NWMLS: Record Low For Listings, Sales Slip Slightly

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February market stats have been published by the NWMLS this week. Here’s their press release.

Housing Inventory Reaches Record Low

Home buyers are in a spring mood, but sellers are still hibernating, suggested one broker while commenting about the latest statistics from Northwest Multiple Listing Service. Figures for February and feedback from brokers indicate record-low inventory is spurring multiple offers, rising prices, fewer sales, and frustrated house-hunters.

“Our robust market has created extreme conditions, and we’re seeing frenzy hot activity on each new listing coming on the market,” reported J. Lennox Scott, chairman and CEO of John L. Scott. “We’re also experiencing some of the lowest inventory levels on record,” he noted.

Frenzy hot! Mad hot! Crazy hot! Hot hot HOT!

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

February 2017 Number MOM YOY Buyers Sellers
Active Listings 1,434 -8.6% -25.4%
Closed Sales 1,351 -14.6% +1.6%
SAAS (?) 1.13 +41.2% -12.8%
Pending Sales 2,084 +7.5% -9.4%
Months of Supply 1.06 +7.0% -26.6%
Median Price* $560,000 +5.7% +14.1%

The only glimmer of hope for buyers in this month’s numbers is the year-over-year decline in pending sales. Last year pending sales shot up 27 percent between January and February, but this year they only rose seven percent.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell 15 percent from January to February. Last year over the same period closed sales actually rose one percent, so we’re definitely seeing some weakness in sales. That said, closed sales were still up slightly from a year ago (+1.6%).

King County SFH Pending Sales

As mentioned earlier, pending sales rose seven percent in February, but were down nine percent year-over-year.

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

King County SFH Inventory

Listings fell nine percent from January to February, the largest decrease between those months on record. The previous record was a four percent drop in 2012. On average between 2000 and 2016 listings rose two percent. In other words, the change in listings last month is generally just terrible for anyone hoping to see more homes on the market.

Just to drive home the point of how terrible inventory is, here’s the chart of new listings:

King County SFH New Listings

Inventory isn’t just low because all the new listings are being sold quickly. There just aren’t many new listings coming on the market.

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 inched up slightly from January to February, but are still below ten percent.

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

Still looks like we’re likely to hit new highs in just a few months.

February 2017: $560,000
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle and Eastside home prices, after brief slowdown, surge to record highs


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.

319 comments:

  1. 251
    Macro Investor says:

    RE: Ardell DellaLoggia @ 249

    Good for you, commission wise. Personally I wouldn’t pay half that (except for the crowd that would take it off my hands the next day).

    Humans are chimps that went hairless and insane.

  2. 252

    By Macro Investor @ 250:

    Personally I wouldn’t pay half that (except for the crowd that would take it off my hands the next day).

    That different people are willing to pay different prices for different things is the very reason that we don’t have constant shortages of everything. That’s the demand side of supply and demand. What one person is willing to pay for anything is irrelevant when what they are willing to pay is less than the market price.

  3. 253
    Kmac says:

    By Kary L. Krismer @ 222:

    ….. but the same disclosure issues would exist if a buyer gives a listing agent a complete copy of their inspection (or worse a listing agent asks for it). ,

    I would think that redistributing any report created by a private inspector who has contracted with buyer A would have a copyright claim on those documents regarding its reproduction etc.
    The MLS attorney seems to suggest that if the document is available, whether from a pre sale inspection or a prior buyer’s inspection, that a copy must be attached to form 17.

    If the seller was required to present the report of [ex]buyer A to [new] buyer B, the inspector could be due additional compensation IF he even allowed the document to be used in such a fashion. He basically owns them.
    Ever try to use an appraisal for two transactions in very close proximity? Usually won’t happen without submitting back to the specific appraiser for approval and generally paying a re-issue fee.

    As a contractor, if I draw a design for a clients new addition, but then the documents are distributed by the homeowner to another contractor who actually builds my design, I can possibly be entitled to damages. I own the drawing (work product) not the owner and not the other contractor.

    Would the same not apply to any private company inspection report regardless of the legislatures ill worded and possibly misguided attempt to require disclosure ?

    Sorry for going so far out into the weeds….

  4. 254

    RE: Kmac @ 252 – There are copyright issues present, and if I recall correctly Annie wasn’t aware of them until after shooting that video. Some inspectors do object, and they let her know that after the video came out. One of the inspectors happens to be one I work with, and the first one I asked about the issue after seeing the video. (BTW, Dept. of Licensing once had some material on their website addressing the copyright issue.)

    I had a transaction last year where a seller contacted an inspector prior to contacting me, and then the inspector wouldn’t allow their inspection to be distributed. It made for some extra work on the Form 17.

    I think there’s a couple of legitimate reasons for the inspectors to object. Their contract with their client may have a limitation of liability or maybe an arbitration clause. Those wouldn’t bind third parties to the contract. But going back to my situation last year, an inspector doing an pre-inspection for a seller should let their client know that they will object, because that creates a difficult situation.

    Two last things. 1. I seldom see inspection reports attached to Form 17, and I don’t see that Form 17 even requests that. It just asks if one was done and if done who did it. 2. I think there would be a decent argument of “fair use” if you just gave one page to a LA to better describe a condition.

