October Stats Preview: Inventory nearly doubles from 2017

Remember, you can always get access to the Seattle Bubble spreadsheets by supporting my ongoing work as a member of Seattle Bubble.

Now that October is behind us, let’s have a look at all of our early indicators for the month.

Home sales volume was down considerably from a year ago in both King and Snohomish County last month, dipping over 16 percent in both counties. Meanwhile, the number of homes on the market began the usual seasonal declines, but were still up 83 percent in King County and 63 percent in Snohomish. Foreclosures are still very rare, although the number of notices did tick up a bit month-over-month.

Here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snohomish County Stats Preview

Rapidly increasing inventory coupled with continued year-over-year drops in sales is still the biggest news in this month’s data. First up, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County rose 14 percent between September and October (a year ago they were basically flat over the same period), but were still down 16 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish inched up three percent month-over-month (versus a 2 percent decline in the same period last year) but were still down 19 percent from a year earlier.

Next, let’s look at our inventory charts, updated with previous month’s inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

The number of homes on the market in King County fell eight percent from September to October. Year-over-year listings were up a whopping 83 percent from October 2017, which is easily a new all-time high year-over-year gain, crushing the record of 68 percent that was set just one month prior in September.

In Snohomish County inventory fell month-over-month seven percent, but the year-over-year growth also hit a new all-time record at 63 percent.

Hit the jump for the foreclosure charts.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were down 2 percent from a year ago but Snohomish County foreclosure notices were up 34 percent from last year. I wouldn’t read much into that increase though, since we’re talking about a jump from 50 notices last year to 67 this year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 61 percent from a year ago, to the lowest level since October 2003.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

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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.

63 comments:

  1. 1
    Justme says:

    Yay!!

    The y-range on the active listings graph could be better, though. It does not quite leap out and say “2X !!!!” :-)

  2. 2
    pfft says:

    “Inventory nearly doubles from 2017”

    Is that bad?

  3. 3
    Market Psychologist says:

    I am sure there are thousands of tech workers waiting in the wings to swoop up this inventory. They are just busy at the microbreweries right now. Once they sober up, those open houses will be teeming again!

  4. 4
    Brady says:

    Surprisingly large volume of sales in King County in October. This keeps monthly supply at 1.5

  5. 5

    By pfft @ 2:

    “Inventory nearly doubles from 2017”

    Is that bad?

    It depends on your point of view. If you’re a seller hoping to sell in a bidding war for more than your house would ever appraise, it is bad. For most other people it is good or at worst neutral.

  6. 6
    N says:

    Another interesting recent sale:

    https://www.redfin.com/WA/Seattle/4540-50th-Ave-SW-98116/home/330228

    Original List – $625k
    Last List – $579k
    Sold – $535k

    Really seems that, at least for some homes, buyers can be hopeful of targeting homes that may be beyond their budget.

  7. 7

    FWIW, we are currently above the 80% of last year’s October sales (King County SFR), and there are still 2.5 days to report without being late. And again, on top of that there is also the late reported sales from the prior month. That may be as few as 40 additional sales, or so, and probably no more than 100.

    Information from NMWLS sources, but not compiled by our guaranteed by the NWMLS.

  8. 8
    eddiemaster says:

    It will be interesting to see how this winter’s numbers shake out, like whether the warranty deeds continues to climb and the active listings continue to get chopped down. Going back to the much older posts, these deeds/SFH active listing numbers and trend look very close to what we saw in Sept-Oct 2013! Interesting to see the mirror effect.

    Mortgage interest rate will likely have some short term upward pressure even as the yield curve flattens. It’s been a year since the Fed start to unwinds tens of billions of the balance sheet per month in an accelerating manner and will continue to do so until at least 2020. There were $2.4 trillion worth of treasury bonds on the book.. so upward pressure on the mortgage interest rate will continue to put downward pressure on housing affordability and price.

    IMO the new reality will more likely lie somewhere between bear and bull, and that’s not a bad thing for home owners. Short term new supply will continue to emerge outpacing the demand’s digestion, so there will be some pressure on pricing. But as the profit margin shrinks, construction and investment will slow significantly as well, balancing the economics basics at a delayed pace as usual.

