Redfin: Buyer’s Market No Breeze for Buyers

Full disclosure: The Tim is employed by Redfin.

Happy Friday everybody. Let’s celebrate the upcoming weekend with a sweet interactive map. That’s right, it’s time again already to check out Redfin’s January market data. Here’s an excerpt from the narrative (which, as it turns out, I wrote):

“It was the best of times, it was the worst of times… it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us.”

The opening line of Charles Dickens’ famous novel is a fitting description of the Seattle-area real estate market in January. Low prices are a buyer’s dream, but a seller’s nightmare. Inventory is still near record highs, but according to buyers, “there’s nothing out there.”

“The number one complaint I hear from my buyers today is ‘there’s nothing out there,'” said Loren Ellingson, a Redfin agent in Bellevue. “We’re all holding out, waiting and praying for more inventory in March.”

Kirkland Redfin agent Kathryn Rion agreed. “I have a lot of buyers who are really ready to go, but most of what’s out there is either overpriced or really yucky,” explained Kathryn.

Redfin’s data and our agents’ experience in the field confirms what I pointed out a month ago: inventory is unusually scarse across most of the Seattle area. One thing that I found particularly interesting when I was talking with our agents to collect their thoughts for this report was the interesting strategy that the banks seem to be employing on the Eastside with their REO inventory.

Despite the low overall sales volume on the Eastside, buyers there are encountering some frustrating situations. Loren and Kathryn are both beginning to see banks get a lot more aggressive with their listings, putting well-kept REO homes on the market at far below market value, often generating over a dozen offers (no joke!).

“When a nice bank-owned home hits the market in Bellevue, it inevitably gets a lot of offers,” said Loren. “Many of these listings are generating so much interest that the banks cut things off after receiving ten offers.”

These homes inevitably sell for a good amount over their list price, but in the end they are usually still cheaper than comparable “non-distressed” inventory, so you end up with a paradoxical situation where buyers are encountering multiple offers, but prices are still falling. Crazy.

You can download the full spreadsheet from Redfin here, and as usual, I’m going to map the data here.

In the map below each zip code with enough sales in January is shown as a dot, with the size of the dot determined by the number of sales in that zip code in the month. Each dot is color-coded based on whichever measure you select below the map. You can view the month-over-month or year-over-year changes in inventory, sales, median prices, or median prices per square foot for single-family homes, condos, or townhouses. There is also a county selector that allows you to narrow, expand, or modify the geographic view to your liking.

If you flip the measure and range to inventory month-over-month, you can see the odd “two cities” dynamics. Inventory actually dropped from December to January (very unusual) across pretty much the entire Eastside, while rising (the normal seasonal pattern) in parts of central Seattle and north Seattle.

Year-over-year, the biggest winner for sales in King County this month was a tie between east of Lake Sammammish (98075) and Kennydale, where sales doubled from January 2010 to January 2011. King County’s biggest decline was in my home town of Kenmore (98028), where sales fell 77% from 39 a year ago to just 9 this year. 35 zip codes had decreasing sales volumes YOY, 3 were flat, and 15 saw an increase. Month-to-month, 53 zip codes fell, 2 were flat, and 1 increased (98007 – East Bellevue).

Here are the zip codes with the most SFH sales in January in King, Snohomish, Pierce, Thurston, and Kitsap County:

  • King: 98059 — 31 sales.
  • Snohomish: 98012 — 33 sales.
  • Pierce: 98387 — 28 sales.
  • Thurston: 98513 — 14 sales.
  • Kitsap: 98367 — 20 sales.

Year-to-year, 33 zip codes in King County gained inventory, 2 were flat, and 34 lost inventory. Almost a dead even split.

The median price fell from a year ago in 37 King County zip codes, and rose in 16. The median price per square foot was also down in 37 zip codes and up in 16.

Anything stand out to you about your neighborhood in this month’s data? Do your observations match up with the stark contrast Redfin’s agents are seeing between the Eastside and Seattle?


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.

