I think maybe there is some kind of virus infecting the minds of potential homebuyers. The virus settles into the brain and causes the victim to lose the capacity for rational thought in matters of real estate. Symptoms include the delusions that "I need to buy now or I'll be priced out forever," "I should use whatever kind of financing I can get my hands on," and "owning any old dump is better than renting." Possible evidence of that last one can be found in today's P-I:
For those undeterred by the sales flier that warned a 96-year-old Columbia City house is "an extreme fixer, to be entered at your own risk" or by the "hazardous environment" sign on the door, Al Johnson left a flashlight just inside the entry.Oh yeah. For sure now is a great time to buy an overpriced dump. When isn't it a great time to buy one?
"I'm on my second battery," said Johnson, an associate broker with Windermere Real Estate, during an open house earlier this month. He posted this listing on a Sunday evening and got calls about the house every half-hour the following day.
"One, it's about the cheapest thing around," Johnson said. "And two, people just get drooly about projects. ... People get weak in the knees and say, 'Oh, I can do this. I love this.' "
Johnson's weekday open house, set up so other agents could get a look, attracted a decent number of visitors. After looking through the house, Windermere agent Susan Sellin said she recently saw a Capitol Hill house in similar condition sell with multiple offers, despite a $500,000 asking price.
The increased interest in fixers over the past few years drove up prices beyond where many projects pay off for those who want to fix a house, then sell it right away, according to agents and builders.
"Everybody and their uncle was in this business," said Mark Johnson, who started renovating houses and building new ones in 2001, after five years as a contractor.
Johnson, no relation to Al Johnson, recently paid $360,000 for an old West Seattle house and said he poured about the same amount into overhauling it before putting it on the market last year. When the offers that came in were lower than he wanted, he decided to move in himself.
He said he knew the market was slowing when he started the project, "but I was kind of a little cocky, I guess, and thought that I could beat it."
But despite the slowing market, [Mark] Johnson sees an upside.
"As far as flipping, it's going to be a good thing, because there's not as much competition," he said. "Quite frankly, it's time to buy."
(Aubrey Cohen, Seattle P-I, 02.20.2007)