Around the Sound: Inventory growth, sales declines spread outside of King County

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With September’s stats in hand, let’s look at broader Puget Sound area. Here’s the latest update to our “Around the Sound” statistics for King, Snohomish, Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

First up, a summary table:

September 2018 King Snohomish Pierce Kitsap Thurston Island Skagit Whatcom
Median Price $668,000 $484,995 $352,750 $355,706 $317,150 $362,750 $365,000 $378,000
Price YOY +6.9% +7.8% +10.7% +12.9% +7.5% -2.0% +10.7% +8.0%
New Listings 3,280 1,350 1,458 419 495 155 197 281
New Listings YOY +7.9% +6.0% -7.3% -10.1% +7.1% -7.7% -6.2% -5.1%
Active Inventory 5,213 2,213 2,611 762 849 395 486 660
Inventory YOY +67.9% +40.2% +6.5% +4.7% +11.3% -7.9% +0.2% -17.7%
Closed Sales 1,833 955 1,256 395 474 148 171 274
Sales YOY -27.0% -20.6% -17.7% -18.0% -14.9% -12.4% -3.9% +5.4%
Months of Supply 2.8 2.3 2.1 1.9 1.8 2.7 2.8 2.4

The biggest gains in new listings and active inventory are still in King County. Snohomish, Pierce, Kitsap and Thurston all also saw some decent gains in inventory, but in Island, Skagit, and Whatcom inventory was flat or still down. Meanwhile, closed sales are falling everywhere but Whatcom.

Here’s a look at new listings across the region:

New Listings of Single-Family Homes

Only King, Snohomish, and Thurston saw year-over-year gains in new listings, while Pierce, Kitsap, Island, Skagit, and Whatcom all continued to fall.

Next up: Active inventory.

Active Listings of Single-Family Homes

Inventory was up sizeably from year earlier in King, Snohomish, and Thurston. It also edged up in Pierce and Kitsap. Meanwhile, inventory in Whatcom county has been down double-digits for the past five months in a row.

Here’s the chart of median prices compared to a year ago. Island County actually saw a slight decrease in prices, but they were still up everywhere else.

Median Sale Price Single-Family Homes

Sales are now significantly declining pretty much everywhere but the furthest-out counties. Skagit saw just a 3.9 percent drop and Whatcom saw a 5.4 percent gain, but every other county had double-digit declines.

Closed Sales of Single-Family Homes

We’re still in a major sellers’ market… but the trend looks at least somewhat hopeful for buyers, with every county except Whatcom inching closer to that magical “balanced market” number of six months of supply.

Months of Supply Single Family Homes

In summary: The inventory surge has spread outside of King County, as sales slow and listings pile up. The one notable exception to this trend so far is up north in Whatcom County. I’m not sure exactly what’s going on up there, but for some reason the market up there is not cooling down this year the way it is pretty much everywhere else.

If there is certain data you would like to see or ways you would like to see the data presented differently, drop a comment below and let me know.

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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.

86 comments:

  1. 1

    Wait Until You Get Your Property Tax Increase for 2019, on Top of the 2017 and 2018 Increases

    I imagine Snohomish county is in the same mess as King county….while home prices decrease too.

    In related business, I’m seeing huge health care budget deficits at the disability home I volunteer at too. Medicaid and even Medicare are a joke [they cover very little and that’s being eliminated now too]…the medical supply companies are threatening collection agencies on “penniless” severely disabled wards of the state folks…its HORRIFYING. These special needs folks need compassion, now they need attorneys.

  2. 2
    wreckingbull says:

    I doubt long-time residents of Bellingham are happy about it, but the ‘ham has been discovered. I can see why – great marina close to San Juans, close hikes, massive network of running/biking trails, and a pretty cool downtown, not to mention good beer and food.

    Also, I still sense a fair amount of Canadian money sloshing around in Whatcom county.

  3. 3
    Tim Galvin says:

    Can you explain the 6-mo supply magic number a bit or provide some reference? I get that it probably means enough inventory to last 6 months at current closing pace, but why is 6 months significant? Are there any graphs for this metric over the years? Have we ever been higher than 6 months? Thanks as always for the post!

  4. 4

    RE: wreckingbull @ 2
    Lovely City Bellingham

    If you can find a job….LOL

  5. 5
    The Tim says:

    RE: Tim Galvin @ 3 – Six months has been the typical “balanced market” level for a long time. I honestly don’t know exactly where it comes from.

    Here’s a graph of King County single-family home months of supply (based on closed sales) back through 2000:

    King County SFH Months of Supply

    As you can see, we were above six months for most of late 2007 through early 2011. I’d say the more “typical” market in Seattle tends to be between 4 and 5 months of supply (slight sellers’ market) since it’s rarely a buyers’ market here unless there’s a major recession going on.