30 comments:

  1. 1

    To Quote the Tim:

    “….These homes inevitably sell for a good amount over their list price, but in the end they are usually still cheaper than comparable “non-distressed” inventory…”

    LOL….it’s like saying it’s good when foreclosed units are only 1% of all homes [when 1% of all homes are for sale]….that’s the same as saying Walmart’s sales are doing well, the purchases and returns are coming in at the same rates….LOL

  2. 2
    SummitSeeker says:

    From my casual market tracking perspective I’ve reached the same conclusion as stated in the article- that inventory is basically horrible. I have 20% down locked and loaded but there’s nothing tempting out there. I’m not about pay 30-40% higher monthly than my rental cost in order to live in a worse condition property.

  3. 3
    David S says:

    RE: SummitSeeker @ 2 – I’m beginning to wonder if “It’s a great time to buy” and “It’s a buyer’s market” should mean the same thing which is “If we could just find a sucker,,,”.

  4. 4

    RE: SummitSeeker @ 2

    Yes

    I just got bad news from a friend that has a very serious ailment requiring brain surgery, she’s recovering now…..but thank God she’s renting, at least if she and her 3 kids ends up on disability, they just move to the low income housing or cheaper rent….if she bought a house, she’d lose it and the 20% down….

    The only thing in life that’s REALLY important is your health, the rest is a joke if that goes.

  5. 5
    Steve Putnam says:

    Love your blog, but what’s with using the color red in your graphics for positive growth? Nitpicky? Hell yes, but after 25 years in the corporate world I am habituated to read red as negative. Keep up the good work–from another ex-semiconductor design guy.

  6. 6

    RE: David S @ 3

    Some Older Professionals Buy Homes in Seattle, Because They Transfer Here and They Came From a High Priced RE Area, So Already Have Adequate Equity

    God help them if they came from the Midwest [even if their like Detroit home was paid for]….LOL

  7. 7
    The Tim says:

    RE: Steve Putnam @ 5 – I was originally using red for down and green for up, but I received some complaints that it was difficult/impossible to read for color blind users. I decided to switch to red = hot / blue = cold, since “heat” is a common metaphor used when talking about the housing market.

  8. 8
    Drone says:

    RE: SummitSeeker @ 2 – Totally agree with you. There’s a hidden danger here too: On the way down the price curve, there’s a point where prices will be only slightly unreasonable. You’ll be able to buy something that’s not QUITE a fair deal, but isn’t absurd either. Restraining yourself from jumping at the first viable property that appears will take unshakable determination.

  9. 9
    SouthernInSeattle says:

    Yep, the inventory just plain stinks right now. All of our Redfin field agents have agreed out loud with our conclusion ,and keep telling us to cross our fingers for the seemingly illusive ‘Spring Inventory’ I keep hearing/reading about..

  10. 10
    Dan says:

    On the flip side, as a seller our experience was that the lack of “good” inventory is almost as frustrating. It is hard to tell what you should price at if you have a house that is well set up, updated, in a good location and you’re going to get out of it and have real listing pictures taken (those are some great ones in the last post). In North Seattle good houses do seem to sell within a week of listing if priced reasonably, but in this market most buyers won’t get into a bidding war (other than maybe for cut-rate REOs) so what you list for is basically the best you will get. A good agent can help, but the lack of good inventory and nice houses to use a comps makes it hard to balance pricing it so you’re sure you get a sale before you go stale (and die a slow price dropping death) and not feeling like you’ve left money on the table, especially when you’re already in a hole to start with.

  11. 11
    me says:

    Yeah, no kidding. I keep looking, but the houses on the market are ridiculous. Worse living conditions than in my apartment for quite a bit more cash yearly, with a strong expectation of depreciation and rising property taxes? Thanks, but no thanks.

  12. 12

    Wait….what?
    More single family houses were sold in the 98059 zip code than anywhere else in King County?
    No disrespect intended, but it’s just not an area I think of when I think of the Seattle area’s most sought after neighborhoods. It’s nice enough, I guess. It’s part of Renton, and all of the City of Newcastle. Some great hiking trails in Newcastle, and much of the zip code is in the good Issaquah school district, but what specifically was/is going on to make this zip code so “hot”? I’m clueless here.

  13. 13
    Scotsman says:

    RE: Ira Sacharoff @ 11

    Ask your realtor- all real estate is local. Location, location, location!

