Most Ridiculous Item Of The Week
Let's have a little fun on a Friday. How about a thread dedicated to sharing the most ridiculous real estate related item you've seen this week. An anonymous commenter yesterday made a good contribution with MLS# 26089900 which urges the potential victim buyer to "Take advantage of the Ballard Craze now," by putting in "lots of work" and "sweat equity."
This might or might not be incredibly ridiculous, but I looked up the info on a house that I pass by sometimes on my way home from work. Asking price: $1,625,000. Most recently sold in: October 2004 (as an empty lot). Most recently sold for: $350,000. Days on the market: 23. I don't know how much it costs to build a 5,000 sqft home and do all that fancy landscaping, but my gut check tells me that this asking price is a tad on the greedy side. I mean, just a few years ago I remember walking through nearby neighborhoods with comparable homes listed in the $600k-$800k range.
So what's your "most ridiculous item of the week"?
95 comments:
This one is pretty obnoxious. $440/sq ft, and a lifetime of serious debt, for that?
I rent a great SFH in Crown Hill, and I'm seeing a lot of marginal properties getting very rushed facelifts and landscaping work. Looks like a sprint to dump these crackerboxes to a bagholder for $400K a pop.
I think part of the last phase of this bubble runup here in Seattle is the self-conscious worry that we're not as good as the Bay Area. Maybe once our RE prices are as inflated as theirs, we'll finally be worthy.
Will be interesting, too, to see how the upcoming Windows Vista disaster, and the accompanying corporate crisis in Redmond (1991 John Akers IBM-style meltdown) will affect us in 2007. I agree with the "mini-Microsoft" blogger that a major convulsion is necessary (IMO unavoidable).
christian,
What Windows Vista disaster are you expecting? (In all seriousness, I ask, I'm not trying to be snarky.)
Christian...that house is basically on I-5! So much for tranquil suburban living.
Looks like they're hoping someone will buy with the hopes of renting as a multi-family. The description says:
This street is a potential candidate for future multi-family rezoning. Buyer to verify from city.
If you remember, please post the excise tax records for that after it sells.
Geez, those examples are ridiculous.
I'm not sure a Microsoft meltdown is imminent in 2007. Mini's arguments may be correct, that a smaller Microsoft would be more efficient and successful. However, they're still bringing in $10 billion per year in profits, and regularly sit on a cash horde of twice that, which significantly reduces any pressure to lay people off. Mass layoffs in large companies are usually preceded by several years of losses (which Microsoft is not headed towards in 2007).
All that said, I certainly worry about the long-term possibility of a Microsoft corporate crisis. 20,000 people laid off would be bad for all the reasons you can imagine.
I don't know how much it costs to build a 5,000 sqft home and do all that fancy landscaping, but my gut check tells me that this asking price is a tad on the greedy side.
I also wonder how much they paid for the land? $300/sqft should get you good build quality (right?); 300 x 5000 = $1.5M plus landscaping and all those incidental costs. So if that house is 5000sqft, and they really optioned out the kitchen/baths, they might only be breaking even on the deal.
Here's one that sold for $399K back in December 2005, now listed at $749K.
MLS: 26078537
It has been remodeled, but it sits on a corner of busy streets, 2 blocks from a freeway entrance.
From the street, the chimney looks like it's falling off and the roof is showing signs of wear.
8003 5TH AVE NE
Most rediculous item of the week...
Hmm. My better judgement tells me that to comment here is something that would be unwise.
You get to know a lot of people and builders in this business. Watching decision making when you are a neutral party is an amazing experience. There are a LOT of people that have no idea about the markets in general.
Moved nearly 90% to cash, CD's. For me that's not saying much, but I'm more conservative than others, so you can take that with a grain of salt.
Here's a favorite of mine:
6533 20TH AVE NW
This thing is totally gutted...my guess is that it will get torn down and a McMansion will replace it. I see this all the time in Ballard. Developer pays 300K or so, tears down house, rebuilds a McMansion and charges 1 mil.
This property has had an interesting history. See: 6533 20TH AVE NW
Someone bought it June 2005 for 300K. I think they might have tried to renovate it and gave up...then sold it in May 2006 for 330K. Not a big margin, especially after carrying and closing costs.
anon 10:03 --
Without taking the thread too off-topic, nutshell of why Vista is a mess and Microsoft Corporation is at risk:
1. 2000/XP works fine. Office, too.
2. Vista wants new hardware, but is itself legacy spaghetti code. It's their "Copland" project.
3. Vista adds NO value for a business user over XP
4. CIOs still burned from Licensing 6 and Software Assurance scams
5. Companies want to limit MSFT lock-in. No one trusts or likes Microsoft.
6. Linux, OS X, web apps, open-source, open document, etc, a million MSFT killers out there
7. Looks like real tech companies are in Silicon Valley after all - Google, Apple, Sun, etc. Oh MSFT invented .NET, such innnovation! Shameless.
8. Steve Ballmer. Your leaders set the tone of your entire company. 'softies must be proud.
At some point Microsoft will give up on their only real strategy, "Windows Everywhere", and narrow their focus. Then they'll be the AOL of tech companies, an old senile giant. Their drift into senescence will be a classic B-school case-study by 2010.
There will be serious aftershocks across the Puget Sound region.
The stock will be < $15 a year from now. And houses in Seattle and on the Eastside will be that much more affordable.
This thing is totally gutted...my guess is that it will get torn down and a McMansion will replace it.
Yeah, there's the poster child for deferred maintenance. So is it worth building a McMansion in that neighborhood? $330K is a lot of money for all of .11 acres.
