Still a “Buyer’s Market” in Many Neighborhoods

Time for another update on the various neighborhoods around King County.

First up is a map of SAAS across King County:

Only three areas were strongly in “seller’s market” territory in April (SAAS <1.75), while twelve were still relatively strong “buyer’s markets” (SAAS >2.25). The remaining fifteen markets were more or less balanced.

Next, let’s have another look at the viz of neighborhood YOY median price changes that we introduced in March.

Not too surprisingly, median prices were down from April 2010 in twenty of the thirty neighborhoods around King County, with the few seeing gains being centered around Seattle and the Eastside.

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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.

28 comments:

  1. 1
    Leigh says:

    And given that mortgage applications have dropped off the cliff, there will be less buyers for those buyers’ markets. Hmmm, more pressure on asking prices? It’s gonna be an interesting summer.

    Home Buyer Credit Expiration Sinks Mortgage Applications by 27%

    http://www.theatlantic.com/business/archive/2010/05/home-buyer-credit-expiration-sinks-mortgage-applications-by-27/56962/

  2. 2
    LA Relo says:

    You really can’t compare any data from the last 8-12 months with any similar historical data, at least not accurately.

    The ludicrous amount of money the Gov’t has stepped in and burned in the name of saving banks and homeowners from the consequences of their own decisions skews any relation between the data.

    Well, I suppose you *could* compare it, but to see a change to the upside in light of Gov’t bailouts and call it a recovery is simply naive.

  3. 3

    Mortgage Payment Delinquencies Hit an All Time Record at 10%

    Article in part:

    “…MORTGAGE TROUBLES RISE: More than 10 percent of homeowners had missed at least one mortgage payment at the end of March, a record high the Mortgage Bankers Association says.

    FORECLOSURES UP TOO: More than 4.6 percent of homeowners were in foreclosure, also a record….”

    http://abcnews.go.com/Business/wireStory?id=10691630

    It would be interesting to also see delinquencies/foreclosures % as a basis of homes puchased the last 5 years….IMO about a 1/3 of these are in mortgage payment delinquency and about 15% of these are in foreclosure. Correct me if I’m wrong, but it’s also a well known fact that 1/3 of the homes sold by 2009 were at a loss and it’s worse now.

  4. 4
    Trigger says:

    Wow! So prices in Kirkland, Bellevue are going up! Wow. Cool stuff. Who said that it is still just a buyer’s market? When is the market in Kirkland going to heat up?

  5. 5
    ray pepper says:

    RE: Trigger @ 4

    When is the market in Kirkland going to heat up?

    Easy answer….It will heat up when all the markets do. Everyone is looking for another round of stimulus to buy again. Rates are here already…Now its the steady grind down of home prices over many years. We will see what appears to be a never ending supply of short sales .

    People will only be stupid for so long!

  6. 6
    CCG says:

    By LA Relo @ 2:

    You really can’t compare any data from the last 8-12 months with any similar historical data, at least not accurately.

    I don’t know, did the Soviet Union keep any housing data?

  7. 7
  8. 8
    Matt Cunningham says:

    Hey Tim,
    I think there is a syntax typo in your SAAS map data–the YOY Change in Median data is not showing up properly when you mouseover the bubbles.
    Matt

  9. 9
  10. 10
    kurt says:

    RE: CCG @ 6
    Great question ;-)

    You might be aware of Dimitry Orlov and engineer/author who described the collapse of the Soviet Union’s economy. He wrote a bit about how their particular housing structure (socialized) actually aided them in mitigating the negatives during their collapse.

    http://cluborlov.blogspot.com/

    http://docs.google.com/Doc?id=dtxqwqr_20dc52sm

  11. 11
    The Tim says:

    RE: Matt Cunningham @ 8 – You’re right. Thanks for catching that. It should be fixed now.

  12. 12
    Scotsman says:

    RE: Greg Perry @ 9

    Yup, looks like sales are heating up. But they came at the expense of a 9% drop in prices. “What fools these mortals be”- I think I’ll wait another year or two- and 25% down- before jumping into the pool. But thanks for the quick summary, Greg.

  13. 13
    David Losh says:

    RE: kurt @ 10RE: CCG @ 6

    It’s interesting that we do have Russia as an example of economic collapse. It did happen. Reading the articles in kurt’s links is a little painful, but there are some excellent points in both.

    Housing and energy are two of the big items that need to be addressed no matter what the economy does. We are better prepared here, in the United States, to deal with economic misfortune.

    How the articles relate to this post is that we have, globally, built millions of housing units. They are in general over priced, globally. Here in the United States we have millions of carpy little condos and town houses thrown up all over the place that are at least functional. You may not like McMansions, but most of them were designed to accommodate more than one family. Most new construction was built with at least one rental unit in mind.

    As the economy continues to decline small bands of entrepreneurs can at least provide housing to the millions of people who are unemployed. Those unemployed, in this country, can still work for food.

    So, in the face of economic collapse we have the housing part covered. A little shared housing, a few tent cities, and were good.

    Of course the price of Real Estate might decline given the circumstances.

  14. 14
    LA Relo says:

    RE: CCG @ 6RE: kurt @ 10RE: David Losh @ 13

    The only problem is that while Communism in the Soviet Union may have had some positive effects on homeowners, our version of Socialism only helps the banks.

    “publicly subsidized! privately profitable! that’s the anthem of the upper-tier (the puppeteer untouchable). we focus a moment, nod in approval and bury our head back in the bar-codes of these neo-colonials. While our former nemesis (ah, the romance!): the nation-state, now plays fund-raiser for a new brand of power-concentrate…”

  15. 15
    The Danza says:

    RE: LA Relo @ 14 – Not everyday you see a Propaghandi song on a real estate website.

