NWMLS: April Saw Little Change in Seattle’s Market

April market stats were published by the NWMLS yesterday. Here’s a snippet from their press release: Housing activity ranges from "red hot" to "slowly healing".

“The residential market is red hot,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He said multiple offers are the “norm” for new listings, with about two-thirds of homes near job centers selling in the first 30 days. That’s about twice the normal rate, according to Scott.

RED HOT! Yeah, mad hot. Sick hot.

On with our usual monthly stats.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

April 2014 Number MOM YOY Buyers Sellers
Active Listings 3,541 +8.7% +9.9%
Closed Sales 2,016 +13.8% -3.8%
SAAS (?) 1.45 +3.1% +6.1%
Pending Sales 2,981 +7.1% -2.4%
Months of Supply 1.76 -4.5% +14.3%
Median Price* $430,500 +3.7% +7.6%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

Inventory continues to make gains, however paltry, while sales slip slightly. Prices rose year-over-year and month-over-month. The gain between March and April was larger this year than last year:

Median Price March to April 2013: +2.0%
Median Price March to April 2014: +3.7%

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

April home sales came in slightly below last year, roughly in the middle of the pack compared to all the other years we have data for.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Slowest inventory increase ever. At least it is an increase though.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Still creeping toward a buyer’s market, with the supply trend in the black, and the demand trend in the red. At this rate it will be a long time before we get to true buyer’s market territory, though.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Back up a bit, but below double-digits.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

April 2014: $430,500
May 2006: $427,950

Here are the articles from the Seattle Times and P-I:

Seattle Times: No thaw in home inventory despite April’s rising prices
Seattle P-I: Local home supply inches up, but remains tight

Check back this afternoon for the full reporting roundup.

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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.

27 comments:

  1. 1

    A few points.

    For buyers:

    As I mentioned elsewhere, the inventory is up again since the 1st of the month, although it’s started dropping again. It is currently still over 3,700. That’s all of King County though, so more locally specific data would be needed for most buyers. The data is highly volatile.

    For sellers:

    1. The mean is the highest since 2008, as is the difference between the mean and median.
    2. The median pending is also the highest since 2008.

    Information from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  2. 2
    ronrontay says:

    This zillow blog claims that in Seattle’s market it is better to buy now than to rent. Opinions?
    http://www.zillow.com/blog/breakeven-horizon-q1-2014-151097/

  3. 3

    By ronrontay @ 2:

    This zillow blog claims that in Seattle’s market it is better to buy now than to rent. Opinions?
    http://www.zillow.com/blog/breakeven-horizon-q1-2014-151097/

    In the Zillow blog, they are factoring in anticipated future home value appreciation rates. That’s not a hard and fast number. in 2007, there were “experts” predicting that local values would continue to appreciate.
    You have to consider the source. Nothing against Zillow, but are they a completely impartial source? Don’t they get quite a bit of revenue from real estate agents either from advertising, or paying to become a “Zillow Preferred Agent”?
    Zillow wants house prices to go up and for the market to be very active as much as John L. Scott.
    But do I dispute their numbers? I don’t know.
    Anecdotally, it seems to me that a house that sells for a million dollars rents for less than what the mortgage payments would be, sometimes significantly. Those kinds of houses tend to be relative bargains for renters, partly because there isn’t a huge market for them. Most people buying million dollar houses aren’t doing it to rent them out. But a 300,000 dollar house is a different story. A 300,000 dollar house would rent for about 1800 in much of this area. The mortgage payments will be less than the rent in many cases. The 300,000 dollar house around here would be more likely to be in a area with worse schools, or is a further commute, or is kind of a dump. So, more affordable, but you have to sacrifice something.

  4. 4

    RE: Ira Sacharoff @ 3 – I would agree with a lot if not all of that. But for me the answer to the question really comes down to a few questions more than some questionable study:

    1. Would you prefer to own or rent?
    2. If the answer to 1 is own, can you comfortably afford to buy a house you would like to live in?
    3. If the answer to 1 is own and 2 is yes, do you expect to be stable in your income, employment and lifestyle, such that you will not need to move for a minimum of 3 years (if not longer)?

