P-I August Numbers Pre-Report Report
It looks like the local rags are finally going to get around to reporting on the August NWMLS figures. In preparation, the P-I is already practicing their anti-bubble spin with the pre-report report.
Real estate experts expect to see slowing sales and price gains and increased inventory, but nothing resembling a bursting bubble, when the Northwest Multiple Listing Service releases its August numbers today.I guess Glenn Crellin should be reading Seattle Bubble, where we've known for nearly a week now what the statistics show. Although, I wouldn't exactly call the numbers all that much of a "balance" to what's going on in parts California. To me the local numbers appear to be neutral and trending down.
"I'm eager to see what the statistics are going to show," said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.
Windermere Real Estate President Jill Jacobi Wood said she is looking forward to having local numbers to balance the grim news from areas such as California.
"It's kind of dismal in some of these places," she said Monday.
...
There are still a lot of buyers out there, Jacobi Wood said. "Our prices are still below the cities that are as desirable as ours."
Apparently they wait until the "recap" sheet is released to write their stories. If there are any significant differences in the numbers between the summary sheet I reported on last week and the recap sheet, I'll let you know.
Update: The August recap sheet has been posted. There are no significant differences as far as I can tell.
(Aubrey Cohen, Seattle P-I, 09.12.2006)
53 comments:
I bought my house in 2001 with the expectations of 4-6% growth every year. The 15-20% was just a bonus...A slowdown would be no big deal to me, but i doubt it will happen. Prices will keep on going up.
"Our prices are still below the cities that are as desirable as ours."
Defninitely agree there. we have another 20-30% before we are on par w/ SF/LA for the desirable parts of town.
...we have another 20-30% before we are on par w/ SF/LA for the desirable parts of town.
The exact same thing could be said of our incomes, as well. For example, let's compare two desireable, close to downtown neighborhoods, one in Seattle, one in San Francisco.
(data taken from here)
Queen Anne, Seattle (98119)
Median Income: $53,271
Sunset District, San Francisco (94116)
Median Income: $65,697
The San Francisco neighborhood has a median income 23% higher than the Seattle Neighborhood.
What reasoning do you have that prices will continue to go up, despite other cities lagging and falling prices? Do you expect your children to priced out completely, in a market that makes no historical or economic sense?
we have another 20-30% before we are on par w/ SF/LA for the desirable parts of town.
San Francisco and LA are world renown cities, with a scope of history, culture and industry that is *far* beyond Seattle's.
Comparing Seattle to these cities is apples and oranges, IMO.
Seattle is probably more comparable to Phoenix, Portland, Minneapolis, Denver, Atlanta, Toronto, etc...
The anonymous posts make sense: Prices have been shooting up like a junky, and Seattle is as desirable as the sunny San Diego or Hawaii (especially in the fall, winter and spring).
There's just no way that RE prices would drop by 50% in Seattle. That sort of thing has never happened before, just like our unprecedented 100% increase over the last few years.
We have a ways to go before our the market starts to level out. The other major crashes (Bay Area, LA, Riverside, Boston, Vegas, Philadelphia, Phoenix, Denver, Miami, DC) are all priced well above Seattle (well, maybe not Philly, Denver, Boston, Phoenix, Miami, Vegas, Riverside, or DC), so our prices can only go up. Seattle is at least as desireable as Hawaii or San Diego. We should be paying $600K median.
Wow, with arguments like that, color me bearish!
"Windermere Real Estate President Jill Jacobi Wood said she is looking forward to having local numbers to balance the grim news from areas such as California."
Sure she is. Just like I'm looking forward to a colonoscopy.
As soon as the lending industry tightens up as it will, who is going to be buying these over-priced condos and mcmansions even at flat appreciation. And once people realize they are not going to get 10-15% YOY appreciation it will be a whole new game. That intrest only ARM and huge mortgage payment will not be looking so good. There was a time not so far back when you would not see any equity in your house, relative to what we see now, for 10 or so years. The reality of that alone will drive down prices to where people feel there life style will not be comprimised. The psychology of the housing market will change dramatically over the next couple of years, as it has in the past few years.
