NWMLS: Sales Slip Slightly from September to October

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October market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release.

Real estate brokers expect only a modest holiday slowdown
But prices in most areas are still rising

With holidays approaching, real estate brokers usually expect a slowdown as buyers and sellers shift their attention elsewhere. “This year is different,” say some industry leaders.

“Today we have one of the best markets we’ve ever seen for sellers,” observed Ken Anderson, managing broker and owner at Coldwell Banker Evergreen in Olympia. “Buyers are still surging to the market and inventory is low. It’s a very good time to sell. Owners who are eager to make the next move don’t have to wait six months or until spring to act,” added Anderson, a former board member at Northwest Multiple Listing Service.

“Buyers are still surging to the market” is definitely not how I would describe a month-over-month decline in pending and closed sales, and year-over-year sales growth of just 1-2 percent. But then again I am not a used home salesman.

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):

October 2015 Number MOM YOY Buyers Sellers
Active Listings 3,064 -10.0% -32.0%
Closed Sales 2,301 -2.7% +2.8%
SAAS (?) 1.06 -2.8% -8.1%
Pending Sales 2,675 -2.8% +1.3%
Months of Supply 1.33 -7.5% -33.8%
Median Price* $480,000 -2.1% +7.3%

I continue to be surprised that prices are not up 10 to 20 percent year-over-year, with the strong sales and weak inventory numbers we’ve seen all year. Between 2000 and 2014, five years saw sales increase between September and October, but on average across the 15 years, sales were flat over the period. This year’s 3 percent decline is definitely not a strong signal, but it’s not a sign that a market collapse is imminent, either.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell 3 percent from September to October. Last year they rose 6 percent over the same period. Meanwhile year-over-year closed sales dropped significantly slightly to the lowest level since January.

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

King County SFH Inventory

Inventory fell again from September to October, while the year-over-year number continued to drop as well. At this rate January will most likely set a new record for low on-market inventory.

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

Everything in this chart is still in sellers’ favor, but the demand line moved toward balanced market territory in October.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Not much change in this chart, which moved from +6.6 percent in September to +7.3 percent in October.

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

The median home price continues to bouncing around in the same $480,000 to $500,000 range it has been in since April.

October 2015: $480,000
July 2007: $481,000 (pre-2015 high)

Here’s this month’s article from the Seattle Times: Short supply pushes up region’s home prices

Check back Monday 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.

34 comments:

  1. 1
    GoHawks says:

    Of course sales are going to slip a little when inventory is down 10% MoM and 32% YoY, there is simply very little out there to choose from.

    The surprise is, that sales numbers are remaining near flat given that there are a third fewer homes to choose from.

  2. 2
    ess says:

    To quote Tim from his article
    I continue to be surprised that prices are not up 10 to 20 percent year-over-year, with the strong sales and weak inventory numbers we’ve seen all year. Between 2000 and 2014, five years saw sales increase between September and October, but on average across the 15 years, sales were flat over the period. This year’s 3 percent decline is definitely not a strong signal, but it’s not a sign that a market collapse is imminent, either.

    My brother in law indicated to me that the value of his house in Richmond BC increased almost 30% this year. He has a nice house – but nothing unique. So why are housing prices increasing so much faster in the Vancouver BC-Richmond area of BC than in Seattle and area? More foreign buyers from overseas? More immigration from other parts of Canada flocking to Vancouver? Different buying patterns? Vancouver and Seattle are so similar in so many ways – one wonders why there is such as difference in rising prices? One hint – lower Canadian dollar is attracting American buyers. Are there so many Americans flocking to Canada forcing prices up? But with the difference in currency – Seattle is about as expensive. Does someone know something about Vancouver that it will keep on going up with double digit increases? Why not Seattle?
    On the other hand – a 7% year over year increase isn’t so bad, and one forecaster sees an almost 15% increase in 2016. Hope that is correct. And 20% would be really exciting for homeowners!

  3. 3
    The Tim says:

    RE: GoHawks @ 1 – Here’s an interesting fact though: For the most part, listings are only down from a year ago because sales are up from a year ago.

