We’re Back! December Stats Preview Time

I hope everyone had a great Christmas and New Year’s. I apologize for the extended, unannounced absence. I was out of town for a couple of weeks spending time with family and on the road, and did not have a lot of time available to get online. But now I’m back and back on a normal schedule, so let’s get back into the swing of things!

Now that the last month of 2015 is behind us, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snhomish County Stats Preview

Sales actually rose in both counties month-over-month, as inventory fell to new all-time lows. Foreclosure notices are near their low points, and inched up from November in both counties.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County increased 19 percent between November and December (in 2014 they rose 13 percent over the same period), and were up 8 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish increased 37 percent month-over-month (vs. a 21 percent increase in the same period last year) and were up 18 percent from December 2014.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were down 6 percent from a year ago, but rose slightly from a month earlier. Snohomish County foreclosure notices were also down 5 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 43 percent from a year ago, and up just a bit from a month ago.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

Inventory fell dramatically again in both counties month-over-month, and both counties set a new all-time low point for standing inventory. King was down 36 percent from a year ago while Snohomish was down 31 percent.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.


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.

36 comments:

  1. 1
    GoHawks says:

    Tim, do you think we may break 1 month’s supply in King County come February-April? That was a big uptick in new sales given the drop off in actives.

  2. 2

    RE: GoHawks @ 1

    I don’t think so. Part of the reason December sales are so high is because some of November “would be” closings fell into December due to the changes effective October 3. The actual law only adds 3 to 6 days, but due to the adjustment needed to be made by lenders and Title Companies, in many cases a 45 day vs 30 day allowance was granted vs adding merely the additional 3 to 6 days.

    If heretofore a large majority of contracts were roughly 30 day contracts with a close date in the last week of the month, after October 3 rd a 45 day closing is expected to be more the norm. One might think that would have all kicked in for late September and early October written contracts and show the discrepancy between October and November. But because agents write the contracts that propose the close date and they are largely not involved in this law, many of the longer contracts did not kick in until the October and November late closings highlighted the impact of the new law.

    The 3 to 6 days “late” in November or October is not as noticeable as the adding of an extra one to two weeks kicking in for contracts written within 30 days or so of the law change on October 3.

    It is expected this will settle down a bit with most lenders being able to meet 30 day closings once they get more familiar with the new requirements. But the escrow side is unexpectedly getting hit with the bulk of the problem.

    Long story short…some of November closings are in the December stats, and more so than usual. :)

  3. 3
    ESS says:

    Spring is just around the corner – if inventories continue to be this low, it will an interesting one for both buyers and sellers especially if we get more people moving to the region that also wish to purchase.

    When is a bubble not a bubble, but a function of limited supply with a great deal of demand? Any operational definitions in the context of supply, demand, renting vs. buying etc? Would like to hear ideas.

  4. 4
    Deerhawke says:

    December may be a little stronger than it should be, but that just means that November was stronger instead. It doesn’t really change the overall picture much.

    If you look at the year as a whole, what you see is that forced transactions (foreclosures, deeds in lieu, etc.) have dropped and new inventory has dropped to historic lows. Meanwhile despite the lack of inventory, new banking regs, higher interest rates, etc. , sales have been remarkably strong. As a result, standing inventory has been nibbled away to virtually nothing. In fact, I have seen cases where people have over-ridden their agents’ recommendations (and dire warnings) on pricing and there was still a bidding war. In other words, some listings that really should have become part of standing inventory (crappy product, overpriced or both) sold– and sold quickly.

    What I am seeing is a weird (but completely rational) kind of hoarding going on. People who sold last year are telling friends and neighbors that they really wish they had waited. People who had planned to sell decide that they might not be able to get back into the Seattle market and so they are renting instead. People who want to retire and leave the area are holding off in anticipation of higher prices. Off-market deals that are close to being signed are suddenly up-ended because the sellers think they can get another $50,000 or $100,000 in 6 months or a year. And they may be right because there is a self-fulfilling element to this whole phenomenon.

    I don’t think we can routinely break the 1 month’s supply number, but because of the lumpiness in the data, it might happen a couple of times this next year. If you look at Seattle (as opposed to King County) it already happened a couple of times this year.

