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.

34 responses to “April Stats Preview: Finally Some Inventory Edition”

  1. Erik

    I will be the first to admit that I am a little disappointed that inventory has risen. I hope inventory shrinks, so I can sell my place for a large profit without having to pay capital gains tax. I will continue cheering for less inventory until next summer. I bought November 2011, so spring 2014 will probably yield the highest profit for me. I think i would be pretty happy pocketing $150k and buying those cheap auction places Ray talks about.

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  2. softwarengineer

    Perhaps the Retiring Seattle Baby Boomers Wanting to Down Size With Clear Titles

    Have suddenly decided to sell….they can’t wait forever….smart move in my book.

    I was offerred a trade last weekend for my “title clear” smaller “30% property taxed reduced” SE King county unit for a much larger Marysville McMansion [I kick in only $74K cash] witha large attached garage too and a two car garage attached to his large rambler…..the retiring Boomer wanting my smaller home is trying to avoid high overhead costs [like property tax, maintenance and utilities] on a small retirement income. He sees the hand writing on the wall now and used to disagree with my predictions. Now he totally agrees with me.

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  3. Erik

    RE: softwarengineer @ 2
    I wouldn’t live in Marysville unless I had no other choice. Yuck yuck!
    It may be better than Kent, Tacoma, Spanaway, Lakewood, and that whole Pierce county area but slightly worse than Everett. Wouldn’t you rather live somewhere nice if you can afford it?

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  4. mike

    RE: Erik @ 3 – but it’s a mansion! without the “Mc”, how could he possibly pass that up? Now why exactly someone built it out there is a question no sane person can answer, but I’m sure sitting on your gold toilet next to your 17 car heated and cooled garage will be enough to suppress any concern.

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  5. Erik

    Correct mike. If you build a nice house in a dump, you still live in a dump. Sometimes people do this to bolster their ego so they can feel like king of the losers. Other times, all they see is dollars and cents.

    Surround yourself by people that are competitive and progressive and it will drive you to strive to be more competitive and more progressive. Surround yourself with people that aren’t progressive and competitive and you will become more like them. I believe this 100%. I have experienced this first hand.

    I notice people on this site don’t prescribe to this idea. I work with other engineers all day everyday and I notice they don’t believe this either. It is one of those things that you cannot calculate.

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  6. Mike

    Inventory may be moving up but it is still at least a 1/3 lower than last year and it wasn’t like last year had a flood of houses on the market. Entirely antecedent but the good inventory in NE Seattle this last month has been almost non-existent, slightly overpriced and sitting longer. Seems like a lot of drift wood is trying to catch the rising tide. I don’t believe that most of the rest of the “Seattle” market really is comparable to N Seattle/Kirkland, but if they are any indication I wouldn’t be surprised in the next month or two to see (1) average prices fall, (2) sales falls, (3) inventory continue to rise.

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  7. Erik

    I think i am strongly Utilitarian on a website filled with Formalists, so I don’t expect to get a lot of thumbs up.

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  8. ARDELL

    RE: Mike @ 6

    “Seems like a lot of drift wood is trying to catch the rising tide.”

    Exactly how long does a house have to be on market to be classified as “driftwood”.

    One of the things that has surprised me in the last 6 months, that I have not seen before in the 23 years I have been in real estate, is seller’s freaking out when their house doesn’t sell in the first 7 days. Granted most of mine recently have sold within 7 days, but I have one in escrow now that sold at full price on day 26. Was that one “driftwood”?

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  9. Blurtman

    RE: ARDELL @ 8 – Smackdown, wimpy man.

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  10. Plymster

    By ARDELL @ 8:

    RE: Mike @ 6
    One of the things that has surprised me in the last 6 months, that I have not seen before in the 23 years I have been in real estate, is seller’s freaking out when their house doesn’t sell in the first 7 days. Granted most of mine recently have sold within 7 days, but I have one in escrow now that sold at full price on day 26. Was that one “driftwood”?

    1) My guess is that they are fairly aware that we are in another housing bubble, and they want to sell while they can. Prices (housing, stocks, gas, gold) have whip-lashed everyone to death since 2008.

    2) When half of all homes sell in about a month (the median days on market for SFH in Kirkland is 39), and all you hear are tales of 5-10 offers in the first week, I’d say sellers have good reason to freak out.

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  11. Eastsider

    This housing market is looking more like the stock market. Price volatility is becoming the norm. Even big monies are now “investing” in housing. The days of stable house prices are long gone. In the not too far future, houses will trade in a matter of seconds, and of course the HFT guys will be around to provide liquidity.

    This market stinks!

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  12. mike

    RE: ARDELL @ 8 – 7 days. Sellers around here seem to be reducing prices if it sits for 2 weekends, is in a high demand area and is the kind of property people expect for the neighborhood. There was one a few blocks from me (8830 Earl Ave NW) that listed at $595K, which seemed just a hair high as my wife described it as an “ugly 70’s house”. Price drop to $577K and it went under contract in 3 days.

