Sales Growth in 2014 Has Been the Weakest Since 2009

I thought it would be interesting to visualize year-over-year sales increases and decreases by NWMLS neighborhood in King County using the one of the views I created for Case-Shiller data. In the chart below each NWMLS-defined neighborhood in King County is represented by a green square if sales increased that month compared to a year earlier or a red square if sales decreased.

King County Closed Sales by Neighborhood

When viewed in this way, an interesting pattern becomes apparent. Although home prices did not bottom out until early 2012, sales began to increase in more neighborhoods than they were decreasing by mid-2011, and remained relatively strong all the way through late last year.

However, starting in November and continuing through the recently-released August data, the scales tipped back toward sales losses again.

To get another view on how weak sales are this year, here’s a view of the average number of neighborhoods experiencing sales gains from January through August in each of the last fifteen years:

Neighborhoods With Increasing Sales

You have to go all the way back to the middle of the housing bubble bust in 2009 to find another year with sales growth in King County neighborhoods as weak as it has been in 2014.

It will be interesting to see if we hit another dip this coming November like we did last year, or if things level out.

0.00 avg. rating (0% score) - 0 votes

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.

12 comments:

  1. 1
    Macro Investor says:

    Goldman Sachs is predicting another housing crash within the next 3 years. Even going so far as sending a warning letter to Obama.

    The question we have to ask is, do banksters say what they mean for public consumption? Or it this just more fear mongering to keep rates low, or to cry for more special favors/bailouts?

    http://www.zerohedge.com/news/2014-09-17/goldmans-former-head-housing-research-predicts-housing-crash-within-three-years

  2. 2
    The Tim says:

    RE: Macro Investor @ 1 – Relevant: Checking Up on Goldman’s Bearish 2010 Two-Year Forecast

    They predicted a 22% drop in Seattle home prices between 2010 and 2012.

    At the time this prediction was made (June 2010), the Case-Shiller Home Price Index for Seattle stood at 146.83. At its lowest point this year (February) it was 128.99. That’s a drop of 12.2%—almost dead center of my 10%-15% prediction and nearly ten points less than Goldman’s call.

    I don’t know how Goldman Sachs’ house price model managed to suggest such a large drop, but local economic fundamentals did not support another 22% drop between 2010 and 2012 any more than they suggested continued home price increases in 2007.

  3. 3
    Charioter says:

    RE: The Tim @ 2
    Did that happen?

  4. 4

    RE: The Tim @ 2

    Yes Tim

    There’s one thing I refuse and can’t do anyway in financial planning; predict real inflation [not the dolled up NWO MSM hogwash]. In my book real inflation went up about 100% the last decade [i.e., gas, food, tuition, healthcare, etc]….whether the bull pundits want to admit it or not [i.e., a QE propped stock market] this sucks money away from real estate and savings.

    What’s the real inflation going to be 5-10 years from now? Lord only knows….hades, if the bottom falls out of household incomes of the bottom 90%, I see deflation possible when consumer spending plummets, like the Great Depression. I also see credit and 2nd mortgages “ATM Machining” the economy to real inflation possible too…but, its heydays are limited, and could shut off very soon too. The realtors must sit and wait to see what happens like the rest of us.

  5. 5

    RE: softwarengineer @ 4
    SWE- The relators aren’t going to sit and wait, because they’ve got a vested interest. Just because they are the least qualified to make predictions hasn’t stopped them in the past. There has never been in a time, maybe in recorded history, when a realtor hasn’t said something like ” “Now is a good time to buy.” The problem six or seven years ago was that too many people believed them, and they believed themselves. A whole lot of real estate agents lost their own houses via either short sale or foreclosure. I still have clients who ask me what I think the market is going to do. I don’t know how to answer that without sounding wishy washy. It’s usually something like ” I don’t think the market is going to significantly tank within the next year or two, but after that, all bets are off.” It strikes me that home prices have gone up too much and too quickly, and that can’t continue. But whether that means a crash, or prices staying in a narrow range for a while, I don’t know. People asking me if they should buy a house is like going into a clothing store and asking if you should buy a new wardrobe. But I always caution people that it’s usually not a good idea to buy a house that’s for the amount they are approved for by a lender, and that it’s probably not a good idea to buy a house if they think they’re only going to keep it for 2 or 3 years. Not that prices are necessarily going to go down, just that there’s a lot of risk involved.

  6. 6
    Macro Investor says:

    By softwarengineer @ 4:

    RE: The Tim @ 2
    I see deflation possible when consumer spending plummets, like the Great Depression.

    Open your eyes SWE. Nothing goes down in price any more because only a few large companies control almost every product, and they’ve gotten very good at matching demand with just enough supply.

    Except maybe in clothing, there are no more large overshoots in supply that must be sold at low prices. Look at how auto producers throw away millions of new cars rather than lower their prices.

    People have been getting poorer for 50 years — the frog boiling a little more each year so that it’s hardly noticeable. Technology lowers costs of everything. Outsourcing and layoffs massively lower costs. Yet prices don’t come down. It goes to corporate profits and executive salaries… and lobbying for political protection.

  7. 7

    By Ira Sacharoff @ 5:

    A whole lot of real estate agents lost their own houses via either short sale or foreclosure. I still have clients who ask me what I think the market is going to do. I don’t know how to answer that without sounding wishy washy..

