03.19.2007 - Monday Open Thread
This is your open thread for Monday, March 19, 2007. You may post random links and off-topic discussions here.
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18 comments:
Is it just me, or have things gotten really ugly around here lately on both sides? If it's not someone trying to rub peoples' noses in their paper appreciation gains, it's people trashing people in the real estate industry for nothing other than being in the industry. The whole place is starting to stink.
I second that, LHR.
Anyone care to explain Money Merge accounts in very simplistic terms? I've seen the software been called a ripoff, and that you could do this yourself, but then the i've read that although you could do it yourself, you could cost yourself thousands in lost savings by not using the software. The idea sounds great, but I just can't grasp the method. I believe these companies are scams, but would like to still understand how it works. Please help??
IT has LHR, I think because we are at the apex of something big happening, or from the other side, the thought of just a lot of hot air, tensions are high. We are all waiting to see what is around the corner. Anticipation brees anxiety. I see a lot of anxiety on both sides of the fence.
I've seen people mention that RE is becoming a taboo-ish subject a la religion or politics - each side is so entrenched in their "belief" that it is near impossible to have the other change sides.
Granted, I still have my doubts as was discussed a few open threads back. But, this gut feeling I've had for the last few years that this market isn't sustainable is still there. I see houses going up in price for no apparent reason - no value is added and that doesn't sit right with me.
I may be biased, but when the RE Bulls weigh in, it seems that it's usually with anecdotal evidence; whereas, those that see the bubble cite statistics and include the links to the data.
Real estate is an emotional issue right now. There are alot of different perspectives as to what is going on and what will happen.
Some people have totally bought into the "real estate will always appreciate" strategy and have invested accordingly. They don't want to hear about how they may have made a very expensive mistake. They get very defensive because it's scary to consider the possibility of depreciation and related consequences.
Others who sense the market is way overpriced are frustrated because seemingly obvious economic fundementals are being ignored. (And they may secretly be kicking themselves for not having bought 4 years ago and profited from the recent significant appreciation - Tulips revisited.)
The so-called "bitter renters" are frustrated and dismayed because they want to buy a place but don't because they either can't afford to or they are convinced that the market is due for a correction and buying real estate right now would be a bad investment.
This issue is big enough for everyone to find someone who thinks differently and is therefore a certified moron.
Hooray for my side!
Soured condo market in Seattle? Think again
Over the past decade, downtown Seattle has experienced a 67 percent population surge, the second-fastest urban growth rate in the nation. Seattle was voted the nation’s most livable city by the 2005 Conference of Mayors and, just last year, residential zoning downtown was changed to encourage our city’s emergence as a 24/7, high-rise metropolis.
....when local media pronounced that in Seattle sales were down and inventory was up. These reports, however, neglected to identify one very important aspect: new construction condos were grossly underrepresented in the data. Typical reports, based on the Northwest Multiple Listing Service (MLS), overlook the fact that less than 10 percent of the new construction inventory is posted on the MLS and, given the very nature of pre-sales, there are no closings on which to report.
In reality, downtown Seattle may see 6,500 condos delivered in the studied 60-month term. Of this number, about 1,000 units will become apartments, leaving approximately 5,500 units of new construction condo inventory. Considering that 2,000 of those units are already pre-sold, this suggests that about 3,500 new units will need to be absorbed between now and 2010 — not a tall order, all things considered
Seattle’s market is far less sensational and much more logical than these other cities. Our economy experienced a delayed recovery from the recession and, from a market perspective, we’re still in the first half of our cycle. Seattle didn’t witness the same rates or consecutive years of appreciation as headlining markets that are now digesting a market correction. It wasn’t until 2005 that downtown Seattle saw double-digit appreciation, and I believe that was brought on more by the introduction of improved product offerings than by any kind of investor ebullience. While investors may have represented 15 to 20 percent of downtown Seattle’s condo absorption in the past, new restrictions are forcing this conditional buyer segment much lower. The vast majority of home buyers today are owner-occupiers, which is a good thing.
It’s understandable if home buyers have become cautious about where and when to buy, especially with resales. They can find themselves in “analysis paralysis” and, for a short while, could actually create a self-fulfilling prophecy about a declining market. That will pass.
I love that phrase "analysis paralysis." I think that's exactly what a lot folks here are suffering from. As the author says...it will pass.
Thankfully, a new year has a way of resetting things. Based on sales so far in 2007, many shy home buyers have reconciled the market truths and decided to buy. Sales are up at all price points.
Meshugy, great article, thanks. However, I would like to know the author is getting his data. When I plug in downtown Seattle in Redfin and look for condos under $1M sold in the last 3 months, I see only 19 sales. That wouldn't seem to support the above quote of sales being up. I'm not saying he's wrong, I hope he isn't, but I do wish there were cites to sources in the article.
I am still buying downtown rentals, but I am seeing more listings on the market 60 days or more. You have to set your price right to buy in any market, and I am being cautious, but optimistic, in this one.
Realogics is the recognized dream team that supports developers and their lenders for the disposition of high-profile, high-value condominum and mixed-use buildings in the city.
Mmmh, yes very impartial souce of news there Meshugy, an article by a firm that supports developers, I'm sure they have absolutely no incentive to tell things how they are...
With 2200 Westlake as the flagship condo icon downtown, and the fact that 25 units are for rent and the 500K+ places are sitting empty should tell people what's going on...
Studios for ~300K! gone in a day, 500K+ DOA... sitting and rotting their equity away.
Seattle cannot support a luxury condo market PERIOD!
According to Realogics website they are an "Award-Winning Market Catalyst for Residential and Mixed Use Real Estate"
Interesting use of the word "catalyst".
These guys are marketers and salespeople, right? How can anybody expect their analysis of the condo market to be objective knowing that their livlihood depends on sales.
Shug/Info/Hotty,
Are the "Bubble Believers" citing sources that appear to be as blatantly biased as this? Not trying to pick a fight, I'm just curious...
Addendum to Grivetti's and my last post for clarification -
Dean Jones, the author of the article linked by Meshugy, is the president of Realogics.
wtf, at this point all sources are guessing and come from some bias. We all know what we think should happen based on our understanding of market forces, but really only time will tell what is really going to happen. There may be some additional factor everyone has missed. I am glad I read this blog and get good comments from both points of view.
So anybody care to explain in terms dumbed down for me how a Money Merge Account Mortgage actually works?
So anyone care to explain to me how a money merge account mortgage actually works, please use real numbers in an example. I can't seem to grasp the concept. (i'm in no way affiliated with any company trying to sell the software), i'm trying to avoid paying a dime for this concept, but try to benefit at least a little bit. Thanks.
Perhaps tomorrow will give us some insight into the upcoming housing market for the year?
Do you need a chrystal ball? Seriously.
Ahhh.... good ol' Dean and Stacy Jones, old aquaintances from a past life. I dont think they have ever met a "Luxury" condo they wouldn't pimp. With the parties those folks would throw for condo pre-sales and openings, I can see why everything is so expensive.
Here is an example of what happens to housing in a depressed labor market. Um, yikes.
http://news.yahoo.com/s/nm/20070319/ts_nm/usa_subprime_detroit_dc
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