January Stats Preview: Sagging Inventory Edition

As January 2011 fades into the distance in the rear view mirror, 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 dropped back down 33% in King County between December and January, falling to the lowest level since January last year. Last year Warranty Deeds fell 37% during the same month. YOY Warranty Deeds were up 11%. Based on this data, assuming no shenannigans, we should see NWMLS-reported SFH closed sales for January fall to just below 1,000.

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

Overall deeds fell less in Snohomish, but since this includes foreclosure sales, it’s hard to know what’s going on with regular sales volume.

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

Both counties were up slightly MOM and YOY.

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

Up 8% month-over-month and 70% year-over-year.

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

If these estimates are correct, it looks like the dearth of new listings I mentioned earlier this month is starting to put some downward pressure on overall inventory, especially up in Snohomish County.

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.

17 comments:

  1. 1
    deejayoh says:

    I was just thinking that the YoY inventory trends are even more interesting if you think about just the number of non-REO properties. I’m guessing that the number of people who are trying to sell their houses voluntarily has dropped pretty significantly.

  2. 2

    Are we now past the point where the change in the foreclosure law affected any of the foreclosure numbers?

  3. 3

    It’s looking like we might see a new low on the median for KC. But for the late reported sales I would say we definitely will be.

  4. 4
    The Tim says:

    RE: Kary L. Krismer @ 3 – Yeah a cursory check I did of January SFH sales in King Co. yesterday was showing $355k. I personally doubt the final number will really come in that low, but who knows.

  5. 5

    RE: The Tim @ 4 – I’m not going to give a number, but if the sales that get reported for January between now and the cutoff continue to come in at a low number, that could push the median down. Of course, those sales could be higher than what the rest of January has been.

  6. 6
    Ben says:

    RE: The Tim @ 4 – That would be in the ballpark of the Altos chart numbers. It seems reasonable to me.

  7. 7
    Julie Lyda says:

    RE: deejayoh @ 1

    You are actually right on that thought. I have a graph charted on my blog with those stats from June 2010 – Jan 2011 and non-distressed property counts have gone down, while REO listings have risen dramatically.

    I had noticed that REO listings had risen, but didn’t notice the significant drop in the non-distressed listings. Thanks for pointing that out. We’ll have to wait another couple of months to see if those come back on the market.

    http://www.snohomishcountymarketstatistics.blogspot.com

  8. 8
    softwarengineer says:

    RE: Julie Lyda @ 7

    Good Point

    During past short-term unemployment recessions [this isn’t our father’s recession] with unemployment rates not near as bad as the 17% U6 unemployment we’re in right now, couple that with a need for about 1000-1500 jobs per month [we’re not even nearly creating] in Wash St just to keep up with uncontrolled insourced population growth mitigating wage levels and stagnating RE prices….the RE beat goes on.

    The sellers holding off waiting for the “infamous bottomming out fairy tale” we’ve been fed the last couple years will eventually run out of both patience and cash IMO.

  9. 9
    Ross says:

    By softwarengineer @ 8:

    RE: Julie Lyda @ 7

    Good Point

    During past short-term unemployment recessions [this isn’t our father’s recession] with unemployment rates not near as bad as the 17% U6 unemployment we’re in right now, couple that with a need for about 1000-1500 jobs per month [we’re not even nearly creating] in Wash St just to keep up with uncontrolled insourced population growth mitigating wage levels and stagnating RE prices….the RE beat goes on.

    The sellers holding off waiting for the “infamous bottomming out fairy tale” we’ve been fed the last couple years will eventually run out of both patience and cash IMO.

    The _big_ difference this time is the implosion of credit availability and tightened lending standards. But that doesn’t mean there won’t be a bounce when the economy does recover. Even folks with fixed loans, who put down substantial downpayments can get hosed when they unexpectedly lose their job and can’t find a new one. I’d suggest something like 80% of the decline is due to the end of easy money and 20% of the decline is due to recession. So if/when the economy recovers, we could reasonably see perhaps a 20% (of the decline, so 2-4%) bounce back. Though I’ll qualify that by saying it’s not clear we are done bottoming yet (at least there haven’t been changes to lending standards in a while, though rate increases are coming), and psychological effects will impact this market for a long time. The other wild card is how inflation plays out.