--I should add that dump was bought by someone at AVA realty in Seattle. Good luck flipping that nightmare.
So is it worth building a McMansion in that neighborhood? $330K is a lot of money for all of .11 acres.
Apparently so...they're sprouting up everywhere. I can think of a dozen built in the last year in the Loyal Heights area.
A little dump right behind me just sold for 330K and I'm sure it's going to end up being a McMansion.
Did you see:
Big homes on small lots crowd Kirkland neighbors
There was a similar article about Ballard 6 months ago...
"A little dump right behind me just sold for 330K and I'm sure it's going to end up being a McMansion."
Well, it will be interesting to see if the market supports those homes in the future. After all, take that $330K land, add a 3000sqft home, and you're easily over $1M--plus incidental costs. By contrast: friends bought an old craftsman in Ravenna for half that, and I thought that was a stretch. I'm too risk-averse to play this game.
Everyone of these McMansions I've seen in Ballard has sold way before even being finished. The builders must be making something....
The first time I saw one go up I laughed at the price...but now the joke is on me. People are lining up to pay top dollar for these...
"but now the joke is on me. People are lining up to pay top dollar for these...
"Lining up to pay top dollar"--I wonder why? Well, these cycles usually see a downside, especially if one buys at the peak.
Here's the latest from Harvard on housing:
Only One Household In Twenty-Four Will See Their Mortgage Rates Reset In 2006
Only about two-thirds of homeowners carry a mortgage at all. Of those, only about one-quarter have adjustable-rate mortgages. And of those with adjustable-rate mortgages, only about one-quarter are scheduled to reset their rates in 2006. That's one-quarter of one-quarter of two-thirds, which Excel tells me is 4%.
Mesh-
71 out of every 100 we closed in '05 will see their's adjust over the next 3 yrs, many this year alone. We are closing one soon that already adjusted: unfortunately it's a short sale.
I'm with you S Crow, practically 100% in cash now as of this week. The ridiculousness of the past couple years is provoking many into loss of faith in the stability of this "economy". Am praying the banks make it through ( or at least MY deposits do!) and beyond that, I give up.
The "ridiculous items" are too many to mention. The Seattle MLS has been chock full of properties bought in '04, '05 for 400K, then on the market for a million or more within a year. It's been happening since last Fall, at least.
I agree with the poster who suggests that we have a bizarre inferiorty complex here that will be satisfied only by seeing for ourselves that property in Seattle can sell at SF prices.
Anyone who buys property in Seattle without first checking what previous sale amount was is just a fool, plain and simple.
Over the top ridiculous reigns supreme right now! Buy in and get burned!
Check out Biliruben's post- "I want my bubble back" for a fun overview of the "ridiculous situation", brought to you by Motley Fool.
Mesh, As of the 2000 census there were 742,237 housing units in King County. Assuming NO new units since that time (ya right) that would be nearly 30K which will have their rate reset -- and this will be no small $ reset on the majority. You can see the monthly inventory for king county and tell that even if only a quarter of those couldn't afford the new payments that would be a dramatic increase on inventory.
Keith Gumbinger, vice president of New Jersey-based HSH Associates, which tracks mortgage rates around the country, said a typical borrower who took out a three-year ARM in 2003 at 4.18 percent could see that loan rise to 6.18 percent this year and 7.625 percent next year.
The first bump would drive up the monthly principal and interest on a $240,000 loan by $296, to $1,467, a 25 percent jump.
And next year, they could see their monthly payment rise to $1,699, a $528 increase from the initial amount, a 45 percent increase.
typical borrower who took out a three-year ARM in 2003 at 4.18 percent could see that loan rise to 6.18 percent this year and 7.625 percent next year.
And better yet (or worse if you're in this category) people that took out a 3/1 ARM in March 2004 at 3.1% will see it adjust up to 5.1% next March. A whopping 64% increase in interest payments! By March 2008, they'll likely see a total increase of 130%.
Sure, they can refinance into a fixed loan, but at that point it won't save them any money - just protect them from further increases.
Should we play a fun game where we post addresses and prices from the Notices of Trustee Sales posted to counties' websites on our birthdays? I counted eight on the King County site for my birthday.
This could also include Deeds of Trust for HELOCs and HELs, to see how prevalent is the raiding of home equity coffers while market prices are inflated.
Milestone hit in 98105:
Of 56 Single Family Homes on the market, 30 are price reduced. That's OVER 50%.
How's that for ridiculous?
Christina-
Yes! Yes! If you can post home equity raids please do it!
That sounds like more fun than anything.
The increasing DOM's and price reductions are getting to be old hat by now.
On to sthg. new by all means!
seattle price drop:
I'll start, but with the caveat that the Deeds of Trusts must be in amounts greater than 5% of the average price of a King County single family residence -- isn't it around $420,000? -- and have been taken out within 24 months of property purchase/transfer -- warranty deed should have that.
Reason for the limits: Longterm homeowners who are taking out less than 5% of the home's value aren't exactly gambling the whole farm.
Hey S Crow:
What's the prevalence of negative-equity mortgages here, in your estimate?
Folks like Meshugy have shifted their stories from "can't happen here" to "won't be so bad, because rates won't skyrocket," but conveniently ignore the people who are going to be hammered by resets on the riskier loans (your average dodo "investor" could easily see a 200% increase in monthly mortgage payments after one of these loans re-adjusts -- and that's without changes in the interest rate!)
Milestone hit in 98105:
Of 56 Single Family Homes on the market, 30 are price reduced. That's OVER 50%.
How's that for ridiculous?
