No wonder you’re scare sh*tless about depreciation there Meshugy, especially with those ‘lucrative’ gigs, how’s those white knuckles doin’?

1) Can afford it (no exotic loans)

2) Can live there for at least 10 years.

Otherwise, it’s safer to rent. If you bought something too expensive and had to sell in the next few years it could be dangerous.

You know, the discussion here is interesting.

Here’s how I see it: we’ve been given multiple clues from multiple directions (the Fed, economists, the news, etc) that we’re in an RE bubble and that bubble is about to burst.

It’s not liked we haven’t been warned. So now it’s up to the individual what they want to do with that information.

Has anyone noticed that a lot of major players have sold their RE this year and gone to renting?

The latest was that guy from PIMCO.

Those are some heavy clues. These are people who, techinically, I would think, do not even NEED the money and could afford a “loss” when RE goes the way of every other speculative mania.

Or they could have sold one mansion and bought the next.

But they sold their mansions and are RENTING!….CLUE!!!

And BTW, a lot of us here are homeowners.
Unlike the recent breed who bought in the last few years with “creative financing”, us homeowners who bought pre 2000 can afford, both literally and figuratively, to cast a more even eye on this ridiculous market.

Telling people who would like to buy but refuse to buy into an out of control credit bubble to “go and rent” sounds a bit sour grapes to me.

Do you have a bit too much “invested” in this shakey market and fear it, like every other pie-in-the-sky dream of riches, is about to explode?

Then go and sell and rent til it’s over. I’m serious, it’s the only way out if you’re scared right now.

Otherwise, stick with the rest of us property owners who are now paying higher property taxes so a few could “invest” in RE that “always goes up”.

You have as much control about where the housing market is going as meshugy. Don’t get all wind up, you can always rent.

I mostly walk around loyal heights….that’s it.

If people say they’re seeing desperate realtors, unattended open houses, and unsold houses sitting on the market for months, then we should see this reflected in the monthly MLS reports. Price Drop and Dukes (what happened to him?) had been saying these same things since Jan. And since that time we’ve seen the median price for Seattle sky rocket from 376K in Jan 06 to 415K in May 06. Back in Jan I was pointing out that the market still seemed strong, and was met with the same sort of denial I’m seeing now. I guess people are going to believe what they want to believe…but the #s don’t lie. Prices have gone up immensely in the last 6 months and will probably continue to do so until the fall.

If we see big drops in the June MLS report, then we’ll know the open houses really are empty. My guess is that the June #s will still be very strong.

The realtor was so dejected that she wasn’t even trying anymore.

It was 3PM (supposed to close at 4) when I walked in. She was packing up to leave and seemed a bit bothered that I wanted to go through.

Maybe she hasn’t closed a deal in so long that she’s given up? It was wierd.

It’s definately hard to miss them since they are popping up over the place.

Listen, I know what it’s like when properties are in very high demand. The realtors can totally ignore you when you walk in. They might even be reading a book, not giving two sh*ts.

That is not the case here now. Now they act more like car salesmen, ready to pounce. Falling over their left feet trying to hand you a flyer.

A walk from Ballard to Bryant is pretty far to go on a Sunday, especially with a youngster in tow.

Never mind Green Lake/Wallingford. Way closer to Ballard but apparently you haven’t made it over that way yet on one of your Sunday strolls.

Hard to imagine why you come on this list M. If you think you’re going to single-handedly hold up Seattle RE values with your pablum and lying on a bubble blog, it ain’t gonna happen.

You’d accomplish much more over at the “Seattle Bubble?” site. People there would actually LISTEN to what you have to say and BELIEVE it.

Think about it.

You have a willing audience who are still thinking now’s the time to buy and wantin encouragement for their shaky decision.

Ballard’s not a good deal anymore, nor has it been, in my opinion, since 1998 when the bulk of the yuppie migration took place. It’s become cute enough (as a result of the yuppigration), but I remember when it was largely occupied by old folks, rabblerousers and weirdos. Kind of like Beacon Hill is now. Hmmm…

DISCLAIMER: Before I get flamed by folks defending rabblerousery, I consider myself a menace in my own right. I think rabblerousing is, by and large, amusing and makes an important contribution to a diverse and rich culture.

