Press Optimism Beginning To Fade?
With the lull that has set in on housing this winter in the Seattle area, the news reports about the dead time are almost more interesting than the housing news itself. For example, take the four stories in today's papers about December's housing numbers. Here are the headlines:
Housing prices keep rising as sales slowSurprisingly, two out of the four local papers actually have headlines that are more negative than positive, one is fairly neutral, and only one is still stubbornly upbeat. This is quite a turn from the usual "everything's going great" face that they all seem to put on. Could this be a sign that there are finally some cracks appearing in the Seattle real estate market? From the P-I:
Elizabeth Rhodes, Seattle Times
Home sales are cooling with the weather
Kristen Millares Bolt, Seattle P-I
Area home sales taper off
Mike Benbow, Everett Herald
Home sales fall, but prices up
Barbara Clements, Tacoma News-Tribune
It was a banner year for real estate prices in the Puget Sound area, and December was no exception, according to statistics released Thursday by the Northwest Multiple Listing Service.I love the logic that because clearly things are "cooling down" slowly right now, that means that there definitely won't be a "bursting bubble" effect at all. I'm not saying there will be (all I know for sure is that recent price gains cannot possibly continue), but I think that the logic presented by the "real estate experts" is rather suspect.
But a drop in pending sales — offers made and accepted, but not yet closed — across 16 of the counties measured by the listing service indicates that people are pulling back from the real estate market. It's the beginning of a cool-down.
Clearly no bubble is bursting, real estate experts agree. Rather, there is a slowdown in the market that will eventually put a damper on home-sale price increases, even as the demand for homes continues to outstrip the supply of them.
(Elizabeth Rhodes, Seattle Times, 01.06.2006)
(Kristen Millares Bolt, Seattle P-I, 01.06.2006)
(Mike Benbow, Everett Herald, 01.06.2006)
(Barbara Clements, Tacoma News-Tribune, 01.06.2006)
17 comments:
And the house I've been tracking in N. Seattle for the past 2 months continues to drop in price!!!!
"Could this be a sign that cracks are appearing?"....
The cracks were there months ago- they are just gettting too wide and deep to ignore or put a good face on. Things must be getting really bad!-(or really good!)
Watch this baby tumble!
seeing that woman's site....honestly, it makes me want to cry. I watched flipping real estate agent flippers decimate whole blocks of solid community when this whole mess started several years back. These people represent the worst that humanity has to offer.
And, as an aside, our neighborhood-terminator-"real estate agent" was also a native Seattleite. Will people please stop blaming every mess on Californians? Please?
Anyone hear the interview on CNBC last night with a rep. of Coldwell Banker? Interesting spin on the future of the RE market: He said "it's going to be a buyers market because of so much inventory available . Just don't expect any appreciation for a year or 2 (!!!)" WOW!
Why is flipping houses bad? "Decimate" a community? It takes two to tango. Somebody has to be willing to buy and another willing to sell. Everyone involved takes risks, just like trading stocks. If flipping houses is bad, speculation in the stock market is bad too.
You're right- the buyers are just as much to blame. Hopefully, most of them have been weeded out now and those who are still wanting to buy will have the patience to wait til the prices go thru the floor.
Anyone who has any doubts about just how far Seattle prices will have to fall to get back into "sane" territory, check out this listing:
MLS#26000601, conveniently located in the trashed out section of the Roosevelt District, right under I-5.
HELLO!!?!? People do not live in their stock portfolios. There is a world of difference between speculating in the stock market and speculating in RE. If you haven't that out yet, what's it gonna take? Perhaps watching as people get thrown out on the street when they've gone bankrupt trying to pay for a house they can't afford? I know, I know, you can look the other way and pretend it's not happening but that won't change the fact that there is a difference. Let's get speculation out of RE and back into stocks where it belongs. This has got to be the stupidest, most unproductive bubble we've ever had.
Aloha Mr. Hand-
Rest assured and have no fear-these prices are coming down everywhere. Let's all just agree on one thing: never ever get involved in a bidding war. All it does is push prices up and ruin it for everyone. Have we learned our lesson here?
Here's the way to buy a house: Take the sellers asking price , consider it and make an offer that is lower. If they say no, walk away. There will be PLENTY of houses out there to choose from.
I am going to look up old sales records for the homes I visit before I go in. I'll check out how much they paid for the place originally and take that into consideration before making my offer.
Folks, it's all in our hands now. Let's make sure this madness never happens again in our lifetimes.
2007 is when all those trillions of dollars in mortgages readjust so you, Aloha, should be hitting the market at an optimal time.
My wife and I have been asking each other how the RE market will unfold. Here is what we came up with:
We live in the Puget Sound region, and it is still quite bubbly. Most of the buyers in our area (Bainbridge Island, Poulsbo) are either active duty military, or California ex-pats/refugees.
Q1-06: Denial of housing softening. Most will not sell. Weak hands are not yet nervous. Those interested in selling are looking to spring.
Q2-06: Inventory starts to build. Prices inch up on declining sales. Not as many Californians marching up here with a pile of equity money as last year. No fear, yet.
