Case-Shiller: Seattle Real Estate is Hot, Hot, HOT!

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to March data that was released this morning, Seattle-area home prices were:

Up 2.6 percent March to April
Up 12.9 percent year-over-year.
Up 15.7 percent from the July 2007 peak

Over the same period last year prices were up 2.1 percent month-over-month and year-over-year prices were up 10.7 percent.

Seattle home prices as measured by Case-Shiller shot up yet again to a new all-time high in April, and let the nation in month-over-month and year-over-year price gains for the third month in a row. We’re also the only market still seeing double-digit year-over-year price gains. #SeattleIsSpecial

Here’s a Tableau Public interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities. Check and un-check the boxes on the right to modify which cities are showing:

Seattle’s rank for month-over-month changes hit #1 in February and has held that position since then, through April.

Case-Shiller HPI: Month-to-Month

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 metro areas.

Seattle’s year-over-year price growth jumped up yet again from March to April, to the highest level it has been at since October 2013. Yet again in April, none of the twenty Case-Shiller-tracked metro areas gained more year-over-year than Seattle. From February through August of last year, Portland had been in the #1 slot above Seattle.

This is not the first time that the Northwest has been “literally the envy of other states.”

Eight cities hit new all-time highs again in April: San Francisco, Denver, Atlanta, Boston, Charlotte, Portland, Dallas, and Seattle.

Here’s the interactive chart of the raw HPI for all twenty metro areas through April.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve metro areas whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

Case-Shiller HPI: Decline From Peak

In the 117 months since the price peak in Seattle prices are up 15.7 percent.

Lastly, let’s see how Seattle’s current prices compare to the previous bubble inflation and subsequent burst. Note that this chart does not adjust for inflation.

Case-Shiller: Seattle Home Price Index

Check back tomorrow for our monthly look at Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 2017-06-27)


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.

57 comments:

  1. 1
    Doug says:

    What do you even say to this kind of growth relative to the rest of the country?

  2. 2

    By Doug @ 1:

    What do you even say to this kind of growth relative to the rest of the country?

    Seattle is special? ;-) :-D

  3. 3
    Hugh Dominic says:

    Only Kshama Sawant can help us now. Please pass a law that forbids prices from rising any more!

  4. 4
    Jordan Chang says:

    I love Seattle. Cha ching!!!!! It’s a good place to live. Surprised it took so long to be hip and desirable on the level of San Fran and San Jose!!!

  5. 5
    REAnon says:

    RE: Doug @ 1

    Unsustainable.

  6. 6

    By Jordan Chang @ 4:

    I love Seattle. Cha ching!!!!! It’s a good place to live. Surprised it took so long to be hip and desirable on the level of San Fran and San Jose!!!

    I don’t think I’ve ever spent any time in San Jose, and if I have it’s been over 35 years ago. Is there anything special about San Jose, or is it just expensive because of the industry that developed there?

    San Francisco does have character, and also the water which limits space (affecting price). And also a rather moderate climate due to the water (and fog). I can see why it’s attractive.

  7. 7
    GoHawks says:

    The beat marches on through summer of 2018.

  8. 8
  9. 9
    Doug says:

    RE: Kary L. Krismer @ 5 – San Jose absolutely sucks.

  10. 10
    sfraz says:

    RE: Jordan Chang @ 4 – This whole speculation thing is out of control. This is a Big Fat Juicy world-wide BUBBLE. This is a YUUUGGEE crime scene that needs the yellow “do not cross” tape pulled around all the banks. Break out the bubbly! The pitchforks are coming.

  11. 11
    piggyshooz says:

    RE: Kary L. Krismer @ 5 – lived in san jose. over priced poo show. help us all if that is the destiny of seattle.

  12. 12
    Cap''n says:

    RE: Doug @ 8

    👍

  13. 13
    Cap''n says:

    I am observing a large number of homes purchased in 2011-2012 coming back on the market. Not sure if the data back it up, but it seems like more folks are taking gains and moving up/out then they were a year ago.

