Case-Shiller Tiers: High Tier Breaks Into the Black

Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

  • Low Tier: < $229,971 (down 0.9%)
  • Mid Tier: $229,971 – $369,399
  • Hi Tier: > $369,399 (down 1.2%)

First up is the straight graph of the index from January 2000 through December 2011.

Case-Shiller Tiered Index - Seattle

Here’s a zoom-in, showing just the last year:

Case-Shiller Tiered Index - Seattle

The high tier inched out a slight month to month gain between December and January—an impressive feat given that this data is still from the middle of winter. The low tier fell 3.1% MOM, the middle tier dropped 0.3%, and the high tier gained less than 0.1%.

Here’s a chart of the year-over-year change in the index from January 2003 through January 2012.

Case-Shiller HPI - YOY Change in Seattle Tiers

For the first time since January 2008, one of the tiers marked a year-over-year increase. Obviously the middle and low tiers are quite a ways behind, but their second derivatives are both positive as well, and at this point it looks like they could both be in the black before the end of the year. Here’s where the tiers sit YOY as of January – Low: -12.1%, Med: -7.9%, Hi: +0.1%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 43.4% off peak for the low tier, 35.7% off peak for the middle tier, and 27.9% off peak for the high tier. The middle and low tiers each set new post-peak low points, while the high tier remains a couple points above its February 2011 low.

(Home Price Indices, Standard & Poor’s, 03.27.2012)

  

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.

80 comments:

  1. 1

    Note the high tier is not all that high. It’s likely below the non-distressed median for King County SFR. We’re not talking really high end houses when discussing the C-S high tier.

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  2. 2
    John Bailo says:

    RE: Kary L. Krismer @ 1

    Yes, you’re right…the lowest end of the “High Tier” and the highest of the low are only $140,000 apart…and at today’s interest rates, that’s what…and extra $200 month?

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  3. 3

    Connecting up to the discussion in the other thread about how short sales and REOs affect the C-S numbers, in the 3 county area for Nov-Jan NWMLS SFR sales, for the high tier only about 15.7% of the sales are REO or short sales. For the low tier it’s about 67.6%.

    Disclaimers: Percentages from NWMLS sources, but not compiled by or guaranteed by the NWMLS. Also, the percentages on the C-S paired sales are likely different, because C-S throws out a some sales and/or doesn’t have a timely matching transaction for a property.

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  4. 4
    FenceSitter says:

    RE: John Bailo @ 2

    On a 30 year fixed it is at least $500.

    Rate this comment: Thumb up 0

  5. 5

    RE: FenceSitter @ 4 – The real estate taxes would probably add another $100 or so.

    Rate this comment: Thumb up 0

  6. 6
    Partial View says:

    This demonstrates just how crazy it’s gotten north of the city. There’s only one SFH currently listed in the low tier in all of Ballard (740 sq ft short sale), and not a single one in the mid tier. Location really is everything today.

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  7. 7
    No Name Guy says:

    And for those s**kers, uh, I mean current buyers, of the high tier…..QUICK, GET IN BEFORE YOU”RE PRICED OUT FOREVER! THERE’S BIDDING WARS OUT THERE – MAKE YOUR OFFER, SIGHT UNSEEN! After all, there’s NO substitute for that Ballard place AT ALL. :-)

    And for the sane folks, just wait…..it’ll turn back down again as fundamentals and reality intrude.

    And Kary @ 3: Great tid bits of info. Good to know those stats on the mix in the tiers.

    One thing I have to wonder – with the low tier being so heavily dominated by REO’s, I wonder if it would be possible to easily compile stats on foreclosures – past, present and with NTS’s, the future impending pipe line, by loan value. I have to wonder when the foreclosure wave will hit the middle and upper tiers harder, and then have the carry on effect on the prices.

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  8. 8
    Disappointed Buyer says:

    We are working with a good buyers agent and scanning redfin/estatly all the time we are mid tier buyers, looking in shoreline school distric area so shoreline-lake forest park right now we are not seeing good 2000+ sf homes that are not on busy streets in this area. they seem very hard to come by. The same cupple of homes that won’t work for us have been on the market for months, so they won’t work for alot of other people too.
    We bid on one good home had 8 bids first 1-7 days we were $18,000 over no inspection close $5,000 earnest and preaproved by two major banks and still lost. there are deffinly buyers out there just not many homes. We went out driving are around the area and block after block after block had NO for sale signs. So where are all these REOs that are suppost to be draging down the market? not in shoreline-lake forest park. mabey some more homes will be listed soon? april-may? Thanks for the vent

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  9. 9
    deejayoh says:

    By No Name Guy @ 7:

    I have to wonder when the foreclosure wave will hit the middle and upper tiers harder, and then have the carry on effect on the prices.

