Expensive parts of King County are seeing bigger dips in sales and prices

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It’s been six months since we took a look at the in-county breakdown data from the NWMLS to see how the sales mix shifted around the county. I like to keep an eye on this not only to see how individual neighborhoods are doing but also to see how the sales mix shift affects the overall county-wide median price.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

  • low end: South County (areas 100-130 & 300-360)
  • mid range: Seattle / North County (areas 140, 380-390, & 700-800)
  • high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of August data:

  • low end: $380,000-$588,500
  • mid range: $599,000-$1,060,000
  • high end: $786,500-$2,557,500

First let’s look at the percentage of each month’s closed sales that took place in each of the three regions.

% of Total King Co. SFH Sales by NWMLS Area

It’s interesting that in each of the last four years the share of sales in the South King regions has peaked in the first quarter and then fallen off sharply. However, this year unlike recent years the share of sales in the cheaper parts of the county has remained a few points higher than the other two tiers throughout the summer. The last couple months has even seen the share of sales in the cheap parts of the county gaining ground, which is probably a big part of why the county-wide median price has been falling.

The number of sales in all three tiers has been decreasing month-over-month for the past two months. Month-over-month sales were down five percent in the low tier, down ten percent in the middle tier, and down eight percent in the high tier.

Meanwhile, year-over-year sales are falling considerably in the middle and high tiers and are down moderately in the low tier. Compared to a year ago, sales decreased five percent in the low tier, fell nineteen percent in the middle tier, and dropped twenty percent in the high tier.

As of August 2018, 37.1 percent of sales were in the low end regions (up from 33.2 percent a year ago), 32.0 percent in the mid range (down from 33.9 percent a year ago), and 30.8 percent in the high end (down from 32.9 percent a year ago).

Here’s that information in a visual format:

Bank-Owned: Share of Total Sales - King County Single-Family

Here’s an updated look at the percentage of sales data all the way back through 2000:

% of Total King Co. SFH Sales by NWMLS Area since 2000

We’re still seeing the same pattern this year that we saw during the bubble years of 2004-2006—a much larger percent of sales taking place in the low tier regions and a lower sales share for the high tier Eastside regions.

Finally, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

Median Price of Single Family Homes Sold

The median prices in the high and middle tiers have both fallen off over the last few months, but the low tier has held fairly steady. Month-over-month, the median price in the low tier fell two percent, the middle tier decreased nine percent, and the high tier lost three percent.

Twenty-five of the twenty-nine NWMLS regions in King County with single-family home sales in August had a higher median price than a year ago, while just nine had a month-over-month increase in the median price.

Here’s how the median prices changed year-over-year. Low tier: up 10.9 percent, middle tier: up 0.3 percent, high tier: up 7.6 percent.

5.00 avg. rating (95% score) - 1 vote

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.

38 comments:

  1. 1
    Webinator says:

    This fits with my theory that we have turned a momentum corner. Specifically, we have lost 2 tailwinds and gained 2 headwinds:
    Tailwind 1: 2015-16 real estate demand from heavy tech hiring
    Tailwind 2: declining rates

    Headwind 1: increasing rates
    Headwind 2: increased property taxes due to standard deduction rule and Sound Transit pkg.

    As a result, everyone’s eagerness to buy has faded and prices are falling back to fundamentals: does it pay to buy vs. rent? I expect new mortgage payments (inc. insurance and taxes) in the low tier will follow rents going forward, which is to say: remain flat unless wages climb or rates fall. There might be a bit more going into buying decisions in the mid and high tiers.

  2. 2

    Sales increasing as a percentage in lower cost areas would result in a lower King County median. Simple change in mix.

  3. 3
    Justme says:

    Looks like every spring, the low-end buyers are suckered into buying by the endless breathless stories of higher mid-end and high-end prices in the later parts of the year before?

  4. 4

    Sales Charts Show Some Flux

    I don’t know if you’d call it big enough to mark a genuine trend. Its mixed YOY trending too.

