NWMLS: Scarce Listings But Prices Dip Slightly In December

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January market stats have been published by the NWMLS. They haven’t put up their press release yet, so let’s get on with the 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):

January 2017 Number MOM YOY Buyers Sellers
Active Listings 1,569 -4.3% -18.9%
Closed Sales 1,582 -26.6% +20.4%
SAAS (?) 0.80 -16.4% -21.8%
Pending Sales 1,939 +18.2% +7.0%
Months of Supply 0.99 +30.4% -32.6%
Median Price* $525,000 -4.5% +6.9%

Still no sign of hope for buyers here or on the near horizon. Listings are way down, sales are still strong, and while the median price did dial back a bit from December to January, it’s still within five percent of the all-time high.

Note that in the following charts the point for January 2017 is a light brown square on the left.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales dropped off 27 percent from December to January, but were still up twenty percent from a year ago.

King County SFH Pending Sales

Pending sales rose eighteen percent in January, and were also up seven percent year-over-year.

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

King County SFH Inventory

Listings fell four percent from December to January, unusual for this time of year. Typically listings actually increase slightly between December and January. The drop this year is the largest we’ve seen. Not exactly setting up 2017 for an inventory recovery.

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

Everything is still strongly in seller’s market territory.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price gains have declined in recent months from nearly fifteen percent in October to “just” seven percent in January, the lowest level since September 2015.

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

Unless things suddenly turn around we will probably be hitting new all-time highs again in a few months.

January 2017: $525,000
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle home prices grow at slowest pace in three years


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.

50 comments:

  1. 1

    The Realtor Lady Living Next Door to Me

    Was laughing uncontrollably when I told her the ‘hideous pink” unit three homes from us was listed for $287K. She agreed the high property taxes and winter utilities make smaller mobile homes on their own land a “desirable location” SE King county location with stagnant and collapsing entree job market wages for the home buying populations.

    My property taxes in SE King county are only $725 every 6 months ….the average home goes for like $350K [with double and triple the property taxes and maintenance/utility costs per SF] there, but they’re all maintenance/utility/tax burning over-sized glue board slap togethers on cement foundations [that weather earthquakes far worse than bendable bases like pilings]. Great homes in SE Kent for gypsy families living together, lousy choices for single home buyers or just married couples.

    We’re running out of working man buyer money, our only hope is open borders with no national security safeguards and cheap maintenance foreign slaves for the rich liberals to use for their retirements?? LOL

  2. 2
    N says:

    http://www.businessinsider.com/regulation-changes-in-china-could-crash-vancouvers-real-estate-market-2017-2

    This all changed January 2, the first business day of 2017. The People’s Bank of China (PBoC) and The State Administration of Foreign Exchange (SAFE) surprised citizens and banks by adding new barriers. Citizens exchanging currency now need to provide a declaration explaining an acceptable use. The US$50,000 limit remains, but banks are now required to report transfers greater than ¥200,000 (US$29,000). Exchanging currency is now prohibited for buying bonds, “insurance-type” products, and real estate.

    Some quick back of the napkin math explains how Vancouver real estate is in for a ride. Foreign buyers provide a 30% downpayment, which at the average would leave CA$708,000 (US$542,757) on a mortgage. At 4% with a 30 year amortization, you’re looking at CA$3,369/month (US$2,582) before taxes, maintenance, and insurance. That’s CA$40,428/year (US$30,975), also known in China as 13,000 yuan too many to not be reported by your financial institution.

    Not every one of the 4,515 buyers is going to default, but that’s the tip of the iceberg. B.C. has only been tracking foreign buyers for 6 months, and Vancouver has been a popular destination for Chinese buyers for much longer. The number of foreign homeowners that need to evade capital controls is likely much higher, and will be subject to the same barriers. So unless someone is working on an Uber for money laundering, Vancouver’s going to see a fire sale.

    Still skeptical this will impact Vancouver real estate? There’s currently 1,777 listings in the Greater Vancouver Region for sale. January saw 179 price reductions, roughly 1 in 10 in properties. Although I’m sure somewhere a Realtor is saying it’s a Chinese New Year sale.

  3. 3
    Eastsider says:

    RE: N @ 2

    China is bleeding its FX reserve. The closely watched number is now under $3T. This may seem like a lot but it has dropped almost $1T in the past 2 years. The Chinese economy needs FX reserve to function and the current level/trend is becoming worrisome.

