Seattle Bubble has moved! Redirecting...

You should be automatically redirected. If not, visit http://seattlebubble.com/blog/and update your bookmarks.

Off-topic comment? Interesting link?
Head over to the forums, or click here for open threads.

Monday, May 01, 2006

Random Thoughts & Observations

I still love this illustration. I heard an ad for a mortgage company on the radio this morning that had the following line:

We can approve you from your car (i.e. - over the phone). Getting a home loan should be as easy as ordering pizza.
It's because of companies with that kind of philosophy that we've gotten into this mess.

My coworker that was selling his Northgate-area house was finally successful. When I asked him about it a few weeks ago, he told me that it sold for $460,000 — just 3% below his original asking price. But, according to the Excise Tax Affidavits Report, it sold for $410,000 — $65,000 (14%) below his original asking price, and even $15,000 below his final asking price. Hmm...

I like meshugy's suggestion:
Since the MLS #s for April will be out on Friday, I think it'd be fun if everyone made some predictions.
However, I don't think I'll be very good at guessing such things, since that would require understanding the mind of today's home buyers—who obviously aren't basing their decisions on logic or reasoning. Despite that, here's my guess for the "residential only" category. Listings flat compared to April '05, pending sales down 10%, median closing price $408,000.

My comment on RCG was rescued from the bit-bucket, but still has not been responded to by Ardell the Eastside realtor, save for an email in which she explained that she hadn't had time to respond yet because she was busy closing a deal. She did respond to another commenter (that used the name "Of course") who asked:
PS. Ardell can you point me to some stats (with a link) that show that a "family" is not a first time home buyer?

Thanks.
Her response:
Of course, I'm assuming that was a "tongue in cheek" question :-) My stats over 16 years. About half of my clients have been first time buyers and only one of those was a family with children and they were only in this country a short time. Since I've sold in five states since 1990 I can't "point to the stats". I have had first time buyers who were not young, in their 40's, but they were single. Just my personal experience.

In my experience, I have had families with two children move from a two bedroom condo to a townhome. Oops, forgot my friend Lori. She rented with her husband and three children until her husband passed away. Then she bought a home, cash, with his insurance money.
So there you have it, if you don't get a house before you have kids, you can forget ever getting one at all (unless you happen upon an insurance windfall). I kid.

Seriously though, if housing prices five years from now aren't on a major trend toward more sensible levels, Missouri may be calling my name.

32 comments:

meshugy said...

How big was your friend's house? Was it on a decent street? What year was it built? Can you post the parcel #?

Unless it was unusually nice, I'd say $410K is a lot for a house in North Gate...that's still considered a cheap area to live. His original price was probably way, way too much for that area. Sounds like he still got a good price for it...unless it was a mansion.

People pay $410K in Ballard all the time...usually for ugly 3 bed room 50s houses.

'm

seattle price drop said...

Not at all surprised about your co-workers house- it just reflects exactly what I've been finding in the tax records for months now: almost everything is selling below, WELL below, original asking price in North Seattle. This has been going on since Januaury at least.

Am a bit surprised though that he'd feel it necessary to "exagerate" what he got for the house. Sheesh... are people's sense of self worth completely entwined with "house worth" now? Wierd.

Ditech's been running these "easier than ordering a pizza" ads on cable TV since last winter. Sick.

The Tim said...

meshugy,

I could post the parcel #, but out of respect for my coworker I don't think I will. It's a two-story, 4-bed, 2-bath house on an 8,000 sqft lot, built in 1978 and remodeled in the late '90's (added a 2nd story). The neighborhood seemed nice enough. It wasn't on major street, just a corner lot on two crossing residential streets.

meshugy said...

It's a two-story, 4-bed, 2-bath house on an 8,000 sqft lot, built in 1978

410K sounds about right for that in North Gate...

'm

Eric D. said...

