February Reporting Roundup: Super Distressed Edition

It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

First up, let’s have a look at the source material from the NWMLS itself. Here’s their press release: February housing activity yields “reason for optimism”

In King County, the median selling price for last month’s completed transactions was $320,000, down about 6.8 percent from a year ago. For the four-county Puget Sound region, last month’s median price for single family homes and condos that sold during February was $262,250.

An old ruined house front by Flickr user Great Beyond
photo by Flickr user Great Beyond

Brokers point to distressed properties as a major reason for depressed prices.

Jacobi said his company’s tracking showed distressed properties accounted for 37 percent of single family home sales in King County in February as compared to 30 percent a year ago. Most of that growth was from sales of bank owned properties, he noted.

Distressed properties continue to drag down home prices, Jacobi remarked. “Since they can sell for 30-to-40 percent less than non-distressed homes, we expected a price drop. In Windermere’s analysis, if you take out the distressed sales for February, the median home price jumps from $334,000 to $390,000.”

Of course. That makes perfect sense. If the numbers aren’t saying what you want them to say, just keep removing low-performing segments from the data until you get the result you were wishing for.

Read on for my take on this month’s local news reports.

Eric Pryne, Seattle Times: Median home price in King County drops in February, dragged down by repos

Home prices plummeted to new post-boom lows in February, dragged down by a continuing surge in lower-priced “short sales” and bank resales of repossessed homes.

…distressed sales are driving much of the market, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, and that won’t end anytime soon.

“It’s going to be a problem for us to deal with for the rest of this year, and perhaps a little beyond,” he said.

Standard & Poor’s estimated in another recent report that, based on recent sales rates, it will take nearly five years to clear all the “shadow inventory” — homes that are in foreclosure, or are about to be — in King, Snohomish and Pierce counties.

I tend to think it will take more than a year to work through all these foreclosures. Especially when prices are continuing to fall and unemployment is still extremely elevated. The fact that the NWMLS and its members don’t seem to want to face is that “distressed” inventory is going to be the main segment of the market that drives prices over the next few years.

Aubrey Cohen, Seattle P-I: Area house prices post largest drops since 2009

This is hitting now because lenders that have been sitting on foreclosures or short sales (where lenders accept less than they’re owed because a property is worth less than the mortgage balance) are starting to make deals, Crellin speculated. “I think we’re seeing some of that market clearing going on.”

But the area still has a lot of this inventory to clear, he added. “On the sales side we’re probably above where the bottom was. Price side, we’re probably going to continue to struggle for the remainder of this year.”

Glenn Grellin and I are in agreement again. With these ever-lower prices, sales basically have nowhere to go from here but up. I’m not saying we’re going to get anywhere near the breakneck sales pace of 2005, but we’re not likely to be testing new lows this year, either.

Mike Benbow, Everett Herald: Home values in Snohomish County down 13.6%

Bob Maple, owner-broker at the John L. Scott office in Everett, said bank-owned homes and short sales are reducing prices.

“The bank-owned (homes) drag down the prices,” he said. “These banks don’t like to sit on this stuff. It’s priced to sell.”

Maple said that in January more than 30 percent of the homes sold were by banks looking to get houses off their books.

Add short sales and the number is larger, complicating the county’s real estate market. “It’s a large chunk of the market,” Maple said.

Which is exactly why it makes no sense at all to pretend that these sales don’t exist.

Kathleen Cooper, Tacoma News Tribune: Home-sales prices decline in Pierce County

OB Jacobi, president of Windermere Real Estate Co., said in the release that the drop stems from the effect of distressed properties on sellers. People are reluctant to compete with the prices of properties that are bank-owned or going through foreclosure, so they’re holding off on listing their home.

Distressed properties generally sell for 10 to 15 percent less than others, but some sell for even larger discounts.

The downward pressure on prices is likely to continue. Foreclosure listing firm RealtyTrac’s data show that in January, 884 homes were added to the list of distressed properties in Pierce County. At the end of 2010, the county had 7,884 properties in some stage of foreclosure, RealtyTrac data show.

Wow, the NWMLS really hit a home run this month with the distressed inventory talking point. It seems every single paper took that angle and ran with it.