    China Jan FX reserves fall more than expected to $2.998 trillion, near 6-year low
    http://www.cnbc.com/2017/02/07/china-jan-fx-reserves-fall-more-than-expected-to-2998-trillion-near-6-year-low.html

    China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years, even as authorities tried to curb outflows by tightening capital controls.

    While the $3 trillion mark is not seen as a firm “line in the sand” for Beijing, concerns are swirling in global financial markets over the speed at which the country is depleting its ammunition to defend the currency and staunch capital outflows.

  4. 4

    RE: N @ 2
    Its Happening in Europe Too

    Non-employed rich elite “energy using and environmental joke money pits” are sitting empty forever….they cost too much and working family pay is too low to help.

    I’m sure with real news coverage [not this NWO fake news] the facts you mentioned would be on MSM, they aren’t….and we complain about the old Soviet Union’s Pravda Brain Washing? LOL

    The rich liberals need to win a real election and support our country, stop the complaining and whining about their greedy losses.

  5. 5

    Apparently scammers are moving up and putting fake for sale listings on Zillow, and requesting rather large “holding” fees.

    http://www.wptv.com/news/region-c-palm-beach-county/west-palm-beach/fake-zillow-listing-nearly-cons-people-out-of-thousands

    The rental scams are quite common, but this is the first time I’ve heard of someone stealing photos from a rental listing and creating a fake for sale listing.

  6. 6
    js says:

    For the 5th month in a row, the Eastside numbers are a lot different than Seattle:
    Seattle YoY median price: +2.75%
    Eastside YoY median price: +13.68%

    The inventory gap is still there, but it’s closed a lot.
    Seattle YoY inventory: -15.11%
    Eastside YoY inventory: -23.14%

    Deerhawk: Source for all these number is the NWMLS marketing report (Res Only, page 2):
    http://www.northwestmls.com/library/content/statistics/KCBreakouts.pdf

    Edit: Tim, I know you have lots of free time. Since the Eastside and Seattle numbers have been diverging, perhaps you could add Eastside vs Seattle charts?

  7. 7
    Deerhawke says:

    RE: js @ 6

    Thanks JS. It is always nice to get my hands on the data rather than just the newspaper’s summary of it.

  8. 8
    Deerhawke says:

    If you look at the YOY figures (which are really the ones that matter), everything is against buyers by double digits. Active listings down 18.9%, Months of supply down 32.6%, Closed Sales up 20.4%, Pending Sales are up 7.0% (OK I lied that is not double digits but it is still not good for buyers). Meanwhile prices are up a mere, meager 6.9%. The Seattle Times made it seem like this is the beginning of a full-on correction with several Seattle neighborhoods so-called judged to be in negative territory.

    Do you just want to just call it an anomaly (the economist’s term for “beats the H out of my why that happened”) or do you want to hazard a guess why?

  9. 9
    jon says:

    The Fed is expected to raise rates three times in 2017. This could just be a frenzy of trying to get in before those increases.

  10. 10
    wilson_greatful_dead_69 says:

    WSJ is chiming in on Chinese buyers landing in Seattle now. I guess the insanity is just beginning here after all. http://www.straight.com/news/866316/another-media-outlet-calls-seattle-new-vancouver-chinese-home-buyers

  11. 11
    GoHawks says:

    RE: jon @ 9 – Jon, those Fed increases are already priced into the Bond and Mortgage market. The largest financial markets don’t wait for the official announcement before they price in major news.

  12. 12

    I don’t have a PSBJ subscription, so I don’t know what this says, but it apparently covers the suburbs. I’d be a bit cautious relying on it though because the part I can read indicates King County inventory dropped almost 4,000 units in one year! :-D

    http://www.bizjournals.com/seattle/news/2017/02/07/home-prices-surge-seattle-suburbs-king-county.html?ana=e_du_prem&s=article_du&ed=2017-02-07&u=mhCEwc2edYmg/4cBYEZBas/CubS&t=1486509560&j=77322301

  13. 13
    ess says:

    By wilson_greatful_dead_69 @ 10:

    WSJ is chiming in on Chinese buyers landing in Seattle now. I guess the insanity is just beginning here after all. http://www.straight.com/news/866316/another-media-outlet-calls-seattle-new-vancouver-chinese-home-buyers

    My favorite part of the above referenced article? The one family that bought two 5 million dollar waterfront properties although they live elsewhere in the US. Wanted one or both for a place for her family to “relax” when on vacation in the area. If that is any indication of the types of foreign buyers we are going to get in this area, this market may go through some exciting times in the near future. After all, even my three little row boats will be affected with all the yachts when the tide rises.

