NWMLS: Prices and Sales Volume Down, Listings Up in July

All right, after a bit of a technical glitch yesterday, things seem to be back to normal today, so it’s time for NWMLS July statistics.

Here’s the NWMLS press release: July’s Pending Home Sales Dip Slightly From June, Prices Edge Up.

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

Here’s your King County SFH summary:

July 2008
Active Listings: up 24% YOY
Pending Sales: down 24% YOY
Median Closed Price*: $445,000 – down 7.5% 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.

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

King County SFH Inventory
Click to enlarge

Inventory bumped back up in July, but didn’t quite reach the level set in May. We may have finally reached somewhat of a plateau in inventory.

King County SFH Pending Sales
Click to enlarge

Pending sales have fallen almost every year from June to July, and this year was no exception. Sales dropped to 1,855 last month, continuing this year’s streak of marking the lowest months on record every month. At this pace, it seems quite possible that there will be fewer than 1,000 single-family home sales in all of King County in December.

Here’s the supply/demand YOY graph.

King County Supply vs Demand % Change YOY
Click to enlarge

While they are both moderating somewhat, the overall trend is still one of growing inventory and shrinking sales volume.

Here’s the chart of supply and demand raw numbers:

King County Supply vs Demand
Click to enlarge

Months of supply bounced back up again to 6.6, bringing King County to within one month of marking down a full year above the 6.0 “buyer’s market” level. I guess it’s a great time to buy? (sarcasm)

Here’s the SFH Median YOY change graph.

King County SFH YOY Price Change
Click to enlarge

As predicted last month, June’s upward tick simply appears to be noise on the way down. July’s 7.5% drop marked a new record year-over-year decline for the median. It’s worth pointing out that most years, prices either flatten out or drop from July through December.

Based on July’s data, it looks like we’re still searching for the bottom in the local housing market. Come back later today for the news roundup to see what your local agents are saying about the numbers.

Here are the Times and P-I links I posted earlier:

Seattle Times: Homes sales, prices fall around Puget Sound
Seattle P-I: King County house prices down in July

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    Slumlord says:

    With sales volumes down and inventories up, how can we measure the effect on new development? Suppose that in 2004 I could sell a 50-lot subdivision in 10 months (5 per mo). By 2006, it might have taken 5 months (at 10/per mo). What would be the clearance rate today? Who could track that kind of information?

    There is a lot of recently subdivided land in the suburbs and not much construction happening. How long will it be before the market absorbs all those extra building lots? How steeply are developers discounting those buildings lots when the sell them to homebuilders?

  2. 2
    AndyMiami says:

    I continue to be baffeled by the Times and PI’s coverage. The numbers continue to indicate the beginning of a protracted downward shift. AIG’s losses today were much higher than analyst’s predictions. They (the analist) might as well be RE brokers (except for Ira)…people in Seattle, in general, are still in denial…when they wake up and they will…inventories will jump. There are many out there with ARM’s that will reset now and into 2010.

    Tim, please do an analysis of the local market re setting ARM’s..look at default rates and increases in default rates and project..then throw in the fact that Seattle is NOT immune from a deep recession…

    You can print that on Weyerhauser paper from the trees they chop down..and the paper they save from today’s layoff announcement..

    Sell all assets they are deflating…your BMW lost 10% of it’s value in the last three months…and it has nothing to do with oil..which will FALL, and may provide some relief, mostly to those who cannot afford to buy a place to live…let alone a fancy car…..the image status will finally DIE..thank GOD

  3. 3
    Ben says:

    The fact that they still talk about month to month differences is mind boggling, considering the seasonal nature of this business.

  4. 4
    uwp says:

    I like the new PI headline:
    “Housing inventory might be starting to level off”

    Well, thank goodness!

  5. 5
    uwp says:

    Reading all the REIC quotes is simply astounding. I wonder if they believe themselves or if they know it’s bullocks.

  6. 6
    sunsplint says:

    Clearly the enormous numbers are finally affecting the market.
    House prices are down, but not enough.

    Would it really destroy our economy if people started printing, on a daily basis, the ratio of rents to wage as compared to mortgages to wages?

    By the way, as an informal question, has your income stagnated over the past 6 years? I can attest that I have experienced this problem.

  7. 7
    Scotsman says:

    A picture is indeed worth a thousand words.