Hi Price drop...I know you've been tracking Laurehurst. What's going on over there? You had mentioned that prices have been falling since Jan. I just check the MLS records and it shows that median price for Laurelhurst was $395K in Jan. In May it was up to $430K.
Christina-
Your plan is excellent. We do not need to bother highlighting fiscally responsible people. They are not the ones who are going to crash this market.
The irrational exhuberance, money-grows- on-trees folks are the interesting ones, IMO.
Speaking of crashing the market, this is almost too good to be true, but over on the housingbubble blog I'v read about three places in the past few days where prices have been reduced by 50% overnight on some properties. Nice trend eh?
So far, it's happened in AZ., CA. and now MA.
A very promising start for a major crash. Perhaps we will see 50% reduction then "sticky on the way down" from there?!?
Who knows, time will tell, but I have a very positive feeling about this.
Price Drop...not as ridiculous as you may think. Not sure where you got the info for 98105 but it sightly off.
Directly from the NWMLS, 98105 has 59 active SFRs. Of those, 24 have taken a price drop, BUT 9 have taken a price INCREASE which you omitted. Thus, you could say, 40% took a price decrease (24/59) while 15% took price increase (9/59).
Or, you could say there was a net reduction of 15 units (24-9)... equating to only 25% of active taking a price decrease (15/59), not the doom and gloom 50% you alluded to.
What does this mean...nothing. Just that we can take numbers and interpret them differently. I included the increases to provide a more balanced review of the market.
Hi RR:
I got the numbers from Zip Realty. They've been showing around 50% reduced since May 31 (for SFH).
here's the numbers:
May 31: 48 on market/ 26 reduced
June 2: 50 on market/ 26 reduced
June 5: 56 on market/ 27reduced
June 9: 56 on market/ 30 reduced
I keep the numbers on a sticky note on my computer so I can keep track of whatever trend.
A link for many articles showing slowdown in housing market all across the country.
To see the articles, go the bottom of the page.
http://patrick.net/housing/crash.html#links
i really wonder why buyers don't see this bubble.
if a majority of the buyers hold off buying just for 2-3 weeks, you can see where prices will go.
seattlepricedrop:
I'd have a positive feeling if I had money to short Toll Brothers, Pulte, Bank of America, and other money centers!
Okay, I have a candidate for my game.
Parcel #141978-0100-09
315 10th Ave S #204 Kirkland, WA 98033
Registered April 18, 2006
Casa Carmel Unit #204
$40,600.55 Equity Loan
Sale Price: $325,000 September 7, 2004
Thankyou Christina- Keep up with the HELOC research. I hear over and over from different economists that 04/05 appreciation could get cut right off the top in a downturn.
I was gifted with some B of A stocks last fall and promptly cashed them out to put in CD's (out of fear- I want the money to put towards my DP and don't want to gamble on the stock market this year!) Am totally lame when it comes to all this "shorting", "puts", etc.
But when this mess is over, you can be sure I'm going to educate myself about it so I can apply what I learn to the next bubble, whatever it is. Or maybe people will have had it with bubbles for another generation or two? We'll see.
Am sick at home tonight, can barely move. Took that as an opportunity to check farther into the MLS list. I haven't done that in months cuz it's time consuming. Plus what I learned last winter when I first started and was highly motivated told me all I needed to know, which was, this market's a goner.
But I was curious about what Realistic Realtor said so I went in and here's the results: (It looks curiously like last January- there was a bounce in the spring when the market looked a bit better, but now it's going down again.)
There are 56 SFH and 30 show up as "price reduced" (98105). Of those, 7 are townhouses on the Burke Gillman. These homes have been on the MLS anywhere from 45 - 219 days. In that time, the builder ,or whoever, has reduced/increased many times. From 529>534>529 etc. Or 489>494>489. The red./incr. are tiny amounts and I guess this guy is having a hard time finding his niche- or he paid too much for the land and can't reduce them down enough! Anyway, today they are indeed price increased.
But check out the rest of them. I've left the 260 prefix off the MLS#:
MLS...DOM...Original Price....New Price 82191...15.....799,950............750
85146....9.....655................629
78353...20.......725...............675
79284....20.......875.............850
78117....21....1,999,000.......1,799,000
78029....22....1,795,000.......1,685,000
77286...23.....1,950,000.......1,850,000
75188...25.....889...............859
67634....37....549,900..........499,950
63533....42....1,024,950......999,950
60041....45.........839..........819
61792...45..........789..........755
62187...45.....1,198,500.....1,095....
53271....58.........475.......459,950
46049....71......849..........790
42603....76......695..........634
38044....85......614,950......584,950
27436....104.....599.950......549,950
03494....151.....925..........875
If you go to Zip, you can add at least a couple I know of that have been re-listed with new MLS on and just off Ravenna Blvd. One (on 59th) started at 599K, now at 506K. The other 1011 Ravenna Blvd, started at 575K, now down to 525K.
Moral of the story: Do your homework if you are thinking of buying right now! Or maybe it's: wait a week, the price is coming down.
On top of above post:
The usual mid -week sell-off is not materializing in many parts of the city.
From the Caldwell Banker list
Greenlake June 5/126 june 9/146
Capitol Hill June5/118 june 9/132
are we starting an inventory pile up in Seattle? usually there's a pretty good sell off during the week that prevents these big jumps from taking hold.
Moral of the story: Do your homework if you are thinking of buying right now! Or maybe it's: wait a week, the price is coming down.
Hi Price Drop, the median price went up 30K last month in Laurelhurst. That's MOM, not YOY. That's a huge increase for one month. That was actually the biggest MOM increase in all of Seattle. There's no way that could happen if there were loads of desperate sellers.
