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.

Wednesday, July 26, 2006

Sue hates me: not really, but she and others want the dirt.

My reponse was too long in the thread so I thought I'd throw it here for people to debate.

Well, Sue hates me. Actually, just teasing. But, she thinks that my picture of Mt. Rainier is rather boring and may not add to this blog. Geez, who couldn't take a shot of Mt. Rainier with a warm and clear evening like we enjoyed. It was staring me right in the face and I have a good interest in photography even though I'm a beginner.

Sue and others would like to bring up actual cases of problematic loans, days on market, price reductions etc....and cases where people have a probability to go delinquent. I'll tap more into this discussion as the blog evolves.

Two key points to internalize:

1) The first is that a change in market psychology is well underway here locally. For example, just months ago, as late as Fall of 2005, our market had virtually no price reductions at all. It wasn't on the radar. The very fact that we have price reductions in listing prices confirms that the real estate community understands this. Price reductions are now common place, incentives from builders are common place and there are some instances where sellers are offering more of a sales commission than normal. For example, a listing may give notice that there is a sales commission bonus of $1000, if a full price offer is accepted by a specific date.

The market change is being felt by Realtors and allied real estate professionals we work with out in the market place. It is being talked about. It is being addressed in staff meetings and is being discussed by various national r.e. speakers that cater to the Realtor community.

One of the very first clues of this was the title of seminar put on in Seattle from national real estate sales trainer, Brian Buffini, earlier this year: "how to survive in a changing market." While I'm not a licensed agent, it was telling that a sought after sales trainer was even discussing the market change to those he serves.

2) My gut feeling is that there is a large pool of potential buyers that have no idea of the realities of the market. This is just an observation and no fault of their own. The world (and I'll have tomatoes thrown at me about this from our friends in the business) does not revolve around me, real estate and sales folks. People have lives to live, work to do, family to tend to, people to visit, and real estate is NOT on the radar in the manner in which many believe.

People are worried about other things: car payments, vacations, a sick family member, world events (I'm concerned about the impact of middle east turmoil for one), sporting events, school, etc...

The take away here is that the psychology is changing, and there is a new medium, called blogging, that when real estate is on the radar for consumers, they can get information that they did not have readily available during the last bona fide market change in our area. And this new medium will continue to have a major impact on the scale and swiftness of the unraveling of the markets across the country.
Please read the rules before posting a comment.

8 comments:

Christina said...

Zillow's reduced its idea of my market value (I subtract 44K from Zillow's idea for my reality estimate) by $3,000 from last week, and I'm supposedly in a tight market (only one listing on Windermere.com for a property similar to mine, for the entire zip code) so that would seem to support your claim of price reductions.

richard said...

People have lives to live, work to do, family to tend to, people to visit, and real estate is NOT on the radar in the manner in which many believe.


I continue to be surprised when I talk with people who have an interest in RE but have no idea about the changes in lending standards or loan products used to buy the homes.

A recent NY transplant who is looking to buy a home here made the comment that "prices seem awfully high compared to what people here make".

I said, "well, people can afford it because they don't need to save a down payment and use an IO ARM or neg-am loan".

After a confused look he asked what IO ARMS were and after explaining for a few minutes he got the idea but didn't realize that was at all common.

S Crow said...

Christina, I'm fond of your ears.

Just kidding.

To be clear, I meant listing price reductions, not sales price reductions, if that's what you were thinking about.

I can't imagine that there is only one comparable property for you to find value of your place.

Another good resource for people is : http://www.realestateabc.com/home-values/

Some like it better than Zillow. Paste the link in your browser and check it out.

S Crow said...

Richard-

Correct, and that's why I'm so passionately consumer driven: when real estate does become a blip on radar for consumers, they have resources like blogs to get information from people discussing housing. Then they are armed with what is reasonable to do for their circumstances. If they go ahead with an loan product, knowing the risks, then we've done our jobs.

Anonymous said...

In theory I understand that DOM and price reductions are indicators of changing markets, but it would also seem that they are indicators of greedy agents and stubborn sellers.
If the median is going up (yeah, I know it is if flaw stat, but I'm not sure what else to use), it would seem that the market is just correcting for the greed and proves that no matter how hot a market, you can't ask any old price you want.

meshugy said...

If the median is going up (yeah, I know it is if flaw stat, but I'm not sure what else to use), it would seem that the market is just correcting for the greed and proves that no matter how hot a market, you can't ask any old price you want.

I'd say that's exactly what's happening. It doesn't really matter what the asking price is...if sold prices continue to go up, then "price reductions" mean very little.

Anonymous said...

I have been looking at houses for family moving up from California. I looked at 4 homes on Monday afternoon, two had already taken 25k off the listing price (they were all in the $350-400k range in Bothell). Another was seriously overpriced and is getting zero interest.

I discussed it with the hopeful buyers on the phone and we all agreed it seems like it makes more sense to wait at least until Fall to do anything - if sellers are not able to keep increasing prices like last year.

I think their priority is to sell their home in Sacramento. Scary, but I have 4 family members with homes on the market in the Sacramento area. Only one has sold and that's because they really "priced it to sell". They are treating their buyer with kid gloves as he is an extremely rare breed in those parts right now.

Yep, they are planning to rent in the Seattle area now and see what the market does later this year....

dash_point said...

she thinks that my picture of Mt. Rainier is rather boring and may not add to this blog.

Well, not everyone can live in Orting for that dramatic front-row view. Volcanoes are more attractive at a distance, imo.