    This whole situation is like watching a train wreck in slow motion. You focus on a flying piece here, a small crunch there, and in an odd way, for a moment, you forget the big picture. But it’s still a train wreck.

  8. 8
    crispy&cole says:

    Good news.

    You guys are 1 year behind California. This is playing out the same way in every market. Prices get sticky…then inventory builds…then prices come down…then forclosures go throught the roof and inventory builds even more…then prices come down even more…

  9. 9
    softwarengineer says:


    AndyMiami brought up a good local media denial point, but believe me, the national media’s still in denial to on the housing bubble crisis worsening this summer [when sales historically should be improving too]. See the proof:


    The national media makes a big deal about “pending” sales improving 5.3%, yet admits “final” sales will worsen from last month because banks are harshly tightening loan requirements lately [read the whole article]. I predict loan requirements will tighten for the next two years worse and worse, the winners are the small minority that saved money.

    Let’s face the pragmatic facts [and not be in media denial], with harsh loan requirements [getting worse] in a fragile Seattle RE market, that was already running on gas fumes years ago with lax bank requirements; I predict more hefty price collapses in Seattle and very soon too. Does anyone disagree with my logic?

    Great charts Tim, I like the “pending” sales YOY at -24%. you posted…lol

  10. 10
    Jonny says:

    Scotsman: That’s right, if you want to do enough data mining you can support almost any conclusion that you are wanting to come to, but that doesn’t change the overall picture… it’s quite clear what’s going on. Yes, this is a massive train wreck and a lot of people are going to get hurt. Being realistic about the situation is not counter-productive… it simply improves the chances that you might be able to avoid getting hurt yourself.

  11. 11
    jon says:

    Although pending sales are down from last month, they are still closer to the year’s peak than any of the other years listed. It is still the second highest for the year, which has not happened in recent previous years. Had the June number not been so unusually strong, the surprise in this months results would have been how strong July pending sales are for this point in the season. In most previous years, August pending sales are also higher than July. It will be very interesting to see if that happens this year also.

    I haven’t seen a graph of monthly prices so see if the same pattern is there also.

  12. 12
    Lake Hills Renter says:

    cripsy&cole, are you the same person that posts under that name on Ben Jones’ Housing Bubble Blog?

  13. 13
  14. 14
    mukoh says:

    New subdivisions are a different breed, some were done and paid for outright some are financed. Banks are not financing new construction period. So no builder can go and buy these lots as he cannot get money :).

  15. 15
    disbelief says:

    Pending sales, schmending sales…

    actual sales are what matters. The above graphs paint a pretty clear picture- for one sales have been, and still are trending downward, while inventory is trending upwards rather steeply. The two are diverging noticeably, and that can’t be good for the RE market.

    If there is any doubt as to what this means, then the second graph which shows price in a free-fall during the last year should clear up that doubt.

    Looking at these graphs makes the belief that we may continue a steep downward trend in the same fashion as the worst affected locales a distinct possibility.

    I personally think that the decline of each market is / will be in proportion to it’s previous rise. If that’s accurate, then Seattle will still have substantial losses in the future. Even though decline may not be as drastic as some other locales, I believe more (and substantial) decline is still in the cards.

  16. 16
    deejayoh says:

    Had the June number not been so unusually strong, the surprise in this months results would have been how strong July pending sales are for this point in the season.

    Jon –
    One of us needs to get our eyes checked, I am not sure how any month this year could be characterized as “unusually strong” relative to any comparative month in the last 5 years. June is always one of the strongest months of the year. If you take the period in Tim’s spreadsheet – June is the second strongest month of the year, right after May.

    Strong in a weak year, perhaps – but that is a tallest midget argument.

  17. 17
    Lake Hills Renter says:

    crispy&cole: Yes

    Cool. I enjoy your posts on HBB. Welcome to the site.

  18. 18
    crispy&cole says:

    Thanks. I have been coming here for some time, but never posted a comment.

    My brother moved to Seattle last year…so I need to keep an eye on the market for him.

  19. 19
    jon says:

    deejayoh, perhaps, but I’m just so tired of the same old “sales are down from 12 months” ago story. Looks like just about more 2 months to go before we are done with that finally.

    Eastside SFH got hammered this month though.

  20. 20
    deejayoh says:

    I’m betting we just saw the peak in sales – I don’t think it possible for sales to be 30 or 40% off last year’s levels for very long – but I still think volumes will be very low for the rest of the year – maybe 10% off last year.

