NWMLS: Sales Are Slipping Because of the Seahawks

NWMLS: Sales Are Slipping Because of the Seahawks

February market stats were published by the NWMLS earlier today. I had an extremely busy day so I’m only just now getting to posting them. Here’s a snippet from their press release: Home Sales Shrink as Buyers Take a Timeout due to Inventory shortages, Seahawks Playoffs.

Northwest Multiple Listing Service brokers reported 507 fewer pending sales during February than the same month in 2013, but members believe the 6.5 percent decline isn’t due to a shortage of buyers. “If we just had enough homes to sell we would easily be outpacing last year’s pending numbers,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “Locally, we are literally starving for inventory,” he added.

Another industry leader pointed not only to a “severe shortage of homes for sale” in the most sought-after price ranges, but also to the fan frenzy surrounding the Seahawks as a factor in the setback of sales. “The Seahawks’ run to the Super Bowl affected sales,” reported J. Lennox Scott. Since the Super Bowl Championship game, he said listing activity has picked up, resulting in brisk sales activity for the new, but still limited inventory.

Lennox Scott has become a parody of himself.

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):

February 2014 Number MOM YOY Buyers Sellers
Active Listings 3,173 +1.3% +7.7%
Closed Sales 1,241 -5.2% -5.0%
SAAS (?) 1.39 +28.4% -1.2%
Pending Sales 2,154 +7.2% -12.8%
Months of Supply 2.56 +6.9% +13.4%
Median Price* $405,400 -1.1% +11.1%

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

Pending sales hit year-over-year double-digit losses for the first time in nearly three years, while closed sales shrank by their largest amount in nearly as long. Prices came in well above last year, but unlike last year they fell between January and February.

Median Price January to February 2013: +4.3%
Median Price January to February 2014: -1.1%

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

February home sales came in slightly below last year, in the middle to the lower-end of the pack.

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

King County SFH Inventory

Second-lowest inventory on record for a February, beating last year just slightly. You would think that with home prices up so much from the bottom two years ago there would be more sellers finally getting “off the fence” and listing their home.

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

Very slightly trending toward a buyer’s market, with the supply trend in the black, and the demand trend in the red. We’ll still need a lot more movement than this before the market actually becomes a buyer’s market.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

The median sale price inched down some more in February and year-over-year number dipped.

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

February 2014: $405,400
March 2006: $405,000
Here are the articles from the Seattle Times and P-I:

Seattle Times: Home prices dip again in King County
Seattle P-I: Fewer home sales, more listings drive up inventory in Seattle area

Check back later 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.

30 comments:

  1. 1
    Erik says:

    The reason inventory is down and prices are down is because owning a home is no longer the American dream. People are happy renting. Plus I bet many people don’t think housing prices are going up anyway, so they don’t buy. Demand has gone down. I think 2015 and 2016 will be lousy years for housing prices. No reason to buy right now when you can rent. Looks like I timed my purchase and sale perfectly. We’ll see though…

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  2. 2
    Blurtman says:

    Owning a home is the right of all Americans. Therefore, the US government should buy homes for all citizens. Maybe even non-citizens, too, if they will vote our way and fight in pointless wars.

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  3. 3

    By Erik @ 1:

    The reason inventory is down and prices are down is because owning a home is no longer the American dream.

    Where do you come up with this nonsense? First, the change in the numbers is just your typical variation from month to month and year to year, except for price, and that change hardly indicates a change in the American dream because it was a significant INCREASE. You don’t get a significant increase like that if any significant factor is hugely negative.

    All you’re doing is looking at data and seeing what you want to see, and then thinking that that data will eventually show what you want it to show X months down the road. Even Cramer has better analysis than that, and he’s a complete idiot.

    As to Tim’s main piece, apparently he’s never heard of “jumping on the bandwagon.” There were a lot more Seahawk fans this year than probably any other year, and it does actually take time to be a fan, even if it’s only 3 hours a week. That’s time not spent looking at houses and time not spent getting a house ready for sale. That could easily impact 66 sales in King County.

