NWMLS: Home prices are falling and inventory is soaring, but pending sales are bouncing back

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January market stats were published by the NWMLS yesterday. The King County median price of single-family homes fell year-over-year for the first time since March of 2012. Inventory is way up from a year ago, but pending sales started increasing year-over-year, so buyers may be coming back.

Before we get into our detailed monthly stats, here’s a quick look at their press release.

Homebuyers resuming search amid improving inventory, attractive terms
Home buyers around Washington state are making their way back to the market, hoping to take advantage of improving inventory, attractive interest rates, and more approachable sellers, according to officials with Northwest Multiple Listing Service.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said buyers “came out of the woodwork” after the holidays, eager to take advantage of better housing conditions. “Areas close to the job centers are seeing improved affordability from spring 2018,” he said, attributing it to lower interest rates, strong job growth, and adjusted pricing.

I’m not a professional used-house salesman like Lennox, but to me it seems like not a great idea to compare your clients to insects crawling out of the walls in a dilapidated home. But hey, you do you Lennox.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

January 2019 Number MOM YOY Buyers Sellers
Active Listings 2,820 -0.6% +126.9%
Closed Sales 1,224 -28.2% -2.8%
SAAS (?) 1.17 +24.9% +16.1%
Pending Sales 1,904 +38.8% +9.0%
Months of Supply 2.30 +38.3% +133.4%
Median Price* $610,000 -4.5% -2.9%

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

King County SFH Inventory

Inventory fell half a percent from December to January, but was up 127 percent from last year. The last time there were over 2,750 homes on the market at the end of January was in 2014.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up 13 percent from a year ago, and more than doubled from December to January.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell 28 percent between December and January. Last year over the same period closed sales dropped 40 percent. Year-over-year closed sales were down just three percent.

King County SFH Pending Sales

Pending sales shot up 39 percent from December to January, and were up nine percent year-over-year.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Still a huge year-over-year increase in listings, but the growth did fall off a bit from December to January.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price changes dropped below zero for the first time in nearly seven years. I doubt we’ll see this continue to fall, but… maybe?

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

January 2019: $610,000
January 2018: $628,388
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle-area home prices drop to lowest point in two years — down $116,000 since last spring

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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.

1,093 comments:

  1. 1001
    dariakus says:

    RE: JWoods @ 997 – I am a former software engineer and a current hiring manager to boot. That average is wildly inflated by 2-3 local companies. If you’re not getting in the door at Amazon or Microsoft, you’re not starting anywhere near $150k a year. Most of the tech companies here can’t afford nearly that much for their employees.

  2. 1002
    OA says:

    By steven @ 983:

    RE: OA @ 981

    uhhh he just commented he had multiple buyers and he ended up paying 6 percent over. yes you can have a good deal when the market is bad with no competition. from information provided its highly unlikely he had such a good deal that would compensate for the downturn and still profit as much as he thinks he would without significant market reversal

    again, just b/c there was a bidding over and the purchase price was above the list price doesn’t mean it’s a bad deal. You need to see the this RE transaction individually and evaluate. And to your post above, you can have a good deal when there is competition and when there’s no competition.

  3. 1003

    RE: OA @ 980
    Yes OA

    There’s just as many foreclosure deals out there during good times too: sickness, lay-offs and divorces continue no matter what…they appear in rich or poor neighborhoods at the same rate too…

    Its mainly timing and being in the right place at the right time….Hades, a funeral home may lead you to a distressed widow looking to sell too…network, network ,network…I like Toastmasters too for my leads.

    Erik has the details worked out better than I do…

  4. 1004

    There are Currently 371 Boeing 737 Max 8 Grounded Planes

    Boeing is updating just the S/W in ten days to fix the problem? Let’s hope this isn’t just another useless NWO style safety engineering Toyota Time Bomb Computer [replace the mats] safety recall fix. The rear stabilizer was jammed in the wreckage they discovered….the control S/W uses mechanical and electrical control mechanisms outside of just the cockpit S/W to control the stabilizer too.

    Fly ’em anyway says the NWO Boeing, FAA and US Safety Board? Like I said, IMO the FAA and the NTSB are in the cross hairs now too. Also, is this problem a wear concern on older 737 models too? I’ve heard even the old 737s shake and rattle. Why?

    Without safety engineering everything goes to pot.

  5. 1005
    Matt P says:

    Where’s the weekend update? You’re slacking.

  6. 1006
    Deerhawke says:

    RE: dariakus @ 1000

    Dariakus, you should not be having second thoughts about not buying. You have a somewhat unusual situation where you are renting for far less than buying and it seems like you have great landlords who want you to stay as long as possible. As long as you are saving a lot and putting your money into other solid investments, that is a great way to play the game.

    A buddy of mine lived in an Airstream in an avocado grove in Montecito California for years. He and his wife were making great money working in Ventura. But they felt no compunction to buy, especially in Montecito/Santa Barbara, one of the most beautiful –and expensive –areas on the West Coast. They got another Airstream when they had kids. They had a great relationship with the farmer who owned the avocado grove. They saved their money and invested it. They maxed out their 401ks. When the second kid went off to college, they retired in their early 50’s. They spent a year traveling and surfing. Last thing I heard they bought a place on the beach in Belize.

    If your plan works for you and your family, it works.

    But there are a lot of others out there that find a comfortable situation and ride it as though there is no tomorrow– and they should have at least thought about buying. Eventually the kindly old guy they have been renting from retires or dies. The rent doubles and they are left in a world of hurt with 60 days to figure it out.

    You see their sad picture on the front page of the Seattle Times and they are quoted saying something like, “We have been so happy here for 22 years. How could this heartless cruel landlord who bought from Mr. Jones sell our beloved HOME?”

  7. 1007
    dariakus says:

    By Deerhawke @ 1005:

    RE: dariakus @ 1000

    Dariakus, you should not be having second thoughts about not buying. You have a somewhat unusual situation where you are renting for far less than buying and it seems like you have great landlords who want you to stay as long as possible. As long as you are saving a lot and putting your money into other solid investments, that is a great way to play the game.

    A buddy of mine lived in an Airstream in an avocado grove in Montecito California for years. He and his wife were making great money working in Ventura. But they felt no compunction to buy, especially in Montecito/Santa Barbara, one of the most beautiful –and expensive –areas on the West Coast. They got another Airstream when they had kids. They had a great relationship with the farmer who owned the avocado grove. They saved their money and invested it. They maxed out their 401ks. When the second kid went off to college, they retired in their early 50’s. They spent a year traveling and surfing. Last thing I heard they bought a place on the beach in Belize.

    If your plan works for you and your family, it works.

    But there are a lot of others out there that find a comfortable situation and ride it as though there is no tomorrow– and they should have at least thought about buying. Eventually the kindly old guy they have been renting from retires or dies. The rent doubles and they are left in a world of hurt with 60 days to figure it out.

    You see their sad picture on the front page of the Seattle Times and they are quoted saying something like, “We have been so happy here for 22 years. How could this heartless cruel landlord who bought from Mr. Jones sell our beloved HOME?”

    Those avocado farm renters sound a lot like our situation :)

    I’m definitely aware that things could change for us, and if the rent suddenly goes up a grand then it makes sense to buy. We’ve made sure we’re prepared for anything.

  8. 1008
    Brian says:

    By Ardell DellaLoggia @ 996:

    RE: Brian @ 977

    The listing you pointed out is in Kirkland where 66.6% of the current pendings of property listed for $1M or less (which that property was) went pending in a week or less in 98033 and 58% of the current pendings went pending in less than a week in 98034. I wouldn’t call that “a rarity”. Still more than half.

    The reason I asked is I thought you were pointing out the faster ones of 1 to 4 days of which there are many more than usual with fewer not looking at offers until a further out review date.

    Fast sales are not a rarity nor are straight to pending with no inspection contingency. Of the 10 Pending Inspection listed at under a million in 98034 where that property is, 7 went under contract in a week or less. 70%.

    And I’m including condos in there.

    Not a rarity. Let’s be careful of spreading misinformation. Be real, yes. But let’s not make stuff up based on some rants that have altered perception. Let’s stick to the facts.

    (Required Disclosure: Stats in this comment are not published, verified or compiled by The Northwest Multiple Listing Service. They are hand calculated in real time by Ardell.)

    I’m talking about listings going pending in 3 days or less, not a week. How many of those 10 properties went pending in under 3 days? I see just 2, which includes that one JWoods probably bought. In fact, those are the only 2 pendings I see for 98034 that have been on redfin for 7 days or less.

