“A Tilt To The Buyers Side” In Washington
The News Tribune reports from Washington. “Home buyers take heart. New figures show Pierce County’s hot home market is continuing to cool off. A dramatic increase in the number of homes being offered for sale could bring a better balance to the supply-demand equation, say real estate experts.”
“The total number of homes and condominiums on the market in Pierce County increased by more than 52 percent in October compared with October 2005, according to new figures from the Northwest MLS. At the same time, pending sales dropped 16.5 percent to 1,369 compared with 1,640 during October last year.”
“‘The evidence looks pretty convincing that the market has corrected itself, and we are experiencing a tilt to the buyers’ side in negotiations,’ said Tacoma Realtor Dick Beeson.”
“Prices fell slightly from September’s median price of $276,670. That decline isn’t worrying agents. The prices and types of houses vary from month to month.”
The Herald Net. “Home sales in Snohomish County continued to slip in October. ‘Housing sales are down, but this has created a greater balance in the market between buyers and sellers,’ said (broker) Lennox Scott. ‘Since we’ve come off of the frenzy market of the past year, buyers have more selection, there’s less competition for homes.’”
“Snohomish County fit the mold of most home sales trends in the Puget Sound area this fall. Listings rose significantly, by 27.5 percent in October; pending sales dipped, slipping 7.5 percent; and closed sales also fell, by 13.7 percent.”
The Seattle Times. “Prospective homebuyers who’ve been frustrated by too much competition for too few homes, your time is now. The number of houses and condominiums for sale in the central Puget Sound region — King, Snohomish, Pierce and Kitsap counties, was up from 27 to 59 percent last month, compared with a year earlier, according to statistics released Tuesday.”
“Increasing inventory is giving buyers more clout, said (broker) Lennox Scott. ‘We’re adjusting from a frenzied market back down to a strong market,’ Scott said. ‘Buyers have selection.’”
“‘I’m amazed the market was basically on steroids for as long as it was,’ said Bob Melvey, a 30-year sales veteran. ‘It makes sense it’s going to have to take a rest. But even with this absorption rate, it’s not as if the market has tanked and the sky is falling.’”
The Seattle PI. “More and more home sellers are chasing fewer and fewer buyers. The median home price in the city was $420,000, the same as July’s price after two consecutive months of declines and represented the largest year-to-year increase since July. King County as a whole showed a similar trend.”
“‘They keep saying it’s a buyers market,’ Dariush Zand said while looking over a Montlake home. ‘Prices haven’t changed. I don’t see any reduction.’”
“Zand, who is planning to move back to the area from San Jose, Calif., said prices have declined there. ‘California’s starting to look like a pretty good deal now,’ he said.”
“While looking at homes in Mount Baker, Hanni and Enrico Perella said selection, not price, was the problem. Having sold a San Francisco Bay Area home for a good profit, ‘I could afford to buy some house,’ Hanni Perella said. ‘I’m just not finding what we need.’”
“The statistics show the market is returning to normal, said Glenn Crellin, at Washington State University. ‘Yes, the inventory is going up,’ he said. ‘It’s still sitting lower than it was three years ago.’”
“Buyers now can take time to search out the house they really want, rather than jumping at something that will do, Crellin said. ‘Because of the period of frenzied activity, we sort of lost sight of what a normal market looks like and feels like.’”
“Not far from the house the Perellas were touring, Rob Mintz was wondering when his Mount Baker home would sell. ‘It’s really hard, I think, as a home seller to have any sense of what you’re supposed to do,’ he said. Mintz, who is moving to Baltimore, had put his house on the market several weeks earlier and had dropped the price from $625,000 to $599,000.”
“‘We bought a house (in Baltimore). Now we own two,’ he said. ‘That’s a little bit stressful.’”
“Mintz cut the price again to $575,000 at the end of October, got an offer soon after and had a sales agreement Tuesday.” “(Broker) J. Lennox Scott said sellers will need to focus more on price, presentation and marketing, he said. ‘What’s great about this market is buyers have selection.’”
It didn’t take them long to get nervous in Seattle. Here are some ads from the Columbian:
‘Town Homes Rent - -ONE MONTH FREE! ..all appliances including w/d, 1 car gar, $950-$1100′
‘Homes for Sale - -HOMES FOR SALE for undermarket value. Owner financing avail. Bad credit OK.’