    If this is referring to a release of a backlog of foreclosures from the settlement of the federal lawsuit, I think this will likely have little, if any effect on the Seattle market. That lawsuit gummed up the works in judicial states, which Washington is not. So if you look at the latest national figures – you’ll see that foreclosure activity has spiked back up in judicial states.

    The latest data from Realtytrac shows that In February, national average for default notices was up 1%. But in judicial states, it was up 24% and in non-judicial states it was down 23%. The Seattle Market, btw – saw a 58% drop. If you want to forecast the direction of foreclosure activity here, the best indicator is looking at 30/60/90 day lates – which to the best of my knowledge been dropping. A view that there is a big backlog of lawsuit-delayed foreclosures locally seems inconsistent with both our legal process and the data points at hand.

    http://www.realtytrac.com/content/foreclosure-market-report/february-2012-us-foreclosure-market-report-7069
    http://www.bakersfieldnow.com/news/national/Some-states-saw-spike-in-foreclosures-in-February-142739545.html

    From RealtyTrac

    Foreclosure activity surged last month across about half of the nation’s states, as banks tackled a backlog of homes with mortgages that had gone unpaid yet remained in limbo due to delays stemming from foreclosure-abuse claims.

    The increase occurred across 26 states where the courts supervise the foreclosure process. In contrast, the 24 states where the courts do not play a role in the process saw activity decline in February, foreclosure listing firm RealtyTrac Inc. said Thursday.

    Among states with a judicial foreclosure process, foreclosure activity rose 2 percent last month from January, and climbed 24 percent from February last year, the firm said.

    Foreclosure activity across states without a court-supervised process fell 5 percent in February from the previous month and declined 23 percent from a year earlier.

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  10. 10

    RE: deejayoh @ 8 – Don’t forget about the impact of headlines. National data can affect local sales through changes in buyer attitude.

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  11. 11
    deejayoh says:

    By Kary L. Krismer @ 10:

    RE: deejayoh @ 8 – Don’t forget about the impact of headlines. National data can affect local sales through changes in buyer attitude.

    Are the same headlines going to affect foreclosures? and what happened to that old real estate agent saw “All real estate is local”? ;-)

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  12. 12

    RE: deejayoh @ 11 – I was referring to a hypothetical headline that refers to a new national C-S low. Something like: “Housing Hits New Low.”

    Someone who reads that, but not the article, might be turned off, and not even realize that the story was a national story. In a different context, sometimes we see local people refer to purchase money loans being non-recourse and refinance loans being recourse. So sometimes even people who read the article don’t know it’s not discussing local matters.

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  13. 13
    whatsmyname says:

    Also from the realtytrac report posted by deejayoh:

    “The 10 metro areas with increases were all on the East Coast or in the Midwest, while most of the metro areas with year-over-year decreases in foreclosure activity were in the West, led by Seattle (59 percent decrease) and Phoenix (43 percent decrease).”

    They report foreclosure filings on one of every 637 housing units nationwide; one of every 1,229 in Seattle. Number of February foreclosure filings in Seattle was 1,191.

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  14. 14

    RE: deejayoh @ 11 – Another example of headlines affecting things–back in late 2007, early 2008, lots of low end buyers had thought that Fannie and Freddie were no longer offering 100% financing and/or that they were ineligible to get a loan, based on press reports.

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  15. 15

    RE: whatsmyname @ 13 – As Tim often mentions:

    “Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using, and includes Notice of Default, Lis Pendens, Notice of Trustee Sale, and Real Estate Owned.”

    That’s from his 11/10/11 piece on foreclosures.

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  16. 16
    The Tim says:

    RE: Kary L. Krismer @ 15 – And they double-count. When a home hits each of those stages it’s counted in that month’s count of “foreclosures.” Their data is really messy. The best picture of Seattle-area foreclosure activity (in my opinion) is just looking at Notices of Trustee Sale. As of February, those were down 51% from last year in King County.