  5. 255

    Wow, this may give some buyer’s agents pause. Liability down the road for having a buyer who pays way too much for a property because they’ve become desperate.

    Ironically, one of the best ways to avoid that result is to make an offer on a listing that is grossly overpriced, where you can eventually come in and pick it up for less.

    One thing Annie doesn’t mention though is the appraisal, but if the buyer waived some appraisal protections that might not come into play.

    https://www.youtube.com/watch?v=HK7-ii25Mt4&index=1&list=PLsU-Dcv-PIXZ1SxR0yfh1mwOIoNN3V9ah

  6. 256

    RE: Kary L. Krismer @ 254

    There were a few cases like that back in 2008. I don’t recall any being successful. It’s kind of like the wood rot case. Courts don’t give buyers a pass for delegating their thought process to a 3rd party. Sellers maybe. But not buyers.

    http://www.today.com/id/22840771/ns/today-today_news/t/home-buyer-who-overpaid-sues-real-estate-agent/

  7. 257

    RE: Ardell DellaLoggia @ 255 – The point is to avoid being sued. Being sued sucks even if you win!

    Not to mention that’s really all just part of your job as being a buyer’s agent.

  8. 258
    piggyshooz says:

    Fears apparently coming true.
    http://www.cnbc.com/2017/03/17/silicon-valley-tech-talent-fleeing-to-seattle.html

    Ive lived in both Seattle and bay area and can tell you first hand that no on in Seattle should want to import the problems from the bay area.

  9. 259
  10. 260

    RE: Kary L. Krismer @ 258
    WOW Kary Great Article

    I too would love to leave high property taxes and clogged freeways. But alas, part of my family needs Seattle too for stability [and I built up a cool man cave in SE King County]….decisions, decisions….LOL

  11. 261
    jon says:

    At some point, telecommuting will be the norm, but it seems for now that that company believes it is worth paying $10,000 to cut off it’s employees from potential poaching by other employers.

  12. 262

    RE: Kary L. Krismer @ 256

    No Kary…the point is that the suits all involved a market shift when people bought at today’s market value and tried to sue when the market went down. This is a very important point as today’s market value has decreased the discount for negative factors (busy road etc) to nil or close to nil as it always does in a hot market. When the market shifts even slightly such that there is no perceivable market value decrease, those properties individually will start experiencing that discount for negatives coming back as $25,000 to $50,000 losses…even when it looks like the market didn’t change.

    Some people will pay that extra $50,000 and some won’t. Informed consent is the correct answer, not my preventing them from doing things…but rather informing them specifically of what they are doing. Then it is their choice.

  13. 263

    RE: Ardell DellaLoggia @ 261 – Ah, you missed both my point and the point of the video.

    No one said it’s about preventing anyone from doing anything or not about being informed. The latter is what I was referring to as being part of the agent’s job. Go back and read/watch everything again. But since you missed it, the point is to document what you did to inform the client. Believe me, when it comes time to sell and they can’t (and/or they need to do a short sale), they are not going to remember what you told them. Having that documentation may very well be the difference between being sued or not being sued. Just being able to say “I warned them” won’t do a thing.

    BTW, I agree on the negative attribute comments and declining value. That’s similar to the siding issues I mentioned.

  14. 264

    RE: Kary L. Krismer @ 262

    LOL…I don’t watch your posted videos Kary. Seriously…do you think you can teach me something? Really. Haven’t I been doing this three times longer than you and better since forever?

    Stop lecturing me.

  15. 265

    By Ardell DellaLoggia @ 263:

    RE: Kary L. Krismer @ 262

    LOL…I don’t watch your posted videos Kary. Seriously…do you think you can teach me something? Really. Haven’t I been doing this three times longer than you and better since forever?

    Stop lecturing me.

    LOL. First, it’s not my video, it’s Washington Realtors. And the attorney is very well respected (although I’ll admit I don’t agree with her 100% of the time).

    Second, that probably explains why you said that other person was “correct” about Redfin on the first page of this thread, right AFTER I quoted their terms of service which makes users clients of Redfin. See posts 239, 240 and 242. It’s not that I can’t teach you something, it’s that you’re unable to learn.

    Third, years is service mean nothing. There are agents out there with 20+ years of service who don’t know what a legal description looks like or why you should order title insurance prior to taking a listing live. Just doing the same thing wrong time after time doesn’t mean someone knows what they’re doing. And actually, whenever I hear the line: “I’ve been doing this for XX years” I know the next thing out of the person’s mouth is likely to be nonsense.

    But whatever. Don’t document what you say to clients. Count on them remembering. That’s very good practice in just about any profession. /sarc

  16. 266

    BTW, Ardell, next time you want to respond to something I wrote, at least try to read and/or listen to what I wrote/linked. Seriously, otherwise you just look really stupid.

  17. 267
    cruzazul says:

    RE: Gooddeal @ 130

    Hi, long time lurker here. I’ve been using this website as a sanity check over the last year , as I’ve navigated the process of buying (done!) and then selling a SFH (sooo close to being done).

    Anyways – I was inspired to post by Gooddeal. I know it’s tough sometimes to determine what’s legitimate information on the internet – and I just wanted to put there that what Gooddeal has been posting in this comment sections is absolutely legit. While not in the residential sector, I do have expertise in building envelope systems. And what Gooddeal is saying is the very best envelope science that we know of to date. Please listen.

