October Stats Preview: Late Sales Leap Edition

With October behind us, let’s have a look at our 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, here’s the summary snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snhomish County Stats Preview

Summary: Foreclosures ticked up, sales jumped (surprising for this time of year), and inventory began its descent into winter. Hit the jump for the full suite of our usual monthly charts.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Salse in King County jumped 14% from September to October, highly unusual for this time of year. It will be interesting to see if we see the same leap in the sales stats from the NWMLS.

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

Deeds in Snohomish increased as well, but remained just below last year’s level.

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

Month to month increases in both counties, and big gains over a year earlier. I still expect the overall trend over the next year to be decreasing foreclosures. It is not unusual to see month to month spikes up and down no matter which direction the long-term trend is heading.

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

Trustee deeds were down both month over month and year over year. It will probably be a few more months before we see the July spike in Notices of Trustee Sale translate into a similar spike in Trustee Deeds.

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

Looks like we’re heading south for the winter. If this year’s fall/winter trend follows usual seasonal patterns (which this spring did not), we can expect to hit all-time lows each of the next three months.

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.

13 comments:

  1. 1
    softwarengineer says:

    Good Work Tim

    Looking at your approximate increasing YOY regression analysis trending of the foreclosure processes and the drops in listings at the same time brings up a plethora of good analysis specifics:

    Could underwater loans mitigating sales listings be more important than the smaller magnitude 2011/2012 increases in the foreclosure processes, potentially adding some listings? I agree with one of the Seattle Bubble Bloggers, short sales before the foreclosure processes seem to rule the listings numbers, even as small as they are.

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  2. 2
    Marc says:

    “Sales in King County jumped 14% from September to October, highly unusual for this time of year. It will be interesting to see if we see the same leap in the sales stats from the NWMLS.”

    This market seems to be exhibiting some signs of the irrational exuberance of 2006-2007. Low interest rates and a little bit of consumer confidence are motivating buyers to get in the mix and low inventory are emboldening listing agents and sellers to price their homes aggressively. I’ve seen quite a few multiple offer situations recently where the comps in no way support the list price yet the house actually sells for over list. WTF?

    And I don’t think it’s going to change much in the near term. We’re admittedly a very small player in the overall market so our results aren’t indicative of much. Nonetheless, October turned out to be our best month for the metric we follow most closely (new paid clients). We never expected to hit 500% of goal for the month let alone for October to be our best month of the year but here we are.

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  3. 3

    RE: Marc @ 2 – I think a lot of the activity is driven by low interest rates (something consumers seem to follow closely), and simply being tired of waiting. Five years is a significant portion of the prime earning period of an adult’s life.

    It’s somewhat similar to how car sales eventually rebound, but there it’s due to the car wearing out. For houses it’s patience that wears out.

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  4. 4
    Marc says:

    By Kary L. Krismer @ 3:

    RE: Marc @ 2 – … simply being tired of waiting. Five years is a significant portion of the prime earning period of an adult’s life.

    I think that’s definitely a big pschological factor for a lot of people. It makes it very difficult to advise clients because they want it and the low supply is causing major discomfort for these folks. Desperation is definitely in the air for some buyers. FIGHT IT. Don’t give into the Dark Side.

    Of course that’s easy for me to say, I’ve got a house and don’t need or want to move.

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  5. 5
    Erik Muller says:

    I’m gonna buy another place when those foreclosures work themselves through the pipe. Seems like March 2013 – December 2013 should be a good time to buy.

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  6. 6
    Marc says:

    RE: Erik Muller @ 5 – Based on Tim’s charts I’ve been advising clients that the increased NOTS we’re seeing might lead to increased foreclosures returning to the market in the spring and beyond. And, if that materializes it may serve to cool off price appreciation.

    However, if Europe doesn’t explode and no other major events upset the economy, that might not be sufficient if the foreclosures don’t come in large enough numbers. The first wave will quickly get swallowed up. I suspect they’ll have to keep coming in reasonably big numbers to satiate demand.

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  7. 7
    Erik Muller says:

    RE: Marc @ 6
    Agreed. Maybe i’ll lean closer to winter.

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  8. 8
    S-crow says:

    RE: Marc @ 2 – I’ve seen quite a few multiple offer situations recently where the comps in no way support the list price yet the house actually sells for over list. WTF?

    And, it’s magic! It appraises. The appraiser I have in my building continues to say it is harder and harder to justify some of these prices….and yet they appraise.

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  9. 9
    Pegasus says:

    RE: S-crow @ 8 – That is the power of the almighty dollar at work. If they start claiming every home won’t appraise at the sale value they will soon be out of business as the appraisals will be directed to someone else who appraises at a higher price. Some things never change.

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  10. 10
    No Name Guy says:

    RE: Marc @ 6

    And don’t forget the massive amount of inventory (already foreclosed) being held off market. In my ‘hood for example (South Sno County – between Lynnwood and Brier) there are multiple vacant foreclosed homes just sitting there, and have been for some time. It’s extend and pretend baby for the insolvent banks holding those properties. They’re trying to dribble them out on to the market so they don’t suppress prices, yet are getting killed on the holding costs. Oh well, I guess when The Bernake will shovel billions of free money your way, you don’t have to play by the same rules as everyone else.

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  11. 11
    Lo Ball Jones says:

    RE: Erik Muller @ 5

    Going with 2014 myself.

    Seattle Reality Check:

    Memphis, TN
    3 Bedroom
    $80,000

    http://www.zillow.com/homedetails/4299-Crystal-View-Cv-Memphis-TN-38141/55303295_zpid/

    2 Bedroom
    Brick Townhome
    $34,900

    http://www.zillow.com/homedetails/4413-Misty-Morning-Dr-Memphis-TN-38141/110282442_zpid/

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  12. 12
    Marc says:

    RE: S-crow @ 8 – To be fair, if they got multiple offers that are in a reasonably close range of one another, then it probably should appraise. Two or more arm’s length offers in the same ballpark are pretty darn good evidence of “today’s” fair market value even if the comps from some past time period don’t seem to support it.

    Admittedly, multiple offers from similarly overly zealous and desperate buyers may also simply mean they’re all off their respective rockers.

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  13. 13
    ARDELL says:

    RE: No Name Guy @ 10

    Actually…that is what most sellers of multiple units do…so yes they are playing by the same rules as everyone else who has lots of inventory to sell. Like most any builder who opens up a few for sale at a time, in succession for years, until they finish Phase 1, 2, 3 and 4.

    Even tiny complexes like Lakeview Lane in Kirkland have been dribbling them out and still have plenty of lots marked as “future” homes to be sold. Builders don’t drive their own prices down by opening them up all at once…never have.

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