    I actually have a slightly different theory. I think they cut off the month too early to get the stats out on the 5th. That allowed only two full work days for sales to be reported. As previously covered here, usually there is a considerable difference between the reported sales and the sales showing on Matrix, due to how they deal with late reported sales from prior months. That didn’t happen this month, so unless they are dealing with late reported sales differently, there was something different in either the cut off or the number of late sales, and I have reason to believe it’s the former.

    References to data not compiled by or guaranteed by the NWMLS.

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  4. 4

    Baby Boomers Don’t have the Money to be “Helicopter Parents” for the Millenials Wanting a House

    They lived it up with debt and now the piper to pay…

    This can mean no leg up for most of their kids [like a sweetheart deal on a family owned rental house], with safe deposit retirement interest rates so low….no one can save enough fast enough [deja vue 1980s trying to save as fast as homes spiralled up in price]….IMO student loans are putting the brakes on qualified buyers too [gone are the days when parents and scholarships were the main way to get a college education]…especially as the college graduates’ job searches settle for P/T underemployment [degreed engineers working at Radio Shack, waiting for their Radio Shack employer to go out of business soon too] living in their parents’ basement…

    But its all the Millenials’ fault….they could get a good job if they really wanted it….who came up with that lie, some foreign/corporate lobbyist for slavery?

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  5. 5
    The Tim says:

    By Kary L. Krismer @ 3:

    As to Tim’s main piece, apparently he’s never heard of “jumping on the bandwagon.” There were a lot more Seahawk fans this year than probably any other year, and it does actually take time to be a fan, even if it’s only 3 hours a week. That’s time not spent looking at houses and time not spent getting a house ready for sale. That could easily impact 66 sales in King County.

    Except the weakness in sales isn’t new, and isn’t limited to just Seattle, as I pointed out in the roundup last week. Here’s another post about the national weakness in sales from Redfin’s tour and offer volume data: 2014 Housing Market Off to Sluggish Start

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  6. 6

    By The Tim @ 5:

    Except the weakness in sales isn’t new, and isn’t limited to just Seattle,

    Huh? Not new?
    August 2012 YTD 36,578, 2013 YTD 43,734 (prior to football season)
    September 2012 sales 1798, 2013 2,200. An increase.
    October 2012 sales 1981, 2013 2187. An increase.
    November 2012 sales 1828, 2013 1775 A decrease.
    December 2012 sales 1741, 2013 1794 An increase.
    January 2013 sales 1363, 2014 1309 A decrease.
    February 2013 sales 1307, 2014 1241, A decrease.

    So three of the past four months have been a decrease, after increased sales before then, but weak sales are “nothing new?” Don’t get me wrong, I’m not suggesting that the Seahawks are a major factor, but they could easily account for 66 sales in February.

    I’m not sure why you’re bringing national sales figures into the discussion, particularly when the discussion is the Seahawks. And the Redfin data also seems odd to cite to, particularly when it shows increases but lower than the increases of the prior year. But that single firm data could simply mean trouble at Redfin if you want to interpret that data as being bad (I wouldn’t).

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  7. 7
    The Tim says:

    By Kary L. Krismer @ 6:

    By The Tim @ 5:
    Except the weakness in sales isn’t new, and isn’t limited to just Seattle,

    Huh? Not new?

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  8. 8

    If I’d only known how the Seahawks were ruining the housing market, I’d have spent more time booing them and rooting for them to lose.

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  9. 9

    By The Tim @ 7:

    By Kary L. Krismer @ 6:
    By The Tim @ 5:
    Except the weakness in sales isn’t new, and isn’t limited to just Seattle,

    Huh? Not new?

    This is pretty unfair only having five comments and having to blow one to point out that your chart indicates the same thing I just said. And it indicates that the decline is in fact new. Three of the past four months have been less. And I’m sorry, but I wouldn’t cite to pendings as meaning anything. Has pfft hijacked your login? ;-)

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  10. 10
    Marc says:

    It seems to me that we’re experiencing a variation of “stickiness” that Shiller and others have discussed. The basic economic principles of supply, demand, and pricing say that when inventory is scarce and prices are rising sellers should enter the market to meet that demand. In past years that manifested itself with increasing inventory starting more or less in January and going forward. Last year defied that trend when inventory stayed flat at historically low levels until April/May.