  6. 6

    RE: Tim Galvin @ 3
    I’ve Heard This Six Month Supply Too

    Never wondered why it didn’t make sense until you asked a good question…why not 24 month supply when selling collapses? Or 2 month supply if sales suddenly surge? IMO its linked to the number of listing agents…its all they can handle in estimated sales scoops? Lord only knows…LOL

  7. 7

    RE: The Tim @ 5
    Thanks Tim

    You educated SWE too :-)

  8. 8
    N says:

    Tim – I wonder if Whatcom is just far enough away to be less affected at this point and/or more affordable that people are fleeing there.

    Further afield, Spokane also has yet to show any signs of a slowdown with inventory down 24% YOY and sales down a mere 1.3%. A lot of people must still be seeking out these lower priced markets due to affordability issues.

    https://www.spokanerealtor.com/mls/market-snapshot

  9. 9
    GoHawks! says:

    Thanks Tim for the number of posts recently.

  10. 10
    Ardell says:

    RE: Tim Galvin @ 3

    We are almost always over 6 months and as high as 2 years at the highest of price points. The rate of absorption up to 3 months is a Seller’s Market. Over 6 months is a Buyer’s Market. In between is an increasingly Balanced Market. Think 4.5 or so for Balanced.

    The Buyer’s Market kicks in when a buyer can target 3 or more homes on market that are all about equal in desirability, giving the buyer the ability to play one seller off another.

    I have worked in all forms of these markets. Down Kary’s way the absorption rate back in July in his area’s median price point was much higher than where I work at that same price point.

    If you target a neighborhood as a must live here neighborhood, think 3 houses for sale and you don’t care which one you get. That is pretty much when the Buyer’s Market kicks in. Arriving at a Home Inspection…hopefully not too many typos.

  11. 11

    Fastest Growing Jobs in America are Mostly Health Care Related Now

    https://www.yahoo.com/finance/news/fastest-growing-jobs-next-5-years-143047910.html

    But there’s no money to support the growing need, without drastic wage cuts or replacing American livable wages with new foreigners…

    Seattle’s new job outlook? American Engineers unnecessary now, we outsourced ’em all to Asia and Europe at higher wage rates there?

  12. 12

    RE: The Tim @ 5 – We hit on that topic a few threads ago, and some consider 3 months a balanced market. I would tend to agree with that, with 6 being the very upper end of balanced.

  13. 13

    By softwarengineer @ 1:

    Wait Until You Get Your Property Tax Increase for 2019, on Top of the 2017 and 2018 Increases.

    There are two separate reasons why 2019 shouldn’t be that bad. First 2018 was double sourcing education. Second the legislature gave a McCleary break for 2019.

    And again a reminder–that an increase in assessed value does not necessarily translate into an increase in tax–although for 2019 those increases might be decreases.

  14. 14
    The Tim says:

    By GoHawks! @ 9:

    Thanks Tim for the number of posts recently.

    Thank the market for finally getting interesting again :D

  15. 15

    RE: The Tim @ 14 – FWIW, this is my favorite topic, because we tend to overconcentrate on King County. Also, it tends to be things I don’t follow as closely. For example, I hadn’t noticed that Thurston county’s inventory had dropped so much at one point last year.

  16. 16
    pfft says:

    By The Tim @ 5:

    RE: Tim Galvin @ 3 – Six months has been the typical “balanced market” level for a long time. I honestly don’t know exactly where it comes from.

    Here’s a graph of King County single-family home months of supply (based on closed sales) back through 2000:

    As you can see, we were above six months for most of late 2007 through early 2011. I’d say the more “typical” market in Seattle tends to be between 4 and 5 months of supply (slight sellers’ market) since it’s rarely a buyers’ market here unless there’s a major recession going on.

    As sports center says.

    Is that bad?

    It’s not good.

  17. 17
    Jadimas says:

    I think we are headed lower. We got told last week that our 4 bedroom listing in Everett was overpriced at $395k. Well if we dont sell construction rates should be cheaper for an addition.

  18. 18

    Absorption Rate Breakdown as of now.

    Residential Product for sale 6,613 at $100k plus.
    $2M or more = 6.6 months of supply representing 6.8% of total property for sale.
    $1.5M-$2M = 3.5 months of supply representing 5% of total property for sale.
    $1M-$1.5M = 2.4 months of supply representing 12.6% of total property for sale.
    $500k to $1M = 2.3 months of supply representing 47.5% of total property for sale.
    $100k to $500k = 1.8 months of supply representing 28.9% of property for sale.

    I didn’t separate condos from single family homes for this as close in condos tend to sell for the same price as far out houses, so pulling those condos out leans the stats too far away from the work centers.

    About 60% of Active Inventory is at roughly 2.5 months of supply.