Q3-06: National economy starts to tank, and FEDGOV can't hide it anymore. Iran involved in military conflict with Isreal/US. Congressional elections heat up. Reports of slow sales spring hit the wire. People pull houses off market to wait until next year. General uneasiness, but no fear.
Q4-06: California has fear. BOS-NYC-WAS corridor has fear. Florida has fear. NV-AZ have fear. Seattle still in denial. "Investors" really upset they could not rent out their homes - blame war/Bush/GOP.
Q1-07: Dollar in freefall. Economy tanking in Pacific NW. Notices of Default hit records in PNW.
Q2-07: Massive inventory build. NO BUYERS! Sheriff sales spike, which drives even more inventory to market. Sellers scared. Buyers even more scared. Massive wave of RE agent/mortgage broker suicides.
Q3-07: CNBC pulled off air. HGTV off air. Panic in full bloom as the long, dark, wet winter is on the horizon. Sheriff becomes the highest volume RE seller in the county. Prices are 40% off the peak, and headded lower. People drink Folgers.
Q4-07: Reports come in about how young families thought they were buying the dip, and caught a falling knife. More panic. All home equity wiped out. No consumer spending. High unemployment. NO BUYERS! Sheriff selling property below 1992 prices. No one admits to voting for GWB. Bubble era RE agents move to Texas. Bubble era appraisal agents raped in prison. Bubble era mortgage brokers recovering from gunshot wounds.
Final count: PNW RE selling at 60-80% discount off of peak. People think you are a moron if you buy (much like they think of you if you rent in '05).
The only difference between speculating in RE and stocks is the size of the trade. If you borrow too much and go broke, you can't blame the real estate agents or mortgage brokers for your miscalculation or downright stupidity.
eleua, you forgot to put in a global nuclear war somewhere in your timeline.
People are either too bullish or too bearish on RE. When you get too caught up on something, be it politics or religion or this, you lose perspective. The truth is often somewhere in between.
Oh NO!!!!! Anything! But don't make me drink Folgers!!
Euelea- I'm ok w/ your evaluation in general, but I really think the panic and price drops are already starting in Seattle.
First of all, well done Dukes. Please keep us posted on your noble efforts at making the insane see common sense.
Now, on to something else that is very very important to all of us would-be future home buyers (ie. those of us who believe in 20% down, minimum and a (preferably) 15 year mortgage:
Please check out the Northern New Jersey Bubble link that Tim has, in his infinite wisdom, provided for us here. Check the price drops over the last few weeks. You will be astounded.
I know that NJ has a horrible reputation the world over as a crappy place to live. But for those who have never been, you need to know that the area he is talking about is one of the nicer areas of this whole country. I went last year for the first time and surprise does not even begin to describe it.
Imagine a beautiful, well established town center surrounded by lovely neighborhoods of well-built solid homes,sidewalks and tree-lined streets. Imagine pockets of forests and parks popping up here and there, everywhere. Then add to that an architectural gem of a railroad station, immaculately clean, with trains going in to midtown Manhattan every 45 min, nearly 24 hours a day. Then add to that bus service that is so frequent into Manhattan that , as a Seattleite, it makes your head spin. For under 2 bucks you can get to the big city in 45 min.
I am telling you for sure that if prices can drop in that area there is absolutely no doubt that they can drop here, just as far, or farther.
Dukes-
I agree, I also have clearly seen that the trend has shifted from "bid 'em up" to "hmm...maybe we have to drop our price a tad.." This shift, tho many would like to downplay it, is signicant as heck. I look forward, in the not-so-distant future, to the remarkable quick slide downward that NJ is experiencing.
I even wonder if perhaps it hasn't already begun here and we just don't have anybody with the know-how and time to organize the data and get it out there for the public to see.
Takers anyone??!!?
"Bubble Markets Inventory Tracking" has added Seattle to it's site.
Check it out at: bubbletracking.blogspot.com
Anonymous,
Drinking Folgers is certainly a sign that a full-blown flop-sweat panic is in bloom...
I don't track the Seattle Metro area all that closely. I watch Braindead Island, and Poulsbo. As of now, there is absolutely no panic. I would say that it is still a strong seller market. There just isn't much for sale, yet people are still marching up here with all their California equity and bidding up prices.
Braindead Island is, for all practicality, California's 59th county.
It will pay the piper in a huge way. Once Californians become trapped in their bubble, and can't sell, Braindead Island will be in a freefall.
Bank on it.
Well, I think were still dealing with equity coming in from other locations "flight to quality" so to speak. I have a feeling though that by mid summer, the slowdown will be obvious.
Imo, Connie pretty much typifies those upbeat (and perhaps overly optimistic) attitudes you see in metro areas during boom times. Maybe her optimism will carry her through the inevitable downside?
For what it's worth, see strikes me as pretty diplomatic in her responses. That's far better than the sharp attacks we've received from realtors and media to reports on our local market.
Someone made a great point...you can't attribute all the hype to Californians. That's a worn, lame excuse that's been overused for decades.
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