“It’s A Contraction” In Washington
The Seattle PI reports from Washington. “While Seattle experienced some of the slowing affecting housing nationally, it is clear that slow here is not the same slow as in many markets. ‘Yes, some consumer confidence issues, some weather issues, some holiday issues are giving us a cold,’ said Peter Orser, president of the state’s largest builder of single-family homes.”
“Orser and others agree a slowing national market, and media coverage of that, has scared buyers away, or at least gave them false expectations about the local market.”
“‘This is not a buyer’s market,’ said Glenn Crellin, at Washington State University. ‘This is really approaching a balanced market.’”
“Then there are people like Ned Redpath, broker in Hanover, N.H. ‘What has been expressed in the media recently has been well written, and has gone an awful long way to help us educate our clients and customers,’ he said.”
“The New Hampshire market is rebounding after an 18-month slump, thanks to sellers lowering their expectations, buyers making quality offers and interest rates staying low, Redpath said. ‘I feel that right now we are at the bottom of this huge trough that we’ve been in.’”
“So is Seattle just slower to descend into a New Hampshire-like trough? Recent numbers show Seattle buyers have less competition and more selection than a year ago. The number of Seattle homes for sale in October was the highest in two years and declined only slightly in November, according to statistics from the Northwest MLS.”
“The year-to-year number of listings increased every month since April, while the number of closed sales decreased in every month since June. ‘Yeah, it’s a contraction, but it’s not a contraction from zero to under water,’ Orser said.”
“One feature of the changing market is that homes that probably would have sold quickly last year, or earlier this year, are sitting on the market for months. The owners of one Seward Park house finally took it off the market in November, after cutting their asking price from $989,000 to $895,000 to $859,000 over about five months.”
“‘They’re so stressed they can’t stand it,’ said agent Carole Alexander. ‘They were willing to look at offers that were significantly lower than that and still didn’t get any.’”
“Alexander said the owners would probably keep the house off the market for at least 90 days, the time needed for it to show up as a new listing in the local listing system, and might use the time for renovations.”
“The owner of a Greenwood house pulled it off the market after two and a half months, and a cut in the asking price from $379,000 to $365,000. ‘The house didn’t sell as quickly as she thought it would so she took it off the market to wait for things to improve,’ agent Deborah Arends said. ‘She’s going to try again after the first of the year.’”
“Crellin said some owners have not priced homes for a softer market or are not willing to wait as long as needed. ‘We do have some folks with some unrealistic expectations,’ he said.”
The Spokane Journal. “Residential and commercial real estate sales are expected to remain strong here in 2007, although below their record-setting paces in 2005 and 2006.”
“Spokane-area home sales during the first 11 months of this year were running about 5.4 percent behind the year-earlier period, in terms of number of units sold, but were on pace to make 2006 the metropolitan area’s second best year historically, says Rob Higgins, executive vice president of the Spokane Association of Realtors. That moderate downturn likely will continue, he says.”
“‘It may still be our third or fourth best year,’ he says of the number of home sales predicted for 2007.”
“In the condominium market, more units are proposed in the downtown and periphery area than usual, says Scot Auble, president of Auble Jolicoeur & Gentry.. Of 539 units proposed, about 140 are under construction, and 116 are presold.”
“‘That’s a whole lot,’ Auble says. ‘Time will tell what the market will absorb.’”
really ? NH is rockin ?
The New Hampshire market is rebounding after an 18-month slump, thanks to sellers lowering their expectations, buyers making quality offers and interest rates staying low, Redpath said. ‘I feel that right now we are at the bottom of this huge trough that we’ve been in.’”
yeah, what is this crackhead smoking?
The owners of one Seward Park house finally took it off the market in November, after cutting their asking price from $989,000 to $895,000 to $859,000 over about five months.”
You know, this is interesting to me from a psychological standpoint. Why oh why would anyone buy a house that expensive if they did not plan to stay there a long long time? Common sense would tell you that the more expensive a house is, the smaller your potential buyers pool is and the pickier they are likely to be. It makes no sense to me at all. The only way I’d pay that for a house would be if (1) I was paying cash for it and (2) I knew I was going to die there.
“‘They’re so stressed they can’t stand it,’ said agent Carole Alexander. ‘They were willing to look at offers that were significantly lower than that and still didn’t get any.’”