  14. 14

    By Cap”n @ 13:

    I am observing a large number of homes purchased in 2011-2012 coming back on the market. Not sure if the data back it up, but it seems like more folks are taking gains and moving up/out then they were a year ago.

    I’ve noticed that too, but I haven’t done anything to verify that it’s actually happening in unusual percentages. But I’m wondering if it’s related to the pre-2008 behavior we saw of people leveraging their way up into nicer homes. If you put $40,000 down into a $400,000 home in 2011 and can how sell it and and clear over $175,000, what do you do with that money?

  15. 15
  16. 16

    By sfraz @ 10:

    RE: Jordan Chang @ 4 – This whole speculation thing is out of control. This is a Big Fat Juicy world-wide BUBBLE. This is a YUUUGGEE crime scene that needs the yellow “do not cross” tape pulled around all the banks. Break out the bubbly! The pitchforks are coming.

    I’d be interested in knowing what speculation you’re seeing. Seattle housing prices seem to be based largely on actual demand, not speculation. Overall the stock market is probably high due to low interest rates and the fear of higher rates. Tech stocks probably are greatly affected by speculation, but that’s the nature of the beast. Are you referring to the commodities markets?

  17. 17
    Ted says:

    RE: Kary L. Krismer @ 14

    Either you put $175k down on a $525k house and end up with the same mortgage and a worse quality house than you started with, or stay put and remodel? This is why inventory is so low.

  18. 18
    ess says:

    By ess @ 8:

    And rents are also going UP UP UP!

    http://www.seattletimes.com/business/real-estate/rent-hikes-slow-around-the-country-but-surge-again-in-seattle-whats-going-on/

    Just a thought on the above – continuous rising rents justify the prices for the houses, and vice versa.

    kary@16 –
    speculation vs demand. Isn’t there always a bit of speculation built into demand? For example – a person may require a place to live (demand), but is speculating that the price will at least remain stable in the foreseeable future? If it was certain the housing market would significantly decline, would various potential buyers continue to rent? OF course they would, because buyers will attempt to time the market without really weighing all the pros and cons of that particular decision.

    And even if there is speculation in this housing market – I assume the market is safer from a significant collapse if there are significant down payments, if not total cash payment for a residence vs 0-5%, down payment as were many home purchases before the last housing recession. Even if prices turn down 20-30% – homeowners are not going to walk away if they have equity in the house, or have paid in cash. Any research that indicates at what percentage of down payment with other variables such as the decline in value triggers defaults?

    And on that issue, what is the average down payment for a residence these days, what percentage of purchases are all cash deals, and what percentage of down payments are at the vey low end (defined as less than 10% of the purchase price)?

  19. 19
    Market Timer says:

    RE: Kary L. Krismer @ 14

    the answer, is you get mom and dad to give you 25K and then you buy a 1M home with 20% down

    unfortunately, that probably gets you only a slightly nicer home than the one you bought for 400k 5 years ago

  20. 20

    By ess @ 18:

    kary@16 –
    speculation vs demand. Isn’t there always a bit of speculation built into demand? For example – a person may require a place to live (demand), but is speculating that the price will at least remain stable in the foreseeable future? If it was certain the housing market would significantly decline, would various potential buyers continue to rent? OF course they would, because buyers will attempt to time the market without really weighing all the pros and cons of that particular decision.

    . . .

    And on that issue, what is the average down payment for a residence these days, what percentage of purchases are all cash deals, and what percentage of down payments are at the vey low end (defined as less than 10% of the purchase price)?

    As to the first paragraph, I would use the term expectations, and it works both ways. Part of the reason those buying in 2010-2012 were able to get such relatively good buys is that many peoples’ expectation of the future were too low. For “speculation” I would view that was being more buying only because you think it will go up. The best worst example of that was pre-2008 when people would buy Los Vegas condos during construction, never intending to live in or rent them, but expecting to sell them for more upon completion.

    As to the second paragraph, I don’t have stats on that, but I have seen a number of relatively low end (but not fixer/tear down) properties go for cash. I’m pretty sure that typically isn’t for their own residential use, although there undoubtedly is some of that. Buying for cash used to be more of a high end thing. For some reason some people are wanting to park their money in real estate notwithstanding the relatively high prices.

