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.

23 responses to “November Stats Preview: Slumping Sales Edition”

  1. Kary L. Krismer

    That inventory trend should be very disturbing to buyers and buyers’ agents. It’s not that much of an improvement over last year, and last year we ended up with four months under 3,000 active listings. If we follow that same trend again, that will suck for buyers.

    The only bright side is only about 300 of those listings are short sales, and from memory that is probably significantly better than last year, meaning the increase of actually available properties is higher than it looks. On the topic of short sales, the banks are still approving relatively few short sales each month–only just over 100. (King County SFR). That is less than half of what they were approving, and it isn’t because of the lack of pending short sales.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

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  2. Mike

    Agree with Kary. In North Seattle at least the inventory that exists is almost all marginal to varying degrees (on busy streets, right off LCW or 99 or other issues readily apparent from the listing). The inventory levels might be above last years and growing and sales falling, but at least anecdotally the growth in inventory is just a reflection of increasing dregs that are staying on the market longer as buyers exhibit patience and move mostly for the more desirable listings of which there are few this time of year. No sure if prices are really increasing still on the good listing, but if you’ve got a house that isn’t on an arterial at least it definitely seems to still be a sellers’ market.

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  3. softwarengineer

    RE: Mike @ 2
    Since I Recently Remodeled My SE King County House

    Now, the realtors are begging me to sell….

    It appears to me that finding pristine staged stock or remodeled inventory in the Seattle area is like finding a “needle in the haystack”…..sorry realitors, I’m not spending more money to move from my newly designed “man cave”. BTW, my converted bedroom to a “disco bar” wasn’t cheap; but to me, it sure beats an exercise room for rock and roll dancing instead. Hades the plush bar stools I got were $500/each….well worth it.

    In fact, home bars furniture and accessaries have no local merchants in Seattle….I could open a store and sell bar tables, mirrors and chairs….also bar-room arcade quality games [not X-box crud, good games like 1980s Galaga and Ms Pacman], disco lighting, flexible ceiling TV stands, black light posters, neon signs, etc, etc….

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  4. David Sprague

    I agree with Kary and Mike that the inventory is a bit lacking but I’m trying not to let these preliminary numbers get me down yet. We all know as winter rolls around and the rain increases fewer people are jumping at the chance to move. I’m hoping this decrease will prove to be just a reflection of the typical ebbs and flow of the business and not a sign of backward movement in our market.

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  5. mike

    RE: softwarengineer @ 3 – I’ve never understood why people buy a cheap house in a downscale area, spend a bunch of $ remodeling it, then fill it with expensive furniture – especially if they are on Seattle Bubble complaining about how expensive Seattle homes are.

    What’s held it’s value better over the last 7 years? A $400K house (er, starter shack) in Ballard, or a remodeled house full of nice furniture somewhere out in the county? The latter I’d bet is still selling for less than $0.50/dollar all included.

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  6. softwarengineer

    RE: mike @ 5

    I Know, You’re the Home Inspection Expert

    I know what I’ve got….you allege on hype.

    I already know my water-proofed baseboard makes most of your $400-500K shacks look like slapped together mildewed junk….my house is 1 in a thousand, for that reason alone and price has nothing to do with it.

    Ohhhhh….did your $400-500K unit come with plastic sealed glueboard like mine before it was painted? Probably hades no…..contractors would be out of business if they built ‘em like an engineer designs ‘em…..that’s my forte’, reducing labor.

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  7. Jonness

    Deeds down, NTS way down. Snohomish listings way up!

    Elsewhere, Detroit rock city officially went bankrupt. In other news, Boeing machinists were shocked to learn McDonald’s doesn’t pay a machinist salary. This is confusing, because in both jobs, they stand in an assembly line and perform redundant manual labor.

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  8. Erik

    The tim has been I big inventory bull this year. Boy was he wrong! Every month this year has been lower than last year except our last two months. I see a further inventory decline next year. All that didnt buy in 2012 are fools! You should have struck when the iron was hot. You are now priced out forever. You cant thumbs down me for hurting your feelings with th truth. Neaner neaner poo poo. Fools!!

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  9. Jillayne Schlicke

    Um, I vote for a party at software engineer’s disco den of fine dancing. We shall wear Saturday Night Fever outfits and all potluck side dishes ought be 70s themed. Hello? Fondue?

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  10. Jonness

    By Erik @ 8:

    You cant thumbs down me for hurting your feelings with th truth.

    http://www.firetheboxingdiva.com/resources/thumbs-down.jpg

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  11. Jonness

    By Jillayne Schlicke @ 9:

    Um, I vote for a party at software engineer’s disco den of fine dancing. We shall wear Saturday Night Fever outfits and all potluck side dishes ought be 70s themed. Hello? Fondue?

    I don’t want to attend, because when the chicks see Software engineer’s ride, they’ll be all over him instead of me.

    http://static.cargurus.com/images/site/2010/11/14/10/27/1977_ford_pinto_cruising_wagon-pic-6756436563321912234.jpeg

    Oh wait. You never told me we’d be partying in this cool place. On second thought, count me in.

    http://uglyhousephotos.com/wordpress/wp-content/uploads/2010/02/100208boiseid.jpg

    I’ll meet you there. Here’s what I look like and will be wearing, so you know its me. :)

    http://www.featurepics.com/FI/Thumb300/20100726/Sleazy-Guy-1620122.jpg

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  12. Astro Kermit

    Inventory is getting sapped away from Amazon. The latest human resources data I’m getting from a contact there is that they are hiring on average 350 people A WEEK. Just think about how insane that sounds. Most of these people are from out of town. We are looking at a boom similar to Microsoft’s growth in the 80s into the 90s. As you seen from the recent releases, they are ramping up to a same day delivery service. I’m confident will get there within a decade. Any layoffs that occurs will be a small percentage of the total number of people who are coming in. Looking for affordable housing at SLU, Cap Hill, Queen Anne or Downtown? It will never happen as long as Amazon is around.

