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.

16 responses to “July Stats Preview: Sales Softness Resumes”

  1. Kary L. Krismer

    I think we’re finally to the point where changes in legislation are not affecting the foreclosure numbers (actually that’s probably been true since the graphs dropped 2012). So these comparisons actually mean something.

    Good to see the inventory growing. I’m currently showing it over 5,000 active SFR listings in King, but in many areas there still is little available.

    Number 5,000 from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

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  2. whatsmyname

    I remember a great gnashing of teeth. It seems that last year, the rental securitizers bought thousands of homes that should have gone to local buyers. But then that activity kind of petered out as prices got higher.

    So when I see that 7 months aggregate of King County warranty deeds is less than 500 fewer than in 2013; do I compare that to 7/12ths of thousands? Do I wonder if the local purchase market, the one that will impact future trends, is actually less soft than last year?

    Well, yes, I do.

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  3. Erik

    Inventory will continue to inch up, but waiting to buy seems foolish because prices will likely be inching up as well.

    Whatsmyname, please reword or explain this better. I don’t understand what you are saying.
    “So when I see that 7 months aggregate of King County warranty deeds is less than 500 fewer than in 2013; do I compare that to 7/12ths of thousands? Do I wonder if the local purchase market, the one that will impact future trends, is actually less soft than last year?”

    Tim,

    I wanted to bring this to your attention. Macro Investor said this “Next up, silly listing photos. Tim should sell this site to someone who cares. I bid 10 cents, since it’s so damaged by neglect.” Here is the link http://seattlebubble.com/blog/2014/07/30/case-shiller-tiers-softer-may-three-tiers/#comments. It is the last comment.

    I was disappointed to see Macro Investor pretty much tell you that you don’t do good work and then comments on here. Macro Investor is bad news and he needs to be stopped. He brings negativity and repeatedly tries to hurt others again and again and he won’t stop. I can understand constructive criticism, but to read this data for free and then tell you that your work sucks is something else. I vote we ban this pile of trash from commenting since he says this website is worth 10 cents anyway.

    I think you do good work and I like this website. I have learned a lot from being on here. I think it is time to get rid of Macro Idiot for the greater good of everyone.

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  4. whatsmyname

    RE: Erik @ 3 – Tim is quite reasonably characterizing sales as soft because this month’s warranty deeds are lower than the number in 2013. That has been generally true all year. If you add up all the warranty deeds through the 7 months ending in July, and compare that to the total for those same months in 2013, there are about 500 fewer for the 7/12ths of this year which have passed. Last years numbers were inflated by sales to securitizers, kind of nonrecurring event. If you want to see the trend, you will want to look at the sales ex-securitization (as Blurtman would say). But to be fair, you need to get your numbers on the same basis – either annualized or partial year. It is a gross comparison and obviously lacks seasonality, but since sales are heavier in the first seven months, no harm done.

    Almost forgot: the reduction in sales this year appears to be less than the securitization sales last year. This would indicate that the market ex-securitization is selling better. It’s not absolute. For example, this does not take into account any variable for securitization sales this year. Sometimes, you just have to guess.

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  5. Erik

    RE: whatsmyname @ 4
    True statement, but I don’t see that it matters. Less houses are being sold this year and more houses are on the market, therefore it is a softer housing market.

    You and Blurtman have good insights. Keep up the good work.

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  6. softwarengineer

    Tim is Good at Letting Free Speech in, Bull or Bear

    Historically speaking and predicting recent changes are areas I’ve seen both sides error on anyway. Sometimes ya don’t know until the fat lady sings.

    Rate this comment: Thumb up 1

  7. Kary L. Krismer

    By whatsmyname @ 4:

    RE: Erik @ 3 – Tim is quite reasonably characterizing sales as soft because this month’s warranty deeds are lower than the number in 2013. .

    But there’s also the idea that small movements are not significant. There’s up, down and flat. But on a site like this flat is boring, so it is seldom mentioned. Thus we ignored the fact that the median price had been relatively flat for a long time before the relatively recent upturn, instead focusing on minor changes and ignoring changes clearly caused by a change in the mix. That creates back and forth, flat doesn’t.

    Just looking at last month I would say we were flat, but I can also understand that with six of the seven months being down you’d say it is soft, even though the total decline is rather small.

    Rate this comment: Thumb up 1

  8. Erik

    RE: Kary L. Krismer @ 7
    Inventory is increasing because economically it is less feasible to by a rental as an investment. The reason that inventory is up and less people are buying is not left to dumb luck or “the mix.” It seems pretty clear to me. You are using the mix as some unknown force that you cannot see, smell or touch. I thought the mix referred to people buying higher priced or lower priced homes? I am sure there is a reason for the mix too such as more high paid programmers polluting the area and things of that nature.