  18. 268
    redmondjp says:

    RE: Ardell DellaLoggia @ 263RE: Kary L. Krismer @ 264

    Hey you two, get a room! ;)

    Anybody with mad claymation video skilz that wants to do a Real Estate Blog Celebrity Deathmatch?

  19. 269
    Ryan says:

    Random anecdote: I spoke with an agent this weekend who didn’t know what the HOA included, didn’t know the building construction type, and a couple other basics. This was their own open house. They offered up they had been in the business for less than a year. “I guess it’s so easy to sell in this market, you don’t even need to know what you’re selling,” I thought.

  20. 270
    Brian says:

    RE: Ryan @ 266

    I am not surprised. I’ve talked to many agents at open houses and only a few have had any clue about the HOA. Pathetic. At least know the basics: rental cap, pets, parking, barbecues, special assessments, etc. Or better yet get the resale cert before listing so that you can point buyers to it instead.

  21. 271

    RE: Brian @ 267RE: Ryan @ 266 – Keep in mind that the agent may be only there for those 3 hours and have no other connection to the property or the seller. I’m not trying to excuse that behavior, because if that’s the situation they should be there to represent the buyers and that’s not very good representation (ignoring maybe the building construction issue, which I’m not clear on). But open houses are seemingly much more popular now that agents want to drive multiple offers, so that means more non-listing agents at open houses.

  22. 272

    I wonder what percentage of these condo buyers plan on actually living in the unit when it is constructed? Hopefully it’s a higher percentage than what was going on in some other cities back in 2006 or so.

    http://www.bizjournals.com/seattle/news/2017/03/20/seattles-condo-market-came-back-in-a-big-way-this.html

  23. 273
    Blurtman says:

    RE: Kary L. Krismer @ 269 – Buy now or be priced out forever. You’re nobody if you don’t own.

  24. 274

    By redmondjp @ 265:

    RE: Ardell DellaLoggia @ 263RE: Kary L. Krismer @ 264

    Hey you two, get a room! ;)

    I think it would be better if Ardell just agreed to actually read/watch a link before she starts making ignorant comments. And it would not be a bad idea for her to actually read the links that she posts herself. The one she posted above in post 255 was a news story of the beginning of the lawsuit, not the end. I tried to get an update on it, but didn’t find anything, but in any case that link is not really evidence of such suits being futile (even if you ignore my argument that it’s better to not be sued in the first place). It wouldn’t surprise me money was paid to settle that suit, at least if those other comps were close in time to the subject sale.

    There are a couple of differences between myself and Ardell. The first is that I have an understanding of legal matters, where she seems to be on the wrong side of a legal analysis almost 100% of the time. It’s almost amazing to me how one person can be wrong on legal issues so consistently. The other is that when a new issue is raised I’ll actually go back and make sure my practices comply, where Ardell will think that because she hasn’t had a problem yet that she doesn’t have a problem at all.

    This is actually an interesting issue, and in some ways a new issue. The “additional deposit” forms that many firms and now the NWMLS have been developing remove the buyer’s protection if the property doesn’t appraise–at least to a certain point. Before those forms a buyer might actually get a wake up call and decide to back out. Now if they get the message that they are overpaying they can back out, but only with the loss of their earnest money. Not the worst result in the world, but if the earnest money is significant a buyer might be reluctant to back out no matter what the appraisal comes in at. But all that is over Ardell’s head because he has her head in the sand thinking that because she’s been an agent so long she doesn’t need to worry about it.

  25. 275
    Brian says:

    By Kary L. Krismer @ 268:

    Keep in mind that the agent may be only there for those 3 hours and have no other connection to the property or the seller.

    I somewhat agree if it’s someone assisting the listing agent. However, many times it’s the actual listing agent and they still don’t have a clue.

  26. 276

    RE: Ryan @ 266
    Ryan With any HOA

    The rest is a moot point anyway….what’s the dues each month? Renton Condos: $600+/mo, Seattle Condos: $2000/mo, Kent Modular Communities: $185/mo, etc, etc

  27. 277
    kenmorem says:

    http://www.seattletimes.com/business/real-estate/facing-rental-crisis-seattle-creates-a-renters-commission-to-explore-new-laws/

    the next straw to break some more camel’s (i.e. landlords) backs?

    i’m tempted to pull the plug and sell my seattle rentals…

  28. 278
    Brad says:

    RE: kenmorem @ 274 Yes please do!
    – Concerned home shopper.

  29. 279
    Kmac says:

    By cruzazul @ 266:

    RE: Gooddeal @ 130

    Hi, long time lurker here. I’ve been using this website as a sanity check over the last year , as I’ve navigated the process of buying (done!) and then selling a SFH (sooo close to being done).

    Anyways – I was inspired to post by Gooddeal. I know it’s tough sometimes to determine what’s legitimate information on the internet – and I just wanted to put there that what Gooddeal has been posting in this comment sections is absolutely legit. While not in the residential sector, I do have expertise in building envelope systems. And what Gooddeal is saying is the very best envelope science that we know of to date. Please listen.

    Gooddeal and Deerhawk do make some good points
    I don’t think anyone is questioning their information, even though people should still keep a skeptical eye when told that the old way is no good and everybody should do it this new[er] way… especially when it adds 50k to the price of a house.

