March Stats Preview: New Foreclosure Surge Edition

Now that March is in the rear view mirror, it’s time for another new 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

We backed off of the big year-over-year surge we saw last month, turning in just a 6.3% gain from March 2011 to March 2012.

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

Snohomish actually fell between 2011 and 2012, but as you’ll see in a moment when we look at King County Trustee Deeds, the dip in deeds in Snohomish was probably due to a decrease in foreclosure sales (back to the bank) rather than regular resales.

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 surged in March, hitting their highest points since last September. With three months in a row of increasing foreclosure notices, I think it’s safe to say that we’re on a renewed upward trend.

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

Actual foreclosure repossessions dropped to their lowest point in years, which is completely predictable since Trustee Deeds tend to track Notices of Trustee Sale on a three to six month delay, and NTSes were at low points three to six months ago.

Lastly, here’s an update of the inventory charts, updated with the inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

I keep thinking eventually we’ll see a “spring bounce” in inventory, but it keeps not happening. How long can inventory keep falling like this?

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.

85 comments:

  1. 1

    Good Question on Lack of Inventory Tim

    I’m a bit more pessimistic than you on its return though, with loan tightening rules, underwater owners unable to sell and the chronic construction collapse; where was inventory suppose to go except the sewer?

    If this trend is longterm [3-5 years] and I think its gonna last at least that long, probably many decades….look for owners that are unable to sell becoming landlords soon, perhaps we need a technical college course on landlording in the Pacific Northwest? This scenario sure beats the other far more pessimistic prediction, they default in groves.

  2. 2
    No Name Guy says:

    Good to see those NTS perking back up again. Hopefully the trustees deeds follow in a few months. The only way to get back to a healthy market will be to hurry up and clear out the dead wood of defaulted loans – banks take their losses, insolvent “owners” move on to sustainable for their situation housing, zombie houses recycled back into a proper RE market, bad debts wiped away. A painful but necessary process all around.

    Tim, I might, just might, have to start to agree that the market is beginning to stabilize, or at least bleed out more slowly. With all the reports of investors buying up the bottom end of the market and turning them into rentals, this is EXACTLY what the market needs to finally start putting in a bottom. When these foreclosures can be turned around into positive cash flowing rentals from the get go for RE investors, that’s a sign that the “end of the beginning” (to quote Churchill from Nov ’42) of stabilizing the market might be approaching.

  3. 3

    Two points.

    That bill we were following related to discharge of indebtedness income when a Form 1099-C is sent was passed, but it also tweaked the foreclosure mediation provisions. That might cause a slight temporary decrease when it goes into effect about 90 days from today. There were emergency provisions that went into effect immediately, but I don’t think those will affect these numbers. But changing forms to comply with the new law might slow things down temporarily.

    Second, these inventory numbers have lead to a fundamental and significant shift in the market. Starting in late 2007, early 2008 it became much riskier for move up buyers to buy a new house first and then sell their old house. Instead they would sell first and then buy (find a buyer of their house and ask for an extended closing date to allow time to buy). Now for the first time since then, it’s now much more risky to sell first and then buy That’s because now if you house is decent it’s much easier to find a buyer, and much harder to find that replacement house. Of course that would depend on the local area where you need to sell, and to some extent the market you intend to buy into. For example, it might still be risky to buy first over $1M if you also need to sell over $1M.

  4. 4

    By No Name Guy @ 2:

    Good to see those NTS perking back up again. Hopefully the trustees deeds follow in a few months. The only way to get back to a healthy market will be to hurry up and clear out the dead wood of defaulted loans – banks take their losses, insolvent “owners” move on to sustainable for their situation housing, zombie houses recycled back into a proper RE market, bad debts wiped away. A painful but necessary process all around.

    It would be nice to see how bad that issue is. I seem to recall stats showing our delinquencies are not that bad compared to some other parts of the country, but it would be interesting to see how that compares to say 2007. There are always some delinquencies.

  5. 5

    RE: No Name Guy @ 2

    I Hope You’re Right

    It sure makes more sense to let private enterprise untangle this gordian knot than making the government the REO landlord with more deficit spending.

  6. 6

    RE: Kary L. Krismer @ 3 – I should add that doesn’t not apply to short sales. First, short sales still are not selling. Second, it would be difficult to buy if you’re in a short sale situation.

  7. 7

    RE: Kary L. Krismer @ 4

    Yes Kary

    I’ve blogged this a million times, we need a Shadow Inventory [FC’d homes held in limbo by banks] tracking of Seattle real estate, without this data we’re all guessing on the missing inventory and shooting from the hips.

