Quick Look: August YTD Pending and Closed Sales

Here’s an idea for a new occasional feature. In “quick look,” I’ll create a few charts, all depicting different takes on the same set of data. The charts will be presented with little to no commentary, to allow the graphs to speak for themselves.

This week’s theme is YTD pending and closed sales as of August.

King County Pending & Closed SFH Sales

August YTD % Change YOY - King Co. SFH Sales

Yearly Orphaned Pending Sales as of August

Let me know what you think of the “quick look” concept.

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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.

16 comments:

  1. 1
    AMS says:

    How about a quick look at total market volume, being average sales price * the number of closed sales. Sure “closed activity” might be up, but when the total market volume is eroding, the overall conditions remain illiquid.

    Take note also that agents divide up the total market volume * average commission. If the average commission is constant, then a downward total market volume indicates an illiquid market where agents struggle. With many of the discount agents available, I suspect that the average commission is falling. I also suspect that the total market volume is falling. A double whammy for agents, but prospective sellers are sensitive to the total market volume.

    (This analysis is without respect to the fact that the market volume could increase, or obviously decrease, while each and every home decreases in market value.)

  2. 2
    waitingforseattletocool says:

    For a long time, I tracked Active – STI on the Windermere website. The pending numbers at months end were about 3x the number of Active – STI (which are now Pending Inspection).

    My question for anyone in the business, during normal markets (not 2004-2007), in general, what percentage of properties subject to inspection failed to close?

  3. 3

    I Think Scotsman Hit the Nail on the Head on a Past Blog

    Your numbers are great and they clarify the massive effect Pending Sales are having on the market, as well as, how this impact cumulates worse, MTM.

    But Scotsman also brought up a wonderful point yesterday, as isn’t the volume flow decrease impact a moot point as the volume flow impact of qualified/ready buyers dwindles to nothing. Couple that with pig-headed sellers unwilling to drop prices [hence, pulling the listed homes off the base] and the home sales stream shrinking to a trickle in Seattle is now normal volume flow, i.e., the recent negative percent closed sales say it all.

    The statistical base needs a completely new Paradigm, with trickle stream activity.

  4. 4
    AMS says:

    RE: waitingforseattletocool @ 2 – If the found defects have to be disclosed to future buyers, then the seller has already suffered a loss. My own personal observation, which is not scientific, is that sellers are generally more willing to fix known or found defects today. In the past the sellers were not willing to repair, as there was a line of willing buyers standing right outside waiting for the deal to fail. Today the repairs are made, if the money is available. I am not sure if this impacts the closing rate, but the net is a lower “profit” (or larger loss) for the seller.

  5. 5
    Irene Dorang says:

    RE waitingforseattletocool, a suprisingly low percentage of transactions failed to close due to the inspection during ‘normal’ years, and I didn’t notice a difference during 2004-2007 – I don’t know the exact numbers but in my own case I’d estimate no more than 2 or 3% and I’d be amazed if the norm was over 5%, probably less. (I don’t know why this comment shows as anonymous, BTW, but can’t change it now apparently.)

  6. 6
    Andy says:

    RUSSELL LEAVING TACOMA
    What are the ramifications to Pierce County Real Estate?
    I imagine Seattle (hyper inflated) will still continue down
    But Gig harbor is going to be full of “FOR SALE” signs, particularly in the high end
    I’m looking in Gig Harbor, and I’ve told my “Real Estate is Local” broker to determine the ramifications to teh town…..
    I think the fundamentals are awful for Tacoma area buyers…

  7. 7
    James Baker says:

    Wow, that’s beautiful. Love all 3 charts and the “quick look” concept.

  8. 8
    Kary L. Krismer says:

    RE: waitingforseattletocool @ 2 – Comparing the failed to close is apples and oranges because it’s largely different reason. But I think the orphaned pendings show that pretty well. Almost all of that is due to short sales, IMHO.

    BTW, Tim, I like this system of just having the graphs.

