October Housing Market Stats Preview

Now that October is behind us, let’s have a look at the monthly stats preview. Most of the charts below are based on broad county-wide data that is available through a simple search of King County Records. If you have additional stats you’d like to see in the “preview,” drop a line in the comments and I’ll see what I can do.

Here’s your preview of October’s foreclosure and home sale stats:

First up, total home sales as measured by the number of “Warranty Deeds” filed with the county:

King County Warranty Deeds

County sales as measured by warranty deeds were up significantly (16.7%) from last year in October, and marked another month-to-month increase (5.2%). This is no surprise, since as I mentioned last month, the impending expiration of the $8,000 mortgage subsidy is definitely having an effect on the people who have been duped into thinking we have already hit bottom.

Next, here’s Notices of Trustee sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Foreclosure notices actually declined from September, which could signal either an easing in the foreclosure “crisis” or possibly just a continued lag as the pipeline from SB 5810 continues to fill. We probably won’t really know for sure which one it is until sometime next year.

Here’s another measure of foreclosures, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

A new record high in October, lagging the peak month for Trustee Sale notices by four months.

Lastly, here’s an approximate guess at where the month-end inventory was, based on our sidebar inventory tracker (powered by Estately):

King County SFH Active Listings

Looks like listings will be down around 13% year-over-year, and 6% month-to-month.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

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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.

26 comments:

  1. 1
    scotsman says:

    Continued deterioration. Despite claims of a rebound in sales volume or prices, the underlying fundamentals suggest that both the consumer and the banking system are weakening. The consumer is increasingly either unemployed or under employed and unable or unwilling to meet prior obligations. Until this changes the economy will continue to weaken. The banks continue to take on unrecognized losses at an increasing rate with steadily rising foreclosures. The negative feedback from both will ultimately push housing prices lower.

  2. 2
    patient says:

    It’s kind of sad to see how esaily manipulated people are by incentives. I for one are suprised and had higher hopes that people would not so easily be tricked to bite on this poisonous apple. It’s one thing to entice buyers in markets that have fallen from say $120k to $90k with a $8k tax credit or a market that has fallen from $400k to $200k. There the gamble to get off the sidelines given the government stimulus is understandable but in a market like Seattle where the downside risk is still huge and the $8k is wiped out in a blink of an eye by just a small percentage of continued weakness is crazy and down right sad.

  3. 3

    The sales volume for King County SFR should be not only above October 2008, but fairly close to October 2007. Of course, the median price will be significantly below both, but all not that much below 2008 (<10%).

  4. 4
    Cheap South says:

    RE: patient @ 2

    I agree; the $8K is gone by next April.

    Basic math is still challenging for the average Joe.

  5. 5
    Kevin says:

    I personally doubt the price is going to fall further (especially good zip codes) – barring another catastrophic event in the economy (2nd stock market crash after mini-boom, commodity market crash, crash in Chinese market, etc).

    I am disappointed the 8K credit is extended – was hoping to get some deal this winter. But on the other hand, it does provide a cushioning & confidence to the market (good for buyer as well), I think by next June the worst should have passed (again with the assumption above).

    I am a sincere buyer and I am starting to look now.

  6. 6
    patient says:

    RE: Kevin @ 5 – Kevin, do yourself a favour and consider fundamentals. Are you comfortable in you belief that prices will stabilize at an above historic level with 10% unemployment, record personal and national debt levels, record foreclosures, stagnant vagues, relatively tough lending standards and interest rates that can’t go much lower?

  7. 7

    RE: patient @ 6 – Kevin, do yourself a favor, and don’t listen to anonymous posters on the Internet for financial advice.

  8. 8
    scotsman says:

    RE: Kevin @ 5

    Yeah, Kevin, don’t listen to anonymous posters, even if they do ask perfectly reasonable questions to provoke thought. But do click on Kary’s name- it will link you to SREP and his email. Feel free to contact him if you want help with that house purchase. Hungry sharks are circling.

    Or, if you have any knowledge of economics, take a minute to read the link I’ve posted below and ponder what effect a 3-4% jump in interest rates will have on both our fragile economy and home prices. I too am anonymous, but I don’t see 50-60% off peak as at all unreasonable given what’s coming. But you get to make the call.

    http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5754447/US-lurching-towards-debt-explosion-with-long-term-interest-rates-on-course-to-double.html

  9. 9
    mydquin says:

    @6 – You might want to check your facts. Consumer debt is not a historic highs. It has actually returned to around 2006 levels. The fact is that price-to-income and price-to-rent ratios have returned to historic levels. The CSI has returned to the trend line set before the exotic mortgage business took off.

    @8 a 3-4% jump in interest rates would be bad. However, you are going to have to provide some rationale for making such a dire prediction. The money that the fed and the stimulus bill have been pumping into the economy has basically just replaced the money supply withdrawn from the economy by the banking industry. So I don’t know why you make such a prediction.

    There will be another round of foreclosures when Alt-As reset next year. Unemployment is a relevant issue, but we are not going to see 50-60% off peak in Seattle proper. I could see another 5-10% drop, but late 2010 is going to be the bottom if it even drops anymore… and chances are that any price drop from here would be quickly erased because it would essentially be an over-correction. People who are more concerned about their careers and families than squeezing an extra $20K out of their home “investment” are already getting back in the market.

  10. 10
    Kevin says:

    Thanks guys for various replies! =)

    I do share the concern about the state of our country – huge national deficit, potential future hyperinflation from the massive cash injection, net loss of jobs. And to be frank, even now I have an unsure feeling in my stomache about buying a property (making a huge half-million investment).

