A reader emailed me to ask if I have “seen a bump in inventory” in the last few weeks. Unfortunately, I haven’t. Here’s a look at new listings by week since the beginning of the year, with last year plotted for comparison:
The number of new listings each week did bump up a bit between mid-March and mid-April, but has been fairly steady since then, up until a big drop in the last week of May.
Here’s a look at the total on-market inventory each week compared to a year ago:
The long slide continues, straight through what is typically a period of steady increases in inventory. Last year the total number of listings on the market increased 11% between the first week of the year and the last week of May. This year, that number has fallen 18%, and still shows no sign of picking up any time soon. Ouch.
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Well, we’re trying to do out part. Here are two new listings we just published today in Bothell and Kirkland: http://www.matrix.nwmls.com/Matrix/Public/Portal.aspx?k=1772292XAOIG&p=DE-16001598-723
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Doing your part? By what doing what? Fleecing the buyer? That SFH should be about 100k less that what it is offered for. Looks like you are trying to help them get 2007 prices in 2012. What’s with that?
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I think everyone needs to realize that we are returning to a pre-bubble real estate market. Less sales, less inventory. What were inventories back in 2001-2003?
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RE: Pegasus @ 3 – We’re way lower than any other year on record.
End of May King County SFH Inventory:
2000: 6,599
2001: 7,916
2002: 8,304
2003: 9,170
2004: 7,360
2005: 5,469
2006: 6,027
2007: 8,689
2008: 12,310
2009: 9,852
2010: 9,497
2011: 8,055
2012: ~4,731
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By Pegasus @ 3:
I guess the 2 or 3 posts in the last 3 weeks highlighting the record low inventory situation didn’t hit home?
http://seattlebubble.com/blog/wp-content/uploads/2012/05/KingCoSFHInventory2012-04.png
Record low /= normal
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RE: Marc @ 1 –
per my buddy Jordan at the NWMLS I can legally say this on the Bubble and be VIOLATION FREE: 339k for a CONDO in Bothell??? Thanks for bringing that to the table…GEEZE!!! Gobble it up Buyers!
Or for that matter 430k for a 3bed 1.5bath and 1700 sq feet…!!..Holy Macrel!! If this is what you Buyers are looking for in June 2012 come and get em!!!
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By ray pepper @ 6:
I would suspect that’s correct. Seems to be opening the door . . ..
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RE: Kary L. Krismer @ 7 –
Yes, Kary the NWMLS indicates they have no rules against Agent initiated blogging on non IDX feeds such as the Bubble Blog. So when a perceived “competent” Agent posts his listings as bringing some perceived “value” to the public on a blog such as this, the listing is fair game for all the applause and and scrutiny it deserves..
I hope the Bubble does not become an outlet for Wa Law’s “Gems of the Week” if you may. Because buying one of those could send the purchaser to the “under-water” arena faster then I could down the Tacquitos at Cheesecake Factory..
The Kirkland house was purchased for about 199k in 1997 WOW Bubbleheads….Reading Seattle Bubble can earn you BIG BIG BIG money..But, in this case ONLY if your the seller! If your the BUYER…..Look out below!!
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RE: ray pepper @ 8 – No more love for Claim Jumper?
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RE: deejayoh @ 5 – We don’t appear to be very far from 2000, 2005 and 2006 are we? Got the sales for those time periods in May?
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RE: ray pepper @ 6 – You were supposed to wait until Marc blasted me for my comment and then pounce. Oh well It was an irresistible moment wasn’t it?
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RE: Pegasus @ 11 –
Hey, I’m the Sheriff here and your my Deputy..Get in line Peg..
Yes, Kary…Since I found Cheesecake Factory Claim Jumper is like an old friend…A distant memory..I was sick of pulling over on I5 anyway with the sweaty scalp from ClaimJumper ..
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Honestly, I have stopped looking; the inventory available just doesn’t contain anything I would actually be interested in, and it’s almost certain some greater idiot will bid more than it is worth on it… as a consequence, I am looking at European real estate right now.
Compare and contrast – I can buy a condo here for 300k, or I can buy a nice house on a beach front over there for 100k and live on the delta for a few decades…
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RE: me @ 13 –
Good heavens! What part of Europe are you looking at?
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This is not rocket science. People are underwater and out of work. They would love to sell their homes. Unfortunately, they can’t afford to bring $100K+ to the table just to get rid of the McMansion. So they stay put and suffer endlessly while their future financial well-being evaporates into thin air.
