NWMLS: Prices are obscene and the market is still stupidly hot, but June saw a record high monthly increase in inventory

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June market stats have been published by the NWMLS. Their press release hasn’t been published yet, so maybe we’ll do a reporting roundup tomorrow and take a look at Lennox Scott’s breathless Lereah-esque bloviations.

For now, let’s just dive into the numbers for June.

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):

June 2017 Number MOM YOY Buyers Sellers
Active Listings 2,602 +21.1% -18.1%
Closed Sales 2,891 +12.2% -0.1%
SAAS (?) 1.36 +4.2% +1.2%
Pending Sales 3,392 -1.8% +0.9%
Months of Supply 0.90 +7.9% -18.0%
Median Price* $653,000 +3.3% +13.9%

New listings are coming on at a decent pace and inventory actually saw a decent increase, but buyers are still snatching up most listings very quickly. The average time on market in King County for single-family home sales that closed in June was just 17 days—an all-time low.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales shot up 12 percent between May and June. Last year over the same period closed sales increased 15 percent. Year-over-year closed sales were down just barely.

King County SFH Pending Sales

Pending sales fell two percent from May to June, and were up one percent year-over-year.

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

King County SFH Inventory

Inventory rose 21 percent from May to June, which actually the largest month-over-month increase on record. If there’s any glimmer of hope for buyers in this month’s data, that’s probably it. Year-over-year inventory was still down 18 percent, though.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up seven percent month-over-month, and up one percent from last year. The overall level of new listings is middle-of-the-pack compared to previous years, which is also at least not terrible news for buyers.

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

The overall supply and demand situation is still very much trending in sellers’ favor.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Another crazy month for year-over-year price gains.

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

Yet another new all-time record high.

June 2017: $653,000
July 2007: $481,000 (previous cycle high)

These numbers only just came out, so there’s no article yet in the Seattle Times. I’ll probably update this post when they publish their story.


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.

72 comments:

  1. 1
    QA Observer says:

    Same rhetoric! I feel quite relieved not to be actively looking at purchasing near the top of the cycle. My feeling is modest growth through the end of this year, tepid spring demand, followed by a correction in the Q3 2018.

  2. 2

    What impresses me is the volume despite the low active inventory. Particularly given the new listings are not at particularly high levels.

  3. 3
    Deerhawke says:

    Pretty impressive median sales figures. Not a lot of comfort in the extra bits of new inventory coming on the market. (Up 1% YOY– woo hoo!)

    Actually I think what we are seeing is a repeat of last year.

    A white-hot spring market with limited inventory and rapidly rising prices.

    A brief pause during July and August while people get away for a bit of vacation and try to figure out why the heck they can’t seem to buy a house despite making lots of offers with pre-inspections and waived contingencies.

    A second hot selling season in September and October.

    Things slow down a bit in November and December with the holidays but the market never goes to sleep for the winter like it used to.

    In other words, the market has a seasonality that breaks into two types– hot (summer & winter) and hotter (spring & fall).

  4. 4
    uwp says:

    Wow RECORD HIGH monthly increase in inventory!!!
    Oh, but it’s still almost 20% below last year’s June inventory, and setting 17 year lows.

    Yes but 21% increase month over month! That is sure high. It’s a record.
    Oh, but last year it went up 18% MOM in June, so it’s pretty typical seasonality.

    Actually, inventory doesn’t matter!

    Just getting all of this out of the way for justme. :)

  5. 5
    uwp says:

    RE: Deerhawke @ 3

    Any projects in the hopper right now?

  6. 6
    ess says:

    The Tim writes:

    The average time on market in King County for single-family home sales that closed in June was just 17 days—an all-time low.

    ——————————————————————————————————————————————————————————————————————————————————————–

    I think that is the most amazing factor of all. A buyer is purchasing a residence, sometimes close to a million dollars in a matter of days. It took me longer to research and then purchase a new television set. What a crazy market!!

  7. 7
    justme says:

    >>The overall level of new listings is middle-of-the-pack compared to previous years,

    The above is definitely correctly stated by Tim, but I would like to point out the following: New listings per month went from a year 2000-2017 low in Jan 2017 and rapidly rose into rank 10 of 18 in June. This means that new listings blew through 9 of the 18 previous years, from the lowest yearly starting point in the 2000-2017 recorded history.

    Basically, the monthly supply, of which new listings is currently the most significant component, is going up at at a high rate. Yours truly thinks this is a sign that increasing number of maybe-sellers are starting to realize that the party is over. The rush for the exits has started, and it will soon enough get ugly.

    As always:

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

  8. 8
    whatsmyname says:

    RE: justme @ 7
    If these new listings keep growing, they will catch up with 2001, 2002, 2003, 2004, 2005, 2006. Talk about a rush for the exits – The worst part is getting trampled by the rush coming the other way.

  9. 9
    The Tim says:

    RE: justme @ 7 – Good observations.

    RE: Kary L. Krismer @ 2 – I’m going to post some kind of absorption chart, but I didn’t want it to get lost in all the usual monthly charts, so I’ll hold it for tomorrow or maybe next week.

  10. 10
    Ehope says:

    I’ve been following this site for a while and would love to hear some wisdom from people more knowledgeable about Seattle real estate: Would you buy a house in this market?

