NWMLS: Closed sales plummet, listings still scarce

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January market stats have been published by the NWMLS. Here’s a quick excerpt from their press release:

Home Buyers Still Competing for Sparse Inventory in Western Washington, Driving Up Prices – Especially for Sought-After Condominiums

“The Seattle area real estate market hasn’t skipped a beat with pent-up demand from buyers is stronger than ever,” remarked broker John Deely in reacting to the latest statistics from Northwest Multiple Listing Service. The report on January activity shows a slight year-over-year gain in pending sales, a double-digit increase in prices, and continued shortages of inventory.

“The decline in sales last month can’t be blamed on the holidays, weather or football. It’s simply due to the ongoing shortage of housing that continues to plague markets throughout Western Washington,” said OB Jacobi, the president of Windermere Real Estate.

Bummer for home salespeople that they can’t use the “football” excuse they usually throw out in January. Not that there’s really anything in these latest numbers for them to be concerned about.

Now let’s dive into the numbers for January.

CAUTION

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

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

January 2018 Number MOM YOY Buyers Sellers
Active Listings 1,243 +6.4% -20.8%
Closed Sales 1,259 -39.9% -20.4%
SAAS (?) 1.01 +17.4% +26.1%
Pending Sales 1,747 +19.7% -9.9%
Months of Supply 0.99 +77.0% -0.5%
Median Price* $628,388 -1.0% +19.7%

Inventory is at its lowest January level ever, and new listings were only barely above last year’s record-low level. Despite having nearly the same number of new listings as last year, closed sales and pending sales are both down considerably. Meanwhile, prices are up nearly twenty percent year-over-year.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell forty percent between December and January. Last year over the same period closed sales were down twenty-seven percent. Year-over-year closed sales were down twenty percent. That’s a pretty big decline. It will be interesting to see if sales pick up in the next few months or keep dropping.

King County SFH Pending Sales

Pending sales were up twenty percent from December to January, and were down ten percent year-over-year.

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

King County SFH Inventory

Inventory rose six percent from December to January, and was down twenty-one percent from last year. Total on-market listings are the lowest level for any January on record.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up just 0.3 percent from a year ago—a whopping six more homes hit the market this January compared to January 2017.

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 drop in closed sales is actually pretty sudden and severe in this chart. The last time the year-over-year change in closed sales was anywhere near this low was late 2010.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year price changes shot up to their highest level since March 2016, nearly hitting twenty percent again.

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

Down slightly from December and currently about $30k below the all-time high hit last July.

January 2018: $628,388
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: King County housing market kicks off 2018 even hotter than before, as Seattle breaks price record


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.

323 comments:

  1. 251
    ess says:

    By Wile E. Millenial @ 228:

    I have friends who commuted to Wall Street from Philly and the Poconos. They broke after two years and moved back to overpriced homes in Jersey. I commuted from Jersey and frankly that’s intolerable too. Seattle is so, so much easier.

    What you describe will loom as an increasingly important issue for more and more individuals who are priced out of the Seattle/Eastside area and will have to make those kinds of decisions if they continue reside in this area. It is interesting to note the types of commute you and your friends endured back east, or what those of modest means have to do to own a home in the LA/SF areas of California. And it is also interesting to note that immigrant communities have developed private bus service from Philadelphia to NYC for commuters as their partial answer to expensive housing costs in NYC.

    Wreckingbull @226 RE: ess @ 223 – You keep using the term ‘hailing distance’. As in a 25 watt VHF radio? Are you sure you don’t mean ‘soul-crushing commute’ distance

    Wreck – thank you for reminding me of the distant past with your post. I knew a young woman who insisted after she was married that she and her husband reside way out in the country, although he was the only one who commuted to work. He accepted that arrangement -and the commute was two hours EACH WAY for years. Now that I consider truly a ” ‘soul crushing commute’ distance”!

  2. 252
    Blake says:

    RE: Ardell DellaLoggia @ 244
    Well said Ardell… My mother sold RE out east and in Ohio. She was terribly upset by the discrimination she saw.

    But it’s one thing to have Fair Housing laws on the books… quite another to bother to enforce the laws!!
    https://www.washingtonpost.com/news/the-fix/wp/2015/07/10/a-look-at-just-how-badly-the-fair-housing-act-has-failed/
    That was 2015: “The administration has announced new rules requiring communities to set fair housing goals, track them, evaluate local housing patterns for racial bias and evidence of continued segregation then report their results periodically.”

    2018 HUD under Trump?
    Hah! Not even trying.

  3. 253
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 247

    Property owners are not exempt from the law. You need go no further than the King County website to see that property owners have no special exemption.

  4. 254
    David says:

    I very much doubt that anyone is refusing to sell their house to someone because of the buyer’s race. I think this is a straw man masquerading as virtue.

