NWMLS: Record Low Inventory, Prices Approach a Flatline

March market stats were released by the NWMLS late yesterday. Here’s their press release:

“Buyer Ready” Home Shoppers Have Edge as Brokers Report Rise in Multiple Offers.

The housing market in the Puget Sound region is pointing toward a sustainable recovery, according to several brokers who commented on the March activity report from Northwest Multiple Listing Service.

“We are seeing a frenzied market in the Puget Sound region, especially in the more affordable and mid-price ranges, with an increase in sales activity in the high end,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Because of the shortage of homes for sale, combined with the sales surge being driven by job growth and historically low interest rates, if you are not ‘buyer ready’ you may not get a house in today’s market,” he added.

Noting stabilizing prices are “forcing buyers to make offers that reflect a more balanced market,” Northwest MLS director Darin Stenvers said house-hunters have taken note of rising rents, fewer choices and increasing fuel costs.”

I told you that this gas prices nonsense would rear its head again. In other news… It’s a FRENZY! You know it has to be true because Pyramid Expert J. Lennox Scott says so!

Before you get too worked up about the biggest February to March median price increase on record (previous high was a 6.4% gain in 2004), remember that prices have jumped up in a similar manner every spring throughout the downturn (albeit not as large):

King County SFH Median Sale Price

With that, let’s get on with the stats!

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

March 2012 Number MOM YOY Buyers Sellers
Active Listings 4,978 -3.9% -34.4%
Closed Sales 1,642 +33.5% +7.7%
SAAS (?) 1.51 +3.3% -11.9%
Pending Sales 3,018 +24.2% +23.9%
Months of Supply 1.65 -22.6% -47.1%
Median Price* $330,000 +7.1% -4.3%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Just the usual seasonal bump in sales, nothing to write home about, especially since they’re still quite a bit below every year before 2007. Just like our monthly stats preview predicted, the big year-over-year gain from February mostly vanished in March, dropping from over 22% to under 8%.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

And we are now at an all-time low for March. Previous record was in 2006 when there were just 5,100 homes on the market. However, keep in mind that the NWMLS did change the definition of “active listing” between then and now, so it’s not apples to apples.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade.

King County Supply vs Demand % Change YOY

Sales gains dropped off, but the steep drop in inventory just gets deeper.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Another upward tick toward zero…

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

King County SFH Prices

March 2012: $330,000
July 2004: $329,950

Here are the headlines from the Seattle Times and the Seattle P-I:
Seattle Times: King County home prices highest since September
Seattle P-I: Seattle house prices up again

Check back Monday for the full reporting roundup.

  

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.

35 comments:

  1. 1
    The Tim says:

    I have no idea how comments got closed on this thread. That was definitely not intentional. Sorry about that, and thanks to Kary for the email letting me know of the error.

    Rate this comment: Thumb up 0

  2. 2

    RE: The Tim @ 1

    Makes You Wonder if Trolls Virus Infected Your Web Tim

    The FAIRUS.ORG non-profit website had some extremist insert a virus in it and they had to shut it down for a day to get it cleaned up. Even our virus software can’t keep up with this vermin hacker problem to warn us.

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  3. 3

    The Prices Bounce Up Every Spring

    That’s because Seattle is special and the higher priced ones are worth the extra loot over all the ram-shackle REOs.

    A little birdie whispered in my ear though this morning; even an over priced bid war over a clean Spring unit, once sold and lived in, give it 5-10 years, and then let’s indepentantly audit the actual $ maintenance done, over-looked at sale and needed from wear and tear. That over-priced perfect home don’t look so perfect then. I know, Seattle’s special….this is a moot point?

    Sounds like a bad time to buy from the charts, if I were a buyer.

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  4. 4
    David S says:

    Only one thing stands out to me: ‘Noting stabilizing prices are “forcing buyers to make offers…”‘

    Just what exactly is Pyramid Expert J. Lennox Scott putting in the coolaid this morning?

    Rate this comment: Thumb up 0

  5. 5

    It really is very frustrating to be a buyer right now, as has been noted here. Remember “the bottom isn’t as fun as it sounded like it would be!” [paraphrase] I’m comparing it to the second ending of the first-time buyer credit as far as sellers are concerned. It’s better than that was for sellers! Reportedly even short sales are getting multiple offers!

    I haven’t run the numbers yet, but I suspect part of the price bump is due to fewer REOs closing.

    Rate this comment: Thumb up 0

  6. 6

    By David S @ 4:

    Only one thing stands out to me: ‘Noting stabilizing prices are “forcing buyers to make offers…”‘

    What you’re missing is that the stabilizing prices have guns! That’s why the prices are up more in Seattle. Fewer buyers there can defend themselves.

