Sales Curve Shifting to More Expensive Homes

It’s been way too long (over a year) since I posted the histogram of monthly sales. Let’s take another look.

To generate the chart below, I took all the sales data for single-family homes sold in King, Snohomish, and Pierce Counties from the beginning of 2010 through the end of June. Since my data download puts late-reported sales into the month that the sale actually took place rather than in the month they were reported, there is a slight difference in the number of sales I’m counting vs. what the NWMLS reports each month.

By default the chart shows just King County sales in June. Use the controls below to view different months, or to see what the mix looks like for Snohomish or Pierce County. I’ve also added color-coding and controls to separate out “non-distressed” sales from the sales of bank-owned homes and short sales.

The blue bars representing sales of bank owned homes have been consistently shrinking over the last year as much of that cheap inventory has dried up. Meanwhile, the peak of the non-distreed curve has moved from $250k-$350k a year ago to $300k-$400k in June of 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.

20 comments:

  1. 1

    There’s a lot of data there with the various months and options, but it’s hard to get to it all.

    Would it be possible/hard to add a “Next Month” button, or some other way to more easily scroll through the months?

  2. 2
    sofwarenginer says:

    Lots of Data to Digest Tim

    On this Bubble Blog we talk about the inventory shortage and such, how about the shifting paradigm of a shortage of qualified buyers?

    This makes sense to me, since most of the top 10-15% of household incomes [qualified] already own a home in the Seattle area; so where’s the beef of qualified buyers in the bottom household lower tiers to sell to?

    Pentup demand is just another wild allegation without data proof.

  3. 3
    Howard says:

    The quality (location, condition, design) of what is available in Redmond/Kirkland is amazingly poor for $450k and below, the sweet spot seems to be $550-650k.

    It is disheartening.

  4. 4

    By Howard @ 3:

    It is disheartening.

    The sellers in that area might feel the same way! ;-)

  5. 5
    corndogs says:

    RE: Howard @ 3 – Well, I should inform you, that according to David Losh, a guy who posts to this website, you can buy a house at anytime from anyone so you shouldn’t have a problem. But you’ll have to ask him about how all that works, it was over my head.

  6. 6
    David Losh says:

    RE: corndogs @ 5

    This post proves my point, and the point I have been making for about three months.

    The sweet spot for finding a deal has moved up in price point. You can buy a better home for over $600K than you could in the past few years, because the people who have money realize that they should sell. The only way they will capture the equity they have is if they sell while the market is hot.

    To stir the supply, and demand BS some more; Every property, every square inch, of property on earth is for sale for a price, terms, and conditions agreeable to both parties.

    If you want to buy a house, get up from your computer, and find a working Real Estate agent.

    Let me explain it again. In a time of “low Inventory” a working agent goes out and looks for properties, inventory, to sell. They get on the telephone, go to the church, visit with freinds, and family, or farm a neighborhood. Real Estate agents farm every day. You either farm or you have no business.

    Different agents have different methods, but probably less than 10% of the agents working actually prospect.

    Now you can do all of this yourself, looking for that one house to make a home just for you, but it takes time. Something could fall into your lap, but the odds are against you. 10% of the Real Estate agents are already covering the same ground.

    Long story short is there is no magic in the Multiple Listing Service. You can always wait with your “write ’em up agent” until you find something, or you can get with some one who can make things happen.

  7. 7
    ray pepper says:

    RE: David Losh @ 6

    Thank You David. You don’t have to do all that for me..

    Yes, I am that man because “I MAKE THINGS HAPPEN!” But, first lets meet at Cheesecake Factory and discuss the details.

  8. 8
    C says:

    David, do you know any good Real Estate Agents? We’ve been working with Redfin, so far they are pretty good, though we have to do most of the searching ourselves. Thanks.

  9. 9

    RE: ray pepper @ 7 – Try some non-chain local restaurants some time. Your taste buds will thank you.

  10. 10
    David Losh says:

    RE: David Losh @ 6

    uh oh, am I striking the redfin nerve?

    Looking at charts, and graphs for housing units is best described as Real Estate porn. It’s no way to make a decision on thirty years worth of debt, no matter how low the interest rates are.

    If you’re smart you will find an agent with experience, product knowledge, and who is financially savvy.

  11. 11
    corndogs says:

    RE: David Losh @ 6 – David Losh Said… ‘The sweet spot for finding a deal has moved up in price point. You can buy a better home for over $600K than you could in the past few years, because the people who have money realize that they should sell. The only way they will capture the equity they have is if they sell while the market is hot.’