Rolf Boone, The Olympian: Thurston home sales, prices decline

After Thurston County home sales rose in January, the South Sound housing market took a step back last month as home sales, median prices and pending sales all fell in the year-over-year February period, according to Northwest Multiple Listing Service data released Thursday.

Thurston County home sales fell 17.49 percent to 151 units from 183 units, median prices fell 6.61 percent to $217,600 from $232,995 and pending sales fell 5.48 percent to 293 units from 310 units, the combined single-family residence and condominium data show.

Unfortunately it seems that The Olympian is fairly uninterested in real estate these days. Half the time we get no story at all, and when we do get a story all we get are these super-short blurbs.

(Eric Pryne, Seattle Times, 03.03.2011)
(Aubrey Cohen, Seattle P-I, 03.03.2011)
(Mike Benbow, Everett Herald, 03.04.2011)
(Kathleen Cooper, Tacoma News Tribune, 03.04.2011)
(Rolf Boone, The Olympian, 03.04.2011)

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.


  1. 1
    Kary L. Krismer says:

    From article:

    Of course. That makes perfect sense. If the numbers aren’t saying what you want them to say, just keep removing low-performing segments from the data until you get the result you were wishing for.

    That’s from the site that always likes to point out how the median isn’t a very good gauge of market health because of changes in mix? ;-)

    I’ve pointed out repeatedly over the past several months that the median without distressed is higher. It’s also been surprisingly steady. Also, we’ve discussed here in the past how the distressed can affect the median more in the winter months because of the lower relative volume of non-distressed during those months. Why is that information any less useful because it’s given by an agent being quoted in a newspaper article? I’ll give you the fact that a lot of quotes by agents in papers is nonsense, but that doesn’t seem to be a good example of that.

    I really wish that the NWMLS had a field for short sale and distressed for the past 5 years so that we could have some idea of the various medians (all sales, short sales, REO sales and non-distressed sales) during that entire time. More information is better and I don’t see the point of complaining when more information is given.

  2. 2
    Fran Tarkenton says:

    By Kary L. Krismer @ 1:

    I’ve pointed out repeatedly over the past several months that the median without distressed is higher. It’s also been surprisingly steady.

    To what purpose? I’ll stop caring about distressed sales when distressed sales stop representing an exchange of money for real estate.

  3. 3
    Kary L. Krismer says:

    RE: Fran Tarkenton @ 2 – At least two purposes come to mind. The first is to simply give more information–more information is good. The second is to show how incompetent the banks are dealing with short sale and REO properties. On the short sales the banks could recover a lot more if they simply processed them in a timely manner. On the REOs I will say the banks are doing a better job on the condition of the properies than they were a year ago.

    Considering that the government has bailed out many of those entities, and is still bailing out Freddie and Fannie, people should be upset by the banks’ incompetence.

  4. 4
    Matthew says:

    A cancer patient is in perfect health if you just ignore the huge melon sized tumor in their brain!

  5. 5
    deejayoh says:

    I think if you are looking to buy a house that isn’t distressed, and the median of the distressed and non-distressed inventories are behaving differently (e.g. one is dropping and the other steady, as Kary seems to be suggesting) then looking at them separately is relevant – because the overall trend is telling you something that isn’t really useful.

    Not sure if that scenario is true or not but I think it’s a fair way to look at the situation if it is/was.

  6. 6
    Scotsman says:

    RE: Kary L. Krismer @ 1

    “I’ve pointed out repeatedly over the past several months that the median without distressed is higher. It’s also been surprisingly steady”

    My gawd, Kary- it’s also higher if we just throw out everything priced below $500K. Why don’t we just do that? You need to step back and see how absurd this line of reasoning has become. After all, it’s going to be a while before distressed homes aren’t a large part of the picture.

    I’m getting a kick out of the idea that distressed homes are “dragging the market down.” Maybe it’s just that the market is continuing to fall and reasonably priced homes are the ones that sell? I assure you that if we removed all the distressed sales and returned inventory to normal levels that prices would still continue to fall, perhaps even faster with more normal inventories relative to the reduced number of qualified and eager buyers. You know that’s true. Kinda blows up the idea that distressed are the problem children here.

  7. 7
    Kary L. Krismer says:

    RE: deejayoh @ 5 – I wouldn’t go that far. In some neighborhoods the drop from peak to the latest King County median might be may not be sufficient to give an idea of how poorly the market is doing. In others it would give an overly pessimistic impression.