  14. 14

    RE: Kary L. Krismer @ 5
    Yes Kary

    Its not only federal courts from the Seattle area whining at Trump and making laws [they are not suppose to making laws or taking political sides as attorneys/judges] that Obama made, its fake news on the Chinese money drawn to Seattle Real Estate. Read today’s WSJ article…..notice its all tracking % changes and not numbers of listing [puny or insignificant?]. More fake news:
    https://www.wsj.com/articles/for-chinese-home-buyers-seattle-is-the-new-vancouver-1486500393

    China should offer cash awards for names of “so-called” home buyers in Seattle from American citizens that turn them over. They broke Chinese banking policy and committed a Chinese criminal law infraction. We should cooperate with the Chinese government for diplomatic leverage during trade talks…..its called good faith for all you Progressives that don’t understand Business 101.

  15. 15
    js says:

    By Deerhawke @ 8:

    …do you want to hazard a guess why?

    My guess is that there are a lot more people (like myself) doing the landlord/rentier thing instead of selling. With rents way up and the supply/demand curve pointing toward more appreciation, there isn’t much motivation to sell. And where do you put the proceeds from the sale? Paying off a low interest rate mortgage? Stock market? Cash?

    My original plan was to sell this spring to avoid capital gains taxes, but I’m now on the fence. Holding the house as a long term rental is seeming like a safer option.

  16. 16

    RE: js @ 15
    My Advice of Being a out-of state Kansas City real estate owner:

    The tenant(s) [in my case my 28 YO daughter and significant other] protect this investment by living there until I give it to my daughter when Milenials get decent jobs with health coverage as Trump envisions. The code police cannot enter the house with family living there.

    Keep your rent extremely and forever low if you have good tenants with jobs. Don’t lose ’em to stupid rent hikes, no matter if you’re losing money or not. Or you’ll throw the baby out with the bath water.

  17. 17
    ess says:

    By softwarengineer @ 16:

    RE: js @ 15

    Keep your rent extremely and forever low if you have good tenants with jobs. Don’t lose ’em to stupid rent hikes, no matter if you’re losing money or not. Or you’ll throw the baby out with the bath water.

    I agree with above only so far as one is not losing money. Good tenants are not worth losing over a 3 -4% increase in rents.

    BTW – as per the article that Wilson provided in comment number 10 as per deep foreign pockets, I wonder how many of those types of buyers need to descend upon the Puget Sound area to have a significant impact on prices? One hundred? Ten thousand? Some number in between? Assuming X number of residences are sold in the great Puget Sound area each year, what percentage of X is needed to skew the market higher? And if those buyers are concentrated in one area (ex Bellevue/Redmond) how far does the impact extend? Is there any established formula as to size of area and number of deep pockets coming into the area, and how much prices go up as a result of outside pressures such as described in the WSJ article?

  18. 18
    Deerhawke says:

    RE: js @ 15

    That is certainly part of the picture.

    As I mentioned in a previous post, both of the buyers for the last two houses I sold last year kept their existing residences as rentals. Three townhouses I sold this past year went to one buyer group that is now renting them out. The house I bought from a neighbor last year is now refurbished and rented out. I was involved in six properties in 2016 and all of them involved units held off the for-sale market. We can call this anecdotal evidence, but hey, they are my anecdotes — they do seem to say something about how people view Seattle real estate as an investment these days.

    Other theories for the anomaly? If we are getting double digit decreases in supply indicators and double digit increases in demand indicators, why are we not getting double digit price increases?

  19. 19
    js says:

    RE: Deerhawke @ 18
    If you look at the neighborhood details, there were healthy (double digit+++) price increases in most neighborhoods.

    Here are the neighborhoods that had the lowest YoY median price change:
    West Bellevue (520) down -23.78% ($1,410,000 $1,849,995)
    Queen Anne/Magnolia (700) down -11.7% ($800,000 $906,000)
    West Seattle (140) down -10.76% ($499,499 $559,750)

    I’d argue that the West Bellevue and Queen Anne/Magnolia numbers were probably due to less expensive sales being a higher percentage of total sales. West Seattle, on the other hand, could have something to do with Erik living there and buying a 2nd condo.