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RE: Marc @ 1 – If that house is legitimately valued at $430K, then we are nowhere near the bottom.
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By whatsmyname @ 14:
Prices are good here!
http://www.dailytimes.com.pk/default.asp?page=2012%5C06%5C02%5Cstory_2-6-2012_pg4_3
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RE: Kary L. Krismer @ 17 –
That does sound nice. Perhaps a summer house at Pripyat on Dnieper?
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Inventory is horrible. It’s one thing to look at the data, it’s another to actualy be looking for a house to buy. There’s very little out there, and if you take out the short sales, which tend to be in worse shape, it’s even bleaker. There are very few homes out there for sale in decent shape in places that are considered desirable. So even though prices are 30% +/- down, and interest rates are really low, it’s still not an easy process to buy a house right now because the quantity of quality is really bad.
But a lot of people bought houses in ’05, ’06,’07, ’08, and paid a lot more than they could fetch right now, so they’re not really in a position to sell because they owe considerably more than the house is currently worth.
It’s a standoff. Something’s got to break at some point. If prices rise, more people will be able to put their houses up for sale, raising the inventory. Either that, or more people will give up and just walk away from their houses, via foreclosure or, deed in lieu of foreclosure, and the result will be more houses on the market.
Seems like the market has pretty well flattened out. I have no real sense of what is about to happen. It’s unchartered territory. But anyone who tells you that now is the time to buy real estate for significant financial gain is just talking out of their butt.
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RE: Ira Sacharoff @ 19 –
Well, there you have it. No point in driving yourself crazy. Best thing to do is buy your landlord a nice bottle of Scotch at Costco, and take another look at the housing market next year.
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RE: Ira Sacharoff @ 19 –
What would cause prices to rise???
Lot’s of downside:
China slowing
European economies and Euro in crisis
USA adding very few jobs
Japan – Huge debt
India and Brazil – slowing down
Wages in USA not increasing
Housing prices in USA lower, but no dent in shadow inventory
Potential first home buyers can’t find jobs and have huge student debt
1 in 5 Americans have negative net worth and less than $50,000 cash
Banks loans harder to come by
Where is the upside?
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RE: MichaelB @ 21 – Three percent mortgage rates? Four percent seems to be working just fine, three might just give us lift off. The majority of those being damaged the most by this depression were most likely not going to be home buyers anyway.
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Question regarding inventory and underwater prices.
Are there any surveys out there which indicate what percent in a given area (even better yet – the King Country metropolitan area) that can inform us what percentage of buyers are underwater and would sell, except for the fact that the loss would be too great? Would that have an impact on low inventory? If so, how much?
Thanks for your responses in advance
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Let me say it again that the Real Estate market never changes. Every property has a value.
Today there is no incentive to list your property for sale. In 2008, 2009, you could list your property, rent, and wait for the market prices to decline.
In 2010, and 2011, that incentive became less likely. The yearly bottom calls keep people thinking this is the best it will get, as buyers, or sellers. There is no pot of gold for spending 10% of your equity to list your property for sale.
Even if you sold you would be faced with a higher cost of renting, or at best a lateral move of your equity from one property to another. As I understand it, eveni if you sold you would be competeing with others for prime properties that you may not get.
So where is the incentive to list your property for sale? If indeed the bottom is in, you are better off staying where you are, riding out the storm, and hopefully paying off your principal balance.
However, the Real Estate market never changes. There is no top, or bottom, but if there were a bottom is nowhere in sight.
First, we had ten years of a building boom. Millions of properties around the world got built, and mortgaged to the hilt in the rising price of Real Estate. Second when this glut of housing units were being built, a lot of people had jobs, business was booming, financial markets were soaring. Last, but not least, when the music of financial well being stopped a lot of people, millions of people, were left with excessive debt they had no ability to pay.
You may have a job, with a managable debt load, but there are millions of people who don’t have that luxury. The economy will grind down until every one is in the same boat. The losses are mounting.
So why would some one sell, and pay 10% for the privledge?
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By David Losh @ 24:
Tim. There seems to be something wrong with your various charts. Apparently every one of them should just be a straight horizontal line! ;-)
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RE: Kary L. Krismer @ 25 –
Public mood or opinion, all the public mood or opinion in the world, doesn’t make a rusty nail worth any more or less than the value of a rusty nail.
Just because in the market place of rusty nails people are willing to pay more, or less doesn’t change the fact that we would only be discussing rusty nails.