    Sorry, Ira- couldn’t resist. ;-)

  14. 14

    RE: Ira Sacharoff @ 12 – If there was one place i’d move to if for whatever reason I decided to leave the city, Renton would be my 1st pick. There’s a lot to do. You got a river, a lake, can skip to the mall, a burger king, a lot of parks, too many movie theaters, a couple transit centers, and 3 choices on which way to go if commuting to the city. There’s also a lot of “nice” single-family homes that have been built over the last 5 to 10 years on the east hill of Renton that I’m sure attract a lot of buyers when comparing prices to older homes w/ a Seattle address that come w/ no yard and are in need of repair. If you were to live in King County but outside of Seattle, where would you go?

  15. 15
    David Losh says:

    RE: Justin Bowers @ 14

    Nice blog, man, and I agree about Renton. It’s mid way to Tacoma, Bellevue, and Seattle.

    I didn’t read the article but how did you connect with Dave Tribble? He’s one of the hardest working Real Estate agents in the business.

  16. 16
    corncob says:

    As an Eastside buyer looking right now I very much agree with this quote: “…most of what’s out there is either overpriced or really yucky,”

  17. 17

    By Justin Bowers @ 14:

    RE: Ira Sacharoff @ 12 – If there was one place i’d move to if for whatever reason I decided to leave the city, Renton would be my 1st pick. There’s a lot to do. You got a river, a lake, can skip to the mall, a burger king, a lot of parks, too many movie theaters, a couple transit centers, and 3 choices on which way to go if commuting to the city. There’s also a lot of “nice” single-family homes that have been built over the last 5 to 10 years on the east hill of Renton that I’m sure attract a lot of buyers when comparing prices to older homes w/ a Seattle address that come w/ no yard and are in need of repair. If you were to live in King County but outside of Seattle, where would you go?

    Oh, I like Renton just fine. I live in Renton. But you just don’t hear about people flocking there…even downtown Renton is cool.

  18. 18
    Lo Ball Jones says:

    The price bidding indicates a situation where immigration has all but halted. Maybe a budding exodus next.

  19. 19
    Lo Ball Jones says:

    RE: Justin Bowers @ 14

    larkspur landing is becoming on of the hippest places

  20. 20
    The Tim says:

    By Ira Sacharoff @ 17:

    Oh, I like Renton just fine. I live in Renton. But you just don’t hear about people flocking there…even downtown Renton is cool.

    It’s apparently cool enough to convert Keister.

  21. 21
    ray pepper says:

    RE: The Tim @ 20

    Nice Keister Vid..Are you all serious? Renton..I spend a great deal of time in Renton and it remains one of the LAST places I would live Justin if I were leaving the city. I strongly suggest you look at 98332,98335,and 98062. You must not get out of the city much and explore.

    Patience, everyone…As the “wisemen” tell us every Friday. “Keep your powder dry, the inventory you seek is but a few years away.” All these homes coming back will have their day of reckoning and the patient will prosper.

    Personally, I could not imagine engaging in a multiple offer scenario in 2011. Why give the leverage to the banks and expose your hand. Last month when I submitted an offer it met 2 others at the last minute. We all got the “please submit highest and best by Friday at noon.” Our offer didn’t budge and apparently nobody elses did either for we all got “At this time the Lender rejected all offers, we will advise of any changes in price.”

    Bravo Buyers, let the prices come down to you.

  22. 22

    By The Tim @ 20:

    By Ira Sacharoff @ 17:

    Oh, I like Renton just fine. I live in Renton. But you just don’t hear about people flocking there…even downtown Renton is cool.

    It’s apparently cool enough to convert Keister.

    I did a blog piece on that. Pre-peak, one of my favorites.

    http://blog.seattlepi.com/realestate/archives/128896.asp

  23. 23

    RE: Kary L. Krismer @ 22 – Actually I guess it wasn’t pre-peak, but still at a time when some pre-peak ideas were fresh in my mind.

  24. 24
    EconE says:

    RE: ray pepper @ 21

    C’mon Ray! You wouldn’t live in Renton? What’s up with that? I mean really…It’s got a Burger King!

  25. 25
    Aaron Smothers says:

    By The Tim @ 7:

    RE: Steve Putnam @ 5 – I was originally using red for down and green for up, but I received some complaints that it was difficult/impossible to read for color blind users. I decided to switch to red = hot / blue = cold, since “heat” is a common metaphor used when talking about the housing market.