  5. 5
    Erik says:

    To all sellers: Raise your asking price 5-10% over the appraised value. With inventory this low, you can probably get more for your homes. That will raise all of our values. Time to make buyers pay! That will likely raise inventory for a bit and help us all.

  6. 6
    StupidLifeDecisions says:

    By ESS @ 3:

    Spring is just around the corner – if inventories continue to be this low, it will an interesting one for both buyers and sellers especially if we get more people moving to the region that also wish to purchase.

    When is a bubble not a bubble, but a function of limited supply with a great deal of demand? Any operational definitions in the context of supply, demand, renting vs. buying etc? Would like to hear ideas.

    It’s probably not a bubble if it’s just a case of demand exceeding supply for a long enough period of time in fair, macro-economic conditions. It probably is a bubble if the cause of demand exceeding supply is because of an economic sector that is in a bubble (tech) and overvalued stock prices (amazon).

    I think Erik will really enjoy most of 2016. After that, I think there will be a lot of middle class people who bought real estate here in 2015/2016 (or shares of amazon or facebook, but especially amazon), who will be totally screwed.

    But let’s focus on the positive, 2016 will have many bright spots for Erik!

  7. 7

    I wonder how much of the low inventory is a hangover from the two first-time buyer credit programs? At this point in time the payback requirement on the second program should be gone, but the first still exists. I believe under the first program from 2008 they had to start paying back over a 15 year period, starting with 2010 taxes. So that means they’d have more than half of the credit left to pay back. People do strange things to delay paying the government back early.

    Even as to the second credit, some may erroneously believe they have to pay money back.

    I doubt either of these are huge factors, particularly since there weren’t all that many houses sold in 2008, but the first could be contributing some.

  8. 8
    Mike says:

    This is the first year I recall seeing handfuls of $100K over asking sales close in December. Even last year holiday closings were mostly stale or undesirable inventory that sold for slightly below asking.

  9. 9
    micheal says:

    Is inventory low because sales volume is high? Do they consistently have this inverse relationship? And then, still, why not more inventory with these prices?

  10. 10
    Erik says:

    RE: StupidLifeDecisions @ 6
    Yay!!!!!

    I’m want the insanity last a few more years so I can harvest some more money from this remodel. I don’t see this slowing down until the software companies start moving out of the area or going out of business.

  11. 11
    ess says:

    By Erik @ 10:

    RE: StupidLifeDecisions @ 6
    Yay!!!!!

    I’m want the insanity last a few more years so I can harvest some more money from this remodel. I don’t see this slowing down until the software companies start moving out of the area or going out of business.

    I don’t see the software companies either moving out of the area or going out of business. Microsoft has appeared to find its legs and is on the rebound, and Amazon is a tried and true business model that has succeeded in the past. ( Think Sears catalogue with computers rather than huge paper catalogues – once upon a time one could buy everything and anything including house kits through Sears and their catalogue – sound familiar?).

    And other software companies are moving or expanding their base in this area. There is a highly educated population on the west coast in an area that has less expensive housing than most other Pacific Coast cities. Check out the cost of housing in the Bay area. Include the lack of building land through natural and artificial geographic boundaries, and there will be a good chance housing prices will continue their upward drift.

    And best of all, that old reliable – Boeing – which used to be the driver of employment around here has had its workforce stabilize over the years and has a record number of orders to fill in the next decade. And the main competitor to Boeing – Airbus, has been known to be looking around the area.

    Happily there are places to purchase or rent in the metropolitan area that are still reasonably priced for those who can’t afford the tonier areas of Seattle and the Eastside.

    Although one can never forecast the future – things do appear to be going well here. I think all remodels completed in the next year or two are safe from any downward pressure barring an unforeseen catastrophe.

  12. 12
    ronp says:

    At least some downward pressure on SFR is available due to 11K new apartment units built this year and another 11K expected next year. http://www.duprescott.com/articles/article.cfm?ArticleId=709 . Last time King, Pierce and Snohomish had this level of production was 1998.