  9. 9
    Kary L. Krismer says:

    This is the gross sales volume for King County SFR since June 2007:

    $1,514,502,808.00
    $1,489,302,983.00
    $1,372,040,670.00
    $990,445,565.00
    $914,140,521.00
    $824,190,825.00
    $716,855,780.00
    $545,408,076.00 Jan 2008
    $610,102,304.00
    $811,218,699.00
    $853,586,646.00
    $844,380,999.00
    $888,940,960.00
    $869,645,062.00
    $800,022,111.00
    $695,189,500.00
    $641,684,267.00
    $414,047,216.00
    $458,231,108.00
    $305,401,532.00 Jan 2009
    $312,994,737.00
    $407,832,920.00
    $451,236,756.00
    $586,631,936.00
    $798,315,730.00
    $801,452,344.00
    $734,645,265.00

    Volume is clearly more important than price for both real estate agents and state excise tax collections.

  10. 10
    AMS says:

    RE: Kary L. Krismer @ 9

    Thank you!

    I took your data and performed the following computation:

    Subtract the current month from the corresponding month a year prior.

    ($M)
    -625.6 Jun 2008 (Jun 2008 was $625M less than Jun 2007)
    -619.7 Jul 2008
    -572.0 Aug 2008
    -295.3 Sep 2008
    -272.5 Oct 2008
    -410.1 Nov 2008
    -258.6 Dec 2008
    -240.0 Jan 2009
    -297.1 Feb 2009
    -403.4 Mar 2009
    -402.3 Apr 2009
    -257.7 May 2009
    -90.6 Jun 2009 NOTE: Jun 2009 was -716.2 from Jun 2007
    -68.2 Jul 2009 NOTE: Jul 2009 was -687.9 from Jul 2007
    -65.4 Aug 2009 NOTE: Aug 2009 was -637.4 from Aug 2007

    Potentially the total sales volume has stabilized? Certainly there has been a big decrease in the sales drops, which are now under $100M for the last 3 months. Another observation is that the total sales volume is down by approximately 50% over the last two years. If average sales commission has remained constant, then agent revenue is down approximately 50%. I suspect, however, that the average commission is down too, thus the revenue is down well-over 50%.

    Revenue down 50%, yet fixed costs have remain constant. I recognize that over a two-year period some fixed costs might be adjusted to reflect the smaller size, but it’s a bumpy ride!

  11. 11
    ray pepper says:

    RE: Andy @ 6

    Why do you use a “real estate is local broker” ?? Seems you have been tossing this guy around for 2-3 years now. Hasn’t he found you a foreclosure yet? Short sale? Prices are down 30-50% in the 98332. Whats your problem in finding a Gem?

    Heres one you missed…………

    http://maps.google.com/maps?hl=en&source=hp&q=7207+93rd+st+ct+98332&um=1&ie=UTF-8&split=0&gl=us&ei=IH-oSte-DYbSsQPf6PyOBQ&sa=X&oi=geocode_result&ct=title&resnum=1

    Want more?

    29112508
    29008438
    29045706

    Andy whats up?

  12. 12
    Kary L. Krismer says:

    I love that last graph on orphaned transactions.

  13. 13
    Hugh Dominic says:

    I’d like a quick look at some measure of citywide total home equity by mortgage vintage. Meaning, how much equity is there in homes purchased in 1997 vs. 2007, 2008, etc.

  14. 14
    Redneck Nerd says:

    RE: ray pepper @ 11 – Ray – none of those three listing numbers show up either on Redfin or your own site.

  15. 15
    ray pepper says:

    Sorry Redneck. u r correct they are all PENDING and you cannot view them. Take my word for it they were GEMS. Theres always GEMS.

    Go to this auction Saturday. Great for titillation and I’m sure someone will score something that qualifies as a GEM!

    http://www.auction.com/

    My daughter has a soccer game in Gig Harbor and I’m the coach so I must miss the auction. But, normally I would be there.

    I went and looked at 9 properties. Here is the only one I liked. Target price under 60k…Will most likely sell for 80k+ but with 300.00 dues it makes it a tough sell in this environment.

    http://www.auction.com/property.php?auctionID=H-101&itemID=140288&venueId=733&start=0&flgRemoved=0&flgEscrowed=0

  16. 16
    Kary L. Krismer says:

    By Redneck Nerd @ 14:

    RE: ray pepper @ 11 – Ray – none of those three listing numbers show up either on Redfin or your own site.

    With a little work you too can see the GEMS! Just Goggle: 29045706 “gig harbor”

    Then find a site that Google has cached, like the Caldwell Banker site, and look at it.

    That might not work for the one ending in 438 because it’s a short sale that’s been pending for over 4 months. I doubt Google keeps things cached that long.

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