    We need more data?

    I sure hope its not wild surprise unanticipated new data…like today’s news….Deputy AG Rosenstein just resigned over the NYTs allegations against him….new Kavanaugh sex accuser this morning, METOO. I’m reaching for more Yuban…

  5. 5
    Justme says:

    It appears that Fig1 is a magnified section of 2013-2018 from Fig3. Fig3 covers 2000-2018. What you can see in Fig3 is that especially during bubbles, the so-called low-end NWMLS regions have a huge sales spike early in the spring, whereas mid/high regions have their spikes later in the year. Case in point, 2015 to 2018 looks even more extreme than 2003-2008.

    Is there an older thread that has low/mid/high sales volume monthly from 2000-2018? I mean absolute sales counts, not percentages.

  6. 6

    Seattle is Losing All Its Buyers to Like Detroit Now?

    Boeing manufacturing was outsourced from Seattle, so they flock to the automobile manufacturing areas and hope Trump’s tariff eliminations on America are implemented?

    https://www.cnbc.com/2018/09/23/why-millennials-are-flocking-to-rust-belt-real-estate.html

  7. 7

    RE: softwarengineer @ 6
    Its Happening Today, No Wonder China is Psychotic Lately Over Russian Sanctions

    https://www.cnbc.com/2018/09/06/cars-made-in-china-at-risk-of-being-pulled-from-us-market-in-trade-war.html?recirc=taboolainternal

    China losing GM automobile manufacturing and its going back to Detroit…Sweden’s Volvo too.

    The manufacturing plant in China looks empty of workers anyway….robots do it all anyway?

  8. 8
    Justme says:

    From realtor.com, going into full damage control mode. The graphic of the article is hilarious. I saved the graphic in case they decide to change it.

    https://www.realtor.com/news/trends/housing-market-finally-becoming-buyers-market/

    “After years as one of America’s hottest housing markets, California is showing some chinks in its armor. Many overzealous sellers who listed their homes at unrealistically high prices are now being forced to reduce them. The state experienced the nation’s biggest increase in the number of homes seeing list price reductions. Santa Clara County, the heart of Silicon Valley, saw the biggest jump in the number of homes on realtor.com seeing price reductions.”

    “There, the number of homes where prices were lowered zoomed up 171% in August, even as the number of listings surged 77%. The likely culprit: rampant overpricing. Santa Clara–based real estate broker Rick Smith is seeing the most price reductions for higher-end properties in the $3 million-and-up range. But prices on homes located farther away from the bigger companies are also falling. ‘People are concerned if we hit peak and I buy now, what happens?’ says Smith, of Windermere Real Estate. So they’re waiting to see what happens.”

    “Median prices in Seattle, the birthplace of tech behemoth Amazon, aren’t coming down. But that doesn’t mean sellers these days can slap whatever price tag they want on their residences—and add some extra zeros. Many may have gotten overzealous in what they wanted to fetch—the number of listings on realtor.com with price reductions was up a whopping 76% in August year over year. That’s the second-biggest jump among the 100 largest metropolitan areas in the country.”

    Do people think Silicon Valley will go down and Seattle won’t? Dream on.

    https://imgur.com/a/l9UdZId

  9. 9

    More Property Tax News Affecting Seattle Real Estate

    Its called automobile equivalent property tax….the article says average $3K depreciation/yr….the actual numbers at the car lots show shifts down from new value MSRP much higher than $3K/yr, try $10K, especially right after you buy it off the lot.

    https://www.cnbc.com/2018/09/21/car-depreciation-is-a-budget-killer-heres-how-to-avoid-it.html

    My 2014 Charger got hit too….it was getting low/zero depreciation and now its more like $3-5/K a year….the HORRIFYING Stephen King Clown from “It” says, “they all float down stream now”…LOL

  10. 10
    kenmorem says:

    apartment to condo conversion question(s):
    1. what rules are required to convert an apartment complex into a condo?
    2. what are the main drivers for an apartment complex owner to do so?
    3. are there macro or micro economic trends that would encourage or discourage conversions from taking place?

