November Stats Preview: Double the inventory, double the fun

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

With November in the books, let’s have a look at all of our early indicators for the month.

It’s pretty much the same story as last month: Home sales volume was down considerably from a year ago and the number of homes on the market is up dramatically, nearly doubling from a year ago. 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

First up, 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 dropped 19 percent from October to November. Year-over-year listings are soaring, and up 111 percent from November 2017, another new all-time high year-over-year gain, easily besting the record of 86 percent that was set just a month earlier.

In Snohomish County inventory fell month-over-month 15 percent, and the year-over-year growth also hit a new all-time record, growing 87 percent.

Next, 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 fell 15 percent between October and November (a year ago they fell 8 percent over the same period), and were down 22 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 fell 10 percent month-over-month (versus a 14 percent decline in the same period last year) and were down 15 percent from a year earlier.

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 up 27 percent from a year ago and Snohomish County foreclosure notices were up 8 percent from last year. Since the numbers are so low, these increases appear large in percentage terms, but in King County the increase represents just 20 additional foreclosures.

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 52 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.

59 comments:

  1. 1
    funkseoulbrotha says:

    I feel bad for those that purchased recently. What a world of hurt they will be in. Shame on those sellers who still think their asbestos filled, mold problem, 1500 sq ft home is worth 650k.

  2. 2
    Ron says:

    RE: funkseoulbrotha @ 1 – I’m sure the ones that purchased a few years ago will be fine.

  3. 3
    Joe says:

    RE: Ron @ 2

    Agree. Those that purchased a few years ago will likely lose their price gains, and perhaps their 20% deposits, but they won’t get underwater on their mortgages. These people should be fine assuming they don’t lose their jobs in the upcoming recession.

    Of course, if people that bought a few years ago levered out the paper price gains with home equity loans, they may be looking at serious financial trouble in the near future as home prices drop.

    Anybody purchasing today could fall on immediate financial trouble if prices keep dropping at the current pace. It looks like inventory growth, and perhaps price drops, are accelerating though. Those seeking to avoid large financial losses should wait this one out. Trends don’t reverse quickly, especially when they are showing signs of acceleration.

  4. 4
    Macro Investor says:

    The 10 year treasury bond rate has backed off to the range it was in last february. I see no reason why there should be a major correction in housing prices. The economy is fine. There are no huge issues that could suddenly bring it down.

    Most likely this is just a normal pause. We had an insanely hot market with emotion-driven bidding wars. Now it’s back to reality. We need stability for a while, so people can get comfortable with the idea of selling and being able to find another decent house to live in. That would bring back normal inventory levels. The low inventory situation feeds on itself because only motivated sellers and cash outs can sell easily.

    I do feel sorry for people who “won” bidding wars. It takes real maturity and emotional control to go against crowd behavior, and delay gratification. You never win when you overpay.

  5. 5
    Justme says:

    Twice the listing inventory and 15% less sales? What happened to the much ballyhooed shortage? If there was a shortage, doubling the listings should lead to double the sales.

    Conclusion: There never was a shortage, just hype and bubble-mongering. And in the end, almost everyone loses. I hate bubbles.

  6. 6
    DavidE says:

    By Macro Investor @ 4:

    The 10 year treasury bond rate has backed off to the range it was in last february. I see no reason why there should be a major correction in housing prices. The economy is fine. There are no huge issues that could suddenly bring it down.

    Most likely this is just a normal pause. We had an insanely hot market with emotion-driven bidding wars. Now it’s back to reality. We need stability for a while, so people can get comfortable with the idea of selling and being able to find another decent house to live in. That would bring back normal inventory levels. The low inventory situation feeds on itself because only motivated sellers and cash outs can sell easily.

    I do feel sorry for people who “won” bidding wars. It takes real maturity and emotional control to go against crowd behavior, and delay gratification. You never win when you overpay.

    It is not just the interest rates that matter these days: it is the Fed balance sheet reductions and lack of support for MBS. Powell has very cleverly thrown investors a bone by indicating a willingness to slow down interest rate hikes, but he has said nothing about balance sheet reductions (where the real action is).

