Buyers Are ‘On The Sidelines’ In The Northwest
The housing bubble is losing some air in the northwest. “Home prices on the Eastside climbed to a record high last month, while home prices in southeast King County were 13.1 percent higher in February than they were a year ago. In southeast King County, the median price of homes and condos whose sales closed last month was $294,000, a 13.1 percent increase over the $259,950 median price a year ago, but down slightly from the record $309,000 recorded in January.”
“The countywide median price for closed sales of homes and condos last month was $344,950, down from $352,000 in January but up 11 percent over the $309,950 recorded in February 2005.”
“Rising home prices are to be expected, especially when combined with the limited supply of available properties. But area real estate agents say those conditions have yet to create a frenzy among home buyers in King County, at least not so far this year. ‘I believe a lot of (buyers) are on the sidelines waiting,’ said (Bellevue realtor) Julie Varon. ‘People are taking their time and are not being as fearful (of losing out in bidding to buy homes).’”
“The number of closed sales of homes and condos on the Eastside fell to 683 last month, down 12 percent from the 777 closed transactions recorded a year ago. The number of pending sales on the Eastside, meaning sales of homes or condos that were agreed to but have not yet closed, totaled 948 in February, down 18.6 percent from a year ago.’
“The housing market around Puget Sound has slowed from its blistering pace of a year ago, meaning some sellers don’t get multiple offers and some have to lower their prices.”
“‘Last year, at least half of the homes had multiple offers,’Kim Emmons in Maple Valley said. ‘Now it’s more like 10 percent.’”
From Oregon. “In Lane County, there are some signs of a slight cool-down. The county’s inventory of homes on the market grew modestly in January, reaching its highest point in two years, after months of a squeaky-tight supply featuring bidding wars among buyers. Also, the median sales price has flattened after accelerating rapidly over the past two years.”
Check out the listing increases and pending sales declines on the Northwest MLS release.
This will be intersting since Oregon has the worst employment rates in America. Talking with some people there, they think the market is going to skyrocket because of limited land availability. What they dont realize is that there is no infrastructure to support it.
Oh so true! I became an “independent” b/c I couldn’t deal with the commute up I-5 anymore. Much of the “old guard” mentality still exists and the old guard says don’t build it, and they won’t come.
Check this out.
First this flipper wants cash infusion
http://seattle.craigslist.org/rfs/139359654.html
After a few days, he decided to put the entire property for sale.
http://seattle.craigslist.org/rfs/139816995.html
Over the weeken, went to a friend’s place in Kirkland for his daughter’s birthday. Between 9000 and 9400 (his place) on 116 Ave NE, there were 7 homes for sale. These are not big blocks either.
LMOA
Jesus - the guy can’t even write coherently and he wants someone to give him a million bucks?
is there some study on how many generations it takes to wipe out a family trust?
Sleeples in Seattle,
Do you have any idea how long I’ve had to deal with these types of people? Wait, no, let me guess! Got inheritance and thought, there’s no way to lose w/RE! I know the folks would be proud. Can you say momentum player?
no idea. I guess there are a lot of those idiots pissing away their inheritance
WA’s most over-priced market still belongs to Whatcom county. In 2000, most homes were worth less than 1/2 of what they are now. I haven’t gone through the pricing since last year. But home I tracked dropped around 15% between July and December 2005. I believe they have dropped more this year, as I’ve never got so many new listings from my realtor. She sends me almost 10 new listings everyday. Those are all homes with bay, ocean, or lake view. The pace of sellers dumping their homes is amazing. I expect to see homes drop over 70% to pre-2000 level. Too many new homes have been and are still being buit, yet there are very few high pay jobs here. There is just no support and it just has to collapse.
I agree with your assessment of -70%. I would say that is going to be the benchmark for how permabulls determine how they are doing in the upcoming “correction.”
My blog, CLEARCUT BAINBRIDGE has a small discussion on exactly how a hip-n-trendy place can lose better than 3/4 value, without any real catastrophe striking it. I have yet to have anyone think it can drop that amount, but I am holding firm on my prediction.
