Despite Red-Hot Housing Market, One in Five Pending Sales Still Fail to Close

With another quarter fully in the books, let’s take a look a the latest data on pending sales volume versus closed sales volume.

For this series I roll the pending sales and closed sales data up by quarter, with pending sales offset by one month. In other words, the second quarter numbers below represent pending sales from March, April, and May and closed sales from April, May, and June.

Pending & Closed Sales of King Co. SFH

After dropping in Q4 to a level near its lowest point since the NWMLS’s redefinition of “pending” in July 2008, the gap between pending sales and following month closed sales grew in Q1 and Q2. This is not surprising though, since typically the first and second quarter of the year see a slightly larger gap than the third and fourth quarters.

The fact that one in five pending sales don’t appear to be closing even in this ridiculously overheated market is the one silver lining for home buyers out there today. Even if you lost the bidding war on the “home of your dreams,” keep a close eye on the home because there’s a chance it might be back…

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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.

28 comments:

  1. 1

    The HUD Homes in my HOA are Selling

    The low end priced units have hope.

  2. 2
    sleepless says:

    I saw a “New Homes” sign spinner yeaterday in northern part of Bellevue DT, next to the single family residential area. I thought home sell by themselves nowadays? Is the sign spinner a sign of desperation? Just wonder because I have never seen sign spinners for new homes

  3. 3

    RE: sleepless @ 2 – Maybe with every house sold they’re giving away a free mattress!

  4. 4

    RE: sleepless @ 2

    New Homes Have Special Financing

    Like big down payments and conventional loans only. The contractor is in debt and needs to reduce his risk.

  5. 5
    David B. says:

    “Even if you lost the bidding war on the “home of your dreams,” keep a close eye on the home because there’s a chance it might be back…”

    Of course, if it fails to close, there’s a fair chance it failed to close for a good reason (i.e. major defects came up in inspection)…

  6. 6

    By David B. @ 5:

    “Even if you lost the bidding war on the “home of your dreams,” keep a close eye on the home because there’s a chance it might be back…”

    Of course, if it fails to close, there’s a fair chance it failed to close for a good reason (i.e. major defects came up in inspection)…

    Not necessarily. Our inspection forms are a subjective standard, so the buyer can walk for any reason, and they are not required to give a reason. So it could be next to nothing (even cold feet) or it could be a very serious condition (foundation issue). On the last two transactions I’ve had my buyer clients walk from, one I’d be happy to show buyer clients the same house and one I’d advise them to not even consider that house. And the latter one did close to another buyer, so your concern is real.

  7. 7
    lordcecil says:

    “Even if you lost the bidding war on the “home of your dreams,” keep a close eye on the home because there’s a chance it might be back…”

    I’m not sure this is actually true. My anecdotal observation is that the homes failing to close is largely due to failed inspection.s People are putting some *really* rough houses on the market right now. So I’m not sure the “dream homes” are the ones getting re-listed.

  8. 8
    Blurtman says:

    Embarrassing realtor stories:

    Popular teacher ‘murdered her husband and infant son’ – and lay with their dead bodies for two days until she was discovered by a realtor showing their home

    http://www.dailymail.co.uk/news/article-3168878/Popular-teacher-murders-husband-infant-son-attempting-kill-suffering-paranoia-lays-dead-bodies-TWO-days-undiscovered.html

  9. 9

    RE: Blurtman @ 8 – Not sure why that’s embarrassing. It is sad.

  10. 10
    Mike says:

    By Kary L. Krismer @ 9:

    RE: Blurtman @ 8 – Not sure why that’s embarrassing. It is sad.

    Yeah, I can’t even imagine finding that. I feel sorry for all involved.

  11. 11
    Erik says:

    RE: Blurtman @ 8
    Everyone stopped posting comments because you killed the mood. Way to go.

