NWMLS: Sales and Prices Slipped in November

NWMLS: Sales and Prices Slipped in November

November market stats were published by the NWMLS yesterday. Here’s a snippet from their press release: Home sales "chugging along," as recovery continues, but brokers expect prices, mortgage rates to rise in 2014.

Improving inventory, stabilizing prices, fewer short sales, and a healthy local economy are credited with keeping the real estate market “chugging along nicely” around western Washington, according to brokers with the Northwest Multiple Listing Service.

OB Jacobi, president of Windermere Real Estate, believes the slowing pace of home prices, is “actually a good thing,” saying, “As we saw in years past, continual double-digit price appreciation leads to boom and bust cycles that none of us want to relive.”

Why don’t I believe that he really thinks a less-hot market is “actually a good thing.”

On with our usual monthly stats.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

November 2013 Number MOM YOY Buyers Sellers
Active Listings 3,820 -16.5% +2.7%
Closed Sales 1,775 -18.8% -2.9%
SAAS (?) 1.07 -4.5% +3.3%
Pending Sales 2,048 -20.6% -0.2%
Months of Supply 1.87 +5.1% +2.9%
Median Price* $414,000 -2.8% +7.5%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

The only indicators that isn’t pointing in buyers’ favor is now prices. Inventory, sales, months of supply, and the rest are now all trending toward a buyer’s market.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales took a larger-than-usual dip between October and November this year, falling into negative year-over-year territory for the first time since May 2011.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Inventory continues to follow the same trend as every year, while remaining slightly above last year’s levels. As I predicted back in July, it looks 2013 will close out as the second-worst year on record for inventory.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

The supply trend stayed in the black, while the demand trend moved into the red. Things are still getting better for buyers but we’re still a ways from “buyer’s market” territory.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

The median sale price tumbled a bit in November, dropping the year-over-year gain back to single digits.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

November 2013: $414,000
April 2006: $419,500

Here are the articles from the Seattle Times and P-I:

Seattle Times: King County home-price gains lose some sizzle
Seattle P-I: Home sales down, but inventory remains tight

Check back tomorrow for the full reporting roundup.

  

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.

17 comments:

  1. 1

    The Jacobi quote was the one I mentioned in the open thread as being the thought I wish I had come up with yesterday. Not sure why you would doubt that he really thinks that. Do you think his firm only represents sellers? Do you think he wants to re-live what his firm went through after the last time we had double digit increases?

    As to the graphs, if you remove the bank owned and short sales the median is very close, if not slightly above (I’d have to check) the peak for November. But not all properties by any means are at or even near their peak values. Just shows how useless the median price is in determining the value of any particular piece of property.

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  2. 2
    Erik says:

    “As I predicted back in July, it looks 2013 will close out as the second-worst year on record for inventory.”

    Interesting conclusion. I wouldn’t say you predicted it. Your projection was much different. I made a different conclusion because I stopped where your projection stopped. In that case 2013 inventory was lower.

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  3. 3
    mike says:

    It’s actually pretty amazing that sales only fell 3% YOY with the cost of owning going up so quickly. I figure at this years price and interest rates, my payment would be 25% higher if I’d waited another 12 months to buy – and I’d have $100K less equity.

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  4. 4
    Erik says:

    RE: mike @ 3
    Good observation mike. Corndogs said we bounced off the bottom. I like that analogy because it implies there may not be more recovery. Basically, prices overcorrected so low that they had to eventually bounce off the bottom. This isnt signalling recovery though. I think prices will level off and all the dumb money will have missed the gains. These are the same fools that bought in 06/07 and got angry at the smart people that foreclosed and short sold in the crash. Go to clark county, I am sure you will meet plenty of people that did that. I have only confirmed there is a clark county on google maps, but based on the sample size from this site, my guess is there are many more with the same thought process.

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  5. 5
    Eastsider says:

    “The only indicators that isn’t pointing in buyers’ favor is now prices. Inventory, sales, months of supply, and the rest are now all trending toward a buyer’s market.”

    Isn’t price the KEY indicator that matters? IMO, the number of buyers in the market today is more than that of last year. If you normalize the existing inventory against the pool of buyers, this is certainly not a buyer’s market!

    Further, the government shutdown might have affected some closings.

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  6. 6
    Erik says:

    RE: Eastsider @ 5
    I totally agree. For some reason tim set his heart that it was turning into a buyers market. There is no conclusion yet. At this point, the situation hasnt changed. I thought prices would level off, but this low inventory will only drive up prices. This will be a sellers market for years to come. This time the people that didnt buy really did get priced out forever. I bet ChrisM didnt buy because he was waiting for more inventory. Now he will end up paying double. Same with christina, kilen, 3rd generation trust fund baby, and toby if he isnt living with his mama.

