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Tuesday, April 18, 2006

Inman Good For A Laugh

We've already done the March numbers to death, but the late story from Inman News caught my attention for its amusing headline and subtitle:

Northwest real estate sales slide
Inventory growth helps lift home prices

Home sales in western Washington fell 9.1 percent in March from a year ago, as prices posted another month of double-digit gains, according to the latest figures from the Northwest Multiple Listing Service.
That's some pretty interesting logic. Increasing supply and decreasing demand "helps lift home prices." It would seem that more appropriate subtitle would have been "Prices up despite increased inventory." But hey, that's just me.

(Inman News, 04.18.2006)

49 comments:

begin the fall said...

It's starting!!!

Cute 1,900 s.f.craftsman at Green Lake advertised as "Must Sell!" for 370K on Craigslist.

Watch those neighborhood comps drop!

begin the fall said...

Whoops --- make that 360K! My mistake!

YOY median down in 3 areas said...

Actually, according to the Sunday Seattle Times last week, YOY median prices are starting to fall.

Two in-city areas had price drops between 1-4.6%.

One area of Eastside had a 30% drop. Yes that's 30 %.

Anonymous said...

As I said in a previous post, I'm already seeing "RE-PRICED" signs in formerly white-hot parts of the city (like Fremont).

I'm giddy (except for the whole economic-collapse, downfall-of-american-economy part, of course).

biliruben said...

Sign of the appocalypse arriving in Seattle:
http://seattle.craigslist.org/rfs/152127683.html

$815000 - Live in it or Could be a great flip house!

Appraised in Dec for 850,000
The right updating could make it worth a million or more :)


A million dollar rambler in Woodinville. Right up there with famine, plague and flippers.

meshugy said...

Check this out:

State economy 'just keeps getting better' as jobless rate dips

The latest monthly job growth was led by construction, up 2,100; health care, 800; temp agencies, 700; and food services, 700.

Lots of jobs added in construction...what's up with that? Is the market slowing down or speeding up? I just walked with my son around Ballard and saw over a dozen sold signs. Looked them up on the parcel viewer and every one was over bid. Still seems pretty hot around here...when will it stop?

matt said...

Yes, Ballard, the last redoubt of the Seattle housing bubble, although its nippin' at the edges, tons of new townhome's being constructed, tons of for sale signs up near Market St...

2100 new jobs in construction, leading the expanding Seattle economy and a 'new surge' in housing, which will cause a new surge in construction, which will cause housing prices to increase, which will cause a new surge....

you get the point.

Anonymous said...

Wow, temp agencies, health care (can anyone say elder home care), and food services. Those are right up there with the loads of chamber maid jobs that are coming to town when all the soon to be finished new hotels are ready.

The wages for those jobs are gonna pay for some really expensive real estate- and ultra-high rents too!!! Seattle's going to be the richest, ritziest town in the country!!!

Meshugy-

Ballard's got it's first foreclosure on Craigslist. Beautiful town home, good location. It's a sign of what's coming.

What is the "parcel viewer"? Can you give us the website address?

The Tim said...

What is the "parcel viewer"? Can you give us the website address?

I can field that one. The parcel viewer allows you to see the sales history of a property, as well as the tax assessment, legal owner's contact info, etc.

The address is different for each county. If they have it online you can generally find it by doing a search for "[county name] county parcel", minus the quotes.

Here are our local county parcel websites:

King County Parcel Viewer
Snohomish County Parcel Inquiry
Pierce County Parcel Search
Thurston County Parcel Lookup
Kitsap County Parcel Search

biliruben said...

Sweet, Tim.

I had King and Snohomish, but not the others.

I am particularly interested in Kitsap, so I can follow descent of Eleua's haunt. ;)

Ballard is HOT!!!HOT!!HOT!!! said...

"Just walked with my son around Ballard and saw over a dozen sold signs. Looked them up on parcel viewer and ..."

Hmm.... Meshugy, you wouldn't by any chance be fibbing to us, would you?

I too have been looking up properties on the county websites to see what they actually sold for.

However, it takes 1-2 months after they are sold for them to actually show up on the site.

Dear, if you saw "dozens of sold signs" on your walk through Ballard and then were able to go home and immediately find those properties on the county website then there is a problem here.

Either:1) Those are REALLY OLD signs which begs the question, why does a realtor feel the need to leave them up so long after a sale's been completed. Could be further proof of a slowing market. Look!!! We really DO sell houses in this part of town. Really!!!! Look at all the (old) "Sold!" signs!!!!

Or: 2) you are, how can I put this gently, lying to us.

At any rate, for those who want a more balanced picture of sales in Ballard, I'm sure that if you pick a few addresses off the realty sites and check them in the tax records you will see that MOST are selling (well) under asking price.