    “In other words, mortgage rates are climbing faster than the 10-year Treasury yield, now that the Fed has begun the shed mortgage-backed securities. This is expected. It’s part of the QE unwind – it’s part of the Fed exiting the mortgage market and pulling its support out from under it.”

    https://wolfstreet.com/2018/11/14/mortgage-rates-reach-6-percent-sooner-fed-sheds-mortgage-backed-securities-whatll-that-do-to-housing-bubble-2/

  7. 7
    No Name Guy says:

    Dividing the month end active listings by deeds for King Co shows the magnitude of the relative increase in supply to demand.

    In November 2017 there was 1879 listings to 3593 deeds, a ratio of 0.523 active listings per recorded deed.
    In November 2018 there was 3961 listings to 2818 deeds, a ratio of 1.406 active listings per recorded deed.

    Joe at 3: “Anybody purchasing today could fall on immediate financial trouble if prices keep dropping at the current pace. ”
    Well, only if they had to sell and convert their paper losses into realized cash-out-of-pocket actual losses, in which case many people would be insolvent since they couldn’t come up with the cash. If they can and will keep making the payments, then meh…..it doesn’t really matter.

    Ask the guy who lives behind me who bought literally at the top in 2007. When things hit bottom, the paper value of his place was ~1/2 of what he paid and he was deep underwater. But strictly speaking, he wasn’t ever in financial trouble since he managed to stay gainfully employed and made his payments. I still wonder to this day why he never walked away………

  8. 8
    Market Pyschologist says:

    https://www.seattletimes.com/business/stocks-slide-as-bond-market-sounds-a-recession-warning/

    “Stocks fell after President Donald Trump added to uncertainty about the trade-war related agreement he reached over the weekend by tweeting a warning to China and referring to himself as “Tariff Man.” Meanwhile, the bond market raised expectations for an economic slowdown.”

    —————

    Looks like the 10Y/2Y yield inversion is coming home for the holidays.

  9. 9
    TheBenBernank says:

    Between now and May will be the eye of the tornado. If we continue to see increase in velocity of price declines and inventory increases by next Spring, then I will consider getting off the sidelines and looking to purchase. But up until then, just wait and see.

  10. 10
    MultiFamilyMan says:

    The market is going to crater, this is a cyclical bear market in RE we’ve entered. 5-10% declines? Ha! 50% is more likely than 5% (which has already occurred from peak pricing.)

    Dear Bulls, show me one period in history when a meteoric rise in RE valuations has simply ‘leveled out’ and not ended with massive price drops afterwards.

    Crickets.

  11. 11
    Funkseoulbrotha says:

    RE: Joe @ 3

    Seems pretty shitty to me to lose their deposit and price gains. You guys are much more optimistic than me.

  12. 12
    Macro Investor says:

    By DavidE @ 6:

    By Macro Investor @ 4:

    The 10 year treasury bond rate has backed off to the range it was in last february. I see no reason why there should be a major correction in housing prices. The economy is fine. There are no huge issues that could suddenly bring it down.

    Most likely this is just a normal pause. We had an insanely hot market with emotion-driven bidding wars. Now it’s back to reality. We need stability for a while, so people can get comfortable with the idea of selling and being able to find another decent house to live in. That would bring back normal inventory levels. The low inventory situation feeds on itself because only motivated sellers and cash outs can sell easily.

    I do feel sorry for people who “won” bidding wars. It takes real maturity and emotional control to go against crowd behavior, and delay gratification. You never win when you overpay.

    It is not just the interest rates that matter these days: it is the Fed balance sheet reductions and lack of support for MBS. Powell has very cleverly thrown investors a bone by indicating a willingness to slow down interest rate hikes, but he has said nothing about balance sheet reductions (where the real action is).

    “In other words, mortgage rates are climbing faster than the 10-year Treasury yield, now that the Fed has begun the shed mortgage-backed securities. This is expected. It’s part of the QE unwind – it’s part of the Fed exiting the mortgage market and pulling its support out from under it.”

    https://wolfstreet.com/2018/11/14/mortgage-rates-reach-6-percent-sooner-fed-sheds-mortgage-backed-securities-whatll-that-do-to-housing-bubble-2/

    Good point. I forgot about that.

