As long as I was knee deep in some statistics I went ahead and generated some more graphs to get a good look at what was going on. Please click on the images for larger, more readable versions.

 

I have to say, this first graph really surprised me. This is a graph of the average prices of Active (For Sale) homes, in blue, as well as Sold homes, in red, for all of King County.  The difference between the For Sale average and the Sold average is not what is surprising. That is typical. What surprises me is that while the average sold price decreased or remained flat from June 2008 on, the average asking price for homes still on the market increased!

 

The For Sale Price is simply the Sellers belief of what they think their house is worth. It is one sided. The Sold prices are an exact representation of what the Buyer and the Seller have agreed is the value of their home. During the last several months we have seen major banks failing, car companies fighting for their survival, and talk of recession not seen since the Great Depression of the 20's and 30's. While all that bad news is hitting the airwaves, Sellers collectively have increased their asking price! It makes no sense to me.

 

There is a similar trend in the 2007 graph. Arguably, it is a bit of a seasonal trend. But I don't think that makes up for all the effects of the bad news that we have had this year.

 

The same graph for 2008 for the East of Lake Sammamish area shows a similar trend in the Seller's asking price (blue). They have trended upwards since May. While the sold prices (red) were largely down for the period, they did jump upwards in November and December. Yes, the 2007 graph shows a similar trend.

 

So how to explain this? It is possible that the average asking price is going up not because there are new high end houses coming on the market but because all the lower priced houses are going off the market. This would result in the average asking price going up, which it does. But, it would also result in the average sold price going down, which it isn't.

 

The median prices have also been increasing slightly over the last few month so I am left with  positive thoughts. Buyers are seeing the value in the houses and bank rates have improved. Buyers, if ever slowly, are back in the market. However, I am open to other ideas. I think this winter and spring will be very telling one way or another.

 

Two last graphs to show you. Months of inventory is a great indicator. Imagine if you have 100 homes on the market and you sell 20 of them this month, it indicates that it will take 5 months to sell all the remaining inventory assuming no new houses come on the market. the year 2008, in red, has seen significantly higher months of inventory as compared to 2007, in blue. Buying activity typically picks up in late winter and spring. So, again, the next few months will be very telling on where our market is going long term. There are no real surprises here. 2008 clearly shows longer inventory times compared to 2007. Likewise, the East of Lake Sammamish area tracks very nicely within the larger King County area. 

Again, if you have specific statistics that you would like to see or statistics on a smaller area... just your neighborhood for example, please let me know.