    That’s fine…as long as it’s not a subliminal persuasion tactic on political slant :-) :-)

    AS

  26. 26

    By EconE @ 24:

    RE: ray pepper @ 21

    C’mon Ray! You wouldn’t live in Renton? What’s up with that? I mean really…It’s got a Burger King!

    Ray lives in Tacoma.
    I don’t know, I really like these underdog cities. You can have Bel Air, or Medina or wherever. You don’t seek out Renton if you can afford the top of Queen Anne. But Renton does have:
    A symphony.
    A first Thursday Art and Antiques walk.
    A Farmer’s Market.
    Big trees.
    History. It’s an old coal town with cool old buildings downtown. And a Hstorical Museum
    Lots of pleasant places to go for a microbrew.
    The Cedar River Trail, which runs for 17 miles, I think about 6 of them in Renton.
    Lake Washington, canoe rentals.
    A mountain. ” Echo Mountain” is a moderately steep 700 ft elevation hike through the woods with a splendid view of Mt. Rainier from the top.
    Quick and frequent bus service to both downtown Seattle and downtown Bellevue.
    And sure, it’s got drunkards and no goodniks , run down buildings in crappy neighborhoods.Do you really want to live in a place where none of that stuff exists?
    Brought to you by the Citizens to Defend Renton.

  27. 27
    David S says:

    RE: Ira Sacharoff @ 26 – Good Citizen, this was our assessment of Renton too. Pretty cool place for the most part.

    But what of the Renton school district has anyone yet mentioned? I’ll go first. Our assessment of it was fail. Issaquah school district, way ahead of the learning curve.

  28. 28

    By David S @ 27:

    RE: Ira Sacharoff @ 26 – Good Citizen, this was our assessment of Renton too. Pretty cool place for the most part.

    But what of the Renton school district has anyone yet mentioned? I’ll go first. Our assessment of it was fail. Issaquah school district, way ahead of the learning curve.

    Oh, the Renton school district most assuredly sucks. There are few good schools, like Hazelwood Elementary, Kennydale Elementary, Mcknight Middle and Hazen and Lindbergh Highs, but most of the Renton schools range from pretty bad to horrible.
    Yet theyve gotten better and making themselves look good. The Superintendent of Renton’s schools is one of four finalists for national school superintendent of the year, and has been named state superintendent of the year. Completely unwarranted as far as I can tell. Renton’s saving grace is that some parts of Renton are in the much better Issaquah district, some parts of Renton are in the much better Tahoma ( Maple Valley) district, and some parts of Renton are in the slightly better Kent school district. It’s a great place to live if you don’t have school aged children.

  29. 29
    ray pepper says:

    RE: Ira Sacharoff @ 26

    Yes, I did live in Tacoma 98406/98407 but has finally convinced the family that the move back to 98332 was ONCE AGAIN the only way now that the bridge is done and the new Costco/theatres/Panera and YMCA are permanent fixtures. We purchased and are just waiting for the right time while the home sits with a tenant. I finally “again” have 1 foot back over the bridge.

    I still say there is no better place in the STATE then 98332/98335.

    As for Renton so many memories. I remember living off Sunset and the Maplewood Apts and dodging plates and waffle stomper shoes that my college girl friend would hurl at me. . I also used to drive by Greenwood cemetary for “inspiration” from Jimi Hendrix when in college. I used to love playing cards at Diamond Lil’s with Fred (owner) until he met Jimi.
    I enjoyed driving by Sound Ford and pulling up into the dealership only to be surrounded by salespeople and then pulling back out smiling.

    Ahh memories..fast forward to now…My friends all seem to live in the Renton area and I spend far too much time there. I will say this however…..They have the absolute best teriyaki (spicy chicken) anywhere up in Fairwood.

    http://seattle.citysearch.com/profile/10762893/renton_wa/fuji_teriyaki.html

  30. 30

    People generally prefer the Kent School District to Renton’s. As to each town, both have areas that are nice and areas that are not. One thing I like about those areas is that both, especially Kent, have a lot of wooded areas left, primarily due to wetland laws.

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