    I’ve always thought that was a function of prices being too low to motivate large numbers of sellers to list their homes. In any case prices have been rising as one would expect. As Eric so deftly pointed out yesterday I agreed with a post Tim put up last summer suggesting inventory could increase significantly. It did increase but not very impressively and then this year we’ve got a repeat of the super low inventory of early 2013 which I thought would be an anomaly not to be repeated.

    It seems to me that most of the traditional drivers of the real estate market are directly in favor of a very robust and active real estate market (for good or ill): interests rates are stupid low, rents are getting stupid high, good paying jobs in Seattle and Bellevue proper are fairly abundant (if not evenly distributed), and personal savings have been growing since the recession began suggesting people have cash for down payments.

    Based on my small sample of anecdotal evidence, it sure seems there are plenty of buyers who are ready, willing, and able to buy if they can find something. Thus, it would seem the problem is potential sellers.

    And I’m one of them. I’d love to get a house with a more useful floor plan (boy and girl can only share a room so long) but the thought of trying to sell and then buy a place in this market is anathema. So, we’ll stay in our place until something happens. But what the hell is that something?

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  11. 11
    Erik says:

    RE: Kary L. Krismer @ 3
    I got this nonsense from Suze Orman. I do think Kramer is a fool, but Suze Orman seems pretty sharp to me. She says home ownership is no longer the goal as it once was. Back in the 1800s, people would sink every dime into their home to buy the biggest and nicest house money can afford. After everyone got screwed in the housing bust, people no longer make that their goal. More people have the goal of financial wellness and not a showy house. Maybe you are unable to understand this, but this is what is going on.

    Since houses are no longer the main goal, demand has gone down and hence prices won’t be as strong. If people’s mindsets haven’t changed, prices would be increasing faster. I just don’t see housing as the ever increasing market it once was.

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  12. 12
    Erik says:

    RE: Marc @ 10
    Sell now and rent a place with an additional bedroom until that something happens. That’s what I’d do.

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  13. 13
    boater says:

    One unusual backdrop to all this is owners with either loan modifications or poor credit. Those are owners who can’t leave what they have because in all likelihood they can’t get back in to another house of equal or greater quality. I have no idea how big that group is but they represent owners for whom normal supply and demand are severely distorted.

    This may be part of why we aren’t seeing sellers.

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  14. 14
    wreckingbull says:

    By boater @ 13:

    One unusual backdrop to all this is owners with either loan modifications or poor credit. Those are owners who can’t leave what they have because in all likelihood they can’t get back in to another house of equal or greater quality. I have no idea how big that group is but they represent owners for whom normal supply and demand are severely distorted.

    This may be part of why we aren’t seeing sellers.

    This is the shadow inventory. People who are on the hamster wheel, underwater, or unable to get financing on a new place. I’m not quite sure how this logjam frees up, but until it does, inventory will suffer.

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  15. 15
    mike says:

    RE: Marc @ 10 – I think two of the important observations from this and previous cycles is that prices don’t reach a cyclical peak until after there has been a significant rise in inventory. Second, prices don’t bottom until after there has been a significant decline from peak inventory. Caveat being you have to carefully define the market you’re tracking inventory in to find likely inflection points. Areas with low #’s of sales have some very noisy data.

    By Erik @ 12:

    RE: Marc @ 10
    Sell now and rent a place with an additional bedroom until that something happens. That’s what I’d do.

    Given that we haven’t seen a sustained or substantial increase in inventory yet to anywhere even near ‘normal’, selling now – and dealing with transaction costs already puts you even with a roughly 9% decrease in housing prices – before there’s even any sign that price increases have stopped. Then there’s the possibility that once the market does cycle back to a buyers market prices may still be higher than they are now. With 2 kids that are likely in or entering elementary school, planning for a minimum of 3 moves over the next 3-4 years in the hopes of catching even a 20% price decline is probably not going to be worth the stress it will cause.