    Often times the omission of scientific clarity is proof it is something big they’re hiding too.

  8. 8

    RE: Kary L. Krismer @ 6

    Interesting Kary

    When does the seller doing a short sale get their credit rating back?

  9. 9
    David Losh says:

    RE: No Name Guy @ 2

    Putting properties in the hands of investors doesn’t make for a stable market place. People losing a home creates disillusionment. Loss of equity, payments made to banks without any return, and losses lowers our consumer spending ability that will be compensated for by credit purchases.

    We have lower wages, and benefits, with higher personal debt levels. Now student loans are the next threat to our economy.

    If banks continue to foreclose, “investors,” banks, or hedge funds will be creating a renter nation. Rents, as we are seeing, are not stable, and can cause massive volatility.

    If the solution is to move if you don’t like the price of rent, that is a massive disruption.

    This idea of clearing out dead wood is causing more people to second guess the great American Dream. If we block wealth creation in the middle, and lower class there will be a back lash. I don’t see where there will be any stability in what is going on today.

  10. 10

    By softwarengineer @ 8:

    RE: Kary L. Krismer @ 6

    Interesting Kary

    When does the seller doing a short sale get their credit rating back?

    I was saying I wasn’t addressing short sales in the buy first scenario. For short sales, I think the biggest problem would be down payment. If you sell first, the bank isn’t likely to let you keep money for a down payment unless it’s one of those programs where they pay you to do a short sale. But even if you have the down payment, I suspect financing would be very problematic.

  11. 11

    Tim, as always a very interesting post. One point of clarification, though: the recording of a Trustee’s Deed does NOT mean that the bank purchased the home (i.e. took it back) at foreclosure. Rather, a Trustee’s Deed is recorded whenever ANYONE bids on the home and purchases it. Given market realities, more than 95% of the time (CAUTION: that number is based on anecdotal experience, not any hard data) the winning bidder is the bank, either for the amount of the loan (so that the bank can then list the property for full FMV, thus minimizing its losses) or something less (because the bank has now realized that it is most successful at minimizing its losses if some third party buys the house at the foreclosure, not by taking it back and then listing it). So the Trustee’s Deed numbers are indicative of foreclosures where somebody bid on the house and it was sold at auction.

  12. 12

    Craig is right and actually raises a good point that I hadn’t considered…. that of the Trustee Deeds recorded, some are investor purchases, not foreclosures. I think I’m going to add that to my statistics, so thanks Craig for pointing that out.

    For instance in January 2012 for King County there were 275 Trustee Deeds recorded. Since I receive a paid report from the Title companies with the breakout of purchasers of the Trustee Deeds recorded, I can see that 68 of those were investor purchases.

    So actual foreclosures were 207 and 68 were investor purchases.

    I’m going to have to re-do my foreclosure charts now!

    Also regarding the March bump for Notices, this is typical for March, for the last 4 years March has shown a bump up over the prior few month. Don’t know if this is seasonal or not…should be able to tell in a couple of more months if the trend is going back up again.

  13. 13
    FenceSitter says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 12

    So almost 25% of the Trustee Deeds were investor purchases in January? I wonder if that is normal. It would be interesting to see a chart of Trustee Deeds depicting these percentages over time.

  14. 14

    RE: FenceSitter @ 13

    I have this data going back to October 2010. I will do a chart and hopefully have it done by the end of the day. Have some priority stuff to do first.

  15. 15
    FenceSitter says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 14

    Thank you very much! I look forward to seeing it :)

  16. 16
    MichaelB says:

    This just in…home prices to drop another 10% nationally according to Moody’s. Don’t worry though, because Seattle is different…We’ve hit bottom!

    Home Prices Seen Dropping 10% in U.S. on Foreclosures: Mortgages
    By Kathleen M. Howley – Apr 3, 2012 11:36 PM GMT+1000

    As many as 1.25 million of America’s least cared for homes are headed for auction after a year-long probe into foreclosure practices kept them off the market. Sales of repossessed properties probably will rise 25 percent this year from 1 million in 2011, according to Moody’s Analytics Inc. Prices for the homes could drop as much as 10 percent because they deteriorated as they were held in reserve during investigations by state officials resolved in February, according to RealtyTrac Inc….

