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Weekly Scorecard 7-27-09

The trends continue. For this week the number of listings was 283. This is at the low end of the range which cycles between 280 and 300. Last week was the low at 279 so a bit of a bounce.

The sales continue to march on with 5 closed sales this week. Again at the low end of the range. However where the numbers get interesting is the per sq. ft. average was $243 per sq. ft. This is a signifigant increase over the prevailing $220 per sq. ft. average where the number had been stuck at for almost three months. Again this could be due to the fact that it appears there was no bank owned homes or short sales in this batch of sales. The depletion of the listed bank owned inventory seems to be playing out in pricing. The average sale price was $518,000 and the average sq. ft. was 2,190. It appears the buyers are digging in their heels going for smaller homes in order to keep the price down.

The pending sales were at 8 for this week but in those numbers was one bank owned and one short sale. The bank owned and short sale homes drew the average per sq. ft. price down to $211. With the bank owned and short sale home going pending for $175 per sq. ft. and $196 per sq. ft. respectively. The average listed sale price was $570,743. In the last three months we have seen the average listed pending price and sold price move up almost a $100,000 as the low end inventory looks to be getting cleaned out and more expensive homes are selling now that Jumbo financing is available.

It looks like declining volumes and a slow move up in pricing if the distressed inventory remains low.

Tags: averg, pendings, Scorecard, sold, Weekly
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Distressed Inventory Report

I am starting a new weekly tracking report similar to the “Weekly Scorecard” which appears on Mondays. The “Distressed Inventory” report takes the number of foreclosures from zipcodes 98005, 98007, and 98008 and inventories the number of foreclosed homes and the number of homes which have had the notice of Trustee Sale recorded. These zip codes roughly correspond to MLS Area 530. I will do this report on Saturday as all the notices are filed in King County at the Auditor’s office on friday. The reason for doing this report is that the amount of distressed inventory is what drives pricing ultimately. Sellers who are forced to sell basically have to keep lowering prices to find a sale in tight market conditions. How these numbers play out is an indication of future market direction. Recently we have see in East Bellevue the amount of distrssed inventroy be significantly reduced the last few months. However as we discussed earlier, lenders tend to meter out this inventory since they cannot take the negative impacts on earnings all at once. The lenders will look at their quarterly numbers and then decided how much to write off against those numbers. These numbers are only indended for directional purposes and could be refined a lot more such as average price of the foreclosed homes and days since foreclosure but I have found like Quantum Mechanics the more information about the state of the object the less information about the overall direction and that is what we are looking for the overall direction. We will keep these numbers weekly and start doing graphs to give an idea of overall trends.

July 26-09
98005
New Foreclosure 0
Foreclosed 7
New Trustee Sale Notice 2
Trustee Sale Notice 28

98007
New Foreclosure 0
Foreclosed 1
New Trustee Sale Notice 0
Trustee Sale Notice 15

98005
New Foreclosure 0
Foreclosed 10
New Trustee Sale Notice 1
Trustee Sale Notice 26

Total New Foreclosure 0
Total Foreclosed 18
Total New Trustee Sale 3
Total Trustee Sale Notice 69

Ratio of foreclosed/trustee sale 0.26

MLS 530 Bank Owned 2
MLS 530 Short Sale 21

You will see a section was added at the bottom for the MLS 530 listed bank and short sale inventory to give an idea of the present inventory listed versus the actual inventory on King County Records. The point here is to give an idea of potential future inventory to be listed. A few weeks data will be necessary to get an idea of how all this tracks. The ratio of foreclosed/trustee sale notice gives an idea of the homes yet to go through foreclosure versus those foreclosed. The number above shows about four times as many homes are posted for a Trustee’s Sale than are actually foreclosed. As an example if the number was 1.00 that would mean a point where the homes heading to foreclosure would be the same as those foreclosed. This would indicate a decline in the distressed inventory. Keep in mind some of the homes showing their notice of Trustee’s Sale may be sold as short sale and sold prior to the Trustee’s Sale. This ratio can be a key indicator of market trends.