‘Homes for Sale - - NEW! HOME! SPECIALIST! “IT’S A BUYER’S MARKET’
‘Homes for Rent Downton Vancouver. 3 BR. Garden area Near shops, Starbucks & more!. $995/mo’
FYI Ben, the Columbian serves Vancouver, which is really a suburb of Portland, not Seattle as it is a few hours to the south. Those rents would be a steal in Seattle!
BanteringBear,
Well that’s true but isn’t Portland a suburb of Seattle?
You do not really think Portland is a suburb of Seattle.
That’s like saying Detroit is a suburb of Chicago… 
Chris,
OK, so it’s a “bit” of a stretch but unlike mid-western towns that have their own identity the only difference I can see is that “Frazier and Niles” don’t live in Portland! Oh and Daphney! Just kidding. Portland’s inferiority complex runs deep. Seattle has both big league baseball AND football and we have the “Trailgangsters” which Paul Allen was unable to find a sucker (I mean buyer) for. The more we try to distinguish ourselves from Seattle, the more we become just like it. We gladly cheer for the Mariners and Seahawks whereas White Sox fans would tear out their own spleen with a pair of pliers before they cheered for the Tigers.
That’s not entirely true. After they took the division you HAVE to cheer b/c otherwise we would look worse if they don’t win?
Portland is more like San Francisco and Vancouver B.C. than Seattle.
Portland is a cool small city. Seattle is an inferior big city.
I’ll take PDX anyday of the week. Better traffic. Better weather. Cheaper living. Just a better quality of life.
Yes I agree that Portland is a nice, smaller big city. I think it is, in my book, quite superior to SF and Vancouver because it is more mellow and livable.
Seattle = LA with bracket fungus
Portland is nice to visit, but that’s about it.
Good luck finding a well-paying career there (that’s why it’s cheap), and the locals hate outsiders far more than in Seattle.
Not to mention that Seattle has far more to going on, both in-city and outdoors, and ….
Less annual rainfall than Portland.
Justin wrote:
“I’ll take PDX anyday of the week. Better traffic. Better weather.”
It’s hard to say which has a more difficult commute. I try not to drive through either town during the rush, but I doubt there is anything worse than trying to get through Portland into Washington state during the afternoon commute. As for the weather, it’s hotter in Portland in the summer, colder in the winter and the wind blows harder in Portland. Hey! No problem. Just stay in Portland.
Yes, Portland does advertise that with 36.5″ of rain a year, this is less than New York, Chicago, and many other places. What we don’t tell you is that this is 0.1″ per day…every day.
Portland is cold and foggy.
I suppose heaven is just a suburb of hell, too? After all, it’s just a bit north…
(PDX forever!)
Ya think Seattle Eric is happy today? Not only is he an idiot, he did it live and in color where nobody will forget!
Seattle Eric is MIA. He has not posted for over a month, meanwhile his homes are just languishing. It seems he is having a hard time drumming up any interest in $250k homes disguised in price as $600k homes. Not even the wooliest of sheep can miss that glaring discrepancy.
Update from our Seattle flipper: http://seattlerei.blogspot.com/
By the way: The update is worth reading - key words “flooded rental property”,”tenant issues” (sad story). Also, you can be sure none of his properties sold, or he would have mentioned it.
He “can’t remember” if the North Bend (flooded) property has a crawl space or not.
Wow, these guys own way too many properties when you “can’t remember” basic stuff like that. Either that or they’re just total flakes. Take your pick.
I didn’t mean to connect the two. I just saw those ads when I was putting this post together.
My apologies. I should have posted “FYI readers” as I know you are aware of the distinction.
bantering bear- those rentals would be a steal in Bellingham even! We’ve got an awfully long way to fall here.
Prices have started coming down here, but $995 for a 3bd/downtown/garden- no way. Not yet. We’re still at the “I’d rather let the place sit empty for a year than lower the price *too* much stage. Must be a lot of bridge loans out there.