Constant referral to sales data should show exactly what I’m talking about.
http://articles.businessinsider.com/2009-02-21/wall_street/30015219_1_home-prices-house-prices-housing-market
Case Schiller uses the same graph, but let’s look a little more
http://www.jparsons.net/housingbubble/
Value, and price, sales price, are two totally different things.
You’re on a bubble blog. As a Real Estate person of course you may object because the system you use is commission based. What if we take the Real Estate commission incentive out of the equation? What if Congress were to outlaw Real Estate commissions, for the public good?
What would be your opinion then?
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By David Losh @ 26:
If you start with an incorrect premise, you end up with an incorrect result.
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RE: Kary L. Krismer @ 27 –
I posted the standard charts, you come back with it’s an incorrect premise.
Prove it’s incorrect.
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RE: David Losh @ 28 – The charts you posted prove your premise is incorrect. Things do not have just one constant value.
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RE: Kary L. Krismer @ 29 –
The cost of housing is tied to the Consumer Price Index, but is not a part of the Consumer Price Index. The cost of housing tracks inflation, and to a larger degree wages.
The value of a housing unit may be subjective, but is ultimately housing.
The fact the charts have a huge spike is a problem, what the NWMLS, or any Multiple Listing Service does is just sales. Sales, making sales, is something seperate from the value of housing.
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By David Losh @ 30:
That the chart goes back to 1890 and people believe it is a problem.
But yes, price increases for years on end above a certain rate are a problem.
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By David Losh @ 30:
You have the cart before the horse there. Housing prices are affected by inflation and earnings.
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RE: Kary L. Krismer @ 32 –
People have to have the money first before they buy, otherwise it might be called speculation: I might make more money, or I might get a job, so I’ll buy a house first.
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RE: me @ 13 –
I would agree for the most part, but nice homes still show up now and then and if you have your lending lined up you can come in with a fair offer and might get it. It happened to us but in our case it started by viewing a property out of our range, not giving it serious thought, then noticing a price drop and getting an offer in a week later after another walk through. Had we twiddled our thumbs a bit it could’ve gotten crowded at the offer table.
Looks like we’re gonna rent our old home primarily for the reasons mentioned here – giving up 10% to also take a loss on the sale – not a pill I want to swallow.
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My wife and I have been trying to buy a house for 18 months now. We carry almost zero debt (only car loan) and pay off credit cards monthly. We have over $120k to put down as a down payment in addition to a 4 month reserve which will increase to a 8-10 month reserve in October and there just isn’t anything on the market. We were negotiating about a house that isn’t on the market yet, but their real estate agent “friend” is suggesting they can get more than our very competitive offer. I asked them for comparable properties that the agent was basing their value off and the agent could never produce anything that warranted a higher price except that the “market is so hot right now”. Even when I showed them examples they (the owners) brought to the table that made our offer valid, they continued to talk about how their agent says they can get more. Honestly I’m about to give up on house hunting and just keep renting.
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RE: JoeBlow @ 35 – I suspect that agent is making the mistake I warned about last month–assuming that the increase in median meant a similar increase in value.
BTW, I’m also seeing another seller behavior–pricing based on what you need out of the property. That has been rather rare lately, but it seems to be coming back.
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I can attest to the fact that the low inventory, record low interest rates, and ravenous buyers are keeping multiple offer situations alive and well. I recently made an offer at 1.5% above asking, pre-inspected and scoped, all contingencies waived. The home had been on the market for 24 hours. We got clobbered. Within 48 hours of listing, the home had 11 offers, five with preinspections, and went under contract for an amount signficiantly above asking. After sticking my leg in the shark tank, I plan on taking my gnarled stump home, waiting for the eurozone collapse, and picking up a home with a 2.9% 30 year fixed sometime around September. If you are a homeowner with a move-in-ready place in a desirable neighboorhood, don’t worry about the fact that you bought at the top of the bubble and owe 30k more than your home is “worth.” Chances are you could sell and still come out on top.
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RE: JoeBlow @ 35 –
Why don’t they just put it on the market at the agent suggested price, and you put your offer in at your price…to see who is correct? If they list it for sale will you be reluctant to make the same offer you are making to them now while off market? If so, why?
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RE: Kary L. Krismer @ 25 –
The Key Kary “Is Should Be”
I especially gawked at Bank Owned Sales “Suddenly” evaporating to 13.8% from double the number recently, smells like rotten crow. And I wouldn’t eat crow anyway.