Most of the reasoning given for why it will not correct is along the “we are special”, or “it never has done that” variety.
It is going to be fugly when this is over.
What amuses me are the excuses that certain local newspapers have been trotting out the last few months in an attempt to explain away the slowdown we’re seeing. In January it was Seahawks football that was holding down the market, and last month it was the Olympics. Heh.
The Tim,
Wondered where it would end myself. Since PDX doesn’t have pro football and many here are Seahawks fans that must be accountable for the slowdown in our market as well. I often kid that for all of the sanity in the PDX market why do we see so many price reductions here. Just take a gander on C/L!
goleta-
Whatcom county probably will see adjustments moreso than Skagit or Snohomish/King, but I think that 70% adjustment may be slightly aggressive. Of interest to me is the lack of slowly building inventory, which today is still tight, generally speaking. I’ve been delving into the paper both print and online to track FSBO inventory and and increases in cars for sale, sometimes thought to be the first signs of financial stress.
I wonder how many buyers out there know what is going on outside our state. Going to San Diego over the weekend and I hope to visit some property and take pictures. I wonder how our Realtors clients would like to work in an environment where inventory is rising more and more (New England, Phoenix, San Diego and So Cal.)
SCrow, after a weekend in San Diego, housing in Seattle will seem real cheap, almost free.
In addition to this deal theirs More……..
……will receive a 20% on each short plated peace.
i always get nervous lending a million bucks to a guy who can’t even spell
cereal,
That’s why I say this has to be “Kevin’s” inheritance. No one would loan depositors/shareholders money to knit wit like this! Posting on a blog w/errors is one thing, entering into a mil$ bus. venture w/a guy that not only struggles w/spelling but math as well? Wait, theirs more!
things are tough all over.
Its kind of scary…One local guy here just received a bundle….Its burning a hole in his pocket…He called on a prop. that I had available and in conversation was more than happy to tell me some recent aquisitions that he made all cash…He could hardly speak he was so enamored with his new found wealth (that he did not earn I might add)…Anyway, I did not tell him that I think one of the properties that he bought was a old gas station site that likely had contamination….I will let him find out that little secret himself…
They have a name for a guy like him…a “mark”.
I’d love to see a Northwest Housing Crash Blog! We have problems. accroyer correctly points out that our employment situation is not enviable. While hardly part of the “old guard” I do advocate for those that visit in July and are thinking about moving here, by all means come! However; bring a job with you! If you don’t have a solid job offer bring money and lots of it. No matter your current status in your chosen field be prepared to start over, at the bottom.
DinOR,
Here’s a shameless plug. Seattle Bubble is probably about as close as there is to a “Northwest Housing Crash Blog.” Check it out. </shameless plug>
Good news from Portland Business Journal for Portland Metro home sellers
http://tinyurl.com/p7fpx
Any comments on this article appreciated
That article is accurate to a point, but what they dont factor in is that the buyers are all from Cali. The real problem is that there are no jobs here besides Nike and Intel. If you like starbucks coffee and playing on your laptop while it rains , you’ll fit right in.
Had a transaction fail to close last month. The buyer was from San Diego buying locally in Snohomish Co. The home they own in San Diego…get this….their buyer of their home walked AT closing. Lost the earnest money but, said so what! Better that then tens of thousands. The domino affect was tangible. No one got paid. Not us. Not Realtors, Not Loan Officer etc….
Whoever says problems in other markets don’t affect other areas of the country need to re-think that mind set.
Wow. As much as posters here like to blast RE types, it’s a bummer not to get paid after everything is already done. Don’t you guys get to split the deposit for costs??
Don’t be fooled. That “good news” is only anecdotal hype from the mouth of self-interested realtors. Better to consider this factual data coming from the RMLS Market Update (local MLS service):
“Residential Review: Metro Portland, Oregon
January Residential Highlights:
Market activity in the Portland Metro area seems to have slowed down for the month of January 2006. When compared with the month of January 2005 there were only 1.1% more new listings. In the meantime, the number of pending sales and closed sales both decreased 3.2% and 4.5%, respectively.”
