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.

Saturday, October 07, 2006

"This doesn't mean that a 'bubble' has burst"

Ms. Rhodes follows up yesterday's admission that the Seattle market is actually (gasp) slowing, with a softened article full of reassurances that the market from here will surely be "steady." She kicks off the article with a paragraph that just cracks me up.

At the beginning of the year, local housing experts predicted the Puget Sound area's super-heated real-estate market would slow. What they couldn't predict was exactly when or how much.

It's now, and the drop-off has been marked.
Hmm, that's interesting. Does anyone here recall any articles by Ms. Rhodes about the predictions of these "local housing experts"? Let's see, what was Ms. Rhodes saying about the housing market earlier this year?
It's also keeping King County prices climbing, putting to rest any notion that ours is a "bubble market" where prices will stall or even fall.
- Elizabeth Rhodes, 04.30.2006
Oh yes, that's right... Ours is not a market "where prices will stall." It seems that she's singing a slightly different tune now.
And, after rising for seven consecutive months, King County's median single-family home price hasn't risen since June. In fact it declined $10,000 from August to September, to $425,000. Month-to-month declines are not unusual — it happened four times in 2005 — but four months without an increase is a signal of a trend.

Plus, inventory is building and homes are selling more slowly.
Granted, it's only a slightly different tune. There's still a huge helping of everything is fine, nothing is ruined-style reporting.
"This doesn't mean that a 'bubble' has burst and property values are declining," said Redmond appraiser Alan Pope. "It means we're moving to a more-normal market where buyers have more choices. If buyers have more choices, they're less likely to pay in excess of the list price to obtain a property."

Bill Riss, Coldwell Banker Bain's CEO, said we are starting to see signs of a slower market. A real-estate veteran who has been through many housing cycles, Riss says he's not upset by the cooling because "there's nothing to push it dramatically down."

"All the mechanics are in place to have a steady market," he said.

Those mechanics include strong local job growth, which feeds housing demand, and moderating mortgage rates.
There's nothing to push prices down? What about the turning of mass psychology against housing? What about the fact that the median home price in the county comes in at about seven times the median household income? What about the rapidly increasing inventory? What about the California equity river drying up? What about boatloads of resetting ARMs?

Yeah, we're all set for "a steady market."
King County houses and condominiums combined have appreciated 8.6 percent in the past year, below the regional average.

In the central Puget Sound region, Pierce County reported the highest annual price increase — 12.9 percent — followed by Snohomish County's 10.4 percent. Kitsap County's annual appreciation came in at less than 1 percent.
While it's true that Kitsap's "appreciation" of -0.33% (yes that's negative zero-point-three-three percent) is "less than 1 percent" that kind of word-twisting makes it seem as though Ms. Rhodes just can't quite bring herself to admit in print the fact that home prices in a nearby county have actually decreased year-over-year.
Pauling says the slowdown is a relief for buyers.

"We have more inventory than we've had in the past, so buyers can pursue the home that meets their needs without having to make a decision based on fear that someone else is going to get their house," Pauling said. "They can actually make a thoughtful decision."

Compared with a year earlier, September buyers had 32 percent more properties to choose from in King County — some 9,890 properties compared with 7,496 in September 2005.
Oh, I get it. So now suddenly we're on the side of the buyers. That's cute. After months and months and months of "rah-rah double-digit appreciation" reporting, I'm finding the sudden concern for buyers hard to swallow.

At leaset she's finally admitting that the market has slowed. She's only about five months too late.

(Elizabeth Rhodes, Seattle Times, 10.07.2006)

5 comments:

The Tim said...

I bet she saw this article or one like it, and translated "the mayor wishes we could add 350,000 people by 2040" into "400,000 people will be moving here in the next five years."

People have such amazing reading comprehension skills.

john_law_the_II said...

what is comical is all of this just played out, not 6 years ago like the tech boom, but less than a year ago on the national stage.

"It means we're moving to a more-normal market where buyers have more choices."

I bet if we looked that up, lereah was saying it last year.

(We're going through a period of adjustment. As home sellers recognize a return to more normal rates of price growth, some that have been holding out for higher prices will be more willing to negotiate terms that are acceptable to buyers but still provide them a solid return on their investment.)

(David Lereah, NAR’s chief economist, said the number of homes on the market has been improving nicely. “The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they’ve seen in the last five years,” Lereah said. “Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year.”)

Matt Rivett said...

Is she publishing any Facts that are incorrect, or is she just giving her opinion on what is happening?

No, she publishes no real facts at all except monthly inventory/median.

Instead she'll say things like, "Empty nesters and young professionals are driving the hot-hot downtown condo market", which is about as valid as saying, "Xenu's unleased the thetans from Mt. Ranier to drive up the downtown condo market" if you have no demographic/financing data to back it up, but instead we get speculative musings masquarading as facts.

This is all the same bubble specter we get when shills like Liz Rhodes say "the robust local economy should keep the housing market sizzlin'", again, a statement with no fact or statistical analysis to back it up. And people wonder why more and more individuals are getting their news from Blogs.

Go Tim, Go!

Matt Rivett said...

Are retiring boomers not moving downtown?

No Young professionals live in belltown?

Something must be driving the market downthere. That statement sounds pretty true.


I dunno? I'm sure there are, but 'pretty true' is an oximoron so I ain't buying none of it...

There's no data to provided to the consumer to determine what's driving the market, there's never been a breakout of numbers. Could be specuvestors in some smokey convention center off the Jersey Turnpike fronting the cash for all anyone knows.

What's driving the markets the end of the road for the housing bubble, the condo 'boom' is the swan songs of housing bubbles, the last dying gasp and there's a plethera of examples around the country to prove it...

MisterBubble said...

What has been driving the redhot downtown condo market?

I don't grant your premise. The downtown condo market is no more or less "redhot" than any other housing market in Seattle.

Loose credit is driving those markets, and there's no reason to believe that it isn't driving this one.

Are retiring boomers not moving downtown?

Maybe.

No Young professionals live in belltown?

Sure they do.

Something must be driving the market downthere.

No kidding.

That statement sounds pretty true.

Because it's a truism. Funny how that works....