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34 comments:
Contrasting messages in today's PI Article entitled, Preoffer home inspection can be key; Cost can be for naught, but step may win a home, By AUBREY COHEN
The article begins with the following, which seems to imply a raging housing market:
House hunter Vicky Tsai has paid for two inspections of homes she didn't buy: one that she lost out on because she was outbid by $20,000 despite offering $50,000 above the asking price, and another that she passed on after deciding it was too small.
"We're over $800 in the hole on that," she said at an open house earlier this month, contemplating the futile payments to inspectors.
And towards the end of the article, the slip in this little admission from George Guttmann, owner of Sound Home Inspections:
"he's starting to notice cooling in the housing market, with more signs noting price reductions. The latest statistics show slower sales and more houses on the market than a year ago."
Thanks for the heads up Peckhammer. I think I'll make that one into a post.
And towards the end of the article, the slip in this little admission from George Guttmann, owner of Sound Home Inspections:
Yes...there is defintly more inventory and slower sales then last year (which was a record year). But what the other inspector said in the article is also still true:
"It's just the Seattle market," he said. "Most any house that's being offered in the core Seattle area, there's always multiple offers."
It's still very competitive within the city...nothing really sits around for more then a few weeks unless it's way overpriced. I think once we get back to mid 90s inventory levels we'll see more of a balanced market. Right now we still have less inventory then 2004. The mid 90s had over twice the current inventory
I don't know why I bother, but...
It's still very competitive within the city...nothing really sits around for more then a few weeks unless it's way overpriced.
Again dude, the definition of a slowdown is when the market is overpriced due to the unrealistic expectations of sellers... Yes, I'm sure if you can find a decent craftsman in Ballard for around 300K it'll go like a hotcake, but when market forces prohibit buyers from purchasing, e.g. higher interest rates, tighter lending standards, unrealistic prices... the market SLOWS....
Matt,
Don't you feel like Sisyphus when you go back-and-forth with 'Shugy?
So I was looking for a house until not too long ago. Got tired of overpriced POS houses, and nearly got burnt on one, and backed out.
Today I got a call from the loan officer who tried to tell me what a great time to buy it was. The houses are sitting longer, sellers offering incentives, less hassles, etc.
Whatever.
Good catch, Matt. Meshugy's argument is brilliant...because it's always true.
Even if every house in Seattle is languishing on the market, Meshugy can just say that they're all overpriced: "They would sell, if they were cheaper, so the market is still strong!"
How do you know that it's still competitive within the city?
Historically low inventory (res/condo for July 2006 was 2,279. In July 2003 it was 2,917)
Rapid appreciation: in July Res/Con for Seattle was up 14.6% YOY. Back in 2002 it was only 6% YOY.
Average Days on the market July 2006: 58
Average Days on the market July 2003: 83
My own tracking of houses in Ballard (posted here on a regular basis) confirms most houses overbid and sold within 2 weeks.
What is "way overpriced"?
7048 19th Ave NW
1514 NW 73RD ST
6716 JONES AVE NW
My observations have been completely opposite here on Queen Anne. Everything is sitting.
Zip realty only shows 28 houses with prices reduced in 98119. And none of them look like a steal to me.
Additionally, the MLS shows residences in Queen Anne/Magnolia shot up 60K over the past year.
Damn, meshugy laying the beat-down on the renting (ranting?) bubbleheads...
You guys can talk him all you want, but he has got the facts, Jack!
And please no more spraying about "not spotting the trends". The trend is still up and Seattle is still desireable and probably is still undervalued as a west coast city for the elite...
Wow, I love the chest pounding of the great real estate gurus that eat up most of the blog space. You can pick the top of a market. Why couldn't you pick the bottom. Sounds like most didn't or couldn't buy in the last 5 years. Do you really believe that prices will drop below 2001 levels? All your sideline bantering just validates the fact that you missed one of the biggest real estate appreciation periods in history. It ain't going all the way back down. Please take an ECON class or two and factor in supply/demand and that interest rates are still way below anything we saw in most of the 90's.
Shortly after I moved into the house I'm renting one year ago, I noticed a distressed-looking family moving out of their house down the street.
Since then, the house has been vacant, but every few months there was a flurry of activity. Several weeks ago, a sign was put up advertising the house; prospective purchasers were directed to call the number of a Seattle bankruptcy and residential real estate firm - RGS Legal. Shortly afterwards, the sign came down, and people came by do to some work, including cleaning up the trash that had stayed on the deck for the past year.
Just the other day, I noticed that this place is on the market. The MLS# is: 26143855. Here is the seller's description, taken from Redfin:
Great Lender-owned repo opportunity in Bryant ready for your buyer! Lots of room here. Sold as-is, without Form 17 provided as Seller is exempt from disclosure. Out-of-State Seller has never lived in home. Buyer and Selling Agent are responsible for investigating and verifying all aspects of home and property to their satisfaction. Seller and Listing Agent make no representations or warranties as to home and/or property's condition, details, size or features whatsoever.
I can only guess that a flipper (probably from California) purchased this house from the bankruptcy firm hoping to make a quick buck.
To me this story contains a cautionary tale for those hoping to pick up real estate at fire-sale prices at the bottom of the housing bust - you have to be very patient, as these things don't happen overnight.
anon 247,
Do you really believe that prices will drop below 2001 levels?
Yes. They will drop to mid-90s levels.
All your sideline bantering just validates the fact that you missed one of the biggest real estate appreciation periods in history.
