Price infliction point
Most of us here would agree that the prices in seattle are not falling as fast as socal or some other sunny places. Did those area also see some price stagnation before they nosedived?
Here's a coule of weeks old aricle in times about it.
http://seattletimes.nwsource.com/html/r ... les05.html
So if there was a duration of flat prices in other areas as well, what was the infliction point? How far out was it from the peak? 6 months? 12 months?
Here's a coule of weeks old aricle in times about it.
http://seattletimes.nwsource.com/html/r ... les05.html
So if there was a duration of flat prices in other areas as well, what was the infliction point? How far out was it from the peak? 6 months? 12 months?
Comments
I am currently hyper tuned into the houses that are selling and the ones that are sitting in the 250K-375K SFH market in Shoreline, as well as the 550K-650K SFH market in-city north of 85th or thereabouts. Both segments are down at least 10% and losing 1-2% a month.
Really? I wouldn't say that is true. They may not have been falling as long, but they are falling at pretty much the same rate off the peak as any market in the country.
Radarlogic comparision
Not to say we knew it at the time but looking back, it isn't hard to spot. I blogged about it at the time, in fact. Wasn't sure what the long-term ramifications were going to be for us here locally since we had managed to not be too affected by the changes in the sub-prime market in the spring, but it became pretty clear fairly quickly that we had a problem when we started seeing sales falling out of escrow. Our area didn't have as much sub-prime as other parts of the country but what we had in a big way was Alt-A and Jumbo.
I think it took until January for people to figure out that what had happened wasn't going away and couldn't be ignored. Once the builders decided they had to react, everyone else has had to as well. So I think the tipping point is really January, but our market started having real problems in August. It just took a few months for everyone--buyers, sellers and agents--to figure out what that was going to mean here locally.
First, what is an infliction point? Is that the point in time where homeowners realize they are literally losing a thousand dollars a week in equity at the same time they are throwing away thousands a month in interest? If so, I think you coined a great new phrase.
Second, deejayoh's graph shows very clear that prices here are not falling as fast as in California...because they are falling much faster! At least if you compare markets similarly deep into a decline (it takes time for psychology to take effect).
Third, every market saw 'stagnation'. If you shoot a bullet into the air, it will peak and start to fall back down. At every point during its fall, it has the same altitude as it did at some earlier time during its ascent. It turns out that our prices are declining at a rate that January/February numbers looked stagnant YOY. But if you go to LA and compare their prices to 2004, they will probably look stagnant today. Shoot, if housing collapsed 95% but you compared prices to 1945 prices you could argue that prices were stagnant for 60 years.
Technically, the peak of a curve is not an inflection point (in fact, it's the opposite of an inflection point). If you think of house prices as a roller coaster, when you go over the peak, you will be thrown up into the air. When you go through the trough, you will be pressed down into your seat. But, there are certain points halfway up and halfway down where you are moving very fast but you can sit comfortably and not be thrown out. These are the inflection points.
We have just nosed over the peak and prices are decreasing. But, the rate at which prices are decreasing is still increasing. Once we get to the point where the rate at which prices are decreasing is steady (so each month we get a consistent 3% drop, for example), then we will be at the inflection point. Prices will continue to decrease past this inflection point, but each month the decrease will be less, until finally we get to the bottom and we start going up again.
Now some more clarification -
If you look at the chart here http://www.housingtracker.net/askingpri ... -Bellevue/
The SFH prices look like they are holding steady. Agree they are non inflation adjusted and the $/sqft are falling but nevertheless, this chart is not similar to the chart for say washington DC
http://www.housingtracker.net/askingpri ... lexandria/
or SF
http://www.housingtracker.net/askingpri ... d-Fremont/
There you clearly see a clear downward slope even in nominal prices. Now my question is, is it because we peaked late, we still are holding steady and just waiting for a point where prices start moving down rapidly or is this flat trend that people here expect to continue.
They seem to do no reasonableness checking and report things like the change JimN refers to for months on end when to any informed observer it is clear they have a data feed problem. Today, they are reporting roughly 14,00 SFH+Condo listings in Seattle/Tacoma/Bellevue. Based on their description, that's for all of King and Pierce Counties. Tim's count for those counties - which tracks to NWMLS pretty closely, is over 24,000. Do you trust them? I don't
Their business model is to collect eyeballs for ads - and I can't say that I sense a lot of care about what they are reporting.
if you want good data on what is happening to listing prices, go over to Altos Research. They actually make a living selling their analysis of data back to bankers, realtors, and buyers. It has to be accurate. You can also get data on every community in Washington of any size.
http://www.altosresearch.com/research/WA/Seattle