However, since this is obviously a topic of interest that we haven’t covered here before, I thought it would be worth explaining when you can and can’t find yourself at risk of deficiency judgment in Washington State. Note that this is not legal advice, just my best interpretation of the available information on the subject.

The most authoritative resource I found that details the nuances around deficiency judgement in Washington is this page on short sales from the Washington State Department of Financial Institutions. You can also go straight to the law and read the Revised Code of Washington, specifically RCW 61.24.100.

You could face deficiency judgment in the following scenarios:

• You had loans with two banks but only one foreclosed. The other bank may pursue deficiency judgment.
• Your home was foreclosed in a judicial foreclosure (most foreclosures in Washington are non-judicial via a Trustee Sale).
• You sold your home in a short sale and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You gave your home back to the bank via a deed-in-lieu of foreclosure and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You trashed your home so thoroughly as to reduce its “fair value.”
• You collected rent for your home after the foreclosure sale.

You should not face deficiency judgment in the following scenarios:

• You had just one lender, and they foreclosed in a non-judicial foreclosure (via a Trustee Sale).
• You sold your home in a short sale and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You gave your home back to the bank via a deed-in-lieu of foreclosure and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.

Again, this is not legal advice, and I make no guarantee that the scenarios above are comprehensive, but this should be a guide to at least give you an idea if deficiency judgement is a risk you might be exposed to.

For the most part deficiency judgement is relatively rare in our state, but if you’re worried about it and any of the scenarios in the first list above apply to you, you should contact an attorney (I recommend both Craig Blackmon and Marc Holmes).

The post Can Banks Seek Deficiency Judgment in Washington State? appeared first on Seattle Bubble.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

• low end: South County (areas 100-130 & 300-360)
• mid range: Seattle / North County (areas 140, 380-390, & 700-800)
• high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of May data:

• low end: $223,900-$365,000
• mid range: $320,000-$685,000
• high end: $459,576-$1,175,000

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

The low end regions were actually the only ones to see a significant increase in the median price between April and May. The mid-range regions fell slightly, while the high end was basically flat.

Next up, the percentage of each month’s closed sales that took place in each of the three regions. The dotted line is a four-month rolling average.

Month over month the low end regions took a big dip while the mid-range spiked up. The high end gained a little share. As of May 2013, 32.3% of sales were in the low end regions, 34.7% in the mid range, and 33.0% in the high end. A year ago the low end regions had more of the share and the high end less: In May 2012 the low end made up 34.0% of the sales, the mid range was 34.3%, and the high end was 31.7%.

Here’s that information in a visual format:

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

If this month’s spike sales share for the mid-range regions keeps up we’ll definitely see the county-wide median price show some strong increases as well, even if ovoerall home values simply hold steady.

The post Seattle Sales Gain, Cheap South King Sales Slip appeared first on Seattle Bubble.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

This poll will be active and displayed on the sidebar through 06.22.2013

The post Poll: I do most of my home searching… appeared first on Seattle Bubble.

As of May, the non-distressed median price for King County single family home sales sits at $449,000, up 6.9% from a year earlier and up 0.9% from April. Last year the month-over-month increase was about the same, up 0.7% April to May.

The bank-owned median sale price was at $229,950 in May, up a whopping 25.2% from a year earlier. The short sale median price came in at $242,500 in May, up 7.1% from 2012.

Here’s a look at the price per square foot broken down by distress status:

The median price per square foot of non-distressed homes was actually up more than the raw median, gaining 12.9% from 2012. The bank-owned median price per square foot shot up 32.0%, while the short sale median price per square foot was up 9.1%. This is the first time the bank-owned median price per square foot has come in higher than the short sale median price per square foot.

With the share of sales that are distressed now below 10%, these charts are quickly becoming less interesting than they were when bank-owned and short sales made up a third of the market.

The post Non-Distressed Median at Highest Point in Over Four Years appeared first on Seattle Bubble.

May 2013
King: 669 NTS, up 10% YOY
Snohomish: 426 NTS, up 42% YOY
Pierce: 551 NTS, up 15% YOY

Nothing much new in these numbers. Still higher than a year ago, but by far smaller margins with each passing month. Most likely we’ll flip back to year-over-year declines in all three counties within the next few months.

Here’s your interactive Tableau dashboard updated with the latest foreclosure data:

The percentage of households in the chart above is determined using OFM population estimates and household sizes from the 2000 Census. King County came in at 1 NTS per 1,236 households, Snohomish County had 1 NTS per 646 households, and Pierce had 1 NTS for every 569 households (higher is better).

According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate for May of one foreclosure for every 736 housing units was 8th highest among the 50 states and the District of Columbia. Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using, and includes Notice of Default, Lis Pendens, Notice of Trustee Sale, and Real Estate Owned.

Hit the jump for a larger version of the chart that shows the percentage of households in each county receiving a foreclosure notice each month:

Note: The graphs above are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, hit this chart and drag the date slider to its full range. For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.

The post Foreclosure Volume Slowly Drifts Back to Earth appeared first on Seattle Bubble.

We’re still a little bit above the low of 5.7% set in November, but well below where we were 2011 through early 2012.

Short sales tumbled dramatically in the month, falling from 9.3% in April to 2.4% in May. A year ago 9.6% of sales in the county were short sales.

The total percentage of sales that were distressed in May was at 8.8%, the lowest point since November 2008.

Later this week we’ll take a look at how the median prices are moving for bank-owned homes, short sales, and non-distressed sales.

The post Distressed Sales Hit Lowest Point in Over Four Years appeared first on Seattle Bubble.

Looks like it’s that time again… Recent headlines have described an increase in mortgage interest rates from 3.35% to 4.0% with hyperbole like “Mortgage Rates Soar,” and “Soaring U.S. Mortgage Rates.”

If this sounds familiar it’s because we heard the same nonsense when rates moved from 5.0% to 5.3% in 2010. These types of articles often include a graphic like the one at right, with the x and y axes manipulated to make the latest gyrations in interest rates look like a very big deal that will most likely destroy the housing market.

I’ve pointed this out numerous times in the past, but it is worth repeating: Rates are still crazy low.

Rates could increase four percentage points and still be historically low. Here’s the appropriate historical context to keep in mind when you read these hysterical stories about rates “soaring” or “hitting a one-year high.”

The latest increase barely registers as a blip when the chart is appropriately scaled.

As long as interest rates are still below 6%, I doubt we’ll have anything resembling a “normal” housing market. I for one take increasing interest rates to be a good sign. It’s an indication that the market is able to sustain itself without artificial manipulation via ridiculously low rates.

The post Déjà Vu‎: Mortgage Interest Rates Panic appeared first on Seattle Bubble.

The post Poll: Buyers: What interest rate would price you out of the market? appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-06-07 appeared first on Seattle Bubble.

Obviously, I love a good contrarian argument. Unfortunately, this piece is far from good.

Take the consumer confidence numbers, which are measured every month by the Conference Board and act as one of the more foolish hinges on which to hang our hopes. Consumer confidence in May jumped to 76.2, on a scale of 100.

Just three paragraphs into the article and we’ve already run into the first error. Consumer confidence is not measured “on a scale of 100.” It’s indexed to 1985 = 100. She might know that if she had bothered to look at the Conference Board’s public documentation (pdf).

In the popular interpretation, that indicates that consumers believe the economy is improving.

No, all it means when the consumer confidence index reads 76.2 is that consumers are ~24% less confident than they were in 1985. What’s important is the direction the index is moving, which is definitely up. Less than two years ago the index sat at 40.9. Is she seriously trying to argue that 76.2 is not a dramatic improvement from 40.9?