    New SFH listings in King County, January – October
    2014: 28,822
    2015: 28,583 (-0.8%)

    Less than one percent difference. Meanwhile, closed sales over that same period:
    2014: 20,541
    2015: 22,894 (+11.5%)

  4. 4
    Azucar says:

    By ess @ 2:

    To quote Tim from his article
    I continue to be surprised that prices are not up 10 to 20 percent year-over-year, with the strong sales and weak inventory numbers we’ve seen all year. Between 2000 and 2014, five years saw sales increase between September and October, but on average across the 15 years, sales were flat over the period. This year’s 3 percent decline is definitely not a strong signal, but it’s not a sign that a market collapse is imminent, either.

    My brother in law indicated to me that the value of his house in Richmond BC increased almost 30% this year. He has a nice house – but nothing unique. So why are housing prices increasing so much faster in the Vancouver BC-Richmond area of BC than in Seattle and area? More foreign buyers from overseas? More immigration from other parts of Canada flocking to Vancouver? Different buying patterns? Vancouver and Seattle are so similar in so many ways – one wonders why there is such as difference in rising prices? One hint – lower Canadian dollar is attracting American buyers. Are there so many Americans flocking to Canada forcing prices up? But with the difference in currency – Seattle is about as expensive. Does someone know something about Vancouver that it will keep on going up with double digit increases? Why not Seattle?
    On the other hand – a 7% year over year increase isn’t so bad, and one forecaster sees an almost 15% increase in 2016. Hope that is correct. And 20% would be really exciting for homeowners!

    Relating to the rate of increases in Canada, part of the big disparity probably has something to do with the exchange rate. In USD terms, a year ago 1,000,000 CAD was equal to about 885,000 USD (at the exchange rate of 1 USD = 1.13 CAD). So a 1,000,000 CAD house that went up 30% – to 1,300,000 CAD, would now be worth about 992,000 USD (at the exchange rate of 1USD = 1.31 CAD)… an increase in USD terms of only about 12%. Still double digits, but not 30%.

  5. 5

    RE: Azucar @ 4
    Also, One Data Point [Example] From a Brother in Law

    Is not trend analysis.

  6. 6

    By The Tim @ 3:

    RE: GoHawks @ 1 – Here’s an interesting fact though: For the most part, listings are only down from a year ago because sales are up from a year ago.

    New SFH listings in King County, January – October
    2014: 28,822
    2015: 28,583 (-0.8%)

    Less than one percent difference. Meanwhile, closed sales over that same period:
    2014: 20,541
    2015: 22,894 (+11.5%)

    So basically the higher prices are not inducing more people to put their houses on the market.

  7. 7
    ess says:

    By Azucar @ 4:

    By ess @ 2:

    To quote Tim from his article
    I continue to be surprised that prices are not up 10 to 20 percent year-over-year, with the strong sales and weak inventory numbers we’ve seen all year. Between 2000 and 2014, five years saw sales increase between September and October, but on average across the 15 years, sales were flat over the period. This year’s 3 percent decline is definitely not a strong signal, but it’s not a sign that a market collapse is imminent, either.

    My brother in law indicated to me that the value of his house in Richmond BC increased almost 30% this year. He has a nice house – but nothing unique. So why are housing prices increasing so much faster in the Vancouver BC-Richmond area of BC than in Seattle and area? More foreign buyers from overseas? More immigration from other parts of Canada flocking to Vancouver? Different buying patterns? Vancouver and Seattle are so similar in so many ways – one wonders why there is such as difference in rising prices? One hint – lower Canadian dollar is attracting American buyers. Are there so many Americans flocking to Canada forcing prices up? But with the difference in currency – Seattle is about as expensive. Does someone know something about Vancouver that it will keep on going up with double digit increases? Why not Seattle?
    On the other hand – a 7% year over year increase isn’t so bad, and one forecaster sees an almost 15% increase in 2016. Hope that is correct. And 20% would be really exciting for homeowners!

    Relating to the rate of increases in Canada, part of the big disparity probably has something to do with the exchange rate. In USD terms, a year ago 1,000,000 CAD was equal to about 885,000 USD (at the exchange rate of 1 USD = 1.13 CAD). So a 1,000,000 CAD house that went up 30% – to 1,300,000 CAD, would now be worth about 992,000 USD (at the exchange rate of 1USD = 1.31 CAD)… an increase in USD terms of only about 12%. Still double digits, but not 30%.

    That is one way to look at it, but for many ordinary Canadians, the hope of owning a single detached house in Vancouver proper with the salaries they earn is totally out of the question. Their salaries have not kept up with housing prices, One wonders if Seattle is following in their footsteps

  8. 8

    RE: Azucar @ 4 – From Article: “I continue to be surprised that prices are not up 10 to 20 percent year-over-year, with the strong sales and weak inventory numbers we’ve seen all year.”