  5. 255
    ARDELL DellaLoggia says:

    RE: David @ 251

    I come across it more in multiple offers where the seller sells his house regardless. You’re assuming there’s only one “best” buyer in the room. Most recently I saw it while the property was in escrow and the seller got the idea a different race would equal more money. It closed but it got a bit hairy. It happens more often than you think. The time before that it was a gay couple. They got the house as well but the seller initially picked the couple that reminded them of themselves when they bought the house. Both times my buyers and they both closed. But I had to get a bit mean about it.

    Sometimes I think there’s more of a blind eye when people suggest it doesn’t happen.

  6. 256
    David says:

    RE: ARDELL DellaLoggia @ 252 – The seller actually said this or it was inferred? By your own words, you said the seller was playing the market for MORE MONEY. No one is entitled to pay less by taking advantage of their race. And you said the seller was looking for the best price from someone actually able to pay.

    I really think if real estate agents develop a reputation for adjudging mental intent and act as prosecutors, then people are going to work harder to kill off the need for real estate professionals as fast as possible.

    If you have the money, no one cares what race you are.

  7. 257
    David says:

    RE: ARDELL DellaLoggia @ 252 – Also, a seller can cure the problem by pulling the property from the market and sell to no one. Property owner gets to still have a house, real estate agents disappear and starve – at least on that sale.

  8. 258

    By David @ 257:

    RE: ARDELL DellaLoggia @ 252 – Also, a seller can cure the problem by pulling the property from the market and sell to no one. Property owner gets to still have a house, real estate agents disappear and starve – at least on that sale.

    Seller could end up paying two commissions on those facts. A sale does not have to close for a commission to be earned.

  9. 259

    Hey, some of you might enjoy this American Experience episode: The Bombing of Wall Street. Very reminiscent of 2007 and beyond, and also Seattle is a key player in the 1918-1920 events, which is first evident by a very old shot of the Smith Tower.

    http://www.pbs.org/wgbh/americanexperience/films/bombing-wall-street/

  10. 260

    By ARDELL DellaLoggia @ 253:

    RE: Kary L. Krismer @ 247

    Property owners are not exempt from the law. You need go no further than the King County website to see that property owners have no special exemption.

    Like I said, I’m not familiar with the scope of state or local laws–I was addressing the federal law. Federal law generally needs a basis, and in this case it would be Interstate Commerce. A For Sale sign out front probably wouldn’t be a sufficient nexus, but my comment was based more on my recollection of federal law.

  11. 261

    RE: David @ 256 – Not going to go into all of the details here David. If you think Fair Housing Laws are unnecessary…you are wrong.

  12. 262

    By ARDELL DellaLoggia @ 255:

    Most recently I saw it while the property was in escrow and the seller got the idea a different race would equal more money. It closed but it got a bit hairy. It happens more often than you think. The time before that it was a gay couple. They got the house as well but the seller initially picked the couple that reminded them of themselves when they bought the house. Both times my buyers and they both closed. But I had to get a bit mean about it.

    These were both situations with mutually accepted contracts and the seller looking to other buyers? That seems odd. I’ve only seen one situation where a seller tried that (totally different facts) and they went from being set financially for life to being bankrupt.

    The language I highlighted is why I think love letters should be illegal. But unfortunately, it’s apparently illegal for an agent to decide to withhold the love letter from their seller client.

  13. 263

    By Blake @ 252:

    That was 2015: “The administration has announced new rules requiring communities to set fair housing goals, track them, evaluate local housing patterns for racial bias and evidence of continued segregation then report their results periodically.”

    2018 HUD under Trump?
    Hah! Not even trying.

    Not that I’m against the goals, but there are real states’ rights issues involved. If the federal government wants to check out things in various areas and determine federal law is being complied with, there’s no problem with that. But to require state and local government to check things out and do a periodic analysis is rather over the top. Obama might have even violated the Unfunded Mandates Act, but I haven’t reviewed that act or the regulation to verify.

  14. 264

    The King County tax numbers are now up on its website. Mine went up 9.4%, virtually all of which was the basic tax amount.

  15. 265
    boater says:

    Just checked and my property taxes went up 18% here on Mercer Island. Less than I expected so a little happy I guess.

  16. 266
    uwp says:

    21% in Greenwood. Pretty crazy. Tax assessment was up 18%.
    Oh well, the price we pay to live here.

  17. 267

    RE: uwp @ 266 – My assessment was up more than my tax.

  18. 268
    Doug says:

    My property taxes are up 47%! There were some big improvements made to the house that I think are finally catching up to me, but jesus.

  19. 269

    RE: Doug @ 268 – What part of King County is that–be as specific as possible without giving up your privacy–e.g. NE Bellevue.