From someone who just left Vancouver:
Ads for Downtown Vancouver, WA real estate……you can shoot a cannon through downtown on the weekend and not hit a soul…..literally; it’s a ghost town. The park is nice but all the vehicles parked there have people living in them. NOBODY wants anything to do with downtown Vancouver. In a booming regional economy, it got so bad downtown, the McDonald’s closed shop.
Battle Ground….NE of Vancouver. Explosive growth over the past ten years as people fled Portland for cheap land and housing. They’ve built so many subdivisions it will take another ten years to get them sold. When I left the area, one upper end subdivision had 32% of the existing houses for sale.
I could be wrong but the multiple house for rent listings sound like the small subdivision built right on top of I-205. You could stand in the tiny front yard, throw a tennis ball over the house, and it would hit the interstate instead of the back yard. Again, I might have this one confused with another development but when I left, they sold ZERO units and were trying to rent them out on a month to month basis.
Maybe someone can do a followup to see if I’m right.
I sold in August at the very end of the “boom”……got SO lucky I can’t still can’t believe it.
Interesting comments on downtown Vancouver WA. - I’ve never been there.
So it sounds like those 3 bedrooms should be more like 500/mo. and the $995 is pretty pricey afterall.
I lived in Portland from 1978 - 1989. Vancouver was always as you describe. It is basically a poor suburb of Portland (not that Portland needed any more poor neighboring towns.)
It is amazing how much growth has occured in Battle Ground and Yacolt!!! Those towns had nothing in them when I lived there and now they have strip malls and subdivisions everywhere. Why anyone would want to live in Vancouver, Battle Ground, or Yacolt is beyond me. I hear the property taxes are much less than Portland, but that still isn’t enough for me to move to any of those towns.
More NW news:
‘ VANCOUVER, British Columbia, Nov 8 - Ainsworth Lumber Co. Ltd. posted a loss in the third quarter as a slowing North American housing construction market held down prices for oriented strand board. The company said it had a net loss of C$77.5 million.’
Bad news for mills around here.
The RE gurus in Vancouver (BC) are still saying the city is immune to the US housing meltdown. Hardy har har.
Vancouver BC - Portland with San Francisco prices.
it’s soooooooooooooo predictable *yawn*
they start out with the old “it’s a balanced market/great time to buy/more selection/we’re gonna be ok here” spewage
now fast forward to florida - freddie is roaming the neighborhoods attacking helpless fb’s at will
Yep…….same garbage, different city, different talking head. (yawn)
It gets tiring reading how every reduction in the market is considered a ‘correction’ as if a correction is a good thing. This must be the only industry where sales declines are refered to as ‘corrections.’ What a bunch of bs sales people.
Chris,
Look on the bright side. When Niles and Frazier get foreclosed they can sub-lease your garage while you and Daphney “work out the rent details” inside!
Funny how many of the quotes come from EL’s (equity locusts) leaving CA somehow believing they will be able to just buy a home in Seattle-Portlandville cash money!
For those that participated in the last N’west thread that doubted me, my expertise (and sanity) my forecasts, ah-hem…. are coming to fruition! This is where the wheels start to come off for us. When the “inefficiency” between the CA market and the PNW no longer afford the EL’s the luxury of being able to pick and choose how long do you think it will be before they stop coming altogether?
People this is what our whole appreciation model is built on!
It apparently was also the appreciation model for places like Flagstaff and Sedona, AZ, Santa Fe, NM, etc. Now it will become the depreciation model.
txchick57,
Well exactly. If it were not for the fact that you could outright buy a home cash money just from the tax free profit from your CA home how many would be flocking here? Now that there isn’t an “arb” to exploit what’s the point?
Oh and thanks Ben for not forgetting the down trodden and water logged!
This point is why I believe those who are renting while waiting are in the cat bird seat. I may buy out of state in a couple of years, probably a whole block.
I never understood this part - one sells in CA, say SF Bay Area, for about $800K, and then goes ahead and buys for $600K in Flagstaff.
Where is the catch? Why should such price compressions make sense for the ELs?
Capital gains is the reason, I believe. Folks figure real estate is the safest haven for their gains.
Very true. And what’s that sucking sound I seem to be hearing?
“Funny how many of the quotes come from EL’s (equity locusts) leaving CA somehow believing they will be able to just buy a home in Seattle-Portlandville cash money!”