    It really depends where you are looking. I helped my client buy this for $100,000 in early 2012 and just sold it for $172,000, so 72% up in that time.

    https://www.redfin.com/WA/Kirkland/10010-NE-122nd-St-98034/unit-QB/home/8649

    One of my clients who didn’t buy this one at $870,000 a couple of years ago (bought a different house) was just talking about it having recently sold for $1,115,889.

    When you average out the entire County you won’t be seeing the many areas that did in fact go up 10% to 20% and the “average” is pretty meaningless for most buyers and sellers.

    The up market from 2012 to present has been less evenly distributed than during the bubble years.

  9. 9
    Deerhawke says:

    I spoke with an older couple about buying their 800 sf house in Ballard for redevelopment. They haven’t put any time or money into it for more than a decade and it is a classic teardown. They want to sell at some point to move into a retirement community but are in no particular hurry. When I asked them about this, they told me that it is not easy living on a fixed income. Right now their retirement portfolio is producing between 1% and 1.5% annually. But their home’s appraised value this year went up more than 10%. Unless there is a sudden change in their health, they have no real intention of selling until things “level out.”

    That in a nutshell is the supply side of the inventory problem. Why should anyone sell when prices are rising so fast?

    On the the other hand, prices will continue to rise rapidly precisely because people are holding off on selling.

    This self-reinforcing cycle makes me believe that in the more central Seattle neighborhoods, you will see 8-10% price increases again this spring. I think median prices in Seattle will be over $600K in 2016, regardless of interest rate increases.

  10. 10
    GoHawks says:

    RE: Deerhawke @ 9 – Tim, thanks for your follow up. Good point.

    Deerhawk, I’m with you. 2016 will feel very similar to 2015 unless something out of the ordinary happens (international/national economy). Inventory will not uptick enough to slow this market down without something happening.

  11. 11
    boater says:

    RE: Deerhawke @ 9
    This is similar to what I’ve been saying only I’ve been talking about move up buyers.

  12. 12

    By Deerhawke @ 9:

    Why should anyone sell when prices are rising so fast?

    By boater @ 11:

    RE: Deerhawke @ 9
    This is similar to what I’ve been saying only I’ve been talking about move up buyers.

    I don’t remember what Deerhawke was saying earlier, but given that in 2007 we had more sellers testing the market due to price, I’d say the lack of sellers is more due to their realizing it will be difficult to find a new place. In 2007 it was more a choice of whether you had to sell first or buy first, where now you are more likely to want to buy first. That doesn’t increase inventory–that just maintains inventory.

  13. 13

    RE: Kary L. Krismer @ 6
    Yes Kary

    Retirees are just staying put and not selling their houses in America like SWE. I’m not alone. I’m staying in Seattle with a lower tier unit for family reasons, but IMO….a lot of the hesitancy to sell the high tier now is the neutral probability the house will fetch more money in the future.

    Did you see the Times article yesterday? 40% of the Seattle homes are owned by male/female singles in the house only. The biggest demographic is singles in Seattle homes, not DINKs [double incomes no kids]. Yep, SWE is not alone as a home owner in the Seattle area either.

  14. 14
    ess says:

    By softwarengineer @ 5:

    RE: Azucar @ 4
    Also, One Data Point [Example] From a Brother in Law

    Is not trend analysis.

    http://www.langleyadvance.com/business/342164761.html
    Here is a recent story of what is happening all over the lower mainland up north. Interestingly, prices are going up rapidly while Canada is in recession.
    Similarities to Seattle? Beautiful environment in a temperate zone, limited land area to develop housing, a growing population base due to migration, and foreign investors. Not to mention that the US is not in recession as is Canada’s, as the US economy is more diversified than Canada’s which is more heavily reliant on natural resources.

  15. 15

    The Week Magazine Had an Article on the Best Properties on the Market

    Some were lower than average priced Seattle homes:

    St Petersburg Fl has a ornate decorative 3 bdrm with pool for $349K.

    Galveston TX, Jamaican Beach waterfront home for $309K [steal of the week].

    They all aren’t $1M+.

    Washington State homes weren’t mentioned. Check ’em out on October’s The Week magazine. All of ’em were top grade.

