Seattle Residents Fleeing To Ellensburg?

Okay, so that title was a bit overdramatic. But that's the job of a "reporter" right? Heh. Anyway, about 100 miles east of Seattle on I-90, the Ellensburg area is experiencing its own real estate boom, with new homes popping up at a record pace:

Building permits issued for new homes in Kittitas County outside city limits hit an all-time high of 286 in 2004, an increase over the 235 issued in 2003.

The 2004 record level was reached and exceeded on or about Oct. 19, according to Darryl Piercy, director of Kittitas County Community Development Services.

"It's definitely a continuation of the trend we've seen in the last few years," Piercy said. "This area is tremendously attractive if you live in the Puget Sound area where your faced with traffic congestion, a large population and crime."

I'm not familiar enough with real estate lingo to know whether 286 permits means 286 homes, or 286 projects (which could each be multi-home), so I'm not sure how big a number we're really talking about here, but it's apparently enough to get noticed frequently by the locals. Speaking of locals, it seems that quite a few of the new homes aren't going to be inhabited by them:

Piercy estimated 20 to 25 percent of new homes are second or vacation homes.

Bob Hansen, a 31-year veteran in real estate, said if the nation's economy doesn't change dramatically, the boom trend could continue through 2006, at least.
...
He said a Seattle resident looking to retire in the Kittitas Valley can sell their $300,000 to $400,000 home and come here, buy acreage in the country and build a new home. The demand is high for three- to five-acre rural lots.

"They want to get out of the mess over there," Hansen said. "It's the lifestyle they are after."

Or is it the relatively cheap land that they think will appreciate considerably in the coming years? When I hear "second or vacation home" lately, that tends to be translated in my head as "investment home." Good thing a "dramatic" change in the nation's economy is so unlikely. Right?

(Mike Johnston, Ellensburg Daily Record, 10.22.2005)

Follow-Up: Anecdotal Evidence

Way back in early September I made a post with the details of two properties in my neighborhood that had recently been put on the market.

The house in question has still not sold, and has now been languishing on the market for over 10 weeks. The price has been dropped from $350,000 to $319,950 (an 8.5% drop), but there have apparently still not been any takers. In my opinion they're still asking way too much in a painfully obvious attempt to take advantage of the peak, but I'm no expert (which should go without saying). I will keep you posted.

The condo I was watching closed on October 6th, for a total of $280,950—$6,000 (2%) over the asking price. The total length of time from listing to closing for the condo was approximately one month. Apparently this inspired the owner of the neighboring unit because within the past seven days the condo next door (parcel # 8035550060) has gone up for sale, with an asking price of $300,000. I'll keep an eye on this one as well.

Thurston County Continues Upward

Nothing shocking going on here, just more confirmation of local neighborhoods still on the rise. Specifically, this story is about Thurston County.

South Sound's booming housing market and recovering economy are contributing to record gains in Thurston County property values.

For the second year in a row, Thurston County set a record for gains in residential property tax assessments.

This year's overall 12 percent gain beat last year's 8 percent gain, which was a record dating back to at least 1999, according to Dennis Pulsipher, the county's chief deputy assessor. Such gains are reflected in 108,000 assessment notices scheduled to be mailed Wednesday to property tax payers.

Those lucky tax payers!

(Jim Szymanski, The Olympian, 10.18.2005)

Kitsap County Continues To Soar

You may recall last month that over on the other side of the Sound Kitsap County made King County's gains look small, and in the month of September they've done it again, with Silverdale posting a 36.7% year-on-year increase.

Doney said the demand for affordable housing continues to increase, but that demand has the perhaps unintended affect of driving prices up, pushing south the line between affordable neighborhoods and higher priced ones.

A year ago in September, of the 19 Kitsap County areas measured by the listing service, Silverdale was the ninth most expensive. This September it came in sixth.

In Central Kitsap 108 homes sold during September, up 21 from the same month a year ago. More than half of those were in East Central Kitsap, where the median price jumped from $189,000 to $249,975, a 32.3 percent increase.

Affordability has left the building.

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CK Home Prices Jump

October 16, 2005

While the usual suspects -- Bainbridge Island and North Kitsap -- continue to see housing price increase, Silverdale appears to gaining momentum.

"I think it comes down to affordable housing," said Cathy Doney, a broker in the Silverdale Reid Real Estate office.

