Northwest Realtor Talking Points
Here's a little sample of the kind of real estate booster piece that gets circulated among those "in the business," courtesy of NWREporter. (Emphasis theirs)
According to CNNMoney.com, the forecasts for housing price growth are calling for booming values in the state of Washington. For the June issue of MONEY Magazine, Fiserv Lending Solutions and Moody's Economy.com provided forecasts for the coming 12 months for 380 metro areas – they predict that five of the top 10 fastest growers will be in Washington. ... Much of the appreciation in housing is attributed to above average job and population growth and limited supply of housing.I believe that in political circles items like this are known as "talking point memos." Real estate in Washington has nowhere to go but up! Prices will never fall in the city because people won't commute! "Boomers" will carry the market!
According to a survey of home buyers by HomePages.com, 70 percent of consumers say rising gas prices have become an important consideration when deciding where to live. Nearly half of all home buyers (48 percent) ranked rising gas prices as "very important." Consumer attitudes and opinions about commuting long distances to work have also shifted rather dramatically over the past year. More than 40 percent of home buyers now think a short commute to work is an important factor in choosing a new home.
...
One in four Americans born from 1946 to 1964 own more than one property, according to a survey of nearly 2,000 boomers done this spring by Harris Interactive for the National Association of REALTORS® and reported in USA Today. Boomers own 57 percent of vacation homes and 58 percent of rental properties, according to NAR. Beyond their primary residences, 13 percent of boomers own vacant land, 8 percent own a vacation or seasonal home and 2 percent own commercial real estate. Those surveyed reported that they aren't financially prepared for retirement, but real estate ownership is a key part of boomers' retirement plans.
Yeah, you just keep right on telling yourself that.
(NWREporter, 06.2007)
37 comments:
Those surveyed reported that they aren't financially prepared for retirement, but real estate ownership is a key part of boomers' retirement plans.
Oh, this is gonna be ugly....
Oh, this is gonna be ugly....
Correct.
Good article on pensions and retirement:
The result is that some 40% of American workers will not achieve a reasonable level of replacement income by age 65, researchers James Moore and Olivia Mitchell estimated a few years ago.
The repercussions could be severe. As the giant baby-boom generation begins to retire in large numbers, many of them will crash into unpleasant financial reality.
Then the pauper Boomers will vote us into servitude. They'll raid our 401Ks, and we'll be rounded up into camps, forced to give them spongebaths and to change the channel to "Matlock" when it comes on.
We'll be fighting them with fixed bayonets in the streets.
For a report on the State Of Real Estate see CNBC (channel 46?) special tommmorow night (Thursday) 8 PM Eastern (5 PM here?).
This program, whatever it says, will be important, as it will have a hand in guuiding public perceptions.
The show is called" RE Survival Guide " or something like that.
Any comments about this part of http://blog.seattlepi.nwsource.com/realestate/archives/104428.asp post:
The size of a median home in Seattle is currently 1,720 square feet. In 1999, average construction cost for market-rate homes targeted at the median range was about $110 per square foot. Right now, construction cost in the same segment is running, on average, at about $160-$170 per square foot
....
Doing a quick calculation, I see that the median home of 1,720 square feet has a construction hard cost replacement value of about $284,000. Adding in 15% soft cost, the comparative value of new construction for the median Seattle home is $326,600 not including land. That is certainly less than the median home sale price of $427K, but not by so much that we should immediately think we're seeing a bubble in real estate prices.
Um, I don't know how you define a bubble anon, but I call 1997/180K homes becoming 2005/1.2 million homes a bubble.
As far as I can see, the only reason the RE complex in Seattle keeps screaming "no bubble here" is to convince equity rich Californians to dump their cash into our RE pit.
It's a con game.
So who are we supposed to believe here about the state's economy? CNN or the State of WA. chief economist?
think I'll go with the guy who actually lives in WA.
JJ said,...who do you trust? CNN? or?
Try your local escrow company, not owned by any r.e.broker, title co, or mortgage broker.
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Speaking of more home price whacky 'ness. Several homes in our immediate neighborhood are on the market for outrageous asking prices. Prices rounded....(homes out in Snohomish Co./Everett area)
Example #1) purchased 16mos. ago for $600K, today asking $1.4. No bona fide improvements.
Example #2) Purchased just a few short years ago for $300K, remodeled it, now on market for $800K. Reduced immediately about $60K (probably after a brokers open, with tough comments).
Flipping continues: closed a few over the last 5 weeks. One transaction was flipped to a builder, whom I believe is still high from beautiful earnings over the last 3 yrs. How long will it take to develop the deal? Months. How long to build? 4-6 additional mos. When does that go on the market? Next year sometime. I'm watching that one.