Some did, some didn't. That is irrelevant. This board is about missing the biggest RE bust in history that is dead-ahead.
It ain't going all the way back down.
Talk dirty to me, Carnack! How do you know? Is your prediction any more grounded than the prediction that it will go all way down?
Please take an ECON class or two and factor in supply/demand and that interest rates are still way below anything we saw in most of the 90's.
Please take a history class that specializes in the aftermath of economic bubbles and inflating the currency. This market is going down harder than Paris Hilton trolling for some publicity. Interest rates will likely be double-digit in a few years, and that will kill this housing market.
Your rant was almost word-for-word what I was hearing in the '99 stock blowup.
"Stocks will never go down!"
"You are just a bitter short-seller!"
"You don't understand the 'New Economy!'"
"Stocks will never return to pre '97 levels!"
"The Baby-boom will drive stocks to 35K!"
"The gov't will not allow the markets to go down!" (they substituted the Housing bubble)
Did you buy Juniper Networks at $200 and thought you were getting a screaming deal?
Funny that the house in Bryant was bought in 2005 for $635,000
but I didn't know Seattle was coined as an undervalued west coast city for the 'elite.' I think I know what you mean by elite, but in case I'm wrong, please explain. LOL
well, given the influx of knowledge worker types, the increase in educational level of residents, outflow of old blue-collar mossback-types ( especially in North Seattle ). second most childless city in the U.S. (after SF), I would say that this city is becoming quite elite.
well, given the influx of knowledge worker types, the increase in educational level of residents, outflow of old blue-collar mossback-types
Zero population growth since 2000, a large sector of the new job growth has occured in construction and related fields, Government related jobs and other housing sector jobs (financing, etctera...) following up the rear, a stalling biotech sector. Yeah, its gettin' real elite around here....
Although I did see a construction worker on the corner of 8th and Denny sipping a latte!
Zero population growth since 2000
Actually, there has been some:
US Census shows Seattle 2000: 563,375
Grew to 573,911 in 2005.
Over 10 thousand more people....
Zero population growth since 2000, a large sector of the new job growth has occured in construction and related fields, Government related jobs and other housing sector jobs (financing, etctera...) following up the rear, a stalling biotech sector. Yeah, its gettin' real elite around here....
zero population growth says nothing about churn. The job numbers are state-wide.
Zero population growth since 2000
Actually, there has been some:
US Census shows Seattle 2000: 563,375
Grew to 573,911 in 2005.
Over 10 thousand more people....
bwahaha, meshugy is my homeboy
I am curious how you can find out the loan info, is there a link to that stuff?
Sure, loan info is open to public
Over 10 thousand more people....
It those number are right, that still is very small growth. Less than 2% for a 5 year period.
I would bet that there were more new houses/condos built in Seattle in the sam time period.
Population growth is not a main factor (if at all) in why home prices will continue to rise.
Let's assume that 'shug's numbers are correct. That's a whopping 1.9% population increase, or an average of 0.38% per year since 2000 (essentially a rounding error).
So matt is basically correct - No (0% YoY) population growth since 2000. Likewise, he's correct about the job sectors that are growing. And let's not forget that wages are stagnating.
Seattle is different. We're more screwed than the rest of the country.
I'm skeptical of the population data accuracy because of the monetary incentive to keep an address outside the city when renting - best example is the now defunct Monorail Tax.
Alot of people I knew were going out of their way to avoid the tax, get lower insurance, and in some cases get around emission requirements.
Last year after forking out over $400 for car tabs, I was walking around my parking garage and noticed that not a single one of the late model Mercedes and Lexuses had monorail tabs on them - although these people had been parking there for more than a year.
Anyway, I'd like to know how the population is being counted or estimated.
Meshug, where'd you get your 2005 data?
US Census
They only have estimates for 2005. But it's at 573,911.
SCROW-
You're on a role today-
Thanks for the info- much appreciated.
How did they flip that home for $200k profit in a week? What do you think happened there?
It's over. Everyday I see signs on the East side...$2000 buyer bonus, today...free upgrades, now a "new price" sign. And what appears like millions of for sale and open house signs.
It was a little late going up here and it'll be a little late going down, but one thing is certain, this market is poised to tank just like the rest of the West coast and US, and now clearly the world.
When the housing market is treated like the stock market, it's easy come, easy go.
Ain't that the truth, here today, gone tomorrow.
Happens all the time with every kind of "investment".
Seattle's Hottest New Hood
Last spring, I found myself needing to move. But where? Wallingford and Fremont had become yuppie strongholds. Capitol Hill was too crowded. I loved Ballard but thought about Beacon Hill—and then moved to Portland.
I'm not alone. Over the past couple of years, significant members of Seattle's music community have been drifting south, drawn by Portland's inexpensive cost of living and vibrant creative community.
Only problem is that Portland isn't really that cheap. I've had numerous friends buy in the last year or so and they're only paying 50K-80K less then Seattle.
If they buy it at 300k, 50k-80k is big difference.
Wow! Excellent detective work. By reading that bio I would bet on it!
Hi Peter...yeah that's my site. Not much interesting for housing folks though. It's mostly for guitar geeks (like myslef!)
So, let me get this straight Meshugy.
It's not worth it to move to Portland to save 80K on a house but it IS worth it to move from San Diege to Seattle to save 75K on a house?
Is that the way it works?
San Diego median on the housing tracker is @ 75K more than Seattle.
Are you related to Sandy Horowitz (male) Meshugy?
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