    A renewed supply/demand happy medium and mortgage rate will be the norm. But Seattle won’t be an affordable city regardless how loudly perma bears keep cheering on. Still plenty of credit at historically cheap price, so as long as companies continues to invest and hire, cascading down to all other companies and service/entertainment industries. Housing demand should do what it did for SF and Silicon Valley.

  9. 9
    Market Psychologist says:

    https://www.seattletimes.com/business/real-estate/seattle-home-sellers-seeing-new-reality-are-lowering-list-prices-faster-than-anywhere-else/

    “Seattle-area homebuyers are getting a double dose of good news: More sellers are dropping their asking price to lure buyers — and buyers are then negotiating the price down further.”

    …Now, 22 percent of all listings are being pitched at a reduced price, the most since Zillow began tracking the data in 2010.”

  10. 10
  11. 11
    Justme says:

    RE: Rentin’ @ 10

    People might wish that Shiller had said last year that the situation reminded him of 2005, rather than waiting until this year to say that the situation reminded him of 2006.

  12. 12
    Eddiemaster says:

    RE: Rentin’ @ 10 – I think he’s said a lot of things, and some are blown out of proportion to grab headlines by MarketWatch. Last recession was brought on by subprime mortgage debt bundled in tranches for CDS and over leverage, therefore, directly impacted housing. Although the Fed’s unwind of balance sheet, a form of monetary tightening, will probably have dramatic impact to economic expansion and mortgage rate, but not only does the Fed have control over the schedule but also quantity to sell; the impact will likely be gradual, less of the knee jerk that would lead to wide spread panicking. The Fed wants a normal balance sheet and interest rate before we get to the next recession but it also doesn’t want to cause the recession. Really let’s stop panicking. A recession doesn’t have to mean wide spread significant depreciation of assets if it’s driven by job market/population growth and less speculative in nature.

  13. 13
    Market Psychologist says:

    RE: Eddiemaster @ 12 – why is everyone telling us not to panic? Hmmm….

  14. 14
    Rentin’ says:

    RE: Market Psychologist @ 13
    I know! And I’m definitely not panicking. I mean, I might be if I recently bought a house…

    Shiller himself said that if we are in some kind of repeat 2006 that he doesn’t think the downturn will be as significant. He’s speaking about the national situation, so I think that sounds really reasonable. The arguments about the Fed’s tightening and interest rate increases being gradual also make much more sense nationally because it doesn’t appear that there is a huge asset bubble in housing in general. But Seattle is not in general. Seattle’s rocket ship ascent has been special. So we very may well be hit harder by this housing downturn and that recession that may catch up with us because it’s long overdue. Who knows! But I won’t be panicking. I’ll be watching and waiting.

  15. 15
    Rentin’ says:

    Also, I want to be convinced that there is no longer an issue with subprime mortgages. And I am mostly convinced. But then there have been those rollbacks on regulations. And then my lender has offered me a loan for far, far above what I would actually be able to pay. Like ever. Even if I only ate Top Ramen. Am I the only one? So there’s that. But I don’t think subprime lending has been anywhere near the degree where it was before. You do actually have to prove you have an income now. But subprime lending isn’t the only thing that could potentially cause a housing downturn. And would we even need a collapse for housing prices to drop substantially? The appreciation over the last two years alone has been bananas, so can it hold up? Who knows?!

  16. 16
  17. 17
    Blurtman says:

    RE: Rentin’ @ 15 – It’s discontinuous movements that are problematic. A slow slide down won’t cause an overreaction, but keep in mind, there are speculators in the market. Don’t necessarily need the subprime Ponzi. A decrease in affordability caused by a recession, increased interest rates, or marijuana induced slackerism could do it.

  18. 18
    Eddiemaster says:

    RE: Rentin’ @ 14 – I would be pissed if I had bought an investment property in the past year or two. But if I had bought a place for my family to live, I wouldnt want to hear all that panicky dooms day talks either. I just think that hyperbole insinuation by bear and bull are mostly not realistic, hence the let’s not go all bananas panicking from 3 months of data talks. It would be like pulling all out of stock after each correction and getting beat by SPX in the long run.