    Yep, for agents the advise should be the same as for drug dealers: “Don’t get high on your own supply.”

    As to the second part, it’s not wishy washy to say that you don’t know, and then add in that know one does, it’s impossible to predict the future. In the attorney world the last attorney you want is an attorney who has an answer to every one of your questions. If they do, they are making up at least some of the answers, because some things are very fact specific.

  8. 8
    Mike says:

    RE: Macro Investor @ 1 – There are a few problems with this logic.

    1) There is currently no excess supply from years of overproduction the way there was in 2007. Quite the opposite. Years of near zero inventory growth were followed by years of well below trend housing starts. New construction hasn’t even come back up to trend – total starts are below trend, and single family starts are still near 50 year lows since most of the recent growth was in apartments. Nearly all of the ‘excess inventory’ out there today is a holdover from the bubble, and it’s not evenly distributed at all.

    2) Due to historically strict lending standards, there isn’t a massive number of loans that need to be cashed out or refinanced all at once the way there was in 2006-2010. Again, quite the opposite. The people who bought or refinanced when rates were low may never need or want to refinance ever again. The people who are in that position are, once again, holdovers from the last bubble and most have already defaulted.

    3) Most of the dumb money was shaken out of the market years ago. Back in 2007 everybody knew somebody that was buying or had bought an ‘investment’ property of some sort – IE: a house they weren’t planning on occupying. Individual investors could easily buy a half dozen investment homes. Now, it’s unlikely these folks would be able to buy more than one home.

  9. 9

    RE: Macro Investor @ 6
    Its a Bucket of Worms, I Agree With You There

    Here’s a new area of the 1992 United Nations globalist mandate that would end real estate as we know it today, all together in Seattle [making both of our blog opinions a moot point]. I’m new at understanding this Agenda 21 [most of the news sources on it are fringe BTW], but here was my first whack on the Immigration Reform website out of Washington DC:

    Nothing Seems to Make Sense When America’s Sovereign Laws on Immigration are Ignored By the Open Border Pundits and Foreign/Corporate Globalists

    I’m trying to approach this “Frankenstein” with a cool calm blog attitude [that doesn’t appear paranoid], but let’s pragmatically look at the bizzarre open border facts and try to explain the reason our government is pushing this country into theoretical extinction. I read this recent local news opinion letter from a Wisconsin County news source and its fight to ban the 1992 Agenda 21 implementation. It startled me, because it explains the reason for this FAIRUS.ORG amnesty and overpopulation fight even existing. I’m new to this type of NWO rationale, and don’t want to appear fringe. But good gosh, what’s more fringe than refusing to obey our sovereign immigration laws?

    A snipet from the opinion letter:

    “…From bailouts to racism, climate change to gun rights, cities shut down to terrorism. The list is almost endless. These are the things that keep Americans terminally ill to the fact that our country is being dismantled. Many of our leaders vote in the interest of their highest paid concerns and the system of checks and balances almost nonexist.

    The dismantling of our country is not only on the federal level. State, county and local agencies, unelected, by the people, regulate on our daily lives, accessing our personal records and private property without warrants using as little as anonymous calls to do it. Threatening and imposing large fines on citizens, making it harder to survive in an already threatened economy….”

    http://www.ashlandwi.com/opinion/letters/article_8f718896-3e02-11e4-b037-3b2742076711.html

    Please read the rest of this opinion letter from the URL I pasted above. Its very well written and yes, local governments are taking it serious enough to vote to ban this UN resolution from their communities. It appears fringe and paranoid, but is it?

    Its definitely a bucket of worms to understand if the United nations Agenda 21 is the real culprit behind the following:

    Current Open Borders to destroy and bankrupt America through overpopulation invasion.
    Depopulation not voluntary [like current sovereign America’s 1.7 birthrate without immigration simultaneously overpopulating it], but “mandatory” [I’ve read down from 7 billion to 0.5 billion on Earth].
    Eventual elimination of automobile use.
    Eventual elimination of land and home ownership.
    Bulldozing the subburbs and making us live as serfs in condo prisons in the city centers.

    Do I believe Agenda 21 is behind this current push for amnesty? I’m gathering more facts, but it appears possible and at the worst case scenario, likely.

    Amnesty open borders ignoring our sovereign immigration laws is the way to currently dismantle our sovereign government control through overpopualtion bankruptcy. Step one in Agenda 21.

  10. 10
    NoahFect says:

    RE: softwarengineer @ 9 – What happened to Agendas 1 through 20?

  11. 11
    Shoeguy says:

    RE: Mike @ 8

    There are always excuses during every asset bubble as to why the current asset bubble isn’t actually a bubble…..until it pops, then nobody saw it coming.

    You would think that after “It’s different this time” became an absolute punchline during the last Housing Bubble that people would avoid using the same sentiment this time around.

    The definition of insanity and all that….

  12. 12
    Mike says:

    RE: Shoeguy @ 11 – I’m definitely not saying that the current market can’t deflate, just that aside from another sharp deflationary recession I don’t believe that current supply and demand is drastically out of balance the way it was in 2007. Therefore predicting another sharp decline based on factors similar to those in 2007 is foolhardy.

    In particular, this ex-Goldman analyst drawing on “home builder inventory” as a sign of oversupply in the face of record low single family housing starts seems ridiculous.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.