Thursday Open Thread
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26 comments:
Does anyone know if the number of withdrawn, or cancelled, listings for the Puget Sound is tracked anywhere? I noticed that the Bay Area bubble blog is tracking these stats for their region, and it's pretty interesting.
http://bayarearealestatebubble.blogspot.com/2006/09/withdrawn-listings-contra-costaalameda.html
I wonder how the Puget Sound compares?
Anyone remember Nicolas Retsinas? He's the head of the "Harvard Center for Housing Studies". The group that issued the extrememly bullish report (backed almost exclusively by the REIC) on the future of housing a few months back. The report was so optomistic that "Seattle Bubble?" blog used it as "proof" that the housing market was/is still healthy.
Just saw him interviewed on CNBC. He has changed his tune TOTALLY. He says now that "housing is in a transition period and the transition is going DOWN".
One after another, all the cheerleaders are capitulating.
There's your warning -if you need yet another one.
If you value/need your money, stay out of the housing market for now.
Mikhail- I would love to see those stats for Puget Sound also.
Thank the Lord we have Ms. Rhodes, she'll never rollover,NEVER I TELL YOU!!!
Seattle Times has a report today on the latest increase (or lack thereof) in Seattle area household incomes. Paltry, but the article claims it's because "last year's Microsoft dividend was so HUGE!"
http://seattletimes.nwsource.com/html/businesstechnology/2003247063_income07.html
That's interesting about Retsinas. I know "bear capitulation" is supposed to signal the top of a market (according to Greg Wharton of the Seattle PI RE Pro - Goooo Housing, rah, rah, rah blog). What do you call it when you have widespread "bull capitulation"?
Sanity?
The "long ride down to economic ruin"?
Beginning of Great Depression II?
Justice?
Plymyster-
I'll call it sanity.
Although any of the other terms you mentioned would apply.
Amazing that even David Lereah is on board now with the "transition".
Not to mention all the homebuilders.
...Will the last national housing bull please stand up???!!...
Holy crap...the Times is running the NAR article about real-estate price declines:
Home-price reductions may burn "flippers"
Now if you'll excuse me, I'll be outside for a moment. I need to see if the world has ended....
I checked the second new house that just sold down the street from me on the king county website:
see for yourself
This house originally was listed for $839,950 last fall when construction started. It sold for ONE HUNDRED THIRTY THOUSAND dollars over asking price (slightly larger house next door, parcel number ending with 46, only went for $100K over asking).
Looks like the insanity continues in my neighborhood. Maybe I should sell my 29-year-old 'scraper' so somebody can build one of these new houses on the lot and sell it for a cool mil. But then I'd have to live in a van, down by the river (sigh) . . .
"Lagging home sales and home price reductions are but one indicator, ever increasing foreclosures are the second.The reality is that with real estate valuations coming back to earth many homeowners have no equity left in their homes or actually owe more than their home is worth." So how did this happen? Martin says the answer can be summed up in one word, "Greed."
The National Mortgage Complaint Center & its partner The Homeowners Consumer Center suggest homeowners do the following to weather the 2006 real estate bubble burst.
1. Don't sell right now if you don't have to. If you do have to sell, do it now, even if you have to reduce your price. The national or some regional markets may ultimately correct to 10%-20% less than current market valuations, especially in formerly hot markets like California, Arizona, Nevada, Washington DC Metro, New York, Florida and the Carolina's. It may take 5 to 7 years for these markets to recover to 2005 price levels.
2. If you are in a mortgage that has features that call for payment increases or adjustments within the next two years, see if your current lender will allow you to convert to a fixed rate product. If not call the National Mortgage Complaint Center Http://NationalMortgageComplaintCenter.Com to see what your options might be. The Complaint Centers toll free number is 866-714-6466.
3. Consumers should not fall for some advertising gimmick from a mortgage firm/bank or homebuilder offering a 1% start rate on a mortgage or 100% financing. Why would anyone want 100% financing in a nationwide real estate market that could see values decline 10% to 15%+ in the next two years? Put another way "why purchase something that at least in the short run may not retain its value"?
4. If you are a potential real estate buyer the Homeowners Consumer Center ( Http://HomeownersConsumerCenter.Com ) & the National Mortgage Complaint Center strongly suggest you wait to see how far real estate values go down in your area before you purchase a home or investment property.
5. While real estate market prices may decline, the rental market should stay intact. Homeowners unable to sell their existing property should consider renting their property until the real estate market begins to recover. This may be the best option for many homeowners to actually hold onto their property.
http://www.prweb.com/releases/2006/9/prweb429485.htm
Let the panic and mayhem ensue.
I am sad to see my otherwise bright and competent friends continue to buy in this market, with zero down payments and 7.682% ARMs. They didn't ask me for my opinion, though. The one time I did have an opportunity to request caution I was shouted down.
How silly of me to ask my friends to buy within certain comfort ratios -- 2.5x-3x one person's salary, have a monthly PITI no greater than 30% of gross monthly income, and review the details of their adjustable rate riders.
We're thinking of finishing our basement and renting it out.
Is that like "can't sleep, spiders will eat me"?
Redmondjp:
"I checked the second new house that just sold down the street from me on the king county website"
Good find, I thought that builder was crazy when they bought that short-plat (and another in Bridle Trails) from the developer @ $350K/finished lot. They lucked out - isnt that just off 148th? In a normal market, that location wouldnt be ideal IMHO
In a bad market, no home will sell for $130,000 over the asking price. Although that is just one example, it tells me the housing market is still not crashing in Seattle.