  13. 13
    Mark says:

    RE: TheBenBernank @ 9

    You have no business getting into this market next spring. If the yield curve inverts at 10year-3month, the US macroeconomy will enter a recession in 6-12 months. When that happens, the S&P500 loses at least 20% of its value, tech companies (eg, Amazon) will see their stock prices drop far more than that.

    If that comes to pass – and the evidence more and more is pointing toward that future – housing will enter a multi year bear market. There is NO rush to go out and buy now. Don’t be a bag holder…

  14. 14

    And the Fun Goes On and On

    The Bush funeral gave the stock market [and looming Government Shutdown over the WALL] a truce period time extension…the Dec 25 Stop-gap Budget may be vetoe’d by Trump?

    How’s the American Stocks [401K loot for Seattle Home buying] fairing today:

    https://www.washingtonpost.com/business/economy/dow-extends-deep-losses-triggered-by-uncertainty-on-us-china-trade-deal/2018/12/06/4b946f8e-f95c-11e8-8c9a-860ce2a8148f_story.html?utm_term=.49b0412a96d9

    Its horrifying Bubbleheads and I can’t sweeten the news. I don’t believe a trade war fear is triggering the sell-off, Hades we’ve had trade war fear last Bull market MOM too. I can’t put my arms around it, but there’s something strange causing panic lately…

  15. 15
    Brian says:

    RE: Mark @ 12

    I think you are spot on. I think the concern about buying a home is rapidly shifting from mortgage rates rising to weaker near term economic outlook. The latter actually concerns me more about buying a house than rising rates.
    Curious if other home buyers will feel the same.

  16. 16

    RE: softwarengineer @ 13
    New MSM Report Lifts Trade Tariffs as the Reason for the Day to Day Stock MASSIVE Sell-off

    Calls it mysterious like me now:

    https://www.cnbc.com/2018/12/06/the-stock-selloff-started-with-a-mysterious-fall-in-the-futures.html

    I imagine foreign stocks are FAR worse. IMO we can get economic stability back if we can find ways to plan a government economic agenda without political bickering….my educated guess. Building the WALL is an inevitable part of the compromise, to avoid a veto.

    I wouldn’t even look at my 401K numbers if its heavy in equities, negative losses are never nice to acknowledge. Also, MOM and YOY trends are more accurate predictors.

  17. 17

    Chinese Wages and Working conditions a Joke

    That $100 Disney doll rakes in to the Chinese worker one “penny”…one cent, LOL….note the one Chinese slave worker collapsed [unconscious?] on the factory table making Christmas toys for Seattle?…

    https://www.theguardian.com/global-development/2018/dec/06/revealed-disney-ariel-doll-earns-chinese-worker-1p

  18. 18
    Joe says:

    RE: Brian @ 14

    Agree. Layoff notices in Seattle will harm RE more than anything.

  19. 19

    It Isn’t Just Student Loan Delinquencies Damaging the Financial Stocks Sector

    Its deadbeats in general?

    https://www.businessinsider.com/people-arent-paying-their-credit-cards-and-more-are-being-shutdown-2018-12

    This does not portend well, interest hikes to ease risks should be on their way now?…

  20. 20

    RE: Joe @ 17
    Low Slave Wages and Lay Offs

    Are like Tweedle Dee and Tweedle Dum? Same effect?

  21. 21

    Robot Care Givers Replacing Seattle’s Biggest Employer Now?

    https://www.independent.co.uk/life-style/gadgets-and-tech/features/robot-carer-elderly-people-loneliness-ageing-population-care-homes-a8659801.html

    The hourly rate is like 10 cents electricity per day….LOL

    Maybe we can get them doing plumbing and electrical maintenance on our moss pits too? LOL

    At a theater near you soon.