The median home price in Silverdale was $312,250 in September, compared to $228,495 in the same month a year ago, according to figures released by the Northwest Multiple Listing Service.

The 36.7 percent median Silverdale home price increase matches the rise on Bainbridge Island, where the median home price jumped from $416,250 to $569,000.

Doney said the demand for affordable housing continues to increase, but that demand has the perhaps unintended affect of driving prices up, pushing south the line between affordable neighborhoods and higher priced ones.

A year ago in September, of the 19 Kitsap County areas measured by the listing service, Silverdale was the ninth most expensive. This September it came in sixth.

In Central Kitsap 108 homes sold during September, up 21 from the same month a year ago. More than half of those were in East Central Kitsap, where the median price jumped from $189,000 to $249,975, a 32.3 percent increase.

Apparently, the view of Seattle had an impact last month as well. Prices in the Manchester/Retsil area of South Kitsap jumped 48.5 percent, from $191,950 to $285,000.

The median price in East Bremerton went up 16.3 percent to $223,750, while West Bremerton at $157,500 saw a 6.2 percent jump.

Doney said the demand for affordable housing will eventually create higher home value increases in Bremerton, too.

In terms of total volume, buyers spent a total of about $164 million on 493 homes during September, and average of $333,114, a 10.3 percent rise in sales and a 22.2 percent increase in average price.

Kitsap County's 18.6 percent overall median home price increase $221,000 to $262,000 was 11th highest in the areas the Northwest Multiple Listing Service covers. Mason County median prices increased 20.9 percent from $145,000 to $175,250.

The median home price was $349,898 in King County, $245,000 in Pierce County and $285,000 in Jefferson County.

By Steven Gardner

sgardner@kitsapsun.com
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(Steven Gardner, Kitsap Sun (free sign-up req.), 10.16.2005)

Sunday Comics Bubble Humor

I failed to mention this before, but I'm actually on vacation right now, through October 30th. So expect posts here to be sporadic, but I will try to get in an update every few days. Although it doesn't have anything to do with Seattle specifically, I thought some of you might enjoy this comic I saw in the Sunday paper. Click it to view a larger version.

(Berkeley Breathed, Washington Post, 10.16.2005)

Schools Want A Piece Of RE Tax Revenues

Here's another update on the continuing focus on the "spend or save" question when it comes to property & real estate tax revenue windfalls. The Seattle Education Association chimes in on the side of "spend," requesting a big piece of the pie.

The Seattle Education Association (SEA), which represents the district's teachers, instructional aides and office staff, called on the City Council and Mayor Greg Nickels to set aside for the district $25 million a year for the next five years. The city expects to collect about $55 million more than analysts had predicted in sales, business and real-estate taxes by the end of next year.

While the city is not immediately acquiescing to the request, it seems the debate isn't whether to spend or save, but rather just how to spend.

Nickels' spokeswoman, Marianne Bichsel, said the city has sustained $120 million in budget cuts over the past three years, and that the higher-than-expected revenue should be used to restore funding to public safety, transportation and human services.

Great idea. Then we can go through the exact same budget cuts a few years from now when the real estate money tree shrivels up and dies.

(Sanjay Bhatt, Seattle Times, 10.13.2005)

Yet Another Real Estate Search Site

Fun! New! More ways to research how best to throw huge piles of money you don't really have into the local real estate market!

Finding the home of your dreams can take months of research. But thanks to new online tools -- including aerial maps that incorporate residential listings -- potential home buyers now have a wealth of information at their fingertips.

Today, Kirkland-based HouseValues Inc. will throw some of its muscle behind online aerial maps with a free service called HomePages that allows consumers in 120 cities to peruse house listings, previously sold homes, nearby parks and other information with a bird's-eye view. It joins a host of other online real estate mapping services -- including HousingMaps.com, Redfin and Trulia -- that are hoping to change the way people find local real estate information.

I'm beginning to think that Tom of Seattle Property News may have been onto something when he said "Is there a regional bubble in online real estate sites?"

(John Cook, Seattle P-I, 10.11.2005)

Fancy $500,000+ Beach Community

We're venturing a bit further outside the Seattle area than usual for this story, but I thought it was interesting enough to merit that. From the Gray's Harbor paper, The Daily World comes this story about an up-and-coming planned community of half-million to million-dollar homes in Pacific Beach:

On a cliff in the woods overlooking the Pacific, seven picturesque beach houses have emerged.