    My argument is only that of return on investment and if that will even happen in your lifetime, but if you mortgage everything in your life anyhow, I guess it is a debatable choice.

  30. 280
    Kmac says:

    By Kary L. Krismer @ 265:

    ……..But whatever. Don’t document what you say to clients. Count on them remembering. That’s very good practice in just about any profession. /sarc

    I’m not going to get involved in this as you both make some pretty valid points over the years, but as my grandmother used to say “an ounce of prevention is worth a pound of cure”.

    Instead of going all the way through trial and spending six figures on attorneys etc , only to prove your innocence, (and possibly losing and paying for opposing counsel) I can definitely see the benefits of having a signed document or disclosure, if you will, which quite possibly allows getting the case dismissed/excluded from or enabling a motion for summary judgment in your favor.

    For the cost of a piece of paper and some ink, you would be way ahead of the game.

  31. 281
    screenname12345 says:

    RE: Ardell DellaLoggia @ 6

    Ardell this is a very interesting stat regarding % of homes that actually close at $1 million, I would have thought it would have been wayy higher close in to downtownSeattle at least. Can you share what price points affect buyers when you go above $1 million to $ 2 million. I’m assuming at $2 million you have a way way smaller pool since they are probably coming in with cash.

    How about at $1.75 million, $1.5 million, $1.25 million etc? I am wondering what prices in that range is the sweet spot especially when you get over $1.5 million to $2 million. Thanks.

  32. 282
    Gooddeal says:

    By cruzazul @ 266:

    RE: Gooddeal @ 130

    Hi, long time lurker here. I’ve been using this website as a sanity check over the last year , as I’ve navigated the process of buying (done!) and then selling a SFH (sooo close to being done).

    Anyways – I was inspired to post by Gooddeal. I know it’s tough sometimes to determine what’s legitimate information on the internet – and I just wanted to put there that what Gooddeal has been posting in this comment sections is absolutely legit. While not in the residential sector, I do have expertise in building envelope systems. And what Gooddeal is saying is the very best envelope science that we know of to date. Please listen.

    Hi cruzazul,

    Thanks for taking the time to post. Like you, I mostly just hung back on the sidelines but was a voracious reader of the blog. I would like the see the entire construction industry elevated to a higher standard that is common in other parts of the world where the focus is on quality and not quantity. If everyone gets on board the techniques and materials to build a better home will be commonplace and there won’t be a premium as there is now. For me, I am willing to pay the premium now to reduce my energy footprint, to make a healthier home for my family and to have more control over my energy costs for now and more importantly in the far future. You don’t know how much energy is going to cost in future but I’m certain it will be more than it is now. There may come a time when the cost is exorbitant and I don’t want to regret not spending the money to make my house better when I built the home. Sure, one can always do a remodel but a remodel is much more expensive and in most cases will never match the performance of a system designed and built from the ground up. You can bring a horse to water but you can’t force it to drink. Hopefully people considering a new home will take the time and interest to explore how a house’s construction can impact their health, future finances and the planet.

  33. 283
    Brian says:

    By Brad @ 277:

    RE: kenmorem @ 274 Yes please do!
    – Concerned home shopper.

    You sound more like a home owner afraid of others selling.

  34. 284

    By Kmac @ 279:

    By Kary L. Krismer @ 265:

    ……..But whatever. Don’t document what you say to clients. Count on them remembering. That’s very good practice in just about any profession. /sarc

    I’m not going to get involved in this as you both make some pretty valid points over the years, but as my grandmother used to say “an ounce of prevention is worth a pound of cure”.

    Instead of going all the way through trial and spending six figures on attorneys etc , only to prove your innocence, (and possibly losing and paying for opposing counsel) I can definitely see the benefits of having a signed document or disclosure, if you will, which quite possibly allows getting the case dismissed/excluded from or enabling a motion for summary judgment in your favor.

    For the cost of a piece of paper and some ink, you would be way ahead of the game.

    Since that quote is out of context, I want to make it clear I wasn’t actually taking that position. I do believe in the ounce of prevention. That quoted material was sarcastic as indicated by the “/sarc” tag that followed.

    But that piece of paper isn’t entirely for CYA reasons. Annie’s advice of identifying the risk, trying to reduce or eliminate the risk and documenting the disclosure of the risk goes beyond CYA. Assuming an agent is not able to reduce or totally eliminate the risk, the very act of describing the risk to a client both verbally and in writing may cause the client to alter their decision.

    As an example, there’s a widely used inspector referral form (41D) where agents list three inspectors and their relationship to the inspectors. My wife and I attach a second page to that form that discusses other inspections beside the general home inspection. The client then initials both pages, indicating that they’ve received the form and the additional disclosure. Part of that is CYA, but part of that is to get the client to actually think about doing other inspections, particularly a sewer scope. I’ve found that on houses where a sewer scope is probably a good idea you can tell a buyer about sewer scopes, and also have them sign that piece of paper that mentions them, but they still might not think it’s a good idea to do one until it is brought up again during the general inspection. Yes I’ve covered my ass by taking those three steps, but if that course of behavior gets clients to actually do a sewer scope then I’ve also reduced the clients’ risk.

