August Neighborhoods Months of Supply Update

Let’s have a look at “Months of Supply” for the 30 NWMLS areas in King County. For an explanation of what months of supply means, please refer to the original neighborhood MOS breakdown post. Also, view a map of these areas here.

August MOS for King County came in at 6.80 (compared to 4.92 for August 2007 and 7.21 for September), bringing the current run to a full year (vs. the previous record of 4-5 months in the winter of 1994-1995).

In the graphs below, you’re looking at the MOS for the “Res Only” data from the NWMLS King County Breakout pdfs for the one-year period of September 2007 through August 2008. The bar graph is centered vertically on 6.0 MOS, so that it is easier to visually tell the difference between a seller’s and buyer’s market (i.e. – shorter bars mean a more balanced market). Each graph again has the same scale on the vertical axis and has the King County aggregate figure plotted in red on the far right, so they can be easily compared.

Note: Area 100 MOS was over 21 in January, and has been clipped.

KC SFH MOS: SW King
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KC SFH MOS: SE King
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Note: For Area 701 (Downtown Seattle) we’re using condo data.

KC SFH MOS: Seattle
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KC SFH MOS: N King
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Note: MOS in area 520 (Medina, W. Bellevue) was over 19 in August, and has been clipped.

KC SFH MOS: Eastside
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A handful of neighborhoods scattered throughout the county were seller’s markets in August. Even in the recently strong city of Seattle, four of eight areas were buyer’s markets in August.

The cumulative MOS for Seattle proper decreased slightly from 5.06 in July to 5.02 in August, up from 3.65 in August 2007. The Eastside as a whole increased to 8.4 MOS, well over August 2007’s 5.2.

Here’s the bonus graph, which lets you directly compare each area’s MOS to its value one year ago. August 2007 is in red, and 2008 is in blue.

KC SFH MOS: Eastside
Click to enlarge

Yet again, even the neighborhoods that remain in “seller’s market” territory were trending more toward a buyer’s market than last year.  The single exception is area Dash Point / Federal Way (110), where MOS went from 6.5 last year to 5.6 this year.

The three toughest markets for sellers were Medina / Clyde Hill / W. Bellevue (520) at 15.76, Enumclaw (300) at 11.31, and Mercer Island (510) at 11.06. 520 has now been over 10 MOS for a full year.  I guess Bill Gates just isn’t buying property like he used to.

North Seattle neighborhoods continue to hold their title as the strongest markets in which to sell a home. The three best markets for sellers as of last month were the same as last month: North Seattle (710) at 3.74, Ballard/Greenlake/Greenwood (705) at 4.09, and West Seattle (140) at 4.57.

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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.

25 comments:

  1. 1
    NotaBull says:

    Tim, I love the graphs, but I’m wondering if you can modify some of the colors a little. I’m having a hard time with the Eastside graph and trying to find my area. In my mind it’s the “light purplish one that’s not too dark, and less kinda blue than that other one”.

    It looks pretty n’ all, but I think more contrasting and distinct colors might help a little.

  2. 2
    Eric Arrr says:

    Hey Tim,

    Maybe this has already been covered or is otherwise accounted for in the MOS numbers, but I just got to wondering — what about all the unsold, unlisted new construction? I notice that in a lot of the new condos in Seattle (e.g. Trace Lofts), the King County Recorder’s Office shows a large number of unsold units, only a fraction of which are listed for sale.

    Maybe I’m missing something, or maybe the condo & downwon MOS numbers are substantially affected this way.

  3. 3
    Eric Arrr says:

    Yeah, on further inspection, there is definitely something to this…

    Taking the Trace North building at 1414 12th Ave as an example:

    103 units total.

    According to the King County Recorder’s Office, the developer (12th & Madison LLC) still owns *80* of those units. 12th & Madison does not offer units for rent, as far as I can tell, although I’m sure a few of the 23 sold units are not owner-occupied.

    Of the 80 unsold units in Trace North, only 18 are listed for sale (at least on Redfin – maybe MLS has more, but I assume not.)