    Required Disclosure: Stats in this post are hand calculated in Real Time by Ardell and are not published, verified or calculated by The Northwest Multiple Listing Service.

    For a month of sales I calculated 10-40 days to account for a 10 day allowance for postings. I then calculated the 10-70 to be sure the most recent 30 was not too far from the last 60 day average. I also tested the high end 6.6 months of supply against a full 12 month average, and not much difference. This time of year using a 10-40 works well. As we get into first Quarter with Spring in front of us the monthly average needs a seasonal adjustment. But right now these numbers work.

  19. 19
    kenmorem says:

    two part question related to selling a queen anne condo (soon). it is currently rented, so the earliest we would be able to sell is 90 days from notice to vacate provided to the tenants.

    1. is it better to get the tenant out ASAP and try to sell in january, or would it be better to wait to time the late february spring selling window? i wouldn’t want them to leave before the holiday season and then be vacant for a few months or try to list at a really bad time.

    2. does anyone know of companies that work with off-market properties that are currently rented? this company would essentially be selling the unit to another investor looking for a rental for their portfolio.

  20. 20
    N says:

    @ Kenmorem 19 – I think you want to sell to a retail buyer. Selling to another investor often means selling based on your cap rate or at a discount to what a retail buyer is more than willing to pay. BUT you can always go to a local landlord association meeting and see who is interested in buying…

  21. 21
    Brady says:

    Could give you reasons why Bellingham is bucking the trend, but I would be wrong. Smaller sample size up there so you just don’t see it in the numbers yet, but it is coming. It has the same affordability concerns as everywhere else.

  22. 22

    RE: Brady @ 21 – I’ve only had one listing that far north, and I had a local agent as co-listing. So not my area, but at one time they were getting spill over from Vancouver, B.C. And with the relatively recent anti-foreigner attitude of Vancouver it wouldn’t surprise me if that is continuing.

  23. 23

    From the SWE American Safety Engineering Desk

    I’d stay away from the new 5G iPhone cell transmitters when you buy a Seattle Home, the EMF is untested and likely harmful, its the same EMF as our military uses against enemies…

    https://www.naturalblaze.com/2018/10/5g-network-uses-same-emf-waves-as-pentagon-crowd-control-system.html

    Where are these new 5G cell towers, the picture I got from MSM looks like a transformer…??? At least I’m in a gated community with no cell towers visible, I think….LOL

  24. 24

    RE: Kary L. Krismer @ 13
    Perhaps Kary

    But my assessed property value and tax bill increase are about the same. Anyone else own the title and get the escrow paperwork mailed to ’em? S-crow would know for sure.

  25. 25

    RE: kenmorem @ 19
    Kary Would Know the Legal on Eviction of Tenants

    I believe it was 90 days notice but King County protects the tenants…their laws my have gotten much harsher against the landlord? I’d hire an attorney. You can be prosecuted if you harm a tenant….ask Motel 6 about calling ICE to have illegal immigrants removed, the State AG prosecuted ’em for calling the feds.

  26. 26
    Brady says:

    RE: Kary L. Krismer @ 22
    I just looked at 100 deeds from last month. Seven had Canadian return labels on them. This method wouldn’t catch all the Canadian buyers, but can’t imagine it being more than 10% of all buyers. Is that enough to change a market. In the deeds I saw it didn’t look like any Chinese buyers, but that could also be deceiving if they went through local representation.

  27. 27

    RE: Kary L. Krismer @ 22

    I’m remembering the lawsuit from back in 2005 when Bellingham Whatcom Multiple Listing Service was suing The Northwest MLS and I’m wondering if Bellingham data is incomplete in either, assuming the smaller one still exists. That could skew the data a lot if you are only looking at one or the other of the mls services there.

    https://www.seattletimes.com/business/judge-dismisses-real-estate-listing-services-claim/

    The suit, which they lost, was based on NWMLS possibly forcing them out of business. I don’t know if they went out of business or not since that time.

  28. 28

    RE: kenmorem @ 19

    Tagging on to N’s answer, I agree that 2. is not a good idea. As to 1. February is fine…early in February better. But to get what N calls “a retail buyer”, keep in mind that a buyer’s lender will want proof that the property will be vacant so the buyer can occupy it within 60 days of closing. Otherwise the Owner-Occupant buyer will have to get an investor loan at an investor rate. Occupying more than 60 days past closing will require a Landlord loan.

  29. 29
    brady says:

    RE: ARDELL DellaLoggia @ 27
    I remember the BWCMLS. It doesn’t exist anymore, since 2006 I believe.