I think the problem with your research is that you consider the original asking price of these houses to be at market value. They obviously are overpriced to begin with, so they eventually drift down to what the market will accept.Which is still appreciating rapidly..
'm
Would someone please explain the concept of WHY MEDIAN IS A DECEPTIVE FIGURE to use!
We have told this to Meshugy a million times and yet he uses it again and again.
Here Meshugy: http://tinyurl.com/r6olg
Read Rich Toscano explain how Median works, then stop the BULLSHIT by using it all the time.
I should also mention that Laurelhurst had a 2.96% DROP in inventory in May and a 4.39% INCREASE in sales. Hardly seems like a area that will see a drop in prices. In fact, one of the hottest areas in Seattle.
Preicedrop, you've been telling us that Laurelhurst as been dropping since Jan. But it simply is not happening. Both MOM and YOY are up for that area, inventory is dropping, and sales are up.
If you read that article is actually makes the argument that in the current market the median price is UNDERSTATING the value of a house:
From 2003 to 2005, however, things headed in the opposite direction, and the growth in the median price started to understate growth in the market price of an individual home. At this point, I would surmise that the desire to spring for as much house as possible was being eclipsed by the crushing expense of doing so. At this point, people started to buy units that were smaller or otherwise less desirable, a trend that was especially pronounced in 2005. The buyer price range grew more slowly than the actual underlying home prices, causing the median to understate the latter.
So houses in Laurelhurst have probably gained even more the median would suggest.
I've been doing some looking in the 98115 area - Wedgwood/Bryant, though that zip spreads pretty far. Something crazy is going on with prices--Zillow anything in that area and you'll see what I mean. 9% appreciation over the LAST MONTH. I'm pretty sure it's the lack of inventory. Any other ideas? It's unbelievable. I was CERTAIN that the peak was behind us.
t.s.,
Wedgewood is in area 710, the same area as Laurelhurst which saw a 30K jump in MOM prices from April to May. As I mentioned earlier, it also had REDUCED YOY inventory and INCREASED YOY sales. Seems like that whole NE part of Seattle is really hot right now.
It's from May onwards that really seems to have spiked where I'm looking. Seriously, something weird happened with the numbers and Zillow comps are up over $50K in the last 30 days on lots of $400K-$500K houses. We may be comparing different measures, though. I don't always know what to make of Zillow "Zestimates," but it seems like a pretty decent thermometer.
This particular spike comes after several months of gradual leveling off, and it looks like a bigger jump then we've seen before--which just seems counterintuitive given rising interest rates. Like I said, I think it's competition over very few available houses in these "hot" neighborhoods.
For the love of Christ Tim, can Meshugy be banned!
If anyone had any doubt that he is a damn troll, just read today's posts.
Interesting...I don't look at zillow too much. Whenever I do it doesn't seem to change much. I'm not sure what sort of algorithm they use and how often the data is updated.
'm
yeah, meshugy. go read Toscano. he is a blogger who pulls 500 hits a day and blogs about the real estate market in San Diego as a hobby. don'cha know that he's an expert on Seattle's housing market? he was interviewed but not quoted in Money Magazine and has written a couple of articles for a local SD rag.
the median price is a horrible metric. the real accurate metrics are the opinions of renters on blogs. they are the experts.
to paraphrase: the median price doesn't measure the quality of the median home (a metric that could be more meaningfully ascertained if he would do a per SF breakdown of median price to median house). furthermore, the median price sometimes overstates values and sometimes understates values. it used to understate but now it overstates and in the future it "will most probably artificially overstate the actual movement of individual home prices". but in which direction, up or down? well, Rich doesn't say. but it will overstate things one way or the other and by God, that makes it imperfect.
his summary line: "But the median only gives us a rough idea of the changes to the market price of a given home." Wow. Cutting edge. Last I knew, that was the reason it was used as a metric. This guy ought to be on the Board of the Fed.
bill, if you defend him, he will continue, get a clue.
Toscano's articles are excellent, and so is his site with its forum. Go have a look: http://www.piggington.com/
I spend quite a bit of time reading what he has to say, as well as the posters on his forum, it is well thought out and backed up.
It is a prelude to the delusional attitude that exists up here. I am going to very much enjoy the coming reveral in Seattle's "bubble? Not here!" mentality...this is going to be great!
I think Bill already used the "lighten up Francis" line already. It is as stale as Meshugy's arguments.
I enjoy the sarcasm. Hate the book-burners/ban Meshugy crowd. Some people just enjoy one-sided discussions, perhaps? Meshugy's point about some sellers over-pricing their homes when first listing them, and then dropping prices, is valid. That's what is going on. That's why Seattle Price Drop sees more decreases than increases. This trend does not mean closed prices are dropping (and yes, it appears they are still going up here)... but I think the trend toward's more "price drops" simply indicates that the market is not as healthy as it was last year, when the story was always multiple bids, escalators, and closed prices exceeding asking prices. But the market is still pretty healthy when invetory is well below 2002-2004 timeframe and median prices are still going (even if median can be a skewed indicator)
Anyone notice that on Housing Tracker the most recent week is the first sign of a REDUCTION in asking prices for the 50th and 75th percentile homes in many months? This may be the beginning of a trend. June is supposed to be part of the hottest season. Why are we seeing an overall reduction in asking price during the hottest season? May be a blip or the beginning of a trend. Worth watching.
Here's Seattle Price Drop's "research" posted on March 17:
Great price drop news for those of you who are contemplating stretching to buy a house:
Prices in Seattle are coming down faster and harder now. Rather than the "10K off after a month on the market", we are now starting to see 30- 50K off within 40 days.
