Puget Sound Foreclosures Continued Upward Trend in December

Here’s your December update on Foreclosure activity in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary:

December 2008
King: 660 NTS, up 105% YOY
Snohomish: 296 NTS, up 67% YOY
Pierce: 578 NTS, up 79% YOY

The graphs below are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, refer to this post.

For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.

First let’s look at the percentage of households that received a Notice of Trustee Sale (based on household data for each county from the American Community Survey, assuming linear household growth between surveys):

Households per Foreclosure

King County came in at 1 NTS per 1,182 households, Snohomish County had 1 NTS per 884 households, and Pierce had 1 NTS for every 511 households.

For comparison, the latest data from RealtyTrac—whose definition of foreclosure includes Notice of Default, Auction, Notice of Trustee Sale, and Real Estate Owned—shows King County with 1 foreclosure for every 938 housing units, Snohomish at 1 foreclosure for every 916 housing units, and Pierce with 1 foreclosure for every 465 housing units.

Following are charts of King, Pierce, and Snohomish County foreclosures from January 2000 through October 2008, with uniform y-axis scales to provide easier comparison. Click below to continue…

Notices of Trustee Sale - King

Foreclosures shot back up again in King County in December, reaching their second-highest level ever, still short of July’s level of 730.

Notices of Trustee Sale - Snohomish

Snohomish County was also up from November, but still short of a new record.

Notices of Trustee Sale - Pierce

Pierce County came in at their second-higest ever, falling short of the high mark set in October.

Coverage elsewhere:
Seattle Times: Foreclosure numbers for Puget Sound region climbing faster
Seattle P-I: County foreclosures up 88%

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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
    DavidB says:

    CNBC announced this morning that Microsoft is considering job cuts.

    Microsoft is considering significant layoffs across its various divisions, The Wall Street Journal reported on Wednesday, citing people familiar with the company’s plans.


  2. 2
    Gary says:

    This announcement from Microsquish is to be expected.
    Likely they are reeling from the poor christmas sales more than they would like to admit.
    Most people are not going to buy into this ” get a new computer or O/S every 2 years ” crap anymore either.
    Do you buy a car every other year?
    I feel sorry for anyone who will lose thier job in this economy.
    I think this is just the beginning of a string of bad news that is going to hurt seattle and washington state in general.

  3. 3
    Buceri says:

    Tim –

    It is obvious that the snow storms are directly related to the foreclosures…give me some time and I’ll come with the reasoning.

  4. 4
    deejayoh says:

    Likely they are reeling from the poor christmas sales more than they would like to admit.

    yeah, microsoft makes or breaks it’s year on christmas. especially server products. and dev tools. great stocking stuffers!

    seriously – E&D is 15% of Microsoft revenue.

  5. 5
    alex says:

    deejayoh@4: E&D may be a small percentage of MS’s revenue, but Windows/Office are bundled with computers which do sell a lot more in holiday seasons…

  6. 6
    Sniglet says:

    We were discussing the WSJ article about Microsoft lay-offs on the forums last night.


  7. 7
    Objectivity says:

    Anyone who doesn’t think tech spending is going to go down significantly is kidding themselves. MSFT will feel the pain just like everyone else.

  8. 8
    patient says:

    Pretty interresting, Pierce already have more notice of defaults than closings and Snohomish is very close with just 70 less closing and 70 more NTSs needed to join the club. King still has a bit to go but with the alt-a bomb and layoffs lurking it could quickly narrow the gap.

    December 2008

    County NTS Closings Delta
    ———- —— ————- ——–
    Pierce 578 528 – 50
    Snohomish 296 437 141
    King 660 1169 509

  9. 9
    deejayoh says:

    Anyone who doesn’t think tech spending is going to go down significantly is kidding themselves. MSFT will feel the pain just like everyone else.