  11. 11
    Justme says:

    RE: kenmorem @ 10

    Answer1: There is quite a bit of information online

    https://www.google.com/search?q=rules+governing+condo+conversions+in+washington+state&ie=utf-8&oe=utf-8

    Answer2: Profit motive during periods of Apartment oversupply or Condo undersuppply

    Answer3: Macro trend: bubbles about to burst Micro Trend: See Answer2

    As has been documented in other threads, there is a huge apartment oversupply in Seattle area, and Seattle City and Bellevue downtown in particular.

  12. 12
    Deerhawke says:

    RE: kenmorem @ 10

    1. This is really a question for a lawyer who knows about the paperwork for these kinds of things. But there has to be a public offering (like a stock offering but less complex) that discloses the pertinent facts about the building and each unit being offered.

    2) The main drivers for an apartment complex owner to do a conversion is to cash out at a higher rate than they would get by selling the whole complex to another owner. The sum of the parts is greater than the sum of the whole. But you really want to do this after the 6 year statute of limitations after the end of construction and first occupancy.

    3) Normally this is done late in the real estate cycle when sales are relatively easy and prices are high. But not necessarily. If this is something you are considering, you should really go and pick up a copy of the Sept. 7, 2018 Puget Sound Business Journal. The lead article is called “The Condo Craze.”

    Quick summary:

    1) A major effort to amend the 1990 Condo Law was blocked by Rep. Jamie Pederson. The legislation that Pederson blocked would have allowed developers to inspect, document and fix any problems before a suit could be brought. No surprise that Pederson makes his living as a lawyer.

    2) There was a long section in the article that talks about how building a condo under the current law guarantees that you will be sued 5-7 years after you deliver the project complete. They quote the head of development at Vulcan who did three condo projects and “had insurance, had photographic evidence of the quality of the buildings and had done everything it could do to protect against lawsuits.” But they were sued and as a result, lost money on all three projects. No more for Vulcan.

    3) Apartment rents are stagnating. Meanwhile demand for well-priced new condos is surging. So with that prospect in sight, several apartment developers decided that they would rather take longer term legal risks than short term rental risks. They have been converting their apartment complexes to condo complexes in droves.

    4) The comments from the developers sound like they are totally whistling past the graveyard. Basically they are saying that since they have engaged the best consultants, hired the best subcontractors, done photographic documentation, gotten the best insurance, dotted their i’s, crossed their t’s, etc. etc., that they should be fine. Ipso facto, no lawsuits possible. They are smart guys and they will be just… fine. (This is just like that part of the film where the cocky guy says, “Zombies?!? Do I look gullible? I am too smart for that! I don’t believe in any damned zombies!”)

    5) Meanwhile, down at the construction liability groups of major Seattle law firms, there is great celebration and rejoicing. “Hah! Those dopes really believe that if they produce the prefect building, they won’t get sued! Oh how funny!!!”

  13. 13
    Macro Investor says:

    RE: Webinator @ 1

    You are right about the tail winds turning around. But it’s still not even a normal market yet.

    By normal, I mean enough quality inventory for 2 sales to happen at the same time. Remember when that used to happen? You could buy a house on condition that yours also sold. Now, unless you leave the area or rent, you have to store your furniture and move twice. I think this is a big reason why people are staying put, and inventory remains low.

    Inventory probably needs to at least double before that can become normal again. A long way off???

  14. 14
    Macro Investor says:

    RE: Justme @ 8

    Funny you should mention this. I was thinking we’ll know it’s another bubble peak when the NAR comes out with outrageous ads. Don’t worry, dear — Susanne has it all covered.

    On the other hand, you know you’re reading a sensationalist article when they use the word “whopping”. Something changed a whopping 76%. That doesn’t mean it’s a large number. Maybe it went from 4 to 7. Just give us the numbers. Grown ups can decide for themselves what’s “whopping”. They don’t explain because they’re trying to manipulate you. It’s another form of fake news.