I don't need CNN, CNBC, MarketWatch, PIMCO, Blogs etc...or any TV. The entertainment both good and bad comes from being the gatekeeper of homeownership.
The UCLA Anderson forcast on housing isn't as sanguine as previously suggeted in an earlier thead - this summary from Inman news:
If history is any indication, the country may be heading for a housing crash, according to the Anderson Forecast, a product of the University of California, Los Angeles.
"The risk of a housing crash rather than a slowdown is far greater than what most people think. In fact history is on the side of a crash," stated David Schulman, a senior economist for the UCLA Anderson Forecast, in his report, "Housing, Inflation and the Fed," released today. He added, "Every major housing cycle of the past 45 years ended with activity declines in excess of 50 percent. Because the current cycle was so powerful, why should we expect any less?"
Well, MSNBC says
foreclosures are a coming and according to their map, Washington isn't the right shaded state, or is it?
So, I'm in a dilemma. My house is reaching is pricing peak so I want to take advantage and get out now. But, then, I also want to wait to prices normalize. Where's the cake?
s-crow, on the otherhand, my clients just signed today on a purchase. The property had appraised $40,000 over the purchase price. Don't normally see that.
Washington isn't the right shaded state, or is it?
According to the breakdown I read earlier today, washinvton has about 1 out of every 435 homes in forclosure. That's alot higher than I expected. Are most of these on the other side of the state?
There's a tinyurl link on one of these threads that gives the WA foreclosure stats.
It is surprisingly high: one out of every 443 households I believe. Anyway, the number is under 450.
If you look through the "must sell"'s on Craigslist/Seattle, the number has grown exponentially since last winter.
I'd sell that place now RR if you need/want to sell.
Central Banks all over the world are raising rates. Once the liquidity is gone, RE is toast.
This credit bubble is about to burst, big time.
On Forclosure.com, I noticed that about 90% of the forclosures with prices listed are below the median in the puget sound area.
If this trend continues, doesn't this have the possibility of flooding the market with low end homes?
Yes. That is exactly what happens in a downturn.
Those foreclosures will drive down the comps.
Realistic realtor-
Why would you want to wait for prices to "normalize"?
Don't you think that when prices normalize, your house will be worth a LOT less than what it is now?
And yes, there are way more foreclosures in WA than anyone has been led to believe.
So what do you think the foreclosures will look like here when things REALLY get going?
UCLA Anderson Forecast: "And in the West, "both prices and volumes (got) out of control in the last several years. Prices ... are starting to fall back to the normal band, but have another 10 percent to get back into the normal range."
If I lose 10% of value (if I were selling)there goes a lot of cash and perceived equity. Further, if people end up selling due to financial stress, I know a lot of people will be totally underwater, more so, if the predictable human behavior of not paying down much principle plays out correctly.
"When things REALLY get going"- you mean, like when the Bank of Japan raises rates in July?
That's the one I'm waiting for to really heat things up.
Looks like it might happen this time .
Don't you think that when prices normalize, your house will be worth a LOT less than what it is now?
Yes/No. That's part of the reason why I'm thinking of selling now, since it's nearing it's peak. However, I'm speculating it can still go up another $30K or so. If I wait a year or so, the price would probably have hit that $30K and start it's downward trend. But, I don't foresee that it will decrease below it's current price.
"Won't it be hard to convince people to buy if you yourself aren't a true believer?"
No. I don't make the decisions for my clients, they're adults. Besides, there's not a lot of convincing to do and I focus on listings anyway.
The reason I'm toying with selling is that it's close to the right time in order to maximize my return and I don't have to pay cap gains on it. I could sell now then either buy some cheapy condo or rent for the time being. Then, buy again in a 1 or 2.
Realistic Realtor-
Your thought that you may want to wait 1 year for that extra 30K sounds dangerously similar to those who play investments. You know the psychology I'm talking about I'm sure.
The danger being that the price of the asset/stock/whatever COULD go down.
Can you handle it financially if it does go down?
No need to answer that question on this public forum but definitely something you might want to consider.
Remember, this is not your father's RE market. This RE market is heavily built on quick profits and speculation. It may behave more like the stock market than is normal .
RR-
Ah, and I just noted that you used the word "I'm SPECULATING that it may go up 30K".
Maybe that's reading too much into your choice of words, but be careful!
(We'll be fighting them with fixed bayonets in the streets.)
like the bonus army of the depression.
many boomers aren't going to be able to retire.
This place in Ravenna was on the MLS last winter for 899K. It was bought in March '05 for 561K.
They took it off the list in the spring. Now it's back on at a price-reduced 889K.
Wow! she's willing to take a 10K hit to her 350K one year profit!
