April 7, 2006

Washington Home Sales ‘Hit A Slowdown’

More reports on the housing bubble in Washington. “Homes are coming onto the market and basically sitting there in many parts of Pierce and King counties, according to a new report released Thursday.”

“(Broker) Gideon Epistola said that while his listing board has been filling up, the sales board has been somewhat static. ‘A year ago, that wasn’t the case,’ he said.”

“Epistola had a personal experience with the shifting market. When he recently sold his home in Lakewood, he first listed it at $375,000. Three weeks later and a price reduction of $30,000, the home finally sold. On the flip side, he bought a home in University Place that had been on the market for a bit last fall. ‘We really didn’t compete against anyone,’ to get the house, he said.”

“Dick Beeson, broker in Tacoma, said that housing inventory has indeed climbed, 26 percent in Pierce County compared with last March. Most of the new listings driving up the numbers come from Spanaway and the Puyallup area, Beeson said. Pierce County’s booming condominium market continues to thrive, with listings increasing by 11 percent when compared with this time last year.”

“NWMLS members added 12,639 new listings to inventory last month, edging out the year-ago total of 11,808 new listings. With those new listings, the total inventory at month end rose to 23,533 listings. Compared to the same month a year ago, the inventory grew by 15.9 percent.”

“The largest gains from a year ago are in Thurston County (up 77.5 percent), Grays Harbor County (up 62.5 percent), Pierce County (up 26.7 percent) and Kitsap County (up 22.9 percent). Only four counties have fewer listings than a year ago: Cowlitz, King, Lewis and Kittitas.’”

“‘Traffic at open houses has been pretty decent,’ Beeson remarked. ‘People are taking a bit longer to decide,’ he acknowledged. He believes the abundance of people moving into the area will sustain demand and price appreciation ‘for some time,’ but tempers his optimism by noting, ‘So long as rates stay under 7 percent.’”

“Pending home sales in Seattle and King County fell again in March. Pending sales countywide fell 8 percent compared with the same period a year ago. The same trend held true in Seattle, with pending sales down 8.8 percent.”

“Throughout King County, listings fell 5.5 percent compared with last March. In Seattle, listings were down 6.2 percent. The drop in listings has worked in favor of some home sellers, such as Pat Garrison in Wallingford. Last month she listed the house..there were three bids from potential buyers, and it sold. ‘Realtors were representing their clients with letters and telling us why they were perfect for the house. It was just like you read about,’ Garrison said.”

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Comment by Ben Jones
2006-04-07 09:18:51

Here is some detail from the MLS.

Comment by officeboy
2006-04-07 12:23:29

That is a handy link, I wonder why Okanogan and Whatcom counties get held out from the rest of the data, and why there isn’t all the info for them.
It’s interesting to me because Bellingham (in Whatcom county) has always been listed as a faster growing more bubbled zone even more so then the Seattle area. +43% overvalued vs. Seattle’s +24%

Comment by officeboy
2006-04-07 12:26:26

And i guess i missed this note.
Note: Okanogan and Whatcom counties joined NWMLS in August 2005; year-prior figures may be incomplete

Wonder what MLS they were with before, and if we could get data from there. Seems like the Bellingham area should be leading any kind of “soft landing” ;)

Comment by sfv_hopeful
2006-04-07 09:22:39

Interesting. I’m originally from Seattle so that’s one of the markets I track in order to establish a baseline for real estate elsewhere..but this article seems contradictory to the numbers posted on the Housing Tracker site. According to those numbers, it seems the housing bubble is still roaring strong in Seattle with ever-decreasing inventory and ever-increasing prices.

Comment by Ben Jones
2006-04-07 09:54:38

Washington is going through what all the other bubble markets did. Like the UCLA economist said, watch the volume not the prices. YOY volume was down double digits in some areas and inventory up in most. There is also the anecdotal evidence of craziness; people writing letters to sweet talk the owner.

Comment by in_the_biz
2006-04-07 12:29:22

Ben, love your site and some of the more thoughtful posters, but you are missing the point. King County/Seattle Metro and the rest of Washington are in separate universes, politically & economically. Lower volumes AND lower inventories in King County/Seattle, with continued price increases, driven by surging job growth is the current reality. The inventory is not just low, it is AMAZINGLY low. Here’s total inventory in King County, in March of the last several years:
Mar’02 - 9,635 listings
Mar’03 - 11,755
Mar’04 - 9,651
Mar’05 - 6,731
Mar’06 - 6,359.
You have to dig a little, but you can get all of that info through Google. Full disclosure - I’m commercial real estate investor in Seattle with a condo I like (but that I am ready to sell). I don’t want prices to dive, but above all I value an objective approach, which some people on this site lack.