    As for Seattle being different from national, still I would ask what are the factors of housing crash, vs a correction. Amazon HQ2 doesn’t mean no more new jobs here, and Amazon certainly isn’t the only company expanding. Job report just rolled out this morning as new wages increasing the most in 9 years and unemployment remains low. Those are factors that drive prices higher. Now if you start to spread words that Seattle housing is tanking like media selling headlines, people might just jump the bandwagon as we are emotional.

    I don’t know or have the time to dissect the numbers but perhaps the luxury homes and new builds are getting hit harder hence the drop in median SFH price? And if so would that really be representative of the entire housing market health? These numbers need context always to explain the discrepancy.

    Lastly the correction may just stop the speculative buyers like Eric, which in itself is also a healthy thing going forward!

  19. 19
    sullim4 says:

    I’m in the tech sector. I agree that HQ2 will impact the housing market, but there are many other high tech companies expanding here, including Facebook’s facility in Redmond across from Willows and the Google campus expansion in Kirkland. Microsoft is adding additional headcount capacity in Redmond. Amazon themselves are also increasing their presence in Bellevue vs Seattle.

    I think the Eastside market in particular is well positioned to benefit from this activity. The question is – will the recent downturn in tech stocks cause some of these companies to back off of expansion?

  20. 20
    uwp says:

    By Kary L. Krismer @ 7:

    FWIW, we are currently above the 80% of last year’s October sales (King County SFR), and there are still 2.5 days to report without being late. And again, on top of that there is also the late reported sales from the prior month. That may be as few as 40 additional sales, or so, and probably no more than 100.

    Information from NMWLS sources, but not compiled by our guaranteed by the NWMLS.

    I’m confused here Kary.

    Is this the “buyers strike” or the sellers “rushing for the exits” that we’ve heard so much about?

    /sarc

  21. 21
    eddiemaster says:

    RE: sullim4 @ 19 – Many recent earnings report record profit, so I’d think that tech companies continue to hire and expand, after all that is the most important way they keep stock price going higher (compared to buybacks, oversea profit repatriation). Forward guidance is what’s been driving Apple and Amazon down, and that may have lots to do with strong dollar and trade war, which will give way at some point. Stock market only loosely correlate with housing price and has much outperformed housing price increase YoY for a good part of this recovery (disregarding the leverage from mortgage). But yes when the recession comes they will both move down, no debate there.

  22. 22
    Justme says:

    https://www.seattletimes.com/business/real-estate/seattle-home-sellers-seeing-new-reality-are-lowering-list-prices-faster-than-anywhere-else

    “At the start of the spring, when the local market was still on fire, just 5 percent of all homes on the market in the metro area had a reduced listing price, according to Zillow. Now, 22 percent of all listings are being pitched at a reduced price, the most since Zillow began tracking the data in 2010.”

    “Take a newly remodeled four-bedroom home just northwest of Green Lake that went on the market in mid-September for $950,000. The flipper who gutted and renovated the home must not have gotten any nibbles because within a week, the price was down to $899,950. A couple weeks later, it was down to $879,950. Still nothing. Another couple of weeks and it sank to $859,950. Another two weeks and they tried $839,950. Nope. This week it went back on the market at $799,995.”

    Check out the graphs of price cuts in the SeattleTimes article.

  23. 23
    Justme says:

    Now, also keeping in mind the above SeattleTimes article:

    Looks like all those sellers crowding the exits of the Puget Sound housing market are infecting each other with some selling enthusiasm. Nevertheless, King County buyers are buying LESS (0.84X) than last year, even with the offerings being up (1.83X), again YOYO.

    The REIC can spin these numbers all they want. “Hey maybe there is a sales count bump in October relative to the dismal September?” Maybe. But with all the price cutting, that just shows that lower prices is what it takes to sell a property. And the sales count is down. And the absorption of the offerings in the market is WAY down, at 0.63X.