    What you can easily do is do a CMA of the specific property at different points in time. That will give you the trend, and show you if there’s a difference between distressed and non-distressed in that particular area.

  8. 8
    Kary L. Krismer says:

    RE: Scotsman @ 6 – Total nonsense. Throwing out a certain price range is entirely different than throwing out types of houses.

    I’m not saying that distressed properties should be totally ignored. I’m saying that the median number is affected by them. Again, the “mix” defect to the median has been widely argued here, but I guess that’s only when you have a change in the mix that affects the median a certain way. When it affects the median in a negative way it shouldn’t be mentioned.

  9. 9
    whatsmyname says:

    RE: Fran Tarkenton @ 2 – If you are in the market for a distressed property, that is perfectly reasonable. In fact, more so because the median price of distressed properties is below the median for all properties. But, if like some here, you are not satisfied with quality of the distress inventory, then it is not reasonable. You will also find that the grocery store isn’t going to sell you organic vegetables at the median price for all vegetables. I think that is Kary’s point.

    edit: Whoops, I see Deejayoh and Kary have already been there.

  10. 10
    Kary L. Krismer says:

    RE: whatsmyname @ 9 – You’re way too slow. ;-)

    Another way of saying it is I don’t see how pointing out the effect of increasing distressed sales on the median over time is any less valid than say pointing out a change in square footage over time. People were doing that here a couple of years ago. It’s data we can deal with and there’s no reason to ignore it.

  11. 11
    LocalYokel says:

    Wow. Cognitive dissonance, hello?

    Stupid banks should process those REOs and short sales faster, so they can get
    rid of the all those REO and shadow inventory so we can have a normal market. Idiots.

    Stupid people should know the difference between a “distress sale” and “happy, shiny people” sale and should pay for more. Morons.

  12. 12
    Kary L. Krismer says:

    RE: LocalYokel @ 11 – The banks do process the REOs timely. My complaint there has been condition, but again they are doing better now than in the past.

    Their slow processing of the short sales mean fewer short sale buyers, which means lower offers. If the end result is foreclosure it also means more REOs. All while no interest payments are being brought in. Pure genius on the part of the banks.

  13. 13
    Econe says:

    2011: Banks unload crap inventory, median goes down and RE bulls say…

    “You can’t count those!”

    2012: Banks unload better inventory, median goes up and RE bulls say…


  14. 15
    whatsmyname says:

    RE: Econe @ 13 – A charge of hypocrisy is always stronger if you can point to actual spoken discrepancies rather than pretend ones from the future.

  15. 16
    Kary L. Krismer says:

    RE: Econe @ 13 – I’m not saying don’t count them. I’m saying don’t ridicule the agent quoted in the paper who provided more information which is both accurate and useful. (Actually, my non-distressed median was higher than his, so he was actually being very conservative throwing out the numbers he did).

  16. 17
    whatsmyname says:

    RE: Ira Sacharoff @ 14

    “Also, it’s a matter of how one uses words. When a broker proclaims that ” Non distressed home prices are steady now, and have been for a while”, that makes it sound good, doesn’t it, rather than saying ” we’re in for a very long slog of flat home prices.”

    One of these statements is an observation (right or wrong); the other is a prediction. I would not fault a person for using observations over predictions.

  17. 18
    Kary L. Krismer says:

    Here’s an article Tim did several years ago, explaining why the median was rising because of a change in the mix.


  18. 19
    ARDELL says:

    LOVE that picture! Reminds me of a “HUD” home one of my clients wanted to buy years ago. I said “OMG! WHY???” Had mega offers though.

  19. 20
    ARDELL says:

    RE: Scotsman @ 6

    Thanks for the laugh. Can we “carve out” anything that doesn’t have a granite counter top while you’re at it? :)

    I do think that people need to determine the % of distressed homes in their area of interest. If there are 10% to 15% on average where you want to live, then basing your expectations on an overall market % of 30% to 50% for the whole county, or an area where you would not live, could be misleading to a person’s particular goals.

    Many buyers who follow “King County Stats” get frustrated when that info does not translate into their particular home search area. I like to know the County-wide stats, but taking it down to reality, given not many would buy “anywhere in the County”, is important.