  22. 22
    QA Observer says:

    RE: Funkseoulbrotha @ 10

    Assets rise and fall. Shocker, right?

    The bulls and bears on this site seems to think everyone is trying to time a market to buy or sell. Some people don’t care if they gain or lose paper value, except for the investor/speculator.

    The tone of the comments makes one believe that housing is nothing more than wealth generation, but les not forget it is also a place to live…a basic human need irrelevant of monetary value.

    Unless real estate is your only income source, then hope for the best and prepare for the worst. Just like any business, and life in general.

  23. 23
    randomseattledummie says:

    RE: QA Observer @ 21

    This comment is such a nice change of pace from the specuvestor psychobabble prevalent around here.

  24. 24
    Matthew says:

    Fed balance sheet Aug 8, 2007 = 870 billion

    Fed balance sheet today = 4 trillion

    Hmmmmm….

  25. 25
    Matt P says:

    By Matthew @ 24:

    Fed balance sheet Aug 8, 2007 = 870 billion

    Fed balance sheet today = 4 trillion

    Hmmmmm….

    But dropping by $50 billion a month.

  26. 26

    Inevitable MASSIVE Carbon Taxes the Open Border Party Screams For

    https://news.grabien.com/story-ocasio-cortez-inevitable-global-warming-governance-will-crea

    California is first on the list for its Carbon Footprint tax on the American Workers….mandatory solar systems add MASS Mortgage Debt to Housing….its just like an interest rate hike….

    You must trash can your $50K gas car by 2026 in CA, it will be illegal to put more mileage on it. The Open Border Party is your friend?….LOL

  27. 27
    David says:

    For those of you expecting to buy into a housing crash, just a reminder that it took years for the banks to mark-to-market and sell at a discount. The banks will also sell to companies like Blackstone with massive liquidity and a focus on housing.

    MEANING – YOU still will not be getting this elusive house bargain you imagine you are.

  28. 28
    Mark says:

    RE: QA Observer @ 22

    I think you’re right that housing is a commodity that all of us have to buy – just like food, water, power, or gasoline. You have to buy these things and you have a limited ability to try to time your purchases to get the best price.

    With housing you do have a choice though. You can lock in today’s prices by buying now, or you can effectively short the housing market through renting, moving from short term rental to short term rental, playing landlords off one another for ever greater concessions until the market bottoms out. This is entirely feasible and a reasonable plan given where we are in the business/debt cycle.

    I would also argue that in decades past, there wasn’t really a bad time to purchase a home. Homes weren’t used as heavily leveraged, speculative investments with large price swings, as they are today. They slowly built value over time as the land they sat on gained in value. Today, the housing market is entirely different. Prices have risen meteorically as a result of historically unprecedented amounts of cheap credit. That economic backdrop is changing. The well of cheap credit is beginning to dry up. You need to be right on price movement as a buyer now or you very well may end up deeply underwater for years (decades?) to come.

  29. 29
    Justme says:

    RE: David @ 27

    >>MEANING – YOU still will not be getting this elusive house bargain you imagine you are.

    Showing your true colors again, David. You are one mean-spirited mutt. You’d rather that Blackstone get a bargain on a foreclosure than an innocent and prudent bubble-sitter getting a dwelling at a reasonable price. Not that I am surprised. This has been your nature all along, not wanting pople to be able to get a house at a decent price.

  30. 30
    richard says:

    RE: David @ 27
    True, you wont get the same sweet deal as Blackstone get. But it is still much better than those who bought homes in the last few years.
    As you mentioned, the process is slow. But I think timing the housing market is not as difficult as people think. What you need is patience and keep collecting data.

  31. 31
    Macro Investor says:

    By QA Observer @ 22:

    RE: Funkseoulbrotha @ 10

    Assets rise and fall. Shocker, right?

    The bulls and bears on this site seems to think everyone is trying to time a market to buy or sell. Some people don’t care if they gain or lose paper value, except for the investor/speculator.

    The tone of the comments makes one believe that housing is nothing more than wealth generation, but les not forget it is also a place to live…a basic human need irrelevant of monetary value.