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RE: softwarengineer @ 39 – Again, the percentage fell because the non-distressed number rose.
Banks almost always sell the listings they market. It might take them a price reduction or two to get to that point, but they do sell them. So that volume number isn’t affected by the seasonal factors as much as the non-distressed properties. Fewer non-distressed sales are marketed so that they are almost 100% certain to sell within 90 days.
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By Kary L. Krismer @ 36:
Sellers acting in their own self-interest has long been postulated to be a foundational leg of the economic table, has it not? Our recent experience is that it cannot always be the driving force in the market, but it’s one of the forces that influences the market for sure.
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RE: Question Mark @ 41 – No doubt, but the activity I described had declined significantly (if you ignore pricing to avoid a short sale situation). Maybe the past four years or so could be described as a decrease in seller confidence, resulting in less of that behavior.
And to be clear, what I’m talking about is a seller saying: “I want to price my house at X dollars because I need to net Y dollars so that I can __________.” Buyers don’t care what sellers want to do. Prices should be based on the market, not on a desired net price.
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By Kary L. Krismer @ 42:
Buy, sell, or hold. These are the prototypical choices for an individual who has an interest in the market. Although prices are set at the margin, when it makes more sense for a greater number of potential sellers to hold given current prices, the number of units available at the margin will tend to shrink. I’m not in the market now myself, but I’ve noted a number of comments recently about how crappy the market is, which sparked my original comment.
On the subject of buyers not caring what the sellers needs are, I’m not sure I’d like the sort of community I might encounter if all who bought into that community brought that that cold-hearted logic with them in the extreme.
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By Question Mark @ 43:
Maybe you’re not following. Buyer makes on offer based on the comps in the neighborhood. Seller says: “No, I can’t sell for that amount, because I want to ________.” Unless maybe that is “pay for cancer treatment for my daughter” that is not going to generate another dime for the seller.
It’s not like people who want to move from Skyway to Medina can generate more money from the sale of their house than people who want to move from Skyway to Ocean Shores. The buyers don’t care. Some sellers though don’t understand that, and think that the price they can get for their house is somehow dependent on what they want to do with the money. It’s not. They too should look at the comps.
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RE: Question Mark @ 43 –
There are clearly more sellers now who are “testing the market”, who bought at the peak and are trying to not have to sell their homes as short sales. They owe a certain amount, and don’t have cash to bring to the closing table. So they’re pricing these houses a little unrealistically high, hoping that some foaming at the mouth homebuyer will pay this inflated price. Sometimes it works, more often it doesn’t. I showed a house in Bellevue that was priced a good 40 thousand higher than it should have been, and it was taken off the market because the seller can’t afford to lower the price, and no offers were coming in at the list price.
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By Kary L. Krismer @ 44:
… Cue “The Jeffersons” theme …
By Ira Sacharoff @ 45:
This is more the scenario I had in mind in my prior comment. Net result, smaller size of the market (at the margin) when overall conditions dictate that the needs of the buyer and needs of the seller cannot be met. Also clear that much frustration can ensue.
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My points exactly – the Seattle market right now is just not attractive. To the question where I am looking: I like Spain and Italy for prices, and Germany and Southern France for quality of life. And the pickings are *ripe*. If you’re not planning to live in Seattle forever, that might be your answer, too.
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RE: me @ 46 –
Spain is my number one favorite. I would be interested in what you consider ripe pricing.
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By Question Mark @ 46:
In post 45 Ira is discussing pricing to avoid a short sale situation. In post 42 I was specifically excluding that. That’s been very common for quite some time.
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Beachhouses ont he order of 300k, lot’s of variation, though. The mother of a friend ended up acquiring a really nice apartment in a development on the beach for $30k. That was impressive, but probably not easy to repeat. Long story (they had to wake up the seller who was apparently drunk when they stopped by, and who nonetheless insisted no driving them to the notary… only to get into a bit of trouble when he was supposed to produce id and it turned out that his drivers license had been revoked a while ago. Oops).
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RE: Happily Disgruntled @ 37 –
If I was a seller in the Seattle area who only owed 30K over a homes worth, I would not hesitate selling now if I really wanted to move! My goodness, here in San Diego homeowners who bought at the peak are more like $100,000 – $200,000 upside down.
No one is selling due to being upside down, therefore buyers like myself can’t find a decent house to buy. Even with cash I can’t seem to find a decent house. So much so that I am considering ,moving back up to the Seattle area!
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