  30. 30
    pfft says:

    Las Vegas Real Estate in September: Sales Down 16% YoY, Inventory up 33% YoY
    https://www.calculatedriskblog.com/2018/10/las-vegas-real-estate-in-september.html

  31. 31

    RE: brady @ 29

    Shortly after losing the suit then. Thanks for the info. Can’t help you with Bellingham. I remember Blaine shifting from super hot to super cold pretty quickly in the last bubble, and being very dependent on shifts coming in and out of Canada. Late to the party speculators got stuck with projects back then. I expect that’s how the area operates most of the time.

  32. 32
    wreckingbull says:

    RE: Ardell DellaLoggia @ 31 – Blaine is turning into one large Mailboxes Etc store for Canadian Amazon customers. It’s really bizarre. I was up there in town for an afternoon last month. Beautiful sunny Sunday, and the town was desolate except for hordes of Canadian Amazon customers picking up their packages. Strange times.

  33. 33

    RE: pfft @ 30
    Interest Detective Work Pffft

    Just a couple months ago Las Vegas was the fastest growing RE market….very high flux market and totally unpredictable. A side question that may relate…are overpoulation water shortages suddenly hitting Vegas?

  34. 34

    By Brady @ 26:

    RE: Kary L. Krismer @ 22
    I just looked at 100 deeds from last month. Seven had Canadian return labels on them. This method wouldn’t catch all the Canadian buyers, but can’t imagine it being more than 10% of all buyers. Is that enough to change a market. In the deeds I saw it didn’t look like any Chinese buyers, but that could also be deceiving if they went through local representation.

    I would say 10% could definitely affect the market. And your sample is sufficiently large, but you’re right you might not have caught them all–thanks for checking.

  35. 35

    By softwarengineer @ 33:

    RE: pfft @ 30
    Interest Detective Work Pffft

    Just a couple months ago Las Vegas was the fastest growing RE market….very high flux market and totally unpredictable. A side question that may relate…are overpoulation water shortages suddenly hitting Vegas?

    Vegas seems prone to speculation. Maybe because it attracts gamblers????

  36. 36
    Ardell DellaLoggia says:

    RE: wreckingbull @ 32

    Maybe they need a wall. :)

  37. 37
    Justme says:

    RE: Tim Galvin @ 3

    2 months worth of listed inventory relative to closed transactions is a buyers market. It is just propaganda from real estate salespeople that more inventory than 2 months is needed. But as long as sellers (and buyers) believe the propaganda, it will work to some extent. But when buyers just say NO, as they are doing right now, the truth will appear.

    BTW, topic already covered in

    https://seattlebubble.com/blog/2018/10/01/september-stats-preview-sales-drop-over-25-percent-from-2017-as-listings-continue-to-pile-up/#comment-274698

    Of course, lots of the expected pushback from those who earn commissions on housing sales.

  38. 38
    N says:

    It’s never a good idea to read too much into one house sale with all the potential variables BUT… talk about going below ask. Originally listed for $810k, sold for $518k (note: was listed at 600k when it sold)

    https://www.redfin.com/WA/Seattle/4010-34th-Ave-SW-98126/home/328359

  39. 39
    Justme says:

    RE: N @ 38

    For starters, the property includes high-volume traffic noise from all the vehicles gearing down and revving up to get up the hill after the bridge.

  40. 40
    uwp says:

    RE: N @ 38 – Seems like a weird sale.
    Went for 20% under King County tax appraisal. Zillow’s listing says it is/was in pre-foreclosure.

    Might be more to the story.

  41. 41
    PH_ Trader says:

    RE: N @ 38 – Yikes that’s a 300k drop. We are in the early stage of downtrend. I would rather wait than catch a falling knife. I just paid off my primary residence after selling another property. Buying a house is like buying a stock when it dumps.

  42. 42
    steven says:

    this might be another interesting set of properties to look at

    https://www.redfin.com/WA/Seattle/1521-2nd-Ave-98101/unit-1002/home/21617069
    https://www.redfin.com/WA/Seattle/1521-2nd-Ave-98101/unit-2202/home/145094512
    https://www.redfin.com/WA/Seattle/1521-2nd-Ave-98101/unit-3502/home/21616625

    same condo building, very similar floor plan with similar. just 12 floors higher and it’s 1 million dollars more . I’m not sure if i’m missing something

  43. 43
    steven says:

    RE: steven @ 42 – v
    similar “view”

  44. 44

    By Justme @ 37:

    Of course, lots of the expected pushback from those who earn commissions on housing sales.

    Of course, this theory comes from someone who doesn’t have a clue what they are talking about, and as evidenced by the fact that they think the current situation is a rush to the exits by sellers. Justme’s 2 month limit is just something he pulled out of his butt.

  45. 45

    By PH_ Trader @ 41:

    RE: N @ 38 – Yikes that’s a 300k drop. We are in the early stage of downtrend. I would rather wait than catch a falling knife. I just paid off my primary residence after selling another property. Buying a house is like buying a stock when it dumps.