    Source: page 2
    http://www.northwestmls.com/library/content/statistics/KCBreakouts.pdf

  20. 20

    By js @ 6:

    For the 5th month in a row, the Eastside numbers are a lot different than Seattle:
    Seattle YoY median price: +2.75%
    Eastside YoY median price: +13.68%

    Maybe this pertains to the other issue discussed–people retaining the property to be a landlord. That’s a much less appealing course of conduct in Seattle due to the city’s ordinances (and/or possible future ordinances), so maybe sellers there are more likely to sell and that is moderating prices.

  21. 21
    jon says:

    For you data nerds, there is a very interesting tool on the page http://www.city-data.com/city/Seattle-Washington.html

    Go about a page down and there is a map with some drop down menus. You can select from several dozen different measurements and see them mapped out.

    One set of data that I think pertains to this discussion is the percentage of people who have been in their house less than one year. That’s probably a mix of renters and owners unfortunately, but it does show that it is clearly in the less affluent areas that people move around more. If that applies to owners as well as renters, then the lower priced houses will be sold more often, and so the average sales price will reflect that, and in addition will be affected by economic changes that drive how often people move. Currently, high income people are moving into the area and low income are moving out. I expect that is more true in Seattle than on the Eastside. But there are so many interacting forces going on it’s hard to see how to now what is really going on.

  22. 22
    Matt says:

    Question – are the inventory numbers controlled in any way for population changes? If not, I suspect the lack of inventory is even worse than it appears.

  23. 23
    js says:

    By jon @ 21:

    For you data nerds, there is a very interesting tool on the page http://www.city-data.com/city/Seattle-Washington.html

    Thanks for the link. Interesting data visualization there. Unfortunately the data is only thru 2013, so we can’t see the big changes from 2014-2016.

    …it does show that it is clearly in the less affluent areas that people move around more. If that applies to owners as well as renters, then the lower priced houses will be sold more often, and so the average sales price will reflect that, and in addition will be affected by economic changes that drive how often people move.

    Nice theory. Another factor might be that people who sell in January in an extreme sellers market are less affluent. The richer families can/would afford to hold on until May, wait until they’ve purchased a new home, or even become landlords. This presumably would not affect YoY numbers — last January (and the January before) were also extreme sellers markets. Unless your theory about the less affluent owners having to sell more often also was true. Then the less affluent may have been already been stretching and holding longer than they normally can/would because of the hot market. Pent-up sellers.

  24. 24
    Go Hawks! says:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

  25. 25

    By Matt @ 22:

    Question – are the inventory numbers controlled in any way for population changes? If not, I suspect the lack of inventory is even worse than it appears.

    They are absolute numbers, so yes, worse than it appears.

    Also keep in mind that there are also a lot more housing units, so the percentage of units on the market is also lower than what it would appear relative to earlier dates.

  26. 26
    noogakl says:

    RE: Go Hawks! @ 24

    Lots of reasons for a potential slowdown:

    1. The dollar gets weaker (has been doing so the last few months). This would mean:
    a. The stuff Amazon sells from China and Europe becomes less affordable to the average American, meaning that they sell less, have less revenue, and slow down their hiring
    b. Foreign buyers decide to buy houses in countries with stronger currencies to preserve their wealth and sell their houses here.

    2. Increasing interest rates – especially at this level, a quarter percent increase in interest rates corresponds to a 5-6 % total increase in your interest rate. When interest rates are this low, a quarter point rate increase has a much more significant impact on the size of loan you can get approved for than say, if interest rates were 3-4 points higher. Furthermore, people with ARMs are at higher risk to default as rates increase.

    3. Virtual reality will make it much easier and more feasible for people to work remotely, decreasing the demand for housing in the area. Companies will like this because they can pay their employees less and have them live / work remotely in Cle Elum versus having to pay them a Seattle salary. Employees will like this because they can afford houses with acreage versus a 2 bedroom condo in the city. It is a win-win for both sides.

    4. Affordability: inflation-adjusted median income in this country has been mostly flat for 30+ years. Home prices have continued to increase at a much higher rate. This is not sustainable, as evidenced by the large number of young people who do not own houses and live with their parents. Median income has risen in the Seattle area, but mostly due to displacement of lower paying jobs with higher paying jobs, not because wages are going up.