    Here is the secret…. Realize you arent smart and find someone smarter to listen to. Those people dont understand that. I waited for tim to buy and say he was probably a little early. I listened to ardell, corndogs, and ira. I even listened to a little of what losh said. They all kind of agreed we were at the bottom or super close, so I bought.

    Finding the top is more difficult. Matthew was sure the top was in last summer. Ardell thought now is a good time to sell. Ira felt I could wait until winter to sell. Tim felt it was turning into a buyers maket. Corndogs thought we would level off, but now says the low inventory will drive up prices. I dont do much thinking, I just read what the people smarter than me say. I have a process now. :)

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  7. 7
    Scotsman says:

    Lying statistics. Those percentage change graphs looks pretty dramatic. The end is near. Yet we still have less than 2 months inventory- well into the slow part of the year. And the Fed is still kicking almost a $trillion dollars a year- 7% of GDP- into the economy/markets.

    I do sense that a greater percentage of the population is acting with due caution, holding back on some larger or non-vital purchases. But the train is still rolling down the track, especially in Seattle. Any calls of a dramatic slow down, let alone a reversal, are premature.

    “This is not the change you seek.”

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  8. 8

    By Eastsider @ 5:

    “The only indicators that isn’t pointing in buyers’ favor is now prices. Inventory, sales, months of supply, and the rest are now all trending toward a buyer’s market.”

    Isn’t price the KEY indicator that matters? IMO, the number of buyers in the market today is more than that of last year. If you normalize the existing inventory against the pool of buyers, this is certainly not a buyer’s market!.

    Price is obviously important, but don’t assume that just because the median is 7% higher today than a year ago that you’ll pay 7% more now for a particular house. Different areas are different, and some sellers actually price their house too low. So you could have two people, one buying November 2012 and one November 2013, and the latter having gotten the better deal.

    Also, I don’t think Tim was trying to claim this is a buyer’s market, only that most of the factors were improving for buyers.

    Finally, the least important data point is probably volume, because each month the volume would likely be higher now if there were better inventory because more buyers would find homes (although some of that would eat into subsequent months’ volume). And in addition, more buyers would probably be in the market at these prices if there were better inventory.

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  9. 9

    By Erik @ 6:

    RE: Eastsider @ 5
    I totally agree. For some reason tim set his heart that it was turning into a buyers market. There is no conclusion yet. At this point, the situation hasnt changed. I thought prices would level off, but this low inventory will only drive up prices. This will be a sellers market for years to come. This time the people that didnt buy really did get priced out forever. I bet ChrisM didnt buy because he was waiting for more inventory. Now he will end up paying double. Same with christina, kilen, 3rd generation trust fund baby, and toby if he isnt living with his mama.

    Here is the secret…. Realize you arent smart and find someone smarter to listen to. Those people dont understand that. I waited for tim to buy and say he was probably a little early. I listened to ardell, corndogs, and ira. I even listened to a little of what losh said. They all kind of agreed we were at the bottom or super close, so I bought.

    Finding the top is more difficult. Matthew was sure the top was in last summer. Ardell thought now is a good time to sell. Ira felt I could wait until winter to sell. Tim felt it was turning into a buyers maket. Corndogs thought we would level off, but now says the low inventory will drive up prices. I dont do much thinking, I just read what the people smarter than me say. I have a process now. :)

    “Predictions are hard to make, especially about the future.” – Yogi Berra
    Just a couple of points. It’s not that you don’t do any thinking. It’s that you’ve decided who the smart people are, and if they agree with you, it confirms your beliefs.
    Often enough, one month’s statistics don’t mean anything. Prices, sales, inventory, and interest rates all influence each other. The last couple of summers have seen prices rising in double digits year over year. And less than two months of inventory is still deep into seller’s market territory. But if inventory continues to rise, and sales continue to fall, it’s inevitable that price rises will level off. At this point, many houses in sought after neighborhoods are still going pending very quickly, and sometimes still over list price.
    It’s still a difficult time to be a home buyer in Seattle and the eastside. There’s absolutely no indication there will be a sudden turn in the other direction. Still, inventory rising and sales slowing is a step in the right direction. I don’t expect that prices in the summer of 2014 are going to be up double digits from the summer of 2013. Up low single digits, flat, or just slightly down. Amazon is still hiring like crazy, Microsoft’s no slouch either, and interest rates are continuing to be held down.
    Party on, Garth.

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  10. 10
    Erik says:

    RE: Ira Sacharoff @ 9
    “It’s that you’ve decided who the smart people are, and if they agree with you, it confirms your beliefs.”

