March Stats Preview: A Faint Glimmer of Hope for Listings

Sorry, no April Fool’s jokes today. Just a look at March stats with 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 & Snohomish County Stats Preview

For the most part, it’s the same story we’ve been seeing for the past couple years. Low inventory, low sales, and few foreclosures. However, there was a new tiny glimmer of hope for buyers looking for more listings: The month-over-month increase in listing inventory in March was the largest we’ve seen in nearly two years. We’re still down from a year ago, but maybe we’re starting to see the very beginning of a listing recovery.

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 38 percent between February and March (a year ago they rose 42 percent over the same period), and were up 1 percent year-over-year. Last month was tied for the smallest year-over-year increase in sales since September 2014.

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 rose 30 percent month-over-month (vs. a 36 percent increase in the same period last year) and were up 6 percent from March 2015.

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 12 percent from a year ago and Snohomish County foreclosure notices were down 17 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 7 percent from a year ago. I assume that most of the volume of foreclosures now are just a trickle of homes where the borrowers defaulted before the current boom, but the homes were held up in the foreclosure process for one reason or another.

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 was up 12 percent month-over-month King County, the largest gain since May 2014. In Snohomish County inventory was flat for the third month in a row, and still down big from a year earlier as well.

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.

18 comments:

  1. 1
    js says:

    However, there was a new tiny glimmer of hope for buyers looking for more listings: The month-over-month increase in listing inventory in March was the largest we’ve seen in nearly two years. We’re still down from a year ago, but maybe we’re starting to see the very beginning of a listing recovery.

    Dude, you are reaching here.

    Typical end of March has well over 5K listing. Last year end of March year was crazy (record?) low with ~2,750. This year we’re down to 2,145 and it’s somehow a good sign because the month over month change was higher?

    Looks to me like we broke another long standing low inventory record, at a time when no one thought inventory could get any worse.

  2. 2
    district says:

    I used to live on Capitol Hill, and began to rent out my condo when I moved. My plan has been to sell either this summer or next, so I keep a close eye on market conditions. One thing keeping me from putting my unit on the market is that rental rates are very much outpacing sales prices. This gives the impression that sales prices just haven’t caught up yet and makes it seem like selling now is leaving money on the table.

    I have no really good way of telling whether my impression is grounded in reality here, but that’s how things seem to me.

  3. 3
    Mike says:

    I will say I have a couple of neighbors looking to sell this year, and that would double inventory over the previous 4 years. But they’re also looking to sell in the $800K range, which is close to double the price of 4 years ago. I doubt they’ll have any trouble selling for that price either, one may have to cut into the $700’s to unload, but both bought in the $400K range a little over a decade ago so not much is keeping them in the house at this point. One of the houses has been vacant for close to a year – the owner relocated and wasn’t in a hurry to sell for obvious reasons.

  4. 4
    Green Horn says:

    What do you imagine could possibly trigger people to sell their homes and increase the inventory of available homes? Please speculate…

    Everything I read indicates that the market has become frozen and illiquid because there is no product available, so people are sitting put.

    How are the margins for the developers of these new 5-pack townhomes placed on a single lot where a sfh previously stood until it was torn down? I’d really like to see a sample business case for this model of development!! But this model seems to offer a potential increase in supply that would evaporate instantly like a few drops of water on the hot summer pavement. What other sources of supply could alter the balance?

    Unless there is a major collapse of the local economy, I have a hard time imagining that Seattle’s real estate market will develop any differently than on a trajectory similar to in the Bay Area. Who says what goes up must come down? At least for the next couple decades the macro trend could be sustainable. It’s a shame that the kids are going to get priced out and communities and families have yet more forces tearing them apart. Seattle is such an outlier from the dynamics of the rest of the country, that the Fed will hardly reign in the exuberance here with punishing interest rates when so many of the nation’s regional economies are still staggering feebly towards the hoped-for recovery.

    But I’ll take prosperity over the alternative. Seattle, Detroit or Youngstown, the choice should be clear.

  5. 5
    GoHawks says:

    RE: js @ 1 – Yeah, it is all in the headlines. Tim does an outstanding job with the stats/charts, it must be hard to write the same headline over and over. This could have read: “Inventory breaks record low for the month of March.” Percentage moves will seem large from such a low level.

    Wake me up when inventory rises year over year. 2017 or 2018?