    Right now the market is cooling from insane to just hot. No reason to panic. But, personally I no longer like Seattle, so I’d probably cash in and watch from the sidelines.

  15. 15
    steven says:

    downtown has been more responsive and dropping quite a bit. I think the there will be some correction for the next 1-2 years. i just sold my unit in downtown so i’ll keep a watch out to see when i should come back. with the double whammy for california, their prices drop significantly

  16. 16
    David says:

    I’ve just seen a house with balloons in the front yard. The gig is up!!

    Seriously, don’t high-end homes have dramatic price swings and then generally return to going up again? Or is that California?

  17. 17

    By Macro Investor @ 13:

    By normal, I mean enough quality inventory for 2 sales to happen at the same time. Remember when that used to happen? You could buy a house on condition that yours also sold. Now, unless you leave the area or rent, you have to store your furniture and move twice. I think this is a big reason why people are staying put, and inventory remains low.

    Huh? I don’t know why you would think that. Sure a contingent offer is not likely to win out over a cash offer, unless the price difference is significant, but a higher price is almost always necessary for a contingent offer. In the recent past market sellers wouldn’t worry that much about another house selling if it were a local house (although they would want to check out the property and the intended list price to make sure). And if a buyer’s financing ability was sufficient, they could go non-contingent.

    The market where it was harder to buy on a contingent purchase offer was that between 6-10 years ago, when the market sucked. And contingent would also be harder in more balanced market. Also, during that same time 6-10 years ago buying first and then selling was much more risky. That changed in about 2012.

    But sure, some people do what you say. We’ve had a couple two-three clients move in with family after selling And I’ve seen some people sell first on an extended close and then buy. I wouldn’t recommend that in the market that was the past two years, but people did it. So the point is, people can choose do lots of different things, and the recent market was probably better for that than most in some ways.

  18. 18
    steven says:

    RE: steven @ 15 – “i hope their prices drop signifcaint”

  19. 19
    wreckingbull says:

    By Macro Investor @ 14:

    RE: Justme @ 8

    Funny you should mention this. I was thinking we’ll know it’s another bubble peak when the NAR comes out with outrageous ads. Don’t worry, dear — Susanne has it all covered.

    You can’t reference Suzanne without a link to the nastiest wife on TV, for our younger SB readers who did not get to witness this firsthand!

    https://www.youtube.com/watch?v=20n-cD8ERgs

  20. 20
    S-Crow says:

    RE: David @ 16 – there are substantial drops happening in rural areas for higher end homes right now and sellers are clearly chasing the market.

    From the trenches: I’ve held off on some items to report and will continue to do so as this Fall season moves along to see how much legs this market change has. However, while not terribly newsworthy, some people are now coming to close with checks and I can assure readers it’s not just my escrow office. It’s not peanuts either. I see this situation accelerating for those that are highly leveraged and are becoming “must sell sellers”. Increases in market time are just a killer for leveraged folks.

    For those with a sense of humor: https://youtu.be/ox-NkyEFTmo

    Sellers should be in a situation where they are genuinely making a move and have a compelling offering: very good price, very good condition and very good location, maybe with some selling perks.

    FSBO’s : I’m seeing more of these signs perk up right now……..you have a tough road in front of you in a softening market with increasing inventory unless you have a compelling property (see above about sellers).

  21. 21
    Funkseoulbrotha says:

    By Justme @ 8:

    From realtor.com, going into full damage control mode. The graphic of the article is hilarious. I saved the graphic in case they decide to change it.

    https://www.realtor.com/news/trends/housing-market-finally-becoming-buyers-market/

    “After years as one of America’s hottest housing markets, California is showing some chinks in its armor. Many overzealous sellers who listed their homes at unrealistically high prices are now being forced to reduce them.

    What pisses me off is how they put the blame on “overzealous sellers”.

    Excuse me?