It’s hard to miss the open houses….6 months ago and now. And my son likes the free cookies!

‘m

Friggin’ liar Meshugy, you’ve been saying this same "golly"ed thing for the past 6 months… and if you’re taking your son to open houses every weekend, you either need to get a life, or take some Xanax to cool your nerves over the Ballard bidding war you jumped into feet first… just because you’re desparate to find a shred of rational for your silly purchase is no need to get all passive-agressive on the bloggers. Gimme a break!

Again, I don’t give a shizzit either way.

“I find it more and more that it is well to be on the side of the minority, since it is always the more intelligent” – Johann von Goethe

You must be going to the wrong ones at the wrong time. I take my son on walks during the weekends and every open house is packed with bid crazy buyers. This is reflected in the huge over bidding we’re seeing in the selling prices and the quick rise in median prices. If seller’s and realtors were desperate we’d see inventory piling up and prices dropping. But that isn’t happening…houses don’t get overbid unless there are multiple buyers. And nearly every house is being over bid right now.

You are correct, now we are in a sellers market. Anyone that is lucky enough to sell at this moment will come out ahead. This market has reached a plateau and is about to go into the next stage (yeah, the ugly one).

As for your bidding wars, that is a total joke. I have been going to open houses all around N. Seattle for the past few months since I got here – to try to understand the market.

Not a lot of foot traffic from what I’ve seen, and a lot of neophite realtors telling me about all the wonderful features and benefits without asking me what I care about. For the most part, they all seemed desperate.

I don’t need weekly ballard figures to understand what to do.

Trust what you SEE, not what you want to believe.

I will buy when we are in a buyers market. That will occur when:

1. It is common knowledge that RE is now a bad investment.
2. All news from MSM is reporting gloom and doom 24/7.
3. New home permits are near all time lows.
4. It’s now difficult to get a loan, lenders have tightened.
5. The economy is sluggish and unemployment has risen.
6. Construction activity is way, way down.

While all those factors may not happen at once, it will still be obvious to observe it happening around you – if you care to look. Once RE negativity is super high, the media hates RE and property values have retreated…. then it will be a buyers market. It may actually happen more quickly than it has in the past due to all the unprecedented funky lending.

Buy when everyone is selling. Sell when everyone is buying. Not rocket science.

Obviously you don’t, because you keep saying that overbidding and price increases aren’t happening. But all the data we have on the Seattle market shows that it’s still by far a seller’s market. Please be honest, you do care what the market is doing right now. You’re waiting to see signs of a slowdown….in the absence of such signs you’re just ignoring the data or worse, making a false assessment that bidding wars and price increases aren’t happening.

For the record, I am not a republican. Having money does not make one a republican or right wing. I moved up here to get away from asshole Right wingers.

While my apartment is expensive and overpriced, it has a very nice view and keeps my wife and 2 ugly dogs safe. Even at these prices, I’m still saving thousands of dollars a month on some dumpy condo downtown. For the record, it is my wife that prefers to live down here. I’d rather be in Fremont, Ballard or Cap. hill. No grocery store and the tourists drive me nuts.

In 2004 I was caught up in the frenzy to purchase a home too – it was by sheer luck that we didn’t buy.

When the market tanks, I’ll have enough cash to buy your house, your neighbors’ AND give twice your yearly salary to the DNC.

Asshat.

Phoenix has already had 50% reductions on some properties.

I’d call that a pretty good forward indicator on what MIGHT happen anywhere.

Read the news.

byt synthetik’s unsubstantiated projections are GOSPEL.

anyone who calls people “folks” are liars or hucksters, usually both. and “asshats”? that is so 2003. which rightwing blogs were you trolling on back then, Syn?

seriously though, we are lucky to have someone who is so obviously enlightened to share their wisdom here. not only have you lived in Florida and San Diego, but you have moved to the Emerald City to rent an overpriced downtown condo and post patronizing crap on weblogs. ding, ding, ding. winner!