    Unfortunately I think Annie’s advice on how to reduce the risk of over-eager buyers is a bit unrealistic. For example, while bringing in an appraiser could help, there typically would not be time for that, and it would be the rather rare piece of property (or really bad agent) where the agent couldn’t properly advise the buyer on value. That’s sort of one of our things as agents–property valuation. And I’m not really sure what a tax consultant could tell them, other than that personal losses are not deductible and maybe the consequences of converting the property later into investment property. But that doesn’t mean there aren’t things an agent could do. Perhaps for the buyer getting financing discuss the possible appraisal results and draft the additional deposit language in a manner where price negotiations would be triggered at a level the buyer wouldn’t consider acceptable even though the buyer could still perform at a much lower valuation. Or just avoid the additional deposit altogether and just go with 22A which would give your buyer client an out if and when the appraisal comes in low even with a 40% down payment (something probably half of agents don’t realize). Both of those would protect the buyer client, although each might make it less likely their offer would be accepted (depending on the skill of the listing agent).

  35. 285

    RE: screenname12345 @ 280

    I’m not sure what you mean when you say ” I’m assuming at $2 million you have a way way smaller pool since they are probably coming in with cash.” The data doesn’t change if it is cash vs financed. But I’ll try to answer what I think you are asking.

    Doing this as I type the results. I’m doing a radius with the center point in the middle of Lake Union. I went a full circle in a radius of just over 3 miles which takes me through most neighborhoods East to West and South to where I-90 dumps into Downtown and North to the top of Green Lake.

    “How about at $1.75 million, $1.5 million, $1.25 million etc? I am wondering what prices in that range is the sweet spot especially when you get over $1.5 million to $2 million. Thanks.”

    $1M to $1.25M = 358 sold in a year of which 107 were condos, 240 were houses and 11 were townhouses. There are 8 condos for sale half of which are on market for less than a week. So only 4 lingering. Not sure I’d even call that a one month supply of condos. There are 12 houses for sale, 3 of them are on market for a week or less so 9 lingering. 20 would be a one month supply.

    $1.25M to $1.5M = 214 sold in a year of which 72 were condos, 137 were houses and 5 were townhouses. There are 4 condos for sale with 1 on for a week or less. Not a one month supply. There are only 6 houses for sale 2 of which are less than a week on market. Not a one month supply.

    $1.5M to $1.75M = 93 sold in a year of which 23 were condos and 67 were houses and 3 townhouses. 3 condos for sale. 4 houses for sale.

    I’m not sure what you are asking…but I don’t see any “sweet spots”. If what I have answered is not what you asked, try again.

    Require Disclosure: Stats in this comment are calculated in real time by Ardell and not Published, Verified or I forget the third required word LOL! by The Northwest Multiple Listing Service.

  36. 286

    RE: screenname12345 @ 280 – On that last group of 93 at the highest price point I checked many though not all while watching The Voice as I have to check each one at a time. There were very few all cash purchases. You commented about most being cash and I did not find that to be the case at all.

    There are more stories about cash purchases than there are actual cash purchases.

  37. 287
    Kit says:

    RE: Brian @ 282
    For people who want to sell in the foreseeable future, isn’t the name of game trying to sell right before everyone else does/has to?

  38. 288
    screenname12345 says:

    RE: Ardell DellaLoggia @ 285

    Thanks for the info Ardell. I was assuming buyers in the over $1 million price were more likely going to be cash buyers so interesting to hear that is not the case.

    My question was related to your earlier posts about the smaller % of houses actually selling over $1 million which was also very surprising to me. I am trying to understand how that % changes between $1 million and $2 million and at the heart of my question is at what price are houses more likely to sell at or below list. From what I understand the bidding wars are really happening under $1 million. The market is not as hot in the higher price points as you move above $1 million and houses take a little longer to sell.

  39. 289
    Brian says:

    RE: Kit @ 286

    Yes, I was pointing out how Brad is a closet homeowner that wants to convince kenmorem not to sell because that mentality threatens his investment.

  40. 290

    RE: Brian @ 288 – It’s quite a stretch that one person’s decision would have market impact. Even all the people on this site don’t have market impact.

    On the other hand, the chance that one seller’s property would be something that a particular buyer would want is also pretty low. Even if you included the possibility that some buyer would take this seller’s property and not bid on another property the particular buyer wants is minuscule.

    The most realistic possibility is that a number of SFR landlords in Seattle would decide it’s time to divest due to a hostile political environment. Even that number though is likely fairly insignificant, but it could help a few buyers and harm a few renters.

  41. 291
    Brian says:

    RE: Kary L. Krismer @ 289
    I never said it was a good attempt.

  42. 292
    Deerhawke says:

    I am going to agree with Kary here. Regardless of any one market participant’s effort to shift the market, their market leverage is pretty minuscule. Nonetheless, in the aggregate the market’s participants seem to have gotten the same memo. Don’t sell. Or at least, don’t sell now.

    Looking at the Estately figures above, with the caveat that this covers only SF homes and not townhouses like the MLS inventory figure, we see that we are down a clean 500 listings since last year this date. On 3/22/16, we were at 1935 listings and today we are at 1435, a drop of just over 25%.

    I bought two teardowns in the last 2 months and each one was very late in the pre-foreclosure or foreclosure process. But despite the fact that neither of the two sellers was what I would consider a sophisticated market participant, they had gotten the same memo. Don’t sell now. What’s the hurry? Next month will be better for sellers than this month.