    I really am pretty lateral. I don’t put a lot of weight in my beliefs. I have no idea where the market is going, I only know how to parrot the people that have good track records and have a lifetime of experience in real estate. If one of you made some sort of prediction, I would watch and see what the others said regarding the prediction. If you all had a similar outlook, I would believe that even if I thought the totally opposite thing. Being ignorant about real estate and knowing it is better than being more informed and thinking you know when you really don’t.

    The only reason I assert things is so that someone can correct me. Otherwise, nobody really says things that are useful to me. That is why everyone calls me a troll. I am looking to elicit a response in that regard so I can form an opinion.

    Last week you asked this…
    “If you get the gig in SC, does it start right away?
    And if it does, how does that affect your plan to hold off a few more months to sell your place in order to avoid capital gains? ”

    I didn’t get the job. I went to SC last week to interview and I think I will do better next time. I am selling now and I will not have to pay capital gains tax. Should close next week with a little luck. I will show you the details after it closes.

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  11. 11
    Erik says:

    MM asked this, but I was out of comments:
    “ERIC – Excellent move on going to Charleston, SC for Boeing. You are lucky they are paying for relocation and it is a win regarding your standard of living improving. I am hearing anecdotal and stories in the press about Boeing pulling out of the Puget sound region; can you from the inside of Boeing provide some insight regarding this? What do you see what do you hear?

    Also regarding becoming a “contractor” have heard Boeing is going out and requesting bids on contractors. Contracting was lucrative is it still?ding . How many contractors are in Charleston now?”

    I hear stuff that if you are an engineer and you are willing to move locations, there will be opportunity. To me that means Boeing is moving out of Washington state, but who knows? I don’t really hear a whole lot, but from reading Boeing articles for years and knowing the history, I would say it would make more sense for Boeing to leave Washington state. The executives control the direction of the company. The executives have been fighting the unions for years and I think the way for them to fight the unions is to move to a non-union state. That is what I see happening.

    Being a contractor is very lucrative still. I have no idea how idea how many contractors are in Charleston. Being a contractor is very lucrative if you want to work lots of overtime since they get paid a lot more to work overtime.

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  12. 12
    whatsmyname says:

    I am reminded of how Corndogs questioned the efficacy of the whole red arrow-green arrow thing.

    Twenty-four months ago, the arrows were oppositely aligned, (all arrows except price looking negative for buyers). Yet people who did buy at that time had more inventory to choose from than has been seen since, and the houses they bought are up a good double digits. That seems much more favorable than today’s post price hike, minimal inventory world.

    Of course, there’s always Thurston County.

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  13. 13

    RE: whatsmyname @ 12 – The arrows are direction–better or worse, not position–good or bad.

    Using an analogy, you could be in the Alabama heading north (direction), but that wouldn’t mean you are not in the south (position).

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  14. 14
    corndogs says:

    RE: Erik @ 2 – The Tim says “As I predicted back in July, it looks 2013 will close out as the second-worst year on record for inventory.”

    HAHAHA really ‘The Tim’? All I see is an erroneous extrapolation assuming rising inventory.

    If I look at these other sources, it looks like inventory is headed to close out at the worst inventory level ever! For King County and particularly Seattle proper. Even looking at your chart, this year doesn’t look any better than last.

    http://www.movoto.com/statistics/wa/seattle.htm#city=&time=2Y&metric=Inventory&type=0
    http://www.redfin.com/county/118/WA/King-County
    http://www.redfin.com/city/16163/WA/Seattle

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  15. 15
    corndogs says:

    RE: Kary L. Krismer @ 13 – “Using an analogy, you could be in the Alabama heading north (direction), but that wouldn’t mean you are not in the south (position).”

    and sometimes it doesn’t matter that your leaving Alabama, because you’re still in Alabama.

    A rising price YOY is bad for the buyer? With that logic the vast majority of history has been unfavorable to the buyer but 2008 would be favorable. and what does ‘favorable’ mean? You’ll get a deal below the asking price or is it a favorable time to buy in general?
    I think most people look at that and say it’s looks like a good time to buy and a bad time to sell. The chart blows.

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  16. 16
    Blurtman says:

    If you ever are in Birmingham, AL, a laid back college town with a surprising number of fine dining establishments, you must visit the civil rights museum, and Dreamland BBQ, the best in the USA. http://www.dreamlandbbq.com/default.aspx?AspxAutoDetectCookieSupport=1

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  17. 17

    By corndogs @ 15:

    I think most people look at that and say it’s looks like a good time to buy and a bad time to sell. The chart blows.

    Maybe what he need are two symbols for each area. A circle, showing where we are and an arrow showing direction.

    So for inventory for buyers it would be a red circle and a green arrow, showing a bad but improving inventory situation.

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