    Our family recently moved here from the dreaded California (though I’m a WA native and my husband grew up in Tacoma) and we did quite well selling our house in Oakland (similar inventory issues, plus we bought in 2012), so we’ve got about $350k to put towards a house, and can afford around a million and change at the max–we’re looking for a 4 bed in North Seattle (2 kids, plus my MIL lives with us part time).

    I know it’s a terrible time to be a buyer, though at our price point we can probably get something that meets our needs (maybe a fixer that we redo?). I don’t generally think of a house as an investment vehicle and am not expecting to replicate the appreciation that we saw in our last house, but I would also hate to buy something now and see that I could have gotten more for the money if we’d waited a bit longer, or see our value drop precipitously–we made more on our last house than I ever thought I’d be in possession of at once in my life (we’re both non-profiteers), so I want to shepherd it wisely! At the same time, we’d really like to be settled (our son starts school next year) and not renting indefinitely–and I also don’t want to see values continue to skyrocket and be priced out. I know no one has a crystal ball, but I’d love any thoughts!

  11. 11
    The Tim says:

    RE: whatsmyname @ 8 – Your comments are going into moderation because you started putting in a different email address than before.

  12. 12
    jon says:

    RE: Ehope @ 10 – Seattle population is increasing 1,100 per week. Prices are going in only one direction as long as that continues. The question is how long that will go on for.

    The base of the King County economy is now solidly software, and Microsoft is laying off salespeople in other countries apparently in order to focus on cloud sales, which is a Seattle area strength in particular. Most of the businesses in that field grew by 50% over the past year. When that market saturates, there will be opportunity for AI and other technologies to pick up the slack. So I would say that with a solid down payment, you are in no danger of getting locked into an underwater mortgage.

  13. 13

    By ess @ 6:

    The Tim writes:

    The average time on market in King County for single-family home sales that closed in June was just 17 days—an all-time low.

    ——————————————————————————————————————————————————————————————————————————————————————–

    I think that is the most amazing factor of all. A buyer is purchasing a residence, sometimes close to a million dollars in a matter of days. It took me longer to research and then purchase a new television set. What a crazy market!!

    That’s not what that number is. That’s the period from when the property is listed to when they accept a contract. The buyer’s search probably started much earlier, and hopefully their investigation will continue longer.

  14. 14
    justme says:

    RE: jon @ 12

    >>Seattle population is increasing 1,100 per week.

    Whoa, dude. Totally wrong. You exaggerated by a whopping 4.33X (52/12) and used July 2016 data.
    popchange2016=1100 (per month, supposedly, from July 2016 census, which is old data)

    RE: Ehope @ 10

    Read my posts that debunk the populationchange==demand fallacy.
    This blog is full of bubble-mongers that will tell you any amount of propaganda to make you buy-now !! Buy-Now!! BUY !! NOW!! At any price!!

  15. 15

    By The Tim @ 9:

    RE: Kary L. Krismer @ 2 – I’m going to post some kind of absorption chart, but I didn’t want it to get lost in all the usual monthly charts, so I’ll hold it for tomorrow or maybe next week.

    Great. I’ve got an idea what it will look like for certain periods, but it will be nice to see it over a longer period of time.

  16. 16
    whatsmyname says:

    Thanks Tim, and sorry for the hassle. I forgot was using this one.

  17. 17
    jon says:

    RE: justme @ 14 – You will have to take that up with the NWMLS and/or the US Census. I got that from today’s press release.

    “Seattle’s growing population is another likely factor. Recent U.S. Census Bureau data shows Seattle is gaining about 1,100 residents per week, an “astounding” figure, said MLS director Diedre Haines.”

  18. 18
    sfraz says:

    RE: justme @ 14 – Agree! This is a WORLD wide mega bubble, with shenanigans, collusion and racketeering in the central banks.

    Auto loans for 72 months with 0% down? There is an auto loan bubble, student loan bubble and real estate bubble. Toronto is deflating, as well as empty office space cropping up in Silicon Valley; NYC is going dark, Sydney is collapsing. Hold on to your hats cause this puppy is goin’ down.

    REITs are not new, but private equity funds like Blackstone purchasing homes as assets is a new phenomenon. According to this Seattle Times story from 2014, Invitation Homes—the country’s biggest rental home fund of this sort, owned by Blackstone—purchased 1585 homes in 2013 in our region to hold and rent out. Is that number big enough to have an effect on prices? From the Seattle Times: “In a market already low on inventory, big investor purchases could artificially pump up home purchase prices, said Yale economist Robert Shiller, whose book ‘Irrational Exuberance’ warned in 2005 of a national housing bubble.” These landlords are not like your Aunt Linda renting out grandma’s old house. Maximizing profit streams is their one and only purpose, and they are ruthlessly efficient in raising rents to the absolute max.

    http://www.thestranger.com/slog/2016/08/08/24442014/hot-money-and-seattles-growing-housing-crisis-part-one

  19. 19
    Eastsider says:

    RE: Ehope @ 10

    I would not buy an investment property in this market. The cap rate simply doesn’t pencil. Without capital appreciation, it is not a good investment.

    If you are a homeowner and not an investor, you should avoid timing the market. You are trading your house in Oakland for a house in N Seattle. There is no ‘gain’ from your sale. But you do incur a transaction cost which can be up to 10% of the sales price. In general, I prefer to trade down in a hot market and trade up in a weak market.

    Keep in mind that property tax and other costs in the area have been increasing faster than income. So make sure that you are able to manage the expected higher cost of living in the city. Do not overextend financially. Good luck!