They will always be able to buy more for their money up here, but not as much as they used to. I just find it silly that, given recent real estate news, they wouldn’t bank the gains and rent for a while. Hard to understand people and their logic.
Absolutely. It’s like dodging a bullet and then volunteering for a second tour of duty. The folks quoted in Ben’s articles seemed genuinely surprised they couldn’t just have their pick of the litter and be able to do it all over again.
And I’m thinking that potential California EL’s will start feeling less rich as they see their house prices drop in CA. Suddenly they aren’t sitting on such a huge pile of equity. Maybe when California becomes affordable, people will actually stay there. (please?)
Yes, good for them and us. Amen.
“They will always be able to buy more for their money up here, but not as much as they used to. I just find it silly that, given recent real estate news, they wouldn’t bank the gains and rent for a while. Hard to understand people and their logic. “
They will always be able to buy more for their money up here, but because of leverage, they won’t always have the same amount of “their money.” As the bubble bursts, equity will fall faster than housing values. At some point, the equity will be small enough that it won’t be enough to buy a house in Portland/Seattle without a significant mortgage, and that is when moving here will suddenly becomes much less attractive. The payoff for becoming an equity refugee is highly non-linear.
There actually is some logic for becoming an equity refugee instead of banking the gains and renting. If you can buy a place in cash, your rent goes down to zero. One step closer to financial independence, even if your income in Portland/Seattle is significantly less than in San Francisco.
“There actually is some logic for becoming an equity refugee instead of banking the gains and renting. If you can buy a place in cash, your rent goes down to zero. One step closer to financial independence…”
How so? Say, for instance, an equity locust has $750k cash. He can either pay that $750k to own a decent home in Seattle outright, or rent the same home for $2500k per month. Say prices drop 25% over two years. During that period, he has paid $60k in rent. He still has $690k left, of which he could have invested in a CD for 4.5%. His return over those two years would be $62100 which covers the rent. At the same time, the house has depreciated by $187,500. So, in two years, he would then purchase the home for $562,500 and invest the savings. He also would save on taxes and maintenance over that period. I don’t follow your logic.
Oh. I was assuming you meant renting in SF vs. moving to, say Oregon.
I suppose your suggestion (renting in OR) makes more financial sense. However, I think some people may just not be all that greedy about it. They may be perfectly content taking the free money and starting a new career, early retirement, whatever. It’s not necessarily an illogical move, just a move that is not financially optimal. Owning a depreciating home and starting a new career you love is still better than toiling away in a job you hate just to pay a mortgage on a depreciating house.
“Prospective homebuyers who’ve been frustrated by too much competition for too few homes, your time is now.”
Here’s the email address of the ‘business reporter” who penned this crap. Feel free to make your disdain known, I already have.
erhodes@seattletimes.com
OT: But I thought I would keep you abreast of the guy I told you about last month that is selling. Wel his Rancho Santa Mar. 4 bed house has been on the market for almost a month at 620K. Well surprise, surprise…He has a buyer, tells me they are Persian w/money. Anywho, they offered 570K. He tells me they have 4 offers in the ‘hood, all lowballs. He says he will counter w/599K,bottom line. All I can say to this is that if someone thinks a 9-10% is lowballing then this market is whack. If the seller thinks that is lowball and the buyer thinks so too, this will take awhile to unwind here in Orange County. Lowball, right! I told me wife at lunch. What did she say, lowball would be at least 400K and then downward. I agreed. To lowball you have to start w/at least a 33% haricut, not 9%.
OCDan…..
To me your example just tells me it’s way to early to even start lowballing…………perhaps 12 months time the party will get started. For now, just sit back and wait for the monkeys to fall out of the trees.
Time is on the buyers side.
Hey . . . a Persian woman in the DFW area paid 20M for to be a “space tourist” last month. What can I say?
OT, but I saw run across the screen on Bloomberg a couple of days ago that the FDIC had doubled their premiums. I haven’t seen or heard anything since. Nobody would want to cause a panic, but I’d say those with skin in the game are doing what they can to keep their skin.