The May data shows the highest measure of consumer confidence since February 2008. That was a time in which a housing crash was already well underway, and only a month before before Bear Stearns collapsed and confirmed that the country was in a financial crisis. At least six months before that, in August 2007, three major hedge funds invested in subprime real estate had to be bailed out by the French bank BNP Paribas, and the Federal Reserve and other central banks started pumping $300bn into the global banking system. Any collective confidence back in February 2008 was foolish and unwitting of the crisis that had already started in the higher rungs of finance.

Again she completely misses the point. In February 2008, consumer confidence was plummeting, having dropped 35.5 points in just 8 months. The current rising trend is obviously good news. To imply that it isn’t is either dishonest or ignorant. Things aren’t great, but they’re getting better.

Housing prices have risen at the fastest rate in seven years, as the Case-Schiller Index of national housing prices showed today.

Apparently neither she nor her editor knows how to spell Robert Shiller’s name correctly.

The housing recovery, for instance, seems to be just another stage of the foreclosure crisis. Note that the areas where house prices have risen the most – Arizona, Las Vegas and California – are all areas that were hurt most deeply by the housing crash. So pry between the boards of the housing recovery and the termites start crawling out.

Home prices are rising fastest in these areas for a number of reasons. These places are where prices fell the furthest, overcorrecting in some cases, so it’s natural for prices to come up a bit to match local incomes.

Also, foreclosures were a huge share of sales in these markets, but over the last year foreclosures have dramatically declined, so the mix of sales has shifted toward non-distressed inventory, which is naturally higher-priced.

There is evidence that lenders are controlling the housing supply by reducing the number of houses for sale. Last year, AOL Real Estate’s reporting suggested that as many as 90% of available properties were not even really on the market, but just polished for sale and being held back to keep supply low.

Then, last month, three major banks, including Citigroup and Wells Fargo, halted all their sales of homes in foreclosure; this also reduced the supply of homes on the market. The reduction in housing supply, then, is largely artificial, designed by the banks and institutions that hold thousands of houses and thus have the most to gain from higher house prices.

It couldn’t be that the number of foreclosures on the market is decreasing because the number of homes being foreclosed is decreasing, thanks to rising prices and a gradually improving economy. No, there must be a conspiracy by the banks to withhold inventory! Yeah! I’ve looked into this data and found nothing to suggest that banks are doing anything other than putting foreclosures on the market at the same rate that they’re foreclosing on homes.

A recovery allows real estate agents and banks to tell Americans that they can’t borrow money for the home they want, that they can’t participate in the housing market, while wealth private investors scoop up as much as they can.

Um, what? That doesn’t even make any sense.

Anyway, if you’ve read any contrarian arguments recently that aren’t rambling illogical messes full of basic factual errors, I’d love it if you shared them in the comments.

The post The Guardian Needs a New Finance & Economics Editor appeared first on Seattle Bubble.

To kick things off, here’s an excerpt from the NWMLS press release:

Competition among home buyers "still fierce;" rising interest rates adding to fury

With inventory apparently improving, some would-be buyers are staying on the sidelines. The increased inventory is “cooling some buyers,” reported George Moorhead, managing broker at Bentley Properties in Mill Creek and a member of the MLS board of directors. “We also have buyers who are stepping back as they are frustrated with current inventory and multiple offers going well above asking price,” he added.

Okay wait. That makes no sense at all. They’re trying to claim that an increase in inventory is causing buyers to get out of the market? When the big story for the last year-plus has been buyer frustration at record low inventory? That does not pass the sniff test. I can see higher interest rates being a reason that sales might soften, but increase inventory? Nope.

Read on for my take on this month’s local news reports.

Marissa Evans, Seattle Times: More buyers than sellers push King County home prices up

Lack of homes for sale has been the major reason behind rising home prices in the Puget Sound area.
…
Glenn Crellin, of the Runstad Center for Real Estate Studies at the University of Washington, said the shortage is happening for a combination of reasons. Some homeowners are waiting for prices to rise even more, while others owe more than what they could get for their home. This prevents owners from being able to sell unless they can make up the difference out-of-pocket.
…
Despite the shortage, Matthew Gardner, principal for Gardner Economics, said this is the kind of report he’s been looking forward to seeing. The number of listings increased 21 percent for Seattle in the past month.

“We are seeing a late increase in spring listings,” Gardner said. “It’s going to be a busy summer now.”

Whoa. Accurate insight from Matthew Gardner? Okay then.

Aubrey Cohen, Seattle P-I: Surging home prices fuel fears of a new bubble

Shoppers fighting over the few homes listed for sale in the Seattle area pushed up prices again in May, prompting fears of a fresh housing bubble, according to a new report.
…
“We certainly can’t sustain 15 percent annual price increases,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.
…
“Traditionally, during the initial phase of a rate uptick we see a flurry of activity,” Crellin said.
…
After that initial flurry, Crellin said, rising rates “will tend to slow things down a little bit.” They’ll also moderate median price increases, as the same monthly payment will buy less, he added.

Here’s hoping.

I held this post until this late because I was hoping a story would appear on the Everett Herald, but so far there’s nothing. If they post one tomorrow I might update this space.

[Update]

They did finally post a story: Kurt Batdorf, Everett Herald: Fewer county homes listed, so prices rise

Median sale prices on homes and condominiums in Snohomish County jumped by $40,000 in May from a year ago, due in no small part to the continuing decline in active listings.
…
“There are still home owners who want or need a higher equity position in order to sell their home, so they may continue to wait and watch,” said Dan Gunderson, broker with Windermere Everett.
…
“We currently have significantly less inventory of bank-owned and short-sale properties,” Gunderson said. “New construction is currently about 15 percent of the inventory, and we would like to see it at 20 percent. Supply is certainly a driver of the increased property values. Affordability, low interest rates and the job market in this region are contributing to the increased value as well.”

[End of Update]

Kathleen Cooper, Tacoma News Tribune: Seller’s market pushes home prices higher in Pierce, Thurston

Prices are rising as more buyers enter the market and fewer homes are listed for sale. Inventories in both Pierce and Thurston counties dropped in May, 20 percent and 16 percent respectively. Pierce County has just under two months’ supply of homes for sale, according to the NWMLS – a number so low only King and Snohomish counties beat it, with about one month’s supply there.

Reasons for owners not putting their house on the market vary but probably include people still suffering the hangover of the market collapse, now five years past.

Well, it’s been five (almost six) years since the local housing market began to collapse, but the collapse only really ended a little over a year ago.

Unfortunately literally the exact same story ran in The Olympian, so instead of the usual five reports this month, we only really got three.

(Marissa Evans, Seattle Times, 06.05.2013)
(Aubrey Cohen, Seattle P-I, 06.05.2013)
(Kurt Batdorf, Everett Herald, 06.07.2013)
(Kathleen Cooper, Tacoma News Tribune, 06.06.2013)
(Kathleen Cooper, The Olympian, 06.06.2013)

The post May Reporting Roundup: Inventory Increase Edition appeared first on Seattle Bubble.

Commenting on the latest report, brokers said the fast pace is frustrating some buyers — and surprising sellers with unrealistic expectations. One broker cautioned against an overheated market. “We do not want a market that escalates too fast and topples again,” commented Frank Wilson, Kitsap district manager at John L. Scott Real Estate and branch managing broker for its Poulsbo/Kingston office.

Yeah, most real estate agents just want that first part. If the bit about toppling could be avoided that would be great.

All righty, on with our usual monthly stats.

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):

May 2013	Number	MOM	YOY	Buyers	Sellers
Active Listings	3,759	+16.7%	-25.4%
Closed Sales	2,516	+20.0%	+22.4%
SAAS (?)	1.37	-4.4%	-1.7%
Pending Sales	3,236	+6.0%	+8.6%
Months of Supply	1.16	+10.1%	-31.3%
Median Price*	$417,500	+4.4%	+15.3%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

As forecasted Monday in our stats preview, inventory gained some more ground from April to May. May’s 16.7% month-over-month increase in listings is actually the largest on record as far back as my data goes (January 2000). Last month I said that “we can’t really jump to any conclusions from a single month of data,” but now that we’ve got two months showing the same trend, I’m more optimistic that inventory is on the rebound.