    It is a rarity these days, I’m not spreading misinformation. Do you have some bone to pick with me? Seems like you’re always coming here trying to refute the minute details of what I write.

  9. 1009
    justsomedude12 says:

    Thursday, 3/14/19:

    “Seattle’s rent and home price increases were among the lowest in the nation last month, as the regional real estate market continues to cool after an extended period of steep increases, says a new report released Thursday.”

    https://komonews.com/news/local/seattle-rent-home-price-increases-among-lowest-in-us-last-month-study-finds

  10. 1010
    Deerhawke says:

    RE: justsomedude12 @ 1008

    I am not sure KOMO is the source I would trust for this kind of news, but still the operative word here is “increases” not “lowest”.

  11. 1011
    Justme says:

    Weekend update, King County active inventory, graphical edition.

    Imgur is being difficult today. I will post a link to the graphs when it works again. Meanwhile, here is snapshot of inventory from this morning

    3280 house
    0808 condo
    0562 townhouse

    The graphs compare 2019,2018,2017 inventory on an hourly basis. 2017 was the year inventory was at a multi-year low for most of the year. Click the link, click an image in the folder, then click once more for enlarged view. Use back-button to navigate.

    http:NO_IMGUR_GRAPHS_YET_BECAUSE_TECHNICAL_PROBLEMS

    King County SFH active for-sale inventory 2017,2018,2019 on 2019-03-16
    King County Condo active for-sale inventory 2017,2018,2019 on 2019-03-16
    King County SFH active for-sale inventory ratio YYYY/2017 on 2019-03-16
    King County Condo active for-sale inventory ratio YYYY/2017 on 2019-03-16

    Editorial: There was quite the spike in active for-sale inventory this week. As one may have guessed, this is because the uptake of product (new pendings) is not keeping up with with the new listings. New listings are outpacing new pendings by a considerable margin. Last year, March (2018) was the month when active for-sale inventory started pulling away from the year-before (2017) levels, indicating the start of the bubble bust that is now in full swing.

    Let’s have a more detailed look at the uptake of product, using 1-week rolling values (as of ~8am today). For three types of conventional listings (SFH+condo+townhouse), there were 1004 (735+147+122) new listings, 336 (238+56+42) new solds/closings (from ~4wk old pendings), and 66 (66+0+0) new pendings (pending within a week of listing). Also there was 507 (396+60+51) pending within 2 weeks of listing.

    With 2 weeks to get 507 pendings, from 1967 units (1004+963(last week)) worth of <2wk old inventory, buyers are not absorbing much new product, with a 25.8% rolling 2-week absorption rate. The absorption rate for older inventory is even lower, as older inventory is generally also the most overpriced.

    SFH absorption is low, condo absorption is even worse, and it is hard to imagine anything but continuing falling prices on apples-to-apples comparable product. The countywide median paid may fluctuate some due to product sales mix variations, as was most recently seen last month (Feb 2019) when most areas dropped (mo-mo) in median price, but the median sold price rose because of more buyer activity and sold units in the high-priced areas (where prices had already dropped more than in lower priced areas). The buyer strike is in effect. Sellers will have to reduce prices more or they will run out of willing buyers fairly soon.

  12. 1012
    justsomedude12 says:

    RE: Deerhawke @ 1009 – I believe the reason prices are still up slightly on a year-over-year basis is that the peak was around May 2018. On a year-over-year basis prices will probably be negative within the next couple months.

  13. 1013
    ess says:

    Before this thread was placed on a new page – someone mentioned that not only is Seattle a tech center, with lower housing costs, but tech companies are hiring individuals at 125K or more per year.

    I, with others were worried about Amazon leaving the area as a result of the shenanigans of the local politicians and organizers. Then Amazon for either those reasons or other factors announced their two proposed headquarters to act as HQ2. Then the LI City agitators stirred up trouble, and Amazon decided to take a hike from LI City 1/2 HQ 2. Let us hope that decision is final.. That decision firmed up real estate investment decisions for a variety of Amazon employees, who can be pretty certain that Seattle will remain HQ number 1 for the foreseeable future, where the corporate action will take place.

    But if that wasn’t good enough, now there are anti Amazonian rumblings out of Crystal City, Virginia. Another group of anti – Amazonians are organizing and protesting tax benefits that Amazon would be getting from various entities in Virginia. Vote on the first round of tax incentives was going to be held today. Even if that vote is successful on Amazon’s behalf, the groups opposing Amazon vow to continue the fight against every other tax break that Amazon is seeking.

    Learning of these anti Amazon activities should bring joy to property owners in the Puget Sound area. Seattle learned its lesson – withdrew the head tax, and some of the city council members are not seeking re-election. Hard to imagine their replacements would be even more hostile to big business than the ones that are currently serving. So the relations between Seattle city government and Amazon should only improve, and there should be no future plans for a head tax.

    Better yet – Bellevue is encouraging Amazon to grow their business in their town, and Amazon is acquiring more office space in that locale. Thus there is a pro business community but a few miles away from Seattle, with a more suburban lifestyle for those Amazonians who either prefer that type of life, or the younger ones that age, marry and have children. And Bellevue – located in the center of Puget Sound, will absorb the potential employment losses that Seattle may encounter – which should avoid a negative impact on Puget Sound home prices.

    This is all great news for Puget Sound property owners insofar as while no one can predict the future as to the success of a business such as Amazon, at least Amazon won’t be packing up and leaving town as a result of SJW activity.

    I have some friends back east in the NY area, and every time I speak to them, I urge them to thank any anti -Amazonians they encounter upon the wonderful job they did in running Amazon out of town. I only hope those activist share their expertise with Virginia anti Amazon activists!

  14. 1014
    Eastsider says:

    By Deerhawke @ 1009:

    I am not sure KOMO is the source I would trust for this kind of news, but still the operative word here is “increases” not “lowest”.

    You don’t trust KOMO, yet you like their use of the operative word ‘increases’ ;)

    CS Home Price Index may already be in negative territory YOY. As you know, CS lags by 2-3 months. If February is still positive, which I doubt, by May it will definitely be negative.

    P.s. Zillow one year forecast is -2.6%. https://www.zillow.com/seattle-wa/home-values/

  15. 1015
    justsomedude12 says:

    RE: ess @ 1012 – A lot of what-if type speculation there. All it would take is a 1% increase in mortgage rates to counteract the price increase effect you’re predicting.

    And no, I can’t predict mortgage rates, but the point is focusing on only one factor like you’re doing will lead you astray in decision making. One could follow your logic and go out and buy a place thinking it just HAS to appreciate, and then something happens such as mortgage rates increase by a percent or so and home prices actually decrease.

  16. 1016
    Justme says:

    RE: Justme @ 1010

    Here are the direct links to the active inventory graphs, but they may get caught up in moderation.

    https://i.imgur.com/tahaaeF.png
    https://i.imgur.com/jkXaZMk.png
    https://i.imgur.com/kq2FIG7.png
    https://i.imgur.com/Gpm6jPE.png

  17. 1017
    Eastsider says:

    RE: ess @ 1012 – I like that you are always so bubbly. LOL.

    Have you heard that our social democrats in Olympia are contemplating an income tax? (I know they don’t call it income tax but IRS does.) I’m sure you will somehow interpret it as RE friendly. More money for environment, children, homeless, healthcare, and even sanctuary!

  18. 1018
    Justme says:

    I’m trying to post a recipe for accessing the graphs from direct links, but without triggering moderation. Please try the following: Use the prefix https://i.imgur.com/, and tack on the following descriptors

    tahaaeF.png
    jkXaZMk.png
    kq2FIG7.png
    Gpm6jPE.png

    These should get to each graph.

  19. 1019
    Justme says:

    RE: Justme @ 1016

    Crapola. Try again.

    I’m trying to post a recipe for accessing the graphs from direct links, but without triggering moderation. Please try the following: Use the prefix https://i.imgur.com/, and tack on the following descriptors

    LzERlVb.png M2mQlVM.png 8zCv7QO.png 9PvkMYA.png

  20. 1020
    Justme says:

    RE: justsomedude12 @ 1008

    What the propagandists say:

    “Home price increases are still positive”
    “Home rent increases are still positive”
    “Home price growth is still positive”
    “Home rent growth is still positive”

    What “still” really means:

    Prices have been declining for months, but we don’t want to say that out loud, so instead we compare with year-ago prices, since we are not quite yet in year-over-year price decline territory.