    In other words, at least in the case of Trace North, one unit listed for sale actually represents 4.44 unsold units. If this is typical of the supply for the downtown condo market, the MOS situation is definitely skewed!

  4. 4
    Eric Arrr says:

    Slight correction: I goofed my Redfin search, this property has 24 units listed (out of 80), not 18. So each listing represents 3.333 unsold units.

  5. 5
    Joel says:

    NotaBull,

    Look at what color your color is next to. For example 530 color is hard to distinguish, but it is to the right of the orange bar.

  6. 6
    98115renter says:

    May I suggest ColorBrewer:

    http://www.personal.psu.edu/cab38/ColorBrewer/ColorBrewer_intro.html

    It is designed by a cartography professor at Penn State whose research involves the cognition of color in maps. It’s a nifty tool to choose colors that people can easily differentiate between, especially for the large segment of the population who have color vision impairment.

  7. 7
    EconE says:

    Eric Arrr…

    yes…you are seeing things correctly…many unlisted units in buildings that are both completed or currently under construction that are not listed on the MLS. I wonder what will happen if the flippers of projects yet to be delivered decide not to close after seeing other flippers that have been sitting on their condos (unable to sell) for over 18 months now. Surely they can do the math…well…perhaps.

  8. 8

    You wrote:

    The three toughest markets for sellers were Medina / Clyde Hill / W. Bellevue (520) at 15.76, Enumclaw (300) at 11.31, and Mercer Island (510) at 11.06. 520 has now been over 10 MOS for a full year.

    That these three areas are relatively the highest in the area is not surprising. They’re some of the most expensive neighborhoods, and more expensive homes tend to stay on market longer and go for slightly larger discounts (see the sale-to-list price data on Redfin:
    http://blog.redfin.com/seattle/2008/07/a_better_deal_in_hawthorne_hills_or_madison_park.html)

    What is interesting is the absolute level- that the months of supply is so much greater than it was last year.

  9. 9
    david losh says:

    I want to sell my house for $725K.
    I would sell my house for $725K.
    Should my house be counted in the months of supply?

  10. 10
    Alan says:

    Losh,

    Hire an agent. Put it on the MLS. Allocate resources into advertising it and then we can consider it as part of the MOS.

  11. 11
    Thomas B. says:

    Anyone got any money so I can buy a house? How about a barter; exchange of services for a house? I can mow you lawn until the debt is paid off.

  12. 12
    david losh says:

    Yes, I know, but I really do want to sell my house for $725K.
    I really would sell my house for $725K.
    What about all of those other people who did list, advertise, and committ huge resources to selling for over 200 days on market then left the market.
    Are they counted?

  13. 13
    Alan says:

    What about all of those other people who did list, advertise, and committ huge resources to selling for over 200 days on market then left the market.
    Are they counted?

    Yep. They are counted. They are expending resources to advertise their assets. Presumably they wouldn’t do this if they didn’t think their price was in a reasonable ballpark.

    Show me an MLS listing for your house at $725k and then we can count it in inventory. Then we can ask your realtor why he would waste his time listing it at that price and heckle him about his time being worth nothing.

    I get your point though. You’ve made it before. How do you measure supply and demand? I would buy the house down the road for $1. Does that mean I am part of the demand? Probably not. We only count supply and demand that is likely to sell or buy. We don’t have a buyers registration database so we can only estimate that by counting closings. We do have a registration database for sellers. It costs money to get into that database. Persumably, people aren’t going to waste their money or time and will only put their property in that database if they intend to sell. Some will advertise a price that is too high. Maybe they would take a lower price. Who knows. It is all estimation anyway. If you think you can get a better estimate then do it and beat the market.

    I think there may be something to this buyer registration database. When buyers are scarce then the sellers should do the legwork to convince a buyer. There is your million dollar idea, David. Take it and run if you want.

  14. 14
    Eric Arrr says:

    I’ll give Losh his point, that it’s hard to say what does or doesn’t constitute supply.