Here’s your closed sales yearly comparison chart:

Closed sales hit their highest level since June 2007, making it all the more impressive that inventory was able to stage such a large increase.

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

There’s still a long ways to go before we can call inventory “normal,” but at least we’re finally heading in the right direction.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade.

Sharp increase in both the listings and sales curves over the last couple of months.

Here’s the median home price YOY change graph:

Another spike up as the median home price gained $17,500 in a single month.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

May 2013: $417,500
April 2006: $419,500

Here are today’s articles from the Times and P-I:
Seattle Times: More buyers than sellers push King County home prices up
Seattle P-I: Surging home prices fuel fears of a new bubble

Check back tomorrow for the full reporting roundup.

The post NWMLS: Inventory, Sales, & Prices All Gain in May appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only one of last month’s homes has gone pending. The third-cheapest home from last month is still on the market but has been pushed off the list. It was priced the same as #3 this month, but was quite a bit more expensive per square foot, which was the tie-breaker.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 20
Average number of beds: 2.3
Average number of baths: 1.2
Average square footage: 1,179
Average days on market: 54

Mirroring the increases we’ve seen in overall inventory over the last couple of months, the number of homes under $200,000 increased for the second month in a row. Days on market dropped from its huge level last month, while size, beds, and baths were all relatively stable.

Here are a couple of charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: June 2013 Edition appeared first on Seattle Bubble.

First up, here’s the summary snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

Summary: Inventory rose for the second month in a row, even as sales increased again. Meanwhile, foreclosures are still slowly but surely decreasing toward historically normal levels.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

Sales in King County rose 15% from March to April, and were up 28% year-over-year, which is a slightly larger year-over-year gain than in April.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Deeds in Snohomish rose 8% month-over-month and 26% from May 2012.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

Foreclosures in King County fell again, and were only barely above last year’s level. Foreclosures increased slightly in Snohomish County, but are still at their second-lowest level in the last 11 months.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

Trustee Deeds fell to their second-lowest level of the year, but still well above last year.

Lastly, here’s an update of the inventory charts, updated with the inventory data from the NWMLS.

More good news for buyers. Last year King County inventory rose 2.3% between April and May. This year it rose a whopping 15.6%. Similar story in Snohomish County: last year listings fell 3.1%, this year they were up 6.0%. The year-over-year drop in King County inventory was at its smallest level in 17 months.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

The post May Stats Preview: Increasing Inventory & Sales Edition appeared first on Seattle Bubble.

The post Poll: Outside of work, I drive to my destinations… appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-31 appeared first on Seattle Bubble.

First up, let’s take a look at the twenty-city month-over-month scorecard. Here’s the original post introducing this chart if you’d like more details. Click the image below for a super-wide version with the data back through 2000.

2013 saw the strongest March since 2005, with 18 of 20 cities experiencing month-over-month price gains. January and February weren’t quite as strong, but overall the first quarter was roughly on par with 2006 for month-over-month price increases.

Next up, the second derivative. For an introduction to this particular view, hit the original post from March.

The second derivative has taken a bit of a dip in the last year, but is still right around the 1% level. Anything above zero indicates that price increases are getting stronger each month, so this is still a strong signal. I’ve been expecting this to move back down toward zero during 2013. It looks like that will not happen until the second half of the year.

Finally, here’s a look at the number of cities that are experiencing second derivative gains or losses.

This one is interesting, because it seems to be showing signs of some initial price weakness. In 2011 and 2012 the number of cities experiencing second derivative gains increased throughout the first quarter, but this year it’s fallen from 20 in January to 17 in February to 15 in March. This could be an early sign of price stabilization to come in the next year. I’ll definitely be keeping my eye on this.

The post March 2013 Case-Shiller Potpourri appeared first on Seattle Bubble.

Today’s “Guess the Price” guest star is 4214 Midvale Ave N in Seattle’s Fremont neighborhood.

This round’s home hit the market yesterday with an asking price of $415,000. This is not the first time it has been for sale in the last few years—it was originally listed in September 2011, had a couple of price drops, and was delisted in December 2011. The market today is quite a bit different than it was in late 2011, so I suspect they’ll have better luck this time.

Your guesses ranged from $405,000 to $486,000. The average price guessed was $439,283, and the median guess was $435,000. Here’s the plot of all the guesses, with the final close price & date marked in green:

According to the NWMLS, the home sold on May 21 (just under six weeks after listing), with a closing price of $450,000. Oddly enough, nobody guessed exactly $450,000. However, two people were just $1,000 off—whynot guessed $451,000 and KC guessed $449,000—which makes this the first round to go to the tie-breaker of guessing closing date. Whynot guessed a closing date of 5/10, while KC hit the nail on the head, guessing the closing date exactly right at 5/21. Congratulations to KC!

Here’s the difference between the average guess and the final sale price our contests so far:

1. -2.2%
2. +5.5%
3. -10.5%
4. +10.0%
5. +2.8%
6. -2.4%

Not bad. Seattle Bubble guessers have been collectively within 5% of the sale price in half of our contests so far. That’s quite a bit better than Zillow’s stated accuracy for the Seattle area, where their “Zestimates” are within 5% of the sale price just 33% of the time, and not even within 20% of the sale price 17% of the time.

Stay tuned in the next few weeks, when we’ll kick off another round of Guess the Price.

The post Guess the Price Round 6: We Have a Winner! appeared first on Seattle Bubble.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

• Low Tier: < $258,908 (up 2.5%)
• Mid Tier: $258,908 – $415,069
• Hi Tier: > $415,069 (up 2.8%)

First up is the straight graph of the index from January 2000 through March 2013.

Here’s a zoom-in, showing just the last year:

All three tiers shot up in March, with the middle tier gaining the most. Between February and March, the low tier rose 2.0%, the middle tier was up 3.5%, and the high tier gained 2.5%.

Here’s a chart of the year-over-year change in the index from January 2003 through March 2013.

The low tier had a whopping 3.4-point boost in its year-over-year growth between February and March. Here’s where the tiers sit YOY as of March – Low: +13.4%, Med: +12.0%, Hi: +10.0%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 36.7% off peak for the low tier, 26.7% off peak for the middle tier, and 20.6% off peak for the high tier.

(Home Price Indices, Standard & Poor’s, 05.28.2013)

The post Case-Shiller Tiers: All Three Tiers Hit Double-Digit Gains appeared first on Seattle Bubble.

Up 3.0% February to March
Up 10.6% YOY.
Down 24.5% from the July 2007 peak

Last year prices rose 1.7% from February to March and year-over-year prices were down 1.3%.

There’s the big bump we were expecting to see. A three percent jump in a single month is pretty huge, especially for the Case-Shiller index, in which each month’s data point is a three-month average.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities, courtesy of Tableau Software (check and un-check the boxes on the right):

Seattle’s position for month-over-month changes shot up from #15 in February to #2 in March.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In March, eleven of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (one fewer than February):

• Phoenix at +22.5%
• San Francisco at +22.2%
• Las Vegas at +20.6%
• Atlanta, GA at +19.1%
• Detroit at +18.5%
• Los Angeles at +16.6%
• Portland at +12.8%
• Minneapolis at +12.5%
• San Diego at +12.1%
• Tampa at +11.8%
• Miami at +10.7%

Nine cities gained less than Seattle as of March: Denver, Chicago, Washington DC, Charlotte, Dallas, Boston, Cleveland, and New York.

Here’s the interactive chart of the raw HPI for all twenty cities through March.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the sixty-eight months since the price peak in Seattle prices have declined 24.5%.

