to the universally agreed upon flaws in the data set she is attempting to use.

    It’s important to note, the basis of Ardell’s original bottom call was her belief that government stimulus would shore up and heal the market. Along with this flawed logic, she provided some useless charts and graphs of local variance that proved to be of completely no significant value in the long term scope of things (i.e. her wide variance eventually went to zero while prices hit new lows).

    I really doubt in her original call she meant that King County had bottomed but other nearby locations would not hit bottom for another year or so. I also really doubt she meant that the bottom didn’t mean when home values bottomed but actually meant when median price was at its lowest. IOW, median price cannot measure the actual bottom, and I suspect she is intelligent enough to know this. Unless of course, calling the bottom of the housing market has no real relationship to the lowest price people can actually pay for their homes.

    To those who question my ill-mannered reply to her post, please take note of her comments in the blog she linked. :)

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  42. 42
    The Tim says:

    RE: ARDELL @ 40 – Ardell, I created that graph. I think I know what it shows.

    1) Go here: http://www.homeprice.standardandpoors.com/
    2) Click the “October 2010″ link in the “Non-Seasonally Adjusted” column in the “Home Price Values” row.
    3) See that Seattle’s latest reading of 143.13 is the lowest it has been since March 2005.

    Atlanta, Charlotte, Miami, Portland, and Tampa are all at new post-peak lows as well.

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  43. 43
    Jonness says:

    By ARDELL @ 28:

    At the end of the day, all methods are not entirely accurate and the stats have to be corrected or interpreted in some way, and collaboration on best way is always better than squabbling over who is “right” or “wrong”.

    As to your earlier comment about not understanding what the Case Shiller is, your above comment is exactly why the Case-Shiller is the universally agreed upon most accurate system of record. Median price is useless in accurately calling the bottom. Even the flaws in $/sqft provide a more accurate picture than median price. We all know this. You are attempting to cherry-pick a data set after the fact that validates your bad call. You will live and die by the results of the Case Shiller. You know it, I know it, everybody here knows it. The only people who don’t know it is your clients. And to you, that’s what’s most important, and that’s why you continue this ridiculousness 2 years after the fact.

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  44. 44

    By Jonness @ 43:

    By ARDELL @ 28:
    At the end of the day, all methods are not entirely accurate and the stats have to be corrected or interpreted in some way, and collaboration on best way is always better than squabbling over who is “right” or “wrong”.

    As to your earlier comment about not understanding what the Case Shiller is, your above comment is exactly why the Case-Shiller is the universally agreed upon most accurate system of record. .

    Not universally agreed at all. Over shorter periods of time I’d much prefer to use the median. Usually by shorter periods I’d mean less than 2 years, but with major events like the tax credit that’s now maybe 6 months.

    The only problem with the median is change of mix. At least with the median you have some idea what that is (at least with some access to the system). With Case-Shiller you have no idea what the change of mix is. It’s a black box.

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  45. 45
    Jonness says:

    By ARDELL @ 36:

    The third graph down in that link confirms my findings that no major city, including Seattle, is or has been lower than 3/09 to date.

    Let’s get past your lack of understanding of Case Shiller data and move on to your 3/09 bottom call you are so proud of.

    Here is what you said on February 7th, 2009:

    The market is shifting. More on this when I do Sunday Night Stats, as I have a busy weekend.

    But I’m calling it…we’re at bottom.

    Here is what you said in the promised followup one month later:

    Revisiting my “bottom call” of February 7th. At the time, even those who potentially agreed with me, wanted more “proofs”.

    But in the instant that I “called it”, it was more like watching the horse at Steel Pier diving into the ocean. You knew the horse was going to land UNDER the surface of the water, even while you were watching it in mid-air. Basically, the market was taking a high dive off of the beginnings of “spring bounce”. It was like standing on a train platform and watching a bunch of people jump in front of the train.

    Question: How many bottom calls does a Realtor need to make to perfectly guess the bottom of the market?

    Answer: One per month.

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  46. 46
    Daniel says:

    RE: ARDELL @ 36 – I do not know why you mention all these things to me. Nothing you say relates to my posts.