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  9. whatsmyname

    RE: Kary L. Krismer @ 7 – I wanted to acknowledge that Tim’s characterization was reasonable because I was about to disagree with it. I would agree with your characterization of pretty flat, but superficially at least, the numbers bias toward softer.

    If you look at the bar charts, a lot of inventory growth has been a mirror of the 2013 seasonal pattern. What we really have is slightly higher inventory, consistently around 200-300 more houses on the market than we had last year. I expect that will grow as the market gets healthier, but seasonally adjusted growth since March has been microscopic.

    Sales are similarly a tiny bit lower; an average of about 80 units per month fewer sales. I think this is because prices on rental quality are no longer so crazy low as to attract securitizers. This is the big piece for me because mom and pop or 1st time buyers seem to be picking up more than half of what the securitizers no longer do. That is a growth trend hiding in plain sight.

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  10. Kary L. Krismer

    By Erik @ 8:

    RE: Kary L. Krismer @ 7
    Inventory is increasing because economically it is less feasible to by a rental as an investment.

    That could certainly be part of it, but don't ignore the listing side.

    The reason that inventory is up and less people are buying is not left to dumb luck or “the mix.” It seems pretty clear to me. You are using the mix as some unknown force that you cannot see, smell or touch. I thought the mix referred to people buying higher priced or lower priced homes?

    Well first, none of my post touched on inventory at all. I was addressing whatsmyname’s sales comment and adding in the median price as another example. And it was on the median I through in mix comment, and although I didn’t specify I was talking about the mix of distressed properties. What was causing most the movement in the median from about 2010 on was the percentage of distressed properties each month. The higher the percentage the lower the median. I’ve spoken of that many times in the past, so I didn’t reference it again. But that is not some “unknown force that you cannot see,” although I will admit it isn’t widely reported.

    And as to whatsmyname’s post #9, I would agree, but add in at the end that we don’t have quite as much buyer frenzy in as many areas as we did a year ago, and that is likely also negatively impacting sales.

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  11. Ardell DellaLoggia

    Remember, we are hitting the first YOY stats since interest rates went from 3.375% to 4.25% pretty quickly. That happened in May 2013, but the May closings were already locked and most of the June 2013 closings were also the lower rates locked before the change.

    So on a YOY basis these are the first documented stats for over 4% in 2013 and in 2014. Before July you were looking at a comparison of sales at much lower rates to much higher rates vs on an even keel.

    The rate differential for most YOY stats to date was at minimum 3.625% to 4.125% as to difference for the most part.

    This chart from WSJ probably shows the best snapshot view: http://blogs.wsj.com/economics/2013/06/13/vital-signs-chart-mortgage-rates-at-14-month-high/ noting first week in June to be the major rise in rates. So that would clearly put the first closings at higher rates into July of 2013 or later.

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  12. Azucar

    RE: Erik @ 3

    Tattle tale.

    I do believe the part in those comments where you said that you drink a lot of vodka, though. It shows in your comments.

    Let me give you a bit of free advice. Drink whiskey, not vodka. People will smell it on your breath more and know that you are drunk, instead of just thinking that you are stupid.

    Rate this comment: Thumb up 9

  13. Erik

    RE: Azucar @ 12
    Your name is sugar in Spanish and you seem soft. I thought you would appreciate a tattle tale. That is what your kind does.

    I wanted to be the first commenter to get another commenter expelled off this site. I saw my opportunity and I went for it. Macro investor is a problem and he needs to be dealt with. He is out of control. I do not drink and comment on here. I am just busy and I use my phone to comment, so the comments are not grammatically correct every time, but the message is extremely valuable.

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  14. Erik's Step Dad

    RE: Erik @ 13

    Everything in your previous post is false except for sugar translating to azucar.

    But since you brought up the topic of someone getting banned from the Bubble… I’d vote for you. Who’s with me? Let’s get my step son, Erik, off the Bubble! Thumbs up for the expulsion of Erik!

    Rate this comment: Thumb up 12

  15. Erik

    RE: Erik’s Step Dad @ 14
    If I get kicked off, the number of daily comments would reduce by 1/3rd. I snap people back to reality. My job on here is to speak logic to you dumb turkeys.

    Rate this comment: Thumb up 0

  16. Erik's Step Dad

    RE: Erik @ 15

    Don’t speak that way to your father.

    Rate this comment: Thumb up 2

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