    Unless real estate is your only income source, then hope for the best and prepare for the worst. Just like any business, and life in general.

    Not calling you a liar, perhaps just not self aware. But I find comments like this dishonest. Everybody, and I mean everybody, knows the value of their house. They may say things like this, but they are secretly cheering every monthly increase, or cringing at declines.

  32. 32
    Macro Investor says:

    By richard @ 30:

    RE: David @ 27
    True, you wont get the same sweet deal as Blackstone get. But it is still much better than those who bought homes in the last few years.
    As you mentioned, the process is slow. But I think timing the housing market is not as difficult as people think. What you need is patience and keep collecting data.

    He is actually right, if you assume it will be like 2010. It was easy to time that. However, there was little to nothing for sale except for some run down short sales. If you were at all picky about neighborhoods it was nearly impossible to buy anything acceptable.

    I know, I looked. A lot. I was on redfin scouring neighborhoods.

  33. 33
    uwp says:

    By Mark @ 28:

    With housing you do have a choice though.

    you can effectively short the housing market through renting, moving from short term rental to short term rental, playing landlords off one another for ever greater concessions until the market bottoms out.

    This sounds like a lot of fun. (Actually it sounds miserable.)

    Enjoy moving every year and then trying to time the bottom.

  34. 34
    Notme says:

    The rentier scarecrows
    want you to move every year
    they like turnover?

    -a why-have-a-stable-tenant-if-you-can-inflict-pain bubble-monger haiku

  35. 35
    uwp says:

    stocks slightly falter
    bubble watchers’ hope increase
    the end must be nigh

    -a surely-I-will-survive-the-recession-intact haiku

  36. 36
    DavidE says:

    RE: richard @ 30

    Things will not crash like 2007: that was a very unique situation with a lot of mortgages resetting to higher rates at the same time and buyers defaulting.

    BUT there are bargains even today. I have been looking for a home in Issaquah for a year now. Two of the houses I was looking at (about 870K and 780K) had price drops and an eventual closing price for about 70K below the original asking price. They were both sitting on the market for over 60 days, and were very unique and in great shape. Both owners had bought many years ago so they had a lot of equity, but this is one the factors that will pressure the Seattle market since owners like these are running for the exits.

    I have to agree with Hussman that it is all about market psychology. Home prices have to just stop rising for the buyer psychology to shift, let alone drop. The reason we have not had a correction was that the Fed pulled every stop for the bubble psychology to continue, but now they are realizing the limits of pushing on a string.

  37. 37
    Matt P says:

    By DavidE @ 36:

    RE: richard @ 30

    Things will not crash like 2007: that was a very unique situation with a lot of mortgages resetting to higher rates at the same time and buyers defaulting.

    BUT there are bargains even today. I have been looking for a home in Issaquah for a year now. Two of the houses I was looking at (about 870K and 780K) had price drops and an eventual closing price for about 70K below the original asking price. They were both sitting on the market for over 60 days, and were very unique and in great shape. Something like this would have been unheard of at the beginning of the year. So a smart buyer could have saved 7-8% just this year.

    I have to agree with Hussman that it is all about market psychology. Home prices have to just stop rising for the buyer psychology to shift, let alone drop. The reason we have not had a correction was that the Fed pulled every stop for the bubble psychology to continue, but now they are realizing the limits of pushing on a string.

    Is it a bargain if you still can’t afford it? The median income family still couldn’t even come close to affording those even with the discount.

  38. 38
    QA Observer says:

    By Macro Investor @ 31:

    By QA Observer @ 22:

    RE: Funkseoulbrotha @ 10

    Assets rise and fall. Shocker, right?

    The bulls and bears on this site seems to think everyone is trying to time a market to buy or sell. Some people don’t care if they gain or lose paper value, except for the investor/speculator.

    The tone of the comments makes one believe that housing is nothing more than wealth generation, but les not forget it is also a place to live…a basic human need irrelevant of monetary value.

    Unless real estate is your only income source, then hope for the best and prepare for the worst. Just like any business, and life in general.

