King County (Seattle) July Figures
In the prior blogs I described various indicators. In this blog I will look at some real current numbers, starting with King County / Seattle Washington.
If you plot our Active Listings you will see a chart like the one below.
One of the first problem is that Active Listings is seasonal (X11) and can have a lot of noise. If you compare the current numbers against their values a year ago (i.e. as a ratio), then a lot of noise disappears and you can quickly see a nice "sink". There are two blips... one that is a peak -- and one year, it's echo, a trough - ignoring this, we end up with a very smooth curve.
If you look at the other counties around Seattle, you see a similar pattern but with the depth being much less and the current values going higher. In short, the distant suburbs around Seattle have far more house-inventory building than Seattle --- perhaps people trying to sell and move closer because of rising gasoline costs...
It is interesting to note that most of the counties have the same data oddity that King County has on the same date - it may have been some form of reporting error in the MLS system or some other event.
Let us add trend lines to the above charts to show how clean the pattern is. The King County follows the numbers well -- and the two hiccups balanced each other out. What is interesting is that the last three values are further away from the line then at any time (except for the hiccups). It appears that there has been an extra influence in the market to get more listings -- Interest Rates? Gas Prices?For the other countrie, we see the bottom occurring much earlier. It almost appears that the folks in King Country were able to hold on longer to the good market, and are not surrendering to the regional reality.
So, what can we conclude --- properties are going to get harder and harder to sell, i.e. they will stay on the market a longer and longer period. This brings us to another Indicator: Days on Market, this is also a long lag indicator because it is not obtained until the house closes. That is, if the Days on Market is 4 months, it reflects the situation four months ago, not now. A new listing now may have Days on Market being 9 month.
Additionally, Days on Market have another problem, it is below the expected days to sell -- because the properties that may be listed for X years are ignored... in short, it's a long lag indicator.