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  16. 16
    FlipperInSeattle says:

    As a pretty active flipper, I can anecdotally confirm the otherwise-lame NWMLS statement.

    We do high-quality rehabs and typically go under contract in less than 2 weekends, and I had 3 houses at 40 CDOM, and a condo at 21 CDOM that all went under contract last week within days of each other.

    Playoffs, major rains, Superbowl, more rains – the traffic was dead. Later February it started to pick up, and last week it went very well with 4 units coming off the board. Normal seasonal fluctuations heightened by our Superbowl champions.

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  17. 17
    Anonymous Coward says:

    Wreckingbull @ 14. Of course, there really does seem to be two markets right now: properties that have been cared for, updated, and well maintained, and properties that have been neglected. The number of “log jam” folks with properties to contribute to the well-maintained market are likely to be vanishingly small…

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  18. 18
    Scotsman says:

    Prices have recovered but new increases are slowing. We’re as close to being back to where we started as we’re likely to get for a while. And guess what- people are still broke. Nationally debt is again rising at a faster rate than incomes. Expectations for the future are net negative. Emotionally it’s 2008/9 and people are stuck with few choices so they decide to just hunker down. This could well be the new normal for several years. Still locked in, but at a higher level. Even though the Fed keeps bringing free beer to the party no one wants to drink any more. They know Monday morning comes soon enough, and won’t be any fun.

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  19. 19
    doug says:

    When QE hits 50 % off its highs either 45 billion or 35 billion (its at 65 billion right now) the markets will collapse and this time it will be everything. The usa is 342 trillion dollars in debt and will not re start the QE ever. Inflation creation has been a total failure. We now are all doomed to deflation in a big way. All bubbles are converging at the same time and will collapse together. Ronald reagan bill clinton greenspan goldman sachs illuminatis have conspired to steal rape pillage are economy through NAFTA and the WTO. THE BATTLE IN SEATTLE was real and we can all look back and realize why younger people are so angry. Today younger people worldwide are furious.

    Millenials are not buying houses they are barely surviving. Investors are buying and increasing rents creating a catch 22. But for the investors there will be no one to buy there supply. The only possible outcome will be way way more foreclosures. Real estate is not a good investment anywhere except in north dakota.

    Now we will see if ameriKa can save the dollar.

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  20. 20
    Erik says:

    RE: doug @ 19
    What do you have your money in? I always imagine you have it locked up in a safe with you sitting with your back to your safe with a shotgun in your lap. I read your comments for a laugh. You are a permabear, which makes it so you never say anything since I know it will always be something negative. You have been wrong repeatedly. In 2013 you were constantly warning everyone that the stock market was about to collapse. It will collapse someday, but you always call a collapse, therefore your comments no longer have value. Kinda like the “Boy who Cried Wolf.” You have cried out for a collapse so many times, I don’t think anyone listens anymore.

    There are 2 main ways people on here say nothing and waste comments. The first way is talking very general and not being specific like wreckingbull has done since 2010. His comments are so general, he makes it so he can never be wrong nor can he ever be right. The other way is to constantly call for a collapse hoping that they will be correct just by probability. Why are you always declaring a collapse? Why so paranoid all the time?

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  21. 21
    doug says:

    It is technically possible that deflation can be countered with a much higher minimum wage say at least 15.00 and as high as 22.00 an hour. This way prices at home depot or on autos and especially real estate could remain the same and there would be more buyers. Prices may increase at some restaurants but all in all a higher minimum wage will be a major positive.

    Could it also be possible that on this website Erik is Tim ?

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  22. 22
    mike says:

    RE: Anonymous Coward @ 17 – Hmmm… I’m noticing the $500K dumps seem to be going under contract just as fast as the nicer homes. We had a couple pop up last week and everything is pending as of today. Another dump went back on market for $675K, but that one I think will be a harder sell unless the lot can be subdivided.