    My buddy who is a mortgage broker is the tell. He can’t qualify half the buyers he used to.

  21. 21
    The Tim says:

    disbelief @15 makes a good point. Here’s a graph of quarterly pending sales (King Co. SFH) and closed sales (offset by 1 month):

    I graphed it on a monthly basis, but it’s really noisy that way. Lumping the quarters together provides a much clearer picture. Q2 2008 set a new record, with closed sales 15.9% lower than pendings.

    While pending sales were “only” off 24% YOY in July, closed sales were down 38%. It’s a trend we probably shouldn’t ignore.

  22. 22
    KB says:

    disbelief @ 15 – “I personally think that the decline of each market is / will be in proportion to it’s previous rise. If that’s accurate, then Seattle will still have substantial losses in the future. Even though decline may not be as drastic as some other locales, I believe more (and substantial) decline is still in the cards.”

    The post on 7/31 by dejayoh (below) could offer support to your statement. I beleive the r-sqaured of .47 indicates that 47% of the decreases in prices experienced thusfar can be explained by the % increase in price.


  23. 23
    deejayoh says:

    That is interesting Tim. I always figured that the two tracked pretty closely to each other – with a relatively constant % of deals falling out due to contingencies, inspection, etc. Looks like that has been a reasonable assumption – but I’d suspect the big driver of the increase here is availability of financing. It will be interesting to see if this holds.

  24. 24
    deejayoh says:

    The post on 7/31 by dejayoh (below) could offer support to your statement. I beleive the r-sqaured of .47 indicates that 47% of the decreases in prices experienced thusfar can be explained by the % increase in price.

    I think that may be a leap, as it implies a causative relationship. I’d say it is safer to talk about “r” (correlation). There is a roughly -70% correlation between “boom” and “bust” – which is consider a “large” correlation but not necessarily good.

  25. 25
    softwarengineer says:


    Great point Tim.

    I’d add to support your worsening data rate(s) the fact that tighter bank requirements and increased unemployment are hand and hand; i.e., root causes.

    The longterm outlook for RE improved with a 330 point DOW surge yesterday; kiss it good-bye today? See the proof below, i.e., Yahoo’s finance states in part:

    “…Key Indexes Turn Negative- AP
    Wall Street retreated Thursday after weekly unemployment claims jumped to a six-year high and Wal-Mart Stores Inc. and other retailers reported disappointing sales, touching off renewed fears that a pullback in consumer spending will damage the economy….”

  26. 26
    biliruben says:

    Calculated Risk article on Existing Home Sales vs. Pending.

    Long-term they track eachother. Recently, they’ve diverged.

  27. 27
    disbelief says:

    The Tim,

    Thanks for posting that graph. Amazing how you do that so quickly!

    I would expect that this gap will narrow back down to historical proportions over time. I actually expected that there would be even more of a gap in the 2007 quarters as the realities of financing changed abruptly during that time.

    Yet that is also why I would expect it to narrow back down in the future – as lenders and other parties adjust to new realities and people are back to scrutinizing the basics of the transaction (i.e., are forced to be more realistic).

    But, I wonder if it would make sense to “zoom in” on this pending vs. closing gap in the quarters following the removal of unrealistic financing and compare it to other locales/markets? My thinking is: is this gap a good reflection of the percentage of sub-prime or “stretched” borrowers present in (and effecting) a particular market? (would it be a good indicator of the “fragility” of a particular market)

  28. 28
    disbelief says:

    KB / deejayoh,

    I’m not sure how you could define the correlation, but I definitely see a strong correlation, and it seems pretty “good” to me ( but I may well be overlooking something).

    Although I’m definitely looking at these graphs from a laymans’ perspective, I think they often paint a clear picture. So, “causal” or not, I think we can safely expect to see Seattle move closer to the trendline and speculate that this correlation is playing a significant role in that movement.

  29. 29
    deejayoh says:

    mostly just a nit for the stats-wonks. A correlation can be “strong” at 95%, bu say if that is between what the gas pump reads and what really goes in your tank, that is not necessarily “good”.

    So 70% is strong, but I don’t know if it is good. maybe it should be 90%

  30. 30
    TJ_98370 says:

    There has got to be some major cognitive dissonance going on with some homeowners these days.

