Posted by: Timothy Ellis (The Tim)

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

21 responses to “March Stats Preview: Fool-Delayed Edition”

  1. Kary L. Krismer

    I wonder if we’ll see an uptick in foreclosures to beat the new Foreclosure Fairness Act, like we did the last time they complicated the foreclosure process?

    On the active inventory, keep in mind it’s even less if you’re not interested in a short sale or REO.

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  2. softwarengineer

    RE: Kary L. Krismer @ 1

    Perhaps Kary We Need a Stuck In Cement Possible Inventory Chart Too…LOL

    Wanna be home sellers today that can’t afford to sell an upside down loan, so are forced to stay put and try to save their way out.

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  3. Kary L. Krismer

    RE: Kary L. Krismer @ 1 – To follow up on that, about 19% of the active King County SRF listings are short sales.

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

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  4. Kary L. Krismer

    RE: The Tim @ 4 – And then a few months later how they are falling rapidly!

    I forget the exact topic (maybe the NWMLS reporting for March), but King 5 seemingly randomly picked the numbers to report that didn’t give people a feel for anything.

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  5. Scotsman

    All foreclosures, all the time. By 2012 distressed properties will own this market. OK, maybe 2013- the government is doing everything it can to slow things down.

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  6. Kary L. Krismer

    RE: Scotsman @ 6 – You might be right. The Tea Party is setting us up for a double dip! ;-) :-D

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  7. Macro Investor

    The Altos Seattle median chart hasn’t fallen in 2 months. It must be the bottom.

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  8. Scotsman

    RE: Macro Investor @ 8

    Whoa!- you may be on to something! But personally I’ll have to wait for Ardell’s confirmation. Until then we can just assume that flat and steady is the love child of the ongoing decline and the annual spring bump. Net zero.

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  9. Scotsman

    All these “bargain” (relative) prices have the “investors” coming out of the woods. I just heard of a friend who’s thinking of picking up a nice little 2/1.5 “rental” for a cool $500K, a fraction of its previous value. Let’s see- market rent maybe $2,000/mo, taxes at $6,000, add in plenty of deferred maintenance and a few vacant months and maybe he’ll get a 2% return. If he pays cash. Now that’s a sweet deal!

    I’m just going to move to Canada- they’re all so polite up there, and pretty much everything is free, or so I hear.

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  10. One Eyed Man

    RE: Scotsman @ 10

    You rich guys are all alike in your high rent neighborhoods drink’n your designer micro brews and smoke’n cigars rolled on the thighs of south county women you never met. If you ever went south of I-90 and got off the freeway, you’d know that on the other side of the tracks, you can get 4bd/2baths, 2000 sq ft, along the I-5 corridor in Kent, Auburn and Fed Way for about $80 to $90/sq ft. It’s true that just a few years ago you all but couldn’t find a listing for less than 300K in King Co. But now you can pull up dozens on the listing map of your choice at the touch of a your middle finger. If you don’t believe me, try it yourself and you’ll see!

    And today only, you can take advantage of our investor volume discount commission special. Buy 2 and get a 3rd commission free. Would 3 be enough? Or would 6 or 9 be better for you? And theres no need to worry about the vacancy rate. Just because you wouldn’t live there doesn’t mean there aren’t plenty of those low life renters who are hoping someone will rent them a place now that a foreclosure or short sale has ruined their credit. (And many of them have there own lawn care equipment and do their own yard work too!)

    The bad news is that at those prices the available homes are still only in the break even cash flow category, unless of course you pay all cash in which case you’ll make a meager 5%. But if you’re a wagering man and contact my friend Stroker The Mortgage Broker, you’ll learn that the key to making money in real estate is to put just 20% down, because then with a mere 4% inflation (in property prices) you’ll make a 150% cash on cash return in just “Ten,” that’s right “Ten,” years. And that starts with “T” and that ryhmes with “P” and that stands for Pool!

    And that my friend is how you sell un-real estate! But you better buy now as we’ll be moving on to another town before DOL discovers us.

    Oh the Wells Fargo wagon is a come’n down the street . . . .

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  11. Scotsman

    RE: One Eyed Man @ 11

    ” contact my friend Stroker The Mortgage Broker”

    That is so wrong, on every level. No more micro brews for you, my over-educated elitist friend.

    P.S. There’s life south of I-90? I mean, before you get to Portland? ;-)

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  12. Scotsman

    RE: The Tim @ 12

    Senior Cardgage? You are a geek’s geek. The true geek mind, much like it’s polar opposite- the “mind” of a beautiful blonde artist, is a total mystery to men like myself. Both live in a space I’d love to explore, but can’t quite connect with. God’s speed, man.