  20. 270
    Doug says:

    RE: Kary L. Krismer @ 269 – NE Seattle.

  21. 271

    RE: Blake @ 252
    Blake, Have you Been to a HUD Home Auction in Seattle the last 40 Years?

    HUD prices fixer uppers at normal high price levels at the auctions. HUD was a complete joke long before Trump.

  22. 272

    RE: Doug @ 270 – Thanks, I just picked one randomly in the Chelsea area and it was about a 24% increase. I wonder what is going on in your area?

  23. 273

    RE: Doug @ 268
    Be Patient With Kary

    He’s getting the same legal mishmash on property taxes HIKES we are….

    To get an idea what your monthly bill on just property tax for 2018 will be, I’d estimate it from last year’s property tax hike [mine was 33%]. This means approximately:

    A $300,000 listed [my home] is $200/mo property tax plus $40/mo insurance= $240 [2017] + 33%= $320/mo. Soooo…if your home is average Seattle area [$700,000] your escrow will be $750/mo in 2018 plus your mortgage, HOA, utilities, maintenance and etc….HORRIFYING.

  24. 274
    Doug says:

    RE: Kary L. Krismer @ 272 – I think it’s tax hikes + property improvements that have finally been captured by the county assessor.

  25. 275
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 269

    The highest I’m seeing is 24% in a neighborhood in Bellevue that did accelerate by 30% in real value last year. The Kirkland ones I checked were 13% to 15%.

    I have Title checking on a couple where adding the new tax bill caused a reversion to former owner names for some reason. One had the old owner on the owner name but the new owner on the tax bill. The other had the old owner on the tax bill with tax mailing address of the sold house going to their new house.

    Could just be a website error but I’m checking all of my 2017 sales and sending the anomalies to Title and Escrow.

    To Kary and those with internal access, you have to check the County parcel viewer as Realist and County website are not in sync with property owner names for these recent errors.

  26. 276

    By Doug @ 274:

    RE: Kary L. Krismer @ 272 – I think it’s tax hikes + property improvements that have finally been captured by the county assessor.

    I remember about 20 years ago we did a to the studs remodel on our prior house. The county (or city??) sent something offering to allow us to self-assess the increase with the benefit being that the county wouldn’t reassess for 3 years, or some such thing. I asked someone about it and his suggestion was just to ignore it. That was the best advice ever given because they never did reassess for the improvements.

  27. 277

    By ARDELL DellaLoggia @ 275:

    To Kary and those with internal access, you have to check the County parcel viewer as Realist and County website are not in sync with property owner names for these recent errors.

    The link I posted above allows you to search by address.

    http://blue.kingcounty.com/Assessor/eRealProperty/default.aspx

    (BTW, love the web design on that one where to continue you need to notice a checbox in the middle of the page.)

  28. 278

    RE: Kary L. Krismer @ 277

    I have been checking by address. The owner names were correct after closing but some are reverting back to the former owners’ names with the 2018 tax info update. The oddest one was where they put the old owners’ names and added their new address as the tax mailing address so that they are getting tax bills for both their old home and their new home.

    Title was recorded properly at time of sale and they sent me a link where old or new owners can send the correct info and ask for the correction.

  29. 279
    Doug says:

    RE: Kary L. Krismer @ 276 – Shortly after we bought the house in 2016 a county assessor came out to inspect it. I played dumb and downplayed all improvements the sellers had made. Honestly, the 47% increase is probably a blessing. It still is shocking.

  30. 280
    ARDELL DellaLoggia says:

    RE: Doug @ 279

    What % of purchase price was the annual tax back when you bought it? Could you tell it was inordinately low at time of purchase?

  31. 281
    Wile E. Millenial says:

    I’m up a “mere” 10.4% here in Seattle.

  32. 282
    David says:

    RE: Kary L. Krismer @ 258 – Good luck in court. And paying the attorney $10k up-front.

  33. 283
    David says:

    RE: Ardell DellaLoggia @ 261 – You are clearly engaging in subversive bahavior in your sales practices per your statements in my opinion. Cloaking it in fair housing language is no excuse.

    Clearly, home sellers need to be cautious about allowing subversive persons into their homes.

  34. 284
    Kmac says:

    RE: Ardell DellaLoggia @ 261

    But you can discriminate against attorneys and other trouble makers ;-)

  35. 285

    By David @ 282:

    RE: Kary L. Krismer @ 258 – Good luck in court. And paying the attorney $10k up-front.

    The way it works is the buyer’s agent goes through arbitration at the NWMLS, and then having to pay out the listing broker sues the seller. And it’s the firm that pays the attorney, because they will have paid the buyer’s agent. And it’s the seller that will end up paying attorney fees.