    All numbers calculated from Tim’s Oct 2018 preview data in this thread:

    4783/2619 = 1.82626956853761 KC active listing yoyo
    3296/3915 = 0.841890166028097 KC closed warranty deeds yoyo
    3296/5213 = 0.632265490120852 KC oct closings/sep listings (mo/mo-1)

    Buyers are getting smarter. There will be SOME buyers at each price point. Would be fun to check how many people are buying at each price point on the way down compared with the approximately same price point (per Case-Shiller) on the way up. My hunch is that that the absorption rate at each price point is notably down. That might be a good topic to investigate further.

  24. 24

    I Wouldn’t Buy a Seattle House Until After the Mid-terms

    The horrifying October and Future [???] 2019 Bear Stock Market buoys or sinks Seattle real estate prices IMO. IMO, that’s why the stock market is WAY down this month….Mid-term voting uncertainty that the tax cuts will be eliminated/stagnated if the Open Border Party takes over the House [Senate too?] for Socialism tax and spend using like MASSIVE Obama QE welfare to the banks [are they even possible today??].

    Savvy stock investors aren’t stupid. High Paying Manufacturing Jobs create economic stability and can’t be replaced with unsustainable QE welfare to the rich elite forever…

    Now Open Border Party: rant that the QE Obama economy was Trump’s recent success formula anyway….LOL…the savvy investors aren’t that stupid. It won’t work on the stock market at all. Kiss your 401Ks good-bye if the Open Border Party has its way?

  25. 25
    eddiemaster says:

    RE: softwarengineer @ 24 – Some political blah blah’s. No POTUS is good enough to steer the economy on his own. QE isn’t Obama’s doing, it’s the Federal Reserve’s decision. Just like how Powell is deciding to increase interest rate even at Trump’s objections. And QE used for this past recession was actually good as it injected money while taking up MBS, the problem child at the time. Maybe you can come up with a way all on your own to stimulate the economy instead of criticizing an opposing party by rambling.
    As for your concern for removing the tax cut… The budget deficit skyrocketed to fund the tax cuts for the rich, so do you really care if the tax cuts for the rich is taken away? Perhaps you are the rich so no you don’t want the tax cut removed, I have no idea.
    Your last two paragraphs.. doesn’t even make sense to respond. I’m not even a Democrat.

  26. 26
    eddiemaster says:

    RE: Justme @ 22 – That sudden exodus as well as the rent/buy ratio to me implies the degrees of speculation — the Hot Money. I feel for the folks who bought in the past two years, but just hang on, things do balance out, eventually.
    Hopefully builders stop over building as costs increase and profit margin shrinks, so we can get to a more balanced state.

  27. 27
    Eastsider says:

    RE: Justme @ 22 – Flippers are generally motivated sellers. Many borrow money at subprime rates and interest payments alone can eat them alive if the property sits. It is normal in this stage of the market cycle to see motivated sales from them. At least this flipper may survive by getting out now. If the market continues to trend down, many, including builders, will be hurt badly.

  28. 28
    Eastsider says:

    UST 10yr went up a lot this morning. It is now at 3.217% and heading higher. 5% mortgage is a foregone conclusion this year. I’m seeing 5.5% mortgage in 2020 and perhaps 6% if the FED keeps up the pace of rate hikes (i.e. 4 hikes in 2020). A 1% increase in mortgage rates in the past year has affected the housing market. Another 1% increase will doom many markets. The only way to bring down interest rates is a recession. No good choices. Of course next Tuesday is another big unknown. Time to play safe.

  29. 29
    eddiemaster says:

    RE: Eastsider @ 28 – It’s all a balancing act. The Fed finally has a lot of control over the economy because the economy by numbers is as sound as it can be for now. So the Fed decides to unwind balance sheet, offering up say 50 billions in UST and MBS each month, and that is going to put downward pressure on UST, causing yield to rise — subsequently the mortgage rate. At the same time the Fed is normalizing the short term interest rate, everything is what it should do for QT as long as unemployment is low, wage growth is decent, and inflation is on target, which are all by number on point. So the employment/wage factors that drive housing price up are also being countered by factors that would drop housing price, which should slowly increase housing price, but not decrease it except in say highly speculative markets such as Seattle in the short term.
    But keep in mind that the Fed, which tends to be conservative, can choose to stop or slow QT next year should it decides that the job report numbers don’t look to support gradual economic growth (not necessary a recession), then we would get lower or stable rates including for mortgages.
    It’s good to know that the Fed acts and thinks independently from the POTUS.