Unless it's really true Meshugy about Ballard. The rest of Seattle will go down but Ballard will stand as a beacon to the once glorious Seattle RE market.

Except of course for the Ballard foreclosures that are now starting to be listed.

We need to forgive Meshugy. He just bought a house in Ballard, sometime in the past year or two I believe you told us in a previous post. So we know you have a vested interest in protecting your investment.

Don't worry. The world's not going to end. It sounds like you like living in Ballard and will be happy to stay through thick and thin. It's only those who want to move who could be in for a rough ride.

meshugy said...

If you look at the excise tax records they come up very fast after the sale.

Look at this one:

Listed at 399K...sold for 417K

http://146.129.54.93:8193/results.asp


Sale date: 4/4/06

I went to the open house for this one...nice but super small. Just one floor with two very small bedrooms. 417K for that?

I did buy house a year ago...but was expecting things to slow down. They simply haven't...if you want to buy a 3 bedroom house around here you have to pay 30-50K more then last year for an equivalent property.

I'm interested in an accurate assessment of the market. I'm not trying to fool anyone, including myself. If the market is indeed tanking I want to be the first one to know. I'm simply not seeing sings of a troubled market. It's obviously still very competitive. Very few houses have sold under asking. If you actually go and look at them there's always a reason why. They were so ridiculously priced to begin with (i mean even more ridiculous then what the average house cost)...they just got bid down to the a more normally (but still insane) price. I wouldn't really call that sort of reduction (from outlandish to just normally insasne) a real sign of lower housing prices. I'm convinced there are still no bargains to be had and the sellers still hold all the cards.

I already own a house, but probably will buy again in the next 5 years. For that reason I want the market to slow down. It'd be great if my particular house or street skyrocketed way above everything else in Seattle. Then I could sell and buy a mansion on Queen Anne...but that's probably not going to happen. I'd be perfectly happy if the market slows down and even recedes some.

'm

Anonymous said...

Besides Ballard, Greenwood and Broadmoor (esp along greenwood ave) are full of new construction, condo conversions and the road is littered with for sale signs north of 85th.

biliruben said...

Broadview, you mean, not Broadmoor, right?

There are a few homes available for the discerning multi-millionaire in Broadmoor, but I would use the term "littered."

They might fine you for even speaking the word.

seattle price drop said...

Meshugy-

I went to that site . Do you need to know the tax parcel # to use it?

It would be great to be able to get sales redcords faster.

BTW, I agree with the others, seen enough evidence that the market here is cooling.

It sounds like you were not in Seattle when it was REALLY HOT. NOTHING was on the market for more than a couple weeks and EVERYTHING got bidded up.

So it's clear that it's started cooling down here in comparison to what it was. The fact that we've got reduced prices and increased DOM's is proof enough that it indeed has changed.

It's just a question now of what the next step will be.

meshugy said...

Sorry...it won't let you link into the tax records.

Try this:http://www5.metrokc.gov/reports/property_report.asp?PIN=1254200555

Then click the " Recorders Office: Excise Tax Affidavits Report" link.

Here a few more recent sales:

Listed: $399K
Sold: $450K

http://www5.metrokc.gov/reports/property_report.asp?PIN=9165100360

Listed: $549K
Sold: $588K

http://www5.metrokc.gov/reports/property_report.asp?PIN=0472000160

Neither of these are anything to write home about...pretty crummy but still people are paying way over asking. Why?

Anonymous said...

When did the sale start, and when did it close? Are the dates in the tax assessment the closing date, or the bid date?

A sale closing today started at least one month ago, and probably more. So, if the tax numbers use the closing date, they reflect lagging market conditions.

I realize that one or two months isn't a lot of time, but by all accounts, the market is just starting to turn....

meshugy said...

I'm pretty sure that the "sale date" is the closing date. That's how it's listed on my parcel record.

Closings do usually take 2-4 weeks...but it all depends on the financing and the contract. I've seen people pay in cash and the house is closed and on the parcel viewer in less the 2 weeks. Doesn't happen too often...but it does.

'm

biliruben said...

Redfin is showing closing prices for late February, and it's got a much easier interface to manipulate.

seattle price drop said...

Meshugy-

As to "why" people are still bidding up some houses, there are still a lot of uninformed people out there.

Seattle realtors in general, are still talking the market up.

And let's not forget the NAR economist Lawrence Yun proclaiming last Fall that Seattle would continue on the appreciation ride and that the economy here was booming. (He has since retracted those sentiments but nevertheless, the damage has been done).

So there is a lot of disinformation about this market floating around.