  36. 286
    S-Crow says:

    Does anyone know what the local Seattle/Metro/Pierce -King- Snohomish Co market share of Redfin is vs traditional franchised brokerages (KW, Windermere, JLS, Re/Max)?

  37. 287
    Doug says:

    RE: ARDELL DellaLoggia @ 280 – Yes, I knew it was wrong, but was just hoping the county wouldn’t figure it out for a while.

  38. 288

    By S-Crow @ 286:

    Does anyone know what the local Seattle/Metro/Pierce -King- Snohomish Co market share of Redfin is vs traditional franchised brokerages (KW, Windermere, JLS, Re/Max)?

    They have more offices now, so it’s not as easy to determine. I’d look for a PS Business Journal article.

    Edit: Here’s what I found, but Redfin didn’t participate. I’d be very surprised if they made the top ten though, although last time I checked this out CB didn’t participate and they are seemingly smaller than I thought.

    https://www.bizjournals.com/seattle/subscriber-only/2017/06/09/residential-real-estate-firms.html

  39. 289
    ARDELL DellaLoggia says:

    RE: Doug @ 287

    I’m glad it wasn’t a complete surprise and you were somewhat prepared for it. That’s a serious hike!

  40. 290
    Doug says:

    RE: ARDELL DellaLoggia @ 289 – Just ran the numbers. Tax assessment was 54% of the price we paid in 2016. Today it is 76% of what I believe the price to be.

  41. 291

    And With Interest Rates Creeping Up Lately for New Mortgage Buyers

    Added to the 25 cent federal gas tax addition they propose for 2018 infrastructure….those monthly bills add up…

    Ya need like $700,000 in retirement savings to afford a mortgage free home to retire in Seattle. No mortgage payment and none of this cash used for entertainment retirement cost, car or survival [food], etc. I assumed your retirement income was above $40,000/yr….if it isn’t God Bless You….you need more than King County reduced property taxes…you need a job.

  42. 292

    By Kary L. Krismer @ 288:

    https://www.bizjournals.com/seattle/subscriber-only/2017/06/09/residential-real-estate-firms.html

    Looking at that again, I never realized that Windermere was entirely a franchise system, or that so much of John L. Scott was (even though my office is a franchisee).

  43. 293
    Kmac says:

    I had never even heard of Keller Williams until about 5 years ago.
    Did they move in from some other region?

  44. 294

    Hey….This Million Dollar Brick Home Has Seattle Earthquake-proof Metal Chimneys

    https://www.yahoo.com/finance/photos/1-million-home-looks-canada-slideshow-wp-215648224/

    Too bad the rest of the house will crack and crumble during a 6.7 Richter….but by gosh the metal chimneys will still be standing….LOL

  45. 295
    N says:

    A minority opinion for sure but..

    https://www.bloomberg.com/news/articles/2018-01-22/housing-bears-hibernate-as-u-s-homebuilders-swagger-into-2018

    He noted that the Fed has projected three rate increases for this year, and said that “raises the risk that today’s highly inflated housing market will again end badly.” He’s watching homebuilder stocks closely because they’re a leading indicator, peaking in 2005, the year he called the crash — and the year before home prices themselves hit a top.

    Stack has been studying median home prices, too, which typically track long-term inflation as measured by the Consumer Price Index. Last summer, they were as high as 32 percent above the measure; in 2006, just before the housing bust, values were about 35 percent higher, according to data from the National Association of Realtors. Half of the 50 largest metropolitan areas were overvalued relative to incomes in November, compared with 36 percent two years earlier, according to an analysis by data provider CoreLogic.

  46. 296

    RE: softwarengineer @ 294
    A Rich Elite Driving That Cheap Looking Maroon Pea Car in the Driveway?

    Looks like an old design Vega from ’71…..oh, I forgot….its a newer Honda…they go for $30,000 a piece, not cheap at all. LOL….I hear no one like the small/cheap looking expensive new cars at all anymore in the polls. Sales are WAY DOWN, like expensive homes.

  47. 297

    By Kmac @ 293:

    I had never even heard of Keller Williams until about 5 years ago.
    Did they move in from some other region?

    They’ve been in the area for about 12 years, at least, and probably in 2008 had more brokerages than today. Their home is in Texas if I recall correctly. They expanded primarily by reducing the cost of agents to be associated with their firms.

  48. 298
    Blake says:

    This is an incredible article about a MASSIVE Chinese money laundering operation on American soil! Below are a few “highlights,” but read the whole article. 21st century kletpo-capitalism! I love the part where one of the operation’s money smuggling yachts got caught and they claimed it was “hijacked by pirates!” … Kind of describes our economy today, eh?

    https://www.bloomberg.com/news/features/2018-02-15/a-chinese-company-has-conquered-a-piece-of-america

    The strongest desire among China’s wealthy is to get their money—ill-gotten or otherwise—out of the country, safe from the threat of government seizure. One prevalent method for magicking money across the border, in defiance of strict capital controls, begins with companies called junkets.
    … Even before ground was broken at the construction site, it got permission to open a temporary casino across the street, in a duty-free mall. It was a ho-hum space, the size of a suburban Olive Garden. Yet in its first three months after opening in November 2015, VIP bets totaled $5.3 billion, across fewer than 20 tables…. The trajectory was unprecedented, verging on impossible, or at least not legally possible.