    Weird but powerful group psychology.

  43. 293

    RE: Deerhawke @ 291 – I wonder how much of it is we broke that crazy cycle from before 2007 where people just planned on moving every 2-5 years into “better and better” houses. Maybe more people are now happy where they are, either because they’ve fixed the place up or they’ve gotten used to it.

  44. 294

    This week’s Washington Realtor’s Legal Hotline question was about a seller trying to back out. That seems to be more and more common. Quite a change from a few years ago where a seller was typically very excited to be selling.

  45. 295
    redmondjp says:

    By Kary L. Krismer @ 292:

    RE: Deerhawke @ 291 Maybe more people are now happy where they are, either because they’ve fixed the place up or they’ve gotten used to it.

    Oh ha ha ha, Kary!!! Try instead: Maybe more people are now trapped where they are by the extremely high prices and they can’t afford to move. Plus, in this market, it is much harder to move because you can easily sell your existing home with no guarantee of getting the house that you want, potentially leaving you without a place to live.

    I’ve been looking into this myself over the past few years (moving to a larger home). Right now, I would have to move into an apartment and move all of my stuff into storage, then get my home sale-ready and staged, and then hope to purchase another home within a week or two of selling mine. That’s an incredible amount of work, not to mention the perfect timing and luck involved. It’s much easier to stay put.

  46. 296
    OyVeh says:

    RE: redmondjp @ 294

    Completely agree. Also, the way prices are increasing…things can increase in the 1-2 mos that it takes the new buyers to close on your home.

    The best thing to do would be to buy and then sell, but you have to have the extra cash for down-payment, etc. And you would probably be paying 2 mortgages for at least a month.

    It’s a bit of a game of luck.

  47. 297

    RE: redmondjp @ 294 – I was just trying to throw out a new idea. It used to be somewhat common that buyers would be talking about their next house before closing the current sale.

    We did have a transaction last year, representing the buyer, where the seller did not have a property identified before committing to our buyer. We gave them something like a 60 day close as an accommodation. I was slightly surprised that there were actually able to find a place and close it on time, particularly since they were limiting themselves to a fairly small area. So it is possible, but also difficult and somewhat risky.

  48. 298
    Kit says:

    RE: Kary L. Krismer @ 293

    My lead was walking around his neighborhood and started talking to someone about a house that sold. Lead was talking about his woes of thinking of going from a starter to something bigger and his decision not to sell and buy now. Well, the person turned out to be the seller of the house and to paraphrase, the seller goes “well, I don’t even know these people cause they never came to see the house. I’d willing to back out for you since I know you and your kids mesh well with the neighborhood”. My lead declined, but wow.

  49. 299
    Marc says:

    By kenmorem @ 276:

    i’m tempted to pull the plug and sell my seattle rentals…

    Amen brother. We’ll be listing our Seattle rent house next week or the week after. Between a city that hates landlords and wanting to lock-in gains before the house of cards collapses, now seems like a great time to unload.

  50. 300

    RE: Kit @ 296 – Not sure what would make them think they have the right to back out. Absent a defect in the contract (e.g. an improper or missing legal description), there’s little a seller can do to back out. There’s no right for the seller to back out as part of the inspection contingency. There are a few situations where the seller can send a notice for a buyer to waive a contingency, but if the buyer waives the seller looses the power to terminate.

    And the risk to a seller breaching is that they would owe both sides of the commission. Plus whatever risk there might be of litigation or even possibly the filing of a lis pendens which would tie up the property.

  51. 301
    Kmac says:

    By Marc @ 299:

    By kenmorem @ 276:

    i’m tempted to pull the plug and sell my seattle rentals…

    Amen brother. We’ll be listing our Seattle rent house next week or the week after. Between a city that hates landlords and wanting to lock-in gains before the house of cards collapses, now seems like a great time to unload.

    RE: Marc @ 299

    House of cards, huh? Hmm…..
    I’ve had a rash of re agents calling up (for sellers) looking to get houses doctored up prior to selling.
    Maybe your sentiments are what everyone else is thinking also.

    We shall see.

  52. 302
    Brian says:

    By OyVeh @ 296:

    RE: redmondjp @ 294
    The best thing to do would be to buy and then sell, but you have to have the extra cash for down-payment, etc. And you would probably be paying 2 mortgages for at least a month.

    They used to have bridge loans that would help with this but I think those mostly died with the 2008 crisis. However, I suppose one could use a home equity loan as an alternative to get most of what you’d need for a down payment and/or temporary multiple mortgage payments.

  53. 303

    I remember this coming up recently, but there are restrictions on terminating a tenancy in Seattle, including those that come into play if the owner is selling. You have to jump through the right hoops in the right order, and I don’t remember what those hoops are, and even if I did I wouldn’t give such advice here. The applicable ordinance is SMC 22.206.160 C.

    So basically if a Seattle landlord wants to sell an occupied rental not subject to the tenancy, they should consult a real estate attorney.

  54. 304

    By Brian @ 302:

    They used to have bridge loans that would help with this but I think those mostly died with the 2008 crisis.