And, unfortunately, there are still silly people out there who, even though it would be in their best interest to do so, have not done their homework regarding the market here in Seattle.

So they believe the market's hot and they have to get in NOW- especially with interest rates rising-!

That's the newest disinformation: get your home NOW before interest rates rise.

People from away tend not to do research before they buy. Gullible people believe the "experts".

In a way, it doesn't matter that some people are now overpaying for homes. If they've got the money, that's fine. But I really feel for those who are squeezing to get in because they believe the lies.

If you keep following the "solds", you'll find that MANY properties are now going under asking.

I checked on 57 Ravenna/Laurelhurst homes last Feb or March- 40 of them went below asking. Only 8 were bidded up. This is an astounding change from where the Seattle market used to be.

So there ARE buyers out there who fully realize the jig is up.

But there will always be a few (especially out of towners) who just don't bother to find out about the new market they're in.

biliruben said...

I think flippers are also part of the answer for why houses may be going over asking.

Particularly for fixers or teardowns in decent neighborhoods, if a fipper can buy now, throw 50K into it and potentially tack on $200K, then they will do it. Even if they only think they can tack on $200K.

That's what's great about redfin. They show you the last sale as well as the asking price, so it's easy to identify flips.

This also might explain the sales below asking. Flippers are going to ask well over market, and are more willing to drop the price because they are still making easy jack.

When the music stops, some flippers are going to get wicked burnt.

Anonymous said...

Why are people still buying?

1) They think this real estate boom will never end. I've heard from many people who've said "Housing NEVER goes down." OOOOOOOOOOOOOOOOOOOk

2) Real estate agents. These pushers are out there for themselves. They don't have the interest of the buyer in mind but many peopel forget this.

3) Interest rates are still not THAT high yet. Give it some time.

4) Speculators who think that they can still make a quick buck.

5) Any others I forgot? Feel free to list them.

meshugy said...

Hi Price drop....

That's the newest disinformation: get your home NOW before interest rates rise.

Yes, I'm sure that's what the real estate industry is pushing. They were saying the same thing when I bought last year...and so far they were right because interest rates have gone up a lot and so has housing. But we still don't know if that will last...I still think of appreciation on my house as a "cushion" for when prices eventually come down.

There's a lot of housing statistics worth looking at. But I believe the best way to know what's going on is to emulate the actions of a potential buyer. That's not too hard to do since I just went through it this time last year.

So I look at the sort of houses in a neighborhood that I like. So I've been following mostly 2 and 3 bedroom houses in the 3K-5K range in Ballard. I go to a lot of the open houses and track the asking and selling price. What I'm seeing is:

1) There just isn't much in that price range. Definitely less then last year.

2) A disproportionate amount of what is for sale in that range is just awful.

3) Anything good in that price range sells immediately with significant overbidding.

I don't think most buyers are stupid or totally mis informed. After all, Seattle has the highest # of college graduates anywhere (ha ha). Seriously, I think people are just responding to supply and demand. People want houses in certain neighborhoods, and there just aren't many people selling. I think most folks know it's a risk, but if you know you want to put down roots for a long time in a certain neighborhood, it's worth the risk.

I know you can rent, but when I looked into that option I found that I could get roughly the same sq. ft house for less then a mortgage would be. So you defintly save money. But most rentals are pretty crappy...very few rental houses have the amenities that the house I bought has: great landscaping, new deck, gas grill, totally remodeled kitchen, bath, basement, top of the line gas furnace, etc.

So you're usually loosing some quality of life when renting. And you never know when the land lord will give you the boot. Which has happened to two rentals in my neighborhood in the last month. Also, the tax right off worked out really well for us...we really saved a ton by owning.

Anonymous said...

Meshugy,

You sound pretty reasonable, so surely you must be aware that in the last 5-10 years, Puget Sound home prices have appreciated at rates well beyond what is historically or fiscally reasonable.

Sure, you can talk about "historically low" interest rates, and "good jobs" and all of that, but when you get right down to it, Puget Sound has been land-limited for FAR longer than the last 10 (or even 20 years), and the job market here isn't minting millionaires by the day. The median income here is only a small fraction of what is necessary to buy the median home (without predatory lending, that is).

The fundamentals don't lie, meshugy. There is housing demand, yes, but the demand is driven by a large supply of easy money, as well as a good helping of speculation. Once those things go away (and they always do), we're going to see a significant correction back to the historic trends. Right now, I think that's somewhere 20-40% below today's medians.

meshugy said...

Yes...I'm total aware of massive appreciation. I've been here since 97.

I agree, it's totally nuts and is at least partially based on the economic anomalies you mentioned (easy money and speculation.)