    And….
    “Its advisers and board of directors have included former directors of the CIA and FBI and former governors of Mississippi, New York, and Pennsylvania…. Both company and government in 2017 used the same lobbying firm: Avenue Strategies, the D.C. influence shop co-founded by former Trump adviser Corey Lewandowski”

    As Gomer Pile would say: “Surprise surprise surprise!”

    Of course they’ve hired only the best!
    “For an American face to lead the development, the company hired Mark Brown, an Atlantic City native who’d run Donald Trump’s casino empire. Brown was so revered by his Trump colleagues that some executives grew mustaches to mimic his own, and in 2004 he appeared at the future president’s side on The Apprentice. But after Trump’s company declared bankruptcy, his star fell. In 2009 he was fired from an executive role at Las Vegas Sands’ Macau operations, and a subsequent move to Sydney was blocked by Australian regulators.”

    “So far, only labor conditions have attracted the attention of Washington… The inspector described one worker arriving at the ER with a broken back and a doctor advising immediate hospitalization. But someone intervened. “The injured person was not allowed to be admitted, and was promptly transported” to China.”

    “The Marianas are in an active seismic zone—2016 saw a 7.7 magnitude earthquake—and one commissioner asked Imperial Pacific’s representatives if they’d installed seismic bracing on the still-not-functioning sprinkler system. The answer: Only in the basement.”

    We don’t need no stinkin’ badges/regulations!!! Laissez-faire baby!

    Finally: “In a case of life imitating The Simpsons, someone recently tried to sell the island a monorail!!”

  49. 299
    Rupert D says:

    RE: N @ 295
    From bloomberg article …..”Bill McBride, who runs the Calculated Risk blog and also called the crash, doesn’t think home prices are inflated this time around. Unlike in 2005, lenders are acting responsibly and the Wild West of real estate speculation hasn’t returned, he said. There is less to speculate on, too. Compared with the overbuilding that preceded the bust, today’s pace of construction isn’t fast enough, he said.” “Lending standards are still pretty good,” McBride said, and he doesn’t expect mortgage rates to “take off” in the short term.

    The bear market mortgage brokers and real estate agents commenting on this site just cant help themselves by trying to instill fear in homeowners. They only care about generating revenue for themselves. Mortgage Brokers and Real Estate agents in Seattle are the new “used car salesman” and will say and do anything to make a buck.

  50. 300
    N says:

    @Ruport D 299 – Interesting perspective. I’ve been hard pressed to find any real estate professionals that provide any measure of caution in their recommendations. It’s almost exclusively hyped as buy, buy, buy before you miss out. Any unbiased person could tell you that it doesn’t continue forever and even though those agents always predict a soft landing that is often not the case.

    Real Estate markets move slowly and likely this will continue a while but after seeing the activity in the early spring market I can’t see it ending well. Can we really sustain another 20% jump in prices while interest rates climb into the 5’s and 6’s (just maybe).

  51. 301
    ARDELL DellaLoggia says:

    RE: Kmac @ 293

    Founded in 1983 by Gary Keller and Joe Williams. I first heard of them here in 2007.

  52. 302
    Rupert D says:

    RE: N @ 300 – That’s it keep up the exaggerations and fear mongering. RE prices haven’t increased 20% in Seattle in the last 20 years if ever. 30 Yr. mortgage rates averaged over 6% each year from 1971 -2002. Of course Seattle home prices didn’t increase during that time period because rates were too high to make mortgage payments affordable.

  53. 303
    ess says:

    Some thoughts and questions on the discussion of rising mortgage rates:

    I assume that rising mortgage rates both discourage and disqualify potential real estate buyers. Does anyone have a link to any research that indicates what percentage of hopefully buyers are either discouraged, or don’t qualify for the amount they need to borrow with each increase of rates? Are there many buyers that are right at the qualifying edge that a .25% mortgage rate increase disqualifies them for the mortgage they were hoping to obtain?

    Furthermore, I assume that number accelerates the higher interest rates go. More buyers may be discouraged or unable to qualify if interest rates go from 4.75% to 5%, rather than 4% to 4.25%. I assume this presumption makes sense? Of course – if there is a corresponding decrease in the value of the property to be purchased, the higher mortgage rate will be offset by the need to borrow less.