  17. 17

    RE: MichaelB @ 16

    Exactly Michael

    The best data on FC’d homes Shadow Inventory is national data. I’m sure they could break it down by Seattle location too, they’re masking it.

    http://www.doctorhousingbubble.com/shadow-inventory-2012-foreclosure-pipeline-no-payments-for-three-years-midtier-los-angeles-orange-country-real-estate/

  18. 18

    RE: MichaelB @ 16 – As long as we’re asking for more data and links here, how about going back and seeing what Moody’s record is for accuracy in prior years?

    I’ll start you off. In October 2002 Economy.com (Moodys) was predicting that Seattle and San Francisco were likely bubble cities, along with Detroit. One out of three ain’t bad, if you ignore the fact that they predicted Seattle by almost 5 years early, that Seattle was one of the last ones, and that Seattle’s median at that point was about $285,000, which is well below the current median even if you include distressed properties.

  19. 19
    MichaelB says:

    RE: Kary L. Krismer @ 18

    I believe them more than you.

  20. 20

    RE: MichaelB @ 19 – That’s fine. I don’t care if you make mistakes. And in any case, I’m not the one making stupid impossible to make predictions which only the gullible listen to.

  21. 21
  22. 22
    Sorin says:

    I suspect that if you looked at active + pending, the year over year numbers are much more comparable. If I search “King County” on Redfin, and just select House and Townhouse, it shows 4,960 active listings, but 5,240 pending/under contract. The active number seems low, and the pending sales number seems excessive. Even when about 2,000 of those pending sales are listed as short sales.

    So, what the heck is going on with pending sales?

  23. 23
    Pegasus says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 12 – Those are all foreclosure sales whether an investor buys at the auction or the bank ends up being high bidder. Knowing what percent are investor purchases would be useful but only if you have the minimum bid to also look at. Most useful would be how much that minimum bid was in relationship to the amount owed.

  24. 24
    deejayoh says:

    By Kary L. Krismer @ 18:

    RE: MichaelB @ 16 – As long as we’re asking for more data and links here, how about going back and seeing what Moody’s record is for accuracy in prior years?

    I’ll start you off. In October 2002 Economy.com (Moodys) was predicting that Seattle and San Francisco were likely bubble cities, along with Detroit. One out of three ain’t bad, if you ignore the fact that they predicted Seattle by almost 5 years early, that Seattle was one of the last ones, and that Seattle’s median at that point was about $285,000, which is well below the current median even if you include distressed properties.

    Moody’s?

    There’s a Reason They’re Called “Moody”

    Whatever.

  25. 25
    Scotsman says:

    The lack of inventory is puzzling. I see two real choices- either we’ve run out of people who can sell, or we’ve run out of people who are willing to sell. Do a significant number of potential sellers really expect prices to turn around and head up anytime soon? Has time and relatively stable employment brought equilibrium to the underwater group with those who remain deciding to just tough it out? We can speculate all we want, but without the ability to get inside people’s heads and examine their thought processes we’ll never really know.

    Here’s an idea- maybe this is the new reality/market for SFH for the next several years: low inventory, decreasing but steady stream of less desirable foreclosed homes, and a few nicer homes that get snapped up in bidding wars as soon as they hit the MLS.

  26. 26

    RE: Sorin @ 22 – The NWMLS published pending numbers are not the current number of pending contracts, so you won’t be able to compare that data. You can compare the number of listings that went pending in the month.

    The pendings are high largely because of the short sales. I’m showing roughly 2,350 short sales in King County (SFR) in some sort of pending status.

    2,350 from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  27. 27

    By Scotsman @ 25:

    The lack of inventory is puzzling.

    Not really. Lower prices bring lower supply. As you note though, there are some people who can only sell with their bank’s permission (short sale). Not a lot of people want to even try that. That reduces the active listings even further, making the low inventory even less puzzling.

    I have heard though that agents doing short sales are seeing more offers due to the low inventory.

  28. 28

    By Pegasus @ 23:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 12 – Those are all foreclosure sales whether an investor buys at the auction or the bank ends up being high bidder. Knowing what percent are investor purchases would be useful but only if you have the minimum bid to also look at. Most useful would be how much that minimum bid was in relationship to the amount owed.

    Pegasus,

    Yes, you are right. They are all foreclosures.

    The correct statement should be 275 foreclosures, of which 68 were purchased at auction by investors.

    I’m still going to add the data to my foreclosure charts, as it is interesting information.

    With regard to mimum bid, I do have the purchase price, but what we are missing is the amount owed. I use to have that information provided by Corelogic, but last month they started stripping the previous mortgage info from the records. I emailed them my displeasure over this and have been told they will be adding it back in, but who knows when, so that put a stop to my short sale/REO research.

