July Reporting Roundup: Totally Not Another Bubble 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).

To kick things off, here’s an excerpt from the NWMLS press release:

Western Washington housing market in "recovery mode" but some brokers say it’s still not at full potential

More sellers listed their homes for sale during July compared to a year ago, but brokers with Northwest Multiple Listing Service say inventory remains “well below” what is considered to be a balanced market.

Muhammad_Saeed_al-Sahhaf-sm“Some agents and firms are beginning to feel the summer doldrums, while others are experiencing a definite increase in activity,” observed Diedre Haines, regional managing broker-Snohomish County for Coldwell Banker Bain. Haines, a director with Northwest MLS, described price increases as “healthy, not exorbitant,” adding, “Thankfully we are not seeing signs of a bubble and instead are seeing realistic appreciation.”

Matt Deasy, general manager at Windermere Real Estate/East in Bellevue, said King County’s slowly improving supply should reduce “the frenzy pace we experienced in the spring,” although he was quick to point out that highly desired neighborhoods remain frenzied.

Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate, also commented on supply. “Although the housing inventory locally is up slightly, we just don’t have enough of the right inventory in the right neighborhoods to satisfy the demand. Our inventory today in King County is under 1.9 months’ supply,” he lamented, noting that’s well below the normal level of 5-to-6 months. “The lack of supply leads to multiple offers and many properties selling for above their list prices.”

Looking ahead, brokers are upbeat:

“A growing economy, job growth, pent up demand, competitive mortgage rates, affordable home prices and low unemployment will keep housing moving on an upward trajectory,” predicts Gain.

With a name like “Gain,” how can you predict anything but a perpetual upward trajectory?

Overall these NWMLS press releases are starting to feel more and more like the ones that were published in the year or so leading up to the market peak and subsequent crash. I’m definitely starting to get nervous again.

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

Seattle Times

Coral Garnick and Sanjay Bhatt: Seattle median home price leaps past 2007 peak

The median price of single-family homes sold in Seattle rose last month to $543,500, blowing away the last peak of $501,000 set in August 2007 — before the housing bubble burst and the country went into the Great Recession.

It’s too soon to say whether the Seattle market can sustain that level; in June the median price of homes sold was $499,000. Nationally, in July existing homes in the top 20 markets were 18 percent short of their summer 2006 peak, as measured by the S&P Case-Shiller index.

“The Seattle marketplace is a very special place in the nation because of our robust job sector,” said J. Lennox Scott, CEO of John L. Scott Real Estate. “We are just in one of those places in the nation where this recovery took place, and all the fundamentals are in place for it to continue.”

“Seattle is special” is such a cliché phrase used to justify otherwise unreasonable home prices that we gave it its own tag on Seattle Bubble back in 2006. Lennox trotting it out again is yet another sign that we might be back in bubble territory.

Seattle P-I

Aubrey Cohen: Seattle’s median house price tops 2007 peak

“Certainly those are extreme pricing numbers,” Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington, said Wednesday.

A big reason for the price increases is a continued shortage of homes, despite some improvement in July.

“Obviously we’ve still got an inventory issue,” Crellin said. “That’s not a healthy supply for the market.”

Crellin said he expected that months of talk about the inventory shortage, along with prices rising to the point where people who bought during the peak would no longer be underwater, would have spurred more owners to list their homes.

People just don’t want to move, apparently, and many of those that do seem to be content to hang onto their home as a rental.

Once again, the Everett Herald has no story, so here’s a piece in the PSBJ instead.

Puget Sound Business Journal

Marc Stiles: Still too tight: Limited number of Seattle houses for sale drives prices higher

More houses were for sale last month in the Puget Sound region compared to this time last year, but the inventory was still way too limited, area Realtors said Wednesday.

For months, real estate agents have been clamoring for more houses and condos to sell. They’re starting to get their wish, albeit slowly. In the four counties, the number of residences on the market climbed to nearly 14,700 in July, or around 1,550 more than a year ago.

Listings, listings, listings!

Tacoma News Tribune

Rolf Boone: South Sound housing market shows strength in July

The summer home-buying season finally kicked into gear in South Sound as sales and median prices rose in July, according to Northwest Multiple Listing Service data released Wednesday.

Pierce County home sales barely inched higher last month, but the county still recorded 1,205 homes sold, the most units sold in one month this year, the combined single-family residence and condo data show. Median prices rose more than 4 percent to $230,000 in July from $220,000 in July 2013.

It’s all about those listings, boss.

The Olympian

Rolf Boone: South Sound housing market shows strength in July

The summer home-buying season finally kicked into gear in South Sound as sales and median prices rose in July, according to Northwest Multiple Listing Service data released Wednesday.

Thurston County, meanwhile, had one of its best months all year as sales and median prices both rose last month. Sales climbed to 362 units last month from 342 units in the same period a year ago, while median prices inched up nearly 3 percent to $234,950 from $228,500 in the same year-over-year period, the combined data show.

One factor that might be influencing the market is that there are not a whole lot of homes to choose from. Although inventory levels are higher than they were a year ago – up 19 percent in Pierce County and nearly 15 percent in Thurston County – it still equates to less than four months’ supply of homes in Pierce County, while Thurston County is right at four months, the combined data show.

