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Friday, November 18, 2005

Crystal Ball Predicts Seattle Slowdown

No, seriously. That's right, a "national housing expert" is predicting that Seattle will see a slowdown in the housing market in the next few years. He saw it on his crystal ball, it seems.

The housing market in the greater Seattle area "will be heading downward" in the next two years, a national housing expert told a gathering of real estate agents and home builders in Bellevue on Thursday.

But the prediction isn't as bad as it sounds.

If you disregard 2005 and 2004 when the greater Seattle housing market "went nuts," the home sales forecast for this area next year would be one of the best on record, said Stanley Doubinis, chief economic forecaster for Maryland-based Crystal Ball Economics Inc.
Maybe it's just me, but I have a hard time taking someone seriously when they have the words "Crystal Ball" on their business card.
The escalation of home prices in King County "might drop back to single-digit increases" next year, "but retrenchment (in prices) is not likely," said Doubinis.
How can we be in a position to "drop back to single-digit increases" and not be in a bubble?
Doubinis said he expects the Seattle-area housing market to fare better next year than housing markets in many other parts of the country because of the Puget Sound region's strong employment growth, which is increasing four times faster than the national rate.

J. Lennox Scott, chairman and CEO of Bellevue-based John L. Scott Real Estate, said Doubinis' forecast pretty much matches his company's expectations for the coming year.

"We're also predicting a historically strong market next year" that will be only "slightly off the all-time best year (2005)" in terms of the number of homes sold, Scott said.
Sounds like someone who has something to sell, personally.

(Clayton Park, King County Journal, 11.18.2005)


Cole Kenny said...

Yeah, sounds like a sales pitch to me too.

midmail said...

No bubble?? median family income for $60,000. let's say about $4,000 a month after tax.
almost $3,000 for housing expense including tax, insurance and utilities for median seattle home.
what a nonsense for this.
who can explain the bubble situation. they can rent for half the money.

biliruben said...

After doing a little research on a house a good friend of mine put an offer on last week, I found that the "invester" (i.e. flipper) they made the offer to had bought the house in August for 145K less.

The flipper countered their offer with a demand for 5K more, so my friend walked, thank god. I hope the flipper ends up regretting not accepting their offer, and takes a relative bath, though I doubt it. The flipper is sitting on 6.25 IO, neg am, so it could get expensive quickly for him, if he doesn't find a sucker soon.

I begged my friend to sell is his current, very modest house and rent for a year, but with a wife and two kids, it isn't worth the headache for him, even if it's likely it will save him 40-50K to do it. Sounds like they found a better, more reasonably priced house as of this writing.

meshugy said...

I watch the Ballard area very closely...over the last year I haven't seen anything that was flipped until this came up:

7217 28th Ave NW

Bought on 5/27/05 for $415

Sold on 11/15/05 for $537

A $112K profit!! And this house really isn't that great. A 1560 sq.ft house built in the 50s. Good shape....but nothing special. So it's still a bubble market in Seattle....

the guy who flipped it is a relator. His name is Brent Schram. Send your flipper hate mail to:

See his bio:


Anonymous said...

I am not sure why anyone should be hated for being a successful flipper. If someone buys at the second price then the market has been set. If there is blame to be put around it is on the credit for me, I am moving to TX, where I can get a mansion for the price of 1100 sq. ft. hovel in ballard

biliruben said...

I don't hate flippers, I just hope they don't succeed. If they do succeed, houses become that much less affordable for everyone.

The more stories of flippers taking a financial bath, the fewer flippers there will be.

The particularly greedy ones such as in my friend's example I wish particularly ill-luck.

anon - I have some sweet west Texas scrub for sale cheap! It could fit 10 Mansions on it, I'm sure. BYOW, however.

Anonymous said...

I don't know about scrub, but a nice house in Austin is still a lot cheaper than what you get in this town. But of course this town is a lot better in terms of all its natural wonders....which I enjoy seeing while stuck on I5 ;-)

SLO renter said...

mesugy said: I watch the Ballard area very closely...over the last year I haven't seen anything that was flipped until this came up:

I lived in Ballard for a couple of years. Still miss it. I didn't get the impression of much flipping going on. However, there was definitely the idea that real estate would only go up, they're not making any more land, buy if you can, growing discrepancies between cost of renting vs. owning i.e. all the things which (combined with lax lending) tend to indicate bubbles.