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Tuesday, August 18, 1981

Weekend Open Thread

This is your open thread for the weekend. Please post random links and off-topic discussions here.

25 comments:

Mikhail said...

I would be interested in continuing a conversation I started on an earlier thread about how a bankrupt municipality might impact home owners. Does anyone have any examples of what happened in previous instances where cities went bankrupt?

It doesn't seem like the fall-out was all that terrible in Orange County, in the '90s, or New York City back in the '70s. People saw services decline, but they didn't see any shocking bills delivered to home-owners to cover the bankrupt city's debts.

Just what will happen to home owners in bankrupt cities when the WHOLE nation is facing a deep recession?

Part of my interest in this question is a concern that home ownership (at ANY price) could be a severe liability if you happen to be living in a town that goes bust.

Any other thoughts?

meshugy said...

There seem to be a number of other cities which are "different." Austin being one of them:

Austin home sales nail July record

Single-family home sales in the Austin, Texas, area posted a seventh consecutive month of double-digit growth in July and set a record for the month, according to the latest Multiple Listing Service report from the Austin Board of Realtors.

In July, Realtors reported a record 2,721 single-family home sales, up 11 percent from July 2005.

The median price of a single-family home last month also broke a record at $178,190, up 5 percent from July 2005, but down from June's record of $182,000.



Although we're still appreciating faster...Seattle had 15% YOY price increase.

meshugy said...

I was just looking at the July MLS Active listings report. Inventory has been undeniably higher this year. However, it interesting to see that the higher inventory is not the result of a "flood" of properties coming on the market. In fact, there were less new res. listings in July 2006 then July 2005.

New Listings Res King County July 2005: 3,883


New Listings Res King County July 2006: 3,724

There were actually 159 less listing this year. So the increase in inventory has more to do with slower sales then desperate sellers. Hence the ever increasing prices...

richard said...

This is the THIRD relisting for 8003 5th

This place has been on the market since May. At that time the asking price was $750K. Relisted today for $689K.

Christina said...

% Houses for sale with reduced prices (8/06)

Peckhammer said...

Dean Baker, co-director of the Center for Economic and Policy Research says,"There are desperate sellers in many of the areas where the housing market was booming just a year ago. In many cases, sellers are offering large concessions to unload their homes."

http://www.truthout.org/docs_2006/
081706L.shtml

biliruben said...

It looks like someone invested too much time and money on a flip too close to I-5 on too busy a street.

They only paid $330 9 months ago, however, so they should probably make more money than they deserve, if they don't get greedy and come down to meet the market.

biliruben said...

Foreclosures soar in North Texas:

http://calculatedrisk.blogspot.com/2006/08/dallas-and-housing-myth.html

Dallas already in the midst of a bust, without the boom.

meshugy said...

% Houses for sale with reduced prices (8/06)

Thanks Chris...We have the lowest # of reduced listings of all of those markets....again, it seems that for some reason we're different.

meshugy said...

Here's a zip realty report on Olympia:

Olympia, WA July 2006 MLS Recap

Both asking and sold prices shot up %5 in one month. These stats are cool because they show the relation of asking to sold price. Pretty clear that sellers are getting their price.
It also has price per square foot. That also shot up around 5%. So it's not a case of people paying the same price for a bigger house.

Consider that places like Austin appreciate 5% YOY....it incredible that cities in the NW can appreciate 5% in one month!

richard said...

Consider that places like Austin appreciate 5% YOY....it incredible that cities in the NW can appreciate 5% in one month!

This is the kind of brainless cheerleading that gets irritating.

Look back one month and see that May-June the median decreased by 4%.

Asking Price $335,477 $321,426 -4%

Olympia is special. It's not Texas, apparently. Thanks for the insight.

Anonymous said...

meshugy said...
There seem to be a number of other cities which are "different." Austin being one of them:

Austin home sales nail July record

I'm no RE expert, but I wouldn't touch Austin now. I remember seeing bigtime socal realestate agents pumping Austin a year or so ago---I bet they've already sold.

richard said...

There seem to be a number of other cities which are "different." Austin being one of them:


Yeah, Compton is different too. Up 28% YOY while nearby Palos Verdes is down -1%.

Matt said...

Would you lump a condo complex in Magnolia with the rest of the condo situaition in Seattle?

a) If its a condo-conversion? yes... this is part of the Seattle dynamic currently underway...

b) Magnolia is within Seattle City Limits... so yes

c) Mortgage on the equivalent apartment conversion is +1K above what rent was for the equivalent property

Peckhammer said...

Baywatch dropped the price by 10K and will provide 5K towards closing costs.

Dude, Magnolia must not be a part of Seattle because prices never drop in the Emerald City.

plymster said...

Watch as I use meshugy-like analyses to drive nails in the RE coffin:

Look at the King County active Residential listings from May 2005 and 2006:

May 2005: 3,914
May 2006: 4,130

That's a 6% increase in listings YoY! In one month! Clearly this market is flooded with desperate sellers.

Not to mention our price reduced percentages are nearly the same as the Bay Area where prices have been dropping as much as 2%!

Soon, even wage-earners in the top 10% will be able to afford a median house!

Pollyanna said...

Wow...I lived in Baywatch back when it was apartments. Looks like there are a lot of units for sale. Generally not a good sign.

Pollyanna said...

P.S. As I recall, we were kicked out of Baywatch back in '90 (or thereabouts...I don't recall for sure). I thought I remember the condo units didn't sell so they reverted back to apartments. How long have they been condos again?

Anonymous said...

Thanks for the feedback. The complex was purchased in late '05 and conversion started around 2nd quarter '06.

matt said...