I have a question here I’d like everybody to help me with. I have these neighbors who have 6 condo’s and 4 houses in Sarasota fl. Oh yeah and they own one house in reno NV. So thats 11 houses/ condo’s. Anyway they are both 35 years old and she does not work at all, and he and his brother have a moving truck and move people for a living. They came from Reno where they own and rent out a house. They are trying to sell that house with no luck. She was a waitress and he drove a bulldozer.
They moved to Sarasota Fl. as it is one of the bubbliest areas anywhere. He admitted to me that she wants to buy as many properties as she can to become wealthy.
I looked up their statistics on the county property appraisers website. Too much info to list but I will list two instances as an example.
Both examples were bought in Aug. 2006 House 1. appraised value is 173,000 and the couple bought it for 253,900. House 2. appraised value is 125,000 and they bought it for 187,000. Both houses are in POS neighborhood and they rent em both out. The house they lived in next to me is vacant for past two months as they have no renters in line yet. They bought yet another house this one 450,000 to move into.
My question is this: Does it seem that these people may be getting cash back to roll into more and more houses like our buddy Casey? I see a big fall for these people. I tried to expalain the principles I have learned here to the woman. After much arguing she said, ” Oh well, either we will win big or lose big.”
Either we win big or we lose big.
That says it all about the gambling mentality inherent among these idiots.
And yet we are supposed to believe we are currently in a buyer’s market.
LOL. My sentiments exactly.
Either we win or lose big. That sums up your life, mister! What a joke. If that is all you have for your decisions/arguments than you are royally screwed. If this is what we have to look forward to, kiss this economy and the middle class, bye bye!
The problem is that in the good ole days, winning big or losing big was a choice made by those who preferred to trade commodities futures for a living instead of putting their money into savings bonds. Nowadays, thanks to suicide loans and a persistent conundrum in the asset markets which has flattened the risk premium to an extent which makes buying high risk debt appear only slightly more risky than buying Treasury bonds, nobody has the choice to avoid gambling. Play it safe by staying long in cash instruments and inflation shock may get you. Do the normal thing and buy a house when you start a family and you may get sucked into buying a deflating asset with a suicide loan contract. Never has it seemed as hard for the ordinary middle-class citizen to make prudent financial choices.
Buy gold.
This is a perfect example of how criminal our lending institutions have become. Who in the hell keeps giving these idiots money?!
She also cited the fact that baby boomers always come to Sarasota and will never stop, housing will go up forever, etc.
Sounds like she is a true believer. You know what they say about discussing religion.
You are so right about that.
I’m sorry, but it sounds like waitressing is a good career path for her.
posted “I’m sorry, but it sounds like waitressing is a good career path for her.”
If this is any help, I think Taco Bell has a opening for night manger. Or try the Pentagon they have a new spot open, if the new guy can cut it.
Already filled by someone from the CIA. Wouldn’t that have raised opposition 15 years ago?
Inventory numbers for Whatcom county - I’ve been tracking them from the Keller Williams web site. This includes all types of properties:
11/8/05 2,238
11/8/06 3,460 +54% yoy
Spoke with a local RE agent recently, he thinks price cuts will start to be interesting in March 07.
A large house I’ve been tracking has been on the market for at least 15 months - orginally priced at $800k and went into escrow in summer 05, only to have the deal fall apart. Spent a year messing with $10K to $20k price reductions here and there. Recently cut the price to $700k and then again to $650k.
Check out this listing. Out in Sumas, includes a lovely free standing propane heater in the LR. All that potential for only $370k!
http://www.windermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=17018058
Blech- that Sumas place is awful. the outbuildings are nicer than the house. And who the heck would pay almost 400K to live “outside of Sumas”? Even when you’re inside Sumas, you’re nowhere.
It is amazing how long people will leave their properties on the market here in Whatcom Cty. with only the tiniest reductions in prices. That’s probably at least part of our inventory buildup phenomena. They just don’t seem to be at all alarmed by a home being on the market for upwards of a year.
In Seattle last winter, when it started slowing down, sellers got right on board with 50-200K price reductions and blew fresh air into the market by spring. They’d start reducing within TWO WEEKS to move property.
Here in Bellingham, places are on the market for over a year and then reduce by 10 or 20 K. Then sit for another 6 mos. before they “slash” off another 10 K. Then sit some more.