Here’s data from the Market Report accompanying spreadsheet:
Pending sales (January 2006 vs January 2005):
North Portland -7%
Northeast Portland -16.5%
Gresham/Troutdale -18.6%
Milwaukie/Clackamas -1%
Oregon City -1.7%
West Portland -3.9%
Northwest Washington -7.3%
Beaverton/Aloha -3.3%
Hillboro/Forest Grove -26.4%
Mt. Hood: Govt Camp/Wemme -46.2%
Columbia County -4.9%
This seems like what I would expect it to be.
No jobs=no money=no homes to buy.
I don’t think there is much of a slowdown yet, unfortunately. For one thing, the inventory is pretty thin. I find houses coming on at 750,000 on Mercer Island get bought pretty quickly–some sit. And when a house comes on the market that’s decent in Seattle and in the 400,000’s it’s gone pretty quickly. If something nice comes in a desirable on that it’s around 400,000, I don’t even bother to call because I know numerous other people are hankering after it will snatch it up. I’m sure houses in average price range in Bellevue, etc., are also moving fast.
Maybe it will be like 1989 and 1990, and a bit behind the East in arriving…
We came out here in 1989, and knew that this place was going to crash as it was doing in the east. It took longer. We had to buy high in 1990; however, first we bought a queer builder house on Bainbridge but then sold it in 10 months at a profit (ferry was running our lives). Then we sat with our over priced house in the city. A realtor in 1991 told me nothing was going to happen until 1998–he was right. Prices sat. It was hard to find a decent handyman type–now, there are thousands of them. I’m so sick of people yakking about real estate around here! In the Starbucks, today on the local radio. On and on and on.
We sold our 1990 house (and the buyer just sold it for double what we sold it to her for 8 years ago–cry, cry, cry–and left the country for 5 years, came back in 2003 and thought the whole market was insane, and then I saw the article in the Economist on the House of Cards, and so we rented a flat with amenities and a community. We are the buyers from hell, and have walked away from more sales in the past 3 years than I can count. I’ve always had issues with real estate agents, but I’m somewhat ashamed….
Every time we thought of being stuck in one of those dumps for 10 years we felt ill. And then today I looked at a rental house for 1800 (kids, schooling) with the rotten curtains, and felt so depressed. My husband wants to go to upstate NY……..
Goleta-
Personally, I think you are not far off with your Whatcom County estimate.
The ONLY thing that ran prices up in Bellingham was the news that “it’s expensive in Seattle”.
Problem is, the 2 places have very little to do with each other.
Personally, I’m looking forward to at least a 60% drop. I’ve been watching the market for a few months and glad to hear that you’ve noticed a slow down over the past year.
Also glad to hear you will not be rushing out to buy at the first signs of a slow down.
Let’s just say no!!
The 70% price drop I estimate will put most homes in Bellingham/Birch Bay/Blaine back to 1997 level. There are not that many high paying jobs here that are not also RE related. The paper mill is said to be the largest high paying employer in town and is closing business for good this year. How are people going to buy or keep those $500K+ homes with minimum way jobs? BC’s lumber market is expected to crash by the end of this year and once the recently added RE jobs are gone, the economy is going to be worse than what it was in 1997. The only thing positive is the next Winter Olympics will be next door in Vancouver. But the Olympics will only last two weeks and should be a no-factor to buyers.
I’m not in a a hurry to buy as I might have to move to Seattle to be close to work if my boss continues to ask me to drive down to our Seattle office.
“The only thing positive is the next Winter Olympics will be next door in Vancouver. But the Olympics will only last two weeks and should be a no-factor to buyers.”
Blasphemy! Up here in Vancouver, 90% of the population is convinced that the Olympics will bring us great fame, fortune, and real estate wealth. See, all of those rich immigrants from Taiwan are going to see a little biathalon on television and immediately drop everything to move to Vancouver.
What a frickin joke.
There is more flipping going on in Seattle than most people realize. And like that second Craigslist ad that “sleepless in seattle” noted, they are turning the endeavor into a sort of “flippers club”. (ie. they flip to each other. I guess because they are running out of ordinary folks who still steadfastly believe that RE can only go up.)