    P.s. IMHO, Seattle housing is very expensive. Unfortunately the bubble can last indefinitely. Many major metropolises have elevated home prices that have no relation to rent and wages.

  20. 20
    Minnie says:

    EHope- because you have sold a property in the same market as which you are purchasing in, it is irrelevant as to when you are purchasing (i.e….selling at the top and buying at the top).

    You mention that you don’t generally think of a house as an investment, but it seems to me that you are trying to time the market. Remember that you could have sold your home in a down market (thus netting less), and prices would also be deflated on the buy side….see…same market.

    If you find a home you like and it’s a home you can afford, then go for it. You obviously want a home and I would agree with children it may be tough to be a renter because of the schools, moving often, etc.

    For some reason I have been following this blog since 2012, when I purchased my first home. At the time, the same folks on here were proclaiming that prices were going to continue to drop “just wait and see”. These same (likely) people continue to say these things. There’s a lot of obscure negativity and fear mongering In this comments section. You can go to wolfstreet, dr housing bubble, and many other blogs for all the gloom and doom.

    I’ll also point out that folks who purchase at the tippy top of the market last time and stayed in their homes have now fully recovered. Find a home you love and plan to stay there for 10 years or more and you’ll be fine.

    Will there be another crash or bubble? Likely. But it may not affect housing the way it did last time. No one can really predict it…..except Ess and SFraz of course.

    RE: Ehope @ 10

  21. 21
    northender says:

    Interesting charts in this article that indicate Seattle prices aren’t out of whack. I expect steady price increases for the next year at least.

    http://www.sightline.org/2017/07/05/stop-blaming-foreign-home-buyers/

  22. 22
    sfraz says:

    RE: Minnie @ 20 – You’re right. If we just look at this blog of realtors and home builders back slapping, and joyfully agree that everything is awesome, the Emerald City would, of course, be immune to the economic chaos and contagion. The other real estate blogs and news sources are just negative blather, right? Reality and facts are sometimes ugly and painful. “Pay no attention to that man behind the curtain!”

  23. 23
    justme says:

    RE: jon @ 17

    >>You will have to take that up with the NWMLS and/or the US Census.

    Wow. I just looked at US Census data, and the most recent population estimates as of today are still 1 year old (July 2016). And as I said, the numbers MIGHT support the claim of netmigration of 1100/MONTH,but that is a far cry from the claimed and errant 1100/WEEK, between July 2015 and July 2016.

    Reference:
    https://factfinder.census.gov/bkmk/table/1.0/en/PEP/2016/PEPANNRSIP.US12A

    >> an “astounding” figure, said MLS director Diedre Haines.”
    >> Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain.

    Astounding, because it is false. Does anyone know Deidre Haines? She should be notified that her press release quote is wrong. She also should give a proper reference for her claim in the press release.

  24. 24
    David B. says:

    RE: ess @ 6 – That really depends. I made my offer on the home I’m currently living in within 24 hours of it going on the market, but I did so after about a year of looking at what was available in my area of interest. So even though I made a quick offer, it was also an informed one; I was sure the property did a much better than average job of satisfying what I wanted. It was, in fact, in a neighborhood that when I discovered it, I had said to myself: “Self, if something comes up for sale there, buy it, unless the asking price is totally out of line.”

    Of course, I didn’t waive any of the standard contingencies. I was willing to be aggressive in a tight market, but not rankly stupid.

  25. 25
    Blurtman says:

    RE: sfraz @ 22 – Marijuana is legal, there is incredible natural beauty, access to the sound/ocean (unlike CO and MT, por ejemplo). Lots of bright people settle here for the quality of life and their creativity is harnessed in the form of incredible companies and indeed new industries. The word gets out that there are jobs with all of the above benefits, and you know the rest.

  26. 26

    By Minnie @ 20:

    If you find a home you like and it’s a home you can afford, then go for it. You obviously want a home and I would agree with children it may be tough to be a renter because of the schools, moving often, etc.

    Or just the lack of control–that would bother me. Not knowing how long I could stay in the house (or if my landlord was going to get into financial difficulty). Not being able to make whatever changes I wanted to the house without asking for permission. Having some third party have the right to come into my house 2x a year to see if I’m keeping it up okay. No thanks to any of that.

    I’ll also point out that folks who purchase at the tippy top of the market last time and stayed in their homes have now fully recovered.

    In most areas they’ve more than recovered. And they haven’t had to move. Not many people who rent can stay in the same place for 10 years.

  27. 27

    By northender @ 21:

    Interesting charts in this article that indicate Seattle prices aren’t out of whack. I expect steady price increases for the next year at least.

    http://www.sightline.org/2017/07/05/stop-blaming-foreign-home-buyers/

    Interesting article. Good that unlike most articles on the topic they note there is no actual evidence. Other things I find interesting:

    1. They seemingly have the Seattle median data wrong, showing both Seattle proper and the area below the last peak.
    2. I like the idea of using electrical usage as a sign of vacancy.
    3. They incorrectly claim that foreign buyers pay a 15% tax when they sell. I believe they are confusing the FIRPTA withholding. The tax is the same income tax we pay.
    4. Interesting observation that our lack of new condos gives less opportunity for places to park money. Buying a house and leaving it vacant would be much more risky.
    5. I had to laugh that this part. Apparently the author is completely ignorant about how willing the Seattle City Council is to break state law.

