Posted by: 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.

29 responses to “Inventory Growth in 2013 is the Strongest Since 2008”

  1. Erik

    Yay, more inventory!

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  2. Matthew

    Who the hell gave this post a thumb down?? What is wrong with YOU people?

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  3. softwarengineer

    Yeah, 2010 had an Increase in Inventory

    It also had that “puny” $8000 2010 tax credit with a MASSIVE psychological push to buy/sell now before it expires. It reminded me of buying bacon for $4.99/lb and cashing in a 15 cent coupon to make the horrifying price palatable.

    Now we’ve got the disappearring low interent rates “psychological” push to buy now before it disappears…LOL, you Seattle Bubble bloggers are great, you reminded me because of the PMT mortgage payment calculation per interest rate; the rate decrease or increase is somewhat moot numerically on the monthly payment….I agree with you.

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  4. softwarengineer

    RE: Matthew @ 2

    The Down Thumbs are Great

    They indicate Tim got some blood pressures up and an interesting blog to read with opposing viewpoints.

    It beats just voting on the best “Pink Pony” picture, etc…..albeit, humor release is great too once in a while…

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  5. Erik

    Inventory growth this year appears to the strongest since 2008.

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  6. mike

    Anecdote: Went with MIL this weekend to look for a ‘downsize’ house and talked to a few other people looking for the same. Place ended with 3 offers and topped out the escalation clause! She got it, but for 10% over asking. Ouch.

    Did get me wondering though how much of the inventory gain is coming from people in her position, and whether it’s going to boost low-mid end prices with more cash buyers looking to owner occupy. She beat out a slightly higher offer with a finance contingency.

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  7. Erik

    RE: mike @ 6
    Yeah, this makes a lot of sense. The baby boomers are downsizing because they don’t need so much house anymore. I think people, including myself, would like to downsize and have less house and owe less. Houses use to be more of a status symbol than they are these days in my opinion. I think after the last big crash, many people have changed their perspective on buying a large home.

    You are saying that people are putting their house on the market now so they can buy something smaller later. Interesting.

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  8. No Name Guy

    The Tim: Keep these factual, data driven posts coming.

    Commentary / my interpretation of the data: Well, I suppose it’s no surprise that inventory is up. With prices going up, more people who “bought” homes with 5 or 10% down at or a bit before the crash with a view of them being investments more than a place to live, can afford to get out of their now barely out from underwater places. They’re no longer trapped.

    It’s now 7 years since 2006. Didn’t it used to be that the average American owned their place 7 years before selling and moving? These sellers / new inventory can also see the writing on the wall about interest rates. Get out while the getting is good and there is plentiful supply of greater fools to snap ‘em up.

    Sell Mortimer, Sell!
    http://www.youtube.com/watch?v=S8H2FIf1oH4

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  9. corndogs

    RE: mike @ 6

    What “The Tim’s” graphs show is that inventory typically increases seasonally along with sales volume (low in Dec, higher in June). There is a component of inventory caused by inefficiencies in turning over properties. Since this years sales volume is approaching pre-bubble, it is not surprising that the inventory is showing a similar seasonal tick up. Your MIL buying, and ALSO selling, leaves the net change in inventory zero for the long run. Therefore, this tick up in inventory that ‘The Tim’ keeps talking about could be meaningless and just a byproduct of higher sales volume. What is more important is to look at ‘Months of Inventory’ (#for sale/sold) which in Seattle is still about 1.5 months…. quite dismal indeed…. as witnessed by Grannys 10% premium she just paid.

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  10. 3rd Generation

    9. corndogs

    What you said. Well done.

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  11. David Losh

    RE: 3rd Generation @ 10RE: corndogs @ 9

    Months of supply would have to calculate demand. If demand were constant that wouldn’t be a problem. If demand were to decrease due to say tighter lending standards, higher interest rates, or debt to income ratios, then the increase in inventory would be significant.

    In terms of sales volume, I guess, “The Tim” could look at that some other time.

    For now this is good information for buyers to have when making an offer.

    Sellers should also be paying attention, and price accordingly.

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  12. wreckingbull

    I look at the graph and I see the start of a slow return to equilibrium. One thing Charles P. Kindleberger taught us in The Bubble Bible is that there is no such thing as “a new normal”.

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  13. Erik

    Months of Inventory = supply/demand

    Inventory_months = C
    demand = a
    supply =b

    C=b/a

    People were getting bid up, so they eventually gave up for the time being. That means “a” will potentially be larger next month. As “a” increases, “C” will decrease. Our months of inventory could likely decrease since demand is so high right now. Yay inventory, but this supply increase really means nothing in terms of Inventory months since demand is probably higher than usual this summer. Those buyers that gave up for the time being will probably be back and looking to buy before summer is over. They didn’t vanish, they took a break.

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  14. ricklind

    By Erik @ 5:

    Inventory growth this year appears to the strongest since 2008.

    There’s an echo in here.