Examples:
4809 University View Pl:
Original Asking Price: 689,500
43 DOM dropped to 649,000
4703 4th Ave NE:
OAP: 699,950
after 39 DOM: 669,950
4753 5th Ave NE:
OAP: 599,959
after 20 DOM: 549,950
DO NOT STRETCH to buy a house. The next step is lower initial asking prices which should start by this summer. And the higher interest rates go, the lower asking prices will be.
Fri Mar 17, 04:27:53 PM PST
Well, it's almost summer and have prices gone down?
March Median price for Seattle was $407. The May Median was $415. An 8K gain in just two months...
I think it's pretty clear that Price Drops research has little correlation with what's actually happening in the market. I'm sure we'll see a genuine slowdown at some point. It has to happen...but we can't fool ourselves into believing it's happening right now. When we see a huge pile up of inventory and median price drops we'll know it's started. Right now we're aren't even close...
I'm sure we'll see a genuine slowdown at some point. It has to happen...but we can't fool ourselves into believing it's happening right now. When we see a huge pile up of inventory and median price drops we'll know it's started. Right now we're aren't even close...
Them's fightin' words. I should ban you right now.
;^)
Meshugy,
You should know by now that the NWMLS numbers are rather easily manipulated. Any individual piece of data released by realtors should be taken with a box of salt. Instead, we need to focus on the trends in the data, and as many people here have noted, those trends don't make much sense at the moment: rising inventory, slowing sales, rising prices. Cookie-cutter articles from USA Today, and hyper-specific analysis of individual NWMLS press releases don't change these facts.
I don't generally agree with the calls to ban you, but I do think that you're an exceptionally devious troll. You consistently post links to micro-economic tripe and rah-rah journalism with little (read: no) analysis. For example, today, you're getting your panties in a bunch over SPDs (admittedly equally sketchy) micro-analysis of sale prices, and now you're resorting to arguing about (of all things) month-over-month trends in prices.
In any case, Meshugy, if you aren't a troll, I think you need to step away from the computer. Go outside. Take a walk. Get a hobby. It'll do you good.
Interesting that some would consider 50% price reduced listings as a sign of a red hot market.
To me it indicates that we have reached the top and it is here.
Who the heck cares if median goes up for a couple more months? We've reached the top folks, or that many homes would NOT be price reduced.
This is how some people end up getting stuck in a home they cannot sell but want to be rid of: they can't see the blatant signs that the top has been reached.
They try to bail only when it's perfectly OBVIOUS to anybody but the braindead that the TOP was 6 months ago.
And they join the crowd of panicked sellers on the way down.
Not sure why SPD's simple report of half of the MLS in 98105 being price reduced would be considered "sketchy" info.
To me it just looks like facts, plain and simple. No?
If not, why not? How is a report on the number of price reductions "sketchy"?
Ha! Thanks sarah. Was wondering myself how that info can be construed as sketchy.
Maybe now, on top of everything else, Zip Realty has taken to lying to us about the market?
Trying to make it look WORSE than it actually is?!
Anyway, my message here has always been, if you are thinking about buying a home in Seattle, do your homework first. Talk to realtors, bankers who are honest (keep looking til you find one, they ARE out there) and go on the web to watch for trends on the MLS.
Despite what you may hear about the "hot Seattle market", it's not as hot or scary as it once was.
So don't freak yourself out into thinking you have to "buy now or be priced out forever".
Slow down and Take your time.
Here's a good one. Short sale, reduced from $400K to $310K in 3 weeks, partially remodeled.
MLS #: 26077896
2819 NE 117TH ST
even if median can be a skewed indicator
Looking at the median, it's easy to say Seattle hasn't seen a big run up. But there are hundreds of specific examples in hot neighborhoods where individual houses have sold for 100% more than they did just 3 years ago.
The median stats are very misleading.
is there some filter I can toggle on this blog to block out all Meshugy's Trollish comments?
Not sure why SPD's simple report of half of the MLS in 98105 being price reduced would be considered "sketchy" info.
The information isn't sketchy (so far as I know)...the analysis is sketchy.
I don't mean to malign SPD too much, because I tend to agree with him/her. The thing is, I have my doubts as to why properties are frequently re-priced on the MLS. You see lots of adjustments up-and-down in increments of only a few thousand dollars, and that kind of thing makes me think it's a realtor price-manipulation game.
I'd have to have more of an insider perspective to be comfortable interpreting these kind of small-scale statistics. Bigger trends, however, are much harder to hide.
Bottom line: I believe that tracking the housing market on anything less than a yearly basis is questionable.
spd - why are you so stuck on your 50% price drop for 98105 when it's not true, and you refuse to offset those by the 15% that had price increases. My numbers came directly from an MLS search of the zip code. Company website info will always lag behind the NWMLS depending on the frequency of downloads.
Plus, some one made the comment that we should be looking at sold price trends, not asking price trends as a better barometer of where the market is headed.
So what if there's a price drop, if the properties are still selling at increased values, it's still a strong market. My interpretation with 98105 is that they were listed high to begin with and are coming down to market level, not that they were at market level and are being reduced below that, since the sold values have appreciated.
"the real accurate metrics are the opinions of renters on blogs. they are the experts."
Now, that's funny. Thanks!
Anon 4:50-
Um, think you need to take a closer look at that price reduction list. I don't call 50K price drops "a few thousand".
realistic realtor-
go back and read spd's note. she clearly states that a bunch of townhomes went UP in price by a few thousand.
who's not reading correctly?
LOL..ReAlistic Realtor has the typical "They were overpriced to begin with" drivel.