    Also I am fully aware what the CSI measures, as I actually read both the methodology _and_ the original publications and have the mathematical background to understand the methodology and the implications.

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  47. 47
    Jonness says:

    By Kary L. Krismer @ 44:

    Not universally agreed at all. Over shorter periods of time I’d much prefer to use the median.

    OK, universally is the wrong term as it means “without exception.” Thanks for pointing this out.

    However, the majority of experts would agree Case-Shiller is the most accurate readily available data set for determining generalized point-in-time (monthly) home values in a particular metro area. It’s biggest weakness is perhaps that it has a 2-month lag.

    The only problem with the median is change of mix. At least with the median you have some idea what that is (at least with some access to the system).

    True, but as it turns out, the “only” problem is a problem that renders median price useless in accurately judging the point of lowest value of houses in the market.

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  48. 48

    RE: Jonness @ 47 – The other problem (besides delay) is it’s too large of an area. Ardell and I agree on that, FWIW. It would be nice if they at least had breakdowns for each county. IMHO that would be much better than their three tier data.

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  49. 49
    Daniel says:

    By ARDELL @ 35:

    RE: Daniel @ 31
    Much better minds than I have similar feelings as mine with regard to Case Schiller

    http://bit.ly/gscTyO

    I still have to comment one more thing here: You seem to have a misconception about the weighting of the sales pairs. The only reason different time intervals are assigned different weights is that the price variance differs substantially. With other words: the time-interval weight correct for errors resulting from heteroscedasticity (http://en.wikipedia.org/wiki/Heteroscedasticity) and DO NOT bias the index but simply provide a more reliable estimate.

    This is standard good practice just like weighting data points by the square of the inverse of their errors (or for data with strong correlation by entries of the inverse covariance matrix) when doing a fit. There is nothing arbitrary about this.

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  50. 50
    Daniel says:

    By Kary L. Krismer @ 44:

    The only problem with the median is change of mix. At least with the median you have some idea what that is (at least with some access to the system). With Case-Shiller you have no idea what the change of mix is. It’s a black box.

    For the intended use of the CSI change of mix is irrelevant. Also, while their input data is not public the method itself is not a black box at all and could at least be implemented without much effort from their methodology and the various old papers. The most difficult part is probably what they have to do to the raw data to get their final input. (One thing they mention is pruning sales from construction companies as the property has most likely been modified heavily.) That part seems like a nightmare =).

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  51. 51
    Daniel says:

    By Kary L. Krismer @ 48:

    RE: Jonness @ 47 – The other problem (besides delay) is it’s too large of an area. Ardell and I agree on that, FWIW. It would be nice if they at least had breakdowns for each county. IMHO that would be much better than their three tier data.

    Their method also allows for an estimate of the error of the index. My guess would be that the error is sizable enough to make it dangerous to reduce the size of the area even further. Both the median and the CS index stop being useful when your sample size is to small. Another indication for sample size issues is the three months rolling average: If data from one month was good enough there would be no need for it.

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  52. 52

    RE: Daniel @ 50 – You probably know more about statistics than I do, but by mix I meant mix of area, not necessarily type of property.

    Let’s assume a hypothetical three county area, where each county had 33 MLS areas (99 areas total), and the median for one of the counties was rising slightly over a six month period, one pretty flat for six months and one falling for six months. Let’s further assume that in the rising and falling counties each had 10 areas countering that county’s trend (e.g. 10 rising areas in the falling county).

    What I’m trying to get at is during each one month period the paired sales for each MLS area most likely would not be close to 1% of the paired sales, and the paired sales for each county most likely not 33.33% of the total paired sales. They have to somehow account for the fact that in one month 60% of the paired sales might be from areas that are rising, and the next month 60% might be from areas that are falling.

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  53. 53
    Daniel says:

    RE: Kary L. Krismer @ 52 – Yes the mix of areas definitely limits its usefulness. This is nothing but the sample size issue again: If the area is chosen to large the information is not useful, if it is chosen to small the information is not accurate. Without knowing the data it is hard to tell if they could do better.

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  54. 54
    SummitSeeker says:

    RE: Daniel @ 50
    Others have coded the CS methodology and applied it to specific zip codes (http://sdhpi.blogspot.com/).
    From my conversations with the author of this site, obtaining and cleaning up the data for the input is indeed the hardest part. Maybe Tim needs another project.