    The most likely approach would be a real estate excise tax (REET), which cities cannot impose without authority from the State.

    Also surprised they didn’t mention Fair Housing laws in that same section.

  28. 28

    By Blurtman @ 25:

    RE: sfraz @ 22 – Marijuana is legal, . . ..

    But that apparently doesn’t mean people still don’t buy properties for grow houses. That really surprises me, but maybe it’s for export????

  29. 29
    Action says:

    It will be interesting to see the absorption rate data that Tim posts.

    What if what we are seeing with shorter times on market isn’t caused by low “inventory” but is actually a long term trend caused by technology? Now days home buyers are instantly notified by Zillow or Redfin when a home meeting their search criteria comes on the market instead of waiting for their agent to find them something. Buyers have way more information at their fingertips in which to compare homes for sale, research comps and determine pricing, data on neighborhoods, schools, commute times, noise, etc. Couple this with Gen X and Gen Y being more comfortable with shopping online. I’d guess that most buyers these days make up their mind on whether they like a house based on the listing photos and seeing the house in person just confirms these things. Especially if purchasing a home in a cookie cutter neighborhood on the Eastside. If you’ve seen one Murray Franklin or Buchan house, you’ve seen them all. This could be allowing for buyers to make offer decisions quicker and resulting in an overall shorter time on market and thus skewing the “inventory” data since new listings go pending in less than a month.

  30. 30

    By Action @ 29:

    It will be interesting to see the absorption rate data that Tim posts.

    What if what we are seeing with shorter times on market isn’t caused by low “inventory” but is actually a long term trend caused by technology?.

    Interesting idea, but I’d say no. The technology isn’t that much different between 2009 and now. The idea that the buyers are more accepting of technology is interesting, but houses were staying on the market for months shortly after the peak. The average time on market in Jan 2010 and 2011 was over three months! That wasn’t due to poor information. It was due to people simply not wanting to buy or being afraid to buy.

    Numbers from NWMLS sources, but not guaranteed by the NWMLS.

  31. 31

    I finally had time to look at the reports. Here are a few thoughts.

    1. Active listings are particularly tilted to the high end. The average active listing price is over $1.2M and the median is about $750,000. That is King County (SFR), not just Seattle (as is the rest of the data). I suspect this is due to the speed at which the lower priced houses sell. Not surprisingly, the average time on market of active listings is closer to 2 months. But this means that for most people the active inventory is lower even than what it appears.
    2. The median pending price is about $40,000 less than the current sold median. That often has been a leading indicator, but I wouldn’t count on it.

    Per some reports I ran, which is a slightly different data pool due to late reported sales (both from prior months and not reported by the cutoff for the official reports), the median time on market of the sold properties is 7 days, and only about 2.5% of the Solds were on the market for longer than 90 days. Surprisingly, the lowest median sold price vs list price was for the 31-60 day period, and the few that sold in the 91-120 day period sold a a median that was 100% of list. Not surprisingly, the 0-30 days was the highest, due to bidding wars.

    Numbers from NWMLS sources, but not all compiled by or any guaranteed by the NWMLS.

  32. 32
    Erik says:

    RE: sfraz @ 18
    Not seeing that at all. We are still in an expansion phase. Not enough supply for demand. I bet if you continue to sit on the sidelines scared of the big one, you will have much less money than me in 10 years.

  33. 33
    Brian says:

    RE: Kary L. Krismer @ 31

    Thanks for taking the time to post your findings. Interesting stuff.

  34. 34
    Action says:

    By Kary L. Krismer @ 30:

    By Action @ 29:

    It will be interesting to see the absorption rate data that Tim posts.

    What if what we are seeing with shorter times on market isn’t caused by low “inventory” but is actually a long term trend caused by technology?.

    Interesting idea, but I’d say no. The technology isn’t that much different between 2009 and now. The idea that the buyers are more accepting of technology is interesting, but houses were staying on the market for months shortly after the peak. The average time on market in Jan 2010 and 2011 was over three months! That wasn’t due to poor information. It was due to people simply not wanting to buy or being afraid to buy.

    That’s true, but I’m not saying in comparison to the recession, I’m talking about in comparison to a healthy market. Also even though the technology was there in 2009, that doesn’t mean that the masses were using it yet. Look how many more millennials are buying homes today vs. 2009. Demand didn’t start to pick up until 2012. I’m not saying access to information increases demand, the technology effect skews the supply side of the equation in the way “inventory” is measured in the industry.

    In many articles I’ve read, “industry experts” say a healthy market should have 6 months supply. Maybe that is no longer the case?

  35. 35
    sfraz says:

    RE: Erik @ 32 – All I can say is that if you aren’t seeing it, it’s because you choose not to look.

  36. 36

    By Action @ 34:

    In many articles I’ve read, “industry experts” say a healthy market should have 6 months supply. Maybe that is no longer the case?

    I think that would be the edge of a balanced market, but even possibly a buyer’s market–you get differing opinions on that.

    I’ll repeat what I’ve said in the past. Last year when I was looking for a client down in the Olympia area it was much more relaxed for buyers, and that was with only approximately a two month supply. But it really does depend on the area AND the type of property. I remember back in early 2012 we were looking for a property for a client where there was a lot of buyer pressure and we’d preview during the day, show during the evening and have offers already drafted to sign on ones we thought they’d like. Even doing that, and getting the offer in the same day the property was listed, we were not the only offer on the one he bought. But the difference is back then we actually managed to buy slightly below list on the same day.