    Agree with that – and sorry for being such a smartass, but I don’t see christmas as terribly relevant. consumer PCs ship with the cheapest version of windows and rarely with office – so yes, some license revenue was lost but I doubt it is material. Xbox drives E&D sales and it had a record holiday season. What is hurting the business is corporate/EA sales. Every bank that goes out of business costs millions in license upgrades.

    town hall invite just went out for 1/23 so I guess we find out more soon.

  10. 10
    patient says:

    It’s one of the big drawbacks with being publicly traded, if revenue drops you are almost forced to layoff people independent of your cash reservs, cash flow and future need for investment in R&D. If you don’t do it as a CEO you could quickly be looking for a new job when the stock starts tanking even if the layoff is a counter productive move. Privately held companies has no such worries and make no mistake there are big successful and profitable companies like that. IKEA comes to mind. So for the people who thinks layoff will never happen at MSFT due to the big pile of cash you are unfortunately and likely wrong.

  11. 11
    buystocks says:

    Agree with patient. I’m guessing official layoffs will be reported to satisfy the investors (the simple revenue – costs reason). If they don’t report official layoffs I’m guessing the stock will plummet. And ,of course, this is a related topic in this blog entry, because more unemployment will lead to more foreclosures…

  12. 12
    Lake Hills Landlord says:

    It seems like an excellent opportunity for Microsoft to reduce headcount in poor performing sections of the company without startling investors. Layoffs in good times are almost impossible. This news may not be indicative of problems at Microsoft, but rather just smart management.

  13. 13
    CCG says:

    Actually I started the MSFT rumor as I was hoping to unload some shares into the bounce. Not working out quite the way I hoped :-(

  14. 14
    Plymster says:

    It seems like an excellent opportunity for Microsoft to reduce headcount in poor performing sections of the company without startling investors. Layoffs in good times are almost impossible. This news may not be indicative of problems at Microsoft, but rather just smart management. — Lake Hills Landlord

    This is a company that has been starting up and shutting down projects with people left and right. On a whim, they’ll hire 200 contractors for a planned project, and then 2-weeks after they’ve got them all on board, they’ll shut the whole mess down.

    I’ve had friends contract there who are nomads, eking out space in conference rooms just to do their work for months on end. The projects they are on have zero environment management, so they don’t even know where the developers are or how many systems are involved in some of their projects.

    Mind you, this is all anecdotal evidence, but for me, it builds a pattern of incompetence in middle and upper management.

    Does this sound like the sort of “smart management” that will cut off the dead weight, or the kind that will eradicate the good and bad employees in nonperforming, non-critical departments like most other large corporations?

    I hope you’re right LHL, but I fear you may be wrong.

  15. 15
    patient says:

    “Layoffs in good times are almost impossible”. I don’t know if agree with that, we have had many rounds of layoffs in “good” times to “trim” the company and it’s been very easy from a law point of view. I haven’t heard of one single instance were it has become an issue. It actually seems far to easy if you ask me. Centralization ( to get rid of staff in remote offices ) and outsourcing (to get rid of staff at HQ) where you don’t replace most of the shedded resources are probably the easiest ways to do it.

  16. 16
    Lake Hills Landlord says:

    Significant layoffs during good times makes shareholders edgy (is this thing a dog? better sell) and lowers employee morale (am I next? better jump ship). These side effects are somewhat mitigated during a serious recession because when companies are doing layoffs left and right, investors almost expect it of you (cutting costs? good move) and the remaining employees are just glad to be working (too bad about Bob, but at least I have a job).

  17. 17
    Objectivity says:

    “X-mas not relevant”.

    Absolutely right. The relevant issues are 1) generally less demand for personal use computers and software; and more importantly 2) the massive contraction of business expenditures that is occuring and will continue to occur. This will surely hurt softies bottom line.

    Looking forward to seeing what Obama has up his sleeve for a stimulus…Get ready to kill the dollar.