However, I've heard a lot of economists say that houses, unlike stocks, are "sticky downward." My gut feeling is that this is true. As long as the economy is at least decent, I think prices will hold and/or dip 10% or so. But will mostly hold and eventually inflation will catch up. The big, sudden, and lasting housing crashes (like Japan) seem to be rooted in a failing economy.

Of course, the big question how important housing to our economy? I think it's less important in Seattle then other places....but I'm beginning to wonder after the job growth data put construction as the top growth category.

I could be totaly wrong...if so, I won't be selling this house for a really long time! Glad I got one I like...

Chachi said...

I recently decided to rent and found a beautiful new rental on the East side in Bothell for less than half what it would cost to buy. I did my research and realized that the housing P/E is the most important indicator of value. If I were to buy at these prices with the interest rates going up, and psychology changing, I just know I'd be regretting it in about 6 months.

As Robert Shiller, the Yale economist said, the major driver likely to impact prices will be buyer attitude driving prices down. Afterall, once the refi's and foreclosures start hitting the news, the Ponzi scheme known as the housing bubble will take in its last buyers and they'll unfortunately be left holding the bag. Prices will start a steep decent at that point.

This will definitely happen. It happens with everything. I don't know of a single market where the price of something rises so dramatically and then just stays there. That's why they say, vertically rising markets inevitably become vertically declining markets. We're due for a huge correction. It will be sad when the buyers of 800 and $900 thousand dollar houses realize they're only "worth" 500 to 600 thousand.

Besides, Seattle is a pretty depressing town. Only 67 days of sunshine makes it a really tough place to get excited about living in. Especially with the introverted people, poor transportation, lousy infrastructure, transient lifestyle, and lack of pizza (and way too much Thai food). Tim, I know you love Seattle, and I'm not ranting or knocking it, I just think it has a lot of shortcomings when it comes to "World-Class" cities.

Also, too many myths about lack of new housing and the entire buildable land being taken. That's a lie to perpetuate the notion that you've got to buy or be left out. The town is very low density with many areas that can easily be cleared out (i.e. South Lake Union) and built for higher density living. The East side (North and South) are basically all farmland and the rest of the state is vacant. What's the deal with "No land to build"...just a myth.

We'll see what happens in Fall 2007 once the $1.5 to $2 trillion in refi's hits and the ARM's adjust higher for millions of people. At that point the music will stop and this inflationary pump up of prices will be well on its way down.

Just my thoughts, but I came here fully looking and expecting to buy, especially since I had read that Seattle was going to be a "bubble-buster" city. I was not even aware of the blogs on the housing bubble. Once I did my research, I became totally convinced of its reality and realize we're just a matter of months away from a housing crash of epic proportions. Seattle will definitely not walk away unscathed once the rest of the country (and world) start going into a housing decline based on low-interest rates and easy money.

Peace.

seattle price drop said...

Meshugy-

Since you bought last year,I'm glad to hear you like your house and are meaning to stay for a long time.

I really believe that our economy right now is probably worse than Japans' economy when it took it's nosedive. So that is the scenario I believe we're looking at: years and years of depreciation.

Time will tell of course.

And a downturn in a housing market, even a sharp and lasting downturn, means absolutely NOTHING to a homeowner who bought as a home rather than "investment" and at a price they could reasonably afford.

So it sounds like you can continue to be happy with your home come what may.

I am disgusted though with those who continue to try to prop this market with the old cliches of "RE always goes up/ get in now before it's more expensive/ and all the manipulation of the MLS to make Seattle look hotter than it is, etc. etc.

There is a lot of "scare tactic" going on in Seattle that I fear is going to continue to drive people into homes they cannot really afford at a time when the market is poised to drop big time.

As these homes are not chump change, it seems very immoral to keep goading people into buying.

Any smart Seattle realtor at this time has surely noticed what I have, that the market is softening. To continue to try to drag people in when the stakes are so high is sickening.

I really believe that the US economy is in for a big hit and the housing market is in for a big hit.

To think that Seattle would be spared is just ridiculous, IMO.

seattle price drop said...

Chachi-

I'm with you on this one- I think the first major blow is just around the corner- within a few months.

All the foreign financial interests are concerned (well that's putting it lightly!) about the US dollar and the US economy.

They seem to be bracing themselves for a US crash on many levels- dollar/housing market/stock market, etc.

It's interesting to see the look of concern and panic on these guys faces and at the same time the cheery nonchalance on the faces of American newscasters, etc.

meshugy said...

Hi Folks....here's another example of how fast sales come up on the Excise Tax Affidavits Report. This crappy little 50s brick house around the corner from me just sold:

Listed: $394K

Sold: $407

See: 7041 20TH AV NW

Click on the Excise Tax Affidavits Report

You'll see that this house was sold on 4/10/06. It's not a great house and was still over bid. Seems like we're still seeing signs of a competitive market. You simply don't get multiple bidders on a houses like this unless people are desperate.

seattle price drop said...