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  55. 55
    Scotsman says:

    But dang it- you don’t understand! I’m a middle aged realtor with little money or savings (and all those fancy coffee terms confuse me, so I can’t just be a barista) so what am I supposed to do if home values continue to fall? Once the public figures this out NO ONE will want to buy a house- they’ll all just be. . . dirty renters! Arghhhh- what to do, what to do?! There must be data somewhere that shows something that at least looks sorta like a bottom. Get the NAR on the horn- we need a press release to save this industry!

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  56. 56

    What’s interesting about this thread is I’ve taken some grief here for not making predictions and taking the position that real estate agents should be prohibited from making predictions. Simply put, I don’t think real estate agents have the training or ability to make meaningful predictions. They should stick to the current and past values of property. But others, some of whom are agents, take a different position for reasons I think are totally absurd.

    Ardell, on the other hand, makes a lot of predictions. So often my argument is they’re not useful at all. I wonder how many of those people who were critical of me were also critical of Ardell.

    If there’s no overlap, then that’s fine. Everyone’s entitled to an opinion, at least if it’s not inconsistent. Otherwise I guess the position would be real estate agents can make predictions only if they’re perma-bears or perma-bulls.

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  57. 57
    Ben says:

    RE: Kary L. Krismer @ 56 – Kary, I generally enjoy reading your posts – and agree with much you say.

    Regarding Ardell’s posts today – I said I was gobsmacked at the attempts to torture the data. The lady doth protest too much. I will be so bold as to posit that business must be down in direct proportion to the effort expended to portray all is well.

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  58. 58
    Scotsman says:

    RE: Kary L. Krismer @ 56

    I have to give you credit for being consistent and reasonable or logical. I’m more than happy to make predictions or speculate, but with a significant difference when compared to Ardell or others. It doesn’t seem that unreasonable to make predictions (or guesses) based on trends in the fundamentals that feed into pricing structures. For real estate that means employment, average wages, interest rates, available supply, etc. It’s really not that hard to look at the current economy and come to the conclusion that unemployment isn’t going to significantly decrease any time soon, that wages are likely to remain fairly flat, and that personal debt/income ratios are pretty well maxed out. While they may not continue to drop it’s hard to see home values rising in that environment. I think most people can reason their way through these ideas and come to the same understanding.

    What doesn’t have any real value or relevance is looking at sales figures or prices in the same way a “chartist” looks at stocks and then deciding that we have a bottom, or a double top, or whatever and then making predictions on that basis. That, or something similar, seems to be Ardell’s approach as she calculates percentage decreases/increases looking for some magical inference in the calculus of the deltas/rates of change. Or what ever it is she does. The reality, as shown by repeated and erroneous calls, is that it doesn’t work. She should not be making predictions, or advising clients on future pricing, or walking around like she has a series 7 license. And at a time when realtors are already suffering from a lack of trust and credibility to continue doing so seems all the more foolish. Any potential buyer/seller who googles their realtor’s name can often come up with more information than they bargained for. But hey, it’s a free country, right?

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  59. 59
    Lurker says:

    RE: Ben @ 57

    Indeed. I never thought I would say this about a lawyer/RE agent but for the most part I enjoy his contributions to the forum as well.

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  60. 60

    By Scotsman @ 58:

    For real estate that means employment, average wages, interest rates, available supply, etc.

    I’d agree with almost everything you said, but as to this quoted portion, that’s part of the reason I say that real estate agents have no real ability to predict future prices (or at least better than the average person). I’d actually add in several other variables, but looking at real estate inventory doesn’t really give an agent insight into any of those variables. If anything, the inventory is the result of those variables.

    I’d also agree with you on the charting statements, except to one point. When either stock or house prices are reaching new highs you can get similar behavior in that a mania can be started. That can lead to irrational pricing and high rates of increase. But I would agree most chart analysis applicable to stocks, even if you believe in such things, has no application to houses, because the market is too slow moving.

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  61. 61

    By Lurker @ 59:

    lawyer/RE agent .

    Hey! There’s no need to throw insults around! ;-)

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