  13. 13
    ess says:

    By ronp @ 12:

    At least some downward pressure on SFR is available due to 11K new apartment units built this year and another 11K expected next year. http://www.duprescott.com/articles/article.cfm?ArticleId=709 . Last time King, Pierce and Snohomish had this level of production was 1998.

    New apartment rentals tend to be more expensive than the existing stock, thus it will have a minimal impact on increasing the number of affordable apartment rentals.

    Added to the mix is the lack of new condo development that has been delayed or canceled until the condo product liability statutes are changed to reduce very long term product liability exposure. Thus there may be more apartments under construction at present, but that may just offset the reduced numbers of major condo projects that were planned for the market that have been converted to rental units.

    Add additional factors such as annual worn out housing that needs to be replaced, increased net migration from other areas, and the continued lack of affordable single family housing – still the gold standard of housing for most people, and it all adds up to a shortage of affordable and available housing for the average renter and especially buyers of single family properties.

    So we shall see.

  14. 14
    boater says:

    RE: ronp @ 12
    Yeah but most of those apartments are in the studio to two bedroom category. I suspect what puts the pressure on housing prices is families not singles or couples without children. The real estate agents here can correct me but I think until you plan on seeing a child go to school the pressure to find a fixed place to live is not nearly as great.
    I’ve seen in several locations the general lament by housing advocates that there just isn’t enough familiy rental options in seattle.

  15. 15
    Erik says:

    RE: ess @ 11
    My original guess for the next peak was 2024. I still think that date of the next peak is feasible.

  16. 16

    RE: boater @ 14

    My two thoughts were what do new apartment rentals have to do with SFH home demand and new apartment rentals are usually very high in price pushing even more people into the buy vs rent side of things. You and ess touched on both of my issues and I agree with you both.

    I am just starting my end of year/beginning of year data baselines and one thing I did notice was that in some highly desirable areas the number of sold properties in 2014 was in many cases double to triple the norm for the same neighborhood. Any time there is a higher than average number of listings in a small geographic space, the following year tends to be on the low side. Seems that people who couldn’t or wouldn’t sell in the downturn of 2008 to 2012 came back in a big way in 2014 leaving fewer to come back last year and this year. i.e. in a neighborhood with an average 5% turnover, 2014 had 16% turnover. So basically a large majority of those thinking to sell did so in 2014. I haven’t completed enough of the stats to see how widespread this is/was, but thought it was worth mentioning since it surprised me. I’m doing the stats for as far back as the neighborhoods existed and doing those on the Eastside so far.

    Part of the increase is normal appreciation and part of it is a bubble. So it is hard to sift through the data. Of more concern are that 60% to 80% sell at the realistic appreciation factor and the people who bid things without sound basis to “the sky’s the limit” are throwing off the stats if you don’t sort them into appreciation vs bubble prices.

    If 30% of the bid up is due to a recent hiring of a large number of people by a few companies, that portion is all bubble since the minute they have enough staff and stop hiring at that rapid pace, the market will level out. That portion is the “air” in the pricing, and yet there is appreciation as well that is not the modest and expected 3% uniformly.

    Soon pricing houses will be as crazy as pricing soon after IPO startup companies. :) Once rational thinking and basic sound principles are cast aside, it’s hard to hang your hat on what a price should be. Once in awhile the market laughs at the price and I feel a bit better when that house doesn’t sell. But more often there are a couple of crazy buyers who jump in front of the pack to a price that makes zero sense.

    Getting to be more and more like parts of CA everyday. It was not that way at all when I first moved here from those parts of CA back in early 2004.

  17. 17
    Erik says:

    RE: Ardell DellaLoggia @ 16
    People are willing to pay more because if they wait, prices go up more. I think we wil likely see double digit appreciation for the next 3 years.

    If you can overbid by 10% today, it’s better than waiting for the price to be 33% higher in 3 years.

    $500000*(1+.1)=550000

    Assume 10% appreciation for 3 years…

    $500000*(1+.1)^3=$500000*1.33=$665000

    If I were buying, I’d rather spend $550000 now as opposed to $650000 in 3 years. My assumptions seem reasonable based on low inventory, past appreciation, and where we are at in this bubble cycle. Housing prices accelerate towards the end of a bubble and I’ll be cheering prices on until I sell and the bubble pops again.