  20. 21
    Scotsman says:

    RE: Kary L. Krismer @ 18

    The issue isn’t that a change in the mix is reflected in the median, it’s the arbitrary exclusion of a class of homes that are moving the median in a direction you and other real estate pumpers don’t like.

    As I said in my first post I discount the idea that distressed properties are pulling the median down because they are somehow inferior or not part of the “true market.”. They simply reflect a group of sellers that want to move out their inventory. A Bank owned sale is no different than a sale brought about because of divorce, unemployment, etc. Some sellers are willing to take a hit to get it done now. Some are living in a 2007 fantasy world. All are part of the market, legitimate, and all should be included.

  21. 22
    whatsmyname says:

    RE: Scotsman @ 21 – There you have it, folks. Time to quit whining about the quality of the inventory, or how the good ones are snapped up right away at ridiculous prices.

  22. 23
    Kary L. Krismer says:

    By Scotsman @ 21:

    They simply reflect a group of sellers that want to move out their inventory. A Bank owned sale is no different than a sale brought about because of divorce, unemployment, etc. Some sellers are willing to take a hit to get it done now. Some are living in a 2007 fantasy world. All are part of the market, legitimate, and all should be included.

    First, I’m not sure what you have against providing additional information.

    Second, I would agree with you that a bank owned sale might not be a lot different than divorce, unemployment, etc., but a short sale is different than any of those things. Imagine if there were a totally incompetent listing agent that was abusing legal and illegal substances, and who would not respond to offers for sometimes as long as 3 months, and when they did finally respond it might often be to say that the property was going to be foreclosed that week. Assuming he was well known (meaning we had a much smaller agent base than we do), agents would not make offers on that agent’s properties, and the prices he obtained for his listings would be much less. That’s what short sales are. They drag down the median, but it’s not because of condition or type of house, it’s because there’s a party to the transaction that is a well known incompetent that most people would prefer not to deal with.

  23. 25
    ray pepper says:


    1. Look at Trustee Sales First! (Watch what the BIG BOYS are picking them up for then flipping them at…That will place a screaching halt to many of your purchases..)
    2. then REO’s
    3. Then Short Sales
    4. then Estate Sales, distressed sellers, conventional sellers and all the rest.

    Buying in a deteriorating asset environment MUST focus all your efforts on the MOST EXTREME price reductions. Remember when you decide to purchase its ALWAYS an investment and you will find that out very quickly when for some unplanned reason you MUST SELL in the next decade..

    I finally see a bottom in Nevada at 80% off highs in the counties I track.

    No where close to a bottom here in the PNW. People are not stupid and will continue to unload these lead weights around their necks. Box homes in Kent, Auburn, Puyallup, Renton, still selling for 250k plus??…See you at 180k. They are all coming back.

  24. 26
    Chaffinator says:

    The availablity and prevalence of distressed properties will disrupt the market in several ways that make overall averages, and segment averages, misleading.
    Because bargain hunters will be drawn to distressed properties, their availablity and higher than normal quality will tend to make the median on non-distressed properties higher (as you remove buyers of lower-cost non-distressed properties into “more house” at distressed prices).
    It will skew overall averages downward, as more people are in the market due to the distressed homes…they might not be in the market at all if so much inventory was not distressed.

  25. 27
    Kary L. Krismer says:

    RE: ray pepper @ 25 – Why would you put estate sales so far down the list?

  26. 28
    Blake says:

    RE: ray pepper @ 25
    I’ve been watching several neighborhoods and areas closely here in Seattle and tend to see more higher quality REOs and short sales… it’s getting “interesting.”

  27. 29
    Scotsman says:

    RE: Chris @ 24

    Nice! But please, Chris- stop it with the stupid math- it’s waaay too depressing. And unfortunately, it’s also too optimistic since your present a static picture of the market. As prices continue to fall and unemployment worsens more and more people will decide to just walk away, pushing even more “distressed” inventory into the market. Your numbers represent the best possible scenario and assume immediate stabilization. I’m not seeing that.

  28. 30
    LA Relo says:

    There have always been foreclosures in home sales data (except maybe during the peak bubble years where you could name your price) and REO sales have always been a component of median price.