  6. 6
    Bob says:

    On my block, there now is a for sale sign up. That’s the first one I’ve seen in four years on my block. They are empty nesters in their late fifties, relocating to a lower cost area while the market is still in an uptrend. Thus, it appears there decision was largely based on the market topping, plus some interest in getting into a more peaceful lower cost area.

    They are doing one those “review all offers on Monday” deals. I’ve been watching the people move through there. They look to be people in their 30’s and 40’s including many immigrants from other countries. That tells me the current market demand is driven by new job opportunities. Things will slow down if there is a recession and hiring freezes.

  7. 7
    Andrew says:

    If I were in the position to sell a house, this summer would be the time to sell. Beyond that there’s too much unknowns. Or take advantage of the low (so far) interest rate to refinance with cash out to catch up with retirements or college funds for the kids, heck Tesla will have “model 3” for sale next year why not buy that just because.
    If I were a buyer, instead of worrying about the jacked-up price I’d invest my down payment and try to catch up with this isolated inflation in housing (i.e. accept the fact that the “base line” had increased and I missed the boat). Once I had more purchasing power, come back to “house hunting” mode.
    All in all, I don’t think for a second that the price would plummet – ever. If anything the acceleration would slow down but overall price trend will go up. Those who’ve been buying cash wouldn’t just panic and sell their properties at a discount. Instead they’d sit on it perpetually and live goes on. There’s too much demand and too little supply.

  8. 8
    Som says:

    I have been looking for around one year. I went to open houses this week and I saw surprisingly low foot traffic in all the houses. The foot traffic was nuts 3 months ago. I am not sure what to conclude from this. But I do think that potential sellers should dump soon because it is too tough to predict which way the wind will blow.

    Also, Bay Area and Seattle is different. Bay Area prices are jacked up because there are thousands (yes over 100,000+) of folks who made 7 figure windfall via startup exits over the past decade. They had surplus cash and they are the ones who screwed the entire Bay Area real estate.

    The ones in Seattle are not startup millionaires. They are middle class salaried tech workers. The market will never get as crazy as the Bay Area. If I were to guess, this year is the last year of strong price growth in Seattle area. It may stretch somewhat to next year but I very much doubt.

  9. 9
    Bob says:

    Seattle would disappear as a city if all its inhabitants had to pay today’s house prices. The fact is, most of our homeowners bought a long time ago and have little house payments, if any. They couldn’t afford to buy the homes they live in now based on their current income. In my neighborhood, 30-40% of the homes are owned by boomers who’ve lived there for 15 years or more. Knowing their income levels, I assume the home equity is a large part of their retirement fund, which they cannot afford to lose. I doubt many boomers in this position would hesitate to downsize in order to preserve their retirement, if and when they perceived a market top. Plus, if they live in a two or three level, they’d much prefer a rambler or condo in a lower cost area.

  10. 10
    ESS says:

    RE: Bob @ 8
    Plus, if they live in a two or three level, they’d much prefer a rambler or condo in a lower cost area.

    No kidding – and it isn’t just boomers that want one level, it is more and more buyers. And with all the building of large houses and townhouses on smaller and smaller lots – stairs are becoming the norm, and ramblers are becoming more scarce as a percentage of the available inventory.
    I attended an open house for a townhouse for sale. Not only were there four levels to the residence, but to accommodate the narrowness of the structural footprint, the stairs appeared much steeper than normal stairs. The buyer will spend a fair amount of time going up and down those stairs. One consolation, at least the new homeowner won’t have to join a gym for their workout.

  11. 11
    Mike says:

    RE: Bob @ 8 – I think you’re making this up. I live in an older neighborhood where the average home is 70+years old. Just looking at the sold figures, 20% of the homes were purchased in just the last 3 years. If I had an easy way to go back and look at the last 10 years data to include the last innings of the bubble, I bet the total figure is over 50% of homes have been owned less than 10 years. For much of that 10 years homeowners saw little if any appreciation, so in a lot of cases the prices they paid were in the ballpark of prices today.

    The median house in my North Seattle zip code has 3 bedrooms, 1.75 baths 1900 sq ft and was built around 1947. Median price on a home like that sold today is $650K. I’m one of very few people who bought during the downturn, so of course I paid a lot less. Most people I know in their 30’s-40’s paid a lot closer to today’s median than the low prices we saw after the market collapse, or for that matter the lower prices 12+ years ago.