  30. 30
    sfrz says:

    RE: eddiemaster @ 29 – Cheering the Fed that it acts and thinks independently from the Government is the same as cheerleading for the vampire squid Goldman Sachs to have control over our lives and our government. You better check yourself before you wreck yourself.

    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
    — Henry Ford

    “Give me control of a Nation’s money supply, and I care not who makes its laws.”
    — M. A. Rothschild

    “The fact that the Fed is committed, first and foremost, to the interests of its shareholders, the commercial banks, explains why its monetary policies are increasingly catered to the benefits of the banking industry and, more generally, the financial oligarchy.” https://www.counterpunch.org/2015/12/18/who-owns-the-federal-reserve-bank-and-why-is-it-shrouded-in-myths-and-mysteries/

  31. 31
    Justme says:

    RE: eddiemaster @ 26

    >> Hopefully builders stop over building as costs increase and profit margin shrinks,

    But, but, BUT SHORTAGE!! Where is the shortage of housing that we have been hearing about endlessly for the last 5 years? You mean there wasn’t really any shortage, only a coordinated onslaught of totally misleading look-at-the-less-than-6-months-of-inventory-and-therefore-a-shortage propaganda? I have covered that absolutely fraudulent inventory propaganda elsewhere(*), but how about that SHORTAGE!! It just evaporated this year. Who would have thunk that could happen?

    (*)REFERENCE:

    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

  32. 32
    Matt P says:

    There was never a shortage, just a ton of speculators buying up houses to unload later for a profit. We need laws to prevent this sort of mess that leads to homelessness and unaffordable housing. Houses are for living in, not investments.

  33. 33
    Eastsider says:

    RE: eddiemaster @ 29 – You are incredibly optimistic. I don’t believe the FED will be able to hike interest rates 4x next year, and QT at $600b/yr pace. It will almost guarantee a next GFC.

  34. 34
    eddiemaster says:

    RE: sfrz @ 30 – Yes, the Fed is the banks’ bank and is highly integral in the whole private banking system. But you are basically alluding to, based on a few quotes from an article from a left-winged site, that the Fed is like GS and only cares about it making money for the rich constituents. Then can you explain why the ZIRP? That didn’t boost bank profits, higher interest rate does. One can look at the Fed actions from multiple angles and derive different POV, and I don’t believe that the Fed doesn’t make mistakes, such as bailing every bank out. But the Fed needs to play the long game and is under constant scrutiny, hence it tends to be conservative in its actions to avoid knee jerk reactions.

    But for you, perhaps the alternative is just abolishing the credit system and set ourselves back a couple decades in expansion. Since you don’t like that an entity isn’t altruistic. Or perhaps let’s try collecting all the money and split it equally among all citizens, that’s never been tried before right?

  35. 35
    Eastsider says:

    RE: Matt P @ 32 – Even if there had been no speculators, Seattle home prices would still have gone straight up in the past few years. Housing inventory is simply not keeping up with population growth. Govt intervention will likely make it worse over time. Just look at the ‘good intentioned’ condo laws and the number of condo buildings built.

  36. 36
    eddiemaster says:

    RE: Eastsider @ 33 – I don’t mean to give that impression that I’m optimistic about the US economy and thus Fed will keep up with QT. I just think it’s a balancing between monetary policy and job report/inflation, and that then drives the rates up or down. Although for now it’s more likely than that Fed will be on track with the 4 hikes and hundreds of billions of UST and MBS shedding, which makes a new mortgage more expensive.

  37. 37
    Matt P says:

    By eddiemaster @ 34:

    RE: sfrz @ 30 – Yes, the Fed is the banks’ bank and is highly integral in the whole private banking system. But you are basically alluding to, based on a few quotes from an article from a left-winged site, that the Fed is like GS and only cares about it making money for the rich constituents. Then can you explain why the ZIRP? That didn’t boost bank profits, higher interest rate does. One can look at the Fed actions from multiple angles and derive different POV, and I don’t believe that the Fed doesn’t make mistakes, such as bailing every bank out. But the Fed needs to play the long game and is under constant scrutiny, hence it tends to be conservative in its actions to avoid knee jerk reactions.

