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Tuesday, March 07, 2006

Olympics To Blame For "Balanced" Market

Here's a media report on February's numbers from the Seattle Times, who says that "prices remain buoyant."

The housing market around Puget Sound has slowed from its blistering pace of a year ago, meaning some sellers don't get multiple offers and some have to lower their prices.

But prices remain buoyant, with the median sales price for a single-family home in King County last month climbing to $392,950, up 14.7 percent from February 2005, according to numbers released Monday by the Northwest Multiple Listing Service.
Sellers can no longer count on numerous offers for properties with high price tags, but buyers are not calling the shots either.

"It's more balanced than it was last year, but it's not a buyer's market by any stretch of the imagination," said Mike Grady, president of Coldwell Banker Bain, which has 19 offices around Central Puget Sound.

The market is taking longer to ramp up this year, Grady said. People are slower to put homes on the market, partly because of bad weather and distractions from the Super Bowl and the Olympics.
Of course! In January it was football, now it's the Olympics! Perfectly logical explanations for why the home sales are "taking longer to ramp up." Right.

(Melissa Allison, Seattle Times, 03.07.2006)


Rob Dawg said...

And when the Easter Bunny comes next month he'll be a scapegoat as well.

Gary Anderson said...

The housing market is only balanced so long as there is an idiot buyer who wants to buy at the very top of a housing bubble. The fed has made this all into a bubble. The only way buyers can take back the market is wait until late 2007 or even later than that to buy. I see many people doing just that in many areas.

Matt said...

I recently bailed my house hunt due to the fact the numbers didn't ad up and have decided to rent in the city, neighborhoods I'd never be able to afford. I would have been paying $1000 a month more for the equivalent properties I was previewing... just insane. Take your cash and roll it into CDs, less risk, more liquid, and probably a better return of the market 'hiccups'

Eleua said...

BINGO!! They finally figured it out!

"Honey, did you find a house for us today?"

"No, I was watching Switzerland vs Finland in women's curling, and getting to watch the 4 man boblsled. Getting a roof over our heads will just have to wait."


The market is correcting, and it will be a doozy. My prediction still stands at -70%+. My blog explains just how.

Eleua said...

Better link

Anonymous said...

The market is correcting, and it will be a doozy. My prediction still stands at -70%+. My blog explains just how.

The Russians are coming too.

Anonymous said...

The Russians are SO yesterday. And so is this housing bubble!

Kiss high home prices goodbye!

Anonymous said...

Anyone know about the building at 9090 Ravenna (98115)? 6 units, 1-2 bedroom condos $220K to low 300's all sold last summer.

Building is vacant. Junk piled up in the shared garage.

I've been been paying attention as I drive around in the new townhome ghettos north of greenlake (85th to 94th) in 98103 and seeing alot of dark windows and apparently unfurnished units.

What gives?

Anonymous said...

Might be a flipper disaster. A flip gone flop.

Lander said...

In Northern California, the rain gets blamed, but I guess that excuse wouldn't work too well in Seattle...Oh wait, I see he did mention "bad weather."

Lodi Agent Debunks Bad Weather Excuse

Sacramento Land(ing) blog

meshugy said...

I live in the Ballard area of Seattle and have been following every sale in this area for about a year. Prices have been about the same since last September. It seems a little less competitive then last summer, but anything decent still gets multiple offers and pretty much nothing sells for less then 400K around here. Overall, it doesn’t seem like much of a slowdown yet. It’ll be interesting to see what happens during the Spring/Summer.

We’ll know somethings wrong when the core neighborhoods of N.Seattle start to tank (i.e. Greenlake, Wallingford, Ballard, Fremont, etc.). If prices go down in Lake City I wouldn’t exactly run scared.

sseattle price drop said...

Here are the numbers for zip code 98103- Green Lake and parts of Fremont and Wallingford:

properties on the market / price reductions:

March 1: 71/24
March 3: 77/25
March 5: 79/25
March 6: 82/23
March 7: 85/25

In RE, risng and falling prices affect all nearby areas. Some areas (ie. Lake City) may always have a lower base price than more desirable areas (ie. Green Lake). And conversely, Green Lake may always have a higher top end price than Lake City.

But both will move in the same direction.
When properties in Green Lake go up in price, so do Lake City properties.

Likewise, when one falls, the other falls too.