Why oh why would anyone buy a house that expensive
They are gamblers plain and simple, they like many others are trying to make up for all the losses they suffered in the market of 2000. Their timing was simply off and now they will add to those losses.
Yeah, but who do they think they’re going to resell to? Bill Gates?
People that rich tend to build their own custom places.
I sometimes waste time panning around goggle earth at costal properties, Hollywood hills, Tuscon foothills, Miami, Santa Barbra etc. etc. It amazes me how many big expensive homes there are anymore. There really are quite alot of wealthy people out there or they are in tremendous debt it’s pitiful. I drive around sometimes and think there can’t be that many doctors and lawyers where I live. I just realized I happen to know quite a few people that have gotten money from some type of setlement. Some as little as a few thousand to a half million. Look at the monies they 911 widows received. I always thought one would have a life insurance policy for things like that? Maybe I’m old fashioned in my thinking.
My husband is a doctor, and we can’t afford a house in LA. We drive around looking at the houses and think that everybody is either a lawyer, or an investment banker o in real estate….
> Yeah, but who do they think they’re going to resell to? Bill Gates?
Strangely, from the right part of the hillside, you can probably see Bill Gates house across the lake from Seward Park.
Yup. Somebody bought a $150K house in 2002 and sold for $200K in 2003. Wow, a 33% return, they thought. Now if I could do the same on a million dollar house…..and you get to where we are today.
33%, if they paid cash. 20% down, 80% mortgage puts the return at 140%. 10% down, 90% mortgage gives them a 333% return. Cool, huh?
Now, do the same math with the million dollar house depreciating at, say 25%. Ouch!
That’s OK, I’m sure they have a large nest egg from their previously successful flips.
What? Spent on vacations and Tahoes with spinning wheels?
Well, I’m sure there’s the rainy day savings. What? Spent on Guccis, plasmas and Rich Dad, Poor Dad courses?
Ohhh….
And at that stupid gamblers. A good gambler buys when there is blood in the streets. Ah may these these stupid morons lose their shirts. Mery Christmas and hope they burn in hell.
Because, until the music stopped, they figured a 10% gain on 800K was more than a 10% gain on 500K. Then someone said “Bubble!” and they said, “Holy shit!” Or, maybe they’re just getting around to saying that now.
At least these people were willing to cut their price significantly, unlike some other jokers that reduced a million dollar wishing price by $10,000. But its still too little too late. If they price it to sell right now, it will probably have to be at least another $100,000 lower. Ouch.
I live in the Seattle area. Most of these people bought in 2002 - 2003 for half of their asking price. I’m guessing this “$895k” home was purchased 4 years ago for about $450k. Why anybody thinks they can double their money in a RE transaction in 4 years is beyond me. Before 2002 you were lucky to break even (with transaction costs) if you had to sell within 3 years. I wouldn’t touch any property around here until prices drop a minimum of 30%. grrrrrrrrr
“Most of these homes were bougt in “02 and ‘03 for half the price..”
Isn’t that the truth, J. Schmitt. And you can even add “04 to your list. I was astounded last winter when I noticed that most of the homes in NE Seattle that were on the MLS for @ 1 million had been sold in ‘03/’04 for 425K. Pretty sick. And shows you where they could be headed.
‘They were willing to look at offers that were significantly lower than that and still didn’t get any.’
Here’s an experiment: I’ll put my used Toyota up for sale at $150K, and be willing to look at much lower offers. Do you think the result will be different or the same?
“They were willing to look at offers that were significantly lower but never got any..”
This was a really stupid seller game that’s been played out all year all over the country. People putting a purely “wishing price ” on their home , then getting desparate when no buyer wants to even take a look and then wondering why they got no 600K offers on their 850K house.
If they “would have taken significantly less” then maybe it would have been smarter last year to price it significantly closer to their actual price. Maybe *then* they would have gotten an offer.
High hopes/Lost chances…
These sellers and others like them who are pulling their homes off the market and generating new game plans (pricing strategies and so on) while waiting for next Spring to relaunch their homes are going to flood the market with pent-up supply.
Inventory has been falling off pretty quickly the last month or so. Folks are sitting out Xmas and waiting for the magical spring buying season. Only problem is that the average home in the Seattle area is 440K while the average salary is about 60K. Homes have doubled and even tripled in the last 5 years. The last 2 years 30 percent of sold homes have been sold to CA equity locusts. Probably another 30 percent have been bought by “infestors”. The CA spigot is turning off the “infestors” have stopped buying.