    So no, a lot of today’s owners did actually pay fairly high prices for their homes and could do the same now if they were so inclined. I’d bet you would find different figures in newer Eastside neighborhoods, but on this side of the lake the houses have mostly all turned over at least once if not more, hence there are fewer boomers aging in place.

  12. 12
    Bob says:

    Mike, I’m not making it up. In my desirable development of 80 homes in the $800.000 price range (currently), I’ve seen a total of five for sale in the last three years.

  13. 13
    greg says:

    RE: Bob @ 8
    I went through this before, a city of a million where tens of thousands were priced out, they simply moved out about an hour and after a decade the state built excellent roads for them and everyone got over it.
    Sure some will be upset for a while, but they adjust and move forward.

  14. 14
    Mike says:

    By Bob @ 11:

    Mike, I’m not making it up. In my desirable development of 80 homes in the $800.000 price range (currently), I’ve seen a total of five for sale in the last three years.

    Too small a sample size to be usable. My zip code has 10,000 owned units, my neighborhood has 2000 homes in it, median price is a hair short of $1M. I’m sure if I narrowed it down to only 80 houses I could find a cluster of homes that had similar low turnover depending on when they were built. You need to look at a broader area to see resale trends.

  15. 15
    II says:

    RE: Som @ 8
    Agree with Som, went to the open houses this weekend and there was almost no one looking. We were the only ones. In one of the houses I laughed at the asking price. At this point it is becoming funny how people just want an “x” amount because they think this market is hot. I will give it a couple of years and if this upward pricing trend continues we will just move somewhere else if it will make more financial sense. Amazon and Microsoft are not paying that much at the end of the day, so, unless foreign buyers are buying these properties, I am not seeing how this will continue.
    Also, these foreign buyers are turning some communities into ghost communities with no one living in the houses. Not sure I would want to live in such a community and I think many feel same way because many want a family friendly neighborhood. Will see how it plays out, in my opinion, people who are considering the possibility of selling should be listing their homes to get the top dollar for their properties because the window of high prices is closing fast. As for me,last thing I need is to be underwater, so, I will rent from those foreign investors and see where the market goes.

  16. 16
    ess says:

    RE: GoHawks @ 5

    ——————————————

    Wake me up when inventory rises year over year. 2017 or 2018?

    The glimmer appears to be rather faint
    http://www.seattletimes.com/business/economy/squeeze-on-homes-for-sale-extends-to-several-counties/

  17. 17
    GoHawks says:

    RE: ess @ 15 – Yeah, still a significant drop in inventory year over years.

    Bears keep clinging to higher rates, lower stock prices, softening real estate demand, a pick up in inventory. So far they are 0-4 in 2016.

  18. 18
    Mike says:

    RE: Som @ 8 – I think that the lack of big windfall profits with all the startups in the Seattle market likely makes it more robust over the long-term than SF, not less.

    Unlike in SF, the Seattle market is running hot to catch-up with an influx of better paid employees who are still mostly salaried with fairly regular bonus levels. The ability for folks to keep paying these prices depends on the overall economy not tanking, but the market doesn’t need a lot of folks who turned options and RSUs into gold to keep fueling it. The other good thing with that difference is that the Seattle market is likely to soon reach a point where prices start to cap out at the top end of what salaried folks can pay.

    I’ve posted on here a few times before that what Seattle is experiencing is effectively a fairly rapid step increase in housing prices to track the step increase from old-line industry pay to a higher paid tech industry. There will be a period like we have seen the last 2-3 years where prices shoot up to the level that matches the new resident’s pay, and then I’d predict in the next year or so prices will start leveling off somewhere in the $600-800k range for desirable close-in hoods, which is about where affordability taps out if you’ve got two working professionals raking in around $175-250k combined. And yes, that means Seattle proper (at least the parts without random shootings) are going to be largely for “rich” tech-bros and other professionals.

    Once that new plateau is hit price growth should slow and be more a reflection of continuing population growth and limited SFR inventory, with price increases then being higher as a percentage basis in the near-in burbs as the lower and mid-level workers are pushed out there in search of family sized housing (which Seattle developers refuse to build other than vertical townhomes). Probably more modest increases in the close-in hoods as they track the purchasing power of a smaller (but hopefully still growing) rank of more senior managers along with some founders.

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