  29. 29
    Scotsman says:

    RE: Kary L. Krismer @ 27

    “Lower prices bring lower supply.”

    Eh, not that simple. This market has moved beyond economics 101, starting with the fact that we don’t really have free markets. As plenty of analysis on this site and others has shown there’s about a dozen different salient factors in the current pricing model. I personally think future expectations has more to do with it than current pricing.

  30. 30
    deejayoh says:

    OMG.

    They did it again. Completely different headline, same source. Four days ago.

    Moody’s Zandi: I’m Optimistic on Housing Sector
    Friday, 30 Mar 2012 11:05 AM

    By Forrest Jones
    Less-than-stellar data on the housing sector shouldn’t sound alarm bells, as the sector is poised to recover, says Mark Zandi, chief economist at Moody’s Analytics.

    The Standard & Poor’s/Case-Shiller U.S. house price index fell at an annualized rate of 3.8 percent in January from a year earlier, while the National Association of Realtors reports that its pending home sales index fell by 0.5 percent in February after rising by 2.0 percent in January.

    Similar indicators have come in little sluggish as well, while many homeowners still owe more on their homes than they’re worth while others are battling foreclosure.

    Don’t fret too much, Zandi says, as even though the sector’s recovery is moving ahead battling bumps on the road, it’s still moving ahead.

    “I feel as confident as I have since the crash began that it’s now coming to an end,” Zandi tells the Washington Post.

  31. 31

    By Scotsman @ 29:

    RE: Kary L. Krismer @ 27

    “Lower prices bring lower supply.”

    Eh, not that simple. This market has moved beyond economics 101, starting with the fact that we don’t really have free markets.

    That’s what the advisers were telling Governor Insufficient Gray Matter Davis before they blew through $20 Billion dollars of state surplus and bankrupted two large utilities. Whenever someone says economics doesn’t apply, that’s wrong.

    We do have free markets in real estate, but they are affected by government policy. Standard economics can tell you the direction of that impact. It’s not like government interference with the economy started in the 20th Century.

    In this case most of the interference would lead to lower inventory, because most of the interference is in the form of low interest rate loans. That leads to inventory being snapped up. Most of the foreclosure legislation also leads to less supply.

  32. 32

    RE: deejayoh @ 30 – I bet MichaelB is torn on what to do! ;-)

    Good catch, btw.

  33. 33

    The sold volume should be higher for March than last March, as Tim’s graphs indicate, and the median price should also be up significantly from last month, but down YOY.

    Indications from NWMS sources, but not compiled by or guaranteed by the NWMLS.

  34. 34
    David Losh says:

    RE: Scotsman @ 29RE: Scotsman @ 25

    Home ownership seems to agree with you. It is different on the other side of the issue after you own.

    The seller mentality makes sense to me. Why would you list your house for sale when it looks like we have a stable economy, that may grow? You keep talking about the possibility of inflation, which is still on the table, I disagree with the possibility, but it is a very viable future event. That could happen, and the sales data may well lift home prices here.

    I was talking with some one today about how banks could appraise properties at these multiple offer prices, when I remembered they have limited exposure with a 20% down payment loan.

    Taken altogether, if I’m a seller, I would wait. In the mean time, by doing nothing but waiting, the buyer market goes more into a frenzy of higher prices.

  35. 35
    The Tim says:

    RE: MichaelB @ 16 – Wow, total reading comprehension fail.

    What the article actually said (which you even directly quoted yourself):

    Sales of repossessed properties probably will rise 25 percent this year from 1 million in 2011, according to Moody’s Analytics Inc. Prices for the homes could drop as much as 10 percent because they deteriorated as they were held in reserve during investigations by state officials resolved in February, according to RealtyTrac Inc.

    In other words, Moody’s is forecasting an increase in sales volume of foreclosed homes this year. Separately, RealtyTrac is guessing that these foreclosures (not all homes sold this year) will sell for around 10% less than they would have sold for last year, primarily because of how much they have deteriorated while being held by the banks.

    What you imagined the article to be saying:

    This just in…home prices to drop another 10% nationally according to Moody’s.

    That’s not even close to what was actually said. In fact, later on they actually give Moody’s forecast-of-the-moment:

    That compares with a forecast for a 2.9 percent decline by Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania…

    Thanks for playing “Angry Perma-Bear Trolling.” Better luck next time.