It’s literally the same exact article as The News Tribune.

(Coral Garnick and Sanjay Bhatt, Seattle Times, 08.06.2014)
(Aubrey Cohen, Seattle P-I, 08.06.2014)
(Marc Stiles, Puget Sound Business Journal, 08.06.2014)
(Rolf Boone, Tacoma News Tribune, 08.07.2014)
(Rolf Boone, The Olympian, 08.06.2014)

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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
    BacktoBasic says:

    People can’t afford to move. There are still a lot house under water. Good job i still scarce. Interest is getting higher if home owner already locked to historic low rate. New home builder is still watch for economy to improve. People are stuck with the wood box for whatever reason. All these translate to low inventory. The buyer has to accept the high price. Tim, what’s the buy vs. rent ratio in Seattle now? But the recent min $15 will definitely add incentive for landlord to increase rent.

  2. 2

    RE: BacktoBasic @ 1

    Banks Are Tight

    I asked a HOA advocate in my neighborhood why I shouldn’t believe a $3K lien per unit or 4% interest payments for 10 years to fund a $300K HOA improvement loan collateral on about 100 units wasn’t rejected by the bank(s) after waiting for the work to start the last 3 months. The reply back is the loan has not been rejected and I wouldn’t see a bill in writing anyway. How can they bill you for $3K or $30/mo without a written bill to all the banks and home owners holding the Title [like me]? I know they mail the revised escrow paperwork to the tooth fairy?

    I know its legal for HOAs to raise fees until we all move out; but jamming a lien down many other banks’ throats by one lending bank not only appears illegal, I’m sure it is….correct me if I’m wrong…

  3. 3
    BacktoBasic says:

    RE: softwarengineer @ 2 – Banks are more consertive. if any of you default the lien and turn in the key back, the worse situation is the condo owner is under water and there is no equity left to cover the roof repair. Could this happen, I don’t think so. But being through 2008 waterfall, anything could happen. This time, no bail out.

  4. 4
    Erik's Step Dad says:

    RE: softwarengineer @ 2

    I am pretty sure you’re wrong. But your post is so horribly written and devoid of context it is hard to be sure.

  5. 5
    redmondjp says:

    [filling in for those permaboosters that no longer frequent this site]

    “We’ve reached a new, permanent plateau. Prices will remain high, and then start escalating again after a few years. Just look at the bay area for what can happen – our prices are a bargain compared to theirs. You don’t want be sitting there a few years from now thinking: ‘Gee, back in ’14 I could have bought that Riverwalk condo in Redmond (close to Microsoft, Marymoor Park, and the Sammamish River Trail) for $355K and now it’s $670K, goshdarnit!’ “

  6. 6

    RE: softwarengineer @ 2

    Generally, any time an HOA needs to raise $300,000…there has been a failure to accurately set the dues appropriately for a very long time. But many people choose condo to purchase by lowest dues, and run into this problem for that reason.

    Unless you disagree with the improvement itself…I don’t understand your complaint. If new roof was needed, as example, I would be more upset that the people who lived there while the roof was deteriorating weren’t charged their fair share of that wear and tear while they lived there, than what you appear to be complaining about.

    If you need a $30 a month increase for roof replacement today, then the dues should be raised at least $60 or more, so that when the roof needs to be replaced again in the future, the money is available without the need to borrow.

    CA has the best prototype to follow on HOA management. I highly and often recommend that every HOA Board Member…or people who want to do things well even when not required by WA law to do so…own and understand everything in this book.


    It makes everything about condo management 100% clear and is a fantastic guide book for HOA management. Most any Special Assessment is a result of failure to run things well over time. In an ideal world every replacement should be earmarked in the Reserve Funds and Special Assessments should only occur for unforeseen events. Needing a new roof some day is not an unforeseeable event. Exception is often complexes with very few units of about 12 or less.

  7. 7
    whatsmyname says:

    RE: redmondjp @ 5 – Ha ha; right on! Twenty cents on the dollar!!! The Great Reset is on the way! Inventory tsunami around the corner!! Oh, wait, I thought you said permabears.

  8. 8
    wreckingbull says:

    Can’t they trot out someone else besides crufty old Lennox? Anyone for a change. Even the kid that washes and waxes the JLS BMW fleet. He must have an opinion on Real Estate valuations too. Does not matter who. I don’t care, just some other angle would be nice.

  9. 9
    Ryan Mack says:

    Speaking of bubbles, does anyone else consider this a huge red flag that banks are getting eager to start lending to anyone with a pulse?


    My opinion: past collections do matter, even small ones. If I can’t be bothered to keep track of my small bills, what does that say about the big ones?

  10. 10
    Blurtman says:

    RE: Ryan Mack @ 9 – The precedent has been continuously set by the banks themselves who have recently had to be rescued from insolvency and yet continue to have access to near zero interest rate credit. The same banks have committed securities fraud, laundered drug money, engaged in wide spread forgery and perjury, and yet continue to borrow at extraordinarily low rates. And besides, they are lending money that they do not have, and so the concern you raise seems a bit misplaced.