That's it, Zip Realty lies. There aren't really that many price reduced properties in that zip.
What a bunch of LIARS they are! They are trying to bring the Seattle market down! Their realtors are all bitter renters!
"go back and read spd's note. she clearly states that a bunch of townhomes went UP in price by a few thousand."
True, spd did after I pointed it out. But in spd's subsequent post he/she went back that the inaccurate 50% price reduction argument. Also, about those increases...when I counted, 4 of the nine were single family homes, not townhomes. The other 5 were towhnhomes, but they went up and at least one increased twice...they never went down.
Call it the typical response, but as long as the properties are selling at increasing values, it's irrelevant whether the listing price goes up or down. To me, the true barometer of the market is the sold price not the list price, and it's still trending upwards at this time. That's why I said they were overpriced. If you think otherwise, then keep your head in the sand.
Rather than making the...it's the same old drivel remarks...lets see your analysis and data. At least post something of subtance.
Moving on...
When I do a CMA for a seller, I give a range rather than a specific value. Sellers almost always choose the top of the range. Understandably, they want to maximize their net profit.
Many times, agents may loose the listing unless they list at the seller's inflated price. If I know at the time they sign the listing agreement the price is too high, I'll make them sign a post-dated price reduction form. When that date comes, the price is automatically reduced.
I second the anon who would like to know how to, or if there is a way to, filter out dickhead Meshugy comments.
I can't stomach coming here any longer because I can't stand reading his drivel.
This isn't a candidate for most ridiculous Seattle-area REAL ESTATE LISTING of the week, but it's probably a candidate for most ridiculous forum posting. And if you read this, and you snigger, feel your fingers fly to the keyboard to comment a Nelson Muntz haaa-ha!, or share your schadenfreude, you're ridiculing the item.
From Another F@CKED Borrower (I am having deja vu of F@cked Company):
"I am starting to get into rough times financially. My
mortgage is going up an extra 900 a month leaving my mortgage to $3400 a month. My bills monthly with
everything food, gas, utilities, etc. total to almost 6800 a month. credit card bills are 800 a month. My husband and my income total together is only 4500 a
month. We made bad decisions by refinancing alot [sic] in
the last two years and the closing cost, prepayment penalty fees ate up alot [sic] of our equity. I paid off our cards and unfortunately have run them up again to get cash to pay bills and stuff. We will now just be
concentrating on paying our mortgage and some bills and I have been trying to get an extra job with no
success. So my credit card bills will be behind in a couple of months and unless a miracle happens, it will be delinquent. I want to know what I should do. If I should just pay what I can monthly or claim
bankruptcy? Total CC bills is 30,000. Please advice [sic]."
A metric that could be more meaningfully ascertained if he would do a per SF breakdown of median price to median house
Redfin actually provides this as part of their site, which I think is an interesting statistics when determining whether a home is priced appropriately for the neighborhood, and/or if the house you're looking at is more or less likely to see appreciation if/as the neighborhood around it appreciates. I probably wouldn't buy a home if 100% of the homes in the zip code/10-block radius sell for less (unless I was a zillionaire buying a penthouse and didn't care about money).
And, while I regularly get bashed by SPD for daring to contradict the "50% reduction in home prices are imminent" assertion, I have to agree with the statement that more homes being price reduced, and more homes are selling for at or below asking is a sign that appreciation and the market are slowing (at least). However, to temper the idea that this translates into a meaningful reduction in the median/average price of homes let me offer the following scenario.
Let's say that at this point next year the figures show a 2-3% (inflation-level) appreciation in median home sale prices for KC. But SPD finds statistics that show "50% price drops" for more than "25% of the homes"? How would one reconcile this data? To me it simply means that realtor is right that the price reductions were not a sign that home prices were headed downwards, but merely that overly greedy sellers temporarily flooded the market with ridiculous hopes for YOY appreciation greater than the 15% that KC saw the year they tried to sell your house.
Looking at the monthly listing price/sales price of homes is just too "micro" to draw strong conclusions, imho. It's might be enough to be a data point/leading indicator, though. The strong opinions on this blog not-withstanding, I don't think anyone outside of a few super-investors (Buffett) are consistently right on entire market trends. So I'd probably put the opinions of anonymous (ahem) blog posters right at the level of predictions from my Magic 8 ball.
Personally, I think there are a lot of mixed signals from the market right now (YOY appreciation, longer sales times, price reductions, more inventory, more remodeling, higher interest rates, slowing economy, potential for lowering interest rates, etc.). Even within areas that are still seeing price appreciation there are homes that stay on the market, lots of new homes/condos still to come, etc. I would agree that the risk is too high to be flipping or getting caught up in a bidding war. I wouldn't shy away from buying a house "like the plague" as advised by most of the people here, though.
I owe SPD a retraction. I looked at the Zip listings and I see where SPD got the info and the reasoning for his/her findings. But, I'm a little confused.
For example, MLS 25164473. Zip shows:
Price Increased: 05/24/06 -- $489,990 to $494,990
Price Reduced: 05/25/06 -- $494,990 to $489,990
Price Increased: 05/26/06 -- $489,990 to $494,990
But NWMLS' Property History shows:
Date | New Status | Old status | New Price | Old Price
05/24/06 Active Active 494,990 489,990
04/28/06 Active Active 489,990 459,990
04/28/06 Active Pending 459,990 459,990
11/21/05 Pending Active 459,990 459,990
11/02/05 Active 459,990
According to the MLS there's been no price or status changes since 5/24. Yet, Zip is showing price changes on 5/25 and 5/26. All changes to an MLS listing is retained in the MLS property history chart.