  36. 36
    Scotsman says:

    RE: David Losh @ 34

    Chicken or the egg- which came first? I bought because I sensed the fundamentals were changing and the risk of additional price declines was minimal. And while I’d love to see some upward movement in prices I wouldn’t base a purchase decision on that happening. The “recovery” is stalling, change isn’t likely to happen nearly as quickly as required, and no one is really talking about what the future may hold. Half a decade or more of muddling along seems most likely. With luck- for current homeowners- we’ll get some inflation that permeates down into the wage structure and higher housing prices. With luck, losta luck.

  37. 37
    ARDELL says:

    RE: MichaelB @ 16

    I just saw a home price drop 10% while I was standing in it. I took out my sharpened #2 pencil and dropped it 10% for the “new” down and dirty handyman roof job, FIFTY year old furnace, new improperly installed hot water tank plopped on top of the 100 sf of surrounding water damaged area caused by the old tank blowing, and the electrical panel with “new” breakers stuffing 2,000 sf of electric service into a 60 amp service box, etc…

    I’ll cut them some slack and add back for their having power washed the driveway. :)

    The Future of Real Estate = appreciation for well maintained homes only. How much of the “market down” is due to people flucking up the poor houses?

  38. 38
    David Losh says:

    RE: ARDELL @ 37

    Absolutely!

    I was in two houses on Queen Anne today, and the difference was night, and day. One was tastefully done to period, the other a mess of confusion; lot’s of work without result.

    The mess was $100K more, and the savvy agent was forth coming that the price may be high, and they would probably take an offer.

  39. 39

    RE: FenceSitter @ 15

    Here is the chart for Foreclosures, REO Sales and Auction Sales back to October 2010.

    http://3.bp.blogspot.com/-UMiZKtceSYo/T3urtCi1_GI/AAAAAAAAA-w/LGyDrAcPnps/s1600/King%2BCounty%2BForeclosures%2BBank%2BSales%2Band%2BAuction%2BSales%2B2010-2012.png

    Some might find the low amount of auction sales to be surprising.

    We also see REO/Auction sales have been out pacing foreclosures for nearly the last 12 months [except April (+7) June (+39) and July (+109)].

    The total for the last 12 months are: Foreclosures 5,772 and REO Sales 6,565. (This does not include the auctions for Feb & March, as I don’t have those numbers yet.)

  40. 40
    FenceSitter says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 39

    Thanks – Interesting stuff! There was a huge spike in the percentage of sales at auction in December and January. Can’t wait to see if that trend continues in February and March.

  41. 41
    FenceSitter says:

    RE: FenceSitter @ 40

    Of course, maybe the surge in percentages has more to do with the drop in forclosures, as the number sold at auction seems to be fairly consistent.

  42. 42

    RE: FenceSitter @ 41

    Exactly. The amount of REO sales has also been fairly consistant as well. What has changed is that foreclosures have dropped.

  43. 43
    Scotsman says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 42RE: FenceSitter @ 41

    And if we totaled them up (REO sales, foreclosures) for the past several years we might find that the big backlog/shadow inventory everybody talks about is no longer there, or at least much smaller than many think.

  44. 44

    By Scotsman @ 43:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 42RE: FenceSitter @ 41

    And if we totaled them up (REO sales, foreclosures) for the past several years we might find that the big backlog/shadow inventory everybody talks about is no longer there, or at least much smaller than many think.

    I’ve been tracking the absorption rates since 2010 and there is now shadow inventory of “bank owned properties”

    http://3.bp.blogspot.com/-ki3WVbWtXVk/Twt6wSHc4OI/AAAAAAAAA6w/cJAcmhHTSQo/s1600/King%2BCounty%2BAbsorption%2BRates%2B2010%2B-%2BDecember%2B2011.png

    However there is another group of shadow inventory and that is the homes that the banks have yet to foreclose on. I can tell you that if the bank can do a loan modification, they will. From the broker price opinion I’ve been doing I’m amazed at how long these people haven’t been making payments.

    Also for those that I’ve had to do “cash for keys” – they are basically broke. How can you be broke if you haven’t had a housing payment for over 2 years. How are they going to pay rent monthly?

  45. 45

    RE: Scotsman @ 25
    I just can’t imagine things staying the same, with a steady supply of crap houses on the market and drips and drabs of nice stuff getting quickly snapped up. Something’s got to break. Either another notch down, or a bit of inflation which allows sellers to put their houses on the market, increasing supply.

  46. 46
    Scotsman says:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 44

    ” How can you be broke if you haven’t had a housing payment for over 2 years?”

    Good question. But I don’t think we’ll like the answer. Some are probably truly broke and unemployed. Most are habitually undisciplined, and will make the same mistakes over and over.