Coming from Missouri myself, I don't think you would want to move there just because real estate is affordable Tim. Jobs are harder to come by, jobs generally make less, it's really hot in the summer, no mountains, and it's basically turned into a red state. Of course that being said there are advantages- you don't need as much to live comfortable, you can get a much larger house, and even land in the country without having to be a millionaire, and you don't have to deal with so many people and traffic. I think the moral of this story is that all places to live have trade-offs, you have to decide what you really value, and then, in the case of Seattle, you have to pay for it. I think Seattle's overvalued as much as anyone, but it's always going to be more expensive than Smalltown, MO.

Anonymous said...

I have to agree with eric...you're always going to pay more to live in Seattle than in smalltown, MO, because Seattle sucks less. That said, if you've never lived anywhere other than smalltown, MO and Seattle, you definitely need to live somewhere else before committing to this place.

In my experience, most of the people who get all slobbery and irrational over the special nature of Seattle have lived in only two places during their lives: Armpit, Middle America, and Seattle, WA. Meanwhile, the people most annoyed with Seattle have lived in one or more real cities during their lifetimes.

In my experience, most western cities have more to offer, culturally and scenically, than Seattle.

meshugy said...

here we go again with the Seattle bashing...


I was born in Manhattan, lived in Boston, Atlanta, North Carolina and The Netherlands (Amsterdam) and Seattle tops them all! I'll never leave...

but I agree Seattle is not for everyone....if it's not for you the best thing you can do to lower housing prices here is to leave...

'm

Anonymous said...

"Seattle-bashing" is no better or worse than "Seattle-raving." The only difference, Meshugy, is that you happen to disagree with me.

As I said, most of the Seattle lovers I know haven't lived anywhere else. There are exceptions.

I don't know, Meshugy...perhaps you just enjoy mold, fat, pasty people, passive-aggressiveness, and people who go 20 MPH too slow in the rightmost lane. To each his own....

Dukes said...

Here is today's 24 Hour Market Info from NWest MLS. Notice a lot of listings, but also a lot of solds. But AGAIN we have 287 Price Reductions and a Whopping 506 Expireds...

New Listings 785

Back on Market 80

Price Increases 63

Price Reductions 287

Contingents 44

Pendings 548

Solds 625

Expireds 506

Inactives 131

Dukes said...

Meshugy, come on now...Seattle is nice, but it certainly isn't the end-all-be-all of places to live.

I agree with anon, I have lived all over the US and Seattle is OK, the weather SUCKS, but there are some trade offs.

I think that mostly the people in Seattle suck, go ahead bash me now, but I have never lived in an area where people were so UNFRIENDLY as Seattle.

seattle price drop said...

Dukes-

Thanks for the numbers.

Re the expired listings:

On my original list of 98105/98115 properties, there were several that stayed on for months then mysteriously disappeared. I'm waiting with anticipation for them to show back up on the MLS list and really curious to see what the new price will be when they do re-appear.

SeattleMoose said...

dukes

A big second on the "unfriendly" thing. Being transferred from Texas last fall to "rain city" has had its up and downs. But I can say truthfully that Texans are MUCH friendlier than Seattlites.

Seattle folks need to lighten up and learn to say "howdy" a bit more.

The Tim said...

Speaking of unfriendly, check out RE Agent Ardell's latest post on RCG:

"It’s time for everyone to “get real” and appreciate that the Seattle area has SO many options, that all of this bubble talk is horsepucky!!
...
It’s worse than horsepucky it’s selfish, self-centered mumbo jumbo aimed at justifying why you can’t do something that you CAN do. If you choose not to buy property…that’s OK. But don’t blame your fear of commitment on some housing bubble baloney. Sure you can lose money. But you lose money by making bad decisions, not by buying property. One of those bad decisions is renting instead of buying, period!"


Yowza! So much for friendly disagreement. Talk about fever pitch! It's a good thing I'm such a nice guy, otherwise I might say some very not nice things right about now.

Dukes said...