Well, here's he latest update on the list of 175 homes that I copied out last Jan. and have followed through the sales process: (They're all in Ravenna, Laurelhurst, Sandpoint area)

Original Asking............Sales Price
1,560,000....................1,465,000
1,795,000....................1,600,000
1,350,000....................1,200,000
1,250,000....................1,075,000
1,049,000....................1,049,000 *
1,195,000......................980K
779K............................765K
725.............................715
725.............................650
699.............................704 **
698.............................650
689.............................685
475.............................455
475.............................453
469.............................462
440.............................422
399.............................432 **
399.............................380
397.............................391
390.............................380
389.............................380
384,950.........................384,950 *
380.............................370
375.............................375 *

* sold at asking
** sold over asking

Last time it was 57 properties, 40 sold below asking, 9 at asking and 8 above.

This time it's 24 properties, 19 sold below asking, 3 sold at asking and 2 above asking.

seattle price drop said...

Meshugy-

Yeah, so I don't know what to say. Ravenna, Laurelhurst, Green Lake (the neighborhoods I watch) have all been mainly selling below asking for several months now- at least since January.

I guess about all anyone CAN say is: Congratulations!!!! Looks like you've bought on the one block in Seattle where things are still being bidded up regularly.

And I mean that- congratulations! There ARE small areas of any town that will hold value better than others.

But it's a mistake to extrapolate those odd areas out into the larger field.

Gotta look at the broad picture.

Anonymous said...

Depressing weather... This is so true with Seattle, even though I've been living here for the more than 18 years and own my house outright. Yet, I still feel very upset when I see my relatives, friends, etc., get sucked into this bubble. Anyone with a sound mind can see that the whole run up is totally unfounded. Six years ago, when there were more working people in Seattle with more high paying jobs – I took me 5 months to sell my house, which appreciated around 5% for each year I owned it. Two of my friends had to take their house off the market because they could not find any buyer… What has changed in the last 6 years to make housing more than double? or triple in some areas around here? Office rental rate in Seattle now is still 40% less than 5 years ago!

No, there are NO fundamental reasons for this run up. It is totally driven by speculation coupled with absurd low lending standard! I remember back in 1994, when I bought my first house, my annual income was about 55% of the price of the house I planned to buy, yet I had to bring a thick stack of documents to show the loan officer - W2s, bank statements for the last 3 months, income tax, pay stubs, etc. Now, I routinely receive flyers advertising that I can qualify a loan with no income verification, no down payment, bad credits, etc.

Any way, the era of cheap money as we see it is ending now as the world bankers are engaging on a tightening course. The rule of mean reversing will ALWAYS prevail in the end.

Anonymous said...

Hallelujah for that.

It will be heavenly when people start living within their means again.

meshugy said...

Hi Price drop,

Thanks for the numbers...it's cool to see what's going on over there. I actually lived in Laurelhurst for 5 years. Bought a condo there in 97 for 108K and sold it for 225K last year. We had over 10 bids on it...crazy.

It'd be nice if you could post your findings every month...that way we could see which direction it's going. It'd be nice if you could post the address and/or link to the parcel viewer for each property. It's hard to know what to make of those numbers without more info (location, size, year built, etc.)

In a totally over heated market everything will get overbid. And that's obviously not happening in Laurelhurst...and it's not happening in Ballard either. But under/overbidding is all relative to the "accuracy" of the asking price. Very rarely do sellers ask for the market price of a property. What I've seen over and over again is that sellers with undesirable properties shoot high...asking for much more then it's worth with the hope that someone is desperate. But often they eventually concede to a lower price. But the "lower" price is still often above the properties market value. So just because it was underbid, doesn't mean that the median price of houses is going down. Sometimes they're still going up anyway.

The flip side of this is that it's common for realtors to advise buyers with desirable properties to price low. They know the market is tight so they know for certain it will get overbid. They just want to reel in as many bidders as possible with an enticing lower price. Once a buyer is reeled in with the low price, they get their heart set on the house and bid more then they wanted to. While the final sale price might be bid 50K or more over, it might only be a few K over the market value of the house. So it works both ways.

See what I mean? Anyway, when I see nice houses with decent prices just sitting for months I'll know the market has tanked. That's just not happening right now.

T.S. said...

I'm finding the conversation here about prices very useful -- so glad to have some positive/hopeful folks to balance us negative/doomsday types. Bottom line, I'm interested in figuring out what's really going on, not just reinforcing my own prejudices.

