Chart Request: Median Price & Inventory Since the Peak

Here’s a chart request that was submitted by a user via the blue “submit ideas” button on the bottom-right corner of the page:

I would like a chart similar to the CSI price since peak chart with base 100. However, this chart would plot and contrast your Seattle median price since peak against the King County inventory number at each same period.

That could be interesting… Let’s take a look. In the following chart I’ve indexed the median sale price and total number of active listings of King County single family homes to 100 in July 2007—the month that local prices peaked.

Median Sale Price & Active Listings

From the peak to November 2012, the median home sale price is down roughly 20%, while the number of listings is down 63%. Of course, listings didn’t peak at the same time as home prices, increasing over 20% in the year following the home price peak. Since the listings peak in May 2008, the number of homes for sale has fallen nearly 70% to where it sits today.

  

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
    ricklind says:

    First in to point out that this is classic demand exceeding supply.
    Nice to see when it works, but it often doesn’t due to market distortions due to government interest rate manipulation, liquidity injection, bailouts of bank (no need to liquidate assets), etc.
    I hope this actually represents a turn in the RE market but am skeptical. Suspicious for QE3/QE4 effect.
    If the prices continue to rise maybe more of the held back inventory will start to reappear?
    I would like to see us come out of thes recession if we are going to. I am in a position to want to retire in 5 years but would like to leave something for succeeding generations.

    Fel Temp Reparatio

    Rick

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  2. 2

    Active lsitings have really fallen of the cliff.
    Sure, many people bought at the peak of the market , and are either unwilling or unable to sell . Sure, some people owe more on their property than the house is worth. Yes, as prices rise more properties will be listed. People often assume that whatever the current market is will stay that way. But I’m still kind of paranoid. Something doesn’t smell right, and it’s not that short sale with the rotten meat on the kitchen counter. The real estate “experts” are saying that properties are not being kept off the market. A few years ago, supply was robust, and buyers couldn’t be found. Now it’s the opposite, and it feels manipulated to me. Maybe I’m nuts, and I can’t begin to say who’s doing the manipulating. It’s a “natural” phenomena that with lower prices, supply will drop. But this much?

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  3. 3

    RE: Ira Sacharoff @ 2 – Don’t underestimate the effect of the press. Low prices, low prices, low prices scream the headlines. How many people are going to want to sell based on that type of news? Unless you have a particularly compelling reason to sell, why would you sell if constantly bombarded by that type of news?

    The reverse was in effect in 2005 and 2007, when the news was high prices, high prices, higher prices! That caused people to rush out an buy, many without a very compelling reason.

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  4. 4

    RE: Kary L. Krismer @ 3
    But what the press is reporting lately is all good news as far as real estate. Recovery! Prices rising! The press has some influence, sure, but I smell something more nefarious.

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  5. 5
    whatsmyname says:

    RE: Ira Sacharoff @ 2 – Ira, I was going to suggest that the high inventory you cite surrounding the market top was “unnatural” as well. But it’s time to come clean.

    We at the NAGH (National Association of Greedy Homeowners) have teamed up with the bankers and the Hunt brothers to corner the market on SFR’s. We have a pledge a la Grover Norquist to not sell our houses. If we can maintain discipline, we will use our power to implement our radical social agenda which I am not permitted to share with you. I just hope that houses are not as ubiquitous as silver.

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  6. 6
    David Losh says:

    This is a perfect chart.

    Inventory is down, prices go up. However this is just another asset bubble due to low interest rates, and affordability payments.

    I think, though that as time goes on, and the exhuberance wears off prices for single familiy housing units will decline.

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  7. 7
    whatsmyname says:

    It is a lot easier to appreciate the seasonality factor after seeing the inventory in annual overlay charts, but I like being able to see the series spread out over time. It looks like about a year of lower prices to see a turn in the inventory buildup, although that might correlate better to dropping sales. It would be interesting to add a closed sales line to this chart to see that interplay.

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  8. 8
    ARDELL says:

    RE: whatsmyname @ 7

    Absolutely agree. True “inventory” includes what was sold…not merely what was left behind.

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  9. 9
    corndogs says:

    RE: Ira Sacharoff @ 4 – “I smell something more nefarious” Does it smell like sh%t or shinola? I’d be interested in your take on the situation.

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  10. 10

    RE: corndogs @ 9
    I wouldn’t know. I’ve been told many times that I don’t know sh%t from shinola.

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