    To argue what the price is without them is irrelevant. That’s like saying if I didn’t owe any money on my credit cards, school loan, car loan or mortgage then my NET worth would be way higher.

  29. 31
    Scotsman says:

    RE: ray pepper @ 25

    “Buying in a deteriorating asset environment ”

    Ah, welcome to the dark side. I sense a new awareness in you, Luke. ;-) Patience is a virtue once again. Now if we can only pry you away from Claim Jumper food.

  30. 32
    ARDELL says:

    I just got an appraisal in on a property in escrow. The appraiser used 5 comps and none were distressed, but it was in an area with very few distressed sales near Downtown Kirkland SFH.

    Only 3 of the 51 properties sold in the last 6 months between $500,000 and $700,000 within a mile were distressed properties. The appraiser could have used one of those, but didn’t. Likely because it was a 1 story with basement vs a 2 story with basement.

  31. 33
    deejayoh says:

    By Chris @ 24:

    Taking out distressed properties is only interesting because the high percentage they comprise is not sustainable in the long run. But that run may be pretty long – Tim, how about a post that vets out these back of the napkin numbers:- King County Population = 1.8Million
    – Ave Household Size = 2.39 nets 750,000 Households
    – 66% Own their own home – for 500,000 homeowners
    – 25% of those have no mortgage – for 375,000 mortgaged homes
    – 7.1% of King County mortgages are delinquent but not yet foreclosed (LPS Applied Analytics) so..
    – 26,625 mortgages are delinquent
    – 30% of the 1244 King County sales in February were distressed, or 373 sales
    – so if only half the 26,625 delinquent homes are going to be sold in distress at this pace:
    – it will take 13,312 / 373 months or 35 months to clear that distressed inventoryAnd that assumes half the distressed mortgages recover and no healthy mortgages become distressed. And King County’s 7.1% delinquency rate is far better than the national average of 9%. I’m generally an optimist but these numbers seem sobering! Am I off base here?

    I think t he % of delinquent/distressed properties that go to foreclosure in practice it’s about a third – plus you’d need to annualize the sales rate.

  32. 34
    ray pepper says:

    RE: Scotsman @ 31

    Just ate there last night…Been having problems all day:


    I really think its the cheese and pretzles that does it to me.

  33. 35
    ray pepper says:

    RE: Kary L. Krismer @ 27

    Estate sales have always worked great for my personal investments but too many times there was an heir that overvalued their families property and it caused problems in negotiating aggressive sales price drops for my clients.

    The more cooks in the kitchen you know……………………So I just place the estate sales next to supposed motivated sellers.

    Just be patient Buyers…They all need to sell far more then you need to BUY!

  34. 36
    Kary L. Krismer says:

    By LA Relo @ 30:

    To argue what the price is without them is irrelevant.

    I would and have argued that the King County median is irrelevant either way, but just out of curiosity, if you’re not a short seller or a bank, why do you think the median of other sellers like you would be irrelevant? Or why would you think a declining or increasing median driven by primarily by an increased amount of any type of sale which you are not a part of would be in anyway relevant?

  35. 37
    Kary L. Krismer says:

    RE: ray pepper @ 35 – I would agree they can be trouble depending on the personalities, but they can also be good too. You have to make an offer to find out.

    I would also note that more heirs can be better. If there are 10 heirs every reduction in price of $10,000 only affects the heirs by less than $1,000 a piece.

  36. 38
    Masaba says:

    There is an obvious companion comment to Jacobi’s remark, ‘In Windermere’s analysis, if you take out the distressed sales for February, the median home price jumps from $334,000 to $390,000,’ that he fails to make.

    If you remove distressed homes from the statistics, then sales of non-distressed homes fell by 9.5% YOY between Feb 2010 and Feb 2011 (see below for math).

    I can certainly believe that Kary is correct, that the median price statistics of non-distressed vs distressed sales may behave differently. However, I also can’t imagine that this type of YOY drop in sales of non-distressed homes won’t put downward pressure on the median price of non-distressed properties as well.

    70% of home sales in 2010 were non-distressed = 698 non-distressed sales.

    63% of home sales in 2011 were non-distressed = 632 non-distressed sales.