    But for you, perhaps the alternative is just abolishing the credit system and set ourselves back a couple decades in expansion. Since you don’t like that an entity isn’t altruistic. Or perhaps let’s try collecting all the money and split it equally among all citizens, that’s never been tried before right?

    The banks make money no matter what. They were required to hold certain reserves with the Fed and the banks were getting big fat profits off of it for no risk. Nearly $30 billion dollars the Fed paid out to them in 2017:

    https://www.federalreserve.gov/newsevents/pressreleases/other20180110a.htm

  38. 38
    eddiemaster says:

    RE: Matt P @ 37 – Yes, the banks make money no matter what, as there is a time value to money so the Fed should pay for them to hold reserve, but relativity still matters. The banks definitely make more with higher short term interest rate for the wider spread to customer interest pay out.

  39. 39
    Justme says:

    RE: Eastsider @ 28

    Quicken Loans
    30-Year Fixed
    4.99%
    (5.285% APR)

    Is that a new multi-year high?

    source: https://www.quickenloans.com/mortgage-rates

  40. 40
    Dustin says:

    By Matt P @ 32:

    There was never a shortage, just a ton of speculators buying up houses to unload later for a profit. We need laws to prevent this sort of mess that leads to homelessness and unaffordable housing.

    Doesn’t this also lead to falling prices and more affordable housing when all those speculators act to realize their gains? You said yourself – investors want to unload to make a profit. They have a clear incentive to sell, especially in a risky or declining market environment.

  41. 41
    Justme says:

    Lawrence Yun thinks there is no bubble and no bust.

    http://www.ocregister.com/2018/11/02/plunging-prices-sagging-home-sales-not-likely-realtor-economist-says/

    What does this remind you of? (*cough* David *cough* Lereah) Anyone remember the famous statement “Prices have reached a permanently high plateau”.

    Be afraid, be very afraid.

  42. 42
    eddiemaster says:

    RE: Justme @ 41 – Yea I read that link that you attached and it makes sense. Higher end under pressure so that drags down median price, but the housing market from the credit risk stand point is relatively healthy. If he had said that there was no bubble in 2013, would you had also not believe him?

  43. 43
    Matt P says:

    By Dustin @ 40:

    By Matt P @ 32:

    There was never a shortage, just a ton of speculators buying up houses to unload later for a profit. We need laws to prevent this sort of mess that leads to homelessness and unaffordable housing.

    Doesn’t this also lead to falling prices and more affordable housing when all those speculators act to realize their gains? You said yourself – investors want to unload to make a profit. They have a clear incentive to sell, especially in a risky or declining market environment.

    But this leads to bubbles and constant boom/bust cycles putting even more people out on the streets.

  44. 44
    N says:

    https://wolfstreet.com/2018/10/30/declines-in-the-most-splendid-house-price-bubbles-in-america/

    Oh-la-la! After a historic spike, Seattle metro home prices performed a vile and unthinkable act: They dropped 1.6% in August from July, down 1.6% in just one month! This comes after they’d edged down a bit in July from June. Over both months combined, index lost 2%. This decline, after the spike, took the index all the way back to, well, April. The month-to-month decline in August is particularly interesting because the August readings (for June, July, and August) are seasonally not weak, and price increases were the norm in every August since the housing bust, except 2014 when the index remained flat.

    So now the scenario is changing in Seattle. This likely confirmed the inflection point I noted last month. Over the past 12 months, the index is still up 9.6%, but that’s down from the 12.0% year-over-year increase of the July reading. The index is up 31.9% from the peak of Seattle’s crazy Housing Bubble 1 (July 2007), but that reading too is down from the 35% jump in the July reading

  45. 45
    whatsmyname says:

    By Matt P @ 32:

    There was never a shortage, just a ton of speculators buying up houses to unload later for a profit. We need laws to prevent this sort of mess that leads to homelessness and unaffordable housing. Houses are for living in, not investments.

