Follow-Up: Offers 2012 Are Finally Slowing, Just a Bit

Full disclosure: The Tim is employed by Redfin.

Last month I posted a comment from a reader who observed that offers appeared to be slowing down from their torrid spring pace. At the time I pointed out that there was “no slowdown as of the end of May” in the data.

Well, last week Redfin released June data, and there is a slight slowdown in the rate at which homes are going under contract in two weeks or less in the Seattle area:

Percentage of SFH Under Contract in 14 Days or Less

Homes are still moving quite a bit more quickly than the national average and double the rate of just a year ago, but at least the pace seems to have leveled off. This news coupled with the slight increase in on-market inventory the last two months may finally be a glimmer of good news for buyers this year.

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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.


  1. 1
    uwp says:

    It’s because everything good is gone now.

    Only slightly kidding.

  2. 2

    Seems like a pretty insignificant difference.

    FWIW, the median is seemingly moderating a bit too compared to this time last month.

    Vague comparison based on data from NWMLS sources, but not compiled or guaranteed by the NWMLS, and my recollection thereof.

  3. 3

    Beware the Macro economic situation. The big picture numbers are deteriorating fast. Mr cheerleader himself, Helicopter Ben, basically said things were getting worse in his congress appearance yesterday.

    I predict this local improvement is head fake and the local market will continue to struggle – notably in the mid to high end the shadow inventory of foreclosure is still enormous both locally and nationally.

  4. 4

    Perhaps They’re Using More Efficient and Perfectly Legal Administration Techniques to Close Escrow Paperwork, Like “Robo-signing”

    Albeit, the relationship of contract administrative speed and sales volume increase/decrease is a complete moot point.

  5. 5

    By softwarengineer @ 4:

    Perhaps They’re Using More Efficient and Perfectly Legal Administration Techniques to Close Escrow Paperwork, Like “Robo-signing”

    This is to just get to a mutual acceptance status, not a closed sale.

    On your point though, some agents are using electronic signatures. That could speed things up a tiny amount.

  6. 6
    David Losh says:

    RE: Scott WeitzScottmweitz @ 3

    I find the upper tiers doing well. There are some good bargains there, and it seems to me that people with money can afford to bring some to the table.

    What concerns me is the number of people who are buying property, paying high prices in the mid tier, with historically low interest payments.

    The housing report today said builders are building more single family homes, and fewer apartments. Well, of course every one wants money now, they want to sell housing units and get the money now, while rental income requires a longer hold time period.

    So the people buying those housing units will be paying the mortgage, and interest income to the bank, for more time with less ability to move. I don’t see that as a good thing long term.

    The shadow inventory doesn’t bother me for a lot of reasons. Number one the lower tier has saturated. That would leave the mid, and upper tiers to sell. Those properties will sell for what the market will bear, so I’m not seeing what the impact would be.

    I don’t see millions of poperties coming onto the market at one time as realistic. Deals will be done.

    What will happen, if the market stabalizes, is that interest rates will creep up a little, buyers will become even more selective, prices will slowly decline, and we’ll get to some reasonable housing prices in line with wages.

  7. 7
    Erik Muller says:

    I’m not really sure what this data means. It seems insignificant to me.

  8. 8
    Jonness says:

    The Spring bounce is over, and the U.S. is heading back into recession. But that’s to be expected after 30 years of exponentially increasing debt in the public and private sectors.

    On the bright side, Bernanke might be able to pull off another year or two of can kicking before the nightmare begins. Then again, it’s increasingly looking like he’s about out of bullets. But have no fear of the impending fiscal cliff, because politicians can always figure out how to borrow money from our future when need be.

  9. 9
    Jonness says:

    We hear the same “bottom call” pipe dream every Spring. Yet, I find it particularly interesting that people equate record low mortgage rates with a housing recovery.

    Right now, Columbia Mortgage in Gig Harbor offers a 3.25% zero-point 30-year fixed mortgage. While this might work to lure Joe and Mary off the fence in the short term, it also speaks volumes about the true state of the world economy.