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  23. 23
    Erik says:

    RE: doug @ 21
    Firstly, thank you. I take that as a compliment to be mistaken for Tim. Secondly, no dummy, I’m not Tim. I ripped the word permabear from Tim because I thought it was funny and it does precisely describe your character on this comment section.Today I had reached my limit with you consistently negative comments. I did consider your comments in 2013 before I invested and luckily it didn’t cost me. You were wrong in 2012, 2013, and now probably 2014. Please stop being such a Debbie Downer. I am new to investing in stocks, but I think 2014 looks like a pretty good year(knock on wood).

    You claimed before that you know tons about stocks. When I asked you why you felt there was a big collapse coming, you told me it was too complex for my simple mind to understand. Well, it turned out you were wrong once again. If you have good reasoning and can make a case, please do. The rest of your negative comments is just noise. Your comment above isn’t spelled out in detail. It is more paranoia.

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  24. 24
    mike says:

    By doug @ 21:

    Could it also be possible that on this website Erik is Tim ?

    Interesting observation. The only thing I’ve seen to back that up is Erik posted a link to a condo he sold in Juanita using Ardell as the agent, and I couldn’t find any sales under the same name in SnoCo (Everett) although Erik claims to have owned a property there.

    Snopes says: Undetermined.

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  25. 25
    Scotsman says:

    RE: Erik @ 23

    Why do you think 2014 looks like it’s going to be a good year for stocks?

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  26. 26
    Blurtman says:

    RE: mike @ 24 – Sure. Blurtman is but one character in the wonderful Cyberpals(TM) catalogue.

    Product “mike,” your program code is faulty. Please log into tech support for an update.

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  27. 27
    SaffyThePook says:

    By Erik @ 20:

    RE: doug @ 19
    There are 2 main ways people on here say nothing and waste comments. The first way is talking very general and not being specific like wreckingbull has done since 2010. His comments are so general, he makes it so he can never be wrong nor can he ever be right. The other way is to constantly call for a collapse hoping that they will be correct just by probability.

    I’d add a third, which is asserting without qualification that a certain trend is manifest without any supporting facts, citing only the opinion of someone else as support, while simultaneously touting the poster’s own savvy timing. Ironically, the opinions cited are generally more more nuanced than they’re characterized and don’t actually support the assertion.

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  28. 28

    By Erik @ 20:

    Why are you always declaring a collapse? Why so paranoid all the time?

    As odd as it might sound to some, I can understand where they’re coming from. We have a totally incompetent President not providing an ounce of leadership over a totally dysfunctional Congress. Neither situation is likely to improve (although we undoubtedly will get more leadership in the next President, because no leadership is hard to duplicate). The Fed is behaving in a way that might best be described as experimental. The debt is apparently now to a point where interest spending is greater than military spending, and that’s with very low interest rates.

    Something has to give at some point. Will it be the $15 mimimum wage or Obamacare causing inflation? Maybe. Will it be a technological breakthrough? Possibly. Will the quality of politicians improve. I wouldn’t hold my breath, but it’s not 100% impossible.

    The main reason to be optimistic is what it’s always been. This country has always seen its way through hard times and done well. But that was during a period where people were self sufficient, optimistic and worked to get ahead. Now we have a bunch of entitled morons getting a voice through social media.

    But none of that has to do with the topic of this thread, which is the February sales data. That data might have been affected by QE, but other than that, all of this discussion is irrelevant to the topic.

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  29. 29
    drshort says:

    With prices are up 10 – 15% yoy and interest rates up a point, the drop in sales and higher inventory is exactly what one would expect. Honestly, who didn’t think the market would slow a little in 2014?

    I suspect prepared buyers had a strong motivation to get off the fence and buy a year ago when prices were still relatively affordable, but increasing and interest rates were crazy low. If I were a buyer today, I’d feel much more patient than a year ago.

    In my neighborhood, homes under $600K are going fast. Above $1M, it’s very slow.

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  30. 30

    Here’s what people were buying! Seattle has four jerseys in the top ten: Wilson, Lynch, Sherman and Fan (#12).

    http://espn.go.com/nfl/story/_/id/10565858/seattle-seahawks-12th-fan-climbs-10th-best-selling-jerseys

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