    If you’re primary focus is on the economics and trying to predict the future, you’re doing it wrong, IMHO. That said, I could see perhaps factoring in economic factors as bonus points (or negative points), such as perhaps if you’re looking for a hedge against inflation anyway, then that could be a positive for buying a house.

  5. 5
    Erik says:

    RE: ronrontay @ 2
    The seattle market is prime to buy and flip to a programmer for a higher price. Someone that wants a finished home. Knowledge is power. The people that don’t understand how to fix things are at a disadvantage. Lots of “smart” people in seattle that know nothing of remodeling or physical labor.

  6. 6
    Kmac says:

    RE: ronrontay @ 2

    According to Deutsche Bank and the WSJ,
    it is substantially cheaper to rent in Seattle than it is to buy now.

    A new renter in Seattle pays $.77 for every dollar that a new buyer spends on housing.

    http://online.wsj.com/news/articles/SB10001424052702303948104579534230618539424?mod=WSJ_hp_RightTopStories&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303948104579534230618539424.html%3Fmod%3DWSJ_hp_RightTopStories

  7. 7
    Blurtman says:

    Deutsche Bank? Ha, ha, ha, ha. Now there is a credible source.

    Deutsche Bank admits US mortgage fraud
    http://www.bbc.com/news/business-18029911

    Deutsche Bank, UBS Convicted by Milan Judge for Fraud Role
    http://www.bloomberg.com/news/2012-12-19/deutsche-bank-ubs-convicted-by-milan-judge-for-role-in-fraud.html

    Fresh fraud probe sees Deutsche Bank raided
    http://www.independent.ie/business/world/fresh-fraud-probe-sees-deutsche-bank-raided-30125103.html

  8. 8
    whatsmyname says:

    This is still my favorite feature, but it probably would be good to break it down a little more.

    No doubt it would be surprising to some people to learn that the Seattle only sfr median is already $479,000, and on the Eastside it’s $618,000, (that’s $61,000 higher than last year).

  9. 9
    ronrontay says:

    Thanks for your thoughts, guys. Seems like there’s no widespread agreement on this topic right now.

  10. 10
    Tim Deerhawke says:

    If the price of some basic commodity like milk, or coffee or gasoline went up 3.7% from one month to the next, there would be major articles about it in the NY Times and the Wall Street Journal.

    So can someone explain to me why the median price of real estate went up in King County 3.7% this month and that was NOT the headline in today’s real estate section?

  11. 11
    drshort says:

    By Tim Deerhawke @ 10:

    So can someone explain to me why the median price of real estate went up in King County 3.7% this month and that was NOT the headline in today’s real estate section?

    RE: Tim Deerhawke @ 10

    The MOM change is rather meaningless regardless of the number due to seasonality, mix shift, and normal month to month volatility. I believe the YOY percentage changes have been slowing down. No one expects this to translate to a 44% (3.7% x 12 months) YOY change next May.

    It happens every spring (aka the “spring bounce”). This is the time of year (April to July) is when buyers are most active and the nicest homes come on the market.

  12. 12
    Erik says:

    RE: ronrontay @ 9
    It is cheaper to rent for the first 7 years. After that, it is cheaper to buy. Seattle property is expensive, but it will most likely just get more expensive if you wait.

    That is why I said to buy something and sell it to someone else. If you own something a few years, you will most likely profit when you go to sell. If you are gonna stay somewhere 7 years or more, it’s a no brainer and you should definitely buy. I think places like in Seattle proper will only continue to get more expensive. If you buy in the poor areas outside of Seattle, you are gambling.

  13. 13
    Tim Deerhawke says:

    Anyone who invests in this market or builds for this market knows about the spring bounce.

    I am a guy who puts his money where his mouth is. I just held a house off the market for six weeks to take advantage of the spring bounce. The appreciation is much greater than the interest float and opportunity cost of capital. I will bring it on the market early next week.

    However the point is that waiting for this bounce is something that was done during the times when people were optimistic about the market from the late 90’s to 2007. You did not dare do this during 2008 through 2011. The fact that we are taking the spring bounce for granted is yet another sign that we are in a rising, expanding market.