  18. 18
    Buceri says:

    Yahoo business –

    Google Layoffs: New Twist on a Well Worn Story
    Posted Jan 15, 2009 02:29pm EST by Aaron Task

    It has long been obvious Silicon Valley is not immune to the economic downturn. Tech sector layoffs aren’t rare, as evinced by recent announcements from Tech Ticker’s parent, Motorola and Oracle, as well as rumors of pending cuts at Microsoft.

    But news Google is laying off 100 people in its recruiting department is an eye-opener. This is new and more significant than prior announcements about the cutting of employee perks and laying off of contractors. Google’s cutbacks suggest:

    * How quickly Google has scaled back its own growth expectations.
    * Search is not impervious to economic activity, as many believed six months ago.
    * 2009 consensus estimates for Google remain too high, meaning the stock remains vulnerable even after it has come down, as Henry Blodget writes.

  19. 19
    b says:

    MS will have layoffs, its inevitable. During the last boom they branched out wildly into non-core products (Zune, XBox, Surface, Live, etc) and produced the biggest software flop ever for one of their two flagship products. It does not take 91,000 people to work on Windows 7 and Office 2009, the only two things that actually make that company money. Its a similar reason as to why Google is going to be having layoffs also, however I don’t know if any of those will be in Seattle. You don’t need 16,000 people to write ad-sense and gmail, but during the boom times they had money to spare to throw everything at the wall and try to find something that sticks. Now that revenues are down, both are going to have to slice and dice to stay competitive.

  20. 20
    Eastside Realestate Agent says:

    Well, the big day is here. The 15th of January. As was reported on here early last month that there would be Microsoft layoffs on this day!!

    Unfortunately for those of you who were rooting for big layoffs, there were no layoffs. So sorry, no McMansion for $150,000 for you. Like I know you are all rooting for.

    I really think you should look at buying in the near future. Our annual winter hiccup is almost over. Californians will be starting to migrate here once again in the Spring. With Obama coming in, there WILL be an increase in foreign work visas. So competition for cheaper housing will be tough.

    So for those of you who have good credit, I would suggest looking to buy now before you get priced out.

  21. 21
    patient says:

    LHL wrote:

    “Significant layoffs during good times makes shareholders edgy (is this thing a dog? better sell) and lowers employee morale (am I next? better jump ship). ”

    One of these is true but unfortunately not the other one. It lowers morale but it does not make shareholders edgy, it makes them cheer. At least that has been our experience. Everytime we announced staff reduction in good times the stock has lifted. Especially in good times since increased revenue and cost savings ( this is of course often counter productuve for the future but the share holders do not care about longterm ).

  22. 22
    Tim says:

    EastsideRealEstateAgent has to be a fake poster. Nobody can be that much of a moron.

  23. 23

    “EastsideRealEstateAgent has to be a fake poster. Nobody can be that much of a moron.’

    You haven’t met enough real estate agents.

  24. 24
    Eastside Realestate Agent says:

    Tim, what part of my post was not factual? Can you do nothing better than just hurl childlike insults at me?

    And tell me this Tim and anybody else on here who wants to criticise me: What Real Estate training have you received? Do you have a license?

  25. 25
    patient says:

    I think it’s The Tim trying to generate more comments :) a tip, it’s a bit to much over the top so most of us just ignore it including myself.

  26. 26
    deejayoh says:

    the meeting is the 23rd.

  27. 27
    The Tim says:

    patient @ 25 – Nope, not me. Although I agree that it’s probably fake. The first few were more amusing, now they seem to have crossed the line into unbelievability.

    deejayoh @ 26 – That is cryptic.

  28. 28
    Lake Hills Renter says:

    b @ 19: “Windows 7 and Office 2009, the only two things that actually make that company money”

    Bzzt. Wrong. Exchange sells well over $1b annually.

  29. 29
    Lake Hills Renter says:

    Eastside Realestate Agent @ 24: “What Real Estate training have you received? Do you have a license?”

    Mack? Is that you?