  18. 18
    ess says:

    By Erik @ 15:

    RE: ess @ 11
    My original guess for the next peak was 2024. I still think that date of the next peak is feasible.

    By Erik @ 15:

    RE: ess @ 11
    My original guess for the next peak was 2024. I still think that date of the next peak is feasible.

    Rising housing prices will benefit those who were fortunate enough to buy some years ago. Furthermore, we are looking at relocating to another part of the country when we retire where housing prices and taxes are not so robust. If you are correct, increased housing prices will pay for a variety of cruises and trips overseas, as well as a very nice house in some retirement community!

  19. 19
    ess says:

    RE: Ardell DellaLoggia @ 16

    Interesting comments you made about increased turnover in popular neighborhoods. One wonders where the sellers are moving to – other Puget Sound areas, or out of the area. Or perhaps those sellers are buying expensive condos in the downtown residential areas.

    As per your comment above as quoted below

    “Getting to be more and more like parts of CA everyday. It was not that way at all when I first moved here from those parts of CA back in early 2004. ”

    One can view housing prices in the South SF Bay area to put housing prices in perspective. Nice “middle class” houses near and around Silicon Valley are selling for upwards of one to two million dollars. Those who believe housing is expensive here may wish to feel better by viewing those properties for sale. I assume there are buyers for those houses.

    Will prices reach those lofty levels here? Who knows? But one thing is for certain. Million dollar homes in a number of Seattle neighborhoods are not out of the question. Having owned an interest in a duplex near the UW many years ago, I never thought those houses would even be worth 150K. A million dollar for a house in north Seattle – no way. Now homes in the North End of Seattle north and east of the U District frequently obtain one million dollars or more, and there are presently enough buyers to keep that market going strong as demand seems to be outstripping supply.

  20. 20
    redmondjp says:

    RE: Erik @ 17 – Yoda says: “Strong with this one, the spirit of Meshugy is.”

  21. 21
    Justme says:

    Amazon was down some ~6% on monday and stayed about flat on Tuesday. Wednesday will soon be here. Europe is already down 1% on the average at this hour, Asian exchanges ended down about 1% in 4 out off 6 biggest markets.

    Yeah, sure 2016 will be another banner year. People are dreaming.

  22. 22
    Erik says:

    RE: redmondjp @ 20
    I wouldn’t overpay myself, I am just describing the logic. I wouldn’t be surprised if housing prices went up 10% per year for the next few years though.

  23. 23
    GoHawks says:

    RE: Justme @ 21 – Rough crowd. Amazon goes up 119% then pulls back 6% and there is finger wagging.

    Russell Wilson completes ten straight passes then misses one throw…….he stinks.

  24. 24
    redmondjp says:

    RE: GoHawks @ 23 – That’s not the real issue. Show me another successful company that has a P/E ratio close to four figures.

  25. 25
    GoHawks says:

    RE: redmondjp @ 24 – Show me another company that can deliver goods to your door in 120 minutes…..

  26. 26
    redmondjp says:

    RE: GoHawks @ 25 – Just because something can be done doesn’t mean that it is profitable in the long term to do it.

    Remember Webvan? I do – I keep both a Home Grocer and a Webvan refrigerator magnet on display.

  27. 27
    GoHawks says:

    Those are good reminders.

    Not sure they ever had $5 b in revenue from other divisions within their company though. Amazon is a tech company, not just a retailer.

    Stock has had a huge run, but it’s a great company.

  28. 28
    Justme says:

    redmondjp@24, yes, the P/E=906 today at P=$632 is indeed what bothers me.

    GoHawks@27, well, essentially ALL of the profit of Amazon comes from the 5B of AWS (Amazon Web Services) revenue. That is NOT good thing, it is a bad thing. With Amazon having a 100B revenue, how is 5B of AWS going to save them? And given that Amazon has about 25% market share in US e-tailing, how much more AWS can they sell to their competitors?