    40% of U.S. homeowners say their houses have risen in value

    …..a national survey finds that 40 percent of U.S. homeowners think their house is worth more than it was a year ago. And 22 percent more believe their home price is unchanged, according to the poll by online real estate site Zillow……

    ……In reality, the real estate Web site folks estimate, more than 75 percent of U.S. homeowners have seen their values decline since last year – whether they are willing to admit it or not.

    Three-quarters of them said they expect their home values to rise or at least stay the same between now and early 2009.

    Strangely, 42 percent said they expect overall values in their local market to drop.

    “Our survey reveals a wide gap between the perception homeowners have about their own home’s value and the realities of a market in which three-quarters of homes declined in value in the past year,” Stan Humphries, Zillow vice president, said in a statement…..

  31. 31
    Alan says:

    We will be halfway to the bottom when 50% of the population believes prices will continue to drop in the future.

  32. 32
    Groundhogday says:

    Some perspective from the East…

    A house located in the more desirable part of Pullman just came on the MLS at $249k after selling for $270k back in 2006. This house was purchased by a Realtor who rented it out at a loss for the last two years. Apparently, just one of many spec properties that this Realtor is trying to unload.


    So in response to the question above, I’m guessing that at least some Realtors know that the housing market is crashing, though few would provide honest advice to buyers.

  33. 33
    Interloper says:

    These NWMLS numbers are great. Meaning, they’re very clear. It’s hard to imagine a clearer picture of a deflating bubble.

    Thank God I rent.

  34. 34
    TJ_98370 says:


    I was in Pullman about three weeks ago. I was amazed to see construction continuing in a new development on the west side of town. These places had asking of upper $300k to lower $400k. Most lots were empty and many of the recently completed homes were vacant.

  35. 35
    Silver9 says:

    The REN headline: “Prices edge up” — what? Are they kidding? After looking at your graphs I looked at their article. How can prices be up when the YoY and monthly changes are down? The only evidence of higher prices was this line:

    “the median selling price for single family homes and condominiums (combined) was $340,070, slightly more than June when the price was $340,000.”

    $70? $70 justifies a headline like that? sheesh.

  36. 36
    Groundhogday says:

    Yep TJ,

    There is a large amount of building still proceeding in Pullman, but building permits went over a cliff two months ago. Builders are complaining that they can’t get financing. We have 5 major SFH developments ongoing, a couple of condo developments and two new SFH developments just getting started. That is a lot of building for a town with just 9000 permanent residents and 1% annual population growth. 145 developed lots on the market with ~5 sales in 2008, none since April. 200 homes on the market including townhomes and condos, with about 4 sales a month. Rental vacancy rates are up over 10% with rents falling.

    Asking price for a decent 2100 sq ft 3/2 new home? $400k. For a run down 1950’s 3/2 ranch in the worst neighborhood the asking prices are still approaching $200k. With a median household income of $50k, there just aren’t any takers at those prices.

    Pullman is a real train wreck right now, a small market but probably falling harder than Seattle.

  37. 37
    TJ_98370 says:

    Thanx for the update Groundhogday;

    The builders inability to get financing would explain the dormant half-finished development I saw.

  38. 38
    Greg Perry says:

    In the PI article Glenn Clellen, Director of Real Estate Research at WSU said,

    “Crellin said the measure should provide some help to the market. He also said he’s seeing more buildup of listings in higher price ranges.”

    “The entry-level part of the market is much closer to being balanced than people expect,” Crellin said. “That part of the market is probably not going to see much in the way of price declines.”

    Here’s what I have for Seattle (All other price ranges are Buyer’s Markets):
    Area 140 West Seattle 0-$500k Balanced
    Area 380 Central 0-$500K Balanced
    Area 390 Central 0-$900K Balanced
    Area 700 Queen Anne 0-$400k Sellers $400K – $500k Balanced
    Area 705 Ballard/Greenlake 0-$400k Sellers / $400k-$700k Balanced // Overall 705 as a whole is a Balanced market
    Area 710 North Seattle 0-$500k Sellers Market. // Overall 710 as a whole is a Balanced Market
    Area 715 Richmond Beach 0-$500k Balanced Market. // Overall 715 is a Balanced Market.
    Area 710 North Seattle 0-$500k Sellers

    As usual, 705 and 710 are the best performing areas in Seattle. Prices $500k and under in 710 are showing Sellers market.