    Not calling you a liar, perhaps just not self aware. But I find comments like this dishonest. Everybody, and I mean everybody, knows the value of their house. They may say things like this, but they are secretly cheering every monthly increase, or cringing at declines.

    Perfect example of a”macro”investor/speculator response. My premise hold true. Thanks for the back up.

  39. 39
    richard says:

    RE: DavidE @ 36
    the truth is we don’t know what will happen.
    will the Chinese money flowing to the market decreases?
    will the FED drastically reduce rate to zero and start QE4? will this time be effective in reinflating the house price like last 10 years?
    will current home owners hold on their jobs? the mortagage drains your saving really quick.

  40. 40
    MultiFamilyMan says:

    QA Observer 22 and randomseattledummie 23

    Great advice! One should be unconcerned with the massive swings in asset valuations and just buy when they need shelter.

    You can pretend you are buying ‘shelter’ only but the reality is that real estate has been commoditized. If someone wants to be solvent they should buy at the appropriate time and rent at the appropriate time. Let me help, right now is a terrible time to buy.

    I for one choose to operate in reality.

  41. 41
    uwp says:

    By Matt P @ 37:

    Is it a bargain if you still can’t afford it? The median income family still couldn’t even come close to affording those even with the discount.

    Not completely out of reach. Median income for married couples with children under 18 was $161,000 in Seattle last year. With 20% down and a 5% mortgage, an $800,000 house has a PITI that is roughly 30% of their income (4,000/13,400). Plus, that family is probably earning a little more in 2018.

    Over 25% of families in Seattle earn more than $200k/year. That’s comparable to DC and San Jose.

  42. 42
    Notme says:

    All bubble mongers
    want YOU to buy a house now
    why don’t THEY buy one?

    -a whats-the-problem-just-follow-your-own-advice bubble haiku

  43. 43
    TheBenBernank says:

    RE: Mark @ 13 – But… but my neighbors and coworkers are all buying nice houses, so that means I need to as well!!!

  44. 44
    redmondjp says:

    By Notme @ 42:

    All bubble mongers
    want YOU to buy a house now
    why don’t THEY buy one?

    -a whats-the-problem-just-follow-your-own-advice bubble haiku

    Certain posters on this blog did just that during the last runup, and ended up losing their house later. No names mentioned of course.

    We live in interesting times. If you are in the doldrums at this time of year, walk or drive around the neighborhoods and look at the pretty Christmas lights. I did just that a few nights ago.

  45. 45
    Eastsider says:

    By uwp @ 41:

    Not completely out of reach. Median income for married couples with children under 18 was $161,000 in Seattle last year. With 20% down and a 5% mortgage, an $800,000 house has a PITI that is roughly 30% of their income (4,000/13,400). Plus, that family is probably earning a little more in 2018.

    Over 25% of families in Seattle earn more than $200k/year. That’s comparable to DC and San Jose.

    The Census ACS 1-year survey reports that the median household income for the Seattle-Tacoma-Bellevue Washington metro area was $78,612 in 2016. The vast majority makes less than half of your “married couples with children under 18” living in Seattle today. How is that “not completely out of reach“?

    What about the millennials who are just starting to form families? What percentage of them can afford a house in Seattle? 5%?

  46. 46
    David says:

    By Justme @ 29:

    RE: David @ 27

    >>MEANING – YOU still will not be getting this elusive house bargain you imagine you are.

    Showing your true colors again, David. You are one mean-spirited mutt. You’d rather that Blackstone get a bargain on a foreclosure than an innocent and prudent bubble-sitter getting a dwelling at a reasonable price. Not that I am surprised. This has been your nature all along, not wanting pople to be able to get a house at a decent price.

    Not really. I just have seen the results of the last HUGE housing bust and was surprised that things were not as they appeared. Believe it or not, most people will not sell their house at a loss unless they absolutely positively must. Banks are the same way. People today are already sitting on their houses and DO NOT move like they used to.