Address: 1919NE Naomi Pl.
Buyer beware!
Nope. No bubble here in Seattle. The prices are totally tied to fundamentals!
Sandy, found the place you're talk about.
http://www.windermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=7333385
I am wondering how much the remodeling is worth. Anyone wants to estimate?
Don't know how much the re-model cost. I remember seeing it last winter and thinking "Darn! She ruined the kitchen!"
I'm assuming she was the one who remodeled. Who knows, maybe the guy who sold it to her for 561K in March '05 did the remodel.
many boomers aren't going to be able to retire
Correct. There'll be high demand for Wallmart greeter jobs.
This article is a keeper - for posterity. What a frickin' joke! And IF prices do indeed go up by these predicted amounts, it is only because of this kind of "criminal" hype driving fear into naive potential buyers.
p.s. In 1911, a White Star Lines promotional booklet about their Titanic stated, "The Captain can, by simply moving an electric switch, instantly close the doors throughout, practically making the vessel unsinkable."
KING 5 TV just had a 30 sec spot on ARM resets, you could almost hear the news casters teeth grating as he talked about foreclosures and poor credit ratings... almost felt like a PSA. They managed to save the doom n' gloom banter by going right into a condo-boom story, luckily not having to in anyway shape or form acknowledge that it THESE submarined lenders were the intelligent uber-smart Seattle home purchasers...
Good catch Matt, thanks for letting us know.
As for being saved by the condo boom, looks like there may be a little specuvesting going on in that sector.
See: urbnlivn
S Crow- the report on flippers is interesting.
The story that bugs me is the one with the builder who, if he'd just quit while he was ahead, it looks like he might have made a pretty penny.
Now it looks like he could lose it all next year instead.
D*mn!! Just like the dot.bombs, almost nobody knew when to quit and preserve capitol!
This makes it look like the place on Naomi Pl SOLD in the spring and is now back on the market:
http://www5.metrokc.gov/reports/property_report.asp?PIN=8825900545
What's going on there?
Or check the sales history on redfin for MLS 26098724
Holy crap Anons, you're right. It sold for 882K in April and now they're trying to sell for 889K.
Sounds like they may be out some bucks when this is over.
Wonder how long it's been on the market and if they've had to price reduce down to 889K?
I'm keeping my eye on this one now.
Here's the latest news from the Bay Area:
Bay Area home sales continue to drop, prices reach new peak
The median price paid for a Bay Area home was $631,000 last month, another record. That was up 0.5 percent from April's $628,000, and up 6.1 percent from $595,000 for May a year ago. Last month's year-over-year increase was the lowest since May 2003 when the $427,000 median was up 3.4 percent.
Things are obviously slowing down: less sales and more inventory. But prices are still reaching new highs. Many folks on this list have said that California is our future. If so, when inventory rises and sales slow here, we could still continue to see prices go up. Albeit at a slower rate. My guess is that we'll see this situation in about 2 years.
They also mention that:
Indicators of market distress are still largely absent. The use of adjustable-rate mortgages has decreased the last five months. Foreclosure rates are coming up from last year's low point, but are still below normal levels. Down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.
Well, too bad these sellers on Naomi Place didn't buy in San Fransisco.
Just checked Zip. The house was put on the market 2 days ago. It's completely empty, all spiffed up and ready to go.
Only problem is, they bought at the top in the beautiful Seattle neighborhood of Ravenna at 882K a few months ago. And now it's on the market for 889K.
Which, if they actually sell for that price will not even cover closing costs.
Re. the CA. situation.
Foreclosures are at 2,500, which is low. But preforeclosures are at 84,760. That is one hefty number right there.
Almost 100,000.
We're looking at a disaster here.
Funny, if you go to the Marin site, his blog shows this:
SF median only up 0.3%
Sonoma, Marin and Napa all down.
He's also using data quick.
Not that it matters. It's all going down eventually.
David Lereah's plea to Bernanke to quit raising rates because the RE market was "sensitive" pretty much says it all, don't you think?
Hey, the folks on Naomi Place will only be out $73K if it sells at their asking price. What's $73K? They probably have that much in loose change in their pockets. (NOT.)
We're all watching this one now. Maybe they'll be lucky and get one of those fantasy bidding wars going again in Ravenna- pump that baby up to million dollars and make a cool 200K for a 4 month flip.
Oh, I forgot, those days are over in that 'hood.
Seattle: "Where Californians Come to Get Burned on RE"
I saw that place last fall when it first came on and it was CLEAR what that seller was up to: Catch an out of town dummy who doesn't know jack about Seattle prices. It only takes ONE and you are one rich Seattleite laughing all the way to the bank.
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