Mayor Greg Nickels, high on his own fumes

Who voted this crack smoker into office? Luckily the hubris of the article is offest with a few gems..

It would more than double the current rate of 4,000 new Seattleites each year. "It's so completely impossible that it's laughable," he said. Seattle's current population is estimated at 575,000.

Yeah, the "build it and they will come" arguement is entertaining.... Seattle's "building boom" is a ruse, the same influx of 2% pop. growth in Seattle has been the same for over a decade, why would it shoot up I ask you Greg NickelS?

Personally, this joker's got to be getting some kick-back from the dot-condo developers salivating to get in on the last of the suckers market here in Seattle... Just too bad they're all going to be dropping a turd in the punch-bowl, leaving us all to clean it up...

Anonymous said...

Although Bearish on real estate I am currently helping a new family to the area look for a rental with 3 bds in a decent school district (Bellevue, Issaquah, Lake Washington - which covers Kirkland and Redmond). We are having serious problems finding anything, any decent rentals are snapped up fast.

It is making me wonder about the price of SFH in the burbs. I'm not sure if prices in those areas will drop so heavily when there are obviously not enough rentals available. They are very desirable locations for home owners and renters who have kids.

Many people sounding off here seem to be regulars with plenty of time on their hands methinks: people without rugrats! Especially men. Once you think about where you want your children to live and grow up the burbs get way more attractive than before. There are a tremendous amount of over educated couples with kids on the Eastside who don't plan on going anywhere.....

SeattleMoose said...

Weekly update of King Co listings. All data relative to start date of 5/7/06.

Date / King Co / Delta / %
7-May / 7302 / /
15-May / 7486 / 184 / 3%
21-May / 7665 / 179 / 5%
11-Jun / 8099 / 434 / 11%
18-Jun / 8154 / 55 / 12%
24-Jun / 8352 / 198 / 14%
1-Jul / 8417 / 65 / 15%
8-Jul / 8758 / 341 / 20%
15-Jul / 9057 / 299 / 24%
22-Jul / 9139 / 82 / 25%
29-Jul / 9044 / -95 / 24%
5-Aug / 9059 / 15 / 24%
12-Aug / 9191 / 132 / 26%
19-Aug / 9348 / 157 / 28%

Clearly the trend is up but the question is...why?

1) normal seasonal fluctuation
2) speculators and folks wanting to cash out "at the top"
3) running out of buyers (CA EL factory shutting down) as prices have gone from ridiculous to outright insane

If 1) then I would expect listings to start going back down after mid-September as people wait until next spring to "try again"

If 2) then I would expect inventory to either level off or keep going up depending on whether the market force of 2) is greater than 1)...or vice versa.

If 3) then I would expect inventory to keep increasing. There are many reasons (layoff, illness/accident, divorce, ARM, etc.) why people HAVE to sell but I can't think of one reason why someone HAS to buy. And if nobody can afford these prices, then nothng will move and inventory will build.

We have been looking for a place to rent the past few weeks. There was one place (flipper who resides outside the U.S.) in View Ridge that was going for $1950. We went to the open house...nothing special. Then I saw the same place for $1850 2 weeks later. I sent an email to the RE agent and asked about the reduction and she said that nobody was biting. So it would appear that at least some flippers are trying to rent "high" to cover their costs but having to adjust to what the market will bear. By being greedy this flipper will get less per month and they have already lost at least a months rent to boot.

My prediction is that inventory will keep increasing due to the combination of 2) and 3) overcoming 1).

Seattle is one of the last dominos to fall in the greatest ponzi scheme of all time (next to SS). And it will play out faster than people think because the U.S economy is about to experience the "perfect storm". (housing bubble collapse, Mortgage/banks going bust, huge govt debt, alltime personal debt, loss of manufacturing, dumping of U.S. dollars by foreign investors, layoffs, oil prices etc.).

Since Seattle is "at the end" our prices will appear less and less attractive as most other places experience the inevitable steep declines before we do. So Seattle will end up being the "last place" anyone can afford to move to. By then the media will be playing the RE fear card which will only expedite the crash.

I wonder where that sign is from the aero-space bust in the late 60's/early 70's that says "last one to leave Seattle please turn out the lights".....may need to dust it off.

meshugy said...

Looks like condos are here to stay:

Condo conversions revert to rentals

In certain markets, though, condos have not succumbed to the reversion trend and solid sales are expected, Nadji of Marcus & Millichap said. He expects Seattle, Philadelphia, Tucson and Portland to continue to see healthy demand, while New York and Chicago will also be fairly stable.

matt said...

I like how you keep bringing up Tuscon as some kind of healthy market we should be comparing ourselves to Meshugy , that place is on the skids big-time...

Lake Hills Renter said...

I saw at least a dozen chalets for sale around Snoqualmie Pass today, in the Alpental and Hyak areas. I have no idea what it means as far as the housing market goes, but it was surprising to me. I wouldn't mind living in one myself, even during the winter, but the hour commute to work would get old very fast.

Closer to home, two of the houses I've been watching in Bellevue sold this week. I'm usually watching a handful at any given time, usually near where I live or on the way to work. Sort of my attempt at watching the micro market. They will usually sit for weeks on end, then several of them will all sell at once. Very odd.

I've about had it with the market. Research online is showing even crappy houses in Preston and Snoqualmie are listed for $350k. I'm about ready to go to sleep for a year as far as the housing market is concerned, check back in a year or so. All following it does is make me waffle back and forth on whether I think prices will come back down to reality or not, and get me disillusioned with the whole damn mess. Maybe I'll just rent for the rest of my life and be done with it.