In the next few years, developer Casey Roloff plans to build 393 more, plus classy cafes, coffee shops, retail stores and parks — transforming this once-vacant mass of forest land a mile south of Pacific Beach into a town unlike any other on the West Coast.

Seabrook emphasizes sustainable development and the cozy community feel that is central to the new urbanist movement. Garages are placed behind homes in alleys, leaving more prominent space for walking paths and pedestrian-only streets. Lots are smaller — but community-owned areas, like parks, amphitheaters and benches — are designed to be accessible from every home. And instead of building gated mansions along the ocean, homes will be balanced with community space, trails and a pedestrian bridge.

It's quite a nice-sounding vision. One wonders if there is really that much demand for such a place in Pacific Beach. Can the local economy support such a grand vision?

About 325 families have placed refundable $5,000 deposits to get on the waiting list for Seabrook. Of those investors, Roloff estimates around 60 percent are from Washington. But people from Florida, Arizona, New York, Idaho and California have also reserved houses, which currently range from $475,000 to $700,000 — almost double the price at which the homes were being offered in June 2004. A few Harborites have even reserved.
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Like 90 percent of the people considering buying into Seabrook, Alison Kruse, a Covington homemaker, is looking for a second home.

Yowza, that's a lot of "investors." How many people are buying with intent to actually live there for at least a portion of the year, and how many are hoping to sell in a few years? At any rate, it sounds like it would make a fun ghost town to visit 50 years from now. I kid, I kid.

(Kaitlin Manry, The Daily World, 10.08.2005)

County Council Candidates Talk Housing

County Council candidates in Snohomish are taking notice of the housing market insanity and (of course) attempting to gain votes based on their position on the matter.

The hot real estate market and its expensive "starter castles" are a key hurdle for the homeless, first-time home buyers and senior citizens, several Snohomish County Council candidates agreed Thursday at a forum on housing.

But should the county jump-start the condo market or roll back property taxes? Candidates diverged on what the next step should be to make housing more affordable in the county.

While I think it's a good thing for public officials to take notice of the continually growing problem, I don't really think that a county council is really in a position to reign in the madness. Also, I'm not so sure about that assertion regarding the homeless—are the only choices home ownership or going homeless?

I give them credit for keeping the issue in the public awareness, but I sense that it's all just a bunch of talk. How unlike politicians.

(Jeff Switzer, Everett Herald, 10.07.2005)

More Takes On September Figures

The usual suspects have chimed in this morning with their detailed stories (as well as graphs, figures, and photographs) reacting to the September sales figures.

Elizabeth Rhodes in the Times:

For the third straight month, there were more sales but fewer homes to choose from in King and Snohomish counties, compared with the same period a year ago, according to September sales numbers released yesterday by the Northwest Multiple Listing Service

Brad Wong in the P-I:

After losing one Seattle house in a bidding war, Rachel Schulenburg spent part of Thursday touring a three-bedroom brick Tudor in Magnolia, which is listed for $615,000.

Schulenburg, 32, arrived from Chicago on Oct. 1 after her husband had landed a job with a Seattle insurance company. "We're definitely excited," she said after visiting the house. "But the multiple-offer thing is frustrating. It's something we're not used to."

But new residents such as Schulenburg, and younger adults remaining and buying in the Seattle region, kept the real estate market strong in September, as the median sales price of a single-family house in King County grew to $381,250, the Northwest Multiple Listing Service reported Thursday.

And finally, Clayton Park with the King County Journal:

Home prices on the Eastside shot up to an all-time high in September, breaking the record set the previous month, the Northwest Multiple Listing Service reported Thursday.

In southeast King County, overall home prices dipped in September compared with August, but remained considerably higher than prices a year ago.

Each article has its own angle on the numbers, with Rhodes speculating on the disparity between faltering prices in Boston, D.C., and California, and Seattle's still-burning market, and both Wong and Park looking forward to increased activity next month brought on by the Microsoft class-action lawsuit payout. I could easily make each one into its own post, but since they're all centered around the September figures, that seemed redundant.

(Elizabeth Rhodes, Seattle Times, 10.07.2005)
(Brad Wong, Seattle P-I, 10.07.2005)
(Clayton Park, King County Journal, 10.07.2005)