  30. 30
    deejayoh says:

    sorry – town hall at msft is the 23rd, so if there is going to be any announcement that will be the day. 15th was never a confirmed date

    As to Microsoft revenues, Server and tools is something like $10b now and growing faster than just about anything else

  31. 31
    Herman says:

    I think ERA’s “buy now or be priced out” quote is the phony giveaway. That’s a known inflammatory on this board.

    A real agent would have said that it’s a great time to buy due to price drops and interest rates at historic lows.

  32. 32
    Lionel says:

    “Tim, what part of my post was not factual? Can you do nothing better than just hurl childlike insults at me?”

    Well, how about the idiotic idea that Obama would be dim enough to increase H1B’s at a time when the economy will be losing a million jobs a month? Oh, and your advice to buy now or be priced out forever. That’s pretty stupid too. We’re headed at least another 30% down.

  33. 33
    b says:

    LHR –

    You are right, some of there server products and dev tools make money also. But the point is that its grown too far across for what is at the core an OS and business software company. Too much time and money was spent trying to chase other markets and now the recession provides a great time to re-evaluate those decisions.

  34. 34
    Tim says:

    In my opinion, server and tools is where MS is putting out some good products and they should focus hard there. THe rest of the company, not so much.

  35. 35
    Tim says:

    and to add to that, I think they can drive enterprise client upgrades by offering compelling features at the server level which require the new desktop OS to unlock. I worked for MS for 6 years many years ago and have since worked in the IT depts. at two publicly traded companies and in my experience nobody considered upgrading from XP to Vista for more than 3 seconds.

  36. 36
    Jillayne says:

    Bank of America rescue plan has been posted:


    we are slowly nationalizing the banks one step at a time. A billion here, a billion there.

  37. 37
    Objectivity says:

    Eastside Realtor-

    I have real estate licenses in AZ and WA, and I assure you that your accomplishment in gaining that license was not that impressive. Its a test for monkeys.

    Besides, what does memorizing how many feet are in a mile have to do with macro-economic analysis?

    As for your ideas:

    “Winter Hiccup” – just like SoCal had a 2008 hiccup…down 40%

    “Foreign Wok visas will issued so competition will be tough”…..1) we don’t have jobs for them so there is no incentive to come here; and 2) even if we did have jobs, do you really think a bank would loan them any money to buy a home??

    My advice to you: concentrate on rentals…there is still a good market for that. I know the money isn’t as good, but its better than most of your fellow realtors.

  38. 38
    offline says:

    It’s a “fact” that RE is expensive compared to income, here is Seattle and elsewhere so it needs to come down for sure. Now I have this weird question and would appreciate comments – going back to macroeconomics and how this bailout, deficit, foreigners (china, Japan, Korea etc) not able to fund our debt gong fwd it looks like, and it’s a topic of discussion everywhere, possible rise in interest rate in near future combined with Dollar depreciation big time. Let’s say if an event like this really happens, this is what I think would occur –

    Dollar value – depreciates compared to other currencies (I don’t know which one that would be, yuan, euro, rambini?? And any global financial collapse)

    U.S Interest rate – Increase to ~ 15-20%?? (To fight inflation and depreciating dollar and no one would fund as any more) or 0% (print, print, print… but worthless dollar like Zimbabwe currency).

    Home loan – remain the same?? i.e. now the house is cheap since dollar is worthless??

    Income/salary – increase, same argument, cheap dollar and company can pay 6 figures easily??

    Food/Commodities – Very expensive like Brazil

    Thoughts?? May be its good time to buy house 

  39. 39
    softwarengineer says:


    Their plan is to skip over the vista horizon into the new O/S, albeit even keeping XP without automatic updates continuing may cause what problem?

    S/W compatibility had better be working adequately on the next version(s) beyond XP, no ones that stupid anymore to buy an office load of new computers with O/S only to find out a good portion of their supporting S/W might as well be trash. Some of the supporting XP compatible S/W costs 10 times as much as the computer and O/S.