    The reason the Fed purposely targets low interest rates is to tempt borrowers to take out loans and spend money in a faltering economy. With a little help from an imploding Europe, a slowing emerging market, and a possible hard landing in China, the cost of borrowing in the U.S. is dirt cheap. But make no mistake, it takes more than borrowed money to make a strong economy, especially when you’ve reached the current debt saturation levels present in the public and private sectors.

    Unfortunately, despite unheard of low interest rates, the unemployment rate is not improving, jobs are not being created, and consumer spending is contracting. This spells “liquidity trap” where rates can’t go any lower in order to further spur borrowing and spending. Thus, we must either get the politicians to borrow more money and dump it in the economy or depend on actual business growth in order to get the country back on track. But politicians are at logger heads over already unsustainable debt levels, and businesses won’t hire until they can feel confident about taxes and consumer spending again.

    So for now, Uncle Sam borrows himself to the hilt at nearly zero interest rates just to maintain the current rotten economy. Much of this debt is short term debt and must be continually rolled over. In addition, we currently borrow about $1.5 trilion/yr more than we earn (3x the rate of the prior president, who was totally out of control). This is wholly unsustainable. Eventually, the bond vigilantes will show up in America, and demand a higher premium for taking a big risk on borrowing this junk. When they do, all heII is going to break loose as the amount of interest we pay yearly on our national debt skyrockets. Then we’ll have to borrow even more money to pay the interest, and the vigilantes will want an even higher premium for buying even more bonds, ad nausea.

    The situation is far more grim and scary than your government and media is letting on. We are on an unsustainable path, and no politicians will act responsibly for fear of not be elected. The only path forward for these shysters is to promise the public they can have their cake and eat it too. And if there is an honest man or woman among them, he/she stands absolutely no chance of making it to the White House due to people not wanting to face the truth about what they themselves have done to America by sticking their heads in the sand and voting these crooks into power.

    My housing-related suggestion is, if you want to buy a house and need to take out a mortgage, stay way within your means. The future is very uncertain right now.

  10. 10
    Scotsman says:

    RE: Jonness @ 9

    Hey Gloomy Gus- watch this ten times in a row. Then you’ll either be happier and excited about the future, or insane and uncaring. Win, win:

    Life will go on, at least for a while. Interest rates will fall further and a stream of buyers will appear to take advantage of record low rates and rising prices. Europe’s collapse will send money into America. People will need shelter. Some, (with more vocal wives?) will need nicer shelter. Depressions happen on the margin- the 20% unemployed still leave 80% with money, hunting for bargins. Not all areas will suffer the same. Always remember, Seattle is special, home to the Pink Yeti. And get one of those “Life Is Good” t-shirts. (those guys are millionaires).

  11. 11

    By Jonness @ 9:

    My housing-related suggestion is, if you want to buy a house and need to take out a mortgage, stay way within your means. The future is very uncertain right now.

    Isn’t that always good advice?

  12. 12
    wreckingbull says:

    RE: Jonness @ 9 – Not that we need any more car analogies, but the engine is idling well. The only problem is that we are spraying starting fluid in the carb, and the can is almost empty. We can’t talk about a recovery until rates return to a non-manipulated equilibrium.

  13. 13

    RE: wreckingbull @ 12 – We should get a more modern car–one less than 20 years old that has fuel injection. ;-)

  14. 14
    DMac says:

    RE: Scotsman @ 10

    Somehow, I tend to think that of those the Depression is happening to “on the margin” may not feel as sanguine as you do regarding the disasterous financial implosions of their lives. There are already too many ruined generations as we speak, let’s not attempt to brush off the real – world implications of another Depression with a “let them eat cake” attitude.

  15. 15
    wreckingbull says:

    RE: Kary L. Krismer @ 13 – Actually good point. I think the sweet spot for automotive fuel systems was right around the 1998 timeframe. Good, solid, fuel injection systems, but without all the computerized crap.

    Maybe one could equate that to our economy too.

    Carbed: 1850-1940
    Sweet Spot:1940 – 2000
    Ridiculously complicated and difficult to fix: 2000 to today.