    Whenever someone use the phrases “price increases” or “price growth”, in general, it is a warning sign that a lie will soon follow. And when these phrases are followed by the phrases “is positive” or “still positive”, you know what it means: Prices are DECREASING. Even propagandists for the most part dare not say “prices are increasing” when published statistics clearly show that sale prices are decreasing. So they try to confuse the public with massive weasel-speak like “Home price increases are still positive”.

    TL;DR Weasels are gonna weasel. REIC-speak “price-growth still positive” means prices are dropping.

  21. 1021
    ess says:

    RE: Eastsider @ 1015RE: justsomedude12 @ 1014

    Just Some dude – not focusing on increase in mortgage rates – but jobs. If LI City was to open and jobs were siphoned off from Seattle – the issue of mortgage rates would remain the same whether in Seattle or LI City. But we would have less high paying jobs in the Puget Sound area – which would put a damper on the real estate market. While an increase of mortgage rates is a problem for everyone – at least the wholesale abandonment of Seattle by Amazon apparently is not.

    Eastsider

    Yes indeed, I understand that there are a number of proposals – including a state capital gains tax.
    A state capital gains tax will not hurt homeowners unless there is some cap imposed and anything above the cap is taxable, such as the Feds have for selling one’s home. It will hurt real estate investors that sell as well as renters – and it may put a damper on the rental real estate investment market. Higher costs for buying and selling real estate – chances are it either will be passed onto the renters, or investors will find more lucrative avenues to invest monies. Already moms and pops are getting out of the real estate rental business because it has become such a hassle – this will be one more opportunity to lose that investor class.

    As to a state income tax – I don’t know exactly what the legislature has in mind, but it will certainly put a damper on very high income earners locating here. I don’t think Bezos and Gates are planning to move to Texas or Florida- but it will give pause to other well off individuals from relocating here if state income taxes become an issue. It is amazing that the WA state legislature hasn’t learned from the example of states such as NY that have lost population, especially the wealthy who are relocating to other areas which has resulted in NY State experiencing a budget deficit. . And lets face it – it will start an entire new industry – Washington State tax exempt bonds – such as other states have. With increased interest rates – those bonds will be more and more attractive as compared to other investments, and wealthy that reside here may be able to shelter most of their income in tax free state and federal bonds.
    In addition, it will be a disincentive for investors to develop and operate rental property, especially lower income rental property. An investor is not going to go through all the hassle if they have to pay a state capital gains tax upon selling if there are other investments that have similar or better returns, without the headaches. As they say – projects have to pencil out – and a tax upon selling rental property is just one more negative calculation with said pencil.

    So we will have to wait and see what kind of mess the legislature comes up with. In these days of blaming the wealthy for everything – it won’t be pretty. And yes – it will hurt real estate residential property but I believe that it will hurt the high end real estate market more than the lower end if the state income tax is graduated and designed to “make the rich pay their fair share”. These legislatures never learn -they increase taxes supposedly on the rich – but it is the middle class that ultimately pays.

  22. 1022
    Justme says:

    Another good example of REIC propaganda:

    year 2017: “It does not matter to the local housing market that Amazon is creating a HQ2 elsewhere”.

    year 2019: “Great news for Seattle and/or Bellevue housing market that Amazon is NOT creating a HQ2 in New York, but only in Virginia”.

  23. 1023
    Eastsider says:

    RE: ess @ 1019

    Re: state capital gains tax – Many $1m+ homes are bought by people selling stocks. Many techies are ‘wealthy’ not due to paychecks, but gains in company stocks. Otherwise, how do they come up with a $300k check for down payment? You will see an exodus of rich techies to low tax states within first 3 years of the new tax. The socialist democrats in Olympia will ruin the good times. The ones in Seattle already did.

  24. 1024
    randomseattledummie says:

    RE: softwarengineer @ 1002

    This is just so untrue. “they appear in rich or poor neighborhoods at the same rate too…”

    Foreclosures undeniably impact poorer areas harder.

  25. 1025
    dariakus says:

    By Eastsider @ 1021:

    RE: ess @ 1019

    Re: state capital gains tax – Many $1m+ homes are bought by people selling stocks. Many techies are ‘wealthy’ not due to paychecks, but gains in company stocks. Otherwise, how do they come up with a $300k check for down payment? You will see an exodus of rich techies to low tax states within first 3 years of the new tax. The socialist democrats in Olympia will ruin the good times. The ones in Seattle already did.

    Yes, that’s one thing people who keep saying “buy now, it’s always a good time!” are missing. Where does anyone get 20% of an 800k house? Especially someone straight out of college. And housing prices were going up faster than any reasonable human could save 20% of the median.

  26. 1026
    Deerhawke says:

    RE: Eastsider @ 1013
    RE: justsomedude12 @ 1011

    I am actually pretty surprised that we did not see YOY declines for February. When the March numbers come out, I would bet that we see a YOY decline, but there is a small but reasonable chance we wont (because this spring market is actually pretty healthy and because we have had some really weird weather.)

    But in April and May (and probably June), no question we will see YOY declines because that was the top of the price rise curve in 2018. By the time we get to summer, however, we will be back in positive YOY territory with 2019 above 2018.

    The only reason this matters to me as a spec builder is that what people read in the Seattle Times is what they believe. If they suddenly see a headline that prices are down, they are afraid to buy. If they see a headline that prices are up, they rush out to open houses.

    When Mike Rosenberg’s piece came out at the beginning of this month, most buyers were expecting to hear that prices were down again. But then suddenly he was writing that KC prices were up — by $45,000 no less. And suddenly I was hearing from real estate agents that their open houses had gone from “meh” to downright lively.

    So this is what it looks like when a market gets out over its skis. What you see is a several month “correction” and then the market goes back to its normal trajectory based on fundamentals. It is not 2008-2011. It is just a re-set.

    By the time we get to summer, the picture in the rearview mirror will be pretty clear and a lot of people will be wishing they bought in November and December (which every year is always the best time to buy anyway.)

    By the way, Rosenberg has another piece in tomorrow’s paper. Which way is the market going? (Spoiler alert: He waffles.)

    https://www.seattletimes.com/business/real-estate/with-king-county-home-prices-picking-up-are-we-in-for-another-brutal-spring-for-buyers-maybe-not/

  27. 1027
    justsomedude12 says:

    By ess @ 1019:

    RE: Eastsider @ 1015RE: justsomedude12 @ 1014

    Just Some dude – not focusing on increase in mortgage rates – but jobs. If LI City was to open and jobs were siphoned off from Seattle – the issue of mortgage rates would remain the same whether in Seattle or LI City. But we would have less high paying jobs in the Puget Sound area – which would put a damper on the real estate market. While an increase of mortgage rates is a problem for everyone – at least the wholesale abandonment of Seattle by Amazon apparently is not.

    Yes, you are focused solely on jobs. That’s my point. You keep posting that since it doesn’t look like there will be a wholesale exodus of Seattle Amazon jobs to LI City, that means the price boom is going to resume. I’m saying there are other factors to RE prices besides how many Amazonians work in Seattle, or the Eastside for that matter. For instance one of these factors is mortgage rates. And yes if mortgage rates increase it puts downward pressure on prices everywhere, including Seattle and the Eastside.

    I’m saying if you have tunnel vision on one factor (like tech jobs) , you’ll think you’ve got this whole RE thing all figured out. You’ll think prices MUST increase because of this one factor. And then some other factor (such as rising mortgage rates) will throw a monkey wrench into things and you’ll end up wondering how you missed something that seems so obvious in hindsight.

    Big Picture – A perfect storm of factors pushed prices in the greater Seattle area up for the last several years. Those factors are no longer present to the same degree. As I’ve said several times on here, I don’t believe another 2008 is coming, but there’s more potential downside than upside to this market over the next several years. We’ve already seen this start to play out over the past 8 months or so with the 14%-16% price drop.

  28. 1028
    justsomedude12 says:

    RE: Deerhawke @ 1024 – I don’t know, I think it was already pretty well established on here that the $45K increase was due to a change in mix of sales, rather than prices really increasing across the board. Could be just a weird month.

    I think it all boils down to potential buyers reaching a limit on what they’re able or willing to pay for a home around here. There is a limit. People talk about tech workers all the time but others would need to be buying as well. The limit was reached, price boom over, end of story.

  29. 1029

    RE: Brian @ 1007

    Please don’t take it personally. I rarely pick on people, I often pick on “facts”.