Comment by Chrisinpnw
2006-04-07 12:56:01

King County/Seattle Metro and the rest of Washington are in separate universes, politically & economically.

You are soooooo right! The three county SEA area is a different State than the rest of us. I live outside that area and our inventory is up with sales down. Offers up to 10% off being taken much like the rest of the country in general. Seattle’s time will come but it is not here yet.

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Comment by sharecropper
2006-04-08 10:06:51

Well said. Glad you contributed this.

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Comment by johndicht
2006-04-07 09:48:10

Big movements in the 10-year rates lately. All the stars are aligned for a BIG BIG drop for housing. 6 months from now, the waves of defaults will hit the coasts and the banks will be breaking. We can help pick up the pieces in 2008.

Comment by crash1
2006-04-07 09:48:24

I made a boatload of $ when I sold the house in Thurston County I bought for my daughter when she attended TESC. Looks like I bought right and sold right. Damn I’m good (or lucky).

Comment by Notorious D.A.P.
2006-04-07 09:51:44

Last month she listed the house..there were three bids from potential buyers, and it sold. ‘Realtors were representing their clients with letters and telling us why they were perfect for the house. It was just like you read about,’ Garrison said.”

That makes me want to puke. I wonder if she has to feed the squirrels as well.

Comment by Simmsays...
2006-04-07 10:07:46

A few isolated stories are stories of the good times that are passing. The news has definitely turned. With rates continuing up, its so over.



Comment by crispy&cole
2006-04-07 10:08:57

‘So long as rates stay under 7 percent.’”

10 YEAR AT 5.00%. With a nice profit spread all rates should be above 7% very very shortly.

Comment by John Law
Comment by scdave
2006-04-07 11:55:59

Good link John…

Comment by Ted
2006-04-07 10:36:06

I wish the last of the suckers would get their buying done so the fun can begin.

Comment by flat
2006-04-07 10:37:19

seattle was the last ” can’t go down here market”
now 100% of USA is a buyers market

Comment by PS
2006-04-07 10:42:06

There can’t be a bubble in Washington. C’mon, if Erik Estrada of CHiPs fame says WA is a good investment, how can there be a bubble there?


Comment by PS
2006-04-07 10:45:22

Here’s Office Poncherello’s video testimonial! BUY NOW!!!


Comment by debt hater
2006-04-07 11:40:08

Now he pushing the great vacation state of ARKANSAS

Comment by AmazedRenter
2006-04-07 10:43:45

Seattle is starting to slow too. Realtors are starting to see overpriced homes sit on the market, and are getting slightly nervous. However, “slowing” and “slow” are two different things. The general mood in Seattle remains that RE will never go down.

Comment by Arwen U.
Comment by Arwen U.
2006-04-07 10:56:27

OT for NVA watchers - the YTD settlements numbers look reversed, especially if you look at February 2006. Weird.

Comment by Mike_in_FL
2006-04-07 11:41:38

Looks like lots of YOY sales declines and listings that are absolutely, positively going ballistic. Also, lots of flat-to-slightly down pricing shown in those reports. Shi* hitting the fan?

Comment by HousingBear
2006-04-07 10:55:45

There can’t be a bubble in Washington. C’mon, if Erik Estrada of CHiPs fame says WA is a good investment, how can there be a bubble there?


Comment by AZ_BubblePopper
2006-04-07 11:09:31

The neat thing about abysmal state of the affordability numbers is that prices don’t even need to go up to make them much worse. Absolutely everything is working against the RE market right now, not the least of which is the surge in interest rates.

Expect the next computation of affordability numbers to be much much worse. Asking prices have stayed stubbornly high, perhaps because most FBs selling into this market simply can’t afford to drop their prices as their basis after refis & HELOCs is too damn high. We should expect that lenders will have an entirely different pricing strategy once properties revert and become theirs to unload…

Comment by seattle price drop
2006-04-07 11:26:01

First off: thanks again Ben!!!

SFV_hopeful: I think the “housing tracker” you refer to is the “benengenbreth”(??sp??) site.