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  17. 17
    T. Y. Lee says:

    RE: Disappointed Buyer @ 8 – I hear ya! The home buying experience has been frustrating for me as well. I have had to deal with completely delusional sellers who truly believe their house is worth the same if not more than what they paid for it in 2006 (because they put in new counter tops, OMG!) or don’t want to short sell, and stubborn banks who are trying to get unrealistic amounts of money on their foreclosed houses and are listing them at higher than comparable non-distressed homes, and then trying to orchestrate a multiple offer situation (like not accepting bids until a specified period of time). And lack of inventory has been very frustrating. Every house I’ve wanted has had other bidders, and I only just a few weeks ago finally went under contract.

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  18. 18

    RE: The Tim @ 16 – That probably is more accurate, but quite frequently a single house will get multiple notices of trustee’s sale filed, so even that can double count. Backing those out though would be very difficult.

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  19. 19
    Disappointed Buyer says:

    I know home sale here seem to be all over the map in price per sf you will have one home that is 890 sf with a 4000 sf lot, sale at $264 a sf for $234,000 and one that is 2060 sf with a 7800 sf lot sale for $137 a sf and $282,000? whats up with that back home in my town most homes were with in $25 a sf.
    I am not looking for an updated home at my price point there is just not alot out there right now, and it seems a home that meets most of my needed also meets alot of others judging by the last house I tryed to buy and the number of offers it got.

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  20. 20
    whatsmyname says:

    RE: The Tim @ 16RE: Kary L. Krismer @ 15

    Didn’t mean to step on Tim’s better data. I was just (and probably needlessly) amplifying that folks waiting for the Seattle foreclosure tsunami may be quite disappointed.

    Here’s a thought, though, that might be relevant to expectations often voiced here. Is your data such that you could easily determine what percentage of those King County NTS’s are south of I-90?

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  21. 21
    deejayoh says:

    By whatsmyname @ 20:

    RE: The Tim @ 16RE: Kary L. Krismer @ 15

    Didn’t mean to step on Tim’s better data. I was just (and probably needlessly) amplifying that folks waiting for the Seattle foreclosure tsunami may be quite disappointed.

    Thanks. That was my point, much more succinctly stated

    I was not trying to cite Realtytrac as infallible – more trying to point out that a forecast of a local foreclosure tsunami does not seem to be a rational assessment of the facts. Tim’s numbers tell the same story, but lack the national comparison.

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  22. 22

    By whatsmyname @ 13:

    Also from the realtytrac report posted by deejayoh:

    “The 10 metro areas with increases were all on the East Coast or in the Midwest, while most of the metro areas with year-over-year decreases in foreclosure activity were in the West, led by Seattle (59 percent decrease) and Phoenix (43 percent decrease).”

    They report foreclosure filings on one of every 637 housing units nationwide; one of every 1,229 in Seattle. Number of February foreclosure filings in Seattle was 1,191.

    The reason I pointed out the Realtytrac method was because I was focusing on the last paragraph, showing higher numbers in Seattle than nationwide, not the second to last paragraph showing decreases over time.

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  23. 23

    By whatsmyname @ 20:

    Here’s a thought, though, that might be relevant to expectations often voiced here. Is your data such that you could easily determine what percentage of those King County NTS’s are south of I-90?

    I need Photoshop so that I can make this a foreclosure heat map and change the title to North King County. ;-)

    http://images.travelpod.com/tw_slides/ta01/232/e50/north-korea-at-night-sokcho.jpg

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  24. 24
    Eden says:

    RE: Disappointed Buyer @ 8

    I sympathize. It’s a similar story for us trying to find something in West Seattle. Not fun to be looking right now.

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  25. 25
    Scotsman says:

    RE: T. Y. Lee @ 17

    The truth is right in front of our eyes, but for some reason we can’t acknowledge it:

    “I have had to deal with completely delusional sellers who truly believe their house is worth the same if not more than what they paid for it in 2006 . . . and stubborn banks who are trying to get unrealistic amounts of money on their foreclosed houses . . . and then trying to orchestrate a multiple offer situation . . . Every house I’ve wanted has had other bidders.”

    Imagine- the horror of other bidders. ;-) Buyers aren’t going to get houses for free unless society as we know it collapses. And while that’s possible, it’s more likely that for the next 4-5+ years this is indeed . . . a great time to buy. Rates are low, inflation hasn’t really kicked in yet, the .gov is still selling debt and controlling the fiscal house, rents are rising, etc. Want to buy? Jump in with minimum down, be ready to walk if it all goes to hell, minimize current housing costs, and then sit back and wait to see what happens next.

    Stability is a thing of the past. Live with an eye toward minimizing costs and maintaining flexibility over a 5 year horizon.