  12. 12
    Blurtman says:

    RE: Erik @ 11 – OK. Back to RE. In the lovely Reese’s Pieces Runs, this newly constructed beauty means no surprises from former occupants. And it’s a steal at $1 million. Surround yourself in 4,037 sqft of Murray Franklyn luxury. Impress your family and friends. You have arrived at Reese’s Pieces!

    http://www.zillow.com/homes/for_sale/Sammamish-WA/2102357660_zpid/26938_rid/1_pnd/47.606486,-122.049104,47.605549,-122.050941_rect/18_zm/1_fr/?view=map

  13. 13
    redmondjp says:

    RE: Blurtman @ 12 – Naaaah, now come on! That is much too far to drive to get to work @MS! HERE is where you want to live, within walking distance to the renowned Grasslawn Park (where world football and cricket games abound), and only a few minutes’ drive from work:

    http://www.quadranthomes.com/find-your-home/grasslawn-estates/

    Prices ‘expected’ to start in the low $1 millions . . .

    Maybe others can put in their $.02 regarding quality of Murray Franklyn vs. Quadrant . . . all I can say is that the Quadrant homes have factory printing on the headers and footers telling the hammer-monkees where to nail what board when they show up on the jobsite. You can come to your own conclusions about that.

  14. 14
    Erik says:

    RE: Blurtman @ 12
    Too big of a house I think. Good transition though. Anywho, enough about death…

  15. 15

    By redmondjp @ 13:

    Maybe others can put in their $.02 regarding quality of Murray Franklyn vs. Quadrant . . . all I can say is that the Quadrant homes have factory printing on the headers and footers telling the hammer-monkees where to nail what board when they show up on the jobsite. You can come to your own conclusions about that.

    Not going to comment on either of those builders, but smaller doesn’t necessarily indicate quality. I’ve seen two smaller builder homes recently, both about 10 years old, where the Hardieplank (sp?) siding wasn’t installed properly. One they nailed the bottom corners where two pieces butted together, and about 50% of those areas have cracked, such that there’s a triangular piece sitting at many of the corners of siding. That listing failed to sell, so I wonder if others noticed it. But that’s probably not so bad compared to the other one. The other one they still tried to nail the bottom of each piece where two pieces butted together, but they did it by pounding a single nail in-between the two pieces! They then caulked (not sure if that was recommended then or not) and the caulking is failing, so water is being diverted to the nail and probably right into the house.

  16. 16
    Blurtman says:

    The real estate market in the greater Seattle area is doing great. Owners have to be happy. The Zillowmeter says my home is worth more than at its pre-crash peak.

    Homes are selling quickly. Yes, open spaces are disappearing, but we still have trees. And the stock market is holding its own.

    We are in a new era. It’s a new morning in America. The feeling is definitely there. The old cynicism is gone. We have faith in our leaders. We’re optimistic.

    As to what becomes of it all, it really boils down to ourability to accept. There are no limits.

  17. 17

    By Blurtman @ 16:

    The real estate market in the greater Seattle area is doing great. Owners have to be happy. The Zillowmeter says my home is worth more than at its pre-crash peak.

    Homes are selling quickly. Yes, open spaces are disappearing, but we still have trees. And the stock market is holding its own.

    We are in a new era. It’s a new morning in America. The feeling is definitely there. The old cynicism is gone. We have faith in our leaders. We’re optimistic.

    As to what becomes of it all, it really boils down to ourability to accept. There are no limits.

    They’ve gotten to you. You have been assimilated.

  18. 18
    Mike says:

    By Blurtman @ 16:

    The real estate market in the greater Seattle area is doing great. Owners have to be happy. The Zillowmeter says my home is worth more than at its pre-crash peak.

    Homes are selling quickly. Yes, open spaces are disappearing, but we still have trees. And the stock market is holding its own.

    We are in a new era. It’s a new morning in America. The feeling is definitely there. The old cynicism is gone. We have faith in our leaders. We’re optimistic.

    As to what becomes of it all, it really boils down to ourability to accept. There are no limits.

    If the zillowmeter is just now showing your home is past the pre-crash peak, something is wrong. Most Seattle neighborhoods passed that point over a year ago. You should be around 20% above summer 2007 by now.