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  13. Mike

    RE: ARDELL @ 8 – I wouldn’t freak out as a seller. It is the buyers who are desperate to find “something” that pick up the slow movers who should worry. If a house doesn’t move in the first week or so right now with very little competition, that is probably not a house I’d want to be left holding when the music stops. As a buyer the current market is insanely frustrating and, assuming you decide to do what half the people on here consider to be a dumb idea in the first place, it takes a lot of discipline not to get sucked into a lemon. There is almost nothing with at least 3br in 98115 right now that probably isn’t a stretch given either its location on a busy street or limited sq footage.

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  14. ARDELL

    RE: mike @ 12

    There are shifting values pushing some areas higher than others. In Seattle when they changed the school system to geographically based (2009 I think) after being not geographically based for 30 years, there was no immediate impact on home prices. That was because the people in their homes that had children in school were grandfathered to stay in the school they previously chose, regardless of the new changes and where they lived.

    What we are seeing now is a result of that change and why neighborhoods that were previously not particularly in favor are pushing up in price and in high demand due to that 2009 change that said you have to go to school where you live. Before that lots of children where in the best schools as long as their parents would drive them there. Now you pretty much have to live there to go to that school, so all areas in the boundaries of those preferred schools are being boosted in price and there are not enough houses for all the people who want them.

    In Kirkland we are also seeing some areas pushing way up over their historic norms as to price, but for a different reason. From Simonds Road down to where Kirkland used to end was previously unincorporated King County with an address of Bothell 98011. Since that section was annexed and now Kirkland 98034, the prices are shifting from Bothell prices to Kirkland prices. So the houses did not technically appreciate by 12%, as Kirkland was always higher than Bothell. But those old neighborhoods are now grabbing the new prices because of the change.

    Bothell didn’t go up as much, and Kirkland that was always Kirkland did not go up as much. But that section that switched from Bothell to Kirkland is playing catch up to the rest of Kirkland.

    A bit crazy when you think about it, as the only thing that really changed was the mailman. :)

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  15. ARDELL

    As to Seattle, yes it was 2009. Late in 2009 decision:

    http://raincityguide.com/2009/11/19/seattle-schools-admit-by-address/

    Not sure when it went into effect after that decision, but people with children too small to be in school at that time have started shifting in panic mode to get to a different house that has the school they want. Before the decision noted above, they did not have to buy a house there to go to that school.

    This is particularly true in some Ballard neighborhoods to be on the better side of 85th, as example.

    So you can’t really talk about housing in Seattle anymore simply by zip code, as the lines have been drawn in the sand…and those lines are called school boundary lines.

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  16. 3rd Generation

    14. ARDELL

    Great information.

    Thank you.

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  17. Erik

    I wanted to buy something in those areas in late 2011, but it was still too expensive for me, so I bought on the Eastside since prices fell way more for low tier homes over here. Those areas in Seattle don’t seem to ever really lose that much value compared to areas outside of Seattle. I have a feeling that I will never be able to afford those areas unless I win the lottery or marry a rich old lady.

    I like where I’m at in 98034. Not as fun as downtown Seattle, but it will have to do. Atleast it’s not North Everett, Marysville, or most of Pierce County for that matter. It’s clean here and not a lot of crack heads walking the streets. When I lived in Everett there was a guy that would scream his head off while walking down the street and another guy that wore overalls that weighed about 80lbs. I lived around 22nd and Oakes for years. I would chase crack heads out of my yard all the time. Terrible experience. Lesson learned. That’s why i am freely preaching my opinion on here. I thought it would be a good idea to start in a poor area and climb the real estate latter. Bad idea… just enjoy life and rent.

    Thanks for the good information Ardell. Out here in 98034, we have always been made fun of as people trying to be part of kirkland, but not. We are raising up!

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  18. mike

    RE: ARDELL @ 15 – most of the Ballard kids go middle school north of 85th @ whitman. Whether they’ll continue bringing kids from Queen Anne and Magnolia up to Ballard is too soon to predict. Maybe this is going to lead to a wave of sales every few years, who knows.

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  19. David Losh

    RE: ARDELL @ 15RE: ARDELL @ 14

    When I first started blogging it always seemed you gave away too much for free. Now it’s refreshing to get any good information out of the internet blogs that is any information at all.

    Thanks for your dedication to far flung future Real Estate clients. We are very lucky to have you.

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  20. Ira Sacharoff

    By ARDELL @ 15:

    As to Seattle, yes it was 2009. Late in 2009 decision:

    http://raincityguide.com/2009/11/19/seattle-schools-admit-by-address/

    Not sure when it went into effect after that decision, but people with children too small to be in school at that time have started shifting in panic mode to get to a different house that has the school they want. Before the decision noted above, they did not have to buy a house there to go to that school.