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  26. 26
    John Bailo says:

    RE: Kary L. Krismer @ 5

    Still, so okay, an extra $7200 in annual salary moves me from the low tier to the high tier!

    Seems like these tiers would have a lot of crossover in terms of income affordability, social groups buying in and so on.

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  27. 27
    Blurtman says:

    RE: T. Y. Lee @ 17 – Get in over your head, and lobby for a principal reduction down the road. Don’t worry, the taxpayer can pick up the tab.

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  28. 28
    robotslave says:

    @26

    I think you mean an extra $7200 in take-home pay, not salary, right?

    Or if we go by the old “housing should be 1/3 of your pay” rule of thumb (I know, I know, who the hell does that, these days?) then we’re talking about >$20k difference in salary. Which is a pretty huge gap, for someone whose payments are 1/3 of salary in the low tier.

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  29. 29
    David Losh says:

    This has nothing to do with foreclosures, short sales, or REOs, those are a major market segment, but not the market.

    It’s not about free housing.

    It’s about the economy, and taking on debt, private debt. How many people are applauding this rise in the pricing index, and why? Those are the sellers, and owners of property.

    The buyers are paying way too much, with low interest payments for long term debt. The housing units are more, and more irrelevant, the debt is what banks want you to pay.

    A good example is a down town condo that rents for $3K per month. Well you can have a $600K debt for $3K per month, right? As we build more rental units down town the rents will fall. People will want newer units. Rents will become more attractive, once again. As the rent verses buy ratio goes down so does the value of the condos. We can’t lower interest rates any more, or can we? but rental income can compete with mortgage payments. It’s a shorter return.

    So looking at an index without its context in the economy is pointless.

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  30. 30
    David Losh says:

    RE: Scotsman @ 25

    but you would have to buy well. It’s a great time to buy is a blanket statement that Real Estate agents use. You’ve qualified yourself before very well.

    This is a great time to buy if it meets your over all financial goals. There are some good properties to buy, but there is also a whole load of carp on the market today. A buyer needs to be calm, and calculating. Today is not your market, but three months ago it certainly was, and it will be again. Relax, tour properties, and wait until the market turns again, which it will.

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  31. 31
    John Bailo says:

    RE: robotslave @ 28

    Well, for a single person yes, but think of a couple…even for the lowest rung professionals.

    With two $55,000 salaries to play with, and maybe a few grand in the combined 401ks, it’s going to very tempting to upsize to that higher tier.

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  32. 32
    Chris says:

    Could be bad times ahead for FHA. And this is with low interest rates and government money poring into real estate.

    “The FHA’s economic projections are surreal,” said Andrew Caplin, a New York University economics professor who has testified to Congress on the agency’s finances. “They must believe there will be very few readers in Congress able to critically review such a complex report.”

    In their annual review, the FHA’s actuaries — risk analysts who specialize in insurance — used earlier projections that called for increases of 1.2 percent in 2012 and 3.8 percent in 2013. The agency, which backs mortgages that cover as much as 96.5 percent of a home’s value, is sensitive to changes in home prices. While the insurance fund’s 2012 outlook called for net growth of about $9 billion, that will drop if home prices decline, according to the FHA’s November report.

    http://www.bloomberg.com/news/2012-03-27/fha-bailout-risk-looming-larger-after-guarantee-binge-mortgages.html

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  33. 33
    WannaBuy2012 says:

    The real high tier, $500 or more, on the eastside is definitely going up. It’s quite amazing to watch after the slow winter with low inventory. A small bump in inventory and a mass of buyers already overpaying by quite a bit when compared to just last November or December. Having watched listings and viewed houses in detail over the past few months, I can tell you that yes indeed buyers tend to get stupid when feeling competitive with other buyers.

    There have been a few good listings in the past couple weeks, but those went pending within 3 to 10 days. It will be interesting to watch the sales prices.

    Take a look at this search, almost every house on there has a significant problem. Close in houses are on a major road, others crazy overpriced, others blocked short sales for complex reasons, and others are just simply very dated/damaged and thus also overpriced, and don’t forget over an acre but less than 1200 sq feet of usable yard space due to being built on a cliff! http://www.redfin.com/homes-for-sale#!lat=47.754929601769625&long=-122.08779946104926&market=seattle&max_price=650000&min_listing_approx_size=2750&min_parcel_size=8000&min_price=450000&sf=1,2,3,4&uipt=1&v=8&zoomLevel=13

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  34. 34
    robotslave says:

    @31

    With two $55k salaries and 1/3 of household income going to housing, they’d have over $3k per month to play with.