    What’s the rational behind cash for keys? I was offered about $12K to move in 2 weeks, but said “no, I’d rather talk about buying the house.” That was NOT the correct reply.

  47. 47
    Scotsman says:

    RE: Ira Sacharoff @ 45

    “Something’s got to break.”

    That’s the thing- we’re stuck in some toporific state where nothing changes. We need some kind of major event to knock out one leg of our current three-legged economy. I don’t see one coming anytime soon- but then, I’ve been known to be wrong on many issues. Take FOX news. . . .

  48. 48
    whatsmyname says:

    By Scotsman @ 47:

    RE: Ira Sacharoff @ 45

    “Somethingâ��s got to break.”

    That’s the thing- we’re stuck in some toporific state where nothing changes. We need some kind of major event to knock out one leg of our current three-legged economy. I don’t see one comming anytime soon- but then, I’ve been known to be wrong on many issues. Take FOX news. . . .

    Some things change. Check out these guys – 3 homes sold and closed in 2011. 4 homes sold and closed with 13 homes sold-pending at Q1 2012.

    http://landcast.com/development/3123/highlands-at-cedar-downs-maple-valley-wa

    Remind me about this one the next time the “burbs are dead” argument comes up.

  49. 49

    By ARDELL @ 37:

    The Future of Real Estate = appreciation for well maintained homes only. How much of the “market down” is due to people flucking up the poor houses?

    A large percentage of the really crappy houses I see are due to either poor maintenance, or worse–owner remodeling projects. I’ve said before that banks should put provisions in their deeds of trust requiring bank approval before any significant remodel. They can really take a hit when someone without a clue takes on a project.

  50. 50
  51. 51
    whatsmyname says:

    RE: The Tim @ 50

    Well, OK. The Czech Sky never changes.

  52. 52

    By Julie Lyda, RE/MAX Northwest Realtors @ 39:

    Some might find the low amount of auction sales to be surprising.

    What’s your definition of auction sales? Bank owned crap that they try to list and then eventually put up for auction? Auctioned by private owners?

    If the former, I’m surprised there are even five a month. I’ve not really been following those, but whenever I see a listing go auction I seem to always see it come back as a listing at an even cheaper price. Those tend to be truly messed up houses.

  53. 53
    ARDELL says:

    RE: Kary L. Krismer @ 49

    So…you don’t like government intervention in the fair market system…but you want an owner of a house to have to ask their lender what color granite they are allowed to use? Holy Caboley!

  54. 54

    RE: ARDELL @ 53 – If you were going to make a private loan to a party, that would be a condition you would likely want to impose. At least some sort of a performance bond or something to make sure the house wasn’t left half finished or done without permits.

  55. 55

    RE: Kary L. Krismer @ 52

    Auctions are those sold at the County Courthouse or through Northwest Trustee Services.

  56. 56

    By Kary L. Krismer @ 49:

    By ARDELL @ 37:

    The Future of Real Estate = appreciation for well maintained homes only. How much of the “market down” is due to people flucking up the poor houses?

    A large percentage of the really crappy houses I see are due to either poor maintenance, or worse–owner remodeling projects. I’ve said before that banks should put provisions in their deeds of trust requiring bank approval before any significant remodel. They can really take a hit when someone without a clue takes on a project.

    And that sure ain’t an uncommon condition! I regularly see some pretty nice houses, but I do go into my share of absolute crapholes. Places seemingly re designed by a guy on LSD. Or at least someone with no spatial skills, like making sure the exterior door hits a kitchen cabinet or appliance every time it opens. There’s lots of strange and wondrously incompetent remodels out there.

  57. 57

    RE: Ira Sacharoff @ 56 – I just looked up one of the most extreme ones I saw last year. It actually didn’t look too bad, although the floorplan was odd, but all the remodel was done without permits and they were apparently caught by the city at about 95% completion. The bank had loaned about $250,000 on it, Fannie started the listing at $190,000, and ended up with about $50,000.

  58. 58

    By Julie Lyda RE/MAX Northwest Realtors @ 55:

    RE: Kary L. Krismer @ 52

    Auctions are those sold at the County Courthouse or through Northwest Trustee Services.

    Okay. Sold to third parties, not the bank. I am surprised it’s that low, but again that’s a very risky way to buy. And financing is difficult (or at least expensive).

  59. 59
    MichaelB says:

    RE: Kary L. Krismer @ 20

    Not making a prediction is also a kind of prediction.

  60. 60
    MichaelB says:

    RE: The Tim @ 35

    Good post Tim.. When are you going to buy your second property?