    Rate this comment: Thumb up 0

  7. 7

    By Kary L. Krismer @ 5:

    I haven’t run the numbers yet, but I suspect part of the price bump is due to fewer REOs closing.

    I just checked and the REOs are down about 22 sales, so against a rising number of sales their effect on the median is less. Short sales were up about 8 sales, which without running the numbers is probably also a slightly lower percentage. These numbers are based on closing date reported, and thus not the same as the published numbers which include late reported sales for prior months and don’t include late reported sales for the current month (Tim’s issue).

    Also, note this from the Times’ article linked above:

    Countywide, he said, the median price of single-family short sales in March was 38 percent less than the median for nondistressed houses, while bank-owned houses sold for 57 percent less.

    The numbers 22 and 8 are from NWMLS sources, but not compiled or guaranteed by the NWMLS, and as noted, compiled differently than the official published numbers.

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  8. 8
    No Name Guy says:

    By David S @ 4:

    Only one thing stands out to me: ‘Noting stabilizing prices are “forcing buyers to make offers…”‘

    Just what exactly is Pyramid Expert J. Lennox Scott putting in the coolaid this morning?

    Whiskey? ;-)

    Rate this comment: Thumb up 0

  9. 9
    tomtom says:

    Woo-hoo, the bottom is in!

    Rate this comment: Thumb up 0

  10. 10

    By No Name Guy @ 8:

    Whiskey? ;-)

    Amazing. That’s what I use in my health faucet! /Stephen Colbert

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  11. 11

    At this point the rising median is only indicating that more higher priced homes are selling, which is pulling up the average.

    This is not a sign that home prices are rising.

    My home is worth no more this month than it was in January.

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  12. 12

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 11 – I would disagree, depending on the area and price range.

    When you have buyers competing for non-distressed properties, the price that a non-short sale seller can get for their property is greater than it was in January. Inventory was tight back then too, but not as tight as now. And there seemingly are more buyers (seasonal effect).

    That said, the median never indicates how much an individual property has gone up or gone down.

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  13. 13
    deejayoh says:

    By David S @ 4:

    Only one thing stands out to me: ‘Noting stabilizing prices are “forcing buyers to make offers…”‘

    Just what exactly is Pyramid Expert J. Lennox Scott putting in the coolaid this morning?

    Well, if you leave off the part of the statement that explains what he means, then I guess it is easy to make him look stupid

    But the real quote is:

    “Noting stabilizing prices are “forcing buyers to make offers that reflect a more balanced market

    But then, that’s not really fair, is it?

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  14. 14
    Scotsman says:

    FRENZY!! BUY NOW OR BE PRICED OUT FOREVER!!

    JLS has taxes to pay: (scroll down- not that interesting a house)

    http://seattle-mansions.blogspot.com/2011/02/groat-point-medina.html

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  15. 15

    By deejayoh @ 13:

    But then, that’s not really fair, is it?

    Or funny. :-(

    Rate this comment: Thumb up 0

  16. 16
    patient says:

    There’s nothing better to make a buyer feel excited about the market than telling him that he is FORCED to pay higher prices. Please, please don’t shoot me mr/ms agent here’s my wallet, take my watch as well.

    Rate this comment: Thumb up 0

  17. 17
    The Tim says:

    RE: Scotsman @ 14 – No kidding. $61,816 per year in property taxes for that place. Plus at least $2M in debt to make payments on. Better keep building that pyramid!

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  18. 18

    RE: Kary L. Krismer @ 5

    Yes Kary

    I saw the same scenario throught the decades with HUD Homes, unqualified bidders pushing the prices way beyond reality. It would sure clean out the vermin if we demanded only “pre-qualified” [by banks BTW] REO and short sale buyers only on offers, albeit it would probably gut the pending sales numbers too, with a big butcher ax.

    The buyers would get a break though, lower prices.

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  19. 19
    Scotsman says:

    RE: The Tim @ 17

    Interesting background in the blurb about Scott’s home and Groat Point. Mostly members of the lucky sperm club- Scott, Freeman, McCaw. We used to roam in the old Mansion that was on the site before it got subdivided. The house to the SE of Scott’s is much more significant while the one to the NW is a cleaner, more interesting design. While I’ll freely admit I can’t afford Scott’s house, I wouldn’t pay what ever he’d want for a bland stucco box- even with the view he has.

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  20. 20

    By patient @ 16:

    There’s nothing better to make a buyer feel excited about the market than telling him that he is FORCED to pay higher prices. Please, please don’t shoot me mr/ms agent here’s my wallet, take my watch as well.

    In yesterday’s piece, reason #3 not to buy was falling prices.

    I realize different people have different decision making criteria. If someone is concerned though about both falling and rising prices, then they simply don’t want to buy.

