Posted by: 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 responses to “August Reporting Roundup: Gutter Momentum Edition”

  1. Kary L. Krismer

    Besides the volume of pendings not matching the volume of the following months’ solds, the prices don’t match up either. These numbers are the published median sold since December, followed by the median pending since December:

    Sold Pending

    370,000 333,500 Dec, 2010

    356,000 324,000 Jan, 2011
    334,000 334,975
    345,000 325,000
    349,950 325,000
    345,000 339,950
    345,000 329,500
    350,000 324,900
    350,000 319,000 Aug, 2011

    If the pendings were relevant, you would see the sold median dropping more.

    Numbers not guaranteed by the NWMLS, and also there’s the possibility of an entry error by me.

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  2. Kary L. Krismer

    Just for comparison, this is what the sold-pendings looked like in 2007:

    429,495 435,250 Jan, 2007
    429,925 450,000
    454,950 468,750
    465,000 459,900
    469,000 474,950
    470,000 474,000
    481,000 469,950
    477,345 449,950
    450,000 439,950
    443,950 432,773
    435,000 442,000
    435,000 428,500 Dec, 2007

    Same disclaimer.

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  3. Scotsman

    If J L Scott was skippering the Titanic I’m pretty sure he’d be assuring the passengers that ice flows would hold the ship up while momentum carried it to a safe shore.

    Would there be a bidding war for the life boats?

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  4. NewNormal

    Why do we expect, or even want, sales to return to bubble levels, as indicated in the comparison of August sales since 2000? Maybe this is the new normal. Or more precisely, the bubble period wasn’t normal to begin with.

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  5. Kary L. Krismer

    RE: NewNormal @ 4 – The bubble period wasn’t normal, but I don’t think we’re to a normal period on the other side either. There are all those people underwater who want to sell but have a snowball’s chance going the short sale route. Other than that, we might be at the new normal.

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  6. Lurker

    RE: Kary L. Krismer @ 5

    I have no idea what a “normal” market is like but I’ve only been somewhat interested for the past ten years!

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  7. NN2

    RE: NewNormal @ 4

    Just for reference (as we are in a tech centric geographic area) the Nasdaq composite peaked in 2000 and it stands at about half that today. Over a decade later the index has recovered half the crash. From here, it’d take another nine or so years of 9% annualized gains to get back to the pre-crash high. Outside of the increase volume due to the volatility in 2007-2010 and the new high frequency traders, the volumes are essentially flat. So, lower prices and flat volumes in the post-bubble world. This is from companies who innovate and actually produce goods and services as opposed to real estate while providing shelter, just sits there.

    Just something to keep in mind in predicting the future (which i cannot)…

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  8. Kary L. Krismer

    By Lurker @ 6:

    I have no idea what a “normal” market is like but I’ve only been somewhat interested for the past ten years!

    You probably missed 4 or 5 normal markets in that period of time. Each one lasting exactly a day. ;-)

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  9. ARDELL

    RE: Lurker @ 6

    As to volume:

    Single Family Home sales have to go up 31% in King County to get to “normal”.

    Condo Sales in King County have to go up by 50% to get to “normal”.

    That based on the two year average volume pre-bubble 1/1 to 8/31 compared to 2011 volume for the same period. I expect Single Family will get there before condos.

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  10. ricklind

    By Kary L. Krismer @ 5:

    RE: NewNormal @ 4 – The bubble period wasn’t normal, but I don’t think we’re to a normal period on the other side either. There are all those people underwater who want to sell but have a snowball’s chance going the short sale route. Other than that, we might be at the new normal.

    What he said.

    I think we have at least “several” years back to any kind of “normal” growth trend, starting from a more reasonable, new, lower reference point. We still have all this debt to unwind, and we have 2 possible routes, from what I see. One is a fast unwind with a crash, and the other is a slower unwind with a softer, but still painful, landing.

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  11. whatsmyname

    RE: ricklind @ 10

    Or, we could monetize.

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  12. David Losh

    RE: NN2 @ 7

    You are correct that we here in Seattle, Bellevue, and areas surrounding Redmond, are a bubble compared to the rest of the world. We can throw in San Fransisco, and New York, maybe Washington D.C. or Chapel Hill North Carolina. In other words we can put job centers into a separate basket. Those could be considered housing unit sales.

    You can compare housing unit sales to affordability if you want, some people do, as in the press releases. It doesn’t mean anything, but it makes for good press.

    I can easily predict that housing units, or any Real Property, as an asset class, will not regain value past, say 1998. We may even have to go back further because of internet commerce.

    We have global dirt. We need a bunch for farming, and manufacturing, The problem with both of those over priced, over valued land masses is that the consumer has to have the ability to buy. The consumer will need to catch some serious economic breaks to continue to pay for the over priced food, and clothing that are rapidly becoming luxury items.

    Looking at Real Estate, or Real Property alone as any type of indicator will never give you the story of how it plays in the global economy. Right now housing isn’t playing well at all.

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  13. Real World Express

    Every little uptick in sales, also removes buyers from the potential pool.

    That’s why we usually see a big drop following the upticks.

    With job creation negative in this region, high costs of living, relative remoteness from the rest of the country, prices will only continue to plummet.

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  14. Ira Sacharoff

    By Scotsman @ 3:

    If J L Scott was skippering the Titanic I’m pretty sure he’d be assuring the passengers that ice flows would hold the ship up while momentum carried it to a safe shore.

    Would there be a bidding war for the life boats?

    I think the line would be ” There is a new paradigm for ocean liners. They only stay afloat and no longer go down.”

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  15. Dave

    I’m wondering if it’s possible to show a similar graph by year, with August closed sales/available listings? Sales are constrained by buyers and the economy, but could also be constrained by available inventory. It seems like that would be an interesting metric to gauge how quickly things are and were moving at various points in history.

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  16. softwarengineer

    RE: Kary L. Krismer @ 5
    Very True Kary

    I was thinking along the same lines as you. The real estate market in Seattle is not some static entity that allows buyers to stay put and not transfer out of the area with their jobs and retirements. Even bad health makes real estate move in Seattle too, as their incomes are slashed. This is normal, bubble or no bubble.

    Tim’s charts could very well tell us more and more folks are turning down job offers, turning down retirement and staying put sick, until they get evicted; because they can’y afford to sell.

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  17. Redfin: “It’s All About the Inventory” | The SunBreak

    [...] Seattle Bubble calls it a “flat, boring summer” and notes that King County’s median home price of $350,000 has rewound to roughly 2005. “[E]ven during the worst year of the dot-com recession in 2002 we had 25% more sales in August than we did this year,” offers Tim Ellis, for contrast, in his follow-up post on NWMLS stats. [...]

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