Lastly, let’s see just how far back Seattle’s home prices have “rewound.” As of March: March 2005.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 05.28.2013)

The post Case-Shiller: Seattle Home Prices Shot Up in March appeared first on Seattle Bubble.

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The post Weekly Twitter Digest (Link Roundup) for 2013-05-24 appeared first on Seattle Bubble.

In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the a family earning the median household income could afford to buy at today’s mortgage rates if they put 20% down and spent 30% of their monthly income.

A slight increase in interest rates from 3.35% in December to 3.57% in March caused the “affordable” home price to decrease slightly. Rates dipped a bit in April to 3.45%, and the “affordable” home in King County now sits at $478,343, with a monthly payment of $1,707.

Here’s the alternate view on this data, where I flip the numbers around to calculate the household income required to make the median-priced home affordable at today’s mortgage rates, and compare that to actual median household incomes.

As of April, a household would need to earn $57,121 a year to be able to afford the median-priced $400,000 home in King County (up from $49,732 in January). Meanwhile, the actual median household income is around $68,000.

If interest rates were 6% (around the pre-bust level), the “affordable” home price would drop down to $356,054—11% below the current median price of $400,000, and the income necessary to buy a median-priced home would be $76,742—12% above the current median income. In other words, low rates are basically the only thing keeping prices high right now.

The post Low Rates Prop Up the Affordable Home Price appeared first on Seattle Bubble.

As a reminder, the affordability index is based on three factors: median single-family home price as reported by the NWMLS, 30-year monthly mortgage rates as reported by the Federal Reserve, and estimated median household income as reported by the Washington State Office of Financial Management.

The historic standard for affordable housing is that monthly costs do not exceed 30% of one’s income. Therefore, the formula for the affordability index is as follows:

For a more detailed examination of what the affordability index is and what it isn’t, I invite you to read this 2009 post. Or, to calculate your the affordability of your own specific income and home price scenario, check out my Affordability Calculator.

So how does affordability look as of April? Good, but definitely not great:

I’ve marked where affordability would be if interest rates were at a more sane level of 6%. An affordability index of 89.0 is slightly above where the index was in August 2005 when I first started Seattle Bubble (rates were 5.82% at the time). We’re definitely on an unsustainable trajectory right now, and the affordability index is only good thanks to still-crazy-low interest rates. Hopefully prices will level off before things get really out of hand.

Here’s a look at the index for Snohomish County and Pierce County since 2000:

Similar situation, but things haven’t taken quite as steep a plunge over the last few months.

Tomorrow I’ll post updated versions of my charts of the “affordable” home price and income required to afford the median-priced home.

The post Home Affordability Tanking in 2013 appeared first on Seattle Bubble.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

• low end: South County (areas 100-130 & 300-360)
• mid range: Seattle / North County (areas 140, 380-390, & 700-800)
• high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of April data:

• low end: $208,000—$328,975
• mid range: $318,000—$631,000
• high end: $465,000—$1,240,000

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

The median price in the low end regions inched up, while median in the high and mid-tier regions both saw another sizeable bump in April.

Next up, the percentage of each month’s closed sales that took place in each of the three regions. The dotted line is a four-month rolling average.

Month over month the low end regions accounted for a slightly larger share of sales. The high end lost share again while the mid-tier gained. As of April 2013, 34.7% of sales were in the low end regions, 32.7% in the mid range, and 32.6% in the high end. A year ago the low end regions had less of the share and the high end more: In April 2012 the low end made up 33.3% of the sales, the mid range was 33.6%, and the high end was 33.1%.

Here’s that information in a visual format:

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

As the low end gains share we’re heading toward a market that looks similar to what we experienced during the bubble, when the low end regions consistently made up 35% to 40% of the sales. So far things are not that extreme yet though.

The post Cheap South King Sales Gain More Share appeared first on Seattle Bubble.

As usual, you should check out Looney Listing for similar content throughout the month from across the USA.

The idea for this series stems from the ongoing forum thread Detrimental Listing Photos. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos submitted by readers and found by yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Nice Home in a great location & neighborhood”

Not that we’re going to show you any of that. All you get to see is this one blurry photo.

“Views of Mountain and Puget Sound possible if a second floor was added.”

I can’t believe they didn’t mention this awesome basement “bedroom” in the description.

“Enjoy sunny summer days on the deck.”

Enjoy dark winter days on the toilet.

“This would make a large owner occupant home with a business or a great investment.”

His and hers toilets? That’s an… interesting “feature.”

“Expansive and bright home”

Bonus “feature”: Kitchen doubles as the laundry room, apparently! Found by Peter.

“Great home for a first time home buyer or investment property. .!”

I just love it when the sellers can’t even be bothered to undertake the bare minimum amount of cleaning. Really? You couldn’t even clear the dining table?

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Interesting “Features” Edition appeared first on Seattle Bubble.

With two full years of home ownership/debtorship now behind me as of today, it’s time to share some more highlights, stats, and thoughts from year two.

First up, the financial highlights from the first two years:

• Initial Loan Amount: $179,950
• Current Loan Amount: $160,700
• Total Spent in Year One: $24,294
  • Principal Paid: $8,907
  • Interest Paid: $8,357
  • Insurance Paid: $596
  • Property Tax Paid: $3,022
  • Repairs: $308
  • Improvements: $636
  • Appliances: $2,468
• Total Spent in Year Two: $34,788
  • Principal Paid: $10,343
  • Interest Paid: $4,333
  • Insurance Paid: $638
  • Property Tax Paid: $2,638
  • Repairs: $8,820
  • Improvements: $8,016

Thanks to some major repair and improvement work, our monthly costs increased from $2,025 a month in year one to $2,899 in year two. If you back out the $10,343 we paid down on the mortgage, the monthly “down the drain” expense drops to $2,037.

You may notice that the balance between how much principal and interest was paid on our mortgage changed dramatically between year one and year two. That’s thanks to a refinance we did last June at the prompting of a number of readers in the comments on the the year one recap post. We refinanced from a 30-year fixed at 4.75% to a 15-year fixed at 3.125%. Our monthly PITI payment went from $1,253 to $1,478, but since we were paying $1,750 a month to put some extra toward principal every month, what we actually pay didn’t change.

Back to that repair and improvement work. Most of the repair expense was incurred replacing 38 feet of crumbling concrete sewer pipe with a new PVC sewer line. Thankfully, it was an expense we had planned for ahead of time since the sewer scope inspection we had done when we bought the house brought the impending failure to our attention before we even closed on the home.

On the improvements front, we spent about $2,000 to have a backflow prevention valve added when they replaced the sewer line (to prevent this from happening to us). We also had a heat pump installed along with some duct work and a new Nest thermostat, on which we’ve paid $5,500 so far (we financed a few thousand dollars of that work, which we’ll pay over the next year). Other improvements include some new exterior lighting and electronic locks.

As I’ve mentioned numerous times before, we plan to pay off this home and keep it indefinitely, so I still don’t care what it’s “worth” right now. That said, if you’re keeping score at home, Zillow’s current black-box computer-generated guess of my home’s value is $225,122 — about three percent more than what they said a year ago and almost exactly what we paid in 2011. On a related note, a home on our block was listed last month that is 35% smaller than ours and sits on a 20% smaller lot. The asking price was the same price we paid for our home, and it went pending within two days of hitting the market and closed today at $229,400 ($5k over asking). The current market is officially nuts.

I still receive instant Redfin listing alerts, and I still haven’t seen any homes come on the market in our price range that I wish I could have bought instead. At the rate that we’ve been paying down our 30-year mortgage, we’ll have it completely paid off by March 2024, a little less than 13 years after we purchased the home.

Is there anything else you would like to know about our second year? Let me know in the comments.

The post Knife-Catcher: Year Two Recap of Tim’s Home Purchase appeared first on Seattle Bubble.

