Seattle Bubble

As a follow-up to last Friday’s foreclosure news, let’s take a look at a couple charts of local foreclosures.

I contacted the folks at RealtyTrac to request historical foreclosure data for the Seattle area, and they were kind enough to provide me with their foreclosure data for King + Snohomish counties going back to April 2005. Here’s a long-term chart:

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You can see that since July’s data showing 1,030 homes in some state of foreclosure (Default, Auction, or REO), we have been in uncharted post-2005 territory. August’s 1,185 foreclosures pushed even further into record highs.

Here’s a chart comparing the foreclosures for each month:

Click to enlarge

We had a couple big spikes in November and December last year, then early this year things seemed to settle down close to 06-07 levels. But since June foreclosures have been noticeably shooting up.

Now that I’ve got this historical data as a basis, these will probably enter the rotation of graphs that are updated monthly.

NWMLS statistics for August have finally been released.

The NWMLS press release will be posted at this link when it goes up.

Here is your summary along with the usual graphs and other updates.

Here’s your King County SFH summary:

August 2008
Active Listings: up 16% YOY
Pending Sales: down 16% YOY
Median Closed Price*: $423,950 - down 11.2% YOY

Here is the updated Seattle Bubble Spreadsheet, and here’s a copy in Excel 2003 format. Click below for the graphs and the rest of the post.

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Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

First up is the straight graph of the index from January 2000 through June 2008.

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You can see that all three tiers basically flattened out through the spring. The medium and high tiers had that slight bump from March to April, but have since given back the slight gain, while the low tier has been nearly flat.

Here’s a chart of the year-over-year change in the index from June 2002 through June 2008.

Click to enlarge

Despite being flat for four months, the low tier continues to perform worst in terms of year-over-year price changes, coming with a nearly 9% drop from June 2007. Here’s where the tiers sit YOY as of June - Low: -8.8%, Med: -7.6%, Hi: -6.2%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Click to enlarge

It’s almost as if the low tier is waiting for the other two tiers to catch up after dropping so severely between months 8 and 9. Looks like another month or so and the mid and high tiers should be pretty close in terms of total decline from peak.

So has the low tier bottomed out, or is the flatness of March-June just the best “spring bounce” that could be mustered? We’ll find out soon enough as we crawl into the summer and fall.

(Home Price Indices, Standard & Poor’s, 08.26.2008)

According to the latest data from the Case-Shiller Home Price Index, the home price bust in Seattle is gaining steam again.

Down 0.2% May to June.
Down 7.1% YOY.

Last year prices rose 0.65% from May to June, and year-over-year prices were up 7.9%.

Here’s the usual graph, with L.A. & San Diego offset from Seattle & Portland by 17 months. With a drop of “just” 5.8%, Portland’s year-over-year numbers have been out-performing Seattle for seven months now.

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This graph is not intended to be predictive. It’s just an interesting exercise to see how closely the Pacific Northwest is tracking the ground already covered by Southern California.

Here’s the graph of all twenty Case-Shiller-tracked cities:

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Six of twenty cities experienced smaller year-over-year drops than Seattle in June. Charlotte at -1.0%, Dallas at -3.3%, Denver at -4.7%, Boston at -5.2%, Portland at -5.8%, and New York at -6.9%. The largest year-over-year drop was in Miami, where prices plummeted over 28% from June 2007. Ouch.

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

Click to enlarge

Eleven months off our peak, the drop in Seattle has improved slightly, and is now only worse than ten of the twelve “bubble cities” were at this same amount of time from their respective peaks. Only Miami and Tampa had dropped more than Seattle’s 7.3%.

Here’s the “rewind” chart. The horizontal range is selected to go back just far enough to find the last time that Seattle’s HPI was as low as it is now. This gives us a clean visual of just how far back prices have retreated in terms of months.

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Well, we can definitely say that March wasn’t the bottom. The index for Seattle dropped to a new post-peak low in June at 178.28, just a hair below March’s value of 178.29. Prices have been holding somewhat steady at June 2006 levels for four months now. Will the summer and fall bring a continued drop, or is early summer 2006 as far as Seattle will “rewind”?

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 08.26.2008)

I mentioned this in the comments on a recent post, but I think it’s interesting enough to merit its own post. Since we regularly track pending sales as our measure of monthly sales volume in the monthly charts, I was curious to know whether the credit crunch has caused closed sales volume to diverge from pending.

What you see below is a graph of quarterly King County SFH sales volume according to the NWMLS, with closed sales offset by one month (since most closings take 30 days). The blue and red lines represent pending and closed sales (left axis), while the green bars represent the percent difference between closed sales and pending sales (right axis).

Click to enlarge

For some reason the first quarter has historically seen the largest difference between pending and closed sales, averaging 8.8% fewer closed sales than pending sales from 2000 through 2007. The first quarter of 2008 stayed close to that figure with 7.5% fewer closed sales than pending.

The second quarter average difference for 2000-2007 was 4.1%. 2008 second quarter closed sales were off 15.9% from pendings, the largest quarterly discrepancy to date.

I think this will be an interesting data set to keep an eye on as the year progresses. 16% of pending sales falling through is certainly not something to ignore when the long-term average 2000-2007 has been just 4-5%.

Let’s check in on the NWMLS statistics from around the sound.

Here’s where the YOY stats stand for each of the six counties as of July 2008:

King - Price: -7.5% | Listings: +22.9% | Sales: -24.4% | MOS: 6.6
Snohomish - Price: -5.5% | Listings: +10.5% | Sales: -32.8% | MOS: 8.4
Pierce - Price: -10.0% | Listings: -5.8% | Sales: -13.2% | MOS: 7.6
Kitsap - Price: -10.9% | Listings: +4.2% | Sales: -15.9% | MOS: 8.9
Thurston - Price: -5.8% | Listings: -6.1% | Sales: -24.8% | MOS: 6.4
Island - Price: -18.8% | Listings: +8.9% | Sales: -13.5% | MOS: 10.7
Skagit - Price: -3.9% | Listings: +8.5% | Sales: -19.2% | MOS: 9.0

Following below are the graphs you’ve come to expect. Click below to continue reading.

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