    Rare means hardly ever. Sometimes people disagree just because they have a different definition for various words. Rare is maybe once a month by your definition?

    In any case no, not “rare” by most anyone’s definition. Looking at my notes from this morning of those sold in a week or less I see 7,3,5,3,3,3,3,5,7,2,4,4,6,3,1,6,7,4,1,2,2,7,5,4,4,2,3,4,3,3,5,3,6. I have a couple of other similar columns but not sure if I jotted some of them twice so I’ll stop there.

    I think we can both agree that the number “3” is not “rare” in that string of numbers.

    I don’t play the who is right game because it’s not fair. I can be more right because I have full access to all of the data at any given moment. I am not trying to correct people…only facts and I have the upper hand as to “right” about facts. So I don’t mean to pick on you. Just correcting the perception you may have and you may be spreading. You are welcome. I’m sure that’s not your intent so I am bringing forth the facts.

    But more to the point I think you are missing my main point which is not about right or wrong. It is about the “offer review date” issue I raised that you seem to be missing. IF most houses are listed with an offer review date that is a week out, then most will sell in a week or less and fewer in 1 to 3 days. You mentioned being surprised to see 3 days and I am surprised to see so many 1 to 3 days. This IS a change and that change is that sellers are not as cocky about not accepting offers until day #7. You don’t see as many listings saying they won’t take an offer on days 1-3 and so 3 days or less is becoming less “rare” and not more “rare” and it is for the opposite reason. It is not because the market is better, it is because the market is not better, and that is why sellers are being less arrogant about turning offers away on days 1 to 3.

    Capish?

  30. 1030
    ess says:

    RE: justsomedude12 @ 1025

    You are missing the point. Of course other factors such as interest rates matter – but all things being equal – I would rather have tech jobs in Seattle than in NYC. And if interest rates rise, and people don’t buy – if the techies are still in Seattle – then they rent. Either way – it is better to have those jobs and renters in Seattle – tech or not – than leaving for NYC or elsewhere. And remember – it isn’t just the loss of one job – each tech jobs has a multiplier effect on jobs in the area, so the loss of each tech job would also reduce overall employment.

    As I have said repeatedly- over time – housing prices generally increase over time. Sure there are pull backs, and no one can say with certainty how much housing will increase in value in any given ten year period. And I have said repeatedly, housing prices increase for all sorts of factors besides tech jobs – including but not limited to population increase, lack of skilled workers to build houses and apartments, inflation, scarcity of buildable land as a result of natural boundaries such as Puget Sound and the mountains, scarcity of buildable land as a result of government regulations such as the GMA, increased regulations that increase both the time and the cost of building, increased requirements for builders such including low income housing and other governmental requirements that just increase the cost of doing business, which means the end user usually pays.

    Yes – factors such as higher interest rates may slow the market down – but the real kiss of death to both the loss of value to both housing prices and rentals is permanent population decline. People were still buying houses with mortgages rates in the double figures in the early 80s – just not enough to make real estate agents happy. But they need to be here to buy or rent – not moving to NY or Virginia. This is why I am so pleased that NY and Virginia are making it so difficult for Amazon to remove themselves from Seattle. Because there won’t be the giant net loss of jobs from the Seattle area that was a real possibility because local government and the SJWs chased them out. At this point I consider the major screw up with Boeing and their 737 MAX to be a greater threat to the housing market than Amazon shedding or slowing down jobs at this point, especially if they don’t get a decent fix in quickly and their 737 MAX program nosedives like their planes seem to want to do

    I have owned rental property during the Seattle depression of the 70s. I have been owned during the interest rates of the high teens. I even bought a house when interest rates were over 12%. I have owned during the giant real estate bust of a decade ago. And guess what – here I am as are most of the people that owned property during that time. Of course some bought at the height of the market – where it just didn’t pencil out. I knew something was wrong a decade ago when I observed houses comparable to rentals selling for prices that just didn’t make sense. People make all sorts of foolish investments choices -not only limited to real estate.

    I can assure you that I probably missed less than most, either in hindsight – or looking forward. But thanks for the heads up!

  31. 1031
    Justme says:

    RE: Justme @ 1010
    RE: Justme @ 1017

    Weekend update, King County active inventory, graphical edition.

    I figured out a new way to collect all 4 graphs into one “post”. That go around the problem I had earlier. Enjoy, and if you appreciate the graphs, give it an upvote. I see every week that the bubble-mongers are active with the downvotes.

    https://imgur.com/gallery/hYExu47

  32. 1032
    JWoods says:

    People talking about Seattle housing being less affordable all the time, if you just look at the “sticker” price, that appears to the case, but looking closely at the data, overall housing affordability has remained roughly the same:

    1) Per capital personal income in King county has increased from $45,906 in 2001 to $83,383 in 2017, an increase of 81.6%. (The longest period of time data where is available)
    https://fred.stlouisfed.org/series/PCPI53033

    2) Case-Shiller home index for Seattle during the same period has increased from 110 in 2001 to 225 in 2017, an increase of 104.5%.
    https://fred.stlouisfed.org/series/SEXRNSA

    Yes home price appreciated 23% more than personal income, but if adding the effect of lower interest rate mortgages, housing may be even more affordable today.

    For example, in 2001 I was paying 6.5% for 30-yr fixed mortgage, earlier this year I refinanced at 4.125% for 30-yr fixed, if it’s the same loan the interest payment would have gone down by ~1/3 during the this period.

  33. 1033
    dariakus says:

    RE: JWoods @ 1030 – Who can afford a house at these prices on 80k a year? Affordability can’t remain that out of whack for long…

  34. 1034
    JWoods says:

    RE: dariakus @ 1031
    The same set of people who could afford buying a house with $45K a year in 2001 :-).

    It’s funny you’re still asking the same question, my previous post was trying to make the point housing is as affordable today as 18 years ago.

  35. 1035
    justsomedude12 says:

    By ess @ 1012:

    This is all great news for Puget Sound property owners insofar as while no one can predict the future as to the success of a business such as Amazon, at least Amazon won’t be packing up and leaving town as a result of SJW activity.

    I have some friends back east in the NY area, and every time I speak to them, I urge them to thank any anti -Amazonians they encounter upon the wonderful job they did in running Amazon out of town. I only hope those activist share their expertise with Virginia anti Amazon activists!

    When HQ2 was announced I believe you were the one saying it was no detriment to Seattle real estate. And then when the announcement came about WA DC and LI City splitting HQ2, again you said no big deal because Seattle Amazon employees would prefer to stay in Seattle over moving to either of those cities.

    Now you’ve admitted a couple times that you breathed a sigh of relief with the cancellation of LI City because there will be no mass exodus of Seattle Amazon employees relocating there.

    You’ve exposed yourself as someone who comes on here spreading lies and propaganda to get people to buy into your narrative.

  36. 1036
    dariakus says:

    By JWoods @ 1032:

    RE: dariakus @ 1031
    The same set of people who could afford buying a house with $45K a year in 2001 :-).

    It’s funny you’re still asking the same question, my previous post was trying to make the point housing is as affordable today as 18 years ago.

    If it’s always a good time to buy a house then why does anyone rent? I bought my first house at the peak in Florida in 2006 and it was perfectly affordable on a 65k income. My income is much higher now, but no math gives me a house payment that’s remotely the same level of affordability. Note I don’t mean monthly payment, I mean cost to income ratio. It’s significantly tilted out of reach.

    Affordability is an issue, even for people in the six figure salary range out here.

  37. 1037
    Erik says:

    RE: dariakus @ 1031
    Hey, I have an idea on how a person with low pay can afford a decent house in Seattle. Buy real estate they can afford and rent it out. Get as many rentals as possible. Then when the prices go up, that person can sell and maybe afford that house in Seattle.

    The other option is to move to a poor area or have a really long commute.

  38. 1038
    JWoods says:

    RE: dariakus @ 1034
    I didn’t say it’s always a good time to buy, I’m simply making the case that buying a house in Seattle area in 2017 hasn’t become more difficult than buying a house in Seattle area in 2001.

    However that’s not a walk in the park for anyone. The same set of people who are determined, the hard workers, the thrift savers, they will be able to buy a house according to their income level in 2001, they will also be able to buy a house today.

    It wasn’t easy for me to afford a house then, and it’s not easy for me either today, even with much higher income, our wants and spending seem to be always 10% more than what we can make each year. :-)

  39. 1039
    ess says:

    By JWoods @ 1036:

    RE: dariakus @ 1034
    I didn’t say it’s always a good time to buy, I’m simply making the case that buying a house in Seattle area in 2017 hasn’t become more difficult than buying a house in Seattle area in 2001.