    In addition – have any of the real estate professionals come across potential or actual clients that have suddenly started or ramped up their search because they are fearful of increase interest rates and in an environment of rising property values? What concerns your clients more – increased prices or interest rates, or are both increases more or less the same side of the expense coin? At least for those who itemize – they can take off the interest from their taxes.

    I wonder where the tipping point in all of this is? On the other hand, yesterday’s discouraged buyer is today’s well qualified potential long term tenant, and that should keep the rental market healthy unless there is a dramatic oversupply of new apartment construction, or the economy has a major hiccup.

    Speaking of hiccups – I also got my real estate taxes today. Haven’t figured out what the increase is, but they sure look like a lot more than last year!

    Thoughts?

  54. 304
    N says:

    @ Ruport 302 – Again appreciate your perspective. I had no intent of creating fear by posting a different opinion than most on here that included some stats that I viewed as relevant to the discussion. FWIW I do not work in the real estate industry and I certainly didn’t make the argument that rates alone would lead to a down market.

    Maybe not 20%, but 19.7% YOY according to Tim’s stats at the top of this page seems close enough :)

  55. 305

    RE: ess @ 303 – I think it’s more that there are some buyers who are barely approved for the home/neighborhood that they want, and if rates go up, or their tax payment goes up, or prices go up they will no longer qualify for that type of home/neighborhood. Their choice would be to either accept a lesser house or a house further out or a condo/townhouse.

    There are also some whose qualification price is so low that any change would be very difficult for them to buy anything in the area they are looking in, but I suspect there are many more of the type I described in the first paragraph.

  56. 306

    RE: Rupert D @ 299 – Who are the bear market real estate brokers on this site? It’s been a long time since Ray was yelling “They’re all coming back!”

    I have seen mortgage brokers try to instill a sense of urgency.

  57. 307
    Marc says:

    Looks like I’m one of the lucky few – my tax assessed value actually decreased nearly 3% year over year and my annual property tax increased by less than 1%. I live in Magnolia where home values have appreciated quite rapidly and we’ve done many improvements since purchasing in 2015 so I will not be asking any questions!

    The taxes on a vacant lot we own in Magnolia went up 12.9% which doesn’t seem too bad comparatively speaking.

  58. 308
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 306

    I’ve been on record as bearish since the end of 2016 with an expectation of a drop by 2019 or 2020 and possibly as early as 2018.

    I’ve repeatedly said since that time “It’s a better time to sell than to buy”. Sometimes you have to read between the lines.

    I’m not as blunt online as I am with my actual clients because other agent’s clients read.

    I was fairly clear when The DOW went into correction recently that it confirmed my previous position. The lag is often 18 months.

    I think rates will hit 5.5% but beyond that someone will stop it from accelerating, though it could go higher briefly before heading back.

    Watching the stock and bond markets. We’re not quite at the clear inducator point… but close.

  59. 309
    MGSpiffy says:

    Tax bill up 14.5% here on Mercer Island.

    I think we’re going to see a bit a lag before house prices react to rising interest rates. Basically I see that the pool of potential buyers is several per property at most price points, and though some of them will be impacted soon by rising rates, but it’ll only shrink the pool of prospective buyers, as it has a big enough slice of people who don’t need to fully finance their purchase. How long it will take for the buyer pool to shrink at a given price point enough to causes homes to take substantially longer to sell, and thus trigger a reaction .. I don’t know. There’s such a mix of factors and demographics.

  60. 310
    ess says:

    By MGSpiffy @ 309:

    Tax bill up 14.5% here on Mercer Island.

    I think we’re going to see a bit a lag before house prices react to rising interest rates. Basically I see that the pool of potential buyers is several per property at most price points, and though some of them will be impacted soon by rising rates, but it’ll only shrink the pool of prospective buyers, as it has a big enough slice of people who don’t need to fully finance their purchase. How long it will take for the buyer pool to shrink at a given price point enough to causes homes to take substantially longer to sell, and thus trigger a reaction .. I don’t know. There’s such a mix of factors and demographics.

    MGSpiffy

    You are certainly correct that there are all sorts of factors in any given market – some which I alluded to in my previous post. I would be interested to learn what percentage of those buying in Mercer Island are paying all or almost all in cash, and how that differs in less affluent areas. In addition – how interest rate sensitive are potential buyers in a place such as Mercer Island, or West Bellevue, as compared to less expensive points and south.

  61. 311

    RE: ARDELL DellaLoggia @ 308 – Well clearly it’s a great time to sell, assuming you do it right. But I still wouldn’t suggest someone sell if they have no need to sell, but I guess that depends on timeframes.

    Being able to pick from multiple offers is fantastic if you’re a seller (assuming your analysis is more complex than which one has the highest amount). Having someone make a well-drafted, well-qualified offer significantly over the value of your house, and have the ability to actually pay/finance that amount is even better! If that happens you can effectively get an optimistic view of next year’s value today. And if prices do decline you can get a value that never was.