  21. 21

    By Ted @ 17:

    RE: Kary L. Krismer @ 14

    Either you put $175k down on a $525k house and end up with the same mortgage and a worse quality house than you started with, or stay put and remodel? This is why inventory is so low.

    Well clearly you’re not going to move up unless you take on more of a mortgage. But you could take that $170,000 and buy a $875,000 house with a 80% LTV mortgage. That wouldn’t be my course of action, but again I’m referring to what people did prior to 2008–buying planning on selling and putting that equity into a more expensive home.

  22. 22
    justme says:

    I see all the bubble-mongers are out in force celebrating data from April. But one can already see signs in the previous thread (*) with NWMLS King County data that Case-Shiller for Seattle metro is likely to come out near flat for May. And then there is the inventory rising. And we are already at the end of June. So don’t celebrate too hard. Go easy on the bubbly, mind the hangover.

    (*) http://seattlebubble.com/blog/2017/06/06/nwmls-may-grand-slam-home-salespeople

  23. 23
    Doug says:

    RE: justme @ 22 – Inventory rising? Doesn’t it continue to set an all-time low for the applicable month?

  24. 24
    Dustin says:

    RE: ess @ 18

    OF course they would, because buyers will attempt to time the market without really weighing all the pros and cons of that particular decision.

    I wonder how many people would buy a house, especially in a market like this, without weighing the pros and cons of the decision? Right now I think anxiety around what level house prices will normalize is more of a factor than trying to time the market. It’s obviously a really bad time to buy a house. High end buyers who are panicking probably don’t need to, but for a low end buyer looking for a SFH in a specific area the anxiety could be rational. There’s not really any assurance they will be able to afford what they want now if they wait – they will likely have to adjust their expectations and accept what is available/affordable to them in the future/balanced market. But no one really knows what that will be.

    Even if prices turn down 20-30% – homeowners are not going to walk away if they have equity in the house, or have paid in cash.

    Or if the house provides them shelter. Walking away from a house is a big deal for an average person. I think if there were a downturn, it could lead to a couple things that could cause certain buyers to walk away: investors who acquired more property than they could sustain in a downturn might decide to cut their losses, or homebuyers who had inflated incomes (tech sector jobs?) and maxed out their buying power on expensive houses may find themselves unable to find similar incomes and be forced to foreclose or sell at a loss.

    A possible game changer for housing prices in Seattle might be if urban living were to fall out of fashion due to an increasing awareness of the inconveniences that come with living in a city – noise, pollution, crowds, constricted space, crime, cost of living, taxes. Urban life has an appeal and comes with benefits, but it doesn’t suit everyone and I wonder whether some people are embracing urban life because it’s fashionable rather than because they enjoy the lifestyle. Maybe in a few years the talk will be about how some people are finding better lives by escaping the city while lower income people can’t afford to leave. It seems to me you can’t underestimate the importance of fashion when trying to understand (or anticipate) the value of any asset.

  25. 25
    Doug says:

    A general comment to bears, if they still remain: Just like you have recency bias and expect another housing market crash, the Fed too has recency bias and they therefore will not let the housing market crash. They already know how that ends.

    I think I saw a comment recently that the Fed’s intent to begin to normalize their balance sheet has signaled the top of the housing market, because that surely means that interest rates are going to the moon! Wrong. The Fed is not going to sell their securities back to the market, rather, they will just let them mature. This allows them to slowly shrink their balance sheet without any disruptions to interest rates (asset prices) while also giving them room to begin easing again when the next recession hits. If you need evidence of this, just look at the 10y UST since the Fed’s last meeting — doesn’t look like the market is too worried about dislocations caused by balance sheet normalization.

    The next crisis isn’t going to involve housing, but it will be created by the Fed in their attempt to prevent another housing crisis. I tend to think it’s going to be a currency crisis as evidenced by the surge in Bitcoin. It is interesting that gold has not rallied with Bitcoin, however. I don’t think gold will stay muted forever, and in general, you want to own hard assets during a currency crisis.