We looked at houses in Ballard in the 400-450 range last month, and it's true, there was some competition at that range, though we never got close enough to bidding to really see how that panned out. On the other hand, a great house that was only a tad overpriced at 475 sat for a couple of weeks before someone bit. I would watch it, though, because I see a lot of new construction coming on in Ballard. Also, Meshugy, the example you report is a far cry from the kind of $30-40K overbidding wars we were seeing last year. I'm not knowledgeable enough about Ballard to know what's really going on, but I know that our agent was predicting that the spring would be "really hot"--and it's not.

But lately we've been looking more closely in the Ravenna/Roosevelt area, up through Lake City Way, and houses are just sitting. And sitting. We had our agent feel out the seller on a house in the low 400's and the answer came back: they'd definitely consider a lowball offer. Another house we were kinda interested didn't get any bids on bid day, then was pending STI, and now I see it's back to "Available." Suddenly, we're wondering why in the world we shouldn't wait another few months. Prices are certainly not going up, why not see if more inventory comes on? There must be more people like us--actively shopping, less and less sure they want to buy.

Just in the last week I *seem* to see many more properties listed in the 399 range all over the place. Anyone else notice this? Might just be an anomaly.

Final observation from a real, live house-shopper: the interest rate increase has made a real dent in what we can afford. I'd say our affordability dropped about $50K over the last month. I was surprised to see how the mortgage payments really increase with such a slight bump in the rate (on a 30-year fixed.

T.S. said...

Woops, correction: I went back and looked at the paperwork and realized that we got mortgage quotes on completely different amounts. Real affordability did go down but I'm not mathematically gifted enough to figure out by how much using these different spreadsheets. Maybe something like $20K difference over the last couple of months.

Anonymous said...

First off, let me make it clear that I am a buyer looking to buy in the eastside and from what i have seen over the past month there is no softening yet.

Properties in desirable neighborhoods such as sammamish, issaquah, snoqualmie ridge etc still go for asking price or more.

More importantly, as meshugy pointed out, the real indicator of a soft market is the increased length of days on the market.
As far as i can tell, 95% of the houses on the eastside are sold within 10-20 days at most. It is still a sellers market unfortunately,
though it may not be as crazy as last year.

Hoping & waiting for a buyers market soon :)

meshugy said...

Hi T.S.,

I'd definitely say it's not as crazy as it was in April 2005. We bid on three different houses at that time...every time there were at least 10 other bidders. Most houses were going for 40k-70K over asking.

However, the asking prices were much lower then. Every single house we bid on was priced below 400K, but got bid up well over 400K. So what's happened since then is that most sellers are just asking more to begin with. Almost always over 400K. But I think final sales prices haven't changed much since August of 2005. So I think we're in a holding pattern right now...I don't think prices are slipping. Just holding and maybe creeping slightly up. But not much...

'm

meshugy said...

T.S.,

I just noticed today that there are more Ballard properties in the 3K-4K on the MLS then I've seen in a long time. A bunch just came up today...it'll be interesting to see if this effect prices.

For the most part, there have been a lot less good houses for sale in Ballard this April then in April 2005. Definitely a smaller inventory. But maybe that's starting to change.

T.S. said...

You're right -- the houses listed just under 400 last summer would all get bid up to low-mid 400's (we lost out a couple of times), and now sellers are just asking 430-450 and letting them sit. It's been really tough for us, very stressful. We planned to settle here after we moved last year, but over the last few weeks I think we're reaching the conclusion that Seattle's kind of a different ballgame than we anticipated. Too bad for Seattle--we're smart, have a good income, and would have tried to make public school work for our (future) kids. It's all so ironic because we decided on Seattle a few years ago, while my wife was in law school, almost exclusively because of the affordable home prices.

chachi said...

I can relate my experiences. I moved here in Oct. 2005 and heard that the market was flying in the Spring/Summer of 2005. That made me concerned that prices had already risen significantly. I decided to hold off and see what would happen to prices.

I created a large inventory list, probably close to 100 houses on John L Scott. I watched inventory daily and would get email alerts on any activity for the houses. Almost the entire winter and into early Feb. there was virtually no activity, none, zippo, nada. Rarely I got an email letting me know that a house went under contract, i.e. pending inspection.

It seemed pretty clear that sales had dropped off a cliff and things weren't moving (at least in the 700-900 range). Suddenly, in mid-Feb the market started to take off. Like a rocket ship. Exactly as the realtors had told me. One by one almost my entire list has sold, I'm not sure if at the asking, over, or under, but I do know that they sold.

So then I see the King county sales data for Feb. and March on Seattle Times. The thing is, sales volume has dropped by more than 10% and upward of 30% in just about every Eastside and Seattle neighbor hood compared to 2005, although median prices keep rising.