    I’m having trouble coming up with a scenario where this example would apply to the low tier; if we assume 10% down, 30-year term, 1% tax, 4.5% interest, then that couple owns at least a $500k home. They’re already living in the high tier, and by a very comfortable margin.

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  35. 35

    RE: robotslave @ 34 – Why would someone necessarily move into the higher tier just because they could? I could buy a new car, but I drive an 89 Ranger. People don’t have to spend all of their income.

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  36. 36
    Blurtman says:

    RE: Kary L. Krismer @ 35 – That’s un-American!

    Rate this comment: Thumb up 0

  37. 37

    RE: No Name Guy @ 7

    I Have an Acquaintance Who’s taking Care of His 80 YO Mother

    They live in her large “paid for” home in Marysville and he tells me when she dies [assuming she doesn’t die a slow death in a decent, like $7000/mo nursing home eating up all the home’s wealth], he plans on selling her house and moving to the nicer downtown Seattle neighborhood with his bag of inheritance cash. He has no investment savvy in my book, he’s 59 and still lives with mom.

    I’m sure they aren’t all suckers like this case…..sarc….

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  38. 38
    David Losh says:

    RE: Kary L. Krismer @ 35

    People pay $500K and more because that is the price. It’s exactly what so many people are complaining about. If you want something decent you have to spend $500K. That is what historically low interest rates are doing to the Real Estate market, and buyers are gifting banks 20% down, so they are stuck.

    This Case Schiller index is becoming very bad news for our over all economy. We are witnessing an unprecedented drain of individual economic resources. No matter how low the payments are that is long term debt with very little likelihood of selling for anything other than a loss.

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  39. 39

    By Kary L. Krismer @ 35:

    RE: robotslave @ 34 – Why would someone necessarily move into the higher tier just because they could? I could buy a new car, but I drive an 89 Ranger. People don’t have to spend all of their income.

    Blasphemy! What are you saying? It’s unAmerican!

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  40. 40

    RE: Disappointed Buyer @ 19

    I Just Passed the Newberry Realtor Building in Kent on the way to Work

    Their sign said:

    2 BDRM 1 3/4 Bathroom $37K

    4 BDRM $139K

    You’d do FAR better buyin’ even $6/gal gas in an Escalade and driving from/to SE King County, than paying high prices closer in with no grocery stores or parking there anyway.

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  41. 41

    RE: softwarengineer @ 40 – The first is seemingly a double-wide in a mobile home park. (Strike that, the baths and price doesn’t match exactly.) Not sure about the second, but it’s possibly a split entry in Kent, surprisingly not close to any freeways!

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  42. 42

    By David Losh @ 38:

    People pay $500K and more because that is the price. It’s exactly what so many people are complaining about.

    You have it backwards. The price is $500,000 because so many people want to pay that much for it.

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  43. 43

    RE: Kary L. Krismer @ 41

    I Thought Maybe the First Was a Condo

    Rate this comment: Thumb up 0

  44. 44

    RE: softwarengineer @ 43 – Maybe, but I’m not getting that exact match either. But there are condos under 40k.

    Maybe it got snapped up in a bidding war! ;-)

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  45. 45

    RE: Kary L. Krismer @ 41

    Actually, Like You Stated In Today’s High Tier Blog

    With Broad Band and I’d add telecommute or in home companies [like I own, albeit I work another job outside too]; who cares where ya live anymore?

    Rate this comment: Thumb up 0

  46. 46

    RE: Kary L. Krismer @ 44

    SE King County Bidding Wars?

    Kary, you do have me rolling on the ground laughing now, thanks for the joke :-)

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  47. 47

    RE: softwarengineer @ 45 – My preference would be to not live too close to a freeway no matter what I did. The noise is the concern.

    Sometimes the freeway can be relatively close, and you won’t hear it much at all. Sometimes it can be over a mile away and be annoying.

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  48. 48

    RE: Kary L. Krismer @ 47

    Power Lines Annoy Me Too

    I’m a Nuclear Engineer and know all about Gaus readings too high and radiation effects. I even keep a Gaus meter in my office, do you know those finger pad mouse replacements on laptops give you red high level Gaus radiation exposure? I use an USB mouse on my laptop BTW.