  37. 37
    justme says:

    RE: Action @ 29
    RE: Action @ 34

    Good stuff. I think technology is a big factor in having less surplus inventory at the end of each month. And as you said, the reason this fact has not been discovered until now is that there was a huge bulge of unsold and unsellable houses in 2008-2013.

  38. 38

    RE: justme @ 37 – So the technology really is “house porn.” It gets people all hot and bothered and then they just have to run out and get themselves some!

    Seriously, for that to work as a theory the technology would have to increase demand, not just increase the speed at which people can make a decision. More likely it’s people moving to this area, others living here having delayed a purchase for years (sort of like what happens to make auto sales cyclical), others first getting the ability to buy, and others deciding not to sell when they buy a second house. All the things we’ve discussed in the past.

  39. 39
    Brimley Chen says:

    By Eastsider @ 19:

    RE: Ehope @ 10

    I would not buy an investment property in this market. The cap rate simply doesn’t pencil. Without capital appreciation, it is not a good investment.

    If you are a homeowner and not an investor, you should avoid timing the market. You are trading your house in Oakland for a house in N Seattle. There is no ‘gain’ from your sale. But you do incur a transaction cost which can be up to 10% of the sales price. In general, I prefer to trade down in a hot market and trade up in a weak market.

    Keep in mind that property tax and other costs in the area have been increasing faster than income. So make sure that you are able to manage the expected higher cost of living in the city. Do not overextend financially. Good luck!

    P.s. IMHO, Seattle housing is very expensive. Unfortunately the bubble can last indefinitely. Many major metropolises have elevated home prices that have no relation to rent and wages.

    I agreed with your analysis. “Many major metropolises have elevated home prices that have no relation to rent and wages.”. I am from Toronto Canada.

  40. 40
    Doug says:

    RE: uwp @ 4 – lol, right? If inventory is 1 and the following month it is 2 that would be a 100% increase!!!!!! Housing is guaranteed to plummet!!!

    While the local supply and demand picture is very important to our market, more attention needs to be paid to the global macro environment. I’ve been a broken record on the subject so I will simply say that in the current environment you want to own real estate.

    This blog will continue on and each month contributors will be shocked by that month’s data, calling tops and wondering if they should buy or sell, and in 5-10-20 years will look back and say, “it was all so obvious. why didn’t I buy?”

  41. 41
    justme says:

    RE: Kary L. Krismer @ 31

    Interesting data. What will it cost a mere human to become and NWLS member so that we can crunch our own stats?

    ANSWER: A mere human cannot become a member. NWMLS does not accept any non-RE members. Only brokers/firms and appraisers are allowed as master members. NWLMS does not want the people to know the real conditions of the RE market.

    http://www.northwestmls.com/index.cfm?/Become-A-Member

  42. 42
    justme says:

    RE: Brimley Chen @ 39

    >>I agreed with your analysis. “Many major metropolises have elevated home prices that have no relation to rent and wages.”. I am from Toronto Canada.

    Hi Brimley. What a coincidence you should join (or just post?) today.

    “Following the Toronto Real Estate Board’s latest data dump, one real estate analyst says we are probably witnessing the housing bubble burst. ”

    http://www.bnn.ca/toronto-s-housing-market-turned-on-a-dime-real-estate-analyst-says-1.798086

  43. 43

    RE: justme @ 41 – You’re overlooking the fact that there is some private information in the database (e.g. phone numbers), as well as the fact that the NWMLS does publish statistics–they just don’t let everyone run their own. If they were really that worried about alternative data being released they would put controls on agents beyond the mere disclaimer language you see us post with stats.

    Also, the link you posted was about firms becoming members. Individual brokers gain access to the NWMLS by being licensed and joining a member firm, but I don’t believe they are considered members (but I’m not certain of that).

  44. 44
    Kmac says:

    By northender @ 21:

    Interesting charts in this article that indicate Seattle prices aren’t out of whack. I expect steady price increases for the next year at least.

    http://www.sightline.org/2017/07/05/stop-blaming-foreign-home-buyers/

    “Cascadia”?

  45. 45
    N says:

    By Doug @ 40:

    RE: uwp @ 4 – lol, right? If inventory is 1 and the following month it is 2 that would be a 100% increase!!!!!! Housing is guaranteed to plummet!!!

    While the local supply and demand picture is very important to our market, more attention needs to be paid to the global macro environment. I’ve been a broken record on the subject so I will simply say that in the current environment you want to own real estate.

    This blog will continue on and each month contributors will be shocked by that month’s data, calling tops and wondering if they should buy or sell, and in 5-10-20 years will look back and say, “it was all so obvious. why didn’t I buy?”

    Yes but because you can say that you will be better off in 10 or 20 years having bought and held doesn’t automatically translate to now is the time to buy and the reality is most don’t hold for that long. Lots of indications suggest buying now is not a slam dunk even though it could be right for a lot of people. To your point, you can already say today that buying in 2011-2013 was so obvious in hindsight and likely that is what people will point to more than it was so obvious to buy in 2017.

  46. 46
    Minnie says:

    LOL the quote you provided tells me a lot about your data sources, justme:

    “Following the Toronto Real Estate Board’s latest data dump, one real estate analyst says we are probably witnessing the housing bubble burst. ”

    Keywords: “ONE real estate agent” and”Probably witnessing”. Were you trying to be ironic?