    (698-632)/698 = 9.45%

  37. 39
    Masaba says:

    I’m not sure why some people are moaning about Kary and the NWMLS making a distinction between distressed and non-distressed properties. This is actually great information for buyers and sellers alike.

    The info for buyers is: if you want the best deal, look for a distressed property.

    The info for sellers is: if you want a reasonable shot at selling your house quickly, then you are going to have to compete with distressed properties.

  38. 40
    Kary L. Krismer says:

    By Masaba @ 39:

    The info for sellers is: if you want a reasonable shot at selling your house quickly, then you are going to have to compete with distressed properties.

    Not quite. I had one property last year where someone without an agent made a lowball offer on the basis of what other things in the neighborhood were going for. I ignored him and looked at the two other offers which are close to or at list. The response to a buyer who wants to use a short sale as a comp is that they should go buy it. If you can afford to wait, and the deal goes through, short sales are great buys.

    Bank owned can be a bit more competition, depending on condition (and that works both ways–some bank owned are in better condition than some normal listings).

  39. 41
    Chris says:

    RE: Scotsman @ 29

    Well if you’re going to call my math stupid I’m going to defend it by saying I pulled the values from the Census Bureau, LPS Applied Analytics, and NWMLS – and absolutely no values were pulled from The Onion!

  40. 42
    Junkbond says:

    Easy Chris. Don’t get into a battle of wits with an unarmed man!

    I’m new to this discussion so please excuse my naiveté and any gaffes of protocol but you all seem very knowledgeable about the real estate market in Seattle.

    It seems to me some of these comments are a little like rearranging the deck chairs on the Titanic. I’m afraid given bankers’ general constipation nowadays, the wave of inflation that’s probably coming and it’s associated impact on affordability, the 2 year backlog in Tim’s “Tableau” graphic and the continued foreclosures that are likely, this “recovery” is going to take several years. Isn’t that what Tim is saying in his blog? That the rose colored glasses worn by the NWMLS journalist, and the associated analysis, should be taken with a grain of salt.

    So is there a solution for the general home-buying market in Seattle? Is there anything to be gained analyzing the difference in a median price analysis or worrying whether distressed sales are included or excluded from a table, or is this a little myopic. At 20,000 feet, is our industry dead for the balance of our careers? Should we buy gold a rent houses?

  41. 43
    Jonness says:

    If distressed sales are dragging down the mix, then non-distressed homes will have to compete with them. It’s well established that REO’s drag down the price of non-distressed homes. If it gets going hard enough, it results in a downward feeding cycle, the lower prices go, the higher the number of homes that go underwater and become distressed sales. (see Vegas)

    During the bubble, people bragged on how much their homes were worth compared to what they paid. The in thing these days is to brag on how little you paid compared to what the home was worth at the peak. It’s a game. Not everyone plays, but enough do to greatly impact the overall psychology of the market, and thus the overall price trend. But people don’t have to sign up to play. If they are caught underwater on their house because they failed to think logically prior to buying, they simply clam up at parties. As you can see, different types of people are rewarded at different points in bubble cycles. The impulsive already ate their cake, and the patient are still waiting to be served. It’s all quite predictable as it has played out numerous times over the course of history in one form or the other. Those who fail to learn from the mistakes of their predecessors are destined to repeat them.

    The game is quite fun actually. If I get the a better house for $50K less than my neighbor paid, it’s going to bother him for a really long time. If I get it for $100K less, it’s going to bother him 4x as bad, even though it’s only 2x the money. Meanwhile, I get to feel 4x as good.

    At the end of the day, the winner is the guy who gets the best home for the cheapest price. Everbody else overpaid. It’s just a question of how much? The worse the number, the less likely people are to sleep at night. And the more sleep people lose over it, the less likely they are to admit their mistake to their friends who are bragging about how cheap they bought their homes.

    IMO, we are witnessing a very predictable process. We get temporary price support, and prices stabilize or go up. The Fed and/or government withdraws the temporary support (or Spring selling season comes to a close), and prices resume their necessary correction back toward healthy relationships to historical fundamentals. The odds of Americans permanently choosing to pay 25% more for their houses simply because we once had a housing bubble is 0% IMO. Yet, most RE agents continue to claim now is a great time to buy. The truth is, it’s only great time to buy if you are excited about being underwater next winter.