    I talked to a MSFT sympathizer tonight and she said although her office still uses XP, the vista horizon is glowing anyway. Sounds like the pink pony blogger who thought more H-1Bs designing more vista horizons are needed during layoffs. She was in total denial of the MSFT stock decline too. I guess Pink Ponies need glasses and hearing aids.

  40. 40
    Robert says:

    I think the key will be bailout. Everybody is cheering every bailout. All industries should unite and ask for bailouts. Even Boeing should ask for bailout or any company that is seeing its revenue going down. The bailout could keep every companu humming along with no layoffs.

    The only small issue is that it would be a big cover up and the landing would be eventually hard.

  41. 41
    Gary says:

    To Deejayoh @ #4:
    All I can find is the 4th quarter 2007 report for MS located here: http://www.microsoft.com/msft/earnings/FY07/earn_rel_q4_07.mspx
    According to this report under total revenue the “client” portion was nearly as large as the “business” division and the operating income was actually larger.
    I know that server licensing come with “x” amount of client licenses but generally those are stand alone (consumer) machines and small businesses likely just purchase those machines with O/S included from the local shop, not licenses in bundles.

  42. 42
    deejayoh says:

    gary –
    At MS, Client = OS = Windows. That does not equal the consumer business. The bulk if it is OEM – much of which goes to businesses, and there is a lot of enterprise license sales in there too.

    Server licenses come with CALs, which are not OS licenses. They are rights to attach clients to servers.

    I spent 4 years working on the business side of windows.

  43. 43
    buystocks says:

    Regarding MS server licensing, I got one thing to say, linux. Of course, this is related to this blog entry because as people lose jobs and foreclose they will naturally move to free open source software options such as linux.

  44. 44
    Thomas B. says:

    Here is a hypothetical.

    I’m mostly against bailing out homeowners because in the process you are also bailing out speculators and flippers, who helped cause this mess. Plus you put the loss on the banks which is tough to bear.

    What happens if we say, no relief for speculators/flippers. Saying instead that they can’t walk away from their homes and loans, no matter how underwater they are. I.e. the bank may not foreclose on their homes, but the banks are allowed to seek liens on everything the speculator/flipper has, including bank accounts.

    I think this would have speculators/flippers thinking twice about walking away from their homes. It would keep them on the hook for tax payments. The speculators/flippers would bear the majority of the risk of loss, which is where it rightfully belongs. Finally, banks don’t have toxic loans of speculators/flippers.

  45. 45
    CheapSouth says:

    Meanwhile; it was just announced that Circuit city could not come up with an agreement with creditors so it will liquidate.

  46. 46
    patient says:

    “Even Boeing should ask for bailout”. No need for that since it’s already being taken care of since what I hear the Airforce have already submitted a request for a proposal on a new Airforce 1 fleet.

  47. 47
    buystocks says:

    Thomas B. – Your punishing the wrong folks. Whomever covered these risky loans (banks and investors) should bear the loss. How would you identify the flippers/speculators vs people whom genuinely bought a house? Perhaps a yearly ratio of purchased pounds of granite and stainless steel per year…

  48. 48
    Jillayne says:

    Thomas B,

    “but the banks are allowed to seek liens on everything the speculator/flipper has, including bank accounts”

    We’d have to change each state’s Deed of Trust Act or other laws governing mortgage lending, or enact a federal law. The borrower might be able to get the lien discharged in bankruptcy.

    Speculators are more likely to walk when things go downhill. Banks should have charged way higher rates and fees on these transactions. We must also remember that plenty of folks lied on their application and indicated “owner occupied” making it hard to tell who to bail out, as you mentioned.

  49. 49
    Joel says:

    …they will naturally move to free open source software options such as linux.

    Just because the bits are free doesn’t mean the cost to switch and retrain is zero. If anything I would expect companies to stick with whatever they have (whether it be *nix, Windows, OS/2, etc.) during a recession to minimize costs associated with upgrading/switching, training and hiring new employees.