I love how real estate agents are quick to point out that RE has a local or regional dynamic. But then in the same breath they start comparing our market to San Diego and LA. Interesting.....
The washing machine is set to SPIN, lets see what the local media comes up with this time!
"...and Seattle is as desirable as the sunny San Diego or Hawaii (especially in the fall, winter and spring)."
With all due respect, and having just moved here from Point Loma (San Diego)... this place is not as desirable as Sunny San Diego.
One of the keys is that Seattle may be desirable to young couples but older couples looking to retire will mostly move to warmer climates. Every old person I know has trouble with even slightly cold weather, especially wet cold. As the boomers age, they won't want to hang around here...
prices will continue up in seattle SEATTLE IS IMMUNE!!
Let's see, inflation adjusted wages dropped 8.1% from 2001-2005.
Seattle is 6th in the nation in Option ARM's, plus a recession is looming.
Yes, I'm sure that we will be spared.
My house goes on the market next month. There are more houses for sale in my area than I've seen in a long time. They don't seem to be moving very quickly (if at all), and three have reduced their asking prices.
I contacted my agent about the softening market, and she replied that things typically slow down for the summer. Then, it slowly picks up again up until the holidays.
I have one group of friends that say to 'up' my selling price, while others say 'price it to sell quick' because you don't want to get stuck in a downturn.
I think everyone's feeling a bit of vertigo, 'cuz no one seems to know which way is up.
With all due respect, and having just moved here from Point Loma (San Diego)... this place is not as desirable as Sunny San Diego.
Sorry, Anon 10:47. I forgot my < sarcasm > tags
One of the keys is that Seattle may be desirable to young couples but older couples looking to retire will mostly move to warmer climates. Every old person I know has trouble with even slightly cold weather, especially wet cold. As the boomers age, they won't want to hang around here...
Please, with global warming, the heat will come to us...this has been a warm summer so far :-)
I don't understand this "it's a nice place to live" argument.
That may be true but arguments like that are lost on economic fundamentals.
The fact still remains that never before in the history of the US has an asset been levered up the way that the current boom has levered up housing.
The fall out will not be pretty, and it is NATIONAL.
Hilarious to see the theories people dream up to explain what is in fact nothing more than a gross excess of credit, time after time after time. How many peoples' life savings could have been saved by the words: "it's inflation, stupid!"
What are all you folks who think that RE prices will not have a meaningful shakeout basing your opinions on?
The logic and evidence I've seen argues very persuasively for reversion to the mean of the price to rent ratio.
Please give us evidence that supports your position.
"With all due respect, and having just moved here from Point Loma (San Diego)... this place is not as desirable as Sunny San Diego."
We should let the Californians know that we're comparable to SF, SD, and LA. They may not be aware of this yet.
We should let the Californians know that we're comparable to SF, SD, and LA. They may not be aware of this yet.
Oh really? From reading this blog, I was under the impression that everyone from California had moved up here already.
The MLS #s are up:
Breakouts - KING COUNTY SECTORS - Northwest Multiple Listing Service AUGUST 2006
The Median in Seattle is down MOM from $420K in July to $405K in August. For the first time in a long time Seattle's appreciation is down to single digits (8%).
However, sales perked up in August. Only 1.7% down YOY. A lot more sales then July. Interesting....more sales but the median is coming down.
Inventory gains, interest rates and in-migration contributed to a solid month of housing activity for members of the Northwest Multiple Listing Service. Despite reports of declining prices and sales in many parts of the country, NWMLS brokers in western and central Washington notched more sales in August than during July. The volume of pending sales dipped from the same month a year ago (down 13.2 percent), but surpassed July by 857 transactions for a gain of 9.4 percent.
Based on current indicators, there is about a 3.3 months supply of available inventory in the MLS system. In King County, the number drops to about 2.3 months and in Snohomish County it's about 2.5 months.