    If you really want to get a good value on a house, here is what you do from my experience:

    1) Find a house that had some form of mortgage fraud during a prior conveyance – stalk the bank.
    2) Become a realtor and don’t ever let anyone know about a foreclosure you like,

  47. 47
    David says:

    By Joe @ 3:

    RE: Ron @ 2

    Agree. Those that purchased a few years ago will likely lose their price gains, and perhaps their 20% deposits, but they won’t get underwater on their mortgages. These people should be fine assuming they don’t lose their jobs in the upcoming recession.

    Of course, if people that bought a few years ago levered out the paper price gains with home equity loans, they may be looking at serious financial trouble in the near future as home prices drop.

    Anybody purchasing today could fall on immediate financial trouble if prices keep dropping at the current pace. It looks like inventory growth, and perhaps price drops, are accelerating though. Those seeking to avoid large financial losses should wait this one out. Trends don’t reverse quickly, especially when they are showing signs of acceleration.

    Let’s take a deeper dive into Joe’s situation:

    1) Joe missed out on housing when the prices were much lower in Seattle during the Obama Depression.
    2) Joe refused to buy even while prices were rising.
    3) Prices are now declining and Joe refuses to buy til they decline more.
    4) If a housing bust did occur, Joe would not be able to get the house he wants and the banks will not lend to him while prices are falling.
    5) Joe ends up right where he left off.

  48. 48
    uwp says:

    By Eastsider @ 45:

    The Census ACS 1-year survey reports that the median household income for the Seattle-Tacoma-Bellevue Washington metro area was $78,612 in 2016. The vast majority makes less than half of your “married couples with children under 18” living in Seattle today. How is that “not completely out of reach“?

    I like how you slipped Tacoma stats in there. Really helpful that you are here asking the tough questions like: What percent of Tacoma residents should be able to buy a Seattle home?

  49. 49
    Eastsider says:

    RE: uwp @ 48 – King county’s median household income is basically the same. As of 2015, median household income in King County was $75,302.

    What is your point again? What percent of King county residents should be able to buy a Seattle home?

    https://www.kingcounty.gov/independent/forecasting/King%20County%20Economic%20Indicators/Household%20Income.aspx

  50. 50
    Notme says:

    That falling knife
    is affordable, buy it!
    Today’s REIC message

    -a please-apply-your-helpful-propaganda-decoder-ring bubble haiku

  51. 51
    uwp says:

    RE: Eastsider @ 49My point is: the income of the typical home buyer is far more relevant than the overall median income. It’s really not that complicated of a point.

    I used recent stats to show that median Seattle families with children (the type of people who buy houses) make enough that 800k homes are not completely out of reach.

    You answered back be using older, less relevant stats. When I point that out, you responded again using even older info.

  52. 52
    Justme says:

    RE: Eastsider @ 49

    I “like” how Uwp constructed, from statistics, a pool of potential home-buyers that to coincide with a socio-economic subgroup that probably has the highest income and the highest rate of home-ownership already!

    The question is, why are people not buying? I’m guessing they realize that prices are completely out of whack.

    Prices (a) “Not completely out of reach” of (b) the median of the richest subgroup, and (c) in fact the same ones that own a house already. To me, that sounds like the bubble just peaked.

  53. 53
    Notme says:

    Buy that house, and stat!
    you can afford it, no cat
    because you’re worth it

    -a does-this-house-make-me-look-fat bubble haiku

  54. 54
    Notme says:

    You should buy NOW, hot!
    ’cause Joe did not buy in ’12
    can’t you see the logic?

    -an is-there-even-a-name-for-this-fallacy bubble haiku

  55. 55
    uwp says:

    By Justme @ 52:

    The question is, why are people not buying? I’m guessing they realize that prices are completely out of whack.

    I know numbers aren’t your strong suit, but The Tim posts the stats monthly and if you look at the pretty charts you can see that sales/pendings are running right in the middle of the pack for the last 19 years.

    There is no buyer’s strike or sellers running for the exit, as much as you want it to be true.

  56. 56
    Justme says:

    RE: uwp @ 55

    There is a buyer’s strike actually. Double the inventory, 15% less sales. And hence sellers crowding the exits.