    However that’s not a walk in the park for anyone. The same set of people who are determined, the hard workers, the thrift savers, they will be able to buy a house according to their income level in 2001, they will also be able to buy a house today.

    It wasn’t easy for me to afford a house then, and it’s not easy for me either today, even with much higher income, our wants and spending seem to be always 10% more than what we can make each year. :-)

    The way people carry on these days – one would think that they were the only generation that had to struggle to get things together to even afford a house.

  40. 1040
    JWoods says:

    RE: dariakus @ 1034
    Housing is sort of like this curved grading system we had in school.

    There are 10% As, these are the great houses in the best neighborhoods;
    There are 30% B+ and 30% Bs, these are the nice houses in decent neighborhoods;
    There are also 20% Cs and 10% Ds, these are not so nice houses in the remote/poor areas.

    Of course everyone wants to have A grade, but there are only 10%, only the hardworking AND really smart students can achieve that, often times it also requires some luck.

    Most students, with hard work and even average IQ, can achieve B+ or B at school. Just like most people can get reasonable housing in this country, they may not be the A level housing you wanted, but they are decent, the level of housing quality and affordability in the US is among the top comparing to other countries in the world.

    Students getting Cs and Ds often because:
    1) they are not motivated, doesn’t want to work hard, or choose to spend time on other things like games
    OR
    2) some kind of learning disability, they need more help.
    As a society we need to help people in 2) bucket to live a reasonable life, and encourages people in 1) bucket to move to B+/B/A grade. But there will always be people ending up with Cs and Ds.

    To be clear, even people with Cs and Ds housing today have a far better living condition than royals 500 years ago, but we humans are social beings, we like to compare to Jones nextdoor and don’t count our blessings enough.

    You asked why housing is more affordable in Florida for you, and less so for you in Seattle. It’s sort of like you just moved from a B level school district (Florida) to an A level school district (Seattle), there are a lot more smart and hardworking students in A school district, and there still is a curved grading system.

  41. 1041
    ess says:

    RE: justsomedude12 @ 1033

    Generally over time and in most places, real estate tends to increase in value. If that is lies and propaganda, then so be it. No one is saying that anytime and anywhere is a perfect time to buy real estate. And everyone’s situation is different and those factors need to be assessed in any equation. If you don’t believe that to be true, then by all means rent and never purchase any type of residence for yourself. The best renters are those who know they are never going to buy a place of their own, because they have a larger stake in assuring they don’t screw up their rental experience.

  42. 1042
    ess says:

    RE: JWoods @ 1038

    To be clear, even people with Cs and Ds housing today have a far better living condition than royals 500 years

    ___________________________________________________________________________________________________________________

    Having traveled extensively through most of Europe over the past 25 years, I can attest to your statement above. What was really horrible were the living conditions for the average citizens throughout the world, especially before the development of both modern heating and lighting. These days many people believe life is almost unbearable if they can’t get an adequate hot spot for their devices.

  43. 1043
    justsomedude12 says:

    RE: ess @ 1039 – Red Herring post.

    Readers can see for themselves that in your previous posts you’ve lied and tried to manipulate them into believing your narrative.

    I’m not sure what your game is on here. My best guess is that you think people will read your posts on here and maybe some will buy homes, contributing in at least a small way to strengthening the property market.

    But whatever your motive, you are manipulating and lying on here.

  44. 1044
    ess says:

    RE: justsomedude12 @ 1041

    You think that one or two people that are so swayed by what some anonymous individual stated on the internet that they will rush out and immediately purchase a house?

    And these one or two house purchases because of my spellbinding writing will boost the price of housing in the entire Puget Sound where there are tens of thousand of real estate transactions every year?

    An interesting theory indeed.

    Once again for the umpteenth time – those who believe that they should rent for what ever reason should continue to do so. I really don’t care if people buy or rent – I am just stating proven facts about real estate markets in general. IF people want to rent because they are not in the position to buy, or they think the market is going to tank, or they are moving in less than 7-10 years – then bless them. If there can’t be an exchange of ideas without charges of lying, then there is really no point in my responding in the future.

  45. 1045
    justsomedude12 says:

    RE: ess @ 1042 – Like I said, I can only guess what your motive is.

    But lying and manipulating people into believing what you want them to believe is not “an exchange of ideas”.

  46. 1046
    Eastsider says:

    By JWoods @ 1038:

    Housing is sort of like this curved grading system we had in school.

    There are 10% As, these are the great houses in the best neighborhoods;
    There are 30% B+ and 30% Bs, these are the nice houses in decent neighborhoods;
    There are also 20% Cs and 10% Ds, these are not so nice houses in the remote/poor areas.

    Of course everyone wants to have A grade, but there are only 10%, only the hardworking AND really smart students can achieve that, often times it also requires some luck.

    You apparently don’t believe Seattle is unaffordable. IMO ~80% of young adults born here will not be able to afford local housing without help from parents. Vancouver 90%? NYC 95%? Kansas city 50%?

    Now explain your curved grading system again.

  47. 1047
    dariakus says:

    There are a lot of generalizations happening here on both sides of the bubble debate. The truth is that there is no perfect solution to everyone’s housing situation.

    Yet I see people claiming that buying right now is never the right idea (but it is, if you can afford it and plan to stay 10+ years). Likewise I see people claim that it’s always worth buying, even if you have to buy a dump and pay two mortgages/rents in hope that you can rent your dump out and move up the ladder (but it’s not worth it if you can’t afford it, have a healthy retirement fund with retirement in sight, and would have to crater your quality of life to make it happen).

    Both sides seem to think their perspective is The One but it’s way more squishy than either side is either able to see or willing to admit.

    I enjoy watching it though :)

  48. 1048

    RE: randomseattledummie @ 1022
    Data Please?

    My data came from a red dot map of foreclosures from the Tim showing equal distribution…

  49. 1049
    Eastsider says:

    By Deerhawke @ 1024:

    I am actually pretty surprised that we did not see YOY declines for February.

    The jury is still out. CS Feb numbers won’t be known for another 2 months or so.

    I have no idea where home prices will be in a year. But I believe affordability should be a key factor in home buying decision. At this time, I would avoid the housing market.

    P.s. I was not against buying if you read my comments from 2-3 years ago.

  50. 1050

    RE: dariakus @ 1045
    No….Its My Way or No Way!

    LOL, good blog…

  51. 1051
    Eastsider says:

    By Erik @ 1035:

    Hey, I have an idea on how a person with low pay can afford a decent house in Seattle. Buy real estate they can afford and rent it out. Get as many rentals as possible. Then when the prices go up, that person can sell and maybe afford that house in Seattle.

    If someone is as motivated as you and put in as much hard work in whatever endeavor he/she pursues, he/she will be able to afford that house in Seattle some time. Maybe with less risks too! LOL.

  52. 1052
    Eastsider says:

    By ess @ 1039:

    Generally over time and in most places, real estate tends to increase in value. If that is lies and propaganda, then so be it. No one is saying that anytime and anywhere is a perfect time to buy real estate. And everyone’s situation is different and those factors need to be assessed in any equation. If you don’t believe that to be true, then by all means rent and never purchase any type of residence for yourself. The best renters are those who know they are never going to buy a place of their own, because they have a larger stake in assuring they don’t screw up their rental experience.

    Generally over time, all prices increase. So your statement means nothing. Home prices track inflation/income/affordability over time. There is no reason to buy a house because prices go up over time. Buy when it makes sense for you. Buy when you can afford it. Don’t buy because it will make you wealthy. Because. It. Won’t. US has homeownership around 60%. The wealthy is always the top 5 percent.

  53. 1053
    ess says:

    RE: Eastsider @ 1050

    Generally over time, all prices increase. So your statement means nothing. Home prices track inflation/income/affordability over time. There is no reason to buy a house because prices go up over time. Buy when it makes sense for you. Buy when you can afford it. Don’t buy because it will make you wealthy. Because. It. Won’t. US has homeownership around 60%. The wealthy is always the top 5 percent.

    Whether real estate will make you wealthy can be a subject for a debate. I have known more people who did quite well in real estate than did poorly.

    If real estate only tracks inflation/income/ affordability over time, then there is no affordability crisis in Seattle, as the price of a single family house is no different than 30 years ago accounting for inflation/income and affordability over time. Someone needs to inform Seattle City Council of this immediately!