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The post Weekly Twitter Digest (Link Roundup) for 2013-05-17 appeared first on Seattle Bubble.

In this chart I’ve grouped zip codes into their approximate NWMLS regions, which break South County into SE King and SW King and display Seattle and N King separately.

Southwest King County is still much more distressed than the other regions, but steep declines in the last two months have dropped its share of bank-owned sales from 28% in February to just 19% in April. Seattle and the Eastside have decreased as well, and now sit at just 2.4% and 3.3% respectively.

After shooting up from 1.4% in December to 11.9% in March, bank-owned sales fell to 9.0% of the total in North King County in April.

Overall, the effects of distressed inventory and sales are mostly behind us in the Seattle area, save for Southwest King County, which still seems to have a bit to work through this year.

The post Bank-Owned Sales Drop Below 20% in SW King County appeared first on Seattle Bubble.

As of April, the non-distressed median price for King County single family home sales sits at $444,000, up 6.5% from a year earlier and up 3.3% from March. Last year the month-over-month increase was about the same, up 3.0% March to April.

The bank-owned median sale price was at $200,100 in April, up 9.9% from a year earlier. The short sale median price came in at $255,100 in April, up 6.3% from 2012.

Here’s a look at the price per square foot broken down by distress status:

The median price per square foot of non-distressed homes was up just 4.2% from 2012. The bank-owned median price per square foot shot up a whopping 20.7%, while the short sale median price per square foot was up 7.4%.

It seems that most of the big price gains right now are in bank-owned homes, while the overall median is increasing more dramatically thanks to the overall shift away from the cheaper distressed properties.

The post Non-Distressed Median Price per SqFt Up 4.2% from 2012 appeared first on Seattle Bubble.

The low point of the last few years was 5.7% in November. I wouldn’t be surprised to see us drop below that level in the next few months.

Short sales inched up a bit in the month, rising from 9.2% in March to 9.9% in April. A year ago 11.6% of sales in the county were short sales.

Later this week we’ll take a look at how the median prices are moving for bank-owned homes, short sales, and non-distressed sales.

The post Bank-Owned Sales Inched Down Again in April appeared first on Seattle Bubble.

Homeownership is a good thing, for the individual and for society. Or so American governments, whether Republican or Democrat, have long believed. The benefits have been cited repeatedly in justifying the existence and expansion of the tax breaks given to home buyers.

But maybe it isn’t nearly as good as had been thought.

A new study by two economists concludes that rising levels of homeownership in a state “are a precursor to eventual sharp rises in unemployment in that state.” As more homes are owned, in other words, fewer people have jobs.

This week’s poll is inspired by the story, but since I only linked to it in the comments and I’m interested in seeing more broad discussion on the topic, I’m dedicating a regular post to the topic. Commenter “whatsmyname” weighed in, accusing the study authors of having ulterior motives:

English translation:

Cutting taxes for the rich without decreasing tax revenues will require increasing tax revenues from the not rich. We think they’re too stupid to notice when we say it openly. Oftentimes, we are right.

Here’s the problem with that claim, though. It has been well-documented by numerous sources that most of the benefit from the mortgage interest deduction is in fact collected by “the rich.” The “not rich” have been duped into thinking it’s a great deal for them when in reality they get very little from it. Here are a few links on that topic:

• Despite Benefit Disparities, Middle Class Supports Mortgage Deduction
• Only Rich People Benefit From The Home Interest Mortgage Deduction
• The Stark Geographic Inequality of the Home Mortgage Interest Deduction
• Who Really Benefits From Interest Deductions

So what do you think about the claim that increasing homeownership in a region leads to a later increase in unemployment? I think the authors make a compelling case, although I admit that I have not yet read the entire original study. I’m a fan of homeownership, but I also understand that it’s not right for everyone, and it is ill-suited to the increasingly mobile workforce of today’s economy.

[Update: Here's the link to the original paper from the Peterson Institute for International Economics: Does High Home-Ownership Impair the Labor Market?]

The post Rising Homeownership May Lead to Rising Unemployment appeared first on Seattle Bubble.

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April 2013
King: 746 NTS, up 69% YOY
Snohomish: 420 NTS, up 53% YOY
Pierce: 598 NTS, up 124% YOY

Same story as most of this year: still above last year’s levels but down month-over-month across the board.

Here’s your interactive Tableau dashboard updated with the latest foreclosure data:

The percentage of households in the chart above is determined using OFM population estimates and household sizes from the 2000 Census. King County came in at 1 NTS per 1,108 households, Snohomish County had 1 NTS per 655 households, and Pierce had 1 NTS for every 524 households (higher is better).

According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate for April of one foreclosure for every 878 housing units was 14th highest among the 50 states and the District of Columbia. Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using, and includes Notice of Default, Lis Pendens, Notice of Trustee Sale, and Real Estate Owned.

Hit the jump for a larger version of the chart that shows the percentage of households in each county receiving a foreclosure notice each month:

Note: The graphs above are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, hit this chart and drag the date slider to its full range. For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.

The post Foreclosures Still Shrinking Around Seattle appeared first on Seattle Bubble.

I attended a meeting last week sponsored by the National Association of Hispanic Real Estate professionals (NAHREP). This group has brought many high quality educational events to the greater Seattle area and I’m so impressed with NAHREP that I decided to join.  I have been following the success and growth of NACA, the Neighborhood Assistance Corporation of America, for several years. They are a non-profit association born out of disgust with predatory lending and the use of subprime loans by banks, lenders, and brokers during the housing bubble.  It’s founder, Bruce Marks, was featured on 60 Minutes, and many other national news programs.  NACA has two main goals:

1. To extend the reach of affordable lending and homeownership to every working person; and,
2. To combat discrimination and exploitation of working people by lenders and financial institutions.

NACA has offices in many states and is in the process of coming to the greater Seattle/Puget Sound. They have no physical office here but they are on the way.  NACA, a non-profit organization, also holds either a lender or mortgage broker license in the states in which they do business.

“Best Mortgage in America”

NACA is bringing their “Best Mortgage in America” to WA State. They hold a WA State Mortgage Broker license MB-4082 and currently have one licensed loan originator assigned to WA State with the intent to hire more, though their compensation plan is best served by loan originators who prefer salaries in line with working for a non-profit….because one of the many duties of NACA employees is to spend many hours thoroughly counseling their clients before the client becomes a homeowner, and requires long face-time office hours of 830-6PM.  So what is the “Best Mortgage in America?” Let’s find out.

• NACA acts as the mortgage broker; loans are funded by Bank of America or Citi
• Purchase money loan only (there is no refinance program)
• Less than perfect credit—Okay
• No credit score—Okay
• Affordability and Character-based lending
• Below market interest rates
• Interest rate buy downs at purchase are encouraged
• 30 or 15 year term
• 1-4 single family home, condo, coop
• Loan limits: Home or Condo for King, Pierce Kitsap. Snohomish county loan limit not yet available…SFR: $341,516, Duplex: $416,254, Triplex: $488,153, Fourplex: $583,514
• Rehab/Renovation Lending: 110% of after-repairs-completed value
• Owner occupied only
• Owner occupied for as long as the NACA loan is in existence
• No down payment
• No closing costs

NOTE: Actually there ARE closing costs.  The representative from NACA said, and I quote, “There is a fee, and there are non recurring costs but these are paid for by the lender.”