    If you think this is bad, there are people who buy FOOD to unload later for profit. Some of them even prepare the food so they can mark up their margins. You can’t live without food. This has just all got to stop!!!!!!!!!!!!!

  46. 46
    Sfraz says:

    RE: Matt P @ 32 – agree. How many seattle SFH did blackstone (aka vampire squid) suck into its belly after the last crash? Heads we win…tails you lose.

  47. 47
    Matt P says:

    By whatsmyname @ 45:

    By Matt P @ 32:

    There was never a shortage, just a ton of speculators buying up houses to unload later for a profit. We need laws to prevent this sort of mess that leads to homelessness and unaffordable housing. Houses are for living in, not investments.

    If you think this is bad, there are people who buy FOOD to unload later for profit. Some of them even prepare the food so they can mark up their margins. You can’t live without food. This has just all got to stop!!!!!!!!!!!!!

    That’s in no way comparable and you know it. Food is cheap and plentiful and we throw tons of it away every day. Not to mention that it’s heavily subsidized and available for free to the poor in many cases. Some food items are expensive, but the basic staples are still available for a very low price in all markets – not so for housing.

  48. 48
    whatsmyname says:

    By Matt P @ 47:

    If we cut your $1500 rent into like 3 meals a day, that’s less than $17 per 3rd of a day. How cheap is that? Plus a restaurant won’t let you leave all your stuff there all day while you’re at work. But if it’s no frills and free to the poor for you; a tent by the freeway is very cheap. And there are shelters that would take you for free.

    Still, I get your point. It is wrong for your landlord to rent you his not so cheap and plentiful housing unit for filthy lucre. And you are complicit. You should get out. Tonight.

  49. 49
    whatsmyname says:

    By Justme @ 11:

    RE: Rentin’ @ 10

    People might wish that Shiller had said last year that the situation reminded him of 2005, rather than waiting until this year to say that the situation reminded him of 2006.

    You make a really good point here. How many people wanting houses today would have been better off buying in 2005. There was more selection. With 20% down, you’d have never really been underwater on the median price – which has now nearly doubled. Your loan would be almost half amortized by now. And you’d have had 13 years to make it your own. Dang.

  50. 50
    Justme says:

    RE: whatsmyname @ 49

    Must be frustrating not to be able to come up with a valid analogy and therefore not a valid parody. But that does not seem to stop you from trying both. Better luck next time.

  51. 51
    whatsmyname says:

    RE: Justme @ 50 – I bought a rental house in 2004 with modestly better results than what I described for a 2005 purchase; so hearing that Shiller thought it was similar to 2005 might have caused a different reaction for me than for you. Still, as they say, maybe this time is different.

    I do accept your wishes for better analogies and for better luck next time, although it seems almost greedy.

  52. 52
    Justme says:

    RE: whatsmyname @ 51

    Stop obfuscating. You are using a very popular propaganda technique that has been widely used by real-estate bubble mongers. We might give this propaganda a new name: The Time-Travel-Fallacy. Maybe there is a better name. I’ll think about.

    Must people will understand this: Just because 2004 was a better time to have bought, as of 2018, compared with not having bought at all, does not mean 2018 is a good time to buy. It is a false choice. Most people who are looking to buy now could not have bought in 2004. 2004 would have been better than 2018, yes. But that does not mean that 2018 is going to be a better time than 2019, or 2010, much like 2007 was not a better time than 2008, 2009, 2010, 2011 and parts of 2012. But, yeah, if I could travel back in time with my 2018 cash and income to 2004, it might very well be a good time to buy at 2004 prices. But I can’t. But again, that does not make 2018 a “good time to buy”.

    PS: Also noticed you moved the goalpost one extra notch, from 2005 to 2004. Nice going.

  53. 53
    whatsmyname says:

    RE: Justme @ 52 – “Maybe this time is different” is fair sarcasm for you, but not for me?

    I did not say that 2018 is a good time to buy. Shiller’s equivalent of 2006 was a little toppy for the recession weathering metrics in my post.