I have news for Ardell, not only was that post ridiculous, it shows just how little she understands about all markets not just real estate.

I am a living, breathing example of a person who "lost" money in real estate. I bought a house in the Pocono Mountains of PA at one point in my life. I was only 25 at the time, I bought my primary house in NJ where I grew up and thought I was a big shot and bought another place, a nice A Frame ski chalet with my bro in law. Anyhow, fast forward 2 years and we realized that the 3.5hr drive to the house wasn't as much fun as we thought it would be and we weren't using it enough.

We sold it at a 10K loss, not too big a deal, but it was a loss nonetheless.

Dukes said...

Seattlemoose - I can't agree with you more.

As stated earlier, I grew up in NJ, which is supposed to (as per stereotypes) have some pretty loud and unfriendly natives. Well, I found people a hell of a lot more outgoing and cheery in NJ than in Seattle.

People here are "icy", or they are afraid to interact with others which is opposite of people I have met while living in other states. It is strange though, I am someone who looks to converse with others, here in Seattle, that is not very often reciprocated.

Dukes said...

Here is a great article in the Pacific Northwest Magazine that explains the "Seattle Freeze" phenomenon.

Read this and see if there aren't at least a few things you agree with:

http://seattletimes.nwsource.com/pacificnw/2005/0213/cover.html

http://tinyurl.com/3wh7z

unfriendly Seattle said...

Alas, it's true, Seattleites are the most unfriendly people in the US.

The averted-eyes thing drives me nuts. Is it so impossible to look someone in the eye and say "Hi" in passing?!!

Sure makes the day more pleasant for all involved when you're not cocooning off from everyone on the street.

Blech... Creepy....

Anonymous said...

You lose money by making bad decisions, not by buying property.

And what's more...no one ever lost money by purchasing stocks, either! (They just made bad decisions about when to sell).

I am more convinced than ever that the bubble is going to implode. We're going to be pulling stupid people out of the suds for generations....

get a life said...

Re. Ardell's post:

Holy crap that is a most disgusting display.

How desperate are these Seattle realtors these days?

Gotta hook in that one last final fool.

Absolutely pathetic.

These realtors need to start watching what they say in print and in public. This garbage could come back to haunt her someday.

Declaring that renting is a bad move right now is not responsible.

What is she, 12 years old? Has she never seen a bubble burst?

watching said...

I believe that Ardell was the one who told me that it is perfectly legal in WA to change MLS #'s and relist because it "freshens the property and is a good marketing tool".

The post is on their website.

Honesty? Who NEEDS it! Certainly not the home buyer.

Nothing much at stake here, just hundreds of thousands of dollars.

seattle price drop said...

Interesting that Ardell thinks it's "selfish" to not buy property in Seattle.

Are you asking us to hold your property value up for you Ardell?

Is it our unwillingness to forfeit our financial well-being so you can keep riding the bubble train another few weeks?

Is THAT proof of our "selfishness?"

Sorry, call me selfish. I prefer to keep my money, not lose it at the height of the biggest credit bubble in history, outside of perhaps the Great Depression.

T.S. said...

Finally, someone has exposed the ugly truth behind Seattle's sky-high real estate prices: selfish, snobbish buyers making wrong decisions!

And to Tim and everyone else on this board, I'm getting tired of your horsepucky, self-centered, stinkin' thinkin'! Now get out there and just buy a dang house!

The Tim said...

Check out this delightful exchange.

meshugy said...

Wow Tim...you're famous!

I think you conducted yourself very well in that exchange. Thanks for representing the bubble argument without looking like some sort of paranoid nut case.

Ardell's post at RCG, which seemed to have been inspired from your exchange, was the most ridiculous thing I've ever seen. Does she really think that sort of rant will actually convince anyone to buy a house?

Dukes said...

Good exchange Tim.

The way I see it, the mentality of the "believers" is the same as the mentality of the tech stock "believers".