Only thing I can figure out is this area has always been slightly depressed so it’s ALWAYS taken a LONG time to sell a house and people aren’t alarmed by that. Whereas in Seattle you could sell in a few days up until last year so sellers would start to freak within 2 weeks if they hadn’t sold.
It’s with great glee that I’ve noticed that, for the past couple months, even a 50K reduction in price on a 450K home is no longer a sure bet for moving a home in the Seattle market. I guess that’s why they’ve finally started to admit to a slowdown down there. When all they had to do to move houses was take a chunk off the asking price, they insisted it was still a HOT!! market.
And who the heck would pay almost 400K to live “outside of Sumas”?
Well if that place was north of Sumas instead of south of it (i.e. across the Canadian border), the land alone would probably be worth over a million. But the border keeps the Vancouver locusts out. Sure they could buy it, but they can’t live there.
This just arrived in the mail. Can’t wait to watch it. Cool house built for 88K.
http://www.amazon.com/Building-Awareness-Construction-Hybrid-Home/dp/B0007RDR7E/sr=8-2/qid=1163024682/ref=pd_bbs_sr_2/104-8437713-6204711?ie=UTF8&s=dvd
From Seattle to Baltimore…the markets are very similar. We’ve had prices double in 5 years and no “official” price declines, yet, but little is selling. Sales have dropped double digits every month since 10/05, and in Sept ‘06 sales were down 30% from the previous year. People here just don’t want to reduce. That guy not only can’t sell his house in Seattle, but probably overpaid at what is still peak pricing in Baltimore. There are plenty of rentals here, 3 on my street alone and signs everywhere. Guy’s an idiot.
I think that the slowdown is highly dependent upon location. It’s easy to paint with a broad brush and say that RE in WA is tanking, and this may be true in certain places.
Where I live in Redmond (2 mi. from Microsoft), I don’t see any indication of a bursting bubble (and I’m a bubble believer). Very little inventory in my neighborhood, and what does come on the market typically sells at or near asking price (or in the case of two new houses up the street, 100-120K above asking, both just shy of $1M), within 1-2 months if not less. I remember what inventory levels were like 5-6 years ago just from the number of for-sale signs I would see driving to the store and back–granted, that was at the end of the dot-com boom, so maybe those inventory levels were higher than normal. At any rate, it is rare to see for-sale signs in my neighborhood. Down the street is a group of 17 homes built in 2000 which originally sold for $500-600K. Most of them have sold once or twice since then, and they don’t stay on the market for very long. The most recent one is getting sold now for $800K. And you can’t touch anything in my area for under $500K any longer (1st-time buyers can move on, nothing to see here unless you want a 2br 1ba 30-year-old condo for $250K). I really hope this will change, but I personally haven’t seen it yet.
It will happen. Once we see the fringes tanking, it will not be long until the “prime” areas follow suit. It will spread like a disease.
The areas that dropped last winter were not “fringe”. It was the Ravenna neigborhood (ACTUAL Ravenna, not the crap near the highway/U. District/15th Ave.) where most of the stuff sold under asking.
I had a list of 57 properties right off the Coldwell Banker site that I tracked through selling. It was before Zip Realty so I had to track the price reductions and DOMS on my own. Totally brutal.
When they disappeared from the CB site, I looked them up on the county website a couple months later.
Of the 57 properties, 49 had sold under asking. Anywhere from 20K- 200K. Most went around 50K under the original asking price. They were not junk. They were nice homes in a great neighborhood.
I was absolutely amazed. But the county records don’t lie about these things.
If that happened last Dec/Jan/Feb/March when the market was supposedly still red hot, what’s going to happen this winter with the market finally acknowledged as “softening”?
Seattle Price Drop-
“….what’s going to happen this winter with the market finally acknowledged as softening?”
I’ll tell you. Lennox Scott (CEO of John L Scott Real Estate) will remark that it’s due to Shawn Alexander’s foot being broken. Last season when the Seahawks were on their Superbowl run he remarked that the slower than usual Winter season was due to the playoff run distracting buyers.
Unbelievable spin.
http://www.safehaven.com/article-6231.htm
refrences Schilling predicting RE crash starting early next year… I guess if its going to happen thats about right.