  42. 44
    Jonness says:

    By Kary L. Krismer @ 8:

    I’m not saying that distressed properties should be totally ignored. I’m saying that the median number is affected by them.

    I agree. At the end of the day, I’ll refer to CS once the data is timely.

  43. 45
    Jonness says:

    By Ira Sacharoff @ 14:

    What I have noticed is that the quality of distressed homes has improved over the last year or so.

    That’s my observation as well. And the cherries are getting picked off fast. My GF got so giddy on one last weekend, I was sorely tempted to make an offer. Fortunately, it was gone by the time I got off work the next day. What struck me as weird was, it was a really nice little turn-key Freddie Mac REO, and I could almost pay cash for it. When I first started looking, I didn’t even have a 3.5% down payment. My how time flies.

    I going to have to start thinking about picking up a foreclosure for cash at auction. But I’m not sure it’s worth the effort as I don’t know much about the process. The smart thing to do is probably to get a little less house and skip the cost of financing all together. In a couple of years, I’ll have saved up another down payment, and I can move up to a nicer house and use the prevous house as a rental. I’m not sure, but it’s certainly something to think about. :)

  44. 46
    Scotsman says:

    RE: Junkbond @ 42

    Oh boy, another bear. Don’t make light of rearranging the deck chairs on the Titanic. Much like the first to yell “fire” and run from the burning theater wins, the guy/gal in the aft most deck chair also, in a sense, wins. Position is important.

    You ask if there is a solution to the Seattle market. While some claim a couple flats of perky pansies from Home Depot, judiciously placed, will do wonders to improve a home’s value and marketability others claim price is the key, but don’t like the current trends. I think we just need to hurry up and crash the whole system to clear out the excess then get to work on something real. But that’s not going to happen, is it?

  45. 47

    By ray pepper @ 34:

    RE: Scotsman @ 31

    Just ate there last night…Been having problems all day:


    I really think its the cheese and pretzles that does it to me.

    Ray, Ray, Ray…You’ve gone to Claim Jumper and become sick from eating the pretzels and cheese dip. So what do you do? You go back to Claim Jumper and have more pretzels and cheese dip?

  46. 48
    ray pepper says:

    RE: Ira Sacharoff @ 47

    I know..I know…I lost 14 lbs on my diet so I wanted to celebrate:


  47. 49
    Julie Lyda says:

    Consider this:

    76% of the inventory in King Co. under $200,000 are distressed properties.

    The majority of distressed properties are under $300K.

    $0-$300K = 1,262 distressed listings
    $300K+ = 621 distressed listings

    How does that affect the $500K+ market?

    I have created charts on my blog for both King and Snohomish County breaking down distressed and non-distressed active inventory by $100K price increments.

    I think you will find it pretty informative.


  48. 50
    Kary L. Krismer says:

    RE: Jonness @ 45 – I would caution you that that turn key Freddie or Fannie isn’t likely to be that turn key when you go through the inspection. It’s largely cosmetic, but that’s fine because that’s work you don’t have to do. Just price accordingly.

  49. 51
    Dirty Renter says:

    RE: Scotsman @ 31
    Speaking of Claim Jumpers…on the Gold Rush series, a guy named Dakota Fred jumped the claim of the Oregon guys when they had just dug deep enough to hit the gold.
    Oh the humanity….

  50. 52
    Scotsman says:

    RE: Dirty Renter @ 51

    Life’s hard. It’s really hard if you’re stupid. Or so John Wayne used to say. ;-)

    I haven’t watched any of that. “Swamp People” and “Swamp Loggers” have caught me a few times. Definitely different!

  51. 53
    softwarengineer says:

    RE: Kary L. Krismer @ 1 -Exactly Kary

    That’s how my friend’s mom got her over-payment of property tax [5 years worth and several thousands of dollars in cash too] in Snohomish County approved, without a hearing….she essentially hired her own appraiser who more accurately included the low listings in with the high….something we all may be very able to do.

  52. 54
    Jonness says:

    On another note, I’m seeing sales pick up considerably in the month of March. I’m not sure of how much of this is normal Spring behavior, but the March MLS release should prove interesting.

  53. 55
    David S says:

    RE: Jonness @ 54 – March sales look to be getting hammered. I’m seeing more price drops and more status from Pending back to Active than I have seen in a long time.

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