Only 2.3 months supply in King Co....that's really tight. We need 6-9 months for a balanced market.
"In close-in Seattle neighborhoods we still have a serious inventory shortage," reports NWMLS director Mike Skahen, the broker at Lake & Company. A good example is a newly listed Ravenna home, he explained. Built in the early 1900s and described as being in average condition, the 4 bedroom, 2 bath home (with no garage) is priced at $700,000. More than 100 parties visited the open house this past weekend, and the agent expects at least a half-dozen offers will be presented today, according to Skahen. "Good houses in high demand neighborhoods are still in very short supply in all price ranges with no shortage of buyers," he emphasized.
Wall Street Journal is reporting today that single-family and condo inventory in the seattle area is up 13.4% from July to August. This is the second highest July-to-August increase in the nation.
You probably need to be a subscriber to see this link: http://online.wsj.com/article/SB115801875576360053.html?mod=home_whats_news_us
This is the second highest July-to-August increase in the nation.
Yes....inventory has gone up. But we're still only a 2 months supply. We need 100% increase to get things balanced.
The MLS also mentions that population and jobs are climbing:
Washington is on track to add 95,000 jobs in 2006, according to the state's Office of Financial Management. With the improving economy, more residents from other states are relocating here. OFM data show annual migration climbed from only 22,000 in 2003 to 51,000 in 2005 and 81,000 in 2006.
See: August Home Sales Stronger Than July as Prices Still Climb in Western Washington
Yes....inventory has gone up. But we're still only a 2 months supply. We need 100% increase to get things balanced.
Who says? The voices in your head?
Who says? The voices in your head?
Nah those are the voices in your apartment building.
6-9 months inventory is seen as a buyer's market by most RE economists. Seattle is still a buyer's market ( and will be for awhile). Too much pressure to move in closer. Great city for recreation.
The housing gloom's creeping north! Looks like Southern Oregon's feeling the funk, up the Willamette and sooner or later the barbarians will be at the gates (of Ballard... of course)
sorry... forgot the link
Seattle is still a buyer's market ( and will be for awhile).
Did you mean Seller market?
Yes....inventory has gone up. But we're still only a 2 months supply. We need 100% increase to get things balanced.
You know, you keep saying that inventory has to go up [X] amount before we get a "balanced" market, but I just realized something. The "Months Supply" number is calculated by simply dividing the month-end inventory with the total month's pending sales (see the Months Supply table in the link you provided).
That means that inventory could stay exactly the same, but if demand (pending sales) plummets, "months supply" will go up. So your assertions like "we need 100% increase" and "we need to double the current inventory" are only true if demand holds steady. Incidentally, demand is dropping.
I think what's more likely is that in the next year or two we'll see a 50-100% increase in inventory, coupled with a 25-50% decrease in demand.
sooner or later the barbarians will be at the gates (of Ballard... of course)
Actually, Ballard had the highest appreciation of any Seattle neighborhood.(14%).* No wonder though, Ballard's streets are paved with gold.
*excluding area 701 which is downtown.
Incidentally, demand is dropping.
Actually it's up.
Pending KC Sales July: 3,650
Pending KC Sales August:3,883
Pending Seattle Sales July: 1,045
Pending Seattle August:1,156
Sales really spiked in August...demand is defintly up.
You know full well that I was referring to YOY figures.
You know full well that I was referring to YOY figures.
Sorry...I didn't.
Anyway, Seattle was 1.7% down YOY from 2005. That's the smallest gap we've seen in months. Looks to me like we're catching up with the record sales of 2005. 1.7% is very small....
Anyway, Seattle was 1.7% down YOY from 2005.
Why are you suddenly cherry-picking numbers only from Seattle city proper? I've been concentrating solely on one set of numbers: King County Single Family Homes. Since I don't even live in Seattle proper, I feel that the county-wide data gives a more complete picture of what's going on, and obviously YOY is better as it automatically eliminates seasonal fluctuations.