  27. 27

    RE: Deerhawke @ 8

    There’s not enough volume to do a YOY on a neighborhood basis, especially when using the antiquated mls “code” system. “Area 700” lumps Magnolia in with Queen Anne. I ran YOY for Dec + Jan just to get a decent number of like kind property, but even then the results cannot be relied on for price trend. There’s a huge price variance between a tear down or starter home in Magnolia and a view house in Queen Anne or even Magnolia Bluff.

    Total Sales YOY went from 150 to 160 Area 700 Dec + Jan with 73 houses (not townhouses or condos) vs 67 this Dec/Jan. So total volume not much different. But when you break down the mix between Magnolia and Queen Anne the median price difference is substantial. So when you are looking at only 25 Queen Anne Homes with a median price of $920K in one subset and lumping that together with 49 Magnolia houses in another subset with median price of $725k, you can’t draw conclusions as to price up to price down. Could just be more Magnolia Homes sold than Queen Anne Homes causing the number to be lower. And taking it down to YOY for only one month vs two, a large % being Magnolia bungalows for $500,000 to $600,000 vs Queen Anne or new houses brings the volume in each mix down to nil for determining price trend.

    Same with a request from someone for Tim to do Eastside stats. “Area 600” is huge and runs from true “Eastside” through rural areas. Unless the data is run by zip code vs “mls area code” it’s pretty meaningless, especially when you pull some closer in Kirkland Area 600 and lump it together with Duvall and everything in between.

    http://seattlebubble.com/blog/nwmls-kc-breakouts/

    Basically…it’s time to stop using mls lingo as to “area” and stick to zip codes or some other more reliable geographic method for stats than the antiquated mls “area code” system. Area 600 seems to be an Eastside “catch-all” for every place the mls didn’t used to care about. Put it all in one bag so the elite agents don’t have to look in the bag. :)

    Suffice it to say that you cannot buy anything this year in Queen Anne for less than it sold for last year unless it had a fire or flood, regardless of what the stats given their limitations say.

    (Required Disclosure: Stats in this comment are not compiled, verified or published by the Northwest Multiple Listing Service.)

  28. 28
    Anonymous Coward says:

    By Go Hawks! @ 24:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

    Eric bought an investment property.

  29. 29

    RE: ess @ 17
    It Depends on Your Financial Situation

    If you’re in debt and using your home as an ATM, you can’t afford to be a landlord….its that simple.

    BTW, I paid off my principle in 2009 and the interest saved alone paid for my Kansas home. A reverse mortgage is a joke too….might as well hit the elderly over the head with a bat and steal their home on contract technicalities [like mandatory in-house inspections by lender leading to possible foreclosure].

  30. 30
    jon says:

    By Anonymous Coward @ 28:

    By Go Hawks! @ 24:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

    Eric bought an investment property.

    Amazon decides it needs to become profitable.

  31. 31
    redmondjp says:

    By Go Hawks! @ 24:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

    You left off DotBomb 2.0. And don’t say that it can’t happen, as that’s what everybody said the last time. In the mean time, let’s take a late rock star’s advice and party like it’s 1999!

  32. 32

    RE: Anonymous Coward @ 28
    Sanctuary City Federal Funding Cut Off By Devos and Sessions Soon

    1. The King County Public Schools won’t get the approximate $10K/yr per illegal alien anymore.
    2. Rich retired folks won’t be able to afford $20-30/hr commercial priced caregivers.
    3. Rich retired folks won’t be able to afford $20-30/hr landscapers and gardeners.
    4. Rich retired folks won’t be able to afford $20/hr commercial house cleaners

    Milenials and older aged unemployed workers can anticipate massive jobs available with health benefits the rich elite will have to legally pay out now. Medicaid needs a life vest too….its a worthless healthcare program that is recently way under-funded because we caved in to Obamacare and lie everyone has coverage now….LOL…the 95M out of the labor force will be begged to return with livable pay, 40 hr weeks and healthcare; its that simple.

    Within 3-5 years with retooling in America, our real estate will go up the old fashion way; by using a normal lawful paycheck, instead of the present organized crime sanctuary cities and MASSIVE debt.

  33. 33
    js says:

    By Go Hawks! @ 24:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

    global thermonuclear war

  34. 34
    ARDELL says:

    RE: js @ 33

    Where does Trump quitting fall? I think he’d quit before he’d let them impeach him. Can he just take his ball and go home while he can still claim to be a winner?

