Sales of $200K-$300K Homes Dipped in February

Let’s have another look at our monthly sales histogram.

After sharpening in January, the sales curve flattened out again in February, with home sales between $200,000 and $300,000 taking a hit while home sales between $400,000 and $500,000 bumped up. The mode (i.e. the bucket with the most sales) for non-distressed sales moved from the $250,000 to $300,000 bucket in January back up to the $350,000 to $400,000 bucket in February, but the $400,000 to $450,000 bucket was just one sale shy of matching that level.

These results match up with my expecations that the mode will continue to shift toward the expensive ranges as we head into spring.

To generate the chart below, I took all the sales data for single-family homes sold in King, Snohomish, and Pierce Counties from the beginning of 2010 through the end of February. Since my data download puts late-reported sales into the month that the sale actually took place rather than in the month they were reported, there is a slight difference in the number of sales I’m counting vs. what the NWMLS reports each month.

By default the chart shows just King County sales in February. Use the controls below to scroll through different months, or to see what the mix looks like for Snohomish or Pierce County. I’ve also added color-coding and controls to separate out “non-distressed” sales from the sales of bank-owned homes and short sales.

As you explore the data for yourself I’d love to hear what stands out to you. Let me know in the comments!

  

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.

34 comments:

  1. 1

    The Majority Poor are Getting Poorer

    And the rich are getting poorer too….but with less impact….

    The very rich can lose a lot and still be very rich….

    Rate this comment: Thumb up 0

  2. 2
    Mike says:

    Hmmm… $600K fixer-upper just went under contract down the street in 3 days. Interesting, as these $600K-$700K fixers seem to be vast majority of the post bubble short sales.

    Rate this comment: Thumb up 0

  3. 3
    toad37 says:

    Does anyone think the Cyprus news will make people (subconsciously) nervous to have cash in the bank and think about putting it into real estate?

    Rate this comment: Thumb up 0

  4. 4
    David Losh says:

    RE: toad37 @ 3

    Whoa! Good for you!

    Rate this comment: Thumb up 0

  5. 5

    RE: toad37 @ 3
    Risky Banks Mean One Thing

    Higher interest rates…..and we all know what that means for real estate prices….

    Rate this comment: Thumb up 0

  6. 6
    The Tim says:

    Note: The Tableau servers appear to be having some issues today, making the viz in this post intermittently unavailable. Sorry about that!

    Rate this comment: Thumb up 0

  7. 7
    HappyRenter says:

    By softwarengineer @ 1:

    The Majority Poor are Getting Poorer

    And the rich are getting poorer too….but with less impact….

    The very rich can lose a lot and still be very rich….

    But at least the “poor” rich are getting all sorts of tax breaks thanks to GOP. That might pick up their moral. The middle class has to live with all the political mistakes made in DC.

    Rate this comment: Thumb up 0

  8. 8
    Top says:

    RE: toad37 @ 3

    Comparatively speaking, the US does not as many savers as the other countries. So it does not make sense for the gov to “tax” the depositors. However, there are $20T sitting in the 401K/IRA/pension funds. Hard to believe that when the going gets tough, the gov will not get their hands in them.

    Also, it is a lot easier to remove the existing tax credit for mortgage interests to boost revenue.

    Rate this comment: Thumb up 0

  9. 9
    whatsmyname says:

    RE: Top @ 8 – Behold the ratchet. Cut taxes for the rich; cut tax breaks for the middle class.

    Rate this comment: Thumb up 0

  10. 10
    animaniac says:

    RE: toad37 @ 3

    No, it makes people nervous about having assets that the gov. can take and put restrictions on. RE being very fixed. Not good news for RE anywhere. Fluid and hidden from the “law” is the key.

    Rate this comment: Thumb up 0

  11. 11
    whatsmyname says:

    RE: softwarengineer @ 1
    Wrong. The rich are getting richer. GDP is up $1.4T from the previous peak. Income-wise, everything the lower classes have collectively lost plus $1.4T has migrated to the rich.

    Rate this comment: Thumb up 0

  12. 12
    David Losh says:

    By Top @ 8:

    RE: toad37 @ 3

    Also, it is a lot easier to remove the existing tax credit for mortgage interests to boost revenue.

    I think a lot of people would be upset to lose the mortgage interest deduction. It would be a hard sell when it is so deeply entrenched. The mortgage interest deduction is more of a middle class thing. You might as well talk about doing away with the child tax credit.

    I would rather tax the financial markets.

    Rate this comment: Thumb up 0

  13. 13
    animaniac says:

    Hey, where is my previous comment? Why is such an innocuous comment being denied?