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  21. 21
    MichaelB says:

    http://www.wcrer.wsu.edu/WSHM/2011Q4/2011Q4-Snapshot.pdf

    Flatline or Freefalling! ie Jerry McGuire…

    6.6% of homes in washington state are seriously delinquent according to the Washington Center for Real Estate… How many are underwater?

    Great site with real stats: http://www.wcrer.wsu.edu/

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  22. 22
    MichaelB says:

    Flatlining or “Freefalling”? ala Jerry McGuire…

    http://www.wcrer.wsu.edu/ 6.6% of homes seriously delinquent. http://www.wcrer.wsu.edu/WSHM/2011Q4/2011Q4-Snapshot.pdf Prices dropped 9.1% in Washington State last year…

    Meanwhile, Median Household income also dropped….

    All Good! Ressurection of Real Estate Market is on the way!

    Rate this comment: Thumb up 0

  23. 23
    patient says:

    RE: Kary L. Krismer @ 20 – It’s the language Kary. Buyers aren’t forced to do anything. They have a choice to make an offer, or not.

    Rate this comment: Thumb up 0

  24. 24

    […] area last month was the highest we’ve seen since September. Ouch! According to stats from the MLS, last month’s median sales price was $330,000, 7% higher than it was the previous month, […]

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  25. 25
    Scotsman says:

    RE: MichaelB @ 22

    “All Good! Ressurection of Real Estate Market is on the way! ”

    Oddly enough it probably is- not because of improving fundamentals in income, etc. but because of the inflationary bomb that will hit at some point in the next 5-7 years. As Ray says “don’t bet against the FED,” or more generally the fiscal dead end the .gov has put itself in. The current situation can’t continue, and the paths out- default and printing- are both ultimately inflationary.

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  26. 26

    RE: Scotsman @ 24 – Or if not, many people perceive it that way.

    Gold didn’t run up due to reality. It ran up due to fear.

    Rate this comment: Thumb up 0

  27. 27
    patient says:

    RE: Scotsman @ 24 – Maybe but I doubt it. $20 gas without salary inflation will topple any government independent of political color. The gov can control a lot but oil prices are not in the hands of friends. I doubt the FED will allow inflation enough to spike energy prices to a level where goverments will fall. And inflation can be controlled much easier than deflation. Just raise interest rate to a couple of hundred percent and inflation is gone in a day.

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  28. 28
    Macro Investor says:

    RE: Scotsman @ 24

    Hello Mr. Giddy Bull, default is deflationary. Big time.

    Rate this comment: Thumb up 0

  29. 29
    Macro Investor says:

    By The Tim @ 1:

    I have no idea how comments got closed on this thread. That was definitely not intentional. Sorry about that, and thanks to Kary for the email letting me know of the error.

    Thank goodness you fixed it, Tim. Kary was getting the shakes.

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  30. 30
    David Losh says:

    I’m surprised this selling season isn’t getting more discussion.

    We have buyers who should feel more confident than they did last year, and listed properties are 4,000, compare to 7,000 last year. That is more buyer ability with fewer properties to choose from.

    That kind of seems like a bubble to me.

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  31. 31
    David Losh says:

    RE: Scotsman @ 24

    You’ve pointed out, repeatedly, that we can’t print any more.

    Rate this comment: Thumb up 0

  32. 32
    Scotsman says:

    RE: Macro Investor @ 27

    “default is deflationary. Big time”

    Personal and business- yes, with qualifications. But if the .gov/treasury defaults that’s highly inflationary. Suddenly we have all the extra dollars created by monetization and t-bill sales floating around out there in the economy without an offsetting debt or liability. It yields the same result as just printing up a few trillion in bills and throwing them out on the street.

    I’ll cut ya some slack Mr. Permabear because it’s not that intuitive- but think about it for a while, then get back to us.

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  33. 33
    Scotsman says:

    RE: David Losh @ 30

    Still true. It’s like pointing out that you shouldn’t drink anymore after having already put away a fifth this evening. But you can’t stop, so you keep drinking. There’s what you should do, what you can’t do, what you won’t do, and what you’ll just continue to do. got it? ;-)

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  34. 34
    whatsmyname says:

    By MichaelB @ 22:

    Flatlining or “Freefalling”? ala Jerry McGuire…

    http://www.wcrer.wsu.edu/ 6.6% of homes seriously delinquent. http://www.wcrer.wsu.edu/WSHM/2011Q4/2011Q4-Snapshot.pdf Prices dropped 9.1% in Washington State last year…!

    Awesome chart! I’m going to use it too. If only I’d bought in Columbia County – prices there were up 116%.

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  35. 35

    The inventory does not seem to be rebuilding at all. We’re likely to have a record low inventory (going back to 2000) at the end of April, per the chart above.

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