  35. 35
    StupidLifeDecisions says:

    By ARDELL @ 34:

    RE: js @ 33

    Where does Trump quitting fall? I think he’d quit before he’d let them impeach him. Can he just take his ball and go home while he can still claim to be a winner?

    Good question. I’m wondering if patty murray and elizabeth warren can quit while there only a little behind before they lose it completely and publicly in a way that even the media can’t brush over.

  36. 36
    Anonymous Coward says:

    RE: ARDELL @ 34 – Bring on President Pence!?!

  37. 37
    ARDELL says:

    RE: Anonymous Coward @ 36

    I think the question was the market impact. I don’t think anyone expects Trump to stick it out for 4 years.

    To SLD, Warren went over the edge a long time ago for me.

  38. 38

    RE: ARDELL @ 37
    LOL Where’s These Democrat Votes in Congress and the Senate to Impeach Trump?

    The tooth fairy???

    The Democrats have already tried to slow Trump’s agenda down and the house/senate Republican Majority makes that impossible now. Sessions and Devos get instated. Last I heard ya need 2/3s majority to impeach Obama for Obamacare….even the majority Republicans knew that was a waste of time.

    Ya may not like the guy the voters voted in, ditto for Obama [I voted Nader one year BTW], so what? The cards have been dealt and sanctuary cities like Seattle are dinosaurs to the majority voters. Its that simple.

    Hey GOP Senators/Congressmen….Dems too….get off your as_es and work as hard as Trump you Government Worker do nothings. Where’s our tax cut? Where’ s a replacement for Obamacare [Hades, we’d be better off with the old American system we once had, with no fake news that everyone in Washington State now has Apple Insurance, Medicaid] that in reality covers almost nothing….]? Now impeach Trump over these horrifying Dem/GOP establishment examples of useless Senate/Congressmen workers paid to stall and golf in the Washington DC Swamp….LOL

  39. 39
    Deerhawke says:

    By Go Hawks! @ 24:

    Curious what everyone thinks are their top reasons this market could slowdown at some point.

    -Affordability?
    -Interest Rates?
    -Stock Market Correction?
    -International Buyer Slow Down?

    Not virtual reality technology. It is hard for people to leave their tech jobs for an afternoon to get a kid to a doctor’s appointment. People don’t take their full vacations because people step into their shoes when they are away. Try telling a recruiter that you want to take a job in Seattle but will stay in Ohio and work via VR technology.

    The main reason this market could slow down is that the business cycle has not been repealed. We can never know exactly what the trigger will be. But if you want to know when to batten down the hatches, it is when you hear the phrase “it is different this time.”

  40. 40
    jon says:

    RE: Deerhawke @ 39 – In view of the immigration turmoil, the more pressing issue than an employee who wants to live in Ohio is a prospective worker from India or China who simply can not come to the US. VR could solve that problem, at the expense of Seattle RE valuations. Hopefully that won’t be an issue. Perhaps Trump and his supporters realize that having the salary go offshore will be a greater loss of jobs for American workers overall than the impact of bringing another person here.

    But I agree that the odds are that a business cycle will be what happens first. Perhaps this time it will be caused by the job losses due to automation in sales and self-driving cars.

  41. 41

    RE: softwarengineer @ 38

    I didn’t say I didn’t like him. We are talking about what could change the market and home prices. I am not expressing my personal political views. I remember watching Nixon resign on TV. I don’t remember what happened to the markets that day, though I do recall the discussions that his resigning was better for the market than a long, drawn out impeachment process.

    I don’t discuss politics on a real estate blog. Only as they overlap into market discussions. I don’t discuss politics much at all given I have some dear friends and family on both sides of this venomous, verbal conflict.

    This was the question in Comment #24: “Curious what everyone thinks are their top reasons this market could slowdown at some point.” The way things are going we can’t rule out that a slowdown could be caused by political issues and that is the only reason I am talking politics. ON TOPIC politics.

  42. 42
    Deerhawke says:

    Ardell, well said. The trigger for the next recession could well be political. And Republicans I know would welcome having Trump leave office mid-way through his first term. In fact, the only way that they could justify voting for such an outlandish figure is that would Trump would implode and it would then be President Pence in charge.

    It has been a long, slow recovery— more a U-shaped than V-shaped recovery curve, as economists like to say. But the expansion is now getting pretty long in the tooth and the stock market (by any normal analysis) is looking more and more like a bubble. I will continue to be building over the next few years, but only top quality spec projects, only single family and only top locations. This mitigates my risk if we get another recession. The stuff that gets you really hurt is multifamily projects in speculative locations that immediately go from “up-and-coming” to “I don’t think so.”