    Inventory is building and sales ratios are falling in outlying areas at a much faster rate than the core.

    Rate of sale in the high end sucks.

  39. 39
    patient says:

    Thanks Greg, I know we have discussed this many time before but I’ll still wanted a new check. You argued in the past that the different price tiers are separate markets that do not impact the value of homes in other tiers. Is that still your opinion that when the high-end finally get it and start to reduce prices that the value of homes currently in the next lower tier will not be pushed down and start a chain reaction? The rate of sales can still keep up in the lower tiers but what you get for your money in the tiers should logically increase imo.

  40. 40
    WestSideBilly says:

    TJ @ 30: Look up the “Lake Wobegon effect”. :-)

    Silver9 @ 38: Look up “the power of delusion” and/or “how advertising works” (eyes firmly rolled). They’re looking at one narrow slice that presents the tale they want to tell – they being the advertisers. Trying to not be doom and gloom, and all that.

  41. 41
    Greg Perry says:


    Changes in prices follow absorption (supply and demand). We saw the legs taken out of the market last year in the 3rd quarter 2007……. and prices did soften…….but not at first if you remember. I’ve observed that prices are slow to fall, at first.

    When inventory tightens, prices seem to rise more quickly as buyers compete for available inventory.

    In the Seattle seller’s markets, I would not expect prices to fall. If ARs remain where they are, prices should trend up. In the balanced markets, prices should remain flat to a slight trend downward.

    We often see several markets within a market. Post dot.com bomb and 9/11 was another time where the high end prices pulled back severely, and the low end appreciated. Simple supply and demand –within price ranges.

    Resellers in new construction zones are getting absolutely HAMMERED as they are competing with their builders now who are sitting on too much inventory.

    I know an agent that just took a $300k price reduction on an area 550 home that he started at $2.1 mil. He’s now right at $1.6 mil and in my mind an incredible deal. The Seller asked what it would take to sell by the end of the year. The movement is showing us that we can expect 3 homes to sell (out of 24 currently) in his price range before the end of the year. The questions was, did he want to be one of them?

  42. 42
    patient says:

    I can accept that. That even if higher tier properties start trickling down in lower tiers as long as they are absorbed together with the existing inventory it will not cause much of a softening. But if the current inventory starts building when buyers start to expect or waiting for some of the current higher-tier stuff in that tier inventory should build and absorption rate fall leading to price pressure.

  43. 43
    Greg Perry says:

    One thing to remember. There are sellers who HAVE to sell and sellers who WANT to sell.

    There is a barrier to keep properties somewhat inside their pricing tier…….the MORTGAGE. Those who WANT to sell battle their personal pucker factor against their equity. For those who HAVE to sell, those holding big equity and are willing to sacrifice it can reduce to sell. The others have to play within the confines of the mortgage, or come to the closing table with money…..or sell short out of hardship. If the bank takes the property back, they make the decision on where to position the house in the marketplace.

    And you’re correct. If a house does lower in a tier, it becomes a part of that tier’s AR which does affect supply/ demand and then price.

  44. 44
    EconE says:


    If you take what you point out in your comment @30 and apply it to the pendings vs. closed…maybe there are people out there still shopping for homes and still “think they can afford it”, however, when the rubber hits the road, reality sets in when the lender throws that cold glass of water in their face.

    It’s like the old “Suzanne” commercial.

    The couple is still saying “We can do it!”

    but the bank seems to be saying “Oh no you can’t”

  45. 45
    Scotsman says:

    “NEW YORK (Reuters) – By Freddie Mac’s own admission, it has a negative net worth — the latest reported net market value of the mortgage giant’s assets is negative $5.6 billion.”

    It’s little bits like the above quote that signal the end of housing. Without Freddie/Fannie, any mortgage but the standard 20%down, 28/36% ratio loan that a bank is willing to hold will be near impossible to find. There goes the entry level buyer. Not to mention the unemployment, depressed wages, etc. that come along with such an economy.

    The government can’t afford to save everything- your house, your health, your retirement, etc. How people can look past all this escapes me. It has to be the ultimate expression of denial.

  46. 46
    biliruben says:

    We the taxpayer are now pretty much the only ones in the mortgage business, and we aren’t particularly good at it.

    Thanks all, for that extra point or two I’m not going to be paying but should! I appreciate you subsidizing my next house.

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