    But lets put it another way. Owning a home over a period of time – ex – 20 -30 years may not make you wealthy, but that ownership has a better chance of producing a positive outcome where the person won’t be poor in retirement , or at least has equity in a home that gives him or her choices. The tenant who is forced out of their homes for a variety of reasons without other assets is often in trouble.

    But as I say – viva la difference! People want to rent all their lives – they should go right ahead if they believe that is best for them, especially if they have the ability to make investments elsewhere. And regardless of the asset – if they believe that it will lose value over the time they plan to hold it – it would foolish in most cases to purchase if ONLY for investment purposes.

  54. 1054
    sfrz says:

    RE: softwarengineer @ 1003 – You are spot on. Boeing and the FAA are in the cross-hairs. Multiple lawsuits being filed. Investigations into the “maneuver characteristics augmentation system (MCAS) that pitches the nose of the plane down if a sensor detects a too high angle of attack (AoA) that might lead to a stall. ”
    “What makes the addition of the MCAS to the 737 MAX problematic for pilots, is not knowing about it.”
    https://christinenegroni.com/737-pilots-not-told-of-max-design-change-that-could-factor-in-lion-air-crash/

    “The pilots’ union for American Airlines, which also flies the Max 8, said Tuesday that the emergency system in question had not been included by Boeing in the standard operating manual. In addition, the flight checklist — which contains information for manually overriding the emergency system — was incorrect, the union said.”
    https://www.nytimes.com/2018/11/13/world/asia/boeing-737-indonesia-crash.html

  55. 1055
    Justme says:

    RE: JWoods @ 1030

    In response to the JWoods post about 2001 versus 2018-2019, and comparing Case-Shiller index curve with average income curve:

    Oh baloney, bullshit and balderdash. Those who bought in 2001 benefited from buying BEFORE the housing bubble started forming. If you buy in 2019 it is less affordable. AND you are buying near the peak of the current bubble, in fact a few months after the peak of the current bubble. Basically, buying in 2001 was super-lucky because Fed (FRB) forced down interest rates to ignite a housing bubble after the dotcom-bubble crash. In 2018-2019 we are at the peak of the *everything* bubble. In 2001 there was only a stock bubble. So your 2001 example is cherry-picked for the best possible outcome, AND at the same time dependent on massive taxpayer and working-class subsidy of your price gain.

    Second, how can you know that people with average income were the ones buying houses in 2001, and in the same proportion as in 2018/2019? You do not know that, and I very much doubt it.

    Third, there is the not insignificant problem that income inequality has increased. While AVERAGE income increased 82%, the spread of income increased by a lot. So fewer people are near the average than in 2001.

    TL;DR Buyers are striking because striking WORKS, prices are utterly un-affordable, completely unsustainable, and there is a huge risk that buying now will lead to large losses. Using your 2001 time-machine back to right before a massive Fed-induced interest rate manipulation and succeeding bubble does not change that.

  56. 1056
    justsomedude12 says:

    By ess @ 1051:

    RE: Eastsider @ 1050

    People want to rent all their lives – they should go right ahead if they believe that is best for them

    You continue to fall back on this, as if the only two options are buying right now in the greater Seattle area, or renting all your life.

  57. 1057

    RE: sfrz @ 1052
    Great Addition to My 40+ Years Aerospace Safety Engineering Experience

    I don’t just “mouth off” with just a non-technical degree, I mouth off with senior experience and an engineering/math degree(s)…we’ve forgotten skills and experience in America.

    I used to design lift equipment when I was a young engineer in the 70s/80s too.

    BTW the 737 MAX 8 is the new version 737 and the 737 is all Boeing really has left in commercial production now. The 787-8 Dreamliner is a “NWO plastic plane” joke [which cracks apart and catches fire], with delivery schedules a joke too. The program should be cancelled now.

    https://aviationvoice.com/battle-of-2018-airbus-or-boeing-201901101428/

    Seattle RE has to take “some kind of a”beating over these NWO Seattle Boeing” scandals…the fake news is covering for Boeing and the NWO WTO “phony” FAA….its horrifying too…why did the FAA certify the MAX 8 in the first place? Just because? LOL

    Meanwhile, correct me if my memory isn’t quite perfect Bubbleheads….I’m seeing Seattle Boeing engineering employment at 3500 per SPEEA data…it was 15,000 several years ago…it was all basically outsourced to date. IMO, its gonna get FAR worse as this NWO American safety engineering vacuum gives us more and more Japanese EngineerdeToyota Time Bomb Computers and Takata shrapnel bombs implanted in all our cars….the Japanese can’t make a dcent automatic transmission without “SIGNIFICANTLY” buffering its acceleration with that joke Japanese engineered transmission computer, etc, etc

    Safety engineering is now political lies about “10 year old” $10,000 MSRP priced new Patriot and Intrepit FCA catalytic converters vehicles possibly wearing out at like 150,000 miles on ’em….let’s see ’em attack the old $35K Camry for normal maintenance on high mileage cars too then…its out of control IMO, too much lying. Wore out catalytic converters on high mileage or low mileage for that matter are NOT a SAFETY CONCERN either….

  58. 1058
    Deerhawke says:

    Affordability is one of those things people keep mentioning, but I am not sure we have a constant metric.

    When my parents were buying their first house in 1958, they were able to buy a new 3 bedroom 1.5 bath house for $100 down. Sounds like a dream. But they were so financially stretched that they had to borrow that $100 from my aunt. The house was 1200 sf and quite unfinished. No landscaping– just rolled dirt. No screens. No carpeting where you would expect it– vinyl or concrete. No insulation. The kitchen was 12×12 including the area for the kitchen table. Formica countertops of course. No appliances. We were a family of 6 and thought it was fabulous.

    It would have been far more affordable for us, but it was completely inconceivable that my mother could or would work. Affordability clearly meant one income per household. Part of the formula was a 0 down 4% VA loan. (All the Dads were vets of course).

    By the time my wife and I bought our first place in Seattle 30-odd years later, it was just as inconceivable that we could pull this off with one income. Two incomes was now a necessity. The houses people were buying were bigger and had more amenities, including more than 2500 sf, appliances, insulation, screens, basic landscaping, etc. We had to put down 20% on our $165,000 purchase price which was 8 years worth of saving. Our interest rate was more than double what my parents paid– 8.75%. My parents were totally shocked when they heard it.

    A friend from Japan asked me about my mortgage and laughed like crazy when he heard me complaining. He had bought (for roughly the same price) a 650sf “manshon” (mansion=condo) with two tatami rooms a tiny kitchen, a toilet and a bath. No appliances. For a family of four. Oh, and what made him laugh was our 30-year mortgage. He had a 99-year term. It became the norm in Japan during the postwar period.

    So when people talk about affordability, remember that the metrics can change. You can achieve greater affordability with less square footage, fewer amenities, and a longer mortgage term. You can define a house as a condo.

  59. 1059
    Blurtman says:

    More cowbell, Mr. Powell! Russian collusion is hurting the US RE market!

    January 2019 Foreclosure Filings See an Uptick

    According to the report, the hardest hit areas in January include Orlando, Florida (up 72% y/y); Austin, Texas (up 60% y/y); Miami, Florida (up 41% y/y); San Diego, California (up 12% y/y); and Seattle, Washington (up 10% y/y).

    https://www.attomdata.com/news/market-trends/figuresfriday/january-2019-foreclosure-filings-see-an-uptick/

  60. 1060
    Justme says:

    RE: Eastsider @ 1050

    @Ess is one of those lucky baby boomers that was born around 1945 and has been shitting gold bricks ever since. US was on top of the world, and every time something went wrong, Uncle Sam and Uncle Fed came to the rescue and inflated asset prices.

    Therefore, everyone else should buy at the peak and lose a lot of money. One last hurrah to keep asset prices inflated, for the sake of Ess!

  61. 1061
    Justme says:

    RE: Blurtman @ 1057

    Not only an uptick in foreclosures, but since 2015 or so, FanneMae and FreddieMac have been hard at work keeping their delinquency and default and foreclosure stats artificially low by auctioning off their NPL (non-performing loans) and RPL (modified now reperforming loans) to Wall St insiders at 60-70 cent on the dollar. And the taxpayer is on the hook for the losses! Wall St special-purpose partnerships hold on to the foreclosures while racking up penalties so large that all other lienholders get crowded out when they finally foreclose, and the foreclosure auction takes place. But those penalties do not represent a real loss, so Wall St can then profit by turning around and selling the house, or keep it as a rental.