You can watch it happen if you follow the MLS along with the county sales lists. Most of the properties were held under one year and added at least 200K to the price. Since fall, they’ve come on the market for close to 800K- which nobody in their right mind would pay. (I know I know, we see people paying that all the time but these are properties in marginal areas that started out at 120 not that long ago. And comparable properties on the same block are priced even now at 550K. So they are DREAMING. They just went through a fast and furious series of flips. These bottom of the pyramid sellers, (the ones who bought at 650K last summer) are going to be floppers.
Here’s an interesting flippers’ blog, for the gory financial details and worries in the life of a flipper:
Warning: Hang on to your hat.
http://seattlerei.blogspot.com
Sharecropper-
Look in North Seattle (98115, 98125, etc). There’s plenty of stuff coming on the market and sitting in the 400K. Lately, stuff is even coming on in 300K range and sitting. Houses that is, not condos. In-city is slowing down.
For that reason, I would not buy in Seattle right now. Those 400K houses will be 300K next year- maybe sooner!
Use the Zip Realty site for info on price reductions and DOM’s. I think you will be pleasantly surprised!
Northwest dominos are falling fast it seems. Pending home sales in Seattle are down 14.5% and Seattle has an infinitely better job base than Portland does –
“The trend seems to be very steady and clear, that the market in Seattle, because of its appreciation last year, has slowed down and it’s the outlying areas … that are now seeing the more accelerated appreciation,” said Jim Reppond, an associate broker at Coldwell Banker Bain.
“We see that over and over again. It seems to work in bands — it starts downtown and goes to the outlying neighborhoods, and then to suburbs and then further out in the counties.”
…
“When a market softens, he said, buyers tend to spend the same amount they originally intended to spend and purchase up the chain — resulting in stable or slightly increased median prices.
“The perception of the sellers that they’re going to have to cut prices may be right, and the perception of the buyers that they’re going to be able to cut some deals may be right,” he said, adding, “We’re still going to be looking at a market with strong demographics. The underlying factors are still there — job growth is continuing, mortgage interest rates are still favorable.
“The expectation by most analysts is that prices will continue to increase, although a bit more gradually.”
One potential wild card, Crellin said, are the investors who hold about 25 percent of the nation’s housing stock.
“We don’t know how they’re going to behave as the market slows,” he said. “Are they going to panic (and flood the market)? If they do, we run some risk of seeing more in the way of potential declines in prices.”
http://seattlepi.nwsource.com/local/261951_housing07.html?source=mypi
yeah speaking of wild cards, that seattle speculator with 10 mortgages is definitely close to panic and probably represents only the tip of the iceberg
here’s the blog site, watch out below I’m sorry to say
http://seattlerei.blogspot.com
I live in the Ballard area of Seattle and have been following every sale in this area for about a year. Prices have been about the same since last September. It seems a little less competitive then last summer, but anything decent still gets multiple offers and pretty much nothing sells for less then 400K around here. Overall, it doesn’t seem like much of a slowdown yet. It’ll be interesting to see what happens during the Spring/Summer.
We’ll know somethings wrong when the core neighborhoods of N.Seattle start to tank (i.e. Greenlake, Wallingford, Ballard, Fremont). If prices go down in Lake City I wouldn’t exactly run scared.
Here are this weeks’ numbers for 98103 (Green Lake and parts of Fremont and Wallingford):
properties on the market / number of price reductions:
March 1 71/24
March 3 77/25
March 5 79/25
March 6 82/23
March 7 85/25
Meshugy-Here are this weeks’ numbers for 98103 (Green Lake and parts of Fremont and Wallingford):
properties on the market / number of price reductions:
March 1 71/24
March 3 77/25
March 5 79/25
March 6 82/23
March 7 85/25
Lake City and Green Lake are very close to each other. It’s true that Green Lake is a more “desirable” in-city area so will maintain higher overall RE prices than LC.(ie. the “same” house will cost more in Green Lake)
But when they move, they move in tandem. Both go up and both go down.
In other words, if you see Lake City prices moving downward and NEED to bail on your Green Lake property that’s your signal to get going because downward prices are heading your way.