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  13. One Eyed Man

    RE: The Tim @ 12

    “Eh, I prefer Senor Cardgage Mortgage.”

    Hey, I know that guy! I think I got my very first mortgage from him in 1990. I think it was at about 9% plus one point origination for every month he’d been in business. I think that worked out to an APR of about 9.25%.

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  14. ARDELL

    RE: Scotsman @ 9

    Just got back from my Spring Break in L.A. Running some numbers now.

    In the meantime, will you settle for anecdotal? I have a closing next week and had one just before I left for LA. I think that means we’re going to have a Spring “Pimple”, potentially filled with ugly pus, instead of a full on hard Spring “Bump”.

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  15. ARDELL

    I think I found David Losh’s dream come true of 1998 prices bought all cash. More than one in the last 180 days over in Sixty-01 in Redmond. Anyone know what’s going on over there? Did they lose their ability to finance again?

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  16. Scotsman

    RE: ARDELL @ 17

    I remember when they built that- it was THE place to live. I haven’t even driven by in over a decade- is it still a popular choice, or headed for section 8 housing?

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  17. ARDELL

    RE: Scotsman @ 18

    The prices sustained at low levels due to a lawsuit against the Association back in sub-prime times, because you couldn’t buy with less than 10% down. So the run up from 2002 due to zero down financing didn’t impact 60-01 early on, with prices for a 2 bedroom townhome holding at about $120,000 through early 2005. Significantly lower than other area townhomes.

    Once the ability to finance restriction was lifted they more than doubled in price in a short time from early 2005 to early 2007. Over 100% increase to $250,000 to $260,000. By Summer and Fall of 2007 a few went as high as a smidge under or over $300,000 with most selling at $275,000 to $298,000.

    Massive run-up in prices over 18 to 30 months from $118,000 to $275,000+. Some of that was due to Microsoft hirings, it wasn’t all about financing.

    Even as recent as during the Tax Credit in early 2010 most were selling at $165,000 to $175,000 with one selling as high as $225,000 and another at $243,000.

    Compare that to most recent sales in the last 6 months being $115,000 to $125,000. One that sold for $115,000 had sold for $118,000 in 1998. Funny thing is the owner who bought it for $118,000 never sold it. Refinanced it to max loan at peak and then let it go to foreclosure. So looks like he pulled all the appreciation out via financing vs selling it, and then let it go into foreclosure.

    From what I can see the recent sales in the last 6 months are all cash purchases, so it makes me wonder if the ability to finance there has become non-existent causing the crash in prices? Almost a 60% drop from peak and about 35% of that drop in just the last 6 to 9 months. Something abnormal going on there. Has to be the ability to finance.

    They rent for about $1,400 a month, so a cash purchase at $115,000 to $125,000 looks like a pretty good deal. But the condo fees are $380 to $420 a month.

    Maybe they will bounce back up during Spring Pimple. What do you thnk? :)

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  18. To the Students from the June 23, 32011 LO CE Class at Sterling Savings in Seattle : National Association of Mortgage Fiduciaries

    [...] are some recent statistics from Seattle Bubble on Notice of Trustee Sales, Trustee Deeds, and Warranty Deeds for the [...]

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  19. corndogs

    Software Engineer @2 – I keep seeing reference on this site about the upside down home owner, would be seller, forced to stay in his home…….

    I think that puts a negative slant on current home owners that probably isn’t very true… I think people are perceiving the general truth that there is a tremendous upside potential in keeping their home…. this has not been the perception for about 6 years or so,,, but it’s back and it’s real…. so the inventory is dropping rapidly….. this will be followed by a rush to buy and higher prices…. it will be choppy but it will happen and is happening..

    The element that will be remembered about this era will be the foreclosures and the people who walked away….. there is nothing keeping upside down mortgage people in their home besides pride and there isn’t much of that. People who bought in 2006-7-8 or refi’d have been walking…. the numbers are large but they are finite…..soon as those people are done, this situation is over….. everyone who’s holding a home now is holding something with an upside potential that is better than any other alternative investment out there…. people know this and it’s the potential value increase that makes people buy in the first place….

    The investors who are snagging the bank owned properties that are at an additional 20% mark-down right now will be the biggest winners. Grandpa always said… you only need a few good deals in your lifetime…… seems like this is the time for that…

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