Sales in Cheap Parts of King Dropped Off in March

Let’s take an updated look at how King County’s sales are shifting between the different regions around the county, since geographic shifts can and do affect the median price.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

  • low end: South County (areas 100-130 & 300-360)
  • mid range: Seattle / North County (areas 140, 380-390, & 700-800)
  • high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of March’s data:

  • low end: $157,000—$282,500
  • mid range: $230,000—$615,000
  • high end: $376,000—$1,025,000

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

Median Price of Single Family Homes Sold

Both South King and the Eastside saw increases between February and March, while Seattle / North King actually dipped slightly.

Next up, the percentage of each month’s closed sales that took place in each of the three regions. The dotted line is a four-month rolling average.

% of Total King Co. SFH Sales by NWMLS Area

Not surprisingly, the big bump in the county-wide median price from $308,125 in February to $330,000 in March corresponds with a big dip in the share of homes sold in the cheapest parts of the county.

Lastly, here’s an updated look at this same set of data all the way back through 2000:

% of Total King Co. SFH Sales by NWMLS Area since 2000

If this one-month dip in sales in South King continues as we move through the spring and into summer, expect the county-wide median price to continue to climb. Personally I think the mix over the next year or so will probably resemble roughly what it was from 2004 through 2006, but for different reasons (more cash buyers instead of zero-down buyers)

  

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.

10 comments:

  1. 1
    Scotsman says:

    This would be more useful if it had some indication of available inventory worked into it. How much of the change reflects buyer choice verses inventory constraints?

    South of I-90 rocks! The rest of you will join us soon enough. Our bottom is in. ;-) /

    Rate this comment: Thumb up 0

  2. 2

    Perhaps its like that Old Saying

    “Blood from a Turnip”

    At some point even the lower tiers run out of qualified buyers. I wish I had been wrong in 1999, but sensed this calamity was ahead of us. I remember my realtor upset with me, exclaiming, “You could afford twice the house.” True, but in the future from 1999, I doubted many could qualify for costlier models, especially first time buyers. I wanted to be able to sell in the future, perhaps.

    Rate this comment: Thumb up 0

  3. 3

    RE: Scotsman @ 1

    The Inventory Magicians are Hiding it All Up Their Sleeves?

    Rate this comment: Thumb up 0

  4. 4
    David Losh says:

    I could understand cash buyers wanting a return on investment from rental income, some may have bought thinking to resell for a profit.

    I don’t see cash being a great equalizer now.

    Maybe builders will continue spot lot construction, but I would like to see building permit data, or occupancy permit data compared to sale price to see if that trend could continue.

    Rate this comment: Thumb up 0

  5. 5
    ARDELL says:

    YES!!!!!!!!!!!!!!!!!!!!!!!!!

    Rate this comment: Thumb up 0

  6. 6
    Scotsman says:

    RE: ARDELL @ 5

    To what? Are you having s#x or something?

    Or did you notice that the 10 yr t-bill dropped under 2% today, a record low in recent history? That should bring mortgage rates back down, maybe to record lows, and keep this “bottom” cemented in for a while. Well, that and current rents. I’d be looking for compression in the tiers, eventually a situation closer to what we had in 2000. Rents will support the bottom but the middle and upper sectors will continue to come down along with equity markets and high end wages. This isn’t New York or San Fran. While there’s money around, there isn’t enough of it to support price structures that were formed in the days of Amazon and MSFT stock options. An H1B visa doesn’t buy you the kind of house 100,000 options did.

    North of I-90 is running on momentum, not future expectations. South of I-90 runs on reality- it’s often cheaper to buy than rent.

    Rate this comment: Thumb up 0

  7. 7
    whatsmyname says:

    I am comparing this to the NWMLS post of 4/6 which I assume is from the same data. Not to pick nits, (sure sign that nit picking is to follow), but by these figures, sales in the cheap parts of the county did not drop off in March. Looks like the share dropped from 40% to 36% February to March, but if the total number of sales increased 33.5%, even a 36 share would represent an increase in individual sales. Headline would more correctly read “Higher priced areas of King surge”. I do agree that the change in mix would tend to exaggerate the change in the median price (or “liar” as we both like to call it).

    I would like to see the three markets charted in raw closed sales numbers. That let’s you eyeball the relative changes in share and the trends in total sales in one picture.

    Rate this comment: Thumb up 0

  8. 8
    whatsmyname says:

    By Scotsman @ 6:

    RE: ARDELL @ 5

    To what? .

    “Waitress, I’ll have what she’s having”

    Rate this comment: Thumb up 0

  9. 9
    Scotsman says:

    “A strong case can be made that the fundamental supports of the housing market– demographics, employment, creditworthiness and income–will not recover for a generation. It can even be argued that housing has lost its status as the foundation of middle class wealth, not for a generation, but for the long term. Let’s begin by . . . . ”

    http://www.zerohedge.com/news/guest-post-what-if-housing-done-generation

    Rate this comment: Thumb up 0

  10. 10
    whatsmyname says:

    By Scotsman @ 9:

    “A strong case can be made that the fundamental supports of the housing market– demographics, employment, creditworthiness and income–will not recover for a generation. It can even be argued that housing has lost its status as the foundation of middle class wealth, not for a generation, but for the long term. “

    Did Romney just win?

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.