    Rate this comment: Thumb up 0

  14. 14
    animaniac says:

    OK, now it showed. Maybe.

    Rate this comment: Thumb up 0

  15. 15
  16. 16
    gxar26 says:

    RE: David Losh @ 12 – The mortgage interest deduction is more of a middle class thing. You might as well talk about doing away with the child tax credit.

    The mortgage interest deduction favors high income individuals and it is basically a subsidy for the real estate industry. Moreover, it is very geographically skewed, favoring high cost areas such as NYC, LA and SFO.

    http://taxfoundation.org/blog/some-facts-about-mortgage-interest-deduction

    Rate this comment: Thumb up 0

  17. 17
    toad37 says:

    Good stuff guys. Sometimes it helps to think like a criminal. I think 401k are vulnerable too, good point Top.

    Rate this comment: Thumb up 0

  18. 18
    Top says:

    RE: David Losh @ 12

    So what if people are upset. They can stay put or sell the properties. It is not like they don’t have a choice.

    I am interested to know what is the impact of the removal of mortgage rate deduction.
    a) Nothing except for a bunch of people complaining.
    b) People shy away from buying real estates, which brings the price down (demand collapse) and making the deduction a non-issue.
    c) ???

    Rate this comment: Thumb up 0

  19. 19
    whatsmyname says:

    RE: gxar26 @ 16
    Oops, does the Tax Foundation think that deducting margin and other investment interest is basically a subsidy for the securities industry? Is that perhaps more skewed to high income individuals? And no $1MM limit. One thing about tax propaganda; you don’t have to worry about the mullet noticing the inconsistencies.

    Rate this comment: Thumb up 0

  20. 20
    whatsmyname says:

    RE: Top @ 18 – Interesting how it “doesn’t make sense” to tax depositors, (because we have fewer than in other countries?), but it’s “easier” to take away the mortgage deduction, (where we have more than in other countries), as it’s a big so what if you “upset” the holdings of about 2/3 of the population. It sounds as though “making sense” and “easy” are have lost their english meanings in favor of congruency with a particular political leaning.

    Let’s go for asset equality. We should have a property tax on gross financial assets like we do on real estate. Then, if we need more money, we can look at deductibility for all investment debt. Makes sense. Should be easy.

    Rate this comment: Thumb up 0

  21. 21
    Top says:

    RE: whatsmyname @ 20

    “taxing” the depositors – the gov comes in and take away what you work for after they have already taxed you for it. Everyone loses faith in the gov. and currency. The gov takes a big risk on doing this because they can only probably do this one time. Therefore, it does not make sense.

    Removal of mortgage interests deduction – the gov comes in and take away the SUBSIDY on the interests. People gets upset but they shouldn’t feel like they are being robbed since it is a subsidy. Unlike taxing the depositors, the extra revenue is there after the removal of the deduction. Therefore, it is easier and make more sense.

    I am not a crusader trying to reform the gov. I am simply thinking what they will do if they need more money. Everyone knows the US is getting closed to the point of no return in term of debt saturation.

    Rate this comment: Thumb up 0

  22. 22
    David Losh says:

    RE: Top @ 18RE: gxar26 @ 16

    The mortgage deduction is absolutely a Real Estate industry subsidy. It benefits home owners, with mortgages.

    The upper tier, once you get passed the want to bes, pay cash for properties. There’s mortgage money available, but it’s high risk, so most people with money don’t carry a mortgage, they don’t want to pay the interest.

    That’s what makes this a middle class thing.

    If the mortgage deduction goes away, then millions of Americans, who thought they were doing the right thing by taking out a mortgage, get screwed. Many will just give up.

    We had a maasive loss of equity in the family home. They tell me that we are regaining that wealth effect from higher home prices, but I don’t buy it. I think we are only seeing more debt created with historicall low interest rates.

    Rate this comment: Thumb up 0

  23. 23

    RE: whatsmyname @ 11

    Yeah, the 15% Drop in American Millionaires Was Due to the Stock Plunge in 2009

    Don’t buy real estate, buy stocks if you think this is positive….any increase in millionaires in 2013 is the stock increases….read the WSJ….

    On the other hand, stocks can plunge horrribly again…..soon too….is this a good way to measure stable wealth?

    I’ve got short term wealth increases in stocks too, am I haughty about it? Hades no. Will I transfer it to a 1% CD to keep it stable as the 5-10% real inflation eats it up? LOL

    Sounds lose/lose to me….