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  49. 49

    RE: softwarengineer @ 48 – I understand that concern. What I don’t understand is why when you drive through wooded areas out in the Covington/Maple Valley area there are so many housing developments built right next to power lines, when other forested areas remain. Is the undeveloped land next to the lines that much cheaper? Do the power lines cross flatter land?

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  50. 50

    RE: Kary L. Krismer @ 49

    Its Secret Population Planning Kary

    Rate this comment: Thumb up 0

  51. 51

    By Ira Sacharoff @ 39:

    By Kary L. Krismer @ 35:
    RE: robotslave @ 34 – Why would someone necessarily move into the higher tier just because they could? I could buy a new car, but I drive an 89 Ranger. People don’t have to spend all of their income.

    Blasphemy! What are you saying? It’s unAmerican!

    Speaking of un-American, the City of Seattle is going to perform a basic government function without asking the taxpayer for more money!

    http://www.komonews.com/news/local/Seattle-to-repave-15-mile-stretch-on-north-end–144734585.html

    Apparently they haven’t been spending enough money on pet projects of the mayor and city council.

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  52. 52
    Scotsman says:

    RE: Kary L. Krismer @ 49

    “It’s Chinatown, Jake- forget about it.” More wasteland, south of I-90.

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  53. 53
    David S says:

    RE: Kary L. Krismer @ 47 – I think you’re making too much of the freeway noise. For only $470,000 and several Redfin agent comments to the fact, this high tier property sold no problem. It is however, just south of I-90.

    http://www.redfin.com/WA/Issaquah/4948-Alpen-Glow-Pl-NW-98027/home/418806

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  54. 54
    Disappointed Buyer says:

    RE: softwarengineer @ 40
    My adoptive daughter is deaf and gos to school in shoreline would cost ALOT to send her there if we lived out of Shoreline.
    Thanks

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  55. 55

    RE: David S @ 53 – I was talking personally, so there’s no way I was making too much of that! ;-)

    But I will tell you there are some buyers who care about that sort of thing, and some who don’t. After all, there are people who live on Melrose just north of Denny, and others who would never live there in a million years.

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  56. 56
    Dorothea says:

    RE: Kary L. Krismer @ 47 – We have a house in Hunts Point that is very near the freeway – and now all the 520 construction – and barely hear the freeway at all.

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  57. 57

    RE: Dorothea @ 56 – I think I’ve mentioned before how noise travels is funny.

    I was recently at a property very near part of Highway 18. There was less noise from 18 there than at another property that was almost a mile away from the same highway. Also, parts of South Mercer Island can hear a lot of noise from 405 over in Renton. That’s why it’s not good to live south of I-90. ;-)

    A few years ago I had two listings that were similar in their proximity to different major four lane roads, with similar traffic. One of them had much more road noise because the land between one was undeveloped and the other had houses. The houses blocked the noise.

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  58. 58
    ARDELL says:

    RE: David S @ 53

    Sold in 97, 98, 2004, 2011 and 2012. If it wasn’t upside down from 2004 to 2011, it likely would have sold “without a problem” in between as well.

    That’s one of the problems with Case Shiller numbers. They only use “matched pairs” of homes that sell more frequently than others. That means they will count all of the short sales and foreclosures and homes that turn over often. But they do not count the best of homes that don’t change hands often.

    Case Shiller does not count all home sales. Only “matched pairs”.

    If someone bought a home new in 1989, and it was a great house in a great place and was never sold until now, it doesn’t fit the CS “matched pair” criteria. So by definition it will always include the worst of homes and never the best of homes.

    This takes me to Kary’s comment #3 where he uses “Case Shiller” and % of foreclosures in the same breath. That 15.7% of ALL sales is not relevant to what % of Case Shiller data are foreclosures. By definition, and CS methodology, the % of foreclosures would be higher of the limited number of sales they are reporting.

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  59. 59
    JB says:

    RE: Scotsman @ 51 – Could you explain the “south of I-90″ theme that you bring up from time to time? Somerset, Lakemont, Newcastle, etc. seem like pretty pricey, in-demand areas to me.

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  60. 60

    Ardell, I tried to say that in my disclaimer language. I wouldn’t though necessarily assume that the percentage of foreclosures in the highest tier is higher. That’s likely though, but many REOs might not be a matched pair because the sale price is deemed too low.

    By Kary L. Krismer @ 3:

    Disclaimers: . . . Also, the percentages on the C-S paired sales are likely different, because C-S throws out a some sales and/or doesn’t have a timely matching transaction for a property.