    The difference is the stock prices are actual sales–list prices are just what some seller wanted to get. Some sellers are very unrealistic. I haven’t looked at that one, but if it was listed so high and then so much lower without anyone grabbing it up, they were almost certainly very unrealistic.

    Which BTW, is why the absorption rate periods can be so long and still be a seller’s market. It’s just like when inventory was hovering around one month, but the number of decent listings was much lower. That still happens when inventory is high, but good properties properly listed will sell much faster than the average period indicated by an absorption rate.

  46. 46
    pfft says:

    By Kary L. Krismer @ 35:

    By softwarengineer @ 33:

    RE: pfft @ 30
    Interest Detective Work Pffft

    Just a couple months ago Las Vegas was the fastest growing RE market….very high flux market and totally unpredictable. A side question that may relate…are overpoulation water shortages suddenly hitting Vegas?

    Vegas seems prone to speculation. Maybe because it attracts gamblers????

    Was in Vegas not too long ago. Jam packed subdivisions(meaning barely any rock lawn) miles from the strip. The housing development I saw was pretty dense. Lots of supply?

  47. 47
    Justme says:

    RE: Kary L. Krismer @ 44

    Kary is mad at me for some reason. I guess I must not have been deferential enough to his mighty intellect. Or he is just mad at the world for being in a buyer’s strike. He’ll calm down again. Or maybe not.

  48. 48
    PH_ Trader says:

    RE: Justme @ 47 – Ahh good ‘ol Kary the bankruptcy lawyer who had been posting on Zillow since it started. Personally, I wouldn’t wanna work that type of an agent. I ain’t paying traditional agents for the work they do. People who bought in the last two years will be underwater pretty soon.

  49. 49
    Justme says:

    RE: steven @ 42

    Haha, what riot of laughter. 1521-2nd-ave is new construction and horribly overpriced, whether upper floors or lower floors (whatever little view they have probably will not last in the longer term).

  50. 50
    pfft says:

    By Justme @ 47:

    RE: Kary L. Krismer @ 44

    Kary is mad at me for some reason. I guess I must not have been deferential enough to his mighty intellect. Or he is just mad at the world for being in a buyer’s strike. He’ll calm down again. Or maybe not.

    Sounds like a no true scotsman argument applied to RE. Stock markets are having a somewhat similar problem sometimes with high frequency trading(HFT).

  51. 51
  52. 52
    wreckingbull says:

    By Justme @ 49:

    RE: steven @ 42

    Haha, what riot of laughter. 1521-2nd-ave is new construction and horribly overpriced, whether upper floors or lower floors (whatever little view they have probably will not last in the longer term).

    The $1200/month in HOA dues will, though. I guess they assume that people that buy these light their cigars with Benjis and the dues are a mere rounding error.

  53. 53
    Longtime Listener First Time Caller says:

    Out of 52 comments Kary L. Krismer has only posted 8 times. Comments are still 15 percent bullshit, but thats way less crap than forecasters anticipated. The market must be shifting!

  54. 54

    By Longtime Listener First Time Caller @ 53:

    Out of 51 comments Kary L. Krismer has only posted 8 times. Comments are still 15 percent bullshit, but thats way less crap than forecasters anticipated. The market must be shifting!

    And you’ve still not posted a single useful thought, but good to know you have the counting skills of a 7 year old. Or did a computer help you?

  55. 55

    RE: Justme @ 47 – It’s two things. 1. Your attitude towards me. 2. The fact that you don’t have an F’n clue what you’re talking about and instead just want to make up theories that completely lack any basis in fact.

    As to number 2, look at the first bar graph above and it clearly shows there is no significant increase in new listings driving the very significant increase in new listings. The sellers are not rushing to the exits as you’ve repeatedly claimed. Well less than a 10% increase, something in the 250 area, when the number of active listings has increased by more than 2,000.

    As to your 2 month inventory being a seller’s market theory, look at Tim’s post number 5. If 2 months were the cutoff then there would have only been two tiny peaks barely into seller’s market range before 2012.

    So basically I’m giving you the same attitude back that you give to me, and specifically pointing out when you’re wrong–which is a lot.

  56. 56
    Notme says:

    Overpriced skybox
    attractively expensive
    otherwise nothing

    -a bubble haiku

  57. 57
    Notme says:

    Oh noes must not offend
    owners and sellers speshul
    since they own so much

    -a bubble haiku

  58. 58

    I just got an appraisal in, and what struck me is both the sales price and adjusted values of the comps were still rising slightly over time. One sale in July, one August and one September. Two of the three later in time were on the market longer than 3 weeks and had price cuts of about 10%, but did sell slightly higher than the reduced price.. Of course a sample of three is a very small sample, and obviously a very tight locality and limited property type, but picking comps that seemingly didn’t have bidding wars the values were not dropping over time per both the sales price and adjusted price, even with the overpricing mistakes.