    For a starters, read

    https://wolfstreet.com/2018/01/26/why-is-fannie-mae-offering-goldman-sachs-et-al-such-fat-margins-on-defaulted-mortgages/

    TL;DR The default rate is much higher than the official stats show, and Wall St is yet again working a legally sanctioned scheme to profit, at the expense of the taxpayer.

  62. 1062
    Eastsider says:

    RE: Deerhawke @ 1056 – When you bought 30 years ago, Seattle was not London or NYC. Otherwise, you would not have afforded your place. Today, Seattle is (almost) London and NYC.

    All new homes in Seattle today are $1m+ homes. Only top 5 percent can afford them. In 1958, I bet the top 20 percent could afford new houses.

    Seattle is unaffordable today.

  63. 1063
    justsomedude12 says:

    By Deerhawke @ 1056:

    It would have been far more affordable for us, but it was completely inconceivable that my mother could or would work. Affordability clearly meant one income per household. Part of the formula was a 0 down 4% VA loan. (All the Dads were vets of course).

    By the time my wife and I bought our first place in Seattle 30-odd years later, it was just as inconceivable that we could pull this off with one income. Two incomes was now a necessity.

    This is an interesting point about moving from one income to two income households over the past 40-50 years. This would seem to be another factor contributing to the rise in home prices over the years that will not continue, unless we go to 3 income households that is. That, and historically low mortgage rates right now mean those two price driving factors that have been a tailwind for the last 30 years are now maxed out.

  64. 1064
    Notme says:

    Moss-pit time-machine
    really handy contraption
    where can I get one?

    -a bubble haiku

  65. 1065
    Notme says:

    Impolite seller
    insulted my hard work
    not giving it away!

    -a not-giving-away-my-labor bubble haiku

  66. 1066
    JWoods says:

    The reason I posted here is to share information and learn. I’ve learned a great deal from this blog, from folks like @Deerhawke, @ess, @Ardell, @Erik and many others. I may not always agree with them, but I’ve found their posts to be informative, balanced, with a lot of real world experience.

    I’m not trying to convince anyone to buy or sell, I’m not a permabull but definitely not a permabear, I actually thought about selling some positions last year but didn’t pull trigger due to transaction cost and tax hit. I bought my first house in 2001, with single income and young kid, with no help from family or anyone, it definitely wasn’t easy but doable, just like today.

    I didn’t think much about investing in real estate, but always kept an open mind. When there were some great deals after financial crisis, I bought. I didn’t know how well it would work out for sure, but I knew the upside is huge with very limited downside risk. My investments have done very well, I think it’s half luck, half work & preparation. I started browsing this site in 2012 and remember a lot people would sound intelligent and debate everything all day long, they never did anything. Opportunity favors prepared mind, real estate is not hard, just need to be rational and have an open mind. Instead of wining all the time, you just need to do it.

  67. 1067
    Justme says:

    RE: JWoods @ 1064

    You should hang out more with Whatshisname. You two could very well be identical twins or even clones. Turn your head and look for him over at the other tata.

    PS: I’m “genuinely curious.”

  68. 1068
    Deerhawke says:

    RE: Eastsider @ 1060

    When we moved to Seattle, we bought precisely because we had lived the previous ten years before that in Manhattan and Tokyo.

    We looked around and realized that this was a place on the cusp of major structural change. It was about to become a world class Pacific Rim city and a world class technology center. We bought the most house we could buy and made sure to buy in a central location that was convenient to the city and the East Side.

    Of course, it is a far cry from buying here in the 50’s. When we arrived here, we had a neighbor who was a Boeing assembly line worker whose wife never worked outside the home. They not only could afford to live in Greenlake, but had a cabin on Whidbey as well. That was commonplace.

    You really can’t turn back the clock. Those who decry the loss of affordability, I hear you and I sympathize. This is the situation my kids are in. I hear it from them all the time.

    But that is different from those who say that prices must, positively must come down damnit because Seattle is no longer affordable. Those folks will soon discover that just because you are outraged by something does not mean it will change. This city can become more expensive and less affordable– and probably will.

    Talk to anybody who lives in Manhattan who had a chance to buy their unit when the building went condo in the late 70s, 80s or 90s. They may have a sweet deal now because of rent control or rent stabilization, but they are always amazed that they could have bought for less than 10% of what it is worth now.

  69. 1069
    sfrz says:

    RE: Justme @ 1059 – The 2008 crisis was never fixed. The central bank created crisis was propped up, with a new wig and lipstick, and marketed as “We’ve learned and changed our ways. We promise we won’t cheat on you again.”

    “But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.”
    “Globally, financial markets today are seeing a rebirth of “collateralized loan obligations” (CLOs), instruments broadly similar to the “collateralized debt obligations” (CDOs), which helped to blow up the financial system in 2008. ”
    https://www.truthdig.com/articles/the-global-economy-is-a-time-bomb-waiting-to-explode/

  70. 1070
    sfrz says:

    RE: Eastsider @ 1060 – It was the west coast Cincinnati.

  71. 1071
    Eastsider says:

    RE: Deerhawke @ 1066 – I fully agree with you that “(this) city can become more expensive and less affordable.” But that does not mean everyone should go out and purchase a home that he/she cannot afford to own. Not everyone should buy a home in San Jose, Vancouver or London, even if you believe prices will continue to climb. This talk of buying regardless of prices and affordability is getting insane. But what do I know.

    As to the claim that “(we) looked around and realized that this was a place on the cusp of major structural change. It was about to become a world class Pacific Rim city and a world class technology center. ” That is a bit of a hyperbole coming from someone like you :)

  72. 1072
    OA says:

    RE: Eastsider @ 1069

    I don’t think I’ve ever seen anyone here say to buy a home even if one cannot afford it.

  73. 1073
    dariakus says:

    By OA @ 1070:

    RE: Eastsider @ 1069

    I don’t think I’ve ever seen anyone here say to buy a home even if one cannot afford it.

    There are many examples if you just scroll up a bit of people saying you should make pretty much every possible sacrifice to buy a house because they’ll just keep going up forever.

  74. 1074
    Eastsider says:

    RE: dariakus @ 1071 – @OA is obviously trolling. LOL.

    By OA @ 981:

    it’s all about finding a really good deal, which takes plenty of homework and looking. I’m not a flipper but have a close relative that has flipped 2 homes in the last 12 months in south king county and has made really good money on it. He’s been doing this for the past 20 years (on and off). There are years when he’ll do multiple flips and there are years where he doesn’t do anything, but is always looking for a deal.

  75. 1075
    OA says:

    RE: dariakus @ 1071

    It’s obvious that there are glass half full people and glass half empty people on here when it comes to Seattle real estate. Good to hear different sides.

    If someone really did say to buy a house at all costs (whether affordable or not) because prices will continue to skyrocket then that person is trolling.

    Am I missing something here?

  76. 1076
    richard says:

    I like JWoods, he walk the talk by buying a house now (crazy to me but I have to respect him). Other folks who are trying to convince others to buy now better follow his example and buy yourself a house in Seattle right now.
    Just do it, at least show you believe what you preaches here. Anyone, take the challenge?

  77. 1077
    justsomedude12 says:

    By JWoods @ 1064:

    The reason I posted here is to share information and learn. I’ve learned a great deal from this blog, from folks like @Deerhawke, @ess, @Ardell, @Erik

    I’m sensing a theme with the people you’ve “learned a great deal from”. They’ll no doubt provide the opinions you’re hoping to hear.

    (Although I will say Ardell is actually fairly un-biased)

  78. 1078
    Erik says:

    RE: Eastsider @ 1049
    I agree. I can’t think of any better ways to make more money without reducing my family time.

  79. 1079
    JWoods says:

    RE: justsomedude12 @ 1075
    I’m always willing to learn from anyone who’s got a brain and can make rational arguments.

    When I posted the property purchase I made a couple of days ago, I’d actually be happy to have folks poking hole at my investment thesis. If I were wrong, I would rather find out earlier and take steps to correct my mistake. However I didn’t hear any rebuttal based on facts and logical reasoning; Instead, I was laughed at and dismissed by people who didn’t even know what I bought, price I paid, or the value creation plan I have for the investment.