    As far as east-side growth, Google is ramping up big time in Kirkland. Their new campus will be ready soon. I seen some of the projects they are working on that are unannounced and there are not enough local engineers to accommodate. Translate: a lot of out of state / country talent will be coming in.

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  13. Corndogs

    RE: Erik @ 8RE: The Tim @ 10 – Your’e right Erik, ‘The Tim’ was constantly talking about inventory making an upward move… in the link below from May he has a graph where he interpolates to an inventory of 6K by September, which of course never happened and inventory started back down again in October.

    http://seattlebubble.com/blog/2013/07/02/inventory-now-on-track-to-beat-2012-by-august/

    While in May Corndog said “It’s typical for inventory to increase substantially in the Spring, this current increase in King County 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,”

    Of course, Corndogs was deadnuts on as usual. The thing ‘The Tim’ didn’t understand is that there is a component of inventory that is a ratio of sales volume that represents the efficiency/inefficiency of making transactions. Corndog knew that the inventory tick up would not be a sustained trend, ‘the Tim’ did not.

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  14. Blurtman
  15. Erik

    RE: Jonness @ 12
    You look a lot more masculine than I had imagined.

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  16. Kary L. Krismer

    Trying to predict where inventory will head requires predicting: (1) How many new listings will come on; (2) How many existing listings will sell; and (3) How many existing listings will fail and not be re-listed. Of those three you might be able to do a halfway decent job on the second, but the others would be total shots in the dark.

    Throw in the fact that short sales shouldn’t count for many buyers and that very few if any buyers are looking for properties over all of King County or all property ranges, so the county wide data isn’t that important, although it is an indicator. For an individual buyer knowing the inventory in Area XXX for prices between $xxx,xxx and $yyy,yyy would be much more useful.

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  17. softwarengineer

    RE: Jillayne Schlicke @ 9

    Its Up to the Tim to Schedule A Seattle Bubble Disco Party

    I could host a potluck at my place, say around 4-8PM on a weekend night….that way cranking up the music is compliant anyway.

    Get a hold of me on my softwarengineer@yahoo.com email address; to get the logistics as Tim approves it.

    Perhaps Dec 21 or Jan 4?

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  18. corndogs

    As Corndog tried to explain earlier in the year the inventory bump was a function of sales inefficiency. It’s pretty obvious now if you look at the redfin chart of #sold vs #for sale. Inventory was up a bit with the huge sales volume and now Seattle inventory has plummeted below 1,000 again with the lower sales. A lot of properties moved hands this year without missing a beat….. where’s that shadow inventory boys!!!!!

    http://www.redfin.com/city/16163/WA/Seattle

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  19. Macro Investor

    By softwarengineer @ 3:

    RE: Mike @ 2
    Now, the realtors are begging me to sell….

    It appears to me that finding pristine staged stock or remodeled inventory in the Seattle area is like finding a “needle in the haystack”…..sorry realitors

    Can you explain how they would know you just remodeled? I doubt they are trolling through building permits, and that wouldn’t reveal anything about your disco furnishings. You must be shopping your house, so it’s weird to be saying “sorry” to the agents you’ve invited in.

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  20. Jillayne Schlicke

    Joness you’re totally Ardell’s type.

    At the end of 2012 Calculated Risk told us inventory would go up then down then up then down. Like party time at Software Engineer’s pad. I can’t find the post CR wrote explaining this. It had to do with price expectations. buyers jump off the fence when prices bottom out. Then there’s a lack of inventory bc sellers want to wait until home values rise. Then home values rise so sellers put their junker homes on the market with the orange carpet and a 1970′s wood stove in the basement-the perfect place for a serial killer. Now there’s too much inventory in some neighborhoods which drive prices down.

    It happens slower than we’d like^ and some neighborhoods are different than others, but Bill McBride (CR) said the bottom of the market wouldn’t be as fun as we would all like because of the ups and downs.

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  21. Kary L. Krismer

    By Macro Investor @ 21:

    By softwarengineer @ 3:
    RE: Mike @ 2
    Now, the realtors are begging me to sell….

    It appears to me that finding pristine staged stock or remodeled inventory in the Seattle area is like finding a “needle in the haystack”…..sorry realitors

    Can you explain how they would know you just remodeled? I doubt they are trolling through building permits, and that wouldn’t reveal anything about your disco furnishings. You must be shopping your house, so it’s weird to be saying “sorry” to the agents you’ve invited in.

    Maybe they’re following Losh’s advice about going around knocking on neighborhood doors to find people wanting to sell? ;-)

    Seriously though, I could see that remodeling would attract agents’ attention. When people are working on a house it’s often either because they just bought or they’re trying to get it ready for sale. So some agents will probably contact the people doing the work or the owner to find out if the house is going to be put on the market.

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