  16. 16
    Jen Law says:

    This is purely an opinion on Eastside housing market.

    1. They say that it is the technology boom that is causing the Eastside housing to go insane. Microsoft, T-Mobile, Amazon etc.
    2. The point when engineers buy house is 6 yrs+ into employment. So engineers who are buying houses have their salary + bonus anywhere from 180K to 350K. I would suspect avg being 250K.
    3. The most coveted market for these engineers is Eastside with following filter: School rated 9+, closer to 520 or 90 (Bellevue, Redmond, Kirkland, NewCastle, and some parts of north Sammamish and south Issaquah), built 1985+, 3BR+ 2BA+, 2200Sqft+, $650K < price < $875K,
    4. If you search on zillow, etc. you will realize that the real crunch for housing for tech engineer crowd is something with this constraint. There were recently 2 weeks when not one house came which met this filter.
    5. Typical technology engineers who are causing the boom do not go for $1MM+ houses. They also do not go for ramblers which there are plenty of in the sub $550K range.

    If you have a house that meets the filters laid out above, you should consider selling it now. Once interest rates go up, the affordability of these buyers will drop and the data driven engineers will do the math and lower their price range.

    As I had mentioned earlier, different markets are different. Bay Area is driven by startup IPO millionaires to whom affordability is not an issue. Seattle is driven by non-startup engineers who can only stretch so much.

  17. 17
    Jen Law says:

    RE: Ardell DellaLoggia @ 8

    Exactly. The devil is in the details. Averages and stats never show the nuances of what is happening on the ground.

  18. 18
    Blurtman says:

    If you like your home, and have nice equity in it and are expecting even more with rising values, why would you want to get in a larger debt hole? With rising values, a home does become an investment in which you can live. And just as flat wages hurt the millennials’ ability to buy that starter home, flat wages as well as economic uncertainty may also make existing home owners reluctant to move up.

  19. 19
    redmondjp says:

    RE: Jen Law @ 16 – You seriously think that interest rates are ever going to go up again? That is a laugh. We have been at ZIRP for how many years now? And guess what? We’re going to NIRP (negative interest rate policy), regardless of how much saber-rattling Jellin’ Yellen does every few months to the contrary. Do some research about the end of a fiat monetary system. We are in a trap that we can’t escape.

  20. 20
    greg says:

    By Jen Law @ 16:

    This is purely an opinion on Eastside housing market.

    2. The point when engineers buy house is 6 yrs+ into employment. houses have their salary + bonus anywhere from 180K to 350K. I would suspect avg being 250K.
    .

    I know plenty of people in the industry, the average tech worker is NOT making $250K . Of course some are, but the average with bonus etc is still coming in $140k- $200k. Many have a base under 100k.
    as to buying after 6 years…. well that is true of those seeking permanent visas and fresh out of school hires. But a huge number transfer here with some existing wealth.

  21. 21

    RE: Blurtman @ 18
    I Can Speak as a Newly Retired Seattle Home Owner

    I worry about decent nursing home care in the $80-100K/yr costs to stay out of the smelly Social Security funded cheap ones….IOWs I’m taking out my locked box matching funds and saving most of it hopefully by turning it into a cash account [after paying its taxes], for my long term disability costs….if likely needed.

    That means that $500K home that’s paid for with no 2nd mortgage or God forbid reverse mortgage could pay about 4-5 yrs of decent disability care once cashed in [assuming its still worth $500K by that time]….gone in a flash IOWs. Why do you think retirees cash in stock funds for safe long term CD rates…..after you retire you can’t gamble on risks, its too late for that. Safe long term cash in the bank or in a mattress is the best bet when you get older.

    And God forbid I get stuck with the $500K+ Seattle property tax bills and throw in maintenance on top of that paid off McMansion cost too….it comes right out of your retirement blood. Nope….my low tier house has about $110/mo property taxes, that’s plenty in my retirement planning. You need elbow room at my age. Even my 1500 SF rambler is way too big for me, a single bachelor home owner, and I represent 40% of the Seattle market as a single home owner.

  22. 22
    Blurtman says:

    RE: softwarengineer @ 21 – Sure. You can also have in-home care, and perhaps rent out a room for extra income. If you are in an appreciating asset that meets your needs, and your mortgage is paid off, or will be, why saddle yourself with new debt? Sell and move to a cheaper location. Or keep the existing unit, and ultimately cash it out for care, or pass it on to your heirs. Or cash out all the equity and live large for a few years.