It seems like every month you pick a different data set to talk about. Jumping around between pending sales vs. closed sales, Seattle proper vs. King County, etc.
Randomly spouting whatever numbers look the least disheartening doesn't really do much to advance whatever point you're trying to make.
Randomly spouting whatever numbers look the least disheartening doesn't really do much to advance whatever point you're trying to make.
All the #s, YOY, MOM, King County, Seattle, etc look very strong. With strong appreciation, low inventory, and climbing sales, the entire county is still very hot. Just a little less so then 2005.
But it's interesting to see what's going in various areas...no crime in that. Seattle had near 2005 level sales in Aug. I think that's worth mentioning.
I noticed that at 2:21, the Seattle Times released their cautious statement on the numbers:
Home prices flatten, still up since last year
The Puget Sound housing market is still stronger than most of the rest of the country, but signs of slowing are clear.
Their most ironic statement - which we should see debated by Elizabeth Rhodes in short order -- was:
"The decelerating pace locally mirrors the trend nationally.
What does that mean? We're not different, but prices will still continue rising like bread made with genetically altered yeast?
meshugy said...
Seattle is still a buyer's market ( and will be for awhile).
Did you mean Seller market?
whoops, my bad.
ONLY 12% FOR KING COUNT WTF??
THATS HORRIBLE
Prices are higher compared with August 2005, but the rate of increase has slowed. For single-family homes and condos combined, the median price — meaning half the homes sold for more and half for less — in King County last month was $392,000, 12 percent higher than a year earlier; in Snohomish County the median sales price was $338,987, 14.2 percent higher than a year earlier
All the #s, YOY, MOM, King County, Seattle, etc look very strong. With strong appreciation, low inventory, and climbing sales, the entire county is still very hot. Just a little less so then 2005.
If I jump up in the air, and someone takes a snapshot of me, it looks like I'm floating.
I've said it before, and I'll keep saying it: what's important are the trends, not a single snapshot.
What none of this median price talk takes into account is all the incentives being offered. Realtors are doing ANYTHING to keep the prices from coming down. 12 months ago we had bidding wars, now we have sellers paying closing costs. Once the real numbers come out, things will drop fast. We're just behind the curve, we're not special.
I've said it before, and I'll keep saying it: what's important are the trends, not a single snapshot.
That's why the increase of MOM sales in August is so interesting. Looks like the buyers are out in full force. Trending towards the levels we saw in 2005. If consumer confidence was waining why would sales go up so drastically?
Remember, all the closed sales in August were reflective of contracts written (pending sales) on property a month or so earlier when the rate drops began.
We're talking about PENDING sales...those happened IN August.
Tim, any thoughts on posting a "rent" clock to track the money you've lost by not buying a few years ago? With the appreciation since you started the blog coupled with the potential positive tax treatment to the mortgage interest deduction, it should be interesting to see you justify sitting on the fence so long...
Anonymous above: do you do this for everything you didn't do at one time or another? You could wallpaper your house with "what if's". That "Not buying Google at the IPO" clock would be an interesting one. How about the "not marrying that one girlfriend back when I was 22" what if?
That's why the increase of MOM sales in August is so interesting. Looks like the buyers are out in full force.
...except that there are 2% fewer of them this year.
Trending towards the levels we saw in 2005.
Now you're just dissembling -- you're purposely confusing month-to-month trends (which are affected by seasonal fluctuations) with year-over-year fluctations (which aren't).
If consumer confidence was waining why would sales go up so drastically?
They haven't. They've dropped 2%, year-over-year. Last month, they droped by more than that (YOY). Same for the month before.
"All the #s, YOY, MOM, King County, Seattle, etc look very strong. With strong appreciation, low inventory, and climbing sales, the entire county is still very hot. Just a little less so then 2005."
"The Median in Seattle is down MOM from $420K in July to $405K in August. For the first time in a long time Seattle's appreciation is down to single digits (8%)."