    Right now we are seeing average $/sf sales for the most saleable properties in the most stable and attractive Seattle neighborhoods not just equalling but exceeding the figures in 2007. I am focused on the figures in Greenlake and Wallingford since that is where I have a property being priced for sale. But this is also true in Capitol Hill, Ravenna, Fremont, Ballard, Queen Anne, etc.

    New construction homes are very rare in this market and get heavily bid up. Most are selling for $370/sf and up. New houses in Tangletown are going for $400/sf and one recently sold for nearly $500/sf (after discounting for the fact that they included the garage in heated sf). This is substantially more than during the run-up to the recession.

    But the bigger neighborhood percentage gains are in the areas that are a bit edgier and scarier like the Central District, South Central, Beacon Hill, Upper Rainier Valley, Delridge, etc. They dropped more during the recession and are coming back fast. I have started to see real change even in Burien after being completely hammered in ’08-’11. A friend in Normandy Park figures he lost $200K on his property value during the recession and thinks that he has regained at least half of that in the past year, maybe more.

    My bet is that we will continue to see limited inventory but you will see more of it coming on the market (finally) in the neighborhoods that got most hammered down. You may see median KC figures flatten for a bit simply because the area mix is changing. But if you looked at neighborhood figures carefully they would all show solid upward movement.

    My bet is that despite this area mix in inventory the median King County prices will exceed the median prices of 2007 by Q4 of this year.

    My bet is that we will see median King County prices exceed the top median price of July 2007 by the end of Q1 next year.

    In other words, my bet is that if you look at the last graph above you will see the dashed red line rising above the royal blue line. There might be some back and forth for a month or two, but then it will stay there.

    Depending on your politics and whether you think this is sustainable, you can call this either the Seattle Rebound or the Seattle Re-Bubble.

  14. 14

    It Appears $35-40K Automobiles aren’t Selling

    So they have to cut the high profits out of option packages to compete. My option B package was $8K in 2012, its $2K today. The Hemi option went from $10K to $3K and the dealer agrees with me, from 0-60 [even 70] mph the 3.6L V-6 [the 2011 hp upgrade] is faster anyway…..even though the stats [similar to like RE listings?] don’t agree with this. The more expensive newly designed German 8 speed is slower [more undependable too?] than the American 5 speed automatic; so the German 8 speed isn’t an option anymore too.

    Its not just Chrysler, all automobile companies face this conundrum of unaffordability.

    When homes with high prices can’t sell anymore like high end cars, look for the same falling price scenario, IMO. Ya can’t get blood from a turnip.

  15. 15

    By Tim Deerhawke @ 10:

    If the price of some basic commodity like milk, or coffee or gasoline went up 3.7% from one month to the next, there would be major articles about it in the NY Times and the Wall Street Journal.

    So can someone explain to me why the median price of real estate went up in King County 3.7% this month and that was NOT the headline in today’s real estate section?

    Seasonality is the answer, but in addition, over half the population likes rising house prices because they own a house or other real property. If and when we get over $434,000 that will more likely be front page news, because that would be a new high since 2008. As it is, it’s just a new high since 2013.

    By Blurtman @ 7:

    Deutsche Bank? Ha, ha, ha, ha. Now there is a credible source.

    I saw the post referencing that last night and wondered what Kmac was doing, and specifically whether he was targeting me! I’ve stated in the past my dislike for both Deutsche Bank and the WSJ. If only he could have somehow worked a Zestimate into that post, then it would have been completely annoying! ;-)

  16. 16
    Blurtman says:

    RE: Kary L. Krismer @ 15 – A lot of folks either ignore reality or are oblivious to it, i. e., that our financial system is run by institutions that think nothing of committing fraud. Banks, ratings agencies, regulators, etc. Pretending that all is OK, that Moody’s and Standard & Poor’s ratings are now believable, that securitization is sound, that it is safe to go back into the water. Prompting the denial or ignorance is a desire for short term gain. And so the table is once again being set.

  17. 17

    RE: Blurtman @ 16
    A lot of it is what I think of as short memory syndrome. We don’t remember that the banksters were committing massive fraud. It’s as if we are giving money to a family member to buy food, and instead, he uses the money to buy bullets, and robs little old ladies. After he gets busted, we bail him out. He promises to be good from now on, and he doesn’t serve any time. A year later, there’s an increase in little old ladies getting robbed. But it doesn’t occur to anybody that it might be our family member doing it again.