    But my personal take on the current situation is: if you are a happy renter, feel absolutely free to do so – rent price is dropping like crazy and house price will likely not see another bubble any time soon.

    To put it cornily: I still have faith in this country – which means not another catastrophe in short term + the economy will turn around, either quickly or slowly. If some one wants to buy a place, now is not a bad time: you still have some bargaining power with the seller during the slow winter months, interest rate is super low (which means you get free money when the hyperinflation kicks in).

    If my faith in our country is misplaced, then Microsoft and Amazon and Boeing will wreck the local economy, house price will collapse. I will definitely be screwed. =)

    Thoughts?

  11. 11
    buystocks says:

    RE: Kevin @ 10
    Not just inflation, but deflation is also a possibility. My take on this situation is that there are many possible scenarios with no way to predict what’s gonna happen. This is why I’m still not buying; I’d rather miss the bottom and buy a leveraged asset for more in the future than buy a leveraged asset when unsure (speculation) and suffer potential financial ruin.

  12. 12
    what goes up must come down says:

    RE: mydquin @ 9 – Oh no someone is smoking the green weed.

  13. 13
    what goes up must come down says:

    RE: Kevin @ 10 – what is the big hurry? a place to live is just that a place to live nothing more or less.

  14. 14

    RE: scotsman @ 8 – I hardly try to get buyers or sellers from this site. You’ll notice that Kevin posted a long time prior to my post, and I only posted because of Patient’s post. I’d seen Kevin’s post earlier and had no comment on it.

    Anonymous people giving others specific financial advice is one of my pet peeves, from back in the say I followed stock forums. Ignoring the fact that anonymous posters probably had no training or credentials, not everyone’s decision is based on the short or mid-term market outlook, especially when it comes to houses.

  15. 15
    Obobo says:

    Re:13 Many people have just a tad bit more attachment to their homes.

  16. 16
    Ray Pepper says:

    Kevin, housing prices still will be dropping for years. However, that doesn’t mean the GEM you buy will tank. There are tremendous opportunities I see every day, week, month if you are patient. Continue your due diligence and watch your target area. Attend the county auctions like we do. It will assist you in VALUE of a property during a deteriorating asset environment.

  17. 17
    patient says:

    RE: Kary L. Krismer @ 14 – Specific financial advice? To ask someone to consider fundamentals that impacts housing prior to buying? That’s not specific Kary it’s very generic.

  18. 18
    patient says:

    RE: Kevin @ 10 – I wish you happy hunting Kevin but in my experience fundamentals generally beats faith when it comes to financial decisions.

  19. 19
    DrShort says:

    RE: patient @ 18

    I believe the fundementals around price/rent and price/income have come down to the range of historical norms.

  20. 20
    scotsman says:

    RE: DrShort @ 19

    True, but now rents are falling, which will continue to bring housing prices down. Forest, not trees.

  21. 21
    DrShort says:

    RE: scotsman @ 20

    Yes, fine, but you realize over the past 18 months there’s been a big shift on the housing fundementals. 18 months ago no caveats were needed — the data was clear and undeniable that housing prices were way too high.

    Now, you hear “well, you can’t trust the {insert housing data metric} that because of …” whenever talk of housing fundementals.

  22. 22
    patient says:

    By DrShort @ 19:

    RE: patient @ 18

    I believe the fundamentals around price/rent and price/income have come down to the range of historical norms.

    Ok, so let’s change that to at or above historic norms for income/prices and rent/rpices. Why would prices stabilize at historic norms when we are in the biggest recession since the great depression and unemployment is vey close to record highs since the world wars and increasing?

    I also here rumours today that MS is laying off more people. Add that to the Boeing news and if true it doesn’t strengthen fundamentals locally. If you see fundamentals that supports a strong housing market please let us know what they are.

  23. 23

    RE: scotsman @ 1
    Yes, Welfare to the Rich Has Propped up the Stock Market this Year….

    But, ask Main Street what they think of Wall Street and another shoe will be flying towards Bush’s face.

    Ask the approx 50,000,000 Lagging Indicators [unemployed and severely underemployed] in America when is their getwell? 50 years from now, at our present welfare to the rich and elite course?

    I’ve said it before, I’ll say it again….there is no quick fix, get used to the slump.

    If you’re lucky to be working with a half-way decent income, its actually a good time to shop for those $500 50″ Plasmas and two for one dining out coupons….I just bought some internet boxer shorts for my son for 70% off and free shipping…..trips are cheap too, its a good time to grab up travel bargains too. But buy a house right now? Only if you have to and I’d add too, if its with mostly cash or old equity.

  24. 24

    By patient @ 22:

    By DrShort @ 19:

    Add that to the Boeing news and if true it doesn’t strengthen fundamentals locally. .

    How does the fact that they’ll be running two 787 lines locally through at least 2013 not strengthen the local fundamentals? Those planes don’t just assemble themselves.

  25. 25
    patient says:

    RE: Kary L. Krismer @ 24 – Sorry if it was unclear so I’ll try to explain. Future outlook, Boeing is obviously investing in production elsewhere where they believe it’s more cost efficient. It’s a bug that easily spreads once it has taken hold on the finance guys, good or bad.

  26. 26

    RE: patient @ 25 – Well, Boeing management is clearly inept because they handled this whole thing wrong. I’m not really sure it matters that they pissed off Sen. Murray, and the rest of us here in the PNW, but they didn’t have to.

    What they should have said is that two lines are not enough, and that therefore they’re going to create three, two here and one in SC. That’s basically what they’re doing, but the second one here is “temporary” in that they aren’t putting the utilities in the plant underground. I suspect that’s probably because they don’t have the time to do that. They’re way behind schedule producing those things and they need to make it up fast.

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