    But, Losh, if you’re equating yourself to a developer with 80 unsold condos and a massive construction loan to pay off, you’re not fooling anyone. ;)

  15. 15
    david losh says:

    We are in a dead market.
    Who is the buyer pool, today?

  16. 16
    Alan says:

    The buyer pool is huge.

    The pool that is willing to buy at today’s prices is very small. As prices fall the pool of willing buyers will grow.

    The number of new buyers that come onto the market for a given price drop is referred to as elasticity. It is tough to get data on that. So instead we estimate a single point using tody’s data.

  17. 17
    DrShort says:

    RE: Trace Lofts

    There are usually 2 – 3 postings per day on craigslist trying to rent units in this complex out. It’s a pretty interesting space, but clearly not selling.

  18. 18
    WritinginRonPaul says:

    Hey D.Losh, just count the amount of California license plates you see. The more you see, the bigger the pool.

  19. 19
    Buceri says:

    Housing costs eat up more incomes this year
    7.5 million spend half of their pay

    By ADRIAN SAINZ AND ALAN ZIBEL
    THE ASSOCIATED PRESS

    MIAMI — Al Ray is so strapped for cash that the only time he eats out is on Wednesday or Sunday, when the local McDonald’s sells hamburgers for 49 cents.

    Ray lost his engineering job in November and has been working as a high school tutor, scratching out about $1,000 a month — if he’s lucky. He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners’ association fee until May, when he stopped paying.

    Ray, 44, is looking for work and renting out a room in his two-bedroom condominium in Davie, Fla., for $500, but his monthly income doesn’t match his expenses, and he’s facing foreclosure.

    “I barely have money to survive,” he said.

    http://seattlepi.nwsource.com/business/380145_homeowners23.html

  20. 20
    Jay says:

    Federal Way area’s relative stability (or dare I say strength?) seems interesting. I think the trend might be explained by 1) affordability probably is higher there than places on North King/Snohomish and certainly the Eastside, 2) it’s a relatively more desirable place to live than neighboring area 3) It’s a relatively older and more established suburb.

    This is the first time I really paid attention to the MOS charts, and I was actually slightly surprised at Seattle’s MOS. It seems a lot better than I had expected. Except the areas 701, 390 (afforability?) and 385 (less desirable than other neighborhoods?), one can almost claim that it’s a buyer’s market in Seattle!

  21. 21

    WATCH FOR NEW HOME PROJECTS IN LIMBO

    I’m watching east King County and the home developments were bulldozed then fenced in and sit there with no more development for 6+ months [no money?]. I’m also seeing many units of new leased space vacant…..its been three months now…..

    I imagine this conundrum doesn’t get tracked by Tim’s charts, but its definitely an over-supply cancer too.

    I believe the housing bailout plan should include an approx 50% budget to bulldoze and cleanup the overbuilt vacant homes; before they turn into rat traps. Then turn the developments back in to green lands again to counter global warming.

  22. 22

    “I believe the housing bailout plan should include an approx 50% budget to bulldoze and cleanup the overbuilt vacant homes; before they turn into rat traps. Then turn the developments back in to green lands again to counter global warming.”

    That’s one of the best ideas I’ve read in a while. We can grow organic broccoli where McMansions once stood.

  23. 23
    geon says:

    Yeah, those MOS #s look like they are all over the map compared to a few months back.

  24. 24
    devil's cousin says:

    “I believe the housing bailout plan should include an approx 50% budget to bulldoze and cleanup the overbuilt vacant homes; before they turn into rat traps. Then turn the developments back in to green lands again to counter global warming.”

    Sounds like a reasonable idea for areas that are grossly overbuilt with shrinking economies and populations. But for any area where someone might actually want to live in those houses at some point in time, it seems like a rather huge waste of resources.

  25. 25

    […] Where you’ll have trouble is Seatac- condos there went for 101.4% of list price. Guess people like light rail and don’t mind listening to airplanes take off. If you want to find out what’s been going on with months of supply for areas around King County, check Seattle Bubble. […]

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