    Seattle will be 10% down by this time next year – guaranteed. Everett by more.

  61. 61
    MichaelB says:

    RE: Kary L. Krismer @ 20

    Kary, it’s time for your weekly bowel movement.

  62. 62
    MichaelB says:

    RE: The Tim @ 35

    Here’s a math question for you:

    Demand = 200

    2011 sold foreclosures = 100
    2011 sold non-foreclosures = 100

    2011 sold foreclosures increases by 25%

    How much has demand increased by?

  63. 63
    David says:

    By Kary L. Krismer @ 3:

    That bill we were following related to discharge of indebtedness income when a Form 1099-C is sent was passed, but it also tweaked the foreclosure mediation provisions. That might cause a slight temporary decrease when it goes into effect about 90 days from today. There were emergency provisions that went into effect immediately, but I don’t think those will affect these numbers. But changing forms to comply with the new law might slow things down temporarily.
    .

    Do you have more information or a link about this bill you mentioned? Thanks.

  64. 64

    By MichaelB @ 59:

    RE: Kary L. Krismer @ 20

    Not making a prediction is also a kind of prediction.

    Yep, I’m predicting prices could go up, down or stay the same. /sarc

  65. 65

    By MichaelB @ 62:

    RE: The Tim @ 35

    Here’s a math question for you:

    Demand = 200

    2011 sold foreclosures = 100
    2011 sold non-foreclosures = 100

    2011 sold foreclosures increases by 25%

    How much has demand increased by?

    You don’t know what the term demand means. Here’s a clue. It’s not volume or consumption at a given point in time.

  66. 66
    David Losh says:

    What a difference a year makes. http://seattlebubble.com/blog/2011/04/12/march-stats-preview-fool-delayed-edition/#comment-162885 Joe Hammy made a comment on last year’s charts and Active Listing were down then. Today that drop in Active Listings is really significant.

    I was talking with a Buyer’s Agent yesterday who has ten buyers, and the last four offers she got were all multiple offer situations.

  67. 67

    RE: David Losh @ 65 – J Hammy’s comment was made about 2.5 hours ago.

  68. 68

    Rather Than Shoot from the Hips and assume All FC Homes are Worse Than Nice Looking Listed Ones [i.e., 1920 Vintage]

    Give old SWE proof. Not a mere example or two; or a post buyers’ pig-headedness allegations. Simple proof.

    I became friends and studied with a realtor who bought pre-FC’d homes in Seattle and was shown the run down, normal maintenance and somewhat nice crops in droves [the nicer ones did sell at too high of prices for quick flip investment]; believe me, there’s no “hard-fast” rules we can all assume from our own personal limited experience.

    The bottom line, he’d grab up a normal maintenance one for 50% off, put a mere 1-2% into it [plus sweat labor though too] while he lived in it and sell it 6 months later for 75% of going prices [he made a fortune doing it and yes, he was a single guy, don’t try this married]. Then he moved to the next unit. He told me his realtor job was a secondary income and a place to investigate listings and meet new students/friends, me.

    BTW, I never did it, I was married at the time…..darnnnnnn…

    Another caveat, this scenario is dinosaur today, back then [early 90s] home prices weren’t severely underwater in the decade, like in Seattle, and selling 25% off and still making money was far more possible then. Today its baton the hatches; the national debt went from $9 trillion 2008, to today’s $16 trillion [2012] and we’re all on the Titanic together. Sorry, no sacred cows.

  69. 69
    David Losh says:

    RE: Kary L. Krismer @ 66

    Hammy made a comment 2.5 hours ago on the post from April last year. When you compare this years charts you can see the difference between this year, and last year.

    I think it’s a significant difference.

  70. 70

    By David Losh @ 69:

    Hammy made a comment 2.5 hours ago on the post from April last year. When you compare this years charts you can see the difference between this year, and last year. .

    Yes, I’m aware of the thread he made the post in. I don’t see what his post does though to help you understand the graphs in this thread. He doesn’t even seem to reference any charts.

    You’re right going from over 7500 active listings to under 5000 is a significant difference. If you want to go back to that old thread, then I commented that the inventory was even less if you’re not interested in REOs or short sales. That’s still true. These graphs understate the extent of the problem, mainly due to short sales.

  71. 71
    David Losh says:

    RE: softwarengineer @ 68

    I’ve had this discussion online, and in person every week, at least, since 2008.

    Even in the 1970s you could find the GEMS Ray talks about, live there, work on them, and sell for a profit. Today the margins are so slim it makes no sense to me.