LOL. Can you dump your head in the sand anymore? And how can the media spin such TERRIBLE NUMBERS? Inventory is flying up, demand is dropping. And Median price in Seattle dropped 15K in 1 month representing a 3.6% DECREASE in ONE MONTH. To say seattle appreciation is down to single digits is MORONIC. We are living in today's RE environment....you can't hold on to last years appreciation forever (except in your head). Prices are also down in North King 395K to 385K DOWN 2.5%. Prices are also down in the Eastside $496,405 to $475K or DOWN 4.3%. only areas that were up from last month were SE King 337K to $344,575 or 2.2% and SW King which was basically flat but up $50 $299,950 to 300K or up 0.01% This is ONE month folks and the trends are all pointing DOWN!
What is a better way to calculate the months of supply? What is the value based on this months numbers?
It sounds like based on Meshugy's numbers that the housing market is still tight.
That's why the increase of MOM sales in August is so interesting.
Sorry, but I don't find it interesting at all. Why? Because sales have only decreased from July to August two years since 2000, and last month's M2M increase in pending sales was pretty much right at the average. Anyone can open my Seattle Bubble spreadsheet and see this for themselves in the sheet titled "Demand M2M %."
Here is the graph.
P.S. (Anon @ 04:15:35, the only reason I'm not deleting your blatant attempt at antagonism is because I'm so amused by it.)
Seattle/Bellevue are behind the curve because of the dot.com bust. Much of the building is hapening right now and 2007 will see a flood of condos on the market. Also, if people are going to sell a house to move into a new luxury condo in one of the downtowns, it will happen next year too.
I don't expect prices to drop until next year.
"This is ONE month folks and the trends are all pointing DOWN!"
You and I both know that but expect no capitulation from the ostrich crowd.
Wait until prices start to tumble and we have our first price decreases of 10% for Seattle. The ostrich will be saying "but compared to CA we are not doing as bad" (after CA reports %20 YOY price decreases)...we told you Seattle is "special".
And the PI will be running every few months the story "RE expert says THIS is the bottom,,,its time to buy"
Predictable as rain...
What's going on? Ms. Rhodes must be letting rogue reporters slip through the cracks... how much longer until this Desilver article gets 'edited' by the self-crowned 'queen of the bubble' herself...
There's just not enough here to spin!
Last month, the third month in a row, median home prices were nearly flat — up just 0.5 percent compared with July in King County
Geez, how about 'normalize' or 'settling down from White-Hot Phosphorus to Red-Hot Chipotle Sizzle!"... maybe their Thesaurus has run out of viable replacement adjectives...
Although, no mention of MOM price retreat...
in refinancing,the lender can require the borrower to payoff credit cards and other loans, so escrow offices then become glorified bill payers.
So...you folks cut a check in advance of loan approval, and then wait for the loan for repayment? Is that how it works?
(By the by...I think it would be really great if you could write up an entry on the role of escrow in the lending process. I don't really know that much about it, other than the basic idea. It would be nice to know more....)
More to the point on the "tracking your losses", I just sold in August and am renting now. I'll keep a little calculator of how much money I've made vs how much I would have made had I stayed in my place. My bet is, I'm up over 20% by 2008.
North-ender-
Good luck selling your house.
I'd go with the "price it low and get out quick with some equity" crowd.
RE markets seem to always turn on a dime after a bit of long, drawn out "signs".
More people are aware of the signs now and once critical mass is achieved it's going to suddenly become impossible to sell.
There's a great investment saying:
"Don't panic. But if you're going to panic, panic early".
The meaning of course is: panic BEFORE everyone else is panicking so you can get out with your hide intact.
Friends of mine in Seattle sold a house last spring. They had a low price and a high price. Chose to go with the high price and then gradually lowered til it down past their original low price and finally sold 3 months later.
Fortunately for them, most people in Seattle were still not aware of any downturn so they did not have to lower too much (just about 50K).But it was very stressful nonetheless.
Many more people are aware now of the softening market. If you want to unload quickly, sell low.
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