    Who do you think is advising these sellers?

    Cannot wait for this market to go down.

    On another note, I still see listings where people are thinking they will sell their beat up 70’s style home (popcorn ceiling included) for $600k.

    Please tell me what they’re smoking because I definitely want some.

  22. 22
    Macro Investor says:

    RE: S-Crow @ 20

    “Sellers should be in a situation where they are genuinely making a move and have a compelling offering: very good price, very good condition and very good location, maybe with some selling perks.”

    I discount your entire comment as exaggerated because of this sentence. How does a seller influence their location? Usually that’s pretty much set.

  23. 23
    S-Crow says:

    RE: Macro Investor @ 22 – You are correct in that location is set. A seller doesn’t influence their location other than discounting for a poor location or other location factors. I can have a phenominal property in superb condition but those transmission towers that are 30 yards from the kitchen window or if I’m in a flood zone in the valley those can be deal breakers for some people. What I’m trying to convey is that sellers should not be jacking around at all. Some are. Hopefully, that clarify’s it more for you and you won’t discount my entire comment as exaggerated.

    As an escrow guy I’m clearly not known as someone who exaggerates or bull$hits around. There are plenty of other people in the real estate industry that fill that void well.

  24. 24
    Macro Investor says:

    By wreckingbull @ 19:

    By Macro Investor @ 14:

    RE: Justme @ 8

    Funny you should mention this. I was thinking we’ll know it’s another bubble peak when the NAR comes out with outrageous ads. Don’t worry, dear — Susanne has it all covered.

    You can’t reference Suzanne without a link to the nastiest wife on TV, for our younger SB readers who did not get to witness this firsthand!

    https://www.youtube.com/watch?v=20n-cD8ERgs

    Pretty entertaining. The overweight weak guy being bullied by his domineering wife and her agent. Okay, we’ll buy — I like the garage.

    In the sequel she’s divorced him and moved in with her buff personal trainer.

  25. 25
    ess says:

    Not every area of California is having a substantial reduction in housing prices.

    https://www.dailymail.co.uk/news/article-6203027/Tiny-house-Palo-Alto-goes-market-big-price-tag-2-59million.html

  26. 26
    Eastsider says:

    Case-Shiller reports today that Seattle’s home price NSA index increased 12.1% in July, second highest in the 20 city index. Note that this is a 3-month average of May, June and July prices. It does not reflect current prices that may well be declining according to a recent Seattle Times article. CS index is general accurate because it is based on sale prices of comparable houses.

  27. 27
    Eastsider says:

    Redfin published an August report on national home prices yesterday. Here are some highlights –

    Seattle
    – Median Sale Price – up 5.8% y/y, down 4.3% m/m
    – Homes Sold – down 18.5% y/y, down 7.3% m/m
    – New Listing – down 2.7% y/y, down 4.8% m/m
    – Inventory – up 46.4% y/y, up 11.1% m/m
    – Days on Market – 12 days this year vs 8 days last year

    https://www.redfin.com/blog/2018/09/market-tracker-august-2018.html

  28. 28

    The New Suspect Poll Data is Out Today

    The past actuals in polling were way out of whack in 2016…approximately -10 points against the GOP candidate. But even though the polls favored the Democrats incorrectly in 2016 and likely now too, new Gallup data is out:

    https://news.gallup.com/poll/242906/republican-party-favorability-highest-seven-years.aspx

    Looks like Trump through 2024 is pretty much slam dunk with this as backup data. Washington will go Democrat, so what.

  29. 29

    RE: Deerhawke @ 12
    LOL Deerhawke

    I heard on a recent Seattle boat tour that our city has more attorneys in like those two big sky scrapers on the waterfront than in the whole country of Japan. We’re literally drowning in Seattle attorneys…hasn’t improved their quality either evidently.

  30. 30

    RE: S-Crow @ 20
    Great Macro Data S-Crow

    We don’t get much of that from bloggers, mostly my neighborhood is somehow different limited data that means far less than your skilled experiences.