    Both last year, and this year I was hopeful that the market would be stronger, but it isn’t. People are paying a lot of money for properties, but the inventory of foreclosure, bank owned, or distressed in general is very slim pickings. Most properties need too much work to make them profitable.

    I’m agreeing with Ardell that it makes more sense to buy Grandma’s well maintained home than anything else.

  72. 72
    The Tim says:

    By MichaelB @ 60:

    Seattle will be 10% down by this time next year – guaranteed. Everett by more.

    Good, just wanted to be clear that when you said:

    This just in…home prices to drop another 10% nationally according to Moody’s.

    What you actually meant was:

    This just in… home prices to drop another 10% nationally according to MichaelB’s imagination.

  73. 73

    By The Tim @ 72:

    By MichaelB @ 60:

    Seattle will be 10% down by this time next year – guaranteed. Everett by more.

    Good, just wanted to be clear that when you said:

    This just in…home prices to drop another 10% nationally according to Moody’s.

    What you actually meant was:

    This just in… home prices to drop another 10% nationally according to MichaelB’s imagination [because it’s too close to too many kitten kickers].

    You forgot something. I fixed it.

  74. 74

    By David Losh @ 71:

    I’m agreeing with Ardell that it makes more sense to buy Grandma’s well maintained home than anything else.

    I like grandma’s home. The main problem with a lot of those though is that they are often functionally obsolete one bathroom homes. The rest is typically just cosmetic.

  75. 75
    Disappointed Buyer says:

    RE: ARDELL @ 37
    hhaahahha thanks for the smile today, i totally agree with you on the quick fixer, hahaha i really like you have a good day!

  76. 76

    RE: David Losh @ 71

    Perhaps David

    Let’s get in the car and drive to about 50 of them and walk inside and look at the asking prices from the pre-FC’d owners [not banks]…..guess what David, we can’t do that anymore and the Shadow Inventory is a big unknown in Seattle; so we can’t visit these units with bank owned price tags on the windshields too.

    I don’t belong to COSTCO BTW, you know why? They don’t advertise prices. Same scenario.

    I’m not saying you’re wrong, but as an investor type I need to assess the risks with prices/quality I see, not be told what to think and do and I’ve seen no inventory to monitor an opinion.

  77. 77

    RE: softwarengineer @ 76 – Costco.com has prices. Also, if you’re a member they mail you stuff that has prices.

  78. 78

    Seems like every search I do every day has more listings going pending than new actives and price reductions combined! Earlier this week I saw a HUD property flip back active, and it was pending 90 minutes later! Not sure how that happens with the HUD system.

  79. 79
    David Losh says:

    RE: softwarengineer @ 76

    You were doing so well, then there this comment that doesn’t make any sense, and refers to Costco?

    I’m saying that people who I know who would usually buy, so they can sell a property are experiencing tight margins. The properties need to look good, and it cost money. The prices being paid for properties are also high.

    The buy low, sell high days are pretty tight right now.

  80. 80
    Realview01 says:

    Latest news on yahoo.
    Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo’s rose 68 percent and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

    Read the full story here…
    http://news.yahoo.com/americans-brace-next-foreclosure-wave-210253440.html

  81. 81

    RE: Realview01 @ 80 – I haven’t been noticing it lately, but Deutsche Bank a couple of years ago had some of the worst quality houses as collateral on their REOs. I mean some real ugly houses with major structural defects.

  82. 82
    Realview01 says:

    RE: Kary L. Krismer @ 81
    ..and that means lower price for that house..driving down the overall house prices.

  83. 83

    RE: Realview01 @ 82 – First, as noted, that was a couple of years ago.

    Second, something like that would not probably have any effect on the median and only a marginal effect on the mean. And these houses I’m thinking of were in such bad shape that I doubt they affected the price of any other property.

    I’m thinking in particular of one they eventually sold for only 95k but started at about 2x that amount. It had major crawlspace issues, roof issues, one of the rooms was apparently an old concrete porch area below grade, etc. The detached garage was nicer than the house!

  84. 84
    whatsmyname says:

    “Both counties surged in March, hitting their highest points since last September. With three months in a row of increasing foreclosure notices, I think it’s safe to say that we’re on a renewed upward trend.”

    Not too safe. Numbers are reasonably retracing last year, albeit at a much lower level. Both counties surged in March last year also, but then trended down for the remainder of the year.

  85. 85

    […] time once again to expand on our preview of foreclosure activity with a more detailed look at March’s stats in King, Snohomish, and Pierce counties. First up, […]

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