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  61. 61

    RE: JB @ 59 – Ardell often mentions stats for the area North of I-90, so the South of I-90 is a bit of an inside joke.

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  62. 62
    ARDELL says:

    RE: JB @ 59

    North of I-90 Sold YTD

    Low Tier is under $354k with 27% REO and 15% SS = 42%
    Mid-Tier is $354k – $530k with 7% REO and 11% SS = 18%
    High-Tier is $530k+ with 3% REO and 5% SS = 8%

    South of I-90 Sold YTD

    Low Tier is under $188k with 60% REO and 16% SS = 76%
    Mid-Tier is $188k to $290k with 30% REO and 16% SS = 46%
    High-Tier is $290k+ with 9% REO and 10% SS = 19%

    To some people that is “a joke”, to others that is important information. When someone is looking for all the REO properties North of I-90 in the High Tier, thinking there are 16% or 17% REO properties when there is only 3% can lead to frustration at matching “the news” they are reading with the realities they are facing.

    I used to draw a line straight across King County, separating the sales in equal numbers above and below. But it was hard to answer questions as to where I drew that line and led to inconsistencies in drawing the line merely based on an even split of units sold. That is why I do above and below a landmark, which just happens to be I-90. YTD that = 1,849 below I-90 and 1,626 above.

    To pick and choose certain zip codes in reporting could be a violation of Fair Housing Issues. That is why choosing an easily identified landmark that is not chosen on the basis of race, color, creed, etc, like the I-90 Bridge, is likely the best method of “drawing a line” in the sand.

    One cannot dispute that overall the price tiers and number of distressed properties on one side vs the other is HUGELY different. But some like to pretend that everything is spread evenly in all areas of King County. Not sure why that is, but it clearly is not the case.

    (Required Disclosure: Data is not compiled, verified or published by The Northwest Multiple Listing Service.)

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  63. 63
    AxlRose says:

    RE: David S @ 53 – Listed since 12/2010, selling 3/2012, is selling “no problem”? Not to mention being foreclosed during that time?

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  64. 64
    ARDELL says:

    RE: Disappointed Buyer @ 19

    Assuming you are talking Broadview there, the 2,060 is a 1,030 sf house with a basement which includes the garage. So you are comparing 890 sf to 1,030 sf, not 890 sf to 2,060 sf. You add something for the finished part of the basement, but not on the same price per square foot as the “house”.

    To some extent the fact that the one with the larger lot was overpriced when it came on market while the other came on “priced to sell” is part of the answer as well.

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  65. 65
    David S says:

    RE: AxlRose @ 63 – Well it being within 2% of list price and all.

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  66. 66
    ARDELL says:

    RE: Kary L. Krismer @ 60

    “I wouldn’t though necessarily assume that the percentage of foreclosures in the highest tier is higher. That’s likely though…”

    Did you mean to say the opposite? The lowest tier has the most, not the highest tier.

    “…but many REOs might not be a matched pair because the sale price is deemed too low.”

    I thought they threw out sales that sold twice because the time frame was too short as in 2 sales within a 6 month period, to avoid the flips. Never heard they threw out sales “because the sale price is deemed too low.” That could be the case. I’ve just never heard that about CS data.

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  67. 67
    Scotsman says:

    RE: JB @ 59

    It’s a poke at Ardell and her creative data compilations where she has in the past cherry-picked sales to support her point. Bless her heart. She works in the rarefied environs of neighborhoods close to Microsoft- where real estate always goes, up, etc. We love her- but always remember that she works in real estate sales. In the original post/discussion that generated the joke anything south of I-90 was tossed into the trash as unworthy of serious consideration- in part because it skewed the statistics in a negative direction. See her post above. ;-)

    Disclaimer: I own property just south of I-90. In fact, I can (ala Tina Fey As Palin) “see it from my back yard.”

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  68. 68
    ARDELL says:

    RE: Scotsman @ 67

    Aren’t you the one who always says that foreclosures are evenly spread throughout King County? Isn’t it more honest data to show this is NOT the case?

    I don’t only work near Microsoft. I have a listing in Ballard and one coming up in Maple Leaf shortly. I have buyers in Bothell and Sammamish who don’t work at Microsoft. But yes…I do also have buyers who work at Microsoft in Redmond and Google in Kirkland.

    I see stories like this one about South of I-90, new construction with a swimming pool for a yard.

    http://www.flickr.com/photos/robertroy/7018092135/

    posted over on the Redfin forum. Love the quizzical look on the face of that doggy. :) There are reasons why agents shouldn’t work “Anywhere!”, and there’s more than one reason why North and South of I-90 are quite different.