    I can’t change the facts on my 2004 purchase, but I did not use the 2004 metrics – I used the 2005 metrics (see the charts in Tim’s NWMLS monthly posts).

    Also, I did not time travel my 2018 income for the 2004 purchase. Anyway, it’s my tenants income that pays for it now.

    Thanks for your continued support of the rental market.

  54. 54
    Justme says:

    RE: whatsmyname @ 53

    >>I did not say that 2018 is a good time to buy.

    There you have it, folks. Whatshisname finally admitted that 2018 is not a good time to buy. Or should I say “finally acknowledged that 2018 *may* not be a good time to buy”. I want to be fair.

    >>Shiller’s equivalent of 2006 was a little toppy for the recession weathering metrics in my post.

    Therefore, 2017 was not a good time to buy either. But then what was whatshisname doing day after day in 2017 and 2018 and more? Doing his darndest to blow the bubble with his propaganda.

    You could not make this stuff up. Some bubble-mongers are just deluded and self-centered wishful thinkers. But thus guy, and MANY OTHERS, just do not give a damn if you lose everything. After all, you will come back and rent from them. Phooey!! Disgusting.

    >>Thanks for your continued support of the rental market.

    Right. That’s what you want. People should be priced out or lose their house, so they have to rent from you. I call that immoral.

  55. 55
    whatsmyname says:

    RE: Justme @ 54
    Priced out forever,
    Not that something has happened,
    It’s just your nature.

    A those who can’t learn from the past haiku.

    p.s. Where did I ever say 2018 was a good time to buy? Even for 2017; it was Shiller’s 2005 parallel that indicated it might be OK – although I was actually ragging on Shiller there.

  56. 56
    Justme says:

    RE: whatsmyname @ 55

    Yeah, that’s just a lovely sentiment.

  57. 57
    whatsmyname says:

    RE: Justme @ 56 – Reality can be a beech.

  58. 58

    I think Shiller is being misrepresented here. He is not saying that we’ll have another 2008-2009.

    https://www.cnbc.com/2018/10/26/robert-shiller-i-dont-expect-a-sharp-turn-in-the-housing-market.html

    Not that it really matters, his is still just a prediction at best.

  59. 59
  60. 60
    whatsmyname says:

    RE: Kary L. Krismer @ 58 -Kary, I think you are correct. Thanks for the articles.

  61. 61
    Notme says:

    I got mine already
    ev’ryone else overpay
    it makes me happy

    -a bubble-monger haiku

  62. 62
    eddiemaster says:

    RE: whatsmyname @ 55 – Let’s get this straight without the hinting and alluding to of those cute haikus. Are you saying that RE right now is like 07/08′, therefore, we are about to get a correction of more than 25% off the peak that we supposedly reached in the past year? I’m interested in how you were able to predict the impending crisis and how right now we are under similar underlying risky debt crisis that directly impact housing. We all have hunches, and I can also jump on any wagon and cry wolf daily, once in a while I would be right too. I don’t understand why such bearish thinking, besides some logic such as ‘that’s what optimistic people said before 2008’.

    The reason it matters is that, if you are correct about more than 25% tanking, then it makes sense to fire sell properties, even the ones we live in and own. If not, then there’s little reason to pay the transaction fees of selling that’s about 8%.

  63. 63
    whatsmyname says:

    RE: eddiemaster @ 62 – I do not believe that today is like 2007/08. I do like to wag those who keep repeating that and other perma-bear hyperbole. Using their own logic; 2017 would be an OK time to buy for a long term holder, yet they cannot process this. Still, if I use this particular mirror, it is unhelpful to argue with the frame. Start with post 49 to get a better sense of the conversation.

    Having said that; it is a cyclical world, after all. We’ve seen stabilization, recovery, and growth. We are better equipped to produce more new suburban housing supply than in a very long time. There is a high level of apartment substitution supply, and the evidence is out there for a de facto slowdown in parts of the market right now. I don’t know how big or for how long. There are enough uncertainties that it could go big or small, one way or the other.

    Aside from this misunderstanding, I am in agreement with your post. I would note that most of the haiku you see is a fellow called Notme. He is not me.

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