So, I check up on bubble theory to see what gives. I now realize this is classic, just like the NASDAQ had it's steepest ascent just prior to plummeting. It's essentially like a capitulation phase in the housing market. Folks who want to buy want to get in before rates rise higher. They're afraid they'll miss out on a good interest rate, and are fearful that prices never go down. The reality is, the market is slowing down in a major way. There is no question, these are hard facts. Prices won't be sustained without ever greater demand driving them higher, and all the data shows that demand is tanking, even though the houses I was tracking all sold.

Like I said earlier, I decided to rent because I concluded that I would be a chump to buy now. This is essentially the highest point in the history of the US and global housing market. Even though we're in a global expansion, these prices are simply unaffordable...period.

Anyway, the data lead me to believe that this is the last gasp for life that this market will have. Remember, this is definitely the best selling season in the Seattle market, and it's certainly not last year. I can hardly wait to see what the fall and winter will be like this year if last year it hit a wall after coming off such a strong spring, with the multiple offers and all.

I remember one house in particular, in Kenmore having the builder throw in a $50,000 Porche to a buyer in addition to $30,000 in buyer upgrades, on an $850,000 house. This winter will be even better...perhaps a Bentley and $100,000 off the top.

meshugy said...

Hi Chachi,

Things are definitely a little slower this year. Like I said earlier, my general assessment is that prices for an average 3 bedroom house got catapulted over $400K last Spring and have stayed there.

We could be seeing the first signs of a big slowdown. But one thing that makes me doubt that is the lack of inventory. There just isn't much out there, and what is there is still selling pretty fast. (In Ballard anyway). The overbidding is not as high but the base prices are higher. The March data still showed that prices are increasing so that tells us that a lower # of overall sales is not necessarily a bad sign. I think lower sales in conjunction with a median price drop and a glut of inventory are the signs of a market in trouble. What we're seeing now is less sales but higher prices and less inventory so that doesn't seem very dire to me.

We also have to keep in mind that 2005 was one of the most record breaking years in the history of real estate. So even significant drops in price and sales from last year would still put the market far above normal. it really has to fall a long way to get back to pre-bubble #s (circa 2001).

It'll be interesting to see what will happen...I'm not ruling anything out at this point. But I'm not expecting any big drops in the next six months.

Here are a couple of houses that sold recently in my hood:

7716 33RD AV NW 98117


3 bdr, 1.75 bath, 1960 sq.ft

Listed: $549K

Sold: $588K

7328 28TH AV NW 98117

2 bdr, 1 bath, 1000 sq.ft

Listed: $399K

Sold: $450K

'm

meshugy said...

A few people mentioned that there's a lot of construction going on in Ballard. That's definitely true...there are essentialy two types:

1) Condos are going up everywhere around Market St. There must several thousand units in the works.

2) Old houses are being torn down left and right and being replaced with huge McMansions (mostly N. of 65th).

Pessimists argue that the market is getting flooded and this will drive prices down. I'm not sure what the condo situation is...but i did notice that Noma, one of the developments around market has a 50% sold sign up.

I'm more interested in what's going on with the McMansions...they buy a little 1000 sq. ft house and replace it with a 3000 sq. ft house! This happened on my friends street...when we saw the asking price we couldn't believe it: $949,000!! The old house was bought for $315 in Jan 2005, torn down and replaced with 3,800 sq. ft Mc Mansion.

We thought no one would buy it...just checked: Sold on April 4th for $949,000.

So I guess people are buying things...

See the record:

3110 NW 75TH ST 98117

seattle price drop said...

Meshugy-

I wish I could post every month but there is such a lag time when I go in to check the tax records.

It is very time consuming because when I do check, half of the properties are not yet recorded.

I'm still not clear on how you get your info so quickly. I've got an old computer so maybe I just can't use that site you are using.

Here's the thing that I think many people are missing when we talk about the Seattle market:

My definition of "hot" is what was happening for the past several years: throw any piece of crap on to the market and watch the price get bidded up.

Now that was HOT!!!

Since January, at least, this is no longer the case. Now stuff sells UNDER asking. That is not my definition of hot.

Seattle realtors have now started saying: "Well it's not selling because it's overpriced" (!!!???) Was ANYTHING "overpriced 2 years ago?

I saw crap right off the Ave., dilapidating, 300 square foot, uninhabitable sh*tboxes with NO LAND that were flying off the shelves at unreal prices. Now THAT was a hot market.

Things are definitely cooling here. Most areas of town have topped out. At some point, I suspect your neighborhood will too.