  29. 29

    RE: Justme @ 28
    Low Seattle Listings and the Current Tech Stock Crash

    A SB blogger straightened me out on Seattle real state, most current home buying is still the old fashion way, mortgage loans, not cash. With trillions lost in the current bear stock market this makes sense too, what cash? LOL [laugh when crying doesn’t do any good].

    The Cash Investment Losses and Dinky Gains for 2015:

    Dec 0.18% (0.30%) (1.57%) (3.91%) (2.03%)
    YTD 2.04% 0.91% 1.46% (2.92%) (0.51%)

    That’s long-term CDs, Long-term Bonds, American Stocks and the last two are foreign stocks [they did worse]. Let’s see, ya still made the most money in CDs….global and domestic stocks are worsening lately too. It seems we’re sick of the tech industry too, the watches were a big failure and the iphones are losing popularity. The current tech gadgets are getting boring to Americans now, ask China.

  30. 30

    By redmondjp @ 26:

    RE: GoHawks @ 25 – Just because something can be done doesn’t mean that it is profitable in the long term to do it.

    Remember Webvan? I do – I keep both a Home Grocer and a Webvan refrigerator magnet on display.

    Not the best example. Any grocery delivery company that buys another company called Homegrocer.com and keeps their other name obviously had poor management. Webvan sounds like a service to transport elderly people to their doctor appointments.

    Also, the timing between the takeover of Homegrocer and the company failing suggests a lot too.

    Safeway and I believe Albertsons still have home delivery, as does Amazon with Amazon Fresh. None are huge though, in part because they all suck compared to what Homegrocer did before the merger.

  31. 31

    RE: Kary L. Krismer @ 30
    Home delivery of meat and produce

    Sucks…..ya need to pick these out yourself, from the store.

  32. 32
    Blake says:

    By Erik @ 17:

    RE:
    People are willing to pay more because if they wait, prices go up more. I think we wil likely see double digit appreciation for the next 3 years.

    So Erik… we are almost 7 years into a “recovery” (so called…) and large chunks of the world economy are already in recession and world trade is shrinking fast. And you think it is “likely” that Seattle will see double digit appreciation in real estate for the next 3 years?
    Boy… it really is starting to feel like 2006/7 around here!
    “Seattle is different”… onward and upward!
    http://www.salon.com/2016/01/03/the_middle_class_is_just_this_screwed_janet_yellen_declares_victory_while_workers_drown/
    … “researchers found that there were now 2.3 million more of the lowest-paying jobs, 700,000 fewer middle-income positions and more than a half million fewer higher-paying jobs… wages in the 800 lowest-paying occupations they surveyed had actually declined by 5.7 percent from 2009 to 2014. Mid-level wage-paying positions saw a 2.6 decline in the real median wage while the best-paying jobs saw a 3 percent slide.

    Historically, residential rental costs were deemed as affordable if they were below or at 30 percent of a household’s monthly income. According to a comprehensive Harvard University study, in 1960 only one in four renters paid more than that 30 percent threshold for housing. Today, half of all renters are defined as cost burdened. From 2007 through 2011 the number of households “severely burdened,” in that their rent claimed 50 percent of their income, spiked from 2.5 million to 11.3 million households.

    The only way that the phony corporate media narrative about the “recovery” works is if its boosters talk about aggregate national numbers. Once you drill down and have to deal with the actual conditions on the ground in a specific place, it quickly becomes apparent just how much of the nation has slipped into the quiet despair that comes with advancing decrepitude.”
    (end quote)

  33. 33
    redmondjp says:

    RE: Kary L. Krismer @ 30 – You missed my point, Kary.

    Webvan did not limit themself to grocery delivery; they promised to deliver you an alarm clock at 3am in the morning. They were trying to be what Amazon is now.

  34. 34

    By softwarengineer @ 31:

    RE: Kary L. Krismer @ 30
    Home delivery of meat and produce

    Sucks…..ya need to pick these out yourself, from the store.

    Actually, Home Grocer’s produce was rather good, and I say that having worked produce for about 3 years when going to school.

    Meat was mainly a problem due to quantity. I’d often get it wrong–usually too little.

  35. 35
  36. 36

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