07-16-2010 04:05 PM
This week we published our Redfin Insider Report on June 2010, Prices Up, Fundamentals Down in Seattle:
Prices for single-family homes increased by 1.7% compared to May, but the fundamentals deteriorated: inventory increased 5.5% and the number of houses sold decreased by 2.0%. Since many Seattle home-buyers raced to close by June for a federal tax credit, we expect July numbers to be worse once the month is done.
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07-18-2010 06:00 AM
07-18-2010 09:40 AM
This report has put all the data on the size of the market up front and put the price info way down, so you have to scroll, but look what is says!!! Prices are up, year over year, in almost all parts of Seattle. Only 3 neighborhoods out of 14 had lower median $/sqft prices than the same month in 2009 - Lake City, Rainier, and West Seattle. Those were down 3.1%, 1.5%, and 2.8%, respectively. The other 11 neighborhoods had increases anywhere from 4.1% to 32%. Does this mean individual houses are up, not necessarily. These figures can be skewed by just a few sales when volumes are as low as they have been. But it does mean that we are not seeing a substantial and continuing decline in prices that so many on this forum keep talking about.
One month doesn't make a trend, but the rate at which prices have been declining yoy in Case Shiller data has been slowing for many months and the trajectory would put us into appreciation YOY this quarter. Jobs are not being created fast enough to dramatically decrease unemployment, but jobs are, on net, being created - both nationwide and in Seattle (http://www.bizjournals.com/seattle/stories/2010/07
Yes there are foreclosures and yes, inventory is up, but banks seem to be putting more effort into getting a good price for their REO and the rise in inventory isn't clearly being driven by a need to sell, meaning that many of the homes on the market will not be dropping prices just to sell.
This report says (IMHO) that it will remain a buyer's market, but that prices are pretty much bottomed and flat. Some neighborhoods are already slowly rising.
07-18-2010 03:49 PM
I am sorry to say but the unemployment rate shows that the economy keeps worsening. Private sector business is facing new taxes in 2011.There will be little job creation there. The public sector is in a job-tightening cycle. U.S.debt is mounting. I am not sure where there is a possibility of job creation? Employment numbers and GDP will have to show improvement to support any real estate recovery? If indeed housing does not decline in 2011 then at best it will remain flat for the forseeable future.
07-18-2010 05:43 PM
NESeaSeler, that seems like a very optimistic analysis of the report. Considering that month is when people rushing to qualify for the tax credit are closing I would see that as a lagging indicator and other fundamental indicators to be leading indicators. I think we still need a few months to see results of the credit expiration. With inventory increasing and unemployment not dropping significantly it seems irresponsible to call a bottom based only on tax credit rush closures. July is supposed to be the highest sales month, right? Yet Redfin is predicting a significant decrease.
07-18-2010 09:16 PM - edited 07-18-2010 09:20 PM
GayleE: Please check the reality before declaring that "the unemployment rate shows that the economy keeps worsening." The opposite is the case: The unemployment rate in US has improved for the last 3 months, in WA state for the last 4 months, and in the Seattle area it has improved every month since January. http://o.seattletimes.nwsource.com/html/businesste
The private sector is adding jobs. Not quickly enough for anyone's taste, but adding jobs nonetheless. No one, not even the best of either parties economists have a good explaination for why unemployment grew so far beyond the 8% or so that all the best models predicted for this past event. But the economy has been growing again for several quarters and though the fed's best guess is that it will be slower than they thought 6 months ago, it will continue to grow.
Under these conditions I would love to see a coherant economic theory that would predict a continuing decline in real estate prices for the foreseeable future as so many are proposing.
07-18-2010 10:55 PM
Quote from NESeaSeller
" But the economy has been growing again for several quarters and though the feds best guess is that it will be slower than they thought 6 months ago, it will continue to grow."
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States –was reported to have increased at an annual rate of 3.2 percent in the first quarter of 2010.This has been revised down to anemic 2.7%. There is no help from Olympia, our state and local government spending is down-they’re out of money. The private sector is facing increasing pressures in 2011 from an increase in federal taxes. Credit has also been a problem for small business since the real estate bubble burst in 2008. But to your point,we will have more economic data out this week ,which should give us a better idea of where housing is going. I like your economic forecast better than mine but I am afraid mine refects the reality of how bleak conditions are in this county.
07-18-2010 11:01 PM - edited 07-18-2010 11:02 PM
Exactly, real GDP has been revised down. By the way did you know that 25% of consumers now have a FICO score under 600? Couple this with the fact many of the qualified and/or motivated buyers already purchased during the tax creditand I am glad I do not have to sell a house.
07-19-2010 09:53 AM
Ecomoy is improving,
Cocoa to be 33 year high?
Eurozone banks rescue twice?
BTW Boeing won some contracts but Revenue isn't up... why nobody ever annouce cancelled orders?
customer spending is down yet saving isn't there. What are people really doing? busy paying off credict card debts, housing, car payments, college tuition,....? It sure seem endless.