    In summary, your house is more likely to double before it falls any meaningful amount.

  26. 26
    N says:

    By Kary L. Krismer @ 16:

    By sfraz @ 10:

    RE: Jordan Chang @ 4 – This whole speculation thing is out of control. This is a Big Fat Juicy world-wide BUBBLE. This is a YUUUGGEE crime scene that needs the yellow “do not cross” tape pulled around all the banks. Break out the bubbly! The pitchforks are coming.

    I’d be interested in knowing what speculation you’re seeing. Seattle housing prices seem to be based largely on actual demand, not speculation. Overall the stock market is probably high due to low interest rates and the fear of higher rates. Tech stocks probably are greatly affected by speculation, but that’s the nature of the beast. Are you referring to the commodities markets?

    Speculation is certainly part of the demand but at least in my eyes its still speculation if your buying properties that don’t pencil long term, betting on rapid appreciaton or buying houses to flip 6 months later. This is speculation that will move onto the next best investment when the tide turns.

  27. 27

    By justme @ 22:

    But one can already see signs in the previous thread (*) with NWMLS King County data that Case-Shiller for Seattle metro is likely to come out near flat for May. And then there is the inventory rising.

    Huh? I’d maybe look ahead a week or two for the June NWMLS before speculating on what the C-S data for May will be when released a couple of months from now. And rising inventory is relative. It’s still at record lows for the time of year. Roughly one month’s supply of inventory is not good–unless you’re selling.

  28. 28
    ess says:

    RE: Dustin @ 24

    Lots of valid points, Dustin, and my responses:

    – I can only imagine that buying a home in this supercharged environment is stressful, and I am so glad I am not in this market at this time. I know potential buyers consider many aspects of purchasing, but some are either ignored altogether or are not heavily considered.

    For example – while prices may be considered high (which we don’t know because as you correctly state – one can’t foresee the future), one factor that is ignored by some are the historically low mortgage rates. A lending institution is willing to finance a potential buyer at an interest rate of 4% for 30 years. That is really amazing when one considers the length of the loan. Even if prices drop 10%, if interest rates spike at the same time – not only may monthly payments be higher, but yet the potential buyer has spent one to three years of paying rent. I am not certain that there is an appreciation of just how cheap it is to borrow money for very long term repayment schedules. I remember interest rates north of ten percent, and that certainly was no fun for buyers.

    I know that each house that we bought, part of the equation of purchasing those residences was the issue of renting the house if that was required. We had no interest in walking away if times were tough, ones credit rating is destroyed for years. But that was us – don’t know how many other potential buyers do that type of research. Happily interest rates went down, and rents went up – so we did not face that problem.

    As to the issue of popularity of urban vs suburban or country life? Yes, that also changes over time. I remember the really good old days when the talk amongst many younger individuals was to get “back to the land ” i.e. the country. Not much of that anymore. These days many younger folks wish to live in an urban environment such as Bell Town or other highly urbanized city environments. In my opinion, some of the best areas to reside in are the SFH neighborhoods in Seattle. One has it all in those areas – a suburban lifestyle of single family residences in an urban environment with city amenities including decent public transportation, assuming the neighborhood doesn’t radically change via redevelopment and increased density.

  29. 29
    justme says:

    On the topic of inventory, I must say that statistics involving inventory is one of the major propaganda tools of the REIC (Real Estate Industrial Complex). REIC want people to believe that inventory equals “supply”, and especially they emphasize this propaganda when the inventory seems “low” relative to sales. Let’s try a little model again, just as I already did a rental supply/demand model in the previous thread.

    Supply = Inventory + Pendings + Newlistings – Delistings + FailedClosingsRelisted
    Demand = Closings + Pendings

    In many ways, month-end (active) inventory is the SURPLUS of active listings from last month. It is NOT the pool from which next month’s closings (completed sales) must be fulfilled. That is an important point. The REIC tries to construct a propaganda tale of product shortage that just is not there, in order to create a self-fulfilling propaganda prophecy.