  10. 10
    Julie Lyda says:

    RE: Ross @ 9

    Well here comes the start of easier money.

    FiCOs and FHA: 2 Big Lenders Loosen Up, Inman News
    January 31, 2011

    “With no fanfare or public announcements, two of the largest FHA-approved lenders have backed off their controversial “overlay” requirements on FICO scores (lender overlays are qualification requirements that can be more stringent than FHA’s own requirements).

    Both Wells Fargo and Quicken Loans confirmed to me last week that they will now lend to applicants with 580 FICOs and 3.5 percent down payments.

    Their revised standards conform in most respects to FHA’s own minimums, and open the agency’s financing to large numbers of buyers whose credit scores have sagged during the recession. Wells Fargo is the largest originator of FHA-insured mortgages; Quicken ranks third, according to industry data.”

    Rest of article here:
    http://ht.ly/3NClK

  11. 11
    Racket says:

    580 fico score? GEEZ I had to have someone cosign a loan when I was 18 to buy a truck with 75% down on it. I don’t know what my credit score was then, but I’m sure it was over 580 as I had no bad credit at all.

  12. 12

    RE: Racket @ 11 – The problem there might have been you had no credit! 18 is when you can first start applying for credit.

  13. 13
    Ross says:

    By Julie Lyda @ 10:

    RE: Ross @ 9

    Well here comes the start of easier money.

    FiCOs and FHA: 2 Big Lenders Loosen Up, Inman News
    January 31, 2011

    “With no fanfare or public announcements, two of the largest FHA-approved lenders have backed off their controversial “overlay” requirements on FICO scores (lender overlays are qualification requirements that can be more stringent than FHA’s own requirements).

    Both Wells Fargo and Quicken Loans confirmed to me last week that they will now lend to applicants with 580 FICOs and 3.5 percent down payments.

    Their revised standards conform in most respects to FHA’s own minimums, and open the agency’s financing to large numbers of buyers whose credit scores have sagged during the recession. Wells Fargo is the largest originator of FHA-insured mortgages; Quicken ranks third, according to industry data.”

    Rest of article here:
    http://ht.ly/3NClK

    That is _something_, but it’s a far cry from the lending that happened during the bubble – where an unemployed person could get a 1.5 million dollar loan with nothing down on a ARM, interest only or negative amortization product. That kind of environment won’t return in our lifetime.

  14. 14
    Ross says:

    By Kary L. Krismer @ 12:

    RE: Racket @ 11 – The problem there might have been you had no credit! 18 is when you can first start applying for credit.

    Aside, you can still build credit without loans, either from being joint on a parent’s card, or from other forms of applications (i.e. some bank accounts do a credit check to open, and even things like car insurance soft pulls can increase the length of your credit history). Though, granted, it would be much better to have a mix of rotating and fixed loans.

  15. 15

    RE: Ross @ 14 – That’s a possibility on the parent credit card issue. I’m not sure how the credit score people deal with that, although it may very well be different now than a couple of years ago. For people over 18 being on someone else’s account no longer drags up your score like it did previously. That was always a stupid rule.

  16. 16
    Racket says:

    By Kary L. Krismer @ 12:

    RE: Racket @ 11 – The problem there might have been you had no credit! 18 is when you can first start applying for credit.

    My point is that 580 is rubbish credit, but they will let you buy a house????

  17. 17

    RE: Racket @ 16 – I’ve argued here that credit scores are stupid tools to use at all when deciding to grant a home loan. And in fact the credit score people have come up with alternative scores for such purposes, but as far as I know, no one is using them.

    Simply put, carrying $20,000 in credit card debt on four cards with a total limit of $40,000 can give you a good credit score. That should typically prevent you from getting a home loan, IMHO.

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