Spring is gonna be brutal.
But I forgot…Seattle is “different”.
OT, but anyone care to comment on the wild US$ swings of late.It’s been the topic of some mention ,but looking at the VIX as low as it is, you would think the dollar swings would be more an indication of larger looming issues.Yes, manipulation ,and other issues ,but seems a canary in the coal mine in my view?
The invisible hand cannot be severed by manipulation. Inside manipulation will eventually correct from without.
reality has no place interfering with today’s market.
The USD will push against the 80 index level until it cracks. Look out below.
Falling US Dollar made the current cover of the “Economist”.
I am moving my cash to a bank in Canada….
the owners would probably keep the house off the market for at least 90 days, the time needed for it to show up as a new listing in the local listing system, and might use the time for renovations.
LOL. That’s it - sink more money into it.
The house didn’t sell as quickly as she thought it would so she took it off the market to wait for things to improve,’ agent Deborah Arends said. ‘She’s going to try again after the first of the year.
Good plan. I remember that Seattle Eric has the same plan with his unsold houses. I’m sure no one else has thought of it.
The Pacific NW got a late start on the rolling boom and now the rolling bust is catching up with them, though it’s LOL funny to hear the RE pros say the same things said in CA and FL a year ago, to similar effect.
It seems like the bust on the Left coast started in San Deigo then went North and it hasn’t hit Seattle yet but it will.
I wonder why it would travel from south to north? Must be demograhics/proxity to Mexico?
It hasn’t even truly hit southern Oregon yet….as far as prices are concerned. Loads of inventory/more to come in a month or so…. The drift of equity refugees moving north stopped about a year ago…
“…the owners would probably keep the house off the market for at least 90 days, the time needed for it to show up as a new listing in the local listing system, and might use the time for renovations.
Good plan. I remember that Seattle Eric has the same plan with his unsold houses. I’m sure no one else has thought of it.”
Yes, brilliant. To do the same thing as all the other greedheads is so innovative. I have a sneaking suspicion they will not find the results so appealing. And, Seattle Eric already has his Everett property back on the market. It seems he could not wait more than a few weeks to throw that POS back on the mls. Good luck with that. The Seattle are is no different than all of the other bubble areas. $475k sounded like a great price to CA locusts until they found it bought them a 875 square foot moldy 1920’s shitbox on a postage stamp lot. Major correction coming, bet the whole farm on it.
Lots of talk up here from RE agents about how interest rates are going down in Jan. and everything will be “great” again after that.
I know people who’ve taken their properties off the market til Jan. for just that reason and others who decided last Fall to wait til Jan ‘07 “when rates go down” to put their homes up for sale.
Hard to believe that there are still a lot of people out there who think that RE agents are “smart” and have inside knowledge on such things as rates.
It may still be our third or fourth best year,’ he says of the number of home sales predicted for 2007.
Then again, it might be their tenth best year, and 2008 might be one of the worst on record. The drop won’t be linear.
“The drop won’t be linear.”
Will it look more like this?
http://tinyurl.com/ydj6tw
Well, this is the same info I posted the other day under a thread that mentioned Washington state, but I’ll put it up again for anyone who didn’t see it.
Inventory for Whatcom County (NW most county in the state - north of Seattle and feeling the “equity locust” effect), all types of property… sfh, comm’l, land, multifamily). Not official, just what I have been tracking from the Keller Williams site.
12/21/05 2,206
12/20/06 3,355
Last year inventory started growing in the fall (05) after it was tight all spring and summer.
One local RE site shows the average price of a current Bellingham listing to be $469,925 ( http://www.muljatgroup.com/ ) What working person in this area can afford these prices?
“What working person in this area can afford these prices?..”
Absolutely nobody. The median income around here seems to be in the 20’s, although some stats say 30’s.
But if you really look at the listings, prices *are* coming down along the coast. The same amount of money can buy more this year than last. But it’s not across the board yet.