  62. 312

    By MGSpiffy @ 309:

    Tax bill up 14.5% here on Mercer Island.

    I think we’re going to see a bit a lag before house prices react to rising interest rates. Basically I see that the pool of potential buyers is several per property at most price points, and though some of them will be impacted soon by rising rates, but it’ll only shrink the pool of prospective buyers, as it has a big enough slice of people who don’t need to fully finance their purchase. How long it will take for the buyer pool to shrink at a given price point enough to causes homes to take substantially longer to sell, and thus trigger a reaction .. I don’t know. There’s such a mix of factors and demographics.

    Given that a good portion of this increase is almost certainly temporary, perhaps this is just what we need to get to a bit closer to a healthy market, assuming other economic conditions don’t change much. Taking away a bit of buyer demand wouldn’t be the worst thing when you’re dealing with record low inventory.

    Somewhat counterintuitive, but this is probably good for buyers (and clearly bad for sellers.)

  63. 313
    N says:

    @ Ess 310 – The buyers in those higher priced areas may be less sensitive to interest rates but what’s interesting is it seems like the higher tier markets ($900k+) have much less competition. It isn’t unusual to see properties at this price point stay on the market several months, of course this is highly dependent on neighborhood.

  64. 314
    N says:

    @ Kary 312 – Officially it is record low inventory. But is it really record low new inventory or is it that we have record numbers of buyers. I think it has been discussed before but it would be interesting to see how the new inventory numbers look compared to prior years as opposed to just month ending inventory.

  65. 315
    Erik says:

    Just saw a commercial from realtor.com that showed 2 women got in a bidding war on a house. The one that lost was sad and the one that overspent was happy. These scumbag realtors are are at it again, tricking consumers into taking on large debts so they can walk away with a fat commission while they leave buyers in financial ruin. It wasn’t as good as “Suzanne researched it,” but the snakes are out in full force. When I see a commercial comparable to “Suzanne researched it,” we know it’s time to sell.

  66. 316
    Erik says:

    RE: N @ 314
    Look at the data. Low number of new houses for sale, average number of sales.

    Data says we are having a normal number of sales but not many people are selling.

  67. 317
    ess says:

    By N @ 313:

    @ Ess 310 – The buyers in those higher priced areas may be less sensitive to interest rates but what’s interesting is it seems like the higher tier markets ($900k+) have much less competition. It isn’t unusual to see properties at this price point stay on the market several months, of course this is highly dependent on neighborhood.

    Yes N, I have noticed exactly what you are said. The sweet spot for housing in this area appears to be in the lower priced housing for individuals with modest incomes and investors – with the top at about 600K -750K dollars for the middle and upper middle class. So perhaps the issue of rich foreign buyers grabbing multi million dollar houses sight unseen is more legend than reality.

  68. 318
    MGSpiffy says:

    RE: ESS @ 310 – Though Mercer Island is more expensive than many other areas, it’s similar when you start breaking it down.

    Houses below $1.5M – I see plenty of conventional finance with a Jumbo loan. This seems to be due to the fact it’s still ‘obtainable’ by working couples, albeit higher end. It’s not unusual to find dual income tech or professional couples making $200-350k a year, with some money for the down payment from savings and/or sale of a previous home. At that point you’re seeing $4000-$6600 mortgage payments, which isn’t that far off from renting a home on the island. That’s not to say there aren’t all-cash buyers in this segment. But this is the group that’s most sensitive to interest rates.

    You won’t see any new construction here on the island for under $2M – and it quickly gets up over $3M+. At these levels, most of the buyers I’ve seen are not traditional dual income working couples looking for best schools and somewhere free of the homeless. I’d would say here’s where we’re seeing a much higher concentration of people with cash and/or significant means, and it’s a smaller crowd overall that’s not as sensitive to rate changes.

    Waterfront properties seems to have their own set of rules for sellers & buyers, but that doesn’t seem limited to Mercer Island.

    I’m very much in the first group – I closed only a couple weeks ago, and was complaining about getting 4.25%. If you remember I declared that when I closed, it would mark the turning point for the entire market as a self-deprecating jab at my historical luck. So far I’m wondering if I did indeed call it.

  69. 319
    MGSpiffy says:

    RE: Kary @ 312:

    Lowering demand would help cool the market, but it seems like the demographics and population pressure are going to keep things warm. I regularly run into people who have moved here in the past couple years for a job at Amazon, MSFT or the like. Too many people new to the area are needing (or wanting) something more than a 2-bedroom apartment, and we have next to nothing for them outside of SFHs.