Before NACA goes wild with their “no closing costs” marketing program in WA State, I recommend their compliance department read our WA State Mortgage Broker Practices Act:
WA 208-660-440

(3) Is it a violation to advertise that third-party services are “free” when the licensee has paid for the services? Yes. Advertising using the term “free,” or any other similar term or phrase that implies there is no cost to the applicant is deceptive because you can recover the cost of the purportedly “free” item through the negotiation process. This is a violation of RCW 19.146.0201 (2), (7), and (11). See the Federal Trade Commission’s Guide Concerning Use of the Word “Free” and Similar Representations (16 C.F.R. §251.1(g) (2003))

Misc

• NACA fully underwrites the credit portion of the loan before the borrower is released to purchase a home from the Realtor and the pre-approval letter will contain the monthly payment including taxes, insurance, and homeowner’s assoc dues, if any, instead of just a sales price.
• One purchase every 5 years to discourage flipping.
• RE Condos: Requires 51 percent owner occupied in the complex w less than 10 percent of the units delinquent. Complex does not have to be FHA approved.
• Not just for first time homebuyers: Home buyer cannot own another piece of real property when receiving the NACA loan.  Note: the Homebuyer CAN own land or timeshare because we can’t “owner occupy” our land or timeshare.
• If purchasing a short sale, NACA buyers do not pay any of the seller’s fees including any third party short sale negotiator fee
• No income limits
• No time limit required to stay in the home
• ITIN (individual taxpayer ID number) okay
• Also avail: mixed use commercial-residential
• Buyer pays for home inspection
• Cannot use a NACA loan to purchase property at a foreclosure auction.
• NACA selects the title company
• Homebuyer’s loan closing will take place in the local NACA office.

Real Estate Brokers

Real estate brokers go thru a NACA training program. Since NACA does a lot of homebuyer outreach education, if a buyer is referred from NACA to the real estate broker then the real estate broker will pay a referral fee to NACA of 33%.  They do not yet have a real estate license in WA State but will soon and mentioned “buyer broker representation” as part of their goal for WA State.  Their real estate broker program is not up and running yet but the NACA rep says plans are in place to bring the program into the Seattle/Tacoma area soon.

REOs: 14-Day First Look with B of A

NACA-approved home buyers have an exclusive option to purchase REOs from Bank of America before they are listed in the MLS. Not all REOs, and not all of B of A’s REOs…just some.  This “first look” list goes from Bank of America to NACA.  NACA sends the REO list to Realtors affiliated with NACA. B of A has three BPOs completed to determine the price.  Selling broker makes sure NACA-approved buyer can qualify.  If yes, then the NACA-approved buyer can view the home before it is listed on the MLS.  If a NACA-approved buyer submits a full list price offer within the 14 day “first look” window, then the offer must be accepted by B of A, even if other offers are higher.  IN ADDITION: If NACA-approved buyer makes a full price offer within the first 14 days…are you sitting down? Get this—B of A will give 10 points to the buyer to buy down the interest rate.  Typically 1 point = .25 of a rate buydown so this means the NACA-approved buyer could end up with a 2.5 percentage point interest rate buydown. The opportunistic side of my brain started thinking about how I could buy a home this way but the skeptical side of my cold black heart tells me that maybe the First Look homes are going to be mostly dog house former meth labs in Granite Falls.

NACA Homebuyers Are Heavily Counseled 

All bets are against the NACA borrower.  Zero down, less-than-perfect credit sounds like your typical FHA borrower using gift funds for the down payment. And currently FHA’s default rate is 15%. Zero-down-less-than-perfect-credit also sounds like a subprime borrower.  At the peak of the meltdown/housing reset, subprime loans defaults went as high as 40%.

So why should NACA’s default rate be any less?  Here’s why: The NACA borrower goes through heavy pre-purchase counseling and has access to after-purchase default support services such as help with forbearance/repayment plans and loan modification support. In addition, if you have a NACA loan and you are in financial distress, you can receive 3 monthly payments paid by NACA to bring your loan out of default.

So what’s the catch?

NACA homebuyers must join NACA at a cost of $20 per month while they are attending pre-homebuyer counseling classes and then the cost is $50 per month for 5 years ($3,000.) In addition, NACA homeowners must agree to participate in 5 NACA activities each calendar year. Activities include community volunteer work, hosting a NACA meeting in your neighborhood, organizing a homebuyer workshop, participating in advocacy campaigns against predatory lenders, and so forth.

Reasons For

Clearly this is a great deal for first time homebuyers who want a mortgage with a very low interest rate and don’t mind going through the extensive homebuyer counseling, don’t mind paying $50/month for 5 years, and don’t mind carving out time to participate in 5 volunteer activities each year.  Some consumers were burned by predatory lenders during the real estate bubble and burned again with the 2008 recession. Maybe they are now renters…it’s been 2 years since their financial distress event and they are considering buying once again.  This sounds like a good program for people with a previous foreclosure of bankruptcy due to the extensive pre-purchase counseling they will get at NACA.. Anyone against predatory lending should welcome NACA to town.

Reasons Against

Clearly this is not a good loan program for people who don’t want to commit to owner occupancy for the life of the loan, or do not want to become active NACA members, are financially uber smart and would consider the homebuyer counseling classes beneath them. Budget? Savings? They’ve been doing this successfully for years and don’t need somebody to hold their hand. On the other side of the financial spectrum, not all buyers are going to fit into the NACA box including those with higher debt-to-income ratios.  Yeah, we are free-throwing those high DTI loans into the FHA program for as long as that will last. NACA DTI is a more manageable 31/40.

Sustainable homeownership should be our goal in mortgage lending. This is NACA’s main priority and I welcome NACA to Washington State.

By the way, NACA’s loan default rate is less than 1 percent.

The post NACA: The Largest Housing Services Organization in America Comes to Washington State appeared first on Seattle Bubble.

The following is taken directly from their follow-up email.

Here are my notes from choosing a property management firm.

Notes from before conducting interviews:

• Windermere Property Management
  • Terrible reviews online
  • Bad review by Seattle Bubble reader
• Acer NW
  • Mentioned by Seattle Bubble reader as very bad
• Apple Property Management
  • Recommended by Seattle Bubble reader
  • Found some concerning reviews online.
• Larissa at North Pacific Properties
  • Recommended by Seattle Bubble reader
  • No response to my email inquiry
• Dave Poletti & Associates
  • Found by internet search
  • Discounted fee structure (8% vs industry standard 10%)
  • Extra liability insurance requirements
  • Good reviews online
  • Charges for advertising during vacancies, which strikes me as a very bad incentive structure. (It makes vacancies less painful for them)
  • Not invited for in-person interview due to the above concern
• Real Property Associates
  • Found by searching for rental properties to see who manages them
  • Impressively large portfolio on website
  • Excellent reviews from property owners
  • Terrible reviews from tenants
  • Somewhat disorganized in early emails, but very friendly and persistent
  • Invited for in-person interview
• Sterling Johnston Associates
  • Recommended by personal friend
  • Mixed reviews from property owners
  • Invited for in-person interview on account of friend’s recommendation
• Brink Property Management
  • Found by searching for rental properties to see who manages them
  • Excellent reviews from property owners
  • Mixed reviews from tenants
  • Higher fees (extra 3% of year’s rent collected at lease renewals), but this gives them an incentive to keep tenants in place
  • Invited for in-person interview

Notes from in-person interviews of Real Property Associates, Sterling Johnston Associates, and Brink Property Management:

• Representatives who came to our house:
  • RPA: Mike and Kathy
  • SJA: Millie
  • Brink: Marcia
  • All representatives were good, but Mike and Kathy made the best overall impression
• Rent estimates for our house:
  • RPA: $1,495, and drop from there as needed
  • SJA: $1,350 to $1,450
  • Brink: $1,350 to $1,400, maybe start at $1,450
• Screening of tenants:
  • All utilize 3rd party services to perform background checks, rental histories, etc.
  • RPA: “70% intuition”, some allowances for black marks on history.
  • SJA: Some allowances for black marks
  • Brink: Very strict. Follows recommendation of 3rd party with no allowances
• Walkthoughs:
  • RPA: Only one walkthrough(!) at 12 months after new tenant moves in. More by request.
  • SJA: Every six months
  • Brink: Every six months. More than that costs $50 each.
• Number of properties managed:
  • RPA: ~1,000
  • SJA: ~500
  • Brink: ~800
• Additional notes:
  • RPA: Possibly the least picky about tenants
  • SJA: “We don’t nickel-and-dime you with fees.”
  • Brink: Lots of additional fees noted. Of high concern was the 10% fee on repairs, which is NOT a good incentive to keep repair costs down
  • All had similar requirements to keep ~$300 on hand for minor repairs
  • All took half of first month’s rent
  • All had similar policies in regards to cleaning deposits, pet deposits, security deposits, etc, with some minor variations

We ended up choosing Real Property Associates. We eliminated Brink based on our concerns with the fee structure. Real Property Associates and Sterling Johnston Associates both made a very good impression in person, and that made the choice between them difficult. Finally, we did another survey of the online reviews and chose Real Property Associates based on their excellent reviews from property owners.

