Posted by: Timothy Ellis (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 responses to “July Stats Preview: Foreclosure Resurgence Edition”

  1. Ira Sacharoff

    When you hear anecdotes of ” there’s nothing for sale”, just look at the number of active listings. We’re just slightly above half the number of listings of a year ago. The usual spring bounce in listings didn’t happen( oh, maybe a tiny burp).
    But this is not a situation that can be sustained. At some point, there will be need to be more inventory. I’m just not sure how we’re going to get there. If house prices rise, there will be more inventory. But is extremely low inventory enough to get prices to rise? It remains to be seen whether prices are actually rising. People have less disposable income, are spooked by the economy and the recent real estate bust, lots of them are unemployed, and there’s just not a lot of confidence in the market. It’s a vicious cycle. People do want to own homes, especially now with much lower home prices and low interest rates. But there’s nothing on the market. And homeowners who’d like to sell are in a position where they can’t sell until prices are higher.

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  2. ARDELL

    I just ran some numbers and it looks like the current inventory is jam packed with overpriced listings in just about every category. I even stretched to “priced about right” being at 110% of where things are actually selling, and still most of the inventory is higher than that.

    4th quarter sales are more likely to come from prices coming down on existing inventory, than from “new” inventory coming on market. When homes “For Sale” are at $100,000 more than they should be…the “Shadow Inventory” becomes the existing inventory that is so overpriced that those homes are invisible…or “in the shadows” when it comes to being within a reasonable range to generate an offer.

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  3. HappyRenter

    RE: Ira Sacharoff @ 1
    I wonder whether Seattle will ever become like Vancouver, BC, where rich Chinese investors have been driving real estate prices to overly unaffordable levels.

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  4. Lord Koos
  5. Blurtman

    RE: HappyRenter @ 3 – Let’s hope.

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  6. HappyRenter

    By Blurtman @ 5:

    RE: HappyRenter @ 3 – Let’s hope.

    Seattle would be a booming city.

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  7. No Name Guy

    Good to see the foreclosure pipeline filling up again. As Ira notes in (1) there are probably a lot of folks that would sell, but are underwater or otherwise trapped by the current lower pricing environment.

    Hurry up and foreclose and these “zombie” / trapped assets can be freed up to re enter the market at a price that a willing buyer of today will pay and can afford. Better still, free up the people who are trapped in those zombie assets so they can get on with their lives. Only once the deadwood / trapped / zombie assets are freed can we have a chance of returning to a “normal” real estate market.

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  8. corndogs

    RE: Ira Sacharoff @ 1

    “People have less disposable income ”

    Please site your source. Disposable income per capita is currently higher now than it has ever been. In actual terms or adjusted for inflation. My source is http://www.bea.gov. In relation to housing, if you were to buy a 500K house at 3.5% interest today rather than the pre-bubble 6.5% interest, you’re putting about 10K a year in your pocket. Add to that the fact that you may pay 25% less for the home, the savings are substantial. Also, the personal rate of savings doubled following the 2007 bust.

    “lots of them are unemployed”

    Seattle unemployment is at about 2002 levels, nothing extraordinary. If you look at ‘employment’ there are more people in the Seattle labor force now than ever before.

    Sure, there are a lot of people out there with low confidence and a lot of them on this site. But don’t confuse gossip and grapevine with what the data shows out in the marketplace…. There are plenty of people out there with plenty of money to buy any inventory that we see coming on the horizon for the next 6 months. There is nothing quantifiable in your post to suggest that the laws of supply and demand will not prevail here. We are at the time of year where inventory typically peaks..Therefore it stands to reason inventory will be dismal throughout the end of the year. Lower inventory = Higher prices. Best case scenario for bubble bloggers…. they track with inflation..

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  9. corndogs

    RE: Ira Sacharoff @ 1

    “People have less disposable income ”

    Please site your source. Disposable income per capita is currently higher now than it has ever been. In actual terms or adjusted for inflation. My source is http://www.bea.gov. In relation to housing, if you were to buy a 500K house at 3.5% interest today rather than the pre-bubble 6.5% interest, you’re putting about 10K a year in your pocket. Add to that the fact that you may pay 25% less for the home, the savings are substantial. Also, the personal rate of savings doubled following the 2007 bust.

    “lots of them are unemployed”

    Seattle unemployment is at about 2002 levels, nothing extraordinary. If you look at ‘employment’ there are more people in the Seattle labor force now than ever before.

    Sure, there are a lot of people out there with low confidence and a lot of them on this site. But don’t confuse gossip and grapevine with what the data shows out in the marketplace…. There are plenty of people out there with plenty of money to buy any inventory that we see coming on the horizon for the next 6 months. There is nothing quantifiable in your post to suggest that the laws of supply and demand will not prevail here. We are at the time of year where inventory typically peaks..Therefore it stands to reason inventory will be dismal throughout the end of the year. Lower inventory = Higher prices. Best case scenario for bubble bloggers…. they track with inflation..

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  10. Seattle Bubble • Foreclosures Spiking Around Seattle

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

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