    I get to work and be around a lot of people in various tech/high paying jobs . There are an awful lot of millennials who have now paired up and in their 30s are wanting to start families soon. There also are a lot of people who are commuting long distances in to the urban cores from remote locations and perpetually sick of their long commutes.

    These are all people who are eyeing something closer-in. I get a mix of envy and crap from them when they find out where I’m living at.

    The only thing I can see that’ll make the demographic numbers relent the pressure its putting on the limited supply in reasonable/preferred locations would be a big economic downturn that sends a number of them elsewhere for jobs. Demand just outstrips supply by too much of a margin right now.

    Will the cure be better than the illness?

  70. 320
    Doug says:

    RE: ARDELL DellaLoggia @ 308 – I can’t find my comment because the older comments have been truncated, but on February 9th I pointed out that the market bounced hard off the 200 DMA and that the sell off was likely over.

    So far I continue to be right and my expectation is for the market to rally to new highs from here.

    As for housing, inventory is still at all-time lows and until that changes you simply can’t have prices decline even in the face of higher rates.

    As for rates themselves, you know I’ve been a perma-bull (price up, yield down) on the 10y UST. The recent sell off in the 10y has not changed my position on the long term trend. I actually believe the 10y yield probably still has room to go higher in the short term, but is nearing it’s ceiling as we clearly approach the next recession. Could it go to 3%? 3.5%? 4%? Maybe. I don’t know and I don’t care. All that matters is that we will, with 100% certainty, see a new all-time low during the next downtown.

  71. 321
    ess says:

    RE: MGSpiffy @ 318

    Thanks for the update, MGSpiffy

    Mercer Island is certainly a different market than the one I am in South Snohomish County. Million dollar houses in my area are more the exception rather than the rule, although I have noticed more houses selling for 600K plus near our modest abode. By the water we do have some multi million dollar homes – waterfront property does seem to go for big money everywhere around here.

    The builders are still optimistic enough to believe there is a market for the expensive multi million dollar houses. At that price – either one is independently wealthy, or is on a financial treadmill that has its own dangers in the event there is a job loss or significant decline in prices. I have met more than one individual whose long term employment not only ended, but the substitute job paid nothing like the old one.

    Not that anyone can forecast interest rates with great certainty, but I would guess in a year you will be congratulating yourself for locking in your mortgage when you did. We dumped our variable line of credit for a mortgage/ cash out at 3.9 percent 30 year mortgage over a year ago, and finally my rising interest rate concerns are finally coming to fruition, although a year late.

    My uneducated guess – 30 year mortgage rates hit close to 5% or higher by the end of the year – barring some unforeseen economic or military calamity.

    As to your other post – why are some people giving you grief regarding your housing choice? What is it to them? And yes – the apartments under construction won’t appeal to those who move onto the next phase of their lives. Problem is – no 1000 – 1500 sq foot houses are under construction either in this area , which is probably where most of these younger folks would probably like to start out. So the shortage of smaller single family houses will probably become more acute barring some unforeseen event.

  72. 322

    RE: MGSpiffy @ 318

    That doesn’t match the stats. Where are you “seeing” this? Are you an agent? Mortgage person?

    156 sold in the last six months. I didn’t separate condos from houses. Just did residential sales. Most of the condos were financed. Of the 50 properties sold at $1,050,000 or less, 15 were cash and about 5 were 50% down and the rest were 20% or 25% down. I eyeballed vs hand calculating all of them. The majority of the 15 that were cash were houses in the $850,000 to million dollar range.

    Of the 50 properties sold at about $1.8 million or more only 7 of the 50 were cash. The mortgage amounts in the highest numbers were a bit random and not % based. But the majority not cash.

    I looked at the lower 50 and the highest 50 of the 156.

    I also saw plenty of new construction homes not bidding up over $3 Million as well.

    Where are you getting the prices and mortgage vs cash data?

    I just peeked again and adding to this comment as none of those numbers jive. You said: “You won’t see any new construction here on the island for under $2M – and it quickly gets up over $3M+” NONE not a one that sold for $3 Million plus was listed at less than $3 Million. Odd.

    If you tell me where your numbers are coming from I’ll try to figure out why there is such a large disparity in the data.

    Required Disclosure: Any data in this post not compiled, verified or published by The Northwest Multiple Listing Service. Calculated in Real Time by Ardell)

  73. 323

    Another interesting Harney article. Apparently the government will be cracking down on lenders who take advantage of veterans by doing refinances that don’t make sense (VA loans can be refinanced relatively cheaply, but that doesn’t mean it always makes sense).

    http://www.telegram.com/news/20180218/kenneth-harney-lenders-who-prey-on-veterans-hurt-other-home-buyers-as-well

    Also, apparently this practice drives up the rates on both VA and FHA loans because the investors in the product sold will get a shorter average return and thus be willing to pay less.

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