Note that our house has been zoned for 4-5 story apartments with shops on the bottom. We are within spitting distance of the Mountlake Terrace park-and-ride, so we are highly motivated to hold onto the land for when a developer comes along someday. Obviously we still want to keep the house in good shape, but the next owner will probably bulldoze it.

The post Follow-Up: Seattle Area Property Management Companies appeared first on Seattle Bubble.

To kick things off, here’s an excerpt from the NWMLS press release:

Multiple offers are “the new normal” for housing market around Puget Sound

“Multiple offers have become the new normal,” remarked MLS director Diedre Haines, the Snohomish County regional managing broker at Coldwell Banker Bain. “We have literally gone off the charts in absorption,” she stated, adding the dip in pending sales in that county “is all due to lack of inventory.”
…
Prices will continue to rise as current market conditions are sustained, predicts J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Among the conditions he mentioned are historically low interest rates, pent up buyer demand, and a shortage of available inventory.
…
Whether the market becomes more balanced may depend on listings. Northwest MLS figures show every county in its service area had year-over-year gains in new listings during April. “Let’s hope this is the start of a positive trend for inventory,” commented Mike Grady, the president and COO of Coldwell Banker Bain, but then added, “Considering the overall market landscape, it’s likely there won’t be enough sellers to fill buyer demand, at least for the short term.”

For once I’m on the same page as at least one of the real estate agents quoted in the NWMLS release (Mr. Grady). Of course, I’m hoping for more inventory so the market becomes more balanced, while they’re most likely motivated primarily by the additional commission checks that come with additional listings, but I’ll take what I can get.

Read on for my take on this month’s local news reports.

Sanjay Bhatt, Seattle Times: County home price back to $400,000

The double-digit percentage gain in home prices is triple the inflation rate and isn’t sustainable in the long run, [Glenn] Crellin said.

“We need inventory for the market to really stabilize,” he said.
…
Eastside broker Mike Chaffee said he represents a buyer who wants a house that will ensure her son attends popular Newport High School in the Bellevue School District. His buyer is well qualified, with a 30 percent down payment.

They’ve been looking for a year.

At homes in the neighborhood, Chaffee has sprinkled fliers with unsolicited offers for “top market value,” vowing to close a deal in 30 days and save the seller money on closing costs. Chaffee said it’s an example of how buyers are getting creative.

“I’m doing my best to get this buyer a house,” he said. “If I can do it without 10 other people putting in an offer, it relieves a lot of stress on the situation.”

Two people responded to the flier: One wanted $50,000 over what the house was worth, Chaffee said, while the other asked for $100,000 over the house’s market value.

His buyer didn’t bite.

Another month of great reporting in the Seattle Times. Kudos to Sanjay Bhatt for doing a great job filling the void left by Eric Pryne’s retirement.

Aubrey Cohen, Seattle P-I: King County house price back up to $400,000

“I’d been hoping to see an increase in listing activity, and I really can’t figure out what everybody’s waiting for,” Crellin said. “It’s been tight now for several months, and that doesn’t bode well for stable prices.”

It looks to me like inventory did begin to show signs of life in April. We’ll know in a few months whether we’re finally heading toward a more normal market, but I was encouraged by April’s inventory.

Kurt Batdorf, Everett Herald: Supply of homes for sale tightens in county

It’s 2007 all over again for the county real estate market as antsy buyers rush to buy what’s available in a tight supply of homes for sale.
…
Several factors are contributing to a “recipe for a frenzied May real estate market,” said John Deely, another member of the Northwest MLS board of directors and the principal managing broker at Coldwell Banker Bain in Seattle.

“The market pace has not subsided from previous months with low inventory and low interest rates being the primary drivers,” he said.

Wait, that does not make sense. Low inventory is driving the “frenzied market pace”? Um, no. If anything, low inventory is holding back sales.

Rolf Boone, Tacoma News Tribune: Pierce housing sales, prices continue up

The Pierce County housing market enjoyed another good month, with both sales and prices rising again and extending a streak that started last October, according to Northwest Multiple Listing Service data released Monday.
…
Another characteristic of the recent housing market has been fewer homes to choose from, and that continued into April as well.

Here we go again with the qualitative language, describing the market as “good” when it is clearly only good for sellers and is in fact quite frustrating for buyers. Boo.

Rolf Boone, The Olympian: Thurston home sales, prices rise in April

Thurston home sales and median prices rose in April, the fourth consecutive month of an improved housing market, according to Northwest Multiple Listing Service data released Monday.

Once again, the full story from The Olympian is only in the print edition, so all we get online is a brief rehash of the press release.

(Sanjay Bhatt, Seattle Times, 05.07.2013)
(Aubrey Cohen, Seattle P-I, 05.06.2013)
(Kurt Batdorf, Everett Herald, 05.07.2013)
(Rolf Boone, Tacoma News Tribune, 05.07.2013)
(Rolf Boone, The Olympian, 05.06.2013)

The post Reporting Roundup: The New Normal Edition appeared first on Seattle Bubble.

“Multiple offers have become the new normal,” remarked MLS director Diedre Haines, the Snohomish County regional managing broker at Coldwell Banker Bain. “We have literally gone off the charts in absorption,” she stated, adding the dip in pending sales in that county “is all due to lack of inventory.”

Haines also reported low appraisals remain a problem as appraisers struggle to keep up with the fast paced activity and increasing values.

I love the twisted thinking that “low appraisals” are “a problem.” Isn’t the whole point of an appraisal to protect the bank from overlending on a property? Perhaps the “problem” isn’t low appraisals but over-zealous buyers willing to pay too much.

All righty, on with our usual monthly stats.

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):

April 2013	Number	MOM	YOY	Buyers	Sellers
Active Listings	3,221	+8.4%	-34.6%
Closed Sales	2,096	+14.8%	+18.5%
SAAS (?)	1.37	+0.5%	-4.1%
Pending Sales	3,221	+4.0%	+7.2%
Months of Supply	1.06	+4.2%	-39.0%
Median Price*	$400,000	+2.0%	+11.1%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

As forecasted last week in our stats preview, inventory actually gained a bit from March to April. The 8.4% month-over-month increase is the largest we’ve seen since March 2010. Perhaps the inventory crunch is finally starting to ease, but we can’t really jump to any conclusions from a single month of data.

Here’s your closed sales yearly comparison chart:

This was also one of the largest month-over-month increases we’ve seen in closed sales, so it’s a pleasant surprise that inventory was able to keep up.

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

This chart puts last month’s inventory increase into perspective. We’ve got a long ways to go to get back to anything resembling a normal market.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade.

The direction of the listings curve is encouraging, but the sales curve took another turn upward, indicating increasing competition among buyers.