    Unsurprisingly, the REIC is not eager to provide detailed day-by-day values of the variables in the above model. Doing so would poke a big hole in their propaganda. They key fact to remember is that INVENTORY=SURPLUS (NOT inventory=supply).

    Have you noticed how the REIC likes to make statements such as “the inventory X constitutes Y months of supply at current demand”? Such a statement is incredibly misleading. It counts only last months inventory as supply, and ignores all the newlistings that go directly from newlisting to pending (or closing) before the end of the month.

  30. 30
    GoHawks says:

    RE: justme @ 22 – slows down this time of year every year. Nothing new this year.

  31. 31
    justme says:

    RE: GoHawks @ 30

    Slowdown = lack of demand. So, every year there is a lack of demand except Feb-May. So it is a hot market, except that it isn’t, and people are foolish enough to buy the propaganda that they MUST. BUY. NOW.

  32. 32

    By justme @ 29:

    Supply = Inventory + Pendings + Newlistings – Delistings + FailedClosingsRelisted
    Demand = Closings + Pendings

    I’d argue both of those understand supply and demand by a huge factor, particularly on the demand side. We really don’t have a clue how many active buyers there are out there just looking at the NWMLS statistics. We just know how many buyers got lucky and/or have a good agent.

    In many ways, month-end (active) inventory is the SURPLUS of active listings from last month.

    And there I’d say it’s leftover listings from last WEEK! ;-)

  33. 33
    justme says:

    By Kary L. Krismer @ 32:

    >>I’d argue both of those understate (edited) supply and demand by a huge factor, particularly on the demand side. We really don’t have a clue how many active buyers there are out there just looking at the NWMLS statistics. We just know how many buyers got lucky and/or have a good agent.

    I’d flip the 2nd statement above around and say that the *supply* is extremely understated, because there is an enormous amount of houses that just aren’t being actively offered for sale at any given time :). Heh.

    But then again, what is an active buyer? What is an active seller? It costs nothing to walk around and look at houses. But to be an active seller you have to list it one way or the other. Many owners are out looking to see what they might be able to get for their house. Then they all rush to join the supply when the bubble bursts.

    >>And there I’d say it’s leftover listings from last WEEK! ;-)

    Goes straight to the INVENTORY=SURPLUS column, I agree :-) :-).

  34. 34

    By justme @ 33:

    I’d flip the 2nd statement above around and say that the *supply* is extremely understated, because there is an enormous amount of houses that just aren’t being actively offered for sale at any given time :). Heh.

    That’s exactly what I was thinking of on the supply side.

  35. 35
    justme says:

    RE: Kary L. Krismer @ 34

    That’s what I thought you thought, but since you are after all a Used House Salesman (UHS), I figured I had to say it for you. Cheers.

  36. 36
    sfraz says:

    Just like Tim Russert with Florida Florida Florida during the days of the Bush/Gore circus, remember last time this bubble went arse over elbows. Florida was tanking while Seattle was still floating in its bubble. Florida Florida Florida. (and add San Fran San Fran San Fran) Going to be a bloodbath with so many bubbles popping at once.

  37. 37
    greg says:

    RE: Kary L. Krismer @ 14

    I am seeing the same thing. Some of the gains from just 2015 to listed price today are very impressive.

    I don’t care what folks here want to pretend, the prices are simply out of control. Lots in my area are selling for insane prices. There are Million dollar chocolate shacks selling in my area. ( walkable to DT Kirkland areas)

    I know some will say it is a new normal , i say it is a feeding frenzy and there will be one hell of a hangover when we wake up.