Homebuilding 2nd on Troubled Industry List
Homebuilding came in second only to the automotive industry in a recent poll as the industry facing the greatest financial or operational difficulties in the coming year, according to the Chicago-based Turnaround Management Association. In the association’s annual Trend Watch poll, 58% of the respondents named homebuilders as likely to face the worst difficulties, compared with 74% who picked the automotive industry. (Respondents were not limited to only one choice.) Construction and contractors were named by 36%, and the manufacturing sector got the nod from 26%, the TMA reported. “Homebuilders are sitting on undeveloped land they once considered assets,” said Tom Henderson, a Houston attorney who serves on the TMA’s international board of directors. “Now the land’s become just another form of liability, as sales of new homes in most markets have slowed.” The association can be found on the Web at http://www.turnaround.org.
“Homebuilding came in second only to the automotive industry in a recent poll as the industry facing the greatest financial or operational difficulties in the coming year, according to the Chicago-based Turnaround Management Association.”
How does that mesh with the soft landing mantra?
An upheaval in the home building sector isn’t enough to significantly topple the bubble. What we need is a major mortgage shake-up.
When banks start lending ONLY to people who can actually pay the money back…..that’s the real turning point IMO. Especially here on the left coast.
If this time is like last time, then we will get there in another six years or so…
Yes… which came first? The high price or the Option ARM to pay the high price? Which will unravel first?
it is clear that slow here is not the same slow as in many markets.
Perhaps not, but was Mr. Orser around for the last few housing busts in WA? When I lived in WA, I remember a few acute housing downturns, but the provincial attitudes stay the same apparently, aka “Seattle is immune to whatever happens in CA”. Play that record over and over, and let’s forget how jacked prices are in Seattle now.
These Seattle articles just kill me.
They always begin with “It’s not as bad here as ___” and then proceed to list all the ways that it’s exactly the same as ___.
Alexander said the owners would probably keep the house off the market for at least 90 days, the time needed for it to show up as a new listing in the local listing system, and might use the time for renovations.”
That’s pretty funny. I see house in Wa go of the market for a couple of hours and reappear as “new on the market.” The realtor routinely does this relisiting here.
Isn’t that the truth? I’ve seen them pulled for as little as ONE DAY then back on with a new MLS#. A half a week is totally typical.
Where’s he getting this 90 day bullsh%t from? Must be the NWMLS “rule” that says it’s got to be 90 days. What a joke!
I saw a house near where I live in Renton, WA was put on market since early April. The price seems to be quite reasonable based on “Zillow”. Yet it kept staying on the market until Thanksgiving and it was removed from the listing. During that whoe time, when I checked Zip Realty, I see that the DOM never exceeded 90 days! (talking about manipulation…) The house has been empty since April and is still empty and dark now. Probably the owner plans to put it on the market back next year where it will be a flood of new listings. The cost of carrying this house during the whole time must cost him 30, 40 K easily…
He’ll put it back on the market in January when the rates go down and the housing bull market takes off again like a streak of lightening!
I saw a house near where I live in Renton, WA was put on market since early April. The price seems to be quite reasonable based on “Zillow”. Yet it kept staying on the market until Thanksgiving and it was removed from the listing. During that time, when I checked Zip Realty, I see that the DOM never exceeded 90 days! (goen is right, DOM doesn’t much here in WA) The house has been empty since April and is still empty and dark now. Probably the owner plans to put it on the market back next year where it will be a flood of new listings. The cost of carrying this house during the whole time must cost him 30, 40 K easily…
My wife’s family own a house down at the Jersey Shore, LBI. Last summer it was appraised at $2.1MM - being redeveloped. It’s a double lot, but even so, $2.1MM!!! And it’s not actually on the beach mind, a block away. I was telling this to a guy at work who comes from LBI and he actually uttered those immortal words to me when I told him how absurdbly high that valutaion was: “But it’s different down there”.
Oh no it isn’t. NJ is just going to completely crater thruoghout the whole state for a variety of reasons. I would be really interested to hear more about NJ on this blog. I have lived there for nearly 10 years and have just been amazed at the RE prices in the past 5/6 years. Renting now and hoping to buy in the next couple of years.
The (lesser) Seattle market has become very compressed in price range since 2000. In my close-in neighborhood, prices haven’t moved much at all, possibly up 10-15% for approx $1M houses. OTOH, many of the outer neighborhoods have doubled. So at this point, there’s very little discount for living further out, in a less well kept neighborhood. I expect that to adjust one way or another.
“Affordability is the problem in housing right now,’ Lereah said.”
No shit……
How much intelligence does it take to be an “economist”?