  50. 50
    Garth says:

    The combination of the WARN act, and the regulations regarding layoffs and H-1B dependent companies (which Microsoft probably is, considering that they hired over 3000 H-1B employees in 2006 alone) make doing across the board layoff of X% of full time employees pretty unlikely.

  51. 51
    Thomas B. says:

    buystocks @ 47

    To say that speculators/flippers are innocent in this fiasco is naive. To let them off scot-free is ridiculous. Even with my proposed plan, banks still will be hurt since I doubt speculators will pay on the loans, and the banks probably won’t find enough assets to cover their loss. As to how do you tell a speculator… it’s easy, if they own more than one home, then they are a speculator. Sorry, if this includes well-off folks that have two homes, but if you are well-off and get into trouble with one of the homes, then maybe you weren’t well-off enough to own two homes. Why should I, as a taxpayer, bailout this idiot?

    Jillayne @ 48

    There are two sets of laws for bankruptcy; federal and state. Also, the law determines what you can and cannot discharge. E.g. tax penalties, student loans, and other government fines are NOT dischargeable in bankruptcy.

    I have no doubt that new laws will be enacted in 2009. It shouldn’t be a problem to include this in one of the bills.

    Finally, not all mortgages come from banks. There are mortgage lenders that originated a lot of these junk loans.

  52. 52
    Jillayne says:

    Hi Thomas,

    Thanks for the clarification. All excellent points. Do you think the bankruptcy cramdowns will pass?

  53. 53
    David Losh says:

    Home Loans, mortgages, or second lien positions were never the problem. You are duped into believing that foreclosures are a bad thing for banks, investors, and lenders when if fact they end up with the asset.

    An investor/flipper will engage a straw buyer, corporation, or investment trust to go on to the next deal. There are no assets, bank accounts, or income tied directly to a shrewd or true investor.

    The real problems today are consumer credit. Consumer spending makes up two thirds of our GDP. The only thing floating that type of consumerism is credit. That credit generates a return of 20% to 50% on an unpaid principle balance. As the economy shrank those balances grew, home equity lines were drawn to pay off the inflated balances and money was churned into the system.

    The funny thing is that consumers using credit actually paid for the banks, investors, and lenders to own these now foreclosed on properties free and clear.

    In terms of the cram downs it’s another great thing for banks, lenders and investors. In my opinion the number of foreclosed properties is higher than anyone ever expected. A cram down would generate more immediate profit bypassing the foreclore process and getting an income.

  54. 54
    Thomas B. says:

    I never believe it when people say that a speculator/flipper cannot be found. Straw buyers, shell corporations, and investment trusts, all have fatal flaws. Piercing the veil of a corporation is a useful tool, but most average Americans don’t know about that legal principal. Again, if Congress or the states so wish, there can be laws passed to defeat these evasion tactics. After all, corporations, investment trusts, etc. are creations of the law. The law can limit those creations.

    2009 is the year of regulations; I have no doubt that there will be several laws passed that will affect everything from banks, to mortgages, to investment trusts, to credit, etc.

    As for the foreclosure = asset argument, in the very long term it is an asset, but banks don’t need assets in the very long term; they need money now. See Citigroup.

    As for cramdowns, I think my idea is a little different from the cramdowns proposed by Congress. Congress wants bankruptcy judges to be able to modify the mortgage, thus keeping the speculator/flipper on the hook for the debt. I advocate that mortgages are not dischargeable and the lender can put liens on the assets of the speculator/flipper. After all, a mortgage is a contract.

  55. 55

    […] in 2009? Really? And how exactly are foreclosures going to “continue to slow,” when the latest data shows that they haven’t even started to […]

  56. 56

    […] in 2009? Really? And how exactly are foreclosures going to “continue to slow,” when the latest data shows that they haven’t even started to […]

  57. 57

    […] in 2009? Really? And how exactly are foreclosures going to “continue to slow,” when the latest data shows that they haven’t even started to […]

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