  38. 38
    sfraz says:

    We have blown past 1929 numbers. Global debt just hit a new record high of $217 trillion (USD) – over 327% of GDP https://www.iif.com/publication/global-debt-monitor/global-debt-monitor-june-2017

  39. 39
    greg says:

    RE: Ted @ 17

    agreed, part of the reason we have supply issues is the extremely high fees charged by the RE industry the 5% tax they charge ensures that many people choose to stay put.

    if you have a home worth 500 it is going to cost you at least 25K in RE fees. Meanwhile in most of the EU for the SAME service you pay 1 to 3% MAX. most pay 1 plus 1 . Last property i sold in the EU I paid about 0.45% agency fees and just under 1% legal which includes title etc. lets pretend it totalled 2% ! that is a hell of a lot cheaper than 5%-7% .
    The USA is not nearly as free , open or competitive as it pretends to be. The consumer gets ripped off all the time. But we are told from birth that the USA is the best and fairest even though it is demonstrably not.

    Kary of course claims that agents in the USA are magical and provide levels of service that justify the fees. I counter that the fees are solely due to the 850 odd MLS services that require members follow strict rules and that use “embrace and extend” to prevent real competition. Of course this is widespread through various markets in the USA and RE is just one of many offenders.
    It is not that the agents are bad, it is that the system they work in is designed to feed up much like a pyramid system. a lot of beaks get wet when a home in the USA sells.

  40. 40
    justme says:

    RE: greg @ 39

    Housing is pretty much a black market in the US. Pay black market prices or do without.

  41. 41
    Blurtman says:

    It’s a climate change play. Seattle becomes the new San Diego and San Francisco becomes the new Phoenix.

  42. 42
    Eastsider says:

    By Doug @ 25:

    I think I saw a comment recently that the Fed’s intent to begin to normalize their balance sheet has signaled the top of the housing market, because that surely means that interest rates are going to the moon! Wrong. The Fed is not going to sell their securities back to the market, rather, they will just let them mature. This allows them to slowly shrink their balance sheet without any disruptions to interest rates (asset prices) while also giving them room to begin easing again when the next recession hits. If you need evidence of this, just look at the 10y UST since the Fed’s last meeting — doesn’t look like the market is too worried about dislocations caused by balance sheet normalization.

    The 10y UST yield trending lower is transitory but will almost certainly be higher by year end. For those getting a mortgage loan, this is a great time to get one, assuming we avoid a recession this year. That said, this market appears bubbly. Good luck!

  43. 43
    uwp says:

    By justme @ 33:

    I’d flip the 2nd statement above around and say that the *supply* is extremely understated, because there is an enormous amount of houses that just aren’t being actively offered for sale at any given time :). Heh.

    And when those people choose to sell their houses, I’m sure they are just going to move into all those great cheap apartments in Seattle rather than become SFH demand themselves.

  44. 44
    ess says:

    Inventory shortages, it isn’t just a Seattle issue anymore…….

    http://nbr.com/2017/06/28/pending-home-sales-tumble-as-supply-crisis-worsens/

  45. 45
    Doug says:

    RE: Eastsider @ 42 – I would make a gentleman’s bet against it being transitory. If anything is transitory it was the spike higher in yield after the election.

  46. 46
    justme says:

    RE: ess @ 44

    And, as if on a cue, someone posts the NAR press release with the “inventory shortage” propaganda again, in the face of flattening and even dropping pending sales counts in May. As I just said above, there is no “inventory shortage”. INVENTORY=SURPLUS (OF OVERPRICED HOUSES).

    There were plenty of new listings. It’s just that the demand for houses was -1.3% YOY for the western region of the US. That’s right: Demand meeting supply at the current listing price point was down YOY for Western US. So, yeah, it’s not just Seattle that is overpriced anymore.

    Demand consist of persons that (a) believe the propaganda and (b) can get financing in excess of their long-term ability to pay. Buyer beware. Bankers beware. Bailouts beware.

  47. 47
    jon says:

    By Doug @ 25:

    I think I saw a comment recently that the Fed’s intent to begin to normalize their balance sheet has signaled the top of the housing market, because that surely means that interest rates are going to the moon! Wrong. The Fed is not going to sell their securities back to the market, rather, they will just let them mature. This allows them to slowly shrink their balance sheet without any disruptions to interest rates (asset prices) while also giving them room to begin easing again when the next recession hits. If you need evidence of this, just look at the 10y UST since the Fed’s last meeting — doesn’t look like the market is too worried about dislocations caused by balance sheet normalization.