If you had tried to explain to someone at the time that Cisco, Juniper, (enter tech stock co. here) were overvalued you were told you were a fool basically and goaded to "join the party", as this person did to you regarding real estate.

You see, the numbers don't make sense, as you pointed out. So, making the leap, or joining the party so to speak is nothing more than an ill advised leap of faith because it doesn't pencil out financially.

Sanity will once again return, reversion to the mean will once again happen, and there will be a lot of crow that will need to be digested.

seattle price drop said...

Who IS this Marlow Harris person?

Are we sure he wasn't pulling your leg with the suggestion to jump into the housing market now with a 0 down, 5 year arm?

His comment sounded like something lifted directly from the "thereisnohousingbubble" spoof blog.

I'm serious, who is this guy? Is he kidding?

The Tim said...

First off, she's not a guy.

I'm pretty sure she wasn't pulling my leg. I think she was being completely serious.

As far as who she is, here's her bio on the Seattle Real Estate Professionals Blog, where you can also see her picture on the right side.

Dukes said...

Funny, if you go to her site: http://www.seattledreamhomes.com/ and see the caption "Seattle Dream Homes", then look at the first P.O.S. that is shown. $459,950 for a "piece of shit" crackerbox in Maple Leaf.

I don't know about anyone else, but that is certainly NOT my dream home.

seattle price drop said...

Thanks for the links. Truth is indeed stranger, or at least as strange as, fiction.

It is inconcievable to me that any "professional" would recommend a "0 DP/ 5 year ARM" right now.

I stand woefully corrected.

Do these people not read the news? Best case scenario: They are living in a bubble within a bubble.

Worst case scenario: They're lying to prop up what's left of the market.

Ameriquest Loans shut down ALL of their branches today. Something like 228 offices. They've left only 3 regional headquarters standing. See Ben's blog.

Homebuilders are finally taking huge hits. See Ben's blog.

I like this new trend of communicating with the Realtors in Seattle Tim. It's interesting to flip over to their websites and see what's up.

nwcoastguy said...

I've lived my share of places, upstate New York, Florida and overseas.

Seattle's got it's good qualities. People are concerned about the quality of their world and being balanced. People are also very well educated.

Unfortunately, my experience here is similiar to others posting. There's a strange distant quality to social interactions even if it's got a friendly face on it. I'm sure this will drive me out of Seattle faster than the rain actually.

What's really troubling is the wierd kind of subtle censorship that occurs when discussing anything that could be controversial or bother some other person a bit. Sort of hyperpolite but emotionally detached.

Anonymous said...

Upstate NY rocks- VERY friendly, warm, people. Great sense of community and live and let live acceptance.

Anonymous said...

Seattle...

Hmmm Lots to be desired as far as the people living in it and the cost of housing.

I came to this city thinking this place was progressive and progressive thinkers are open, outspoken adn friendly or at least friendlier(what about some freelove hippies) than your staunch conservative.

Now reality is Seattle IS a small town with too many people in it so prices of homes are thru the roof for a single guy like me.

Adding to the small town appeal is the reality that people are not eager to make conversation, friends or dress nicely when going out to a expensive restaurant.

People here are stubborn and nothing better to hang out with people who have opinions like their own. They wont listen to anybody elses views or even speak up to strangers.

The city harbors pan handlers, small time crooks and a very poor infrastructure. Did I mention the tax hike the minute the democrat gov came into power? Yeah for such a liberal state why doesnt anyone stand up to this?Just look at the traffic and the condition of I-5 in d/t Seattle...

People have $ here but they clench it with fists of iron and so nothing gets donw to repair major roads or bridges here.

I for one live in the land of reality and not afraid to express my opinions being pc like Seattle gets people nowhere.

I am glad to leave here soon never to return. Ill take the Northeast anyday. At least you know who your friends are! All the conservatives I have meet care for family values, religion and have the decency to say Hello to their fellow American when walking down the street more than anyone here!