Another item I noticed, Zip is showing CDOM of 220 while MLS is 62. I guess since pending status means the property is no longer on the market, the MLS is not calculating the 5 mos when the property was in pending status. When the buyer backed out on 4/28 it went back to active and the CDOM clock started ticking again.
Right now, I'm a little skeptical about Zip's price tracker. I also noticed that licensed agents are supposed to get Zip's approval before accessing their website per their TOU (I didn't). One wonders why Zip has this TOU when the other company sites don't.
I would agree that the risk is too high to be flipping or getting caught up in a bidding war. I wouldn't shy away from buying a house "like the plague" as advised by most of the people here, though.
I agree with that...I think a lot of folks are conflating professional real estate investing (for profit) with personal home buying (just a place to live). Just because Buffet is getting out of real estate, it doesn't mean it's a bad time to buy a house to live in. I seriously doubt Buffet is selling his own residence.
I didn't buy my house to make money...I think the idea of your average person "making" money on their house is a recent phenomenon. For me, a house is a longterm "quality of life" investment. I think you can still do that in the current market. But buying and selling for profit is pretty sketch right now.
For me, a house is a longterm "quality of life" investment.
Same as it is for me, and 95% of the people I know who have bought or sold a house in the last 5 years.
When I went looking for my current house back in 2002 besides looking for all the things I wanted in a house, I did make sure to consider the neighborhood's "potential", for the following reasons: I didn't want to be the most expensive house on the block (which I'm not, even after my renovations), my "quality of life" is improved by having a nice neighborhood; and because I wanted to increase the chances that my home's price would rise (at least with inflation). Anything else that I get from my home is gravy. I'm not over-leveraged (I fall under the 25% guidelines for housing expenses) and am not in danger of having a ARM adjust to the sky.
BTW - Despite being labeled a troll and a cheerleader here, I've cautioned a couple of friends not to buy a home if they think they'll be moving in under 5 years. I'm not blind to the risk in the market and how you have to factor in closing/transaction costs.
For anyone who's interested, here's an article that I think aptly describes why it's so easy for people to draw the wrong conclusions from what they read in the media (applies to most subjects, real estate included). A quote: "The more we rely on the popular media to inform us, the more apt we are to misplace our fears.
Hey Meshugy, Buffet sold his house in Malibu you fool. He has always kept his primary residence.
He is NOT a big real estate investor. If you want to read a great article from a guy who is a very smart analyst at PIMCO read this:
http://tinyurl.com/jht5o
It is chock full of great info that you should consider.
You are all stupid- your rent will go up and you will be living in Renton in a couple of years.
Anon 11:41-
ROFL
Hi synthetik,
Every home I have ever owned has been an investment as well as a place to live. To do otherwise is foolish.
I'm not saying loose money....but there's a fundamental difference in gaining wealth from your residence and gaining wealth from an investment property. Even if your house is only appreciating 3% a year, it's still a good long term investment. But an investment property must either appreciate quickly or generate more income through rent then it costs to carry. That's much more difficult to do...and the current market conditions are not as favorable to investment properties. With the current high prices you can forget about covering the carrying cost with rent..so you have to bet on rapid appreciation which might be ending soon. But these variables don't matter nearly as much for a residence...especially a long term residence.
So when you see real estate big wigs getting out of the market, I don't necessarily think it means it's time to sell your house. And if you look at the local market, developers seem to be very bullish. Especially in Ballard which has something like 6 huge condo projects which have either broken ground or will soon. A friend of mine has access to the NWMLS and said the huge bump in Ballard sales last month was due to mass selling of the new (unfinished) condos.
Meshguy, I understand you are optimistic and believe what you are saying, and although you sometimes come across as a bit passive-aggressive I doubt you mean harm or are a bad person. Still, so many of your comments come off as so naive, particularly the comments related to "look how great things are looking in this area - things are looking so good this can't POSSIBLY be a bubble!". In fact, it is when things look that best that you are likely to be in a bubble. Many people don't recognize bubbles until they're long over. The fact that prices have continued to be strong in this are while other bubble markets are beginning to crumble is a total gift to those here who have been given a bit more time to get out. When they don't they will just kick themselves down the road. Pretending all is ok here while things deteriorate elsewhere is like running under a tree when it starts to rain, and after you begin to get wet under that tree, running under a slightly larger tree and expecting to stay dry. You'll still get wet, it'll just take a bit longer. When stocks collapsed in 2000, the Nasdaq lagged the peak in the other major indices. People who invested in the Nasdaq bubble felt just like you do now - well I'm not in the DOW - eveything still looks FINE here in the Nasdaq - this is such a more desireable place to be! Only problem is when it did crumble 3 months later than the other averages, it crumbled FAR WORSE. Many people say prices will not drop here nearly as much as other bubble areas. That may or may not be true. Those other areas ARE more desireable places to live. The only reason prices are being driven up here is that this place looks cheap compared to Calif and Florida. Once they fall the prices here will look REALLY overpriced allowing for the fact that we're in drizzle/gray skys 6-8 months a year.
A friend of mine has access to the NWMLS and said the huge bump in Ballard sales last month was due to mass selling of the new (unfinished) condos.
Yeah. Ya know what's funny about that? People who want to live in a place generally want to see it before they buy it.
Call me a skeptic, but I'll wager that the vast majority of those "pre-sales" are to market speculators.
Speculator city. This thing's gonna be a mess.
The RE section of the Seattle Times got thicker again today.
Christiangustafson-
Do tell us more about the coming Microsoft meltdown.
What do you mean?
BTW, I read in the Post Intelligencer last week that most of the new engineers for the new Boeing planes will be Russians, working at Russian sites.