That's right Anon, inventory's increasing, price REDUCTIONS rampant, news that WA. is top of the heap nationally for crap mortgages.
But if just one house sells over asking, the market must be healthy.
Love the logic there.
Better get out there and buy then! Go rescue a seller who needs your help!
Similar to other couple that posted yesterday, interested to see what the consensus would be on how much house I can afford or should be looking at next year.
Make $125K per year, no credit card debt, car paid off. Cash saved up around $60K.
Own condo with approx $190K equity (purchased many years ago), rental with about $180K equity.
Wondering what to do about down payment, if you can take equity from another property out or is that bad interest rate move. Basically have been very good about not taking out any equity - old mentality.
Am thinking a few homes in some of the better Seattle neighborhoods next year in the $550-$600K range (quality older home, no updates as I can do) - is this a stretch? Prev approved for $550K house that I lost in a bidding war but am glad b/c didnt want it that bad.
Thanks -
That's right Anon, inventory's increasing, price REDUCTIONS rampant, news that WA. is top of the heap nationally for crap mortgages.
Inventory is still tight...especially in the trendy N.Seattle hoods. Price reduction are about 24%...which is low. Especially considering most of the houses that get reduced were way overpriced to begin with. If the median price for KC was tanking we'd know those reductions meant something. Thus far, that hasn't happened. We're are still 12% higher then last year.
Why would you be looking to buy anything next year??? Do you think the market is in for a quick correction? It seems that Seattle is lagging behind, I have a feeling the ball is just barely starting to roll. Why not hold off until the dust settles?
Do you guys think that the condo market in downtown Seattle is going to suffer as much as single family residences? I have a guy at work that is always bragging about his Belltown condo and how he is made 125,000 + in equity on his one bedroom in just 2 years.
The Seattle market is lagging being the rest of the US right now due to the fact that most people do not perceive a bubble. I have asked several co-workers about the housing market and all of them believe that it may level off, but that prices will not drop much. As soon as the Seattle Times and the rest of the local media acknowledge that there is in fact some inflation in the local market, we are going to see major panic, and I predict that our market might be one of the hardest to fall.
Our special sister city:
St. Paul real estate retains its value
First, the good news: If there is a real estate bubble, it isn't popping yet in St. Paul.
The total value of all real estate in the city will rise by an estimated 9.4 percent next year, slightly above the growth in residential value, thought to be near 9 percent for next year. The 71,000 homes in the city represent about half of the county's housing and about three-quarters of the city's total real estate value.
"It's less than we've seen in recent years, when we saw double-digit growth," said Chris Samuel, who calculates taxes for Ramsey County, including St. Paul.
They must have crystal ball..how do thet know "The total value of all real estate in the city will rise by an estimated 9.4 percent next year"
Swing to a buyer’s market after several hot years tempering Anacortes home prices
Home prices are still going up here, though not as quickly. Interest rates are increasing slightly and homes are staying on the market rather than being swept up by desperate buyers.
“We’re starting to see a ton of inventory so people have a choice and they’re taking time to make those choices,” said Nate Scott, owner/broker of Windermere Real Estate/Anacortes Properties.
The cost for a three-bedroom, two-bath home in Anacortes has increased from an average of $304,500 last year to $319,040 this year. The average price of all homes has jumped from $357,000 last year to about $450,000 so far this year.
Less expensive and mid-range homes continue to be sold, but one thing’s for certain: High-end homes are what’s hot.
Scott said he is seeing the less expensive homes, $300,000 and lower, and the high-end homes, $1 million and higher, still moving pretty quickly. It’s the mid-range homes, $400,000 to $600,000, that are tough to sell right now.
While the housing market on the island is slowing, homeowners have no fear of losing value. Appreciation is just going up slower, Scott said.
The supply is limited but demand continues. Anacortes home prices are starting to go up less quickly, so places like Oak Harbor are beginning to catch up, he said.
Here are the trends I see in Seattle RE based on Tim's mls data spreadsheet:
* Inventory is climbing. (Meshugy is right, it is historicly "tight", but at the current rate of growing inventory since Jan 06, the inventory will get up into the 8500 range by early 07, which is where I think a real decline in prices will happen)
* # of Sales are declining - YoY sales are declining and the trend shows no flattening or upswing for the rest of the year. July/Aug are supposed to be the "hottest" month.
* Prices are still appreciating, but not at the rate of 2004-2005. I think prices are lagging behind the fundamentals, as seen in other bubble markets across the country.
At this time, I would say the seattle market is resiliant - but not "still hot" as some would like to think.
Sue, the thing is it is not just one home. If you want to buy a house in desirable neighborhoods like Redmond, Bellevue, Mercer Island, Queen Anne, you are not going to be able to low ball your way in. Are home prices in those places crashing? It doesn't appear that way. I also have doubts that the people there need to be rescued when push comes to shove.
At this time, I would say the Seattle market is resiliant - but not "still hot" as some would like to think.
That sounds like a sensible analysis.
Tim, thanks again for compiling all that data! That's very useful. It'd be really cool to have all the Seattle neighborhood data complied like that. Would you be up for that? It'd be neat to see that all laid out..especially since Seattle (especially certain areas) runs contrary to trends of the whole county.
Anon 7:27 - sorry for the crappy advice here, its just like I remember all talk - no real world experience or action here - just a bunch of blah blah blah. Nobody w/ a vested interest or any money where their mouth is - check out the pi blog last Wed for an explanation
If you want to know what Seattle real estate will be like in 6 months, look at San Diego today. They are about that far ahead of us on the curve. When it looks like it is finally a good time to buy again in SD, wait 6 months and buy here.
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