    I remember looking at Washington Federal’s products within the past couple of years, so they still exist. But they aren’t for everyone. As I recall though they gave you some flexibility in deciding how much of the proceeds of your old house to apply to the loan (which would obviously affect the final payment).

    https://www.washingtonfederal.com/washline/news-and-articles/2011/04/15/what-is-a-bridge-loan-2

    One other possibility is using a HELOC against the old house for the down payment on the new house, but you would need to make sure the bank’s HELOC terms allow that use.

  55. 305
    sleepless says:

    @Gooddeal, we would love to build our own house, the question is, where to buy buildable lot. Anything that is suitable for construction is in $400K+ range in nice areas…

  56. 306
    kenmorem says:

    RE: Kmac @ 301

    it doesn’t take much to see a situation where a certain someone is impeached, the stock market crashes, tech money dries up, and seattle is SOL and overbuilt. that’s my fear. realistic…? dunno. worried? sure.

  57. 307
    Doug says:

    RE: kenmorem @ 306 – Not realistic. Equal chance of getting a 10.0 earthquake.

  58. 308
    Anonymous Coward says:

    RE: Kary L. Krismer @ 304 – The other way to do it, which we did, is to use a 401(k) loan to fund the down payment on the new place, which can then be paid off with the proceeds from the sale of the old house.

  59. 309
    Kit says:

    RE: Kary L. Krismer @ 300

    Oh I figured that, but I guess it was worth it? Who knows. My lead and I were puzzled too, but he didn’t ask. It is strange all around, but your comment reminded me of bold sellers.

  60. 310
    Benvolio says:

    By Brian @ 302:

    They used to have bridge loans that would help with this but I think those mostly died with the 2008 crisis. However, I suppose one could use a home equity loan as an alternative to get most of what you’d need for a down payment and/or temporary multiple mortgage payments.

    I did that last year with a HELOC. It helped cover some of the down payment.

    We paid double mortgage for a few months while we did some cosmetic improvements to the new place before moving in. Was pretty stress free being able to dictate out own timeline, and knowing the old house would sell immediately as soon as we were ready to list it.

  61. 311
    screenname12345 says:

    By kenmorem @ 306:

    RE: Kmac @ 301

    it doesn’t take much to see a situation where a certain someone is impeached, the stock market crashes, tech money dries up, and seattle is SOL and overbuilt. that’s my fear. realistic…? dunno. worried? sure.

    Stock market doesn’t care. It’s been going straight up regardless of what the Shmuck does. It’s going up even with the Fed raising rates.

  62. 312

    RE: screenname12345 @ 311
    The Only Folks Facing Prison Time

    Are the intelligence executives [Progressives?] that controlled the Oval Office [Trump Tower] classified surveillance and whoever the Hades leaked this classified information….this Dem/Rep anarchy has been this way for decades. Then the establishment open borders press against the majority of American citizen voters can invent fake news from illegally obtained fake documents using their Shadow Government brainwashing…and keep out of prison by 1st amendment lies…God help us.

    We all know I’m speaking the truth too.

  63. 313

    RE: screenname12345 @ 311
    Stock Losses Big Tomorrow If the American Voters don’t Get Repeal of Obamacare Today

    Seattle Real Estate will suffer too when pension and investment funds lose trillions from stock market collapse tomorrow if the law isn’t repealed today. Remember, I warned you today.

    Do we have a “proverbial” deadly weapon to our own Seattle Real Estate heads wishing the potential federal tax decrease away? This is not a political question, its an investment question.

    We’ve lost all our business savvy?

  64. 314
    sleepless says:

    RE: softwarengineer @ 313
    So, tomorrow is the day when everything comes crashing down? Should I buy ammo, food, and other supplies?

  65. 315
    sleepless says:

    RE: softwarengineer @ 312
    I don’t want to hijack the thread again, but c’mon. Trump doesn’t give a sheet about little guy. Look at his cabinet, filled with filth and corruption. Look at his policies, he backtracked on most of his promises. Pentagon cannot account for wasted $125 bil, but Trump need to increase the DOD budget? Who are you kidding? To be clear, i despise democrats just as much as I despise Republicans. Deep state cronies fight each other for the piece of cake. Trump is a part of the same establishment, he is a lair and just as corrupt as the lairs before him. It is time to admit SE, you were duped by Trump’s rhetoric…

  66. 316

    RE: screenname12345 @ 288

    Sorry it took me so long to answer your question but I don’t jump to conclusions. Even though I do this every day, I test even my own perceptions against the data of most current reality. You asked:

    “My question was related to your earlier posts about the smaller % of houses actually selling over $1 million which was also very surprising to me. I am trying to understand how that % changes between $1 million and $2 million and at the heart of my question is at what price are houses more likely to sell at or below list. From what I understand the bidding wars are really happening under $1 million. The market is not as hot in the higher price points as you move above $1 million and houses take a little longer to sell.”

    First a small visual presentation I created and while I did it for Kirkland, when I checked the data I used that methodology in both Seattle and The Eastside. I did this to see if a million dollar home in the lower Average Price area of Kirkland took longer than in the higher average priced area. I broke it down by Average Price per Elementary School vs “neighborhood”.

    https://www.realtown.com/Ardell/blog/tracking-the-market/2017-home-prices-kirkland-wa-by-elementary-school

    The answer was no as to over a million and the clearer point was over three million. What was surprising was that even those longer on market had odd results in the PI vs STP segment.