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  69. 69
    AxlRose says:

    RE: David S @ 65 – Actually it listed at least as high as $650k, in 12/10, and finally down to 480k this past January. I have emails from redfin going back years, for historical reference.

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  70. 70

    By ARDELL @ 66:

    RE: Kary L. Krismer @ 60

    “I wouldnâ��t though necessarily assume that the percentage of foreclosures in the highest tier is higher. Thatâ��s likely though…”

    Did you mean to say the opposite? The lowest tier has the most, not the highest tier.

    “…but many REOs might not be a matched pair because the sale price is deemed too low.”

    I thought they threw out sales that sold twice because the time frame was too short as in 2 sales within a 6 month period, to avoid the flips. Never heard they threw out sales “because the sale price is deemed too low.” That could be the case. I’ve just never heard that about CS data.

    I was only addressing the high tier, indicating that the percentage of foreclosures in the C-S matched pairs might be higher in that tier than the NWMLS would indicate.

    As I understand it, C-S throws out pairs where the price is either much higher or much lower than what they would expect over that period of time. When they see that they assume that a change in condition affected the property, or perhaps it wasn’t an arm’s length deal. I don’t know what their cutoffs are, but as an example, if most the houses in a neighborhood that sold in 2008 sold for 35% less in 2011, and one house in that neighborhood sold for less than 10% less or more than 60% less in 2011, they would assume there was a change in condition affecting the price and not use it.

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  71. 71

    By Scotsman @ 67:

    <Disclaimer: I own property just south of I-90. In fact, I can (ala Tina Fey As Palin) "see it from my back yard."

    How’s the noise? ;-)

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  72. 72
    Scotsman says:

    RE: Kary L. Krismer @ 71

    Noise isn’t an issue except for very cool, still afternoons in the fall/winter when the foilage is down. A new garage addition will pretty much block what little there is from impacting the living areas. It’s worth it for the fact that I can be in downtown Seattle in less than 30 minutes, but still watch bears wander through the yard and not have to worry about the neighbors when I want to hit the hot tub in my birthday suit, etc.

    Plus, I can barely spell CC+Rs let alone conceive of obeying them. They’re for you golf course guys. ;-)

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  73. 73
    Scotsman says:

    RE: ARDELL @ 68

    You see a potential flooding issue. Others, including many potential buyers, see the possibility of hunting ducks in the back yard. I hate to say it Ardell, but you’re a Bellevue snob who fails to think creatively when marketing homes. That’s not flooding- that’s an opportunity going to waste. ;-)

    Besides, it only rains here from late Sept. to July 4th. The rest of the year that yard is all a dog could want. Well, maybe a few more trees . . .

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  74. 74
    ARDELL says:

    RE: Scotsman @ 73

    Actually…I’m a Kirkland snob not a Bellevue snob. :)

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  75. 75
    Anthony says:

    By whatsmyname @ 20:

    RE: The Tim @ 16RE: Kary L. Krismer @ 15

    Here’s a thought, though, that might be relevant to expectations often voiced here. Is your data such that you could easily determine what percentage of those King County NTS’s are south of I-90?

    Doesn’t give you a percentage, but this map I made does show most of the NTS activity in King County has occurred south of 90.

    http://s1263.photobucket.com/albums/ii635/anthonycacallori/?action=view&current=foreclosure.jpg

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  76. 76
    WestSideBilly says:

    Tim, I asked last month, but how much trouble would it be to add a graph of the two cutoff points ($232k / $374k for this month) over time?

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  77. 77
    The Tim says:

    RE: WestSideBilly @ 76 – Unfortunately they don’t provide that data so I won’t be able to get it going all the way back to 1990. I might be able to make time to manually copy it from all the tiered spreadsheets I have though.

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  78. 78

    RE: The Tim @ 77 – Maybe to make it an easier task you could just just use data from every January and July, or even just one month a year, like very July.

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  79. 79
    robotslave says:

    RE: Kary L. Krismer @ 35

    Of course, but I’m responding to Blurtman’s contention that low-tier buyers will be tempted to bump up to the high tier, just because they can.

    I’m also suggesting that his example couple is not at all representative of low-tier buyers.

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  80. 80
    WestSideBilly says:

    RE: The Tim @ 77 – I didn’t think it would be available all the way back. I was mainly thinking since you started SB and reporting the C-S tiers. 4 or 5 years of data?

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