All righty, it may be ten days into Ocotober already, but that’s not going to stop me from posting our regular stats “preview,” because I just like to see the data presented in the simple bar chart format of this series. Most of the charts below are based on broad county-wide data that is available through a simple search of King County and Snohomish County public 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.
First up, total home sales as measured by the number of “Warranty Deeds” filed with King County:
Up from a year ago by about twenty percent, which is right in line with NWMLS-reported sales. Note that this year’s steady slope down after June is much more normal than last year’s sheer dropoff.
Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.
The data in Snohomish is a bit more noisy, but deeds still marked a year-over-year bump.
Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:
A pretty significant drop both month-to-month and year-over-year in both counties. I wonder if that’s finally the result of the new foreclosure red tape legislation passed in Olympia a few months back. The dropoff is much too sudden to be natural.
Here’s another measure of foreclosures for King County, 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.”
Another decline in repossessions, with September marking the second-lowest point of the year.
Lastly, here’s an update of the inventory charts, updated with the inventory data from the NWMLS.
2011 has not been the best year for selection, that’s for sure.
Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.
Surging YOY sales (up as much as 20% in some areas!) coupled with falling foreclosures, record low interest rates and the return to the market of first time buyers and investors looking for deals has led to a shortage of inventory. JLS and other industry leaders talk privately about how this may be the long anticipated bottom. A quiet movement toward staffing up broker’s offices across the Puget Sound region in anticipation of record spring sales has the industry all a twitter. Bears are rumored to be headed for hibernation.
Smells like realtor spirit.
RE: Scotsman @ 1 –
What do you think is the reason then for the observed increase in home sales and drop in foreclosures?
RE: HappyRenter @ 2 –
I think sales bumped up a bit on some combination of record low interest rates and a misguided expectation that the economy might have stabilized. Notice the YOY bump up is only since July, a nice correlation with the drop in rates and chatter about rate stability over the next several years thanks to the Fed.
Foreclosures are initiated by increases in unemployment and mortgage resets to unaffordable levels. Most of the option arm resets are behind us and unemployment levels have remained relatively stable compared to 2008/2009. So I would expect a drop in new foreclosures. Some sort of temporary equilibrium has been achieved. Legal and processing complications may also offer a small contribution to the reduced pace.
But here’s the thing. We are most likely headed for another leg down. Reputable indicators have us on the edge of another recession or worse. There are still major forced reductions in government spending at all levels, (probably on the order of 4-7% of GDP), to come. That will mean a new round of additional unemployment, a new round of additional foreclosures, and ongoing home price reductions.
Some economists are starting to talk about permanent unemployment in the 8-10% range. Many of the jobs lost aren’t comming back as we may never again be competitive in a growing number of industries. And those who have lost jobs often don’t have the skills to fill what positions we do offer. Fewer employed means less government revenue, less consumption, fewer potential home buyers.
Maybe I should have put a “/sarc” tag on my first post? Ayeah, as they say in Maine.
I don’t do much in Real Estate any more, but I do have long standing clients from 25 years in the business.
Over the week end I got a call on Saturday morning from a past client who I told to sell, told to lower the price until it sold, who decided to wait until the market came back. Well, he hasn’t made a payment on his first position mortgage in 11 months now, he has been paying the second because they were so aggressive. Out in Bothell there are vacant houses all over the place. He knows people who have lived for over two years without making a mortgage payment.
By coincidence another client is finally putting her house up for sale, this week. She started last spring looking at houses, but this fall she found a place to love. Her two kids have been sharing a bedroom. When I ran some numbers for them in the spring they could sell the two bedroom Wallingford Craftsman and buy a bigger, better house, over in Wedgwood, or close to Roosevelt High School.
I think the lateral move, to move up buyer market is pretty hot, from what I’ve seen. What I also think is that banks are stuck with more to do than they ever bargained for.
RE: Scotsman @ 1 –
You (and he, I guess) forgot to mention the ever popular “uptick in activity at open houses”.
Why Listings Have Gone Down YOY and Foreclosures Slowed
IMO, its more convoluted than just one or two root causes, irrespective, having gone through the Savings and Loan crash of the late 80s and early 90s recession; I watched a similar phenomena in the Seattle area…..stubborn mule used home sellers not willing to reduce prices like new construction had to. I’m sure the same scenario, except a caveat….now with MASSES of underwater home owners, what sellers? Who can afford to sell at a loss anymore, they’re just staying put.
The July 2011 foreclosure mediation requirement bill is probably slowing this year’s foreclosures IMO [if only through delays and confusion], but it appears a “kick the can down the road” solution and when the harsh reality that we’re just letting the old “unqualified” poorer home owners tear down the stock a little longer, starts impacting our homes’ values even worse….it will all come to a screeching halt. Then foreclosures should really spike.
RE: softwarengineer @ 6 – I think King News said there have only been about 425 requests to mediate since that went into effect. I think that’s a statewide stat.
That doesn’t surprise me because the request to mediate has to come very early in the process, and people procrastinate and act in denial. Also, the participation rates in other states have been low.
RE: Kary L. Krismer @ 7 –
Yes Kary
But whenever new rules impact an entity it does cause confusion and I wonder if requests for relief under the new law are a lot higher than the 425 number [albeit as you said, not soon enough]? In my own small company, I contract out and need conversation/teaming with government agencies, almost all under-going budget and regulatory changes/impacts…..sometimes we both laugh, because my total confusion is their’s too.
It does slow a lot of decisions down, and understandably too.
My understanding is mediation focusses on the payment, not the underlying math of a homeowner being upside down. As such it has the potential to cure a very small percentage of the problem loans. My guess is most home owners realize the long term futility and don’t bother to even try.
RE: Scotsman @ 9 –
You’re Right IMO Scotsman
Most solutions to our current mess is throw money at the wrong entities IMO and/or create regulations that are akin to a leaky bucket holding water. But by God we did something to solve the problem.
RE: Scotsman @ 9 –
Also, Scotsman, On a Political Schedule Timing Issue
If foreclosures are not a critical mass problem in 2011/2012 at the Japanese reactor, why would our governor initiate a 2011 Bill that tries to fix it at all?
Especially if the foreclosures will mitigate on their own.
By Scotsman @ 9:
They can also use it to set up short sales, deeds in lieu and other things that don’t come to mind. Basically it’s a way of getting to talk to someone at the bank who actually has some authority, or get get the authority.
[…] time once again to expand on our preview of foreclosure activity with a more detailed look at September’s stats in King, Snohomish, and Pierce counties. First […]