  59. 59
    Sfrz says:

    By Notme @ 57:

    Oh noes must not offend
    owners and sellers speshul
    since they own so much

    -a bubble haiku

    This is rich! Snickering on the metro!

  60. 60
    Notme says:

    RE: Sfrz @ 59

    Okay, one more along similar psychological lines.

    Look at that list price!
    that house is worthy of me
    anyone can see

    -a bubble haiku

  61. 61
    steven says:

    in regards to the 1521 2nd ave, the units i posted do not have great view and are priced that high. Ones with great view have sold for 2.5M+ as recently as within the last 2months.

    you guys speak of the great equlibirium/balance of housing supply in 4-6months of inventory but if you look at the graph the duration that seattle had “balanced” market is less than 20% within the last 20 years, and it was always short lived in between the housing supply overflow or shortage. Most likely if history repeats itself, which it always does, there will be “balanced market” for less than a year and quickly oversupply of housing. How long the duration of oversupply will be, i wish to know myself

  62. 62

    One more thing about that appraisal. It’s the standard Fannie/Freddie form, and it breaks down marketing time in the area as: (1) Under 3 months; (2) 3-6 months; and (3) Over 6 months. I guess that’s just quasi-government entities (or whatever they are now) trying to create buyer pressure. /sarc

  63. 63
    Voight-kampff says:

    By Justme @ 49:

    RE: steven @ 42

    Haha, what riot of laughter. 1521-2nd-ave is new construction and horribly overpriced, whether upper floors or lower floors (whatever little view they have probably will not last in the longer term).

    1521 2nd ave is actually 10 years old. It is in fact a really nice building. It is one of the few buildings in which the developer purchased and secured “air rights”. Units with westerly(water) views will not be obstructed. Buildings to the west cannot build above a certain height.
    This was costly for the developer.

  64. 64

    By Voight-kampff @ 63:

    By Justme @ 49:

    RE: steven @ 42

    Haha, what riot of laughter. 1521-2nd-ave is new construction and horribly overpriced, whether upper floors or lower floors (whatever little view they have probably will not last in the longer term).

    1521 2nd ave is actually 10 years old. It is in fact a really nice building. It is one of the few buildings in which the developer purchased and secured “air rights”. Units with westerly(water) views will not be obstructed. Buildings to the west cannot build above a certain height.
    This was costly for the developer.

    Yep, 10 years old, and not new construction as claimed by Justme. I don’t know of the air rights around that building, but I have run into that issue on other view condos. Local knowledge can be very important when it comes to things like views.

  65. 65
    pfft says:

    By Longtime Listener First Time Caller @ 53:

    Out of 52 comments Kary L. Krismer has only posted 8 times. Comments are still 15 percent bullshit, but thats way less crap than forecasters anticipated. The market must be shifting!

    So many people had the over Vegas is making out.

    The house or moss pit always wins.

  66. 66
    pfft says:

    By wreckingbull @ 52:

    By Justme @ 49:

    RE: steven @ 42

    Haha, what riot of laughter. 1521-2nd-ave is new construction and horribly overpriced, whether upper floors or lower floors (whatever little view they have probably will not last in the longer term).

    The $1200/month in HOA dues will, though. I guess they assume that people that buy these light their cigars with Benjis and the dues are a mere rounding error.

    And people complain about property taxes in blue states. No way I am ever paying HOA fees. Suckers.

  67. 67

    Recent comments have caused me to want to create a list of the many things that are likely affecting this market. While I have my pet issue (sellers/agent overpricing), I’ve never claimed that’s the only factor as some people claim with their pet factors. So here’s a go. Feel free to add items I might have missed.

    First, let’s look at the reduction in the number of multiple offer situations. We seemingly went quickly from a situation of multiple offers the first week being rather typical to many properties staying on the market longer than a week. Unfortunately, we never really had good data on the number of multiple offers, just random reporting of questionable data (e.g. do you have four offers or two when two are $50,000 over list and two are $50,000 under list or without approval letters, etc.). But where did those buyers go? It’s possible they bought houses. Maybe week one the average multiple offer number was four buyers, the next week three, the next week two, etc. Perhaps some of those multiple offers were due to buyers unethically making offers on more than one property at a time. Or it’s possible some dropped out due to rising interest rates. While interest rates covered separately, how likely is it that someone willing to get into bidding wars is likely to drop out entirely over somewhat modest increases in interest rates? There’s also HQ2, which could impact Amazon employees who have not yet bought a house. Maybe they want to see what their options will be before committing to buying, particularly the newer employees who are maybe finding it difficult to find friends in Seattle. Perhaps more widely available downtown apartments are keeping people away from buying. While apartments are not a perfect substitute for a house, if you’re younger and don’t have kids then living in an urban environment is pretty nice. Finally, there’s also the fact that Seattle isn’t as “nice” as it once was. Homelessness, lots of bad press about Seattle’s government, smoke filled summers, traffic, etc. Perhaps a lot of people don’t like the direction the area is moving and don’t want to commit long term.