Anonymous said...

price reductions don't mean as much as actual prices at closing... Seattle has flatlined over the last 5-6 mos, and obviously there are sellers who are starting out too aggressive. But inventory in King County remains below where it was in the similar month (i.e. Feb #'s) from 2001-2005. Months inventory is about 1.9. Prices can't fall much until the supply situation changes... but it amuses me to watch all the priced-out Seattle renters on this blog praying for a big drop.

seattle price drop said...

Here's some prices at closing, gathered from the county records:

5014 18th Ave NE
original Asking Price: 749,950
Price Reduction: 729,950
2/27 Sold: 725,000

7702 58th Ave NE
Asking Price: 725,000
2/16 Sold: 650,000

4508 NE 38th St
Asking Price:574,900
2/16 Sold:545,000

6813 19th Ave. NE
asking Price:529,000

Frankly, I think us wannabe buyers are not only praying for a drop, we are WATCHING it drop too!! And it's very uplifting!

Anonymous said...

"but it amuses me to watch all the priced-out Seattle renters on this blog praying for a big drop."

Everyone who does not buy, now, will be priced out forever. Those who do buy will enjoy a lifetime of riches, as their property will continue appreciating 10% or more per year, forever, no matter how far the price increases outrun incomes, population growth, and centuries-long historical averages.

Renters, and those born in future generations, will be unable to afford a $10 million starter home in 10 years. They will live in tent cities and Hondas.

This asset bubble is unlike all others in history, because it will never slow down, or pop. The gains are permanent.

Ballard_Bob said...

"Price drop? There are no price drops here! We have driven out the housing bears! I predict they will all die!"

Anonymous said...

The very definition of this bubble is that NO ONE is priced out, except by their own common sense.

If you have no income or assets, but you're willing to mortgage your future with a kamikaze loan to bail out some lesser sucker, why, your friendly banker will be more than happy to help you.

Anonymous said...

gal I work with just cashed out re-fi'd on a 295K place she bought in May after pumping up her appraiser to value the joint at 370K, quickly blew through the cash and now says the place has declined to 330K in the couple of months since she re-appraised... now her I/O loan just added 40K to her overall debt-load...

Yeah, this is normal. Anybody ever heard of the old adedge 'you can't get something for nothing'? its held for time-eternal, nothing's going to change it now... not even Seattle's kevlar housing bubble.

waiting said...

Thanks for the story anon.

People in Seattle need to hear more of this to avoid getting into some very rough financial straights in the coming months/years.

Unfortunately, they're still being pumped with too much RE rahrah from the likes of Lawrence Yun and others- people desperate to try any kind of dis-information to keep this market humming.

Anonymous said...

It all comes down to simple economics. Supply and demand is the name of the game. Yes, the market is in the process of correcting itself, but to imply that the bubble will burst is overboard. Think about it.... What are the two most affordable cities on the West coast? Seattle and Portland... The economies are robust and they are very desirable places to live. I would recommend getting in before you get left out for good. Yes, the market will drop and then it will go back up. That is what it does. The market is cyclical. The Feds know this and if you have been doing your homework, you would know that they have managed to curb inflation by pushing short term interest rates up, which of course affect the mortgage rates. Sellers are not experts in real estate and for the most part they choose their prices from what their neighbors down the street sold their house for. Not an exact science by any means. In the meantime, let the investors come in and become very wealthy while the doomsayers are sitting on the sidelines.

livininamerica said...

As you stated Anon 6:24, yes, the market is cyclical. Have you noticed that we've been on a bit of an up trend for quite a while now?

As you know, what goes up must come down.

As you also stated, interest rates have risen slightly (supposedly a reason to jump in now, before you REALLY can't afford those monthly payments!).

Problem is, interest rates are just getting going. Bank of Japan is finally going to start rising it's rates and that's going to force the US's hand. They hold too much of our debt for us to not respond in kind.

When rates go high enough, this bubble's going to splatter no matter HOW desirable/unique you think the NW is.

It may be desirable and unique. But it's still a part of the Good Old US of A.

Anonymous said...

"I would recommend getting in before you get left out for good"

Please refer to the following link for an emergency lesson in economic history.

concerned said...

Highly doubtful that "investors" will be getting wealthy if they buy now. The days of wild appreciation are over for the forseeable future.

A lot of them will just get stuck with high property taxes, rental income that won't cover the mortgage payment, and a property that will become harder to sell over the next several years.

A lot of them will be bleeding expenses on a monthly basis or bringing money to the table just to close.

The time to "become wealthy" on Seattle property is past. Wait til the market crashes then get back in if you still like RE as an investment.

Buy low sell high. Nobody ever got rich buying high and selling low.