  16. 16
    Scotsman says:

    RE: DMac @ 14

    An economic depression is defined as a 10% or more drop in GDP. It’s not the end of the world. Does a 10% reduction in your income destroy your life, or does it just force some adjustments? As a practical matter a 10% drop only affects those who are living right at or above their income, not those who are currently saving 15%. You know, like the government and the 90% of the population who have no idea what “saving” means.

    The correct analogy isn’t “let them eat cake” but rather “I want to have my cake and eat it too.” And I want it for free. Seriously- I’m not the problem here. Nor is George Bush. It’s the mindset of entitlement, the unwillingness to say “no” to anyone or thing, and the idea that all problems are someone else’s fault, not yours.

  17. 17
    Scotsman says:

    RE: wreckingbull @ 15

    GM’s basic throttle body injection- brilliant!

  18. 18
    DMac says:

    RE: Scotsman @ 16

    Thanks for the clarification – and if you think for one minute that I have any interest in yet another corrupt pol from my hometown being in the WH for one minute beyond this November, then I have an excellent bridge to sell you in the Mojave. BTW, my wife and I moved out to Portland around two months ago, after spending nearly all of our entire adult years in Chicago proper. Believe it or not, the taxes in our new state and city are vastly less than what we were paying for our condo less than a mile away from Wrigley Field. Decades of widespread corruption and fraud always costs everyone, eventually – and what until recently only local Chicagoans/Illinoisans had to suffer as the price of just trying to survive, we now have the entire nation coming a cropper. I predicted this occurring as surely as the swallows returning to Capistrano, but I’m not happy about being proved accurate.

  19. 19
    Jonness says:

    By Kary L. Krismer @ 11:

    By Jonness @ 9:

    My housing-related suggestion is, if you want to buy a house and need to take out a mortgage, stay way within your means. The future is very uncertain right now.

    Isn’t that always good advice?

    Different investment climates require different portfolio allocations. For instance, in times of high inflation, it’s better to hold assets than cash. So someone buying a house in such an environment might do well to buy within his means, but perhaps not way within his means.

    But I agree it’s much better to buy within your means than not account for a possible job loss in the future, etc. and buy a house you really can’t afford. I like Tim’s method of ensuring one paycheck in a dual income family can fully float the boat in times of need. Unfortunately, not all families enjoy that luxury. But even ones who don’t earn as much should be salting away a little extra every month and trying not to bring home too much crap from Walmart. It takes extreme discipline to save money on a tight paycheck, but it can be done. I’ve seen others do it, and I’ve done it myself.

  20. 20
    Jonness says:

    By Scotsman @ 10:

    Hey Gloomy Gus

    What’s there to be gloomy about? The U.S. is on the cusp of another recession, and I’ve positioned myself to profit from it. I’m actually quite cheery about this!

    Besides, my band will be playing at a big outdoor rock concert this weekend. Our songs kick ass, and I’m going to melt some freaking faces off of people. Life is good! You only live once, and you don’t get to go back and change anything. So live well now.


  21. 21

    RE: Jonness @ 19 – I was assuming a house to live in, not an “investment.”

  22. 22
    apartment boy says:

    RE: DMac @ 18
    Portland was a smart move…there’s no baseball team to make you miserable.

  23. 23
    apartment boy says:

    RE: Jonness @ 20
    Wow – Steve Tyler & Peter Lynch all rolled into one!

  24. 24
  25. 25
    Blurtman says:

    RE: Jonness @ 20 – What kind of music?

  26. 26
    DMac says:

    RE: apartment boy @ 22 – Heh – after 45+ years of Cub fandom, I won’t miss it in the least. Not to mention the idiot frat boys and other miscreants relieving themselves in front of our building, or alleys.

  27. 27
    DMac says:

    RE: ChrisM @ 24 – That team should actually draw quite well here, at least based on the rabid fandom for college football, minor league hockey and the wretched Portland Trailblazers and MLS team. They could also support an NHL team, but Seattle looks to be the most likely choice when the Phoenix franchise finally moves out of the desert.

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