    Just stop with the “sales/pendings are running right in the middle of the pack for the last 19 years”. It has little meaning.

    Oh, and you forgot to mention that Seattle prices are the HIGHEST of the last 19 years, as of the Apr-May-Jun CS average.

    So much for “helping millenials”, uwp. I guess “helping” translates into selling them your overpriced starter home at the peak? I bet being “helped” by you is something that millenials can do without.

  57. 57
    Justme says:

    Speaking of the buyer strike, and dropping prices, Seattle Times had a nice big article about this just yesterday. It paints the most vivid picture of a busting bubble that I have seen so far this cycle.

    “The cool-down in the King County real-estate market has now reached six months, and the drop in home prices over that span is among the largest on record. King County’s median single-family home price fell to $644,000 in November, all the way down from $726,000 in the spring, according to the Northwest Multiple Listing Service. Prices are also falling faster here than anywhere else in the country.”

    “The price drop equals 11.3 percent over six months, more than any May-to-November stretch in recorded history for King County. The biggest six-month decline for any time of year happened after the housing bubble popped last decade and prices plunged 14 percent. When the dot-com bubble burst, prices never dropped more than 6 percent in six months.”

    COMMENT: ^^^^ dropping prices alert, epic proportions edition

    “Even going back a full year, prices dropped in several Seattle neighborhoods in November, including Southeast Seattle, Sodo/Beacon Hill, the Capitol Hill/Central Seattle area, Queen Anne/Magnolia, the Ballard/Green Lake area and downtown.”

    “Buyers are seeing far more homes to choose from. Countywide, the number of houses on the market jumped 114 percent year-over-year, easily the largest gain on record dating back to 2000 – led by a whopping 177 percent increase in the city of Seattle. The last three months have now featured the three biggest increases in inventory in history. The trend is entirely attributable to more homes sitting on the market unsold, as opposed to more people putting homes up for sale.”

    COMMENT: ^^^^ buyer strike alert

    “For condos, inventory more than tripled in the past year, while prices are down $61,000 from the spring.”

    COMMENT: That must be some percentage drop in condo median price. And condo inventory up 3.5X from same-time last year, just two weeks ago.

    “Sales also continued to plummet, down 19 percent in the past year. It was the seventh straight month that fewer people bought homes. Even mortgage interest rates, which had been on a steady climb for much of the year, have fallen back down recently. ‘It’s a little bit of a herd mentality,’ said Sabrina Booth, a Windermere broker in Seattle.”

    “Among the places where prices dropped on a year-over-year basis in November: East Bellevue, the Eastside area south of Interstate 90, Richmond Beach-Shoreline, Jovita-West Hill Auburn and Renton-Highlands & Kennydale.”

    “Looking since the peak spring period, prices have fallen more than $100,000 in the Capitol Hill/Central Seattle area, Queen Anne/Magnolia, Richmond Beach-Shoreline, the Eastside south of I-90, East Bellevue and Redmond-Carnation.”

    Reference:
    http://www.seattletimes.com/business/real-estate/seattle-area-home-prices-drop-again-with-6-month-decline-among-largest-ever/

  58. 58
    uwp says:

    By Justme @ 56:

    There is a buyer’s strike actually. Double the inventory, 15% less sales. And hence sellers crowding the exits.

    Just stop with the “sales/pendings are running right in the middle of the pack for the last 19 years”. It has little meaning.

    It has more meaning than a single year over year comparison.

    I don’t know how to explain this any clearer:

    If closed and pending sales are running in line with long term averages (which they are), than the number of buyers is probably average as well. You see, when someone sells a home, someone else buys it.

    There is no shame in renting, but I hope you find your home someday Justme.

  59. 59
    Eastsider says:

    By uwp @ 51:

    My point is: the income of the typical home buyer is far more relevant than the overall median income. It’s really not that complicated of a point.

    I used recent stats to show that median Seattle families with children (the type of people who buy houses) make enough that 800k homes are not completely out of reach.

    By your reasoning, homes are not completely out of reach anywhere, even in Medina!

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