  18. 18

    RE: Ira Sacharoff @ 17

    The Outcome Ira

    “..Would-be first-time buyers have no money. The housing market depends on young buyers to keep demand strong and snap up homes as older owners move out. But young Americans may be under the most financial stress of all. Many recent college grads have thousands of dollars in student loans and weak job prospects, which means they’re not leaving their parents’ basements anytime soon. Those living on their own — and renting — have probably noticed rents are rising sharply, making it harder to save for the down payment on a home. And fewer people are moving around, which dampens demand for homes even more.

    Mortgage rates are expected to rise….”

    http://finance.yahoo.com/blogs/daily-ticker/why-the-housing-market-is-suddenly-struggling-201005280.html

    But all this doesn’t matter to Seattle’s real estate, you’re branded negative if you bring it up….the mitigated bankster probem is similar.

    .

  19. 19
    wreckingbull says:

    “red hot” to “slowly healing”

    Oh…. the housing market. For a second I though we were talking about Ray’s colon after he swore off Claim Jumper. We have not heard stories of gastrointestinal distress in quite some time now.

  20. 20
    whatsmyname says:

    RE: Tim Deerhawke @ 13 – Very interesting post. It would be fun to see a poll on
    “What month do you think median prices will first exceed the same month in 2007?

    Also, maybe one on
    “What month do you think median prices will exceed the 2007 peak?

  21. 21
    Blurtman says:

    RE: Ira Sacharoff @ 17 – Right. But he sometimes shares a small amount of the loot with you, and you need to retire, after all. And he has graduated to killing people, and has already inflicted a few deep knife wounds on you, but you need the loot to retire, and he bought off the cops, so…..

  22. 22
    Kmac says:

    RE: Kary L. Krismer @ 15

    no targeting here, but now I’m laughing ;-)

  23. 23
    Erik says:

    RE: wreckingbull @ 19
    Ray has leaky gut syndrome. That is my guess based on what I have heard about this. He should take action before he develops an autoimmune disease if he doesn’t have one already.
    http://draxe.com/4-steps-to-heal-leaky-gut-and-autoimmune-disease/

  24. 24
    SaffyThePook says:

    By Erik @ 23:

    RE: wreckingbull @ 19
    Ray has leaky gut syndrome. That is my guess based on what I have heard about this. He should take action before he develops an autoimmune disease if he doesn’t have one already.
    http://draxe.com/4-steps-to-heal-leaky-gut-and-autoimmune-disease/

    Dude, seriously? You’re a doctor too? The mind boggles.

  25. 25
    Erik says:

    RE: SaffyThePook @ 24
    These are free comments am that is my opinion. If you think I am a fool, ignore me. I don’t know what “The mind boggles” means. Maybe you are on a higher level than me?

  26. 26
    Erik says:

    RE: SaffyThePook @ 24
    Ray has helped me, so I felt maybe I could help him or atleast spark a curiosity in him to learn about what this leaky gut thing is. I am only trying to do good.

    Are you a person that writes computer code all day for cash? I have learned many of you are very closed minded. You are rule followers. I am not a doctor, therefore I cannot be right. I don’t think that way. I have changed many members in my friends and family’s life by helping them fix leaky gut. It is a real thing and it is an epidemic in the United States. I think it is one of the biggest discoveries in this century. Don’t listen if you don’t believe it. My hope is a couple people will look it up and maybe try it and get the benefits.

  27. 27
    Erik says:

    RE: SaffyThePook @ 24
    Ray has helped me, so I felt maybe I could help him or atleast spark a curiosity in him to learn about what this leaky gut thing is. I am only trying to do good.

    Are you a person that writes computer code all day for cash? I have learned many of you are very closed minded. You are rule followers. I am not a doctor, therefore I cannot be right. I don’t think that way. I have changed many members in my friends and family’s life by helping them fix leaky gut. It is a real thing and it is an epidemic in the United States. I think it is one of the biggest discoveries in this century. Don’t listen if you don’t believe it. My hope is a couple people will look it up and maybe try it and get the benefits.

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