    Toronto real estate prices are still bonkers….they are still insane. They still do not represent local wages.

    RE: justme @ 42

  47. 47
    Minnie says:

    LOL again. The NWMLS are not savvy. Their website is not user friendly and every single time Tim and Kary posts about the stats I think to myself “1 – they have mad skills” and 2- ” They have mad patience”.

    The NWMLS is a tool. They are not trying to hide information from the public. Enough with the conspiracy theories. If you could accurately predict the market like you say you could, you wouldn’t be posting on seattle bubble blog.

    RE: justme @ 41

  48. 48
    justme says:

    Kudos to The Tim, who definitely has mad skills (although is not a NWMLS member, I think). Tim compiles some data into usable and graphic form, and additionally collects and graphs data from county recorders, estately and others. This is highly useful, but it is far from a complete story. Kary and Ardell are appreciated, too, for their data, although those tends to be snaphots. However, that does not negate the fact that NWMLS mostly publishes data that tells a BUY NOW story. Selection of what kind of data is published, and in what form, is very important.

    There is no substitute for full-fledged NWMLS access. NWMLS has data that is both real-time and historical, and that can be aggregated into different kinds of statistics that does not fit the BUY NOW narrative at all.

    Look at my favorite equations below, how do I get real-time or daily values for all of the variables? And not just real-time: Historical values require either enormous amount of manual effort, or are not available at all. How do I get Delistings and FailedClosings from public sources at all?

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

    And additional variables such as PurchasePrice, HouseArea, LotArea all in one place, no web site scrubbing needed. I know Kary and probably others think that daily values are not important, but I am not at all convinced. I have not seen the data, for the most part.

  49. 49
    uwp says:

    That Sightline article on foreign buyers was pretty good. Nice to see someone attempt to dig into the numbers rather than, “One agent said he saw a lot of Asians at an open house.”

  50. 50
    Erik says:

    RE: sfraz @ 35
    A few years ago there were many doomsday predictors on here saying they can tell it’s about to go. They used fancy words like calling this a “house of cards” and basically saying this whole thing is built on lies and it’s about to go. I fought and fought and fought them. I showed them good data just like I could show you to prove that we a nowhere near a collapse. These boneheads continued to badger me. They ganged up and started telling me how I was wrong blah blah blah. Well if they would have listened to me, they would be much richer today. I could do the same thing with you and the other fraidy cats on here, but it’s not worth my effort.

    Here is my advice to you fraidy cat…stay out of the housing market and buy a bunch of real estate in 2024. That way I can laugh in your face when it all collapses on you.

  51. 51
    Ross says:

    By Kary L. Krismer @ 30:

    By Action @ 29:

    It will be interesting to see the absorption rate data that Tim posts.

    What if what we are seeing with shorter times on market isn’t caused by low “inventory” but is actually a long term trend caused by technology?.

    Interesting idea, but I’d say no. The technology isn’t that much different between 2009 and now. The idea that the buyers are more accepting of technology is interesting, but houses were staying on the market for months shortly after the peak. The average time on market in Jan 2010 and 2011 was over three months! That wasn’t due to poor information. It was due to people simply not wanting to buy or being afraid to buy.

    Numbers from NWMLS sources, but not guaranteed by the NWMLS.

    It is no doubt a combination of things, but I would argue that technology is speeding up home purchasing in a non trivial way. The first home I bought in 2009 was a set of laborious paper-in-person and paper-via-fax efforts, even though I had the technology to do everything by email (the other side wasn’t ready). That was both for the home purchase itself and for lender paperwork. I bought a second home in 2015, and that transaction was done pretty well entirely by email/docusign, both for the offer/contract and for the lender qualification process and closing paperwork. We did still do the final closing in person. Even my home inspector sent the inspection report via PDF, rather than the fancy binders I received in 2009. It’s hard to say exactly how much this saved, but it did reduce the # of in person meetings significantly. I’d estimate we might have saved a week of time overall.

    We also did our real estate search primarily using redfin (though not their agents), which is so much better than most of the braindead offerings from the local brokerage houses. When it came time to offer, I went with the listing agent, asking for 2% rebate which he agreed. This saved a lot of time and money.

  52. 52

    RE: Ross @ 51 – Those technical things certainly make it easier, particularly for real estate agents and loan officers, but I’m not sure they really speed things up in that I don’t know that the closing date would be any earlier. The offer might get submitted a few hours earlier though!

    Stated differently, those type of advances probably have a greater impact on the environment than the closing date.

  53. 53
    Go Hawks! says:

    RE: uwp @ 49 – I agree, very informative article. Thanks to whomever posted it, was a great read.

    Reinforces that on a national/global scale, Seattle is still not that expensive when compared to other major cities with strong economies. It’s just very expensive to us and growing mores so for many.

  54. 54
    northender says:

    RE: Kary L. Krismer @ 27
    If you haven’t already, I suggest emailing the author. I’m sure he’d appreciate your feedback.

  55. 55
    Weasel says:

    RE: Ehope @ 10 – Whats the attraction to North Seattle? Ive yet to figure out what people think is good about it other than its desirable because everyone else thinks it is. Its a vast wasteland of burbs and roads with expensive houses, one freeway and no real rail unless you position your self near Edmonds, but you have to contend with mud slides every winter.. Or predict where Link might run sometime later this century, and if you’ve used Link anytime recently its just an electric sardine can on rails.