  23. 23
    wreckingbull says:

    By softwarengineer @ 21:

    RE: Blurtman @ 18
    I Can Speak as a Newly Retired Seattle Home Owner

    I worry about decent nursing home care in the $80-100K/yr costs to stay out of the smelly Social Security funded cheap ones….IOWs I’m taking out my locked box matching funds and saving most of it hopefully by turning it into a cash account [after paying its taxes], for my long term disability costs….if likely needed.
    .

    $100K/year is a low estimate if you end up in a place for ‘memory care’. These places can easily run $12K/month when all is said and done. Watch for more and more people pulling the eject lever themselves, before it gets to this point. Quality long-term care, both self-funded and insured, is out of reach of almost everyone.

  24. 24
    Erik says:

    RE: Ardell DellaLoggia @ 8
    Good point. That’s why I sold the Kirkland condo and bought in alki. The prices in the alki area seemed low when I bought. Unfortunately, they really haven’t gone up all that much. Hopefully they go up more next summer as there will be less distressed sales.

  25. 25
    greg says:

    By softwarengineer @ 21:

    RE: Blurtman @ 18
    I Can Speak as a Newly Retired Seattle Home Owner

    I worry about decent nursing home care in the $80-100K/yr costs to stay out of the smelly Social Security funded cheap ones….IOWs I’m taking out my locked box matching funds and saving most of it hopefully by turning it into a cash account [after paying its taxes], for my long term disability costs….if likely needed.

    That means that $500K home that’s paid for with no 2nd mortgage or God forbid reverse mortgage could pay about 4-5 yrs of decent disability care once cashed in [assuming its still worth $500K by that time]….gone in a flash IOWs. Why do you think retirees cash in stock funds for safe long term CD rates…..after you retire you can’t gamble on risks, its too late for that. Safe long term cash in the bank or in a mattress is the best bet when you get older.

    And God forbid I get stuck with the $500K+ Seattle property tax bills and throw in maintenance on top of that paid off McMansion cost too….it comes right out of your retirement blood. Nope….my low tier house has about $110/mo property taxes, that’s plenty in my retirement planning. You need elbow room at my age. Even my 1500 SF rambler is way too big for me, a single bachelor home owner, and I represent 40% of the Seattle market as a single home owner.

    If you just retired, I feel you cant risk NOT holding some stock and or funds. Cash is negative , it loses value each year, you need to buy some risk just to tread water.

  26. 26
    Anonymous Coward says:

    By greg @ 20:

    I know plenty of people in the industry, the average tech worker is NOT making $250K . Of course some are, but the average with bonus etc is still coming in $140k- $200k. Many have a base under 100k.
    as to buying after 6 years…. well that is true of those seeking permanent visas and fresh out of school hires. But a huge number transfer here with some existing wealth.

    Don’t rule out the possibility of a 2nd income… And if one puts those bonuses & stock options into the down payment jar, it’s likely not too difficult to bring enough enough to closing to yield a comfortable payment…

  27. 27
    greg says:

    RE: Anonymous Coward @ 26

    of course there can be 2nd incomes, in fact that is the normal state of affairs with couples….

    I find it strange you would assume anyone would rule out the possibility of 2nd incomes and other sources of monies.

  28. 28

    By greg @ 27:

    RE: Anonymous Coward @ 26 – I find it strange you would assume anyone would rule out the possibility of 2nd incomes and other sources of monies.

    People on this site have a long history of assuming very narrow fact patterns as to the buyers of real estate. So the assumption was rather reasonable.

  29. 29
    Blurtman says:

    RE: Kary L. Krismer @ 28 – “People have a long history of assuming very narrow fact patterns.”

    Fiixed it for you.

  30. 30

    RE: Blurtman @ 22
    In Home Licensed Care-Givers

    Aren’t cheap either. My friend, a CNA, was doing it for one client for about $80/yr. Plus home upkeep on top of that.

  31. 31

    RE: greg @ 25
    Stocks After Retirement?

    I’ll wait until you retire and see if that’s your path….very wealthy can do it with extra bucks perhaps, but not the bottom 0-96%.

  32. 32
  33. 33
    Blurtman says:

    RE: softwarengineer @ 30 – Well then, how about marrying down several decades?

    http://www.filipina-brides.com

  34. 34

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