    Fel Temp Reparatio

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  15. Erik

    RE: ricklind @ 14
    It was a joke. I noticed the people that paraphrase Tim are well liked and get lots of thumbs up. I’m trying it out.

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  16. corndogs

    RE: wreckingbull @ 12 – “there is no such thing as “a new normal”.

    When someone perceives something to be abnormal it usual means that they can’t fathom the whole picture. This real estate market has been quite predictable and normal… there is no old or new normal….. it’s all normal…. what’s ABSOLUTELY normal is brain dead people like Losh… we live in a world populated by archaic life forms, still believing that an imaginary being who lives in the clouds will place judgement on them and provide eternal life after death. Losh feels remorse and dread everytime he flushes the toilet because his mind hasn’t quite advanced to understand the difference between a turd and a human offspring.. he only has this feeling that he lost a part of himself, he sits and stares at the empty toilet bowl for 15 minutes and then his mind shifts randomly to something else related to food or boobies..

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  17. wreckingbull

    By corndogs @ 16:

    RE: wreckingbull @ 12 – “there is no such thing as “a new normal”

    This real estate market has been quite predictable and normal

    Predictable, perhaps, but normal, no way. Printing trillions of dollars to buy mortgage backed securities and treasuries is unprecedented in the history of humankind. That is an external market manipulation. Hey, don’t believe me, ask Uncle Ben. He has not tried to hide anything!

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  18. 3rd Generation

    11. David Losh

    Take your medicine, and don’t forget to eat a lunch today.

    I’m done responding to your half-assed ideas and ridiculous ‘thoughts’.

    You simply are hopeless. Some people just deserve to be poor, and I am afraid you are one of them.

    Good Luck to you, Losh.

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  19. David Losh

    RE: corndogs @ 16

    Absolutely predictable, the bears have predicted that there is a bubble in asset pricing, and I agree.

    You have nothing to dispute that. You threw in a random comment about months of supply as though you had an original thought.

    You also threw in something about sales volume which I pointed out a month, or two ago was pretty solid.

    What’s funny is that you made a comment indicating you can’t see past sales data, then referred to those who couldn’t see the big picture.

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  20. johnnybigspenda

    From The Big Picture Blog (Barry Ritholtz). Appropriate for SeattleBubble these days?

    Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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  21. corndogs

    RE: David Losh @ 19 – “You have nothing to dispute that” You’re right I don’t because I don’t have the desire to try and decipher the Loshenese language today and figure out what the hell you’re talking about.

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  22. Ray pepper

    RE: corndogs @ 16 – This is a classic! That’s it. Corn dog is my all time favorite. Beat out the guy who slammed Tim for his purchase. Not for the slams. Just the pure poetic genius and the atheistic slant.

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  23. Scotsman

    Every once and a while I pop in to see if The Tim has drained the swamp. Apparently not yet.

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  24. corndogs

    RE: Scotsman @ 23 – “Every once and a while”. …

    You’re one and a million Scotsman. What and the world are we all thinking. Obviously you’re and the know in we are not. You know real estate andside out don’t you? ‘Pop and again in see us sometime. You’re a freaking andcredible genius. Pass along my regards to Muffy.

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  25. Jonness

    By corndogs @ 16:

    he only has this feeling that he lost a part of himself, he sits and stares at the empty toilet bowl for 15 minutes and then his mind shifts randomly to something else related to food or boobies..

    The last time I talked to my father before he died, he made me promise him I would hang around with winners and stay away from losers. So I asked him how to tell the difference between a winner and a loser? He replied, “winners build you up, and losers tear you down.”

    IMO, your posts are a lot more worthwhile when they are on topic and of constructive nature.

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  26. Jonness

    By Ray pepper @ 22:

    RE: corndogs @ 16 – This is a classic! That’s it. Corn dog is my all time favorite. Beat out the guy who slammed Tim for his purchase. Not for the slams. Just the pure poetic genius and the atheistic slant.

    Ray: We are all well versed in your love for toilet jokes. Interestingly, I haven’t seen you make many of them since giving up regularly dining at Claim Jumper. Now that’s what I call a lifestyle improvement. IMO, you would make an excellent food critic for the Seattle Times. :)

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  27. ray pepper

    I cant help it!

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  28. Macro Investor

    By softwarengineer @ 3:

    Yeah, 2010 had an Increase in Inventory

    It also had that “puny” $8000 2010 tax credit with a MASSIVE psychological push to buy/sell now before it expires. It reminded me of buying bacon for $4.99/lb and cashing in a 15 cent coupon to make the horrifying price palatable.

    Now we’ve got the disappearring low interent rates “psychological” push to buy now before it disappears…

    Weekly drive by to see if I’ve missed anything… I see one insightful comment by SWE. The remainder is all name calling, incoherent rambling and 3rd grade potty jokes. Gee, I wonder why America is swirling the drain?

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  29. To the Students from the July 23, 2013 BPO-R Class at SKCAR Bellevue | ceforward.com

    [...] was a question about increasing inventory happening locally. Here’s a link to a Seattle Bubble article on this [...]

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