    This is particularly true in some Ballard neighborhoods to be on the better side of 85th, as example.

    So you can’t really talk about housing in Seattle anymore simply by zip code, as the lines have been drawn in the sand…and those lines are called school boundary lines.

    How can you explain Madrona and Leschi? Insanely expensive homes that sell quickly, and poor to fair public schools. I know that the houses are classic , the neighborhoods are pretty and pleasant, and the views are killer. And that lots of parents send their kids to private schools. But it seems to be an aberration where the home prices are strongly influenced by the public schools.

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  21. David B.

    The question is, is this uptick in inventory a blip in an ongoing downward trend, the beginning of a sustained increase, or a sign that inventory has bottomed out (i.e. it’s going to linger at about this level for some months before changing). I’m pretty sure it’s not a blip (inventory is so abnormally low already that the chances of continued decline are small), so it’s most likely a case of it being one of the two latter situations.

    The question is, which one?

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  22. ray pepper

    RE: David Losh @ 19 – We all love to give free advice. Heres some now…ABSOLUTELY FREE:

    1. Unless your at a Trustee Sale, paying 70% off of retail, if you enter into a highest and best bidding competition..YOUR A FOOL!

    2. If you are buying now BECAUSE of low interest rates…YOUR A FOOL!

    3. If you accept your Loan Modification, and your still upside down…YOUR A FOOL!

    4. If your still paying anyone 6% to sell your home, or even worse giving away YOUR 3% for some to FIND YOU A HOME, and your a Seattle Bubble Reader……….then….http://www.youtube.com/watch?v=Nh7UgAprdpM

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  23. SG

    RE: ray pepper @ 22 – If you don’t know the difference between ‘you’re’ and ‘your’ – YOU REALLY ARE A FOOL.

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  24. ray pepper

    RE: SG @ 23 – sorry I dont read em..i just blurt em out and write em! Looking for correct grammar? Don’t come to blogs! The hidden value is in the message………you obviously missed it so maybe read again and find the true value from the author!

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  25. Ira Sacharoff

    By SG @ 23:

    RE: ray pepper @ 22 – If you don’t know the difference between ‘you’re’ and ‘your’ – YOU REALLY ARE A FOOL.

    Contrary to popular belief, former Texas Governor Jim Hogg did not have a daughter named Ura. He did have a daugter named Ima.
    But if my last name were Fool, I’d surely name my daughter Ura.

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  26. redmondjp

    RE: Ira Sacharoff @ 20 – Ira, I think you hit the nail on the head with your statement that a lot of those homeowners probably send their kids to private schools – so for them, the school district they live in is irrelevant.

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  27. David Losh

    RE: Ira Sacharoff @ 25

    Obviously you missed the connection to your good buddy cornholes comment about schools on the other thread, a comment by cornhole that you encouraged, and he got my response.

    You’re a fool to be playing a fool on a blog.

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  28. Blurtman

    RE: redmondjp @ 26 – Except for a few magnet schools, you would send your kids to private school in SF. The idea of mingling with the rabble would seem repulsive to many.

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  29. corndogs

    RE: Mike @ 6 – “I wouldn’t be surprised in the next month or two to see (1) average prices fall, (2) sales falls, (3) inventory continue to rise.”

    It’s typical for inventory to increase substantially in the Spring, this current increase in KC of less then 200 houses is nothing. Inventory would have grown substantially in April, except buyers cranked up the sales pace to match the increased supply (you might have noticed April was the highest sales month since the bubble), so this is NOT an indication that inventories are going to increase to a point that prices fall, certainly sales don’t look like they are going to fall, sales are high and still being limited by availability. If you don’t see KC inventory increase by a couple THOUSAND houses within the next 3 months, you’ll be looking at another year of rising prices.

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  30. erik

    RE: Corndogs @ 29
    Please explain what kc is.

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  31. ARDELL

    RE: erik @ 30

    King County?

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  32. corndogs

    RE: SG @ 23 – “If you don’t know the difference between ‘you’re’ and ‘your’ – YOU REALLY ARE A FOOL.”

    Thanks male secretary, you forgot the other variant that you hear from your boss everyday “SG! get me another cup of coffee Y’hore!”

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  33. Brett

    Hello, I’m a first time buyer. I am 58 years old, single, pay cheap rent, have money saved up for 20% down. Should I take the plunge now and buy a house this late in life or am I too old to buy? The loan would be a 30 year mortgage. I appreciate your professional advice.

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  34. ARDELL

    RE: Brett @ 33

    Keep saving, wait until you are older and buy your retirement dwelling in the place you intend to die in, all cash. That’s my personal plan and I’m turning 59 in June. :) Not a “first time buyer” though by any stretch of the imagination.

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