    Backing up a minute. I was thinking in theory the one and only million dollar house sold in the lower price average area would have taken longer, but no. It sold in 7 days at full price with an Inspection Contingency (PI)

    When trying to test further what I found was the Million Dollar plus houses mostly only existed where you would expect million dollar plus houses to be. So between one million and two million they acted pretty much the same as lower price points that exist where that price is the norm.

    You can’t do “average DOM” because if you have most selling in 1 to 7 days and a few at 228 or 1105 days (which I did see) the huge disparity gives a false reading.

    What was surprising is there are three indicators:

    1) Days on Market
    2) % of Asking Price i.e. a bid up might say 107% and under asking would be 98%
    3) PI or STP Buyer had an Inspection Contingency (PI) or no inspection contingency (STP-Straight to Pending).

    At over two million and especially over three million you had more that sold in more than a week and several that sold at or less than asking. BUT the surprising piece of data was that many that clearly only had one buyer bidding, took longer to sell, sold for less than asking…still went Straight to Pending with no Inspection Contingency. That’s a bit odd. I can only guess that sellers are requiring that buyers do a pre-inspection even when they are the only buyer before the seller will accept the offer. They want the sale to be final before putting it pending even when it sold for less than 90% of asking.

    What I did see more in the over $2M (vs $1M to $2M) market was the same bidding war on day 85 that they would have had on day 1 except it was within a day or a few of a price reduction. So those that were overpriced didn’t sell until they did a price reduction and then the sale acted the same as it would have if the seller had priced it right in the first place. I did see one of those first hand this weekend where after the 2nd price reduction they had multiple offers immediately. Though those tend to bid up only a tad and the price reductions are major and not little nudges.

    “My question was related to your earlier posts about the smaller % of houses actually selling over $1 million which was also very surprising to me. ” The only reason THAT happened was because Brian used the territory as “from Lynnwood to Renton”.

    This is why I created this visual of only the chart and map of Kirkland.

    https://www.realtown.com/Ardell/blog/tracking-the-market/2017-home-prices-kirkland-wa-by-elementary-school

    In Brian’s example, Lynwood and Renton and some others in between will act like the first four bars on my Kirkland graph and dilute the % of million dollar homes sold since there aren’t many or any. Adding all of the sales in areas with no or almost no million dollar homes will skew the data. If you do only the areas likely to have million dollar homes, the result is quite different.

    I tested this in the Seattle “near downtown” as you had asked earlier while I was doing these stats and it took you out to neighborhoods like Broadmoor before the $2 Million plus homes started to act differently than lower priced homes. Magnolia fared a bid better than closer in but still sold quickly…just not a bid out. Again we are talking over $2 Million.

    I think the bottom line is $2 Million plus is the new $1 Million plus.

    P.S. I did the data and created the two visuals in the link using Public Source vs “in the mls” so that you and anyone else can do these yourself. Easiest to do on Redfin. Change your filter to homes sold in the last 90 days for most recent stats and uncheck “for sale” and everything except Houses. I like to check minimum 3 bedrooms as well so we are not getting “value in the land” as much. At the bottom of the string of properties on the right it will give you average price, average $ppsf, days on market, etc. You can then click on any and all of the houses to dig deeper into how many bid out and by how much. I did the deeper dig in the mls because I wanted the PI – STP ratio which won’t show in Redfin as the P will replace the PI and give you a false result on a public site.

    So I don’t need the required disclosure because I only posted data that came from Redfin. Play around with putting a school in the search field and then seeing the up to date, actual averages post at the end of the list of homes on the right. You want the actual averages of your data that show in small print above the Page 1 of 2 or more and NOT the “overview” printed more obviously and easy to find below that.

    The Overview is not the data you just calculated via your search and is not as current as the data you are collecting. You can do many different averages for Currently for Sale or Sold in the last 3 months or 6 months or a year. Very useful tool for those who “fact check” everything like I do. :) Better than using overviews from Estately or Zillow or even Redfin. You can calculate it and check the data yourself. There is also a button for downloading the full data that created those averages so you can play and double check accuracy to your heart’s content. :)

    Hope that is helpful, if not to you than to someone else who likes to fact check and do their own stats, as many do.

  67. 317
    Deerhawke says:

    RE: softwarengineer @ 312

    Yes, yes we know you are speaking the truth dear. Of course you are one of the chosen ones who know the truth.

    Now let’s just double up on your doses of Aricept and Namenda and maybe that will help. OK dear?

    And lets just let these nice people talk about real estate while we go take a nice long nap, shall we?

  68. 318
    Blurtman says:

    RE: Deerhawke @ 317 – Fearless leader Inslee would disagree with your suggestion of maintaining the somnambulistic RE diddling status quo. He is offering testimony of a changing WA state climate, including more droughts, unprecedented forest fires, etc.

    http://www.seattletimes.com/seattle-news/politics/inslee-to-speak-before-united-nations-about-climate-change/

    Of course, RE playuhs can try to profit on the trends.

  69. 319

    This doesn’t say where Seattle stands, but it very likely is a reason Seattle city government is so pro-renter. (Even ignoring the fact that the percentage of landlords is well under 50%.)

    http://nreionline.com/multifamily/renters-now-rule-half-us-cities

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