    If I was in your position I’d pickup something nice in Pierce county with a minimal mortgage, Bonny Lake, Sumner, Puyallup – nice small towns, views, open spaces, don’t have to go far for anything much, a selection of freeways, near Tacoma (private schools in Tacoma if the public ones don’t do it for you) and Point Defiance, fairly reliable commuter rail to Seattle.

  56. 56

    RE: Minnie @ 47

    “The NWMLS are not savvy. Their website is not user friendly…”

    That is by design and not because they are not “savvy”. The public site is required but they make it as lame as possible, while still complying with the letter of the “law”, to push the eyes to the Member Brokerage sites. This of course decided long before there was a Zillow and when the only non Brokerage site was Realtor.com

  57. 57

    RE: Ardell DellaLoggia @ 56 – I don’t think it’s anything that notorious. It’s just that there’s no real incentive for them to have it progress beyond basic. Creating really good websites is not cheap. If it is, then Redfin needs to explain what happened to that $600M! ;-)

    I’m not sure what “letter of the law” you’re referring to. I’m not aware of any reason it couldn’t just go away entirely.

  58. 58

    By Weasel @ 55:

    RE: Ehope @ 10 – Whats the attraction to North Seattle? Ive yet to figure out what people think is good about it other than its desirable because everyone else thinks it is. Its a vast wasteland of burbs and roads with expensive houses, one freeway and no real rail unless you position your self near Edmonds, but you have to contend with mud slides every winter..

    I think you’re right–it’s that everyone thinks it is, because at one time it was. And sure there are nice places, but there are also places that are sort of run down because the owners couldn’t afford decent maintenance on top of PITI.

    The commute options from the north are much more limited, but not quite as limited as what you suggest. But it is only two major bridges (I-5 & Aurora) and something like four minor bridges (Montlake, Roosevelt, Fremont and Ballard). But in addition to the train you mention, now light rail technically crosses into the north–barely. But on top of all that you also get the people commuting over the top of the lake to avoid 520 tolls.

    Still it beats the hell out of the commute from Renton to Bellevue–most the 405 dollars in that area went to straightening the S-curves without adding a single lane. But most the other south end commute has a lot more options.

  59. 59
    Brimley Chen says:

    RE: justme @ 42

    They have been talking for Toronto housing bubbles in last 15 years, and yet house price in Toronto is 400% higher than year 2000. Lol.

    In fact, I have been reading this blog in the past three years, and bot two houses in Seattle via Redfin

  60. 60
    jon says:

    RE: Kary L. Krismer @ 58 – The two major bridges and several smaller ones to the north is in total a better connection than to the Eastside, and UW is a draw all of its own. I would have guessed that the north side is more expensive than the south because of sociological self-segregation to avoid crime, but according to this data, the north side has a higher crime rate than the south, https://www.neighborhoodscout.com/wa/seattle. If you click on the schools tab of that website, the better schools are on the north side, and house prices are a mechanism that causes economic segregation to increase automatically, since higher prices keep out lower income people, and higher incomes helps students do better and thus makes the schools there look better performing, on paper.

    One factor that comes to mind is the airport noise. But also West Seattle is cut off from the rest of Seattle by the harbor and river. The north side seems much more well connected with itself, so you have more places nearby to visit.

  61. 61

    Here’s an interesting article on short-term rentals, from the owner’s side. I wish they’d covered more about insurance.

    http://nwlawyer.wsba.org/nwlawyer/june_2017?pg=21#pg21

  62. 62

    RE: Kary L. Krismer @ 57

    That was not my opinion Kary…that was a quote. We have had this conversation before. :) That IS the reason.

    As to the second part of your question…look up VOW Requirements. I’m more familiar with them from the NAR requirements, but the NAR requirements came from the DOJ. The DOJ in the end didn’t require it (as I recall) because NAR offered to before they did. A lot of the DOJ suit was about brokerages not being able to “opt out”. I don’t remember what year that happened. It was a long time ago. But follow the trail of VOW requirements and it should point you in the right direction.

    There’s a snippet of it on Wikipedia under Virtual Office Website. But the guy who has all the details is Saul Klein. You can find him in my facebook friends. He just started a couple of fb groups where you can hash out the details. But yes…it is mandatory and lame-by-design both.

  63. 63
    Ehope says:

    RE: Weasel @ 55
    My husband’s commute in the Bay area was up to an hour and a half each way, and it’s such a quality of life issue that we’re bound and determined not to have that here. He works in SoDo, we want to be in an area with good public schools in the city — North Seattle is the best option for that scenario that we’ve come up with. (Although my job is in Renton, so my commute is getting longer!)

    Although it’s more suburb-y than downtown, there are plenty of areas that are walkable, which is a big plus for us–our rental is right by Green Lake and it’s so great to be able to walk to the park, the library, the store, etc. with the kids. I’m pretty familiar with Pierce County (my husband grew up in Tacoma out by Puyallup and we lived there for a year after college) and, commute aside, there just aren’t a lot of places that have the feeling of a neighborhood that I’m looking for (though parts of North Tacoma do) — there’s just a lot more driving in that life than I’m looking for.

    Thanks Jon, Minnie, and Eastsider for the advice–I appreciate it. I think we’ll probably try to take the plunge… The word from the realtors we’ve talked to at open houses is that things have definitely slowed down a bit so hopefully we’ll be able to get something.