    Sellers/Agents pricing too high. Since this is my pet theory I won’t say a lot about it. But suffice it to say buyers won’t pay whatever a seller asks, and if the seller asks too much perhaps no one will make an offer. That leads to price reductions, longer time on market and rising inventory.

    Rising interest rates. Clearly this affects what some buyers can pay, effectively driving them out of the market, and it also impacts what most buyers are willing to pay. And this connects in with the pricing too high issue—even pricing at the same price as two month’s prior might be too high for some markets. On the other hand, fear interest rates might rise further could get some buyers to jump. Overall though, this is almost certainly mainly negative.

    Rising taxes. Basically the same analysis as the interest rates, but a double whammy at the same time.

    Smoky summers. Mentioned above, this undoubtedly had a significant impact on view properties, and went on long enough it could even have impacted bot the volume and mix of properties sold in September. But as to the value of a view, how do you assess what you can’t see? And this being the second year in a row, is that view now worth as much? If you own a view property does it make you more likely to want to sell? If you work for Amazon does it make you more likely to want to go to wherever HQ2 will be since that area might be less polluted? Bottom line the pollution is clearly negative and goes beyond just views to health concerns.

    More sellers due to higher prices. This just seems logical. Unfortunately, those who are likely to sell due to higher prices are probably also more likely to price too high. Or perhaps they aren’t even that interested in selling, but willing to move if the price is right. And of course, some might be trying to time the market. Clearly this leads to more listings, and given the shortages that is good, unless the market overreacts.

    Fewer foreign buyers. Like multiple buyers, we really don’t have good data on this. We do though have exchange rate data, and at least some currencies (e.g. China’s) are going the wrong direction for house purchases here, making the effective price higher.

  68. 68

    RE: Jadimas @ 17
    The Owner of the Large Disability Home I Visit

    Owns rental property too, he’s very grumpy right now….his basement was flooded a few months ago when the upstairs toilet flap got stuck…

  69. 69
    wreckingbull says:

    RE: Kary L. Krismer @ 67 – Thanks Kary, I like this. I think your point #1 could be rephrased as “buyer weariness”. After losing out on multiple bidding wars for homes of questionable quality, people start to reflect and communicate with each other. It causes gradual market psychology shifts and I think we are seeing the result of this. People reason that it can’t be this bad forever, and they decide to wait. The glut of apartments make this waiting easier and cheaper.

  70. 70

    RE: pfft @ 66
    HOA Fees On Renton Condos Were Horrifyingly Priced a $600/mo

    Them Seattle Condos no one can afford can top $2000/mo or more with over priced amenities….

    Mine is $185/mo and includes gated community road maintenance/security and unlimited water with sewage too. No bargain, but far lower. The rules are a downer, but the clean neighborhood with no junky neighborhood houses sure is nice. We can paint our homes any color too.

  71. 71
    wreckingbull says:

    RE: softwarengineer @ 70 – Actually that is pretty reasonable if it indeed includes both unlimited water and sewer. One pays pretty close to that in Seattle – I recall about $140/month for average usage of water/sewer.

  72. 72
    Justme says:

    RE: Voight-kampff @ 63

    It can be okay to be mistaken once in a while. It was the 1521second condo marketing website that fooled me. The condo has an dedicated/in-house/contracted team of salespeople. Here is what the website says:

    Select Condominium Residences Available
    (Please contact Julie, Sandy and Sam for more details)

    By the way, the press section of the website goes back to Jan 2009, and in Jan 2013 it claims
    “Condominum Tower Above Pike Place Market Nearly Sold Out”

    If some units did not sell yet as of 2018 do they still count as “new construction”? Maybe not those that @steven found on Redfin, but some other ones?

  73. 73
    Justme says:

    Man oh man, look at the Amazon stock price go…..down. It was as low as 1792.60 this morning, from a close of 1870.62 yesterday. That’s a $78 drop. Right now -$61 or -3.21%. The P/E ratio is getting better and better, with today’s drop it is a mere 143, says yahoo finance. But there is still room for P/E ratio improvement.

  74. 74

    By wreckingbull @ 69:

    RE: Kary L. Krismer @ 67 – Thanks Kary, I like this. I think your point #1 could be rephrased as “buyer weariness”. After losing out on multiple bidding wars for homes of questionable quality, people start to reflect and communicate with each other. It causes gradual market psychology shifts and I think we are seeing the result of this. People reason that it can’t be this bad forever, and they decide to wait. The glut of apartments make this waiting easier and cheaper.