    Rate this comment: Thumb up 0

  24. 24
    Bob Loblaw says:

    Re: MID, there is absolutely no question that it disproportionately benefits the upper class. And it’s fairly wrong to state that the very rich don’t utilize mortgage debt to buy homes. Of course they do! They have financial advisors, who know that utilizing a mortgage to buy a home is basically free money due to the MID, and that the opportunity cost of not using that money elsewhere (say investing in XYZ fund) is high.

    Also, the very rich don’t simply buy stocks or bonds, but typically invest in a wide array of investments that are not available to the rest of us (during the boom, this included ARS, CDOs, CP, and both during and after the boom, this still includes alternative investment vehicles like hedge funds and VC funds). Goldman or Morgan will take care of their portfolio and have a nice highly educated young man or woman stay in touch with said rich person to ensure their risk profile is being at least nominally represented in their investments. Of course, if said rich person is rich enough, they will have their own in-house investment professionals. Regardless, they get to play around in stuff that you and I don’t.

    One of the reasons that real estate is seeming so attractive to so many people right now is the total lack of any other attractive investments. Stock markets are at very high P/Es, bonds are of course very highly priced historically, and even commodities like gold seem very frothy. I think that many smart people are basically saying something like “Well, housing seems unlikely to drop significant amounts at this point [I understand that this point is debatable, I’m just trying to convey what I think is the elite conventional wisdom], and given that everything else either seems to be returning close to 0% or has significant downside risk, housing seems like a decent investment, particularly given the tax benefits.”

    Note that this sentiment is different from that of the 04-07 bubble in at least one very critical way: the buyers in this market are not looking to turn a quick buck but instead are looking to buy and hold. They may be wrong about the bottom (I for one think the effects of the sequester will hit employment and wages in about 6-9 months, and this in turn will negatively impact the housing markets in about 12-18 months), but it’s not frothy speculation either.

    Just my two cents, fwiw.

    Rate this comment: Thumb up 0

  25. 25

    RE: Bob Loblaw @ 24

    Free Money for the Rich Ringing Up Real Estate Mortgage Debt Using Debt Fed Tax Write Offs???

    Bob, you have SWE rolling on the ground in laughter now….

    You remind me of those near sighted financial advisors [?] telling people [when checking accounts had 8% interest too] not to save their money, they’ll owe taxes on the interest. But refused to acknowledge most of the 8% interest earned was “not taxed”…

    Same scenario in reverse, ya borrow at 3-6% mortgage rates and ya deduct mabe 1/3 off your fed tax liabilities….but still pay the banksters the rest….on a house principle risk depending on QE welfare to keep interest rates artificially WAY TOO LOW.

    The rich can’t afford the risks and losses, and no, it ain’t FREE MONEY.

    Rate this comment: Thumb up 0

  26. 26
    Bob Loblaw says:

    RE: softwarengineer @ 25
    You don’t understand basic tax and arbitrage principles. There is literally no good reason to buy a house with cash, given current tax and housing finance policies in the United States, unless you are able to negotiate a steep discount. Debt payments are deductible from income, and current mortgage rates are very low (particularly if you are low credit risk, as the very rich are).

    So you were the guy laughing in Econ 101 and Accounting 101! Looks like you ended up failing those classes, but glad you found a job as a software engineer.

    Rate this comment: Thumb up 0

  27. 27
    Bob Loblaw says:

    RE: Bob Loblaw @ 26

    Didn’t look at your previous posts. You’re the guy calling for 5-10% inflation in a deflationary environment! Explains your worldview. Peace.

    Rate this comment: Thumb up 0

  28. 28

    RE: Bob Loblaw @ 27

    Buy Gas and Food and Rent Lately?

    Zero inflation????
    Keep believing that brainwashing from the foreign/corporate sources that tell ya the best is the worst and overpopulation causes wage increases…LOL

    Rate this comment: Thumb up 0

  29. 29
    wreckingbull says:

    RE: softwarengineer @ 25 – Softie, aren’t you the one that is always bragging about your stock portfolio performance? You tell us that you are getting double digits returns on your money. Why in the hell would you tie up that money when you can unleash it at the cost of 2.75% (not to mention the MID)? Your posts seriously confuse me.

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  30. 30
    David Losh says:

    RE: Bob Loblaw @ 26

    I do understand the what you are saying. You think people who are wealthy will play around with funds from the family home to invest elsewhere. I don’t see the point in that. I can see property pledged as a security, but don’t see borrowing those funds. Why would you? Why would you take 2.5% say, from your investment to pay other debt?

    What I see is more people scambling to get cash. Equity in an asset, like the family home, is cash, why risk it?