    If the Fed does what they say they are going to do, they will take the money that is paid to the Fed when the securities mature and destroy it instead of putting it back into the market. That will cause lenders to have to compete for fewer dollars being lent, and so will drive up rates. They will be limited in how much they do that by presumably not wanting to drive housing prices down nationwide. Since Seattle housing is being driven higher by growth relative to the rest of the country, we probably won’t see price reductions for that particular reason, assuming there is not significant speculation going on now.

  48. 48
    whatsmyname says:

    RE: just @ 46 – You have converted me. I went to the market, and told them I didn’t care about the state of last month’s surplus sitting on their shelves. I wanted to buy some of the inventory that will be coming in during the next month. I don’t know why they were laughing, but I left with no food.

  49. 49
    Brian says:

    By justme @ 46:

    As I just said above, there is no “inventory shortage”. INVENTORY=SURPLUS (OF OVERPRICED HOUSES).

    Heh, very true

  50. 50

    RE: justme @ 46 – Again I largely agree with you, but I think you’re overlooking one point, or maybe not looking at the right data. I think it was Greg Perry over at Seattle P-I RE Professionals (not the GP in Snohomish), who always used to focus on absorption rate, which is basically how many months of active listings there are at the current sales (or sometimes new pending) rate.

    Active inventory by itself doesn’t really tell you anything. Our roughly 2,600 of active listings now would be great for buyers if we had the low sales of December, 2009. And 4,000 wouldn’t be much better for buyers if the sales increased to that same level.

    The problem with the market right now from the buyer’s perspective is that the sales numbers and active inventory are relatively close, and that means the chance of a bidding war for buyers is high. But you can’t tell that by looking at active inventory or sales, you see that by looking at active inventory AND sales.

    Rough number from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  51. 51

    By greg @ 39:

    Kary of course claims that agents in the USA are magical and provide levels of service that justify the fees. I counter that the fees are solely due to the 850 odd MLS services that require members follow strict rules and that use “embrace and extend” to prevent real competition.

    No, I just contend it’s a different level of service. Even within the MLS system you could find an agency willing to list at the numbers you mention. That would likely be penny wise and pound foolish, because the goal isn’t to keep the costs of sale as low as possible, the goal is to have the net recovery be as high as possible. Only the naive and cheap focus on the former.

  52. 52

    BTW, on the increase in value issue, we’ve talked about change in mix before, but there’s another factor skewing the numbers. The typical listing today is in very good shape relative to not so long ago. It seems as if people are making more of an effort to fix properties up so as to get the most and highest offers. That is undoubtedly contributing to the numbers.

  53. 53
    boater says:

    By Brian @ 49:

    By justme @ 46:

    As I just said above, there is no “inventory shortage”. INVENTORY=SURPLUS (OF OVERPRICED HOUSES).

    Heh, very true

    This seems like a ridiculous statement. So if I’m understanding correctly you both think there should be a one to one matching of buyers and sellers despite the fact that houses are not cans of soup. I mean I might want a 3 bedroom 2 bath house but for there to be zero inventory I’d have to accept whatever is available.

  54. 54
    greg says:

    RE: Kary L. Krismer @ 50

    very fair point kary , ref the absorption rate. I think in general we sometimes forget that these numbers need to be viewed collectively and direct comparisons to other years may end up tricking us into thinking things are better or worse than they really are.

  55. 55

    RE: greg @ 54 – I’m suggesting to Tim that he add that chart to the NWMLS data posts. I think that would be incredibly informative. Hopefully that is easy to do–I suspect it is.

  56. 56
    Erik says:

    RE: Market Timer @ 19
    20% down is $200,000. The kids would need to come up with $175,000 more. These free loving millenials probably can’t save that much money.

  57. 57
    Rene says:

    Tim – can we get an updated post on home price to income ratio?

    I think you last did this in 2015:
    http://seattlebubble.com/blog/2015/07/24/price-to-income-ratio-back-in-bubble-territory/

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