A Glimmer Of Hope?
Do you think demand for commercial space will result in a continued rise in property values in King County?
Evidently, Susan Ryan at the P-I Real Estate Blog thinks so...
An article in today's PI on the institutional investor interest in Seattle, highlights one of the reasons the local residential real estate remains strong.Blink. Blink.
Low office vacancy rates and investor/retailer interest in commercial property means more people working dowtown and wanting to live near where they work. If you're not one of them — as in you can't afford a home or condo close in — it seems hard to believe that there are enough folks who can afford to live in town to sustain the prices. But there are.
The problem is that there aren't enough houses to buy. It's kind of a weird point in the market cycle. There are both more buyers actively seeking homes that are still in short supply with other buyers afraid to buy right now, scared by what's happened in other parts of the country and the unrelenting news coverage of the real estate downturn in those places. They don't want to get stuck with a property bought at the top of the cycle.
But with the strong Seattle economy, in order for there to be a downturn, there has to be a flurry of homes coming on the market — like when sellers trying to cash out before prices drop. It is that glut of homes for sale that that makes them get cheaper. So far there's no flurry, no glut.
It's like a collective holding of breath with buyers and sellers both waiting to see who will blink first.
(Susan Ryan, Seattle Real Estate Professionals, 09.29.2006)
(Andrea James, Seattle P-I, 09.29.2006)
10 comments:
The problem is that there aren't enough houses to buy.
Don't worry about that, Susan. Inventory is soaring (about 32% YoY), and shows no signs of abating.
Everyone keeps pointing to the mythical "strength of the economy". Am I the only one who looks beyond headlines trumpeting one measley sales increase to note that YoY sales are dropping like a rock, as are national median RE prices? Leading economic indicators are down. RE Sales are down. Companies are whispering about missing Q3 profit goals. Inventory is building. Paul Volcker (the only decent Fed chief in the last 40 years) is concerned about inflation creep. The dollar has dropped (no doubt as a result of recent oil fixes thanks to the GSCI scam).
What about this sounds good for the economy?
But with the strong Seattle economy
I hear people say this all the time, but it's never quantified.
Does anyone have data that proves or disproves the "strong seattle economy"?
"If you're not one of them-- as in you can't afford a home or condo close in -- it seems hard to believe that there are enough folks who can afford to live in town to sustain the prices. But there are."
Sure there are! After all, it's a class war...the rich are eating the city! Soon there will be nothing for a poor suburban serf to do but move to Wenatchee (or farm turnips for a Microsoft millionaire in some Belltown p-patch).
Here's an idea, Sooz: instead of assuming that the people who buy Belltown economy studios for $500 per square foot are smart and rich, consider that they're probably scared, poor and in debt up to their eyelids -- you might have a better idea of what's actually going on.
'Does anyone have data that proves or disproves the "strong seattle economy"?'
Last I heard we were still ~ 6,000 jobs short of the dot com peak. (If anyone has updated figures, please post.) Even if we've caught up in job numbers, I doubt we've replaced all those $100K+ incomes for 21yo e-business consultants and other new economy gurus.
But, as Goebbels knew, repeat something often enough and the herd will eventually accept it as fact.
Thanks for that link, plymster. Good reading. You may enjoy reading www.xanga.com/russwinter, who pointed to that a few days ago also.
I also heard that prices were suppressed at the height of driving season by Congress borrowing around $19B and giving it to the oil companies. No link I'm afraid, so maybe it's a conspiracy theory. If anyone else knows about it I'd certainly appreciate the information.
it's amazing how many people actually believe this crap...
I talked to an aunt who is upside down on a loan convincing her to find a way out and she chimes... well the seattle PI just put out an article that seattle prices will keep going up this year... I'll just wait...
It was at that point I just kept my mouth shut...
well the seattle PI just put out an article that seattle prices will keep going up this year
Down here in "prime" coastal CA the press was saying basically the same thing--but now the market's tanked, with prices clearly heading south. You hear far fewer people quoting the papers now.
and downtown is special?
so next year, downtown will see a 30% yoy appreciation while the rest of seattle stays flat...
interesting... maybe I should buy one of those unfinished condos and flip it then...
I don't care if it's next to Pikes Market... the RE boom is over
"Folks, at least read carefully enough to respond to what she's actually saying -- she is talking about housing close to downtown, not the whole county or region!"
No she isn't. She mentions people wanting to "live near where they work," and then talks about "folks who can afford to live in town." There is no mention of location beyond these vague terms, so discussion of rising inventory in King County is certainly relevant to the discussion.
"it is strange how so many commenters on this blog put words in the mouths of journalists"
Indeed.
"i believe the article is simply saying that there is no sign of a bust in the neighborhoods close-in to downtown, even though these are among the most expensive properties."
You believe wrong. Her blog post simply asserts that low office vacancy translates to high residential demand downtown. She also repeats the specious argument that there "has" to be a rise in inventory to see a drop in prices -- an argument that has been debunked on this very blog several times before.
I'm done feeding the troll. Sorry, everyone.
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