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Weekly Score Card 7-20-09

The listings for MLS Area 530 have now dropped to 279. That continues the downward trend for overall inventory. There were14 homes that came through as sold. The news here is that the average per sq. ft. sales price was $236 per sq. ft. this is the first significant move above the $220 per sq. ft. number which is where the market seemed stuck at. Also on the volume side at 14 that is a significant number and most impressive is that it appears there was only one bank owned home and one short sale. A move up in volume and per sq. ft. sales price indicated the reduction of distrssed inventory appears to be translating into higher over all pricing. The average sales price was $555,814 for this week’s sold homes and appears to be holding firmly above $500,000.

The pendings were very interesting. The volume was very high at 12 homes going pending. However the per sq. ft. average was $209. This is the first time in a long time the pending per sq. ft. sales price was lower than for the sold homes. In addition the average home pending list price was $525,982. This again is the first time the pending home sale price was lower than the sold home average. However even more interesting aspect of this weeks batch of pending sales is there appears to be no bank owned homes or short sales. This is a first. A dip down on pricing with no distressed inventory is counter intuitive. It appears the sellers must have been very sensitive to overall market weakness.

On the surface it appears the distressed inventory is getting cleared out and the per sq. ft. average home sale price is stabilizing over $500,000. The inventory under $400,000 is getting pretty picked over. My personal opinion is that the volumes will fall somewhat and that prices will level out but should not slip unless there is a significant fundamental second shoe to drop in the economy overall.

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Annaly Salvos

Well I have been busy and have not had the time I wish to put in some new blog post but I wanted to let everyone know about a new link on the website. It is titled “Annaly Salvos”. This Blog is sponsored by a company known as Annaly Capital (NLY). In my personal opinion these are some of the sharpest guys on Wall Street and some of the most ethical. Believe it or not they are a mortgage REIT (Real Estate Investemetn Trust). Most of these have gone bust in the mortgage meltdown but Annaly Capital was the exception to the rule and in their quarterly reporting they pointed out the problems developing in the mortgage industry. They stayed away from the toxic assets and their REIT has paid excellent dividends even in through very trying market conditions. As a matter of fact now they are doing great with a portolio of excellent mortgages and a very cheap cost of capital to buy those mortgages. Now I am not here to promote the company but those of you wanting more insite into the future and the capital markets you will find this blog very interesting.

As some of you know I am of the opinion that until the consumer works off their mound of debt things will stay real soggy in the overall economy. In particular such things as residential housing will not expereince any meaningful appreciation until that debt is worked off. This blog deals not only with that subject but how all of that interplays with corporate and government debt. If you want to understand the background and context of our national economy this is one of the best blogs you can read.

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Weekly score Card 7-13-09

Here is the weekly scorecard. The listings for this week fell to 284. This is a big drop from last week, when it was over 290 homes. I thought, as prices stabilized, that more inventory would come on the market, but that is not the case. If you go to the Monthly Stats section on the Blog, you will see that since last November, total area for MLS Area 530 has been hovering right around the 285 mark, with dips as low as 260. The big deal, though, is that the percentage of bank-owned and short sale inventory has been drastically reduced.

Six homes came through as sold. This is a reduction, and reflects the lower sales volumes in the pending sales from last week. The per sq. ft. average also dipped to $215 per sq. ft., but there were no bank or short sales. This is a first, and I think is indicative of the blow out of this inventory over the last three months.

There were only three pending sales. This extends the trend of prices stabilizing, but sales volume is going down. The per sq. ft. sales price was $209, considerably under the $220 per sq. ft. average, but with so small a sample, the number is not reliable.

Dwindling inventory and sales volumes at the same time looks like a recipe for prices to flatten.

Tags: =score card. pending, inventory, sold, trend, Weekly
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June Numbers

The June Stats are now posted. Just to let everyone know I figured out how to cut and paste in the html for the pictures. That code is pretty small next time I think I will use a 40 size font. Take a look at the numbers. In KC and the East Side the per sq. ft. values have moved up. West Bellevue looks like a big increase but again there is a smaller data base for each month so they will cycle a little more. You will probably start to see things level out but it looks like there is some stability if the economy can be keep from deteriorating. The next three months will be interesting.

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