    Buyer weariness could actually be a separate factor by itself, so I’ll highlight it. But you would think that the recent news about increased inventory would bring them back, unless those other factors like interest rates, etc. keep them out.

  75. 75
    Justme says:

    mmm…buyer weariness sounds a lot like those buyers who lost with a bid earlier, but now do not want to pay the same amount they bid just last month.

  76. 76

    By Justme @ 75:

    mmm…buyer weariness sounds a lot like those buyers who lost with a bid earlier, but now do not want to pay the same amount they bid just last month.

    I’m not sure what situations you think you’re talking about. But in any case, I think it’s more situations a buyer has made 5 or more offers, with terms they think are appealing (but may not be), and not had one accepted. So they just quit looking or as wreckingbull put it “wait.” Just not being willing to offer the same amount wouldn’t be a situation where they stayed out of the market. And not offering the same amount as if a listing were on the market a month or two ago is probably rational.

  77. 77
    N says:

    @ Kary — Re: Foreign buyers. Just as important is the clamp down the Chinese government has put on taking money out of the country in the past year. It is very hard and involves quite a level of deception now..

  78. 78
    Maryann says:

    RE: N @ 8
    Living up here in B’ham, I see lots of Seattle/Bellevue people moving here, either as retirees or telecommuters. There is always the significance of Canadian buyers here too. Lots of vacation homes here on the lakes owned by Vancouverites.

  79. 79
    Maryann says:

    RE: wreckingbull @ 2
    Canada! Go to Costco up here in B’ham and you will see about 75% Canadian license plates.
    We are very tied to Canada up here!

  80. 80
    Maryann says:

    RE: Brady @ 21
    My real estate agent up here in Bellingham told me that Bellingham usually follows the Seattle market trend but is about a year behind it usually. I am hoping that proves true!

  81. 81
    wreckingbull says:

    By Maryann @ 79:

    RE: wreckingbull @ 2
    Canada! Go to Costco up here in B’ham and you will see about 75% Canadian license plates.
    We are very tied to Canada up here!

    Indeed. Same thing at the Burlington Costco. Enter the dairy cooler at your own peril, lest you be overtaken by a mob.

  82. 82

    Google Maps is showing several Costcos in the Vancouver area, including Lanley. Why would they need to come down here? You would think Costco would give them effectively the same exchange rate, or at least close enough it wouldn’t be worth the hassle of crossing the boarder. Is there stuff sold down here they can’t get at a Costco up there? Or is it just gas?

  83. 83
    wreckingbull says:

    RE: Kary L. Krismer @ 82 – Dairy and gas (and almost everything else) are much cheaper. The Canadian dairy price protection measures make for very high prices on milk and cheese for Canadian residents.

  84. 84
    pfft says:

    By softwarengineer @ 70:

    RE: pfft @ 66
    HOA Fees On Renton Condos Were Horrifyingly Priced a $600/mo

    Them Seattle Condos no one can afford can top $2000/mo or more with over priced amenities….

    Mine is $185/mo and includes gated community road maintenance/security and unlimited water with sewage too. No bargain, but far lower. The rules are a downer, but the clean neighborhood with no junky neighborhood houses sure is nice. We can paint our homes any color too.

    If I pay a high HOA it better come with a butler named Alfred and a batmobile.

  85. 85
    Maryann says:

    RE: Kary L. Krismer @ 82
    You must not spend much time in Canada. We vacation there 3-4 times per year, and food, alcohol and gas are much, much more expensive. We always try to bring all of our food in from WA and as much alcohol as they will allow across the border. And it is not just Costco that attracts Canadians. The parking lots are filled with BC plates all over the shopping areas of Bellingham. And this is true even though the exchange rate is not very favorable right now to the Canadians.

  86. 86

    By Maryann @ 85:

    RE: Kary L. Krismer @ 82 – You must not spend much time in Canada. We vacation there 3-4 times per year, and food, alcohol and gas are much, much more expensive. We always try to bring all of our food in from WA and as much alcohol as they will allow across the border..

    I don’t go there a lot. Before I noticed restaurant food seemed pricy, but that was countered somewhat by the exchange rate. This time we did take food and alcohol with us. We did stop once at a fast food place, but it was the wife who went in so I didn’t notice prices. I did go into a Walmart looking for something I almost bought at a US Walmart, and noticed the selection was different so I couldn’t really compare price.

    Gas has always been deceptive in Canada. They used to have the Imperial gallon, now it’s liters. Add on top the exchange rate and it makes it almost hard to tell you’re paying a ton of money for gas! ;-)

    But my point was more that you would think Costco would adjust for exchange rate. So unless there’s some sort of a tax applied you’d think those non-gas/dairy items would be priced similarly.

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