  64. 64

    RE: Ardell DellaLoggia @ 61

    Clearly there is a reason why it looks like this and it is not lack of “savvy” or lack of resources. :)

    http://www.nwrealestate.com/nwrpub/

    Saul was part of the full history going back to when NAR originally leased the rights to “Realtor dot com” and was involved in most of it. You would likely enjoy friending him and picking his brain. They are setting up a Word Press site with some of the old conversations so that this info is more “googleable” than it is at present. He and John started the original e-Pro program and they saved all of the communications going way back.

  65. 65
    Weasel says:

    RE: Ehope @ 62

    North Seattle to Renton, that’ll be an interesting commute :-) I guess the Seattle/Renton end of it will in the opposite direction to everyone else. We rented in Rainier Beach the first 6 months in Seattle, and I used Link, so am familiar with Renton.

    I’m a fan of leaving the car at home and using rail, so that left looking around Sounder Southline stations, ended up in on the edge of South Hill overlooking Puyallup and the valley, and can spy the port of Tacoma in the distance and Olympic mountains on a clear day. End-to-end commute is on the longer side but reliably consistent, got a place with space we like on a nice quiet street with good neighbors. In the end its striking a balance that works between desired neighborhood characteristics and the daily commute.

  66. 66
    Erik says:

    RE: Weasel @ 55
    Pierce county is where poor drug addicted laborers live. Rhode Park in Bonnie Lake is where they relocate prison inmates. I know that for a fact.

    On the other hand, North Seattle is near one of the best educational institutions in the country, the university of Washington. Also near Fremont, Greenlake, Ballard, etc. Have you lived in both areas? I have, and I can tell you it is night and day. North Seattle is wayyyy better.

  67. 67
    greg says:

    By sfraz @ 18:

    RE: justme @ 14 – Agree! This is a WORLD wide mega bubble, with shenanigans, collusion and racketeering in the central banks.

    Auto loans for 72 months with 0% down? There is an auto loan bubble, student loan bubble and real estate bubble. Toronto is deflating, as well as empty office space cropping up in Silicon Valley; NYC is going dark, Sydney is collapsing. Hold on to your hats cause this puppy is goin’ down.

    REITs are not new, but private equity funds like Blackstone purchasing homes as assets is a new phenomenon. According to this Seattle Times story from 2014, Invitation Homes—the country’s biggest rental home fund of this sort, owned by Blackstone—purchased 1585 homes in 2013 in our region to hold and rent out. Is that number big enough to have an effect on prices? From the Seattle Times: “In a market already low on inventory, big investor purchases could artificially pump up home purchase prices, said Yale economist Robert Shiller, whose book ‘Irrational Exuberance’ warned in 2005 of a national housing bubble.” These landlords are not like your Aunt Linda renting out grandma’s old house. Maximizing profit streams is their one and only purpose, and they are ruthlessly efficient in raising rents to the absolute max.

    the everything bubble is here.

    Now can someone anyone tell me what to do about it?

    Bitcoin? gold (i hate gold)? beans n bullets?

    Maybe the best bet is a contrarian fund with a multiplier? I am stumped. In my mind there is no doubt we are in a nasty multi bubble, perhaps a bubble of everything. But frankly what are we supposed to do about it, while not just going to gold…?

  68. 68
    greg says:

    By Erik @ 50:

    RE: sfraz @ 35
    A few years ago there were many doomsday predictors on here saying they can tell it’s about to go. They used fancy words like calling this a “house of cards” and basically saying this whole thing is built on lies and it’s about to go. I fought and fought and fought them. I showed them good data just like I could show you to prove that we a nowhere near a collapse. These boneheads continued to badger me. They ganged up and started telling me how I was wrong blah blah blah. Well if they would have listened to me, they would be much richer today. I could do the same thing with you and the other fraidy cats on here, but it’s not worth my effort.

    Here is my advice to you fraidy cat…stay out of the housing market and buy a bunch of real estate in 2024. That way I can laugh in your face when it all collapses on you.

    ANYONE claiming to have data and then making claims as to the market based on that, should do the right thing and post the data…

  69. 69
    Erik says:

    RE: greg @ 68
    It’s already posted on here Greg. If you take the time to understand the anatomy of a housing bubble, you would know we are not on the verge of a housing price crash in Seattle. Hyper supply–>housing crash, that’s how it works. Seattle is in the expansion phase and not in the hyper supply phase. Therefore we are not going to have a major crash soon unless of course all the markets get wiped out from a war or another disaster.

  70. 70
    S-Crow says:

    Anatomy of Bubble is rooted in DEBT load which leads to default which leads to supply. If your neighborhood had 45-50% of the neighbors at 95%+ CLTV would you be concerned?

    More later.

    S-Crow

  71. 71
    Ross says:

    By S-Crow @ 70:

    Anatomy of Bubble is rooted in DEBT load which leads to default which leads to supply. If your neighborhood had 45-50% of the neighbors at 95%+ CLTV would you be concerned?

    More later.

    S-Crow

    I’d love to see a mapping layer estimating LTV and color coding the neighborhood. I’ll bet it would be eye opening.

  72. 72
    Blurtman says:

    RE: greg @ 67 – “But frankly what are we supposed to do about it, while not just going to gold…?”

    Go long on guns, ammo, rice and beans.

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