  16. 16

    By Scotsman @ 12:

    RE: Greg Perry @ 9

    Yup, looks like sales are heating up. But they came at the expense of a 9% drop in prices. “What fools these mortals be”- I think I’ll wait another year or two- and 25% down- before jumping into the pool. But thanks for the quick summary, Greg.

    You surprise me, Scotsman. I had you pegged as someone who believed that prices were going to go down 90%, and that you’d be able to barter some guns and canned food for a house. Really? You might jump into the pool in a year or two? Or did you literally mean swimming?

  17. 17
    CCG says:

    RE: kurt @ 10 – Thank you – his “Reinventing Collapse” is definitely on my list of things to read when I can get to it :-)

  18. 18
    Scotsman says:

    RE: Ira Sacharoff @ 16

    They might continue down, but in two years the worst will be over, at least out here. Prices are already down 35-40% on a lot of stuff and still very little is selling. Not many want to live in the woods I guess.

  19. 19
    Daniel says:

    By Scotsman @ 12:

    Yup, looks like sales are heating up. But they came at the expense of a 9% drop in prices. “What fools these mortals be”- I think I’ll wait another year or two- and 25% down- before jumping into the pool. But thanks for the quick summary, Greg.

    Sales heat up in periods of panic sales as well. Just usually houses aren’t something sold in panic.

  20. 20

    By Scotsman @ 18:

    RE: Ira Sacharoff @ 16

    They might continue down, but in two years the worst will be over, at least out here. Prices are already down 35-40% on a lot of stuff and still very little is selling. Not many want to live in the woods I guess.

    Where’s “out here”?
    Cause I was gonna offer you my house in exchange for ten AK 47s, ten cases of Stagg’s chili, ten bottles of bourbon, and ten gallons of water.

  21. 21
    Scotsman says:

    RE: Ira Sacharoff @ 20

    Preston/Fall City

    You can’t have the chili.

  22. 22
    deejayoh says:

    Here are some interesting stats I pulled off of redfin searches of pending listings that might inform the “pending” discussion. Looks like short sales are >20% of pendings in most markets
    – 21% of Seattle core pendings are short sales. This was based on a map covering Ballard to Laurelhurst and south to Leschi. 72 of 341 pendings were short sales
    – 35% of Bellevue pendings are short sales (98 of 275)
    – 31% of Renton pendings are short sales (110 of 352)
    – 47% of Kirkland Pendings (78 of 163)

  23. 23
    drshort says:

    By deejayoh @ 22:

    Looks like short sales are >20% of pendings in most markets

    20% of what’s currently in pending status is a short sale or are 20% of what’s turned pending this month a short sale?

    If it’s true that short sales take forever to to closed, then we should expect the percentage of pending status that are short sales to grow and grow. The short sale pendings will just stack up while the regular pendings will turn unto closed sales within 20 – 30 days.

  24. 24
    ARDELL says:

    I ran some stats a few days ago on Redmond 98052 solds YTD. There were 137 total of which only 13 were bank-owned or short sales. 10%. 6 of one and 7 of the other. A colleague of mine I met with on Saturday is saying that the banks have a great advantage to foreclose and hold the properties vs selling them short. So those pendings could turn into foreclosures, but not necessarily quickly make it back to market as a short sale.

    Often people will fake a pending contract to postpone the foreclosure so they can live in the house longer, so all pending short sales are not necessarily valid contracts to purchase and sell.

  25. 25
    ray pepper says:

    “Often people will fake a pending contract to postpone the foreclosure so they can live in the house longer”

    Yes, and I have observed this first hand over the last 3 years in Nevada with all the investors. Banks have become very aware of this as well as:

    1. Writing bad checks/cashiers checks 72 hours prior to trustee sale to delay.
    2. Change Title holders of properties to delay.

    Heres a bunch more I have observed:

    http://housingdoom.com/2009/01/23/15-ways-to-delay-foreclosure/

  26. 26
    dancingeek says:

    By ARDELL @ 24:

    Often people will fake a pending contract to postpone the foreclosure so they can live in the house longer, so all pending short sales are not necessarily valid contracts to purchase and sell.

    That’s an interesting strategy. If one knows that it takes months for the bank to close a short sale, and getting a short sale offer appears as a sign of good faith, then that sounds like a way to stay foreclosure.

  27. 27
    S-crow says:

    RE: ARDELL @ 24RE: ray pepper @ 25

    You’re kidding me? People are writing dummy/false contracts (to go pending) with the full intent of defrauding the lender to delay foreclosure and live in the home for months on end for free, or even rent it out and collect the undocumented or under the table cash income? (tongue in cheek)

    Seriously, what are the managing real estate brokers/owners doing to curb this?

  28. 28
    deejayoh says:

    By drshort @ 23:

    By deejayoh @ 22:

    Looks like short sales are >20% of pendings in most markets

    20% of what’s currently in pending status is a short sale or are 20% of what’s turned pending this month a short sale?

    If it’s true that short sales take forever to to closed, then we should expect the percentage of pending status that are short sales to grow and grow. The short sale pendings will just stack up while the regular pendings will turn unto closed sales within 20 – 30 days.

    20% of what is currently pending. I am not sure if at the end of the month, what is reported is what is currently pending or what has turned pending. Sounds like from Ardell’s comment that the MLS reports what has turned pending

    I was just struck by the absolute number of listings. I am sure many of them are stuck in the pipe

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