    I had the opportunity to meet and talk to Robert Shiller once in 2013 (Yes, the Robert Shiller in Case-Shiller index). He has made the compelling case in his book “Irrational Exuberance” 2nd edition that overall housing in the US appreciates at similar rate as GDP growth. I asked him how to explain housing in Seattle has appreciated much faster than GDP, and what his outlook was for Seattle housing going forward. He thought Seattle housing was an anomaly, it will probably revert to the mean and appreciate at much lower rate. But he also acknowledges that pockets of anomaly will always exist, due to so many economic factors specific to a particular area, he doesn’t know whether Seattle housing will continue appreciate at much faster rate than rest of the country. That’s the kind of intellectual honesty and rational debate I truly appreciate and enjoy, it doesn’t matter whether he agrees with me or he only tells things I like to hear. A true gentlemen and brilliant economist he is, I have the utmost respect for him.

    Despite Robert’s Shiller’s cautious outlook for Seattle market in 2013, I went on and bought a few more properties after that, because I found there are other local economic factors at play which don’t show up in his data and statistics for the overall US housing market.

  80. 1080
    Eastsider says:

    By Erik @ 1076:

    I agree. I can’t think of any better ways to make more money without reducing my family time.

    Yup. Running a small landlord business involves a lot of labor. If your current job pays you $80k, your hourly rate is $40. You can easily put in $10k in labor alone each year if you own more than a couple rental properties. The investment better pans out or you may work for ‘free’.

  81. 1081
    randomseattledummie says:

    RE: Justme @ 1053

    I keep asking you this.

    What do you think the king county median price will be in 2035?

  82. 1082
    randomseattledummie says:

    RE: Deerhawke @ 1056

    But I want turnkey with Quartz, Stainless top of the line appliances, any “gross plastic” surface won’t do and the hardwoods better be exotic old growth lumber and it must be in one of the 6 nicest neighborhoods in Seattle. Oh and it should only cost 30% of my single income take home pay.

    I am obviously kidding.

    Your points are so perfect. There are TONS AND TONS AND TONS of affordable housing units even in “desirable” areas but yes, they need some work, they might have *gasp* formica countertops or *gasp* vinyl flooring in places or outdated carpet and paint colors.

    How dare you suggest I raise my family of 3 in anything less than a 3,200 square foot detached single family home with a “suitable” sized yard for fluffers. The numbers just don’t work, not everybody can have this and there are lots of places out there which are quite affordable but maybe just not perfect and meet every want of the modern day buyer.

  83. 1083
    randomseattledummie says:

    RE: Blurtman @ 1057

    ZOMG FORECLOSURE FILINGS ARE UP 10%!!!!!! Run for the hills.

    Up 10% from historic lows is not actually a significant change. In the past 4 weeks in Seattle city limits there were 5 homes foreclosed on. Obviously actually being foreclosed on is not the same as having a foreclosure notice filed but having a 10% increase is not interesting at all.

  84. 1084
    richard says:

    RE: JWoods @ 1077
    Hi JWoods, I appreciate your honesty.
    Just curious. People here are usually has little knowledge or don’t want admit their knowledge about Chinese money inflow. When you made in your investment in the last 5 years, did you know the Chinese money were coming to Seattle in a big way?
    Or in your conversation with Mr. Schiller, did he ever mentioned Chinese money or foreign investment? My impression about Schiller is similar as yours, over cautious and I feel he know more than what he said in his interview.
    I think real estate people has an edge on information about foreign investment. I am annoyed by real restate people here intentionally avoid talking about Chinese money, which to me is the elephant in the room.

  85. 1085
    randomseattledummie says:

    RE: richard @ 1082

    I’ll take a stab at answering this.

    I’ve sold a lot of places and never personally had a buyer who had a name that would suggest the they were a foreign investor.

  86. 1086
    JWoods says:

    RE: richard @ 1082

    I had no idea that Chinese money was coming to Seattle in a big way, nor did Shiller mention anything about it. I did know that people all over the world wanted to come to Seattle, because it’s the center of technology innovation and it’s such a great place to live, people from China, South Korea, India, Europe, etc. A lot of them actually considered Seattle as a bargain comparing to the other tier 1 cities in the world, which remains to be the case even today.

  87. 1087
    Erik says:

    RE: Eastsider @ 1078
    I have more than a couple and I don’t put any time into my rentals. Get a good property manager and cpa you can develop a good working relationship with and you won’t be doing work.

  88. 1088

    Boeing 737 MAX 8 Development Now Under DOJ Investigation Probe

    You’ll need a subscription to the WSJ to read the whole article….but here’s page 1:

    https://www.wsj.com/articles/faas-737-max-approval-is-probed-11552868400

    The NWO companies like Boeing quickly outsource 737 intellectual property to enemy nations like China, GM is similarly closing Detroit production in favor of outsourcing with their NWO greed buddy, China. The FAA is useless and spineless during this 737 development outsourcing process too, they certify this anomalous NWO activity automatically in my book. Don’t rock the boat IOWs, you’ll get less profits.

    Its a mess Bubbleheads, but forget the horrifying political/greed side folks…ya move American money out of Seattle and yes, RE will crumble in price….its that simple, ask Detroit if you don’t believe me.

    Historically on a safety engineering milestone chart, the old production outsourced 737s [pre MAX 8] had rock and roll problems without root cause either…so the MAX 8 new S/W attempted to smooth them out? Without FAA required training or proper root cause analysis too? Is NWO politically correct replacing safety in America?

  89. 1089
    Justme says:

    RE: randomseattledummie @ 1082

    QUOTE: There are TONS AND TONS AND TONS of affordable housing units even in “desirable” areas but yes, they need some work, they might have *gasp* formica countertops or *gasp* vinyl flooring in places or outdated carpet and paint colors.

    I think we should all ask @RSD to post links to at least SOME of these “affordable” units in “”desirable”” areas. According to RSD, there are TONS of them out there. Clearly he is not going to buy them all for himself, so I think it is fair to ask that he provides a number of concrete examples.

    Any other people here that would like to know?

  90. 1090
    Blurtman says:

    RE: softwarengineer @ 1088 – Will the CEO resign? And what’s the Russian collusion angle on all of this?

  91. 1091
    randomseattledummie says:

    RE: Justme @ 1089

    The median income for a married couple with kids in Seattle is 161k (Seattle times article at the bottom)

    Most would consider housing that takes 1/3rd of your income to be ballpark reasonable, some say 30%, some 36%, some even are into the 40’s but I think that is too high. Figure that 161k turns in around around 11k/month after taxes. 1/3rd of that is around $3600-3700/month. If you can’t find a home for around 625k, your standards are too high. Can you afford new construction with sweeping views in a mansion on Queen Anne? No. Can you afford a comfortable to lovely house or even in some areas a new construction townhome. Check out basically anywhere in Seattle that isn’t waterfront south of I90 or north of roughly 100th st in north seattle. I am not going to post the 314 results that I got on redfin with those search parameters.

    Depending on your desires you can find things that meet those criteria which are over 3,000 square feet albeit a little bit dated or much newer and slightly closer to 1,000 square feet. If you move your search to be under $400,000 you still have 29 homes which is not a ton of inventory but a 400k property with market rate mortgages would be considered affordable for a buyer making ballpark of 100k which is well below any Seattle family median income.

    If you are willing to *gasp* live outside of Seattle and look at places like Burien, SeaTac, Mountlake Terrace, Lynnwood, Tukwila, etc, suddenly your 650k buys you borderline mansions.

    If you want to use the single person median income I don’t know what that is but I can assure you that 1 bedroom condos are well within what is considered affordable…again if you are willing to look outside of super premium neighborhoods.

    If you are a single person making $15/hour, you are correct, you won’t be able to afford to purchase a home in Seattle but I am not familiar with a recent time in Seattle when minimum wage workers were able to afford to purchase homes.

    https://www.seattletimes.com/seattle-news/data/what-is-middle-class-in-seattle-families-now-earn-median-of-121000/

    Justme, I answered your question. Now why don’t you answer mine.

    What do you think the king county median price will be in 2035?

  92. 1092
    Justme says:

    RE: randomseattledummie @ 1091

    You say “There are TONS AND TONS AND TONS of affordable housing units even in “desirable” areas”,
    but you are unable to post a single property listing that you consider to be “affordable” and in a “desirable” area.

    Got it.

  93. 1093
    LuLu says:

    It is very unaffordable in Seattle. Seattle is a desirable place to live just like all other cities on west and east coast . if you are handy enough, you could fine some “affordable” house but with less perfect conditions such as vinyl floor, rusty roof and old appliance. The owner might cash short to up keep the conditions. You can buy it below market price and make improvement. It is very expensive if you contractor to do all the work.

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