The area that those "sold" posts are from is actually a very lovely area of the city. Walking around there up on the hill overlooking Lake Washington with full views of the Olympics and the Cascades. It's not "cool" like Ballard but lovely none the less. It's also super convenient to all the "cool" places like Green Lake, Whole Foods, Traders, etc.- (I should be a realtor!)

If homes there are sitting on the market (and they are) and going under asking (and they are), then the Seattle market has gone past the hot phase.

seattle price drop said...

Anon10:46-

Re. houses being sold in 10-20 days:

I've been watching the realty lists very closely. About 1 or 2 months ago, there was an uptick in properties pulled from the list, then put back on with a new MLS# and DOM rolled back to "1".

In the past 2 weeks, this has been happening at an accelerated pace to more and more properties.

I asked a realtor if it was legal to do that in Wa. and she said "Yes, it's legal. It keeps the property looking fresh and is a good marketing tool."

In other words, it may LOOK like things are selling in 20 days, but they may just be being relisted with new pictures and MLS numbers, etc.

BTW, 20 days seems to be a favotite time to pull and relist.

I've seen a few properties go back to 0 several times (not just once!) after 20 days.

Anonymous said...

I am sure some overpriced properties are getting relisted at 20 days like you said.

But i think the majority are sold because i see the "subject to inspection" not just disappearing off
the list. (Eastside again).

Also here is why i think the housing prices won't tank too much suddenly

1) The people who overpaid have already done that and would not let
go unless they absolutely have to
(job change etc).

2) Even if they got an ARM, they
would be refinancing to fixed rate
now even if they have a little bit of common sense and try to ride out
the market.

3) #1 & #2 will cause low inventory
which in turn will keep prices high

4) The smart flippers/speculators
have probably gotten out of the market already.

5) If all fails, the govt will bail
out the lenders one way or the other. (Elections are near remember ;) )

What is likely to happen is prices
will stay flat and/or rise modestly
over the next 2-3 years.

Though i wish I was wrong and prices
do come to reasonable levels so i can buy :)

meshugy said...

Hi Price drop,

You are using the parcel viewer to get your data, correct?

Just go to:

Parcel Viewer

Look up a property and click on "Property Report"...if it sold recently and you're not seeing the recent data then click on the " Recorders Office: Excise Tax Affidavits Report" link. The sales data shows there much faster then on the main report.

Regarding the overbidding/underbidding issue...it's like I said before, people might not be overbidding as much as last year, but that's mostly because the base prices for houses are higher. So houses are no cheaper then last year. If people were over bidding the current prices we'd be seeing massive appreciation. That's not happening, appreciation is creeping up much slower now. Again, don't forget the median prices for King county went up last month, so that says it all.

Have fun with the parcel viewer!

'm

SeattleMoose said...

We are at the top right now. High end property sales are holding up the "price gains" while lower end properties are already starting to slide. Net is pretty much flat and will remain so thru mid-summer.

By fall it will be more than leaves that are falling and by next spring the full horror will be revealed during the "spring buying season".

Patience, Seattle is at the end of the domino trail....

seattle price drop said...

Meshugy-

Actually, median prices fell in 3 areas last month. I think that was a first! It was in the RE section of the Sunday Seattle Times.

2 of the sections were in-city. One of those was down like 1.2% and the other 4%. Not sure of those #'s but there's a post somewhere in this blog.

Here's the number I do remember though:
30% on the eastside- between Bellevue and Kirkland. -30%! Now that is an impressive drop in median.

I think you have to get used to the fact that the market is turning! You seem very resistant to the news.

Really, it happens all the time in RE markets, especially after massive run-ups like this one.

You seem like a pretty nice guy. I hope your loan's okay and you'll be fine.

Just don't take out any of those freaky HELOC loans on your house. That's been one of the whackiest thing about this bubble- people who WOULD have been fine but HELOC'd themselves to death. Too wierd.

Anon 8:08:

The loose cannon in this particular run-up has been all the "creative financing".

It seems that many many people bought houses they simply could not afford. One little false move and they're screwed.

It's true that we don't have hard statistics on that right now. (I'm sure SOMEBODY does but we on this blog do not).

I DO know 2 people who bought houses but cannot really afford to live there themselves so are renting them out. That's a pretty bizarre situation.

The Snohomish blog mortgage guy said that 70% of the loans out of his office were of other than fixed type. Not a good sign.

I THINK I heard Seattle was over 60% but not sure about that.

Wish a Seattle loan guy or gal would get on this blog to enlighten us all.

Anyway, it's hard to imagine that the loan underpinnings of the Seattle market would be much more stellar than anywhere else in the US.

So, I think we will be seeing fallout from bad loans.

Foreclosures in desirable neighborhoods have started hitting the list this week.