  19. 19
    redmondjp says:

    RE: Blurtman @ 16 – But we’re losing our trees right now:

    http://www.king5.com/story/news/local/2015/07/21/drought-making-dutch-elm-disease-worse/30496591/

    http://www.kirotv.com/news/news/traffic-alert-sr-522-closed-both-directions/nm4Xr/

    The tree that fell down on 522 was a locust tree, which is one of the most evil trees God ever created. Why? Because they can break, without warning, without wind or snow, and block traffic for hours (same thing happened around the corner from me a few years ago on a major street and the fire department had to cut the tree up and get it off the road). I have two of these trees in my front yard.

    And the geniuses at the City of Redmond required the developer to LEAVE one of these nasty trees on the nearby 4-lot short plat, along with a lot of half-dead poplar trees that similarly will be eventually falling down.

    All trees are not created equal. I have the trifecta of garbage trees near my house: poplar, locust, and cottonwood. Never, ever plant one of these trees anywhere on your property. A neighbor’s poplar caused over $2K in damage to the roof of my truck ($50 comprehensive deductible FTW).

  20. 20

    By Mike @ 18:

    If the zillowmeter is just now showing your home is past the pre-crash peak, something is wrong. Most Seattle neighborhoods passed that point over a year ago. You should be around 20% above summer 2007 by now.

    Incorrect. There are many neighborhoods which still have not recovered, which means there are other neighborhoods which have gone way up.

    In any case Zillow has never been that accurate, and lately I’ve noticed it seems to be getting worse, not better (although admittedly a very incomplete, insufficient sample).

  21. 21
    Blurtman says:

    RE: Ira Sacharoff @ 17 – The last bit is from my avatar in They Live.

  22. 22
    David B. says:

    RE: Blurtman @ 12 – Yuck, just yuck. I’ve never liked houses with oversized two-story entries like that. They’re making a pathetic try at traditional design yet miserably failing at it.

  23. 23

    RE: Blurtman @ 16

    Now if everyone would just learn to cook…using only fresh, locally grown ingredients…instead of succumbing to the evils of quick and easy fast food…the world would be our oyster! Or at least Seattle would be our oyster…hmmm…does Seattle have oysters?

  24. 24

    RE: Ardell DellaLoggia @ 23 – The Puget Sound area has oysters, but I’m not sure about Seattle proper. If it did I’d be concerned about eating them due to pollution concerns like those for bottom fish.

  25. 25

    By Ardell DellaLoggia @ 23:

    RE: Blurtman @ 16

    Now if everyone would just learn to cook…using only fresh, locally grown ingredients…instead of succumbing to the evils of quick and easy fast food…the world would be our oyster! Or at least Seattle would be our oyster…hmmm…does Seattle have oysters?

    Puget Sound has oysters, and they’re a wonderful thing to have for Happy Hour.

  26. 26
    steve says:

    Zillow is way off base on values of homes in Capitol Hill. Not sure if that is true in other parts of the city. The last few sales of town homes recently have been sold over the zestimate by between $50, 000 – 60, 000. Zillow is NOW an advertising site mainly.

  27. 27
    Jonness says:

    By Kary L. Krismer @ 24:

    RE: Ardell DellaLoggia @ 23 – The Puget Sound area has oysters, but I’m not sure about Seattle proper. If it did I’d be concerned about eating them due to pollution concerns like those for bottom fish.

    No way I would eat oysters off a Seattle beach. The best oysters are grown by Taylor Shellfish in Totten Inlet where they grow fast in clean water with a high nutrient content. I like the Kumamotus the best.

    http://www.taylorshellfishfarms.com/about-our-shellfish.aspx

  28. 28
    Blake says:

    RE: Jonness @ 27
    Kumamotos are the best oysters! And I second Taylor shellfish… They have an outlet on Melrose between Pike and Pine… awesome!

    We sold one of our houses in CapHill/CD area last week for more than $100k over the Zillow estimate… But it was only 3 BRs and the description/fact sheet that Zillow’s algorithm uses could not possibly estimate all the intangibles (it was a turn of the century Victorian…)

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