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.

15 responses to “Inventory Now On Track to Beat 2012 By August”

  1. ARDELL

    Is this an increase in inventory? Or merely a slow down in the pace at which they are selling, causing there to be more “standing” inventory?

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  2. Erik

    A very basic rule of engineering is that interpolation is okay, but extrapolation is never okay. Not sure why you think it’s okay to extrapolate inventory increasing? Do you know something that we don’t? Why are you assuming inventory is gonna increase?

    2003, 2004, 2008, 2009, 2010, 2011, 2012 didn’t peak in September. 2000, 2001, 2002, 2005, 2006, 2007 did peak in September. I see more instances where the peak is NOT in September. In fact, from this data, we are more likely to peak before September. I think your projection is a wild assumption.

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  3. Jonness

    RE: Erik @ 2 – Erik: You are comparing all months vs September as opposed to any other single month against September. Looking at the chart, September has the highest probability of being the peak compared to any other single month (which is why Tim says it’s typically the peak month). But as you point out, the data shows the odds are against September when compared to all other months combined.

    That being said, I don’t think Tim made any assumptions. Here is what he said:

    “If listings keep growing at their recent pace, we’ll hit year-over-year positive territory by August, followed by a nice 17% gain in September. Of course, even it that happens…”

    I notice he used the word “if.” Thus, no assumptions were implied.

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  4. Carl

    RE: Jonness @ 3 – And “if” aliens land and buy up all the inventory, then prices will go up. Your semantic parsing of “if” would render Tim’s statement worthless. I think Tim’s judgement is that inventory will go up.

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  5. erik

    RE: Carl @ 4
    I agree. The statement could read “Assuming inventory goes up…” Why would someone make that statement if they didn’t think that was going to happen?

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  6. LMaS

    Only two years on that graph have a trajectory anything like the one projected: 2006 and 2007. Does that say more about the projection or the current market?

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  7. Marc

    By Erik @ 2:

    Do you know something that we don’t? Why are you assuming inventory is gonna increase?

    Simple economics. Prices are up which tends to draw out sellers.

    I’ll put good money on inventory increasing and following a path along the lines of Tim’s projection through the rest of this year with Q4 being YOY positive. Prudent buyers will hang tight rather than go berserk trying to win a multiple offer death match.

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  8. Erik

    RE: Marc @ 7
    I would love nothing more than to see a death match winner takes all fight outside the steps of my home. I would cheer the potential buyers on and walk away with my pockets filled with cash. I will be cheering for low inventory.

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  9. Marc

    RE: Erik @ 8 – I hope you handle disappointment well.

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  10. Erik

    RE: Marc @ 9
    I’m use to disappointment. I always aim high and as a consequence, I often fall on my face. Most people on here play the safe route and shoot for mediocre. That isn’t my approach. I have a great job, a great degree, and a great home. I use to have a bad job, a bad degree and a bad home. I attribute it to taking chances and not being scared of risk.

    To get these things I had to “swing for the fences” everytime. My attitude has always been “You miss 100% of the chances you don’t take.” If I continue swinging for the fences, I think i will achieve more than if i swing for a base hit.

    With the condo, I could have sold and lost 20% to capital gains tax. I chose to wait until after November to avoid capital gains tax. We’ll see how it plays out, but if you are right, I will have made the wrong decision.

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  11. Jonness

    By erik @ 5:

    RE: Carl @ 4
    I agree. The statement could read “Assuming inventory goes up…” Why would someone make that statement if they didn’t think that was going to happen?

    Isn’t that obvious? If you thought for certain inventory would go up, you wouldn’t say “assuming.” OTOH, if your forecast is that inventory will most likely go up, or that it might go up, you would say “assuming” or “if.”

    I just don’t see where Tim did anything worthy of being criticized for being a guy who makes wild assumptions. He is a busy guy with a job, a commute, and a family. Yet, day in, day out, he somehow finds the time to post interesting content for us to debate upon. It’s not like we are paying him to entertain us. It seems to me, you are trying to validate yourself by criticizing his work as opposed to living off the merits of your own work.

    Why not expend that kind of energy writing a guest article for this website worthy of Tim’s publishing criteria? Myself and several others have done it. Show us something interesting if you are capable.

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  12. whatsmyname

    “If listings keep growing at their recent pace, we’ll hit year-over-year positive territory by August, ”

    This is a fun game; you could do it with anything, maybe with the new mls data. For example, if median prices keep growing at their recent pace, we’ll hit positive territory compared to the corresponding month in 2007 by September.

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  13. Erik

    RE: Jonness @ 11
    It wasn’t meant to be anything personal towards Tim. I don’t draw the same conclusion based on my limited knowledge. I did note Marc’s explanation, which is what I was looking for.

    If you don’t get it by now, I’m not a real estate guru. I observe what Tim writes and what others say and I try to understand it and repeat it. So when I discuss something that is perhaps an inappropriate assumption, I throw it in the comments pit to see what everyone else thinks. Maybe Tim is making a great assumption and I’m too ignorant to get it. The best process for me to learn on here is to make statements when I see something my logic doesn’t agree with. What I’m looking for is if I’m wrong for someone to educate me, so I no longer think that way. Seemed pretty obvious to me what was going on….

    When I sell my condo, I was thinking of documenting my process including prices, contractors used, risk, etc. and post it on here. I have already written a document on it, but i’d probably have to consolidate it because it was a paper for an Engineering Project Management class I took. I will possibly sell in February 2014, so it would be after that I could submit my post. My remodels are pretty real and I do most of the work myself. Not an HGTV remodel. It takes a year of pushing myself after work and on the weekends with a limited budget.

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  14. Jonness

    RE: Erik @ 13 – Erik: IMO, your style of remodel would make an excellent article and be very educational to others. Not everyone has the cash to hire everything out. Also, hiring out eats into profits. I’m guessing you did a lot of the work yourself and hired some of it out, which would make a nice blend.

    If you need help putting the article together, I’d be glad to lend a hand. Also, I can provide you additional space if you want to condense the story but provide a drill down for more detail.

    I can’t speak for Tim. It would be up to him if he wants to feature it. My guess is, it will depend on the quality of the finished article.

    I really wish Ray Pepper and/or his associate Nick would put together a nice expose on flipping a house or fixing one up as a rental. I’d really like to see some in depth articles on this topic. And both of these guys have an enormous wealth of experience in this area.

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  15. NWMLS: Inventory Increases Again, Pending Sales Fall • Seattle Bubble

    […] little over a month ago I pointed out that inventory is on track to beat 2012 by August. So far that still looks like a strong […]

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