  11. 11
    Erik says:

    I hope this bubble doesn’t burst for a year. I am at the king county court steps now to bid on one. Hope I get something…

  12. 12
    Erik says:

    Cool, I got. Now we can talk more about condo remodel for the next year.

  13. 13

    RE: Erik @ 12 – Or talk about:

    1. Damn, I didn’t know I was bidding on a second position deed of trust.
    2. Damn, I didn’t know the association was going to have a huge special assessment.
    3. Damn, I didn’t know the owners had filed bankruptcy yesterday.

    Don’t get me wrong–a condo is probably one of the least risky foreclosure purchases, because there should be fewer structural issues. But there are some risks, and with #2 above there’s few ways to research that one.

    [Love the gollies–they allow people to fill in words on their own which are likely much worse than the word I used!]

  14. 14
    Erik says:

    RE: Kary L. Krismer @ 13
    The hoa might want me to pay $5k for back dues. I am hoping to weasel out of that though. We’ll see… Fun times either way. I will make this place prettier than the kirkland place because I have some money now. Everything is easier when you have some money to remodel with.

  15. 15
    Mike says:

    I thought this article was interesting from the Seattle Times and am surprised it didn’t make the cut.


    Article itself was sort of the usual fluff, but the interactive graph linked to on the side was interesting and seems reasonable credible if Redfin provided the data. Really demonstrates how important specific locations are, which I’ve always thought was true in Seattle area where you have weird legacy things like 85th street where you can find the answer to Shel Silverstien’s question of where the sidewalk ends.

  16. 16

    RE: Erik @ 14 – I would suggest consulting an attorney if they want that kind of money for back dues. The deed of trust foreclosure could/should have wiped out a bunch of them. I was talking about special assessments that might come due in the future.

  17. 17
    Shoeguy says:

    If you’re buying a home when inventory stands at 2 months and interest rates are still hovering at historic lows, you are buying the most expensive home you can buy.

    Ten years from now, when the selection of housing is triple what it is today and interest rates are back up to 7%, good luck selling it for a profit to the next guy making what you’re making today (considering there is no reason not to assume that incomes will continue to stagnate like they have the last decade.)

  18. 18
    Another Mike says:

    RE: Blurtman @ 10 – Those banks just create money out of thin air when they create a loan. They don’t need to have any money on hand to loan it out. That’s the magic of banking today. Under ZIRP, these banks borrow money from the Fed at 0.005%, and loan it back to the Fed at 0.025% interest. That may not seem like much except they are borrowing $billions, which the banks just then lend back to the Fed. This money that was just borrowed from the Fed (also created out of thin air) and lent back to the Fed, is used as collateral for the banks operations- including those sub-prime home loans.

    Those sub-prime loans will then be resold as part of mortgage backed securities anyways; there is great demand for them from retirees & pension plans because the return on safe investments are so low, due to ZIRP. Zero Hedge ran a piece about a research paper on MBS recently. Something like 75% of all MBS’s ended up getting downgraded or outright written off since 1999 – they are a terrible investment.

    The more you learn about the system, the more horrified you will get.

  19. 19
    Blurtman says:

    RE: Another Mike @ 18 – Yes, and one of the biggest creators and sellers of fraudulent securities became a US Treasury Secretary. It is surreal to see folks go about their daily routines, peddling RE, in a country that has been taken over by the financial industry.

  20. 20
    Erik says:

    RE: Kary L. Krismer @ 16
    I heard that can legally hold you hostage for 6 months of back dues. That would only cost me about $2400. To consult a lawyer would cost me atleast $300. I think they would tell me that yeah, I owe them 6 months of dues which would increase my total cost to $2700. If I had a lawyer fight it, I imagine it would atleast cost $2400. My best option is to first tell them I don’t owe anything. If that doesn’t work, I will pay up to 6 months of dues. Anything more than that, I will get a lawyer to help me out. What I really need is to learn where to find these rules so I can through around law talk for free and make some good points.

    Blurtman, This country has been raped and pillaged by greedy bankers and we blame it on the families that foreclosed and are scraping to get by. You gotta love capitalism. I see it with most of this people on this site. I definately see it with these software people that are rule followers. These code monkies where told rules by the bankers, so they follow them. Everyone got raped by the banks and these code monkies still support those same people that raped them getting richer while us people with honest jobs are getting poorer. Wake up and smell the coffee bozos. When Tim posts it is always things like, oh no!!!! Housing prices went down!!! I noticed all his negative feelings come when rich people lose money and opportunity is created for poor people. I do not share that same opinion. I am happy when rich people lose some of their money and poor people get an opportunity to live a little better. Being poor is depressing. When you go from wealthy to regular, it probably isn’t that bad.

  21. 21
    Oahu Realty says:

    If you think $543,500 is too high for the median home price, Oahu is currently at $683,500. We too are experiencing a summer doldrum. Properties in the more popular and affordable areas are moving quickly. Everything else seems to be moving a bit slower than was anticipated for this summer.

    Prices are definitely rising. And economic indicators show that this trend will continue for years.

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