  43. 43
    ARDELL says:

    RE: Deerhawke @ 42

    Agree 100%. I have been saying “no, don’t buy that one.” to buyers so often since running into the 5th year of the upswing that I feel like the wicked witch of the West. It’s hard to keep people on track when they get overly anxious due to low inventory. I’d rather they fire me for being mean than buy the wrong house in this market. On the bright side I’m heading to one now that is perfect for these particular people. :)

    Keeping people from shooting themselves in the foot when they want to jump on anything that moves is this market in a nutshell right now. But it’s getting better in the last couple of weeks.

  44. 44
    screenname12345 says:

    @Ardell. So I guess you no longer are calling for a flat market at best for 2017 like you did after the election? Seems like this year is going to be even stronger than 2016.

  45. 45
    Blurtman says:

    RE: screenname12345 @ 44 – Folks invested in the stock market are certainly feeling wealthier and can spend more money on RE.

  46. 46
    ARDELL says:

    RE: screenname12345 @ 44

    I’ve been calling for caution, especially as to product selection (much the same as Deerhawke is saying) since early 2016. Don’t remember saying flat, but unpredictable in election year turmoil and no solid expectation past the fifth year into an upswing. If you have a quote I can maybe explain better after seeing what I said in context. I recently said flat to down on rental prices in a specific market, but don ‘t recall saying that about sale prices.

  47. 47

    By ARDELL @ 43:

    RE: Deerhawke @ 42

    Agree 100%. I have been saying “no, don’t buy that one.” to buyers so often since running into the 5th year of the upswing that I feel like the wicked witch of the West.

    It’s often hard to hold back some buyers, but in the past that was more about getting them to take their time in going back and forth with the seller so that they could negotiate the best price. In the unlikely event some other buyer would jump in it wasn’t a huge deal because there would always be another house (or five). For the past 2-3 years it’s been more about the house they want to make offers on, and buyers nearly totally giving in on their criteria just to get something.

  48. 48
    justme says:

    RE: Deerhawke @ 39

    >>The main reason this market could slow down is that the business cycle has not been repealed.

    What in US freshwater economics is called the “business cycle” is just the cycle of privatizing profits and socializing losses from speculation in the asset markets. To repeal it, what we have to do is to repeal the Federal Reserve, which is the mechanism used to enact the cycles. First low interest rates, coupled with QE, so that Wall St can have (a) lower funding costs and therefore boosted profits on those loans that are still performing, and (b) free QE money to buy the busted assets low. That socializes the losses and sets up low-priced purchases for future privatized profits. Then end QE, and when the general public starts to work themselves out of the hole they were in, sell them the assets at high price, driven by demand for anything that yields anything at all. Then start increasing interest rates slowly. When the public chokes on the interest rates on their loans, and the default rate rises, it is time to start over again.

    The only “problem” for Wall St has been that the cycle has become so extreme that interest rates never are brought back up to a normal levels, and interest rates have to be brought down all the way to ZIRP in order to reflate the busted bubble. And here we are. Anyone who thinks there is anything natural about the “business cycle” as practiced in the US need to think again. It is simply a mechanism for Wall St and banksters (and realtors, too) to extract economic rent from the people.

    Economies SHOULD cycle. –George W. Bush

  49. 49
    redmondjp says:

    RE: justme @ 48 – You said it. As I have posted here before, I strongly recommend reading Charles A. Lindbergh’s books and other writings on The Federal Reserve, written around a century ago. They are entirely relevant to the economic situation of today, and even predict the election of somebody like Donald Trump:

    “The voters become dissatisfied with the old ways and finally they vote in protest, instead of having a definite plan for action when they win. Anything they consider is likely to be at least as good as the old, so they take a chance.

    There are always candidates with rosy promises who wedge into such moves. They present themselves as the new “Moses,” but all they know is to criticize the old — a thing that any one can simply do. These would-be saviors are beginners — they see the wrong but not the remedy, and in spite of their best intentions, the cause is lost before they start, even if they win an election.”

  50. 50
    justme says:

    RE: redmondjp @ 49

    Yes, one might start with some of the quotes found at Wikipedia, link https://en.wikipedia.org/wiki/Charles_August_Lindbergh.

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