    I made the distinction between the rich, and the wealthy. The rich are leveraging at what I consider an alarming rate, as you outlined. The wealthy are making financial moves that guarantee returns. There are plenty of guaranteed returns out there if you have enough cash, Real Estate would be one of them, right now.

    The question, that I think only the wealthy can answer, is when the musical chairs of this bubble will stop. They’ll see the bubble bursting long before, and will be able to capitalize better than, we will.

    There is no such thing as insider trading rules in Real Estate.

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  31. 31
    whatsmyname says:

    By Top @ 21:

    RE: whatsmyname @ 20

    “taxing” the depositors – the gov comes in and take away what you work for after they have already taxed you for it. Everyone loses faith in the gov. and currency. The gov takes a big risk on doing this because they can only probably do this one time. Therefore, it does not make sense.

    The sales tax taxes you on money you have already made and paid taxes on. Property taxes tax not only what you have worked for after “they” already taxed you for it (down payment and amortized loan balance), but also tax you on money you have not yet earned by taxing the full asset value.

    Asset taxes have been around for a very long time. Your deposits are simply another asset. There is no reason a 1 or 2% annual tax on deposits should seriously impact soundness of the currency. It would simply impact portfolio decisions in holding dollar denominated assets. It would, in fact, be a positive motivation to invest heretofore dead cash in productive assets as “they” keep saying they want to do.

    What they will do, I truly do not know, but without resistance, they will continue to fix the machine to distribute more income to the rich, and more taxes to the lower classes.

    Bob at 24: “MID, there is absolutely no question that it disproportionately benefits the upper class. And it’s fairly wrong to state that the very rich don’t utilize mortgage debt to buy homes. Of course they do!”

    Disproportionately to the poor, perhaps. MID is capped at $1MM, though; and much less disproportionately skewed to the rich than the investment interest tax deduction. It is fairly dishonest to justify ditching the MID as skewed to the rich while ignoring an interest deduction much more skewed to the rich.

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  32. 32
    Azucar says:

    By David Losh @ 22:

    RE: Top @ 18RE: gxar26 @ 16

    The mortgage deduction is absolutely a Real Estate industry subsidy. It benefits home owners, with mortgages.

    The upper tier, once you get passed the want to bes, pay cash for properties. There’s mortgage money available, but it’s high risk, so most people with money don’t carry a mortgage, they don’t want to pay the interest.

    That’s what makes this a middle class thing.

    If the mortgage deduction goes away, then millions of Americans, who thought they were doing the right thing by taking out a mortgage, get screwed. Many will just give up.

    We had a maasive loss of equity in the family home. They tell me that we are regaining that wealth effect from higher home prices, but I don’t buy it. I think we are only seeing more debt created with historicall low interest rates.

    If what you’re saying is true, then why not limit the MID to interest on the first $500K of a mortgage? The “middle class” would still get the benefit of the deduction, and those who take a mortgage of over $500K only get the benefit for the first $500K.

    Or are you saying that “middle class” mortgages are usually higher than $500K?

    Also, I don’t understand what you mean when you say “There’s mortgage money available, but it’s high risk.” What is high risk about taking a mortgage at around 3 percent? Unless you’re saying that trying to make more than 3 percent with the cash that you could invest (instead of spending on a house to buy it in cash instead of taking a mortgage to pay for it) is high risk… I agree that there’s a lot of risk in stocks at the moment, but I don’t see what you’re saying when you say that a mortgage is high risk.

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  33. 33
    David Losh says:

    RE: Azucar @ 32

    Lending millions on a mortgage is high risk, high exposure, to the lender. The lender has money out that would probably sit in a portfolio, because the secondary market would rather have smaller mortgage chunks.

    A safe investment is paying about 4.5%, So for a safe equity position it is a no brainer, you might as well pay off the mortgage.

    The whole point is made perfectly by Azucar. In the world of tax subsidies there is a lot to go after before tackling the Mortgage Interest Deduction.

    The Real Estate market is alread screwed up enough.

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  34. 34
    Top says:

    RE: whatsmyname @ 31

    Sale tax is voluntary – People is aware of it before they conduct a transaction. They have a choice no to participate or use a different venue (legally or illegally) to complete the transaction to minimize the tax burden.

    Depositor tax is non-voluntary and only target a specific group – There is no service performed or transaction taking place. It is only happening because there are money sitting in the accounts.

    In a nutshell, sale tax is like you are giving Uncle Sam a cut on every transactions you made. Deposit tax is like Uncle Sam pointing a gun at your head asking you to hand over your wallet.

    As for property tax, I am sure you can buy/build a house on a piece of land with no services like water, sewer, electricity, gas, school, police, fireman, phone, and infrastructure to reduce it to the bare minimum.

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