    I tip my hat to you too.

  31. 31
    wreckingbull says:

    RE: softwarengineer @ 27 – I should not be responding to your political posts, but I here I go anyway. After the 2016 humiliation, why the dems doubled down on identity politics and socialism I will never know. If they had a sense of reason they would have gone toward the middle (i.e. JFK) instead of the left (i.e. Che Guevara) I’m no fan of the GOP, but I think you are correct on this one.

  32. 32

    By wreckingbull @ 31:

    RE: softwarengineer @ 27 – I should not be responding to your political posts, but I here I go anyway. After the 2016 humiliation, why the dems doubled down on identity politics and socialism I will never know..

    I’m not sure they doubled down, but they clearly have not changed. So the election will turn on whether more people hate Trump or more hate the left which continues to insult those who have different political beliefs. Tough call.

    Interesting that in the local contested Congressional race the R doesn’t want Trump to come to town and the D doesn’t want Pelosi. Although I’m not sure Pelosi has ever been a big draw anywhere.

  33. 33
    pfft says:

    By Macro Investor @ 24:

    By wreckingbull @ 19:

    By Macro Investor @ 14:

    RE: Justme @ 8

    Funny you should mention this. I was thinking we’ll know it’s another bubble peak when the NAR comes out with outrageous ads. Don’t worry, dear — Susanne has it all covered.

    You can’t reference Suzanne without a link to the nastiest wife on TV, for our younger SB readers who did not get to witness this firsthand!

    https://www.youtube.com/watch?v=20n-cD8ERgs

    Pretty entertaining. The overweight weak guy being bullied by his domineering wife and her agent. Okay, we’ll buy — I like the garage.

    In the sequel she’s divorced him and moved in with her buff personal trainer.

    They had to get a condo because he spent all his money on supplements.

  34. 34
    pfft says:

    By wreckingbull @ 31:

    RE: softwarengineer @ 27 – I should not be responding to your political posts, but I here I go anyway. After the 2016 humiliation, why the dems doubled down on identity politics and socialism I will never know.

    They won the popular vote by 3 million and are poised to take the House and maybe the Senate. I would say the Blue Wave is doing ok.

  35. 35
    redmondjp says:

    By pfft @ 34:

    By wreckingbull @ 31:

    RE: softwarengineer @ 27 – I should not be responding to your political posts, but I here I go anyway. After the 2016 humiliation, why the dems doubled down on identity politics and socialism I will never know.

    They won the popular vote by 3 million and are poised to take the House and maybe the Senate. I would say the Blue Wave is doing ok.

    Give it up. You predicted the same nonsense two years ago promising us that Hillary would win.

  36. 36
    pfft says:

    By redmondjp @ 35:

    By pfft @ 34:

    By wreckingbull @ 31:

    RE: softwarengineer @ 27 – I should not be responding to your political posts, but I here I go anyway. After the 2016 humiliation, why the dems doubled down on identity politics and socialism I will never know.

    They won the popular vote by 3 million and are poised to take the House and maybe the Senate. I would say the Blue Wave is doing ok.

    Give it up. You predicted the same nonsense two years ago promising us that Hillary would win.

    Well she did get more votes…If I were a gambler who won 100% of the time I’d own Seattle Bubble.

    How about a bet? If the Democrats win back the House you won’t post for a week? Same for me if they don’t.

  37. 37
    Eastsider says:

    By pfft @ 36:

    How about a bet? If the Democrats win back the House you won’t post for a week? Same for me if they don’t.

    Hey, how about if Dems take over Senate and I will quit posting here and if they don’t you will stop posting political stuff? LOL.

  38. 38

    By redmondjp @ 35:

    Give it up. You predicted the same nonsense two years ago promising us that Hillary would win.

    Two years? You’re going way past pfft’s memory. Two weeks is the top limit.

    But more to your point, polling has become extremely inaccurate of late. And also, opinions seem to turn on a dime now.

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