If so, that is the graph that a lot of people refer to around here to “prove” that the Seattle market is still in boom mode.

However, if you scroll down to the bottom of that graph, you’ll see that the “rise” in price is based on ASKING price. Not SOLD price.

A few months back, I printed out one of the realty site lists for a desirable in-city Seattle neighborhood. At the time, there were 176 properties on the list.

Over the months, I’ve made notes on my copy re. price reductions, MLS# changes, sales, DOM, all the ususual stuff.

Last month, “sold” houses finally started showing up on the county tax assessor website. (@Two month time lag from date of sale).

The astounding results were: Of the 57 homes that sold in Feb and early March, FORTY of them sold below Asking Price (by anywhere from 200K-30K). 9 sold at Asking and 8 sold over asking (by like 3K-20K tops, can’t remember the exact #’s but it was CLEAR that the bidding wars were over).

So, at this point, I’m not going to fret about the Wallingford home that got bidded up. There are always a few last fools- or people who just plain have the money to buy in a falling market.

Realtors in Seattle are hanging on with a death grip to this market and throw out these examples of bidding “wars”. They will never mention that most of the homes sold now are sold below asking.

As long as there is just ONE home in the city that sold above asking, you can be sure that that’s the one you’ll hear about.

In the meantime, it looks like the market continues to deteriorate with or without their input.

Comment by HousingBear
2006-04-07 11:28:08


The Donald just announced that he is going into the mortgage business, aka Trump Mortgage. Umm, isn’t he a bit late?

LOL This is the END!!!

Comment by Housing Wizard
2006-04-07 11:47:05

Its the only way Donald can get any funding on his junk condos.

Comment by CrazyintheOC
2006-04-07 11:53:33

In reading this topic and the last one I realized we are watching this thing unfold in slow motion. I think by next year this time the housing market will be a disaster followed by the general economy. Of course the govt. and flippers will say they did not see it coming(of course they do see it). They will want the public at large to help bail this out and help the poor home owners who cant pay thier mortgage on thier house that is worth less than what they owe. Well there must be some reward for people like us that did not act foolishly. We rented and waited. I hope the prudent ones will not get shafted again.

Comment by Housing Wizard
2006-04-07 12:02:19

I move for giving you a reward .

Comment by AZ_BubblePopper
2006-04-07 14:51:44

Everyone will get shafted - Only a matter of degree. The govt will jump in to the rescue, they always do. In the process they invariably screw everything up much worse than it was before for the bulk of their constituents. So, expect to get shafted. The dollar will take a serious hit as foriegn banks SELL $$$s IMO… and so will the stock market. Gonna be ugly for many many years as a result of the cleanup operation for this mess.

Comment by bellevue_blogger
2006-04-07 12:15:57

don’t think for a minute that this means that inventory is up in king county (containing seattle). it’s not. take a look at this news release from the NWMLS. 1.5 months of inventory at current sales levels!! median price is up, inventory has not gone up. i have been tracking inventory for six months and we had more inventory last summer. we will have to be more patient here than those of you in prime bubble markets.

Comment by Betamax
2006-04-07 18:59:13

I don’t think they’re saying inventory is up in King/Seattle:

“Throughout King County, listings fell 5.5 percent compared with last March. In Seattle, listings were down 6.2 percent.”

Comment by SeattleMoose
2006-04-07 18:47:07

Seattle will lag CA by a year. The economy is better up here than in CA and we are still getting a lot of CA equity refugees who have been renting after cashing out last year. A drive thru any high end eastside apartment complex will have a high percentage of CA plates although fewer than last summer when I thought a tectonic shift had moved LA up 1500 miles or so…..

Comment by Joe Logic
2006-04-08 16:06:54

I have noticed a shift of less Volvos and more SUVs in my neighborhood (don’t like either). This can only mean one thing though - CA transplants. If I see CA plates I call the WA DoL and report em.

Comment by Jazmnia
2006-04-08 20:03:59

Seattle will level out. Consider that at $407K, with 20% down ($81.4 K!), a 6.5%/30 year mtg will cost someone a little over $2K/month, and that doesn’t include taxes and insurance. For that kind of dough, you can rent a much nicer and/or larger home in the Seattle area than you can buy. Once people get past listening to all the realtor hype, and stop getting scared, the market will take a slow turn south.

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