Here’s the median home price YOY change graph:

Big drop in the year-over-year price gains, falling from 19% last month to 11% this month.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

April 2013: $400,000
March 2006: $405,000

I haven’t seen any articles about the numbers yet at the Times and P-I, but I’ll update this post when they’re posted.

[Update: Here they are.]
Seattle Times: Home prices reach $400K amid tight inventory
Seattle P-I: King County house price back up to $400,000

Check back tomorrow for the full reporting roundup.

The post NWMLS: Inventory Inched Up in April appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only one of last month’s homes has gone pending. The third-cheapest home from last month is still on the market but has been pushed off the list.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 15
Average number of beds: 2.3
Average number of baths: 1.2
Average square footage: 1,282
Average days on market: 120

Couple more homes on the market than last month, and a huge spike in days on market. Apparently most of what’s left on the market after the big drop in inventory over the last few months is the stale homes that buyers just aren’t interested in even at rock-bottom prices.

Here are a couple of charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: May 2013 Edition appeared first on Seattle Bubble.

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The post Weekly Twitter Digest (Link Roundup) for 2013-05-03 appeared first on Seattle Bubble.

First up, here’s the summary snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

Summary: Foreclosures fell again, sales rose some more, and inventory looks like it actually made a decent month-to-month gain. Hit the jump for the full suite of our usual monthly charts.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

Sales in King County rose 14% from March to April, and were up 25% year-over-year, which is a slightly larger year-over-year gain than in March.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Deeds in Snohomish rose 17% month-over-month and 31% from April 2012.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

Same story we’ve seen all year: Both counties are well above their respective 2012 levels, but both also experienced a month-over-month drop. It’s the third straight month of declines in King County. Unless foreclosures experience a sudden spike, we’ll probably be seeing year-over-year drops by July, possibly even June.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

Since Trustee Deeds are on a delayed cycle from notices, they rose month-over-month, to a 19-month high.

Lastly, here’s an update of the inventory charts, updated with the inventory data from the NWMLS.

Finally some good news for buyers. Last year King County inventory fell 1.0% between March and April. This year it rose 6.6%. Similar story in Snohomish County: last year listings fell 3.1%, this year they were up 5.1%. Here’s hoping it’s the start of a positive trend for inventory.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

The post April Stats Preview: Finally Some Inventory Edition appeared first on Seattle Bubble.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

• Low Tier: < $252,611 (down 0.6%)
• Mid Tier: $252,611 – $403,620
• Hi Tier: > $403,620 (down 0.6%)

First up is the straight graph of the index from January 2000 through February 2013.

Here’s a zoom-in, showing just the last year:

The middle tier took a bit of a hit in February, the high tier was basically flat, and the low tier increased. Between January and February, the low tier rose 0.5%, the middle tier was down 0.7%, and the high tier lost 0.1%.

Here’s a chart of the year-over-year change in the index from January 2003 through February 2013.

The biggest gainer in year-over-year growth was the high tier this month, which had a 1.5-point boost. Here’s where the tiers sit YOY as of February – Low: +10.0%, Med: +10.5%, Hi: +9.0%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 37.9% off peak for the low tier, 29.1% off peak for the middle tier, and 22.5% off peak for the high tier.

(Home Price Indices, Standard & Poor’s, 04.30.2013)

The post Case-Shiller Tiers: Low Tier Gains, Middle Tier Loses appeared first on Seattle Bubble.

Down 0.2% January to February
Up 9.3% YOY.
Down 26.7% from the July 2007 peak

Last year prices fell 0.8% from January to February and year-over-year prices were down 2.9%.

I was actually expecting a bit of a bump up from January to February, so it’s a little surprising to see a slight drop. I’m 99% certain we’ll see an increase next month though.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities, courtesy of Tableau Software (check and un-check the boxes on the right):

Seattle’s position for month-over-month changes dropped slightly from #13 in January to #15 in February.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In February, twelve of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (one more than January):

• Phoenix at +23.0%
• San Francisco at +18.9%
• Las Vegas at +17.6%
• Atlanta, GA at +16.5%
• Detroit at +15.2%
• Los Angeles at +14.1%
• Minneapolis at +12.0%
• Miami at +10.4%
• San Diego at +10.2%
• Tampa at +10.0%
• Denver at +9.9%
• Portland at +9.4%

Eight cities gained less than Seattle as of February: Dallas, Washington DC, Charlotte, Cleveland, Boston, Chicago, and New York.

Here’s the interactive chart of the raw HPI for all twenty cities through February.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the sixty-seven months since the price peak in Seattle prices have declined 26.7%.

Lastly, let’s see just how far back Seattle’s home prices have “rewound.” As of February: January 2005.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 04.30.2013)

The post Case-Shiller: February Home Prices Dipped Slightly appeared first on Seattle Bubble.

Don’t forget to check out Looney Listingthroughout the month for similar amusing listing photos from all around the country.

The idea for this series stems from the ongoing forum thread Detrimental Listing Photos, which is where you should post your nominations for next month’s Real Actual Listing Photos post.

No particular theme this month. Just enjoy a collection of odd listing photos submitted by readers and found by yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Property is located just far enough away from 145th and Lake City Way to make it a desirable project.”

And also just far enough away to make the listing agent run out of time to actually get out of his car to take any photos of the home. Spotted by Aaron W.

“Legal duplex updated w/ new kitchens, plumbing, wiring.”

Neat! I’ve always wanted a glowing, radioactive dining room.

“Location ideal for: home care, students attending nearby schools, first time buyers or investors.”

It’s hard to tell on the small photo, but there appears to be a power cord running from beneath the bed to under the mattress. Um. What. Also: nice hat.

“Classical early 1900 Farm House with large level lot in the town of Silvana famous for “Silvana Meats” just up the road!”

The shot above is what the home looks like after you’ve eaten some famous “Silvana Meats” that have been sitting out way too long.

“Don’t miss this diamond in the rough.”

Guess who couldn’t figure out how to turn off the time/date stamp on their camera? No problem, just fix it in MS Paint!

“…custom tile bathroom and Playhouse’s signature modern kitchen tile backsplash & custom cabinetry.”

Okay this one is a dupe from Looney Listing, but it was too good not to share here. Can’t say I’ve ever seen a dinner table staged with rubber chickens before.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Driveby, Radioactive, Timestamp appeared first on Seattle Bubble.

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The post Weekly Twitter Digest (Link Roundup) for 2013-04-26 appeared first on Seattle Bubble.

Shame on you, Tim, for publishing misleading data. You cannot say that unemployment has dropped nationwide without also commenting on the record high not in the labor force number. I trust you are not turning into a NAR cheerleader at this stage. Remember, if there were zero jobs, and folks stopped looking, the unemployment rate would be zero, and yet no one would be working. Tsk, tsk…

The jobs posts, like most of the content on this site, are intended to be primarily about what’s going on in the local area, and as the first chart showed, the number of jobs in the Seattle area has been growing since late 2010. That’s hardly a “zero jobs” scenario.

That said, I love a good data request, so here’s a chart of national labor force participation alongside the unemployment rate:

Indeed, in 2006-2007 when unemployment was at its lowest (~4.5%) before the housing bubble popped, the national labor force participation rate was at 66.3%. As of March it is three points lower at 63.3%, while unemployment stands at 7.6%.

Here in the Seattle area the picture is somewhat different, though:

In early 2007 when Seattle’s unemployment was as low as 3.6%, the local labor force participation rate was at 69.5%. As of March, unemployment is at 5.5%—nearly two points higher than it was pre-bust—but the labor force participation rate is virtually the same, at 69.0%.

Even when you include the labor force participation rate in the local picture, the jobs situation is clearly improving. That’s not to say that the jobs that are being added pay well compared to those that were lost during the bust, but there’s no denying that the Seattle area is adding jobs and unemployment is falling fast.

The post Seattle Labor Participation Outperforming National Rate appeared first on Seattle Bubble.