    Why don;t you try using numbers some time? The volume of houses in Kirkland that sell in the $550 to $650 price range has been remarkably steady at about 7 to 9 sales per month for the last 3 years… The current active listings in this price range are only 25. If you look at the median sized house sold in this price range over the last 3 years it was 2,724 sq ft. The median in the last 3 months is 2,364 sq ft. So there is no evidence that this group is rushing to market, the evidence is that the houses in this price range are getting significantly smaller.

    Certainly, there are people who want to sell, otherwise there would be no market at all. But you have to put numbers behind what you say….. just because Dave Losh has a gut feeling or opinion about something doesn’t make it true. If you take the time to post 10 paragraphs, why not take the time to see if what you’re saying is correct….

  12. 12
    Kaiser says:

    How does one determine causation here? Is the market rising because there are no more bank owned homes, or are there no more bank owned homes because the market is rising? If I were a bank, and the market were falling, I’d be keen to sell my homes quickly. However, if the market is rising rapidly, I would not be in any rush to sell house X for $1 when it could fetch $1.1 in a few months, especially with some reconditioning.

    Given that Case Shiller reports that the low end of the housing market is rising, it’s not unthinkable that the latter is occurring–namely, that banks are simply keeping a tighter leash on their now more valuable inventory.

    Also, in a rising market, there will be fewer short sales, as people hold on longer in anticipation of better times–and, obviously, if the market price is rising, it will eventually cover the short, turning a would-be short sale into a non-distressed sale.

  13. 13
  14. 14
  15. 15
    JoeBlow says:

    The reality is the market isn’t “hot”, but rather the limited pool of buyers able to afford a good property in a good neighborhood are stuck with very limited supply (likely because most sellers can’t afford to sell). Most houses that sit on the market for more than 30 days are garbage and way overpriced. I’ve been looking at houses for 3 years now. Initially our budget was in the low-mid 500k’s. Now we have extended our range up into the 650k’s because we have been able to save more money for a down payment (our income can easily justify higher if needed). In these 3 years I’ve seen the quality of house at 500k go down and at 650k go way up.

  16. 16
    ray pepper says:

    RE: WestSeattleDave @ 13

    Well, YES..We had a record month of 2.5 Mill + in sales but it cannot be TOTALLY attributed to Cheesecake Factory. I purchased new gaberdeen pants and a few nice shirts at JCP that may have also added to the madness.

  17. 17
    David Losh says:

    RE: corndogs @ 11

    I have, repeatedly, over the course of years, and this isn’t my blog. These are comments on a Bubble blog where people disagree about the direction of the market.

    My experience in the Real Estate market place spans forty years. The market place comes, it goes, it ebbs, and flows, but looking at daily numbers, or where the market is today, is pointless. You’re going to need to know the trends.

    What I see is that million dollar homes either sit on the market, or sell for less than I think they are worth. At the same time people scramble around paying way too much for crap priced in the $400K to $600K range. Why is that?

    Show me in the numbers why some people pay way too much for a property that can only decline in price, while others make good solid prudent buying decisions.

    In my opinion the people who are doing well in today’s market get professional advice, and pay the price for it.

    It’s an opinion.

  18. 18
    C says:

    By David Losh @ 10:

    RE: David Losh @ 6
    If you’re smart you will find an agent with experience, product knowledge, and who is financially savvy.

    RE: David Losh @ 10
    We’re having problems finding a good real estate agent, that’s why we go with Redfin. I really don’t know where to find a good agent. I tried contacting an agent recommended by a friend, but she never responded. I also called an agent recommended by Redfin who deals mostly with banked owned sales, but she seemed to know a lot about Seattle, and not much about Bellevue. Do you have any suggestions?
    Thanks.

  19. 19

    RE: C @ 18 – Keep in mind Dave’s primary criteria for suggesting an agent is likely whether they are willing to pay him a “referral fee.” He’s admitted here that’s the main (only?) reason he currently has his real estate license.

    What a referral fee is, for those who don’t know, is the agent will give another agent your name in return for a split of the commission if and when you buy or sell. It’s a very common practice in the industry, but not one I’m sure benefits consumers in any way. Arguably the agent will want to refer the person to an agent who is likely to complete a deal, but even that is questionable.

  20. 20

    […] been a few months since I posted the histogram of monthly sales. Let’s take another look as of October’s […]

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