If you want any more fuel for the fire, read the New York Times Magazine that came out today.
www.nytimes.com/pages/magazine/index.html
Sure, 'd rather pay $1500 more per month and buy now rather than waiting 2-3 years when prices are more in line with fundamentals.
If you're talking about the difference between renting comparable single family homes, it's a lot less then $1500 more to own per month. Closer to $500....and rentals never compare in terms of quality. They're always severely outdated, in poor locations, etc. We compared rentals last year when we bought....there was nothing with completely remodeled kitchen, basement, deck, landscaping, etc. that we have now. In most cases you're talking about a lower quality of life in a rental. Let's face it, most landlords do as little as possible. A fresh coat of paint is usually the most you can hope for. Apartments can be better...but if you want a single family home renting is usualy pretty crummy.
I think the market will flatten out and that prices won't drop. But even if they do drop, it will take a lot longer then 2 or 3 years for it to happen. If you look at San Diego (arguably the most investor infested, exotic loan mad city in the US), you'll see that despite rising inventory, prices are still rising. The median price in San Diego was up this month. In Seattle we're not even back to 2004 #s yet....never mind any sort of real pile up of inventory.
No one can say what will happen in the next few years. But if I look back at the decision to buy, it has been a very good decision for us. We bought in April 2005....since that time MLS records show 50K increase in the median price of Ballard (where I live) and a 65K increase for all of Seattle. Comps in my area indicate that our house is worth about 70K more then we bought a year ago. If we don't see one bit of appreciation for the next 5 years...we still have done really well. There's no way we could have saved 70K in one year by renting.
mesh-
I pay rent to Washington Mutual.
My home is essentially worthless until it's paid off by me or if someone bought the home for what THEY think it's worth to them.
Unless a homeowner's house is free n clear of encumbrances, they are paying rent too. Except that the fancy word for it is called a mortgage.
------------------------
In other news, it was fun participating in the highly charged and humorous posts over at Rain City Guide (agent central)this evening. All about commissions, marginalization of agents and more
"But if I look back at the decision to buy, it has been a very good decision for us. We bought in April 2005....Comps in my area indicate that our house is worth about 70K more then we bought a year ago. If we don't see one bit of appreciation for the next 5 years...we still have done really well. There's no way we could have saved 70K in one year by renting."
You have a poor understanding of money, Meshugy. Consider these two points (both completely undebatable):
a) You haven't saved anything more than the principle you've paid on your mortgage. Everything else is dream money -- until the day that you sell.
b) If you're right, and your home is worth 70k more than you paid for it in 2010 (five years from the day that you bought it), that's a mediocre annualized return:
I'll be extremely conservative, and assume that you paid 300k for your home in 2005. If it's worth 370k in 2010, that's a 23% increase in five years, which works out to only 4.2% annually (for comparison, right now, my savings acccount is returning 4.5% APR. And I don't pay for mortgage insurance, property taxes, maintenance fees, or girl scout cookes to the neighborhood rugrats).
Wanna stop the housing bubble? Seeing as you all like talking about San Diego so much and comparing everything to it, we Seattlites would appreciate if you would get on a plane, train or bus and go back there.
Sorry, but you are flat out wrong. We rented a house in San Diego for $1500/mo which was recently listed for $525,000.
I'm talking about Seattle...San Diego is one of the most ridiculously overpriced markets in the world.
There are very, very few nice 3 bedroom single family homes to rent in areas I'd like to be in (N.Seattle). Believe me, I looked. You're always looking at an outdated dump on a busy street. Additionally, the few that are available are getting sold off at an accelerated rate. There were four rentals within a few blocks of me when I first moved in last year (all were tiny dumps). In that time two have been sold off, longterm renters kicked out and had to move. I have a friend who has been renting houses for a decade...he has to move every three years because of rent increases or because the house gets sold. I feel much better knowing I can stay where I am. Plus, the rapid appreciation in home prices means I can sell at any time and come out way ahead.
If my wife and I both lose our jobs today, we can live for 6 years on our savings - and at our current spending level.
Me too....nice feeling isn't it? Actually my wife quit her job and watches our son full time.
If you look at San Diego (arguably the most investor infested, exotic loan mad city in the US), you'll see that despite rising inventory, prices are still rising.
Is that really true? I thought prices had turned around there.
Another question for you guys--especially those of you who seem to have invested so well in the past (6 years of living expenses? In the words of M.C. Hammer, I cannot touch that.) The question - where would you recommend investing now if you believe the economy is headed toward downturn and inflation? I think cash is going to be a loser before long, obviously real estate is out as an investment, so . . . where to go?
Is that really true? I thought prices had turned around there.
Sand Diego prices are up 4.3%YOY.
See: Harvard report sees no losses from slowed sales
HousingTracker claims San Diego is down 5% in the last 9 months, inventory up 43%. I wish that the site would go back further for historical data.
The Housing Tracker tracks asking prices, not the actual prices the hosues sold for. So it's only a general indicator of what's going on...
T. S.
Put your money in CD's. 4.8% for 3 mos. last I checked. and probably going higher as we speak.
Now that the dandilions are in bloom, spotting vacant homes has gotten alot easier.
If you see a bright patch of yellow, look closer. On one road I drive regularly in 98115) I spotted 5 new vacant properties. All older bungalows with no cars, no garbage cans, no signs of life at all. Level of disrepair varies, but none are in "good" shape. Everything else for sale on the street is going for $450K minimum.
Keen observation Anon 2:18.
I notice the empties by looking at the photos on the MLS.
I like your way better!
Housing crash, here we come! Hang on for the ride!
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