I could care less what is happening RIGHT NOW in ballard, or anywhere else in Seattle. That data only matters to the person who is a homeowner RIGHT NOW and is considering selling their home.

I don’t think it takes a rocket scientist to predict what will happen. The market will drop. The ONLY question is, by all reasonable standards, HOW MUCH.

Your monthly data about what the housing market is doing in this zip code, or that zip code – really has no meaning.

If people aren’t informed enough to see that NOW is the time to get out of their home (unless they have good equity and don’t want to be bothered, kids in school, etc, I understand and respect that concept fully); well, that’s just darwinism.

My greatest fear now is how well the economy will sustain this down cycle event – most likely to be one of the worst in history.

It’s nice to KNOW that housing will return to pricing in line with incomes, however it’s frightening to think what MIGHT happen when you realize how much of our economy is tied into RE/construction.

If I were to predict, I’d say by 2008 the drops in RE values will be:

Pheonix: 30-45%
Las Vegas: 30-45%
San Diego: 25-35%
Ft. Lauderdale: 35-45%
Wash DC: 25-30%

Seattle: 20-25%

San Diego had losses of nearly 40% in the early 90’s, but that was due to a military base closing. I don’t think there is a precedent for a nationwide housing increase of this proportion.

We’ve had increases of 160%+ in some areas of USA since 2000. Why is it so unreasonable to think 30-40% pullbacks are possible? God knows it could be MUCH worse.

Hold on to your asshats.

Yeah, thats a rational economic argument. Everyone that has bought a house in the last ten years, or the last five years, is rightly patting themselves on the back, because they have seen incredible appreciation. Dont expect these people to think the party will end. I think its interesting that the state economist is sounding an alarm. he knows his future reputation is on the line, so he prob feels he has to call it as he sees it. Corporate earnings just drove the stock market back up today, and
oil is still at $70 a barrel, so depreciation is not a foregone conclusion yet. I predict oil will drop like a rock this winter though, and with it,
all commodities and maybe some economies, and definitely Vancouver BC RE.

Maybe we will stumble our ways through all this without a recession,
but with RE valuations the way they are and various markets hurting, it would stand to reason we’re all gonna eat the dirt. The fact that its not totally clear yet is very similar to the way it was in the dotcom boom.
The difference is that then it was just the stock market. But there ways a day when it was crystal clear to everyone that the NASD was finished,
and by then it was way too late. Also dont forget that when it started dropping, people kept jumping back in, thinking they were buying in, and they also got creamed. Dont forget that we got out of that debacle through borrowing and RE appreciation. Dont forget all the coomers counting on their homes for retirement. WERE DONE.

Find out how this thing is being directed and how it’ll play out.

I speculate (tee hee) that inventory is low because poised sellers may be waiting to see how this all shakes out. Those that aren’t in a hurry to sell (probably because they only just bought within the last three years) are digging in and hoping for another run up in appreciation. They might get it. They also might not. Thems the risks when you buy anything and consider it an invesment. Additionally, if you have dollar signs in the eyes, you might not be seeing things so clearly either, in my opinion.

Watch as the Fed, expected to raise rates yet again (and again, and again), combined with rising inflation pops this bad boy bubble. **Mandatory Buffet Quote of the Day**: It’s only when the tide goes out that you learn who’s been swimming naked.

P.S. I see so many condos going up around town, it’s starting to scare me. Who is expected to purchase all of these? People who wouldn’t dare buy a two bedroom 380K pit in Loyal Heights? The paranoia! I feel like I’m being targeted as a demographic: Young apartment dwelling single income urbanite with no kids!

Ack! The siren song of the REI!

So you can blather on about supposed bidding wars that aren’t happening, and imagined price increases – but what we obviously have here, folks, is a day of reckoning.

We all have our predictions….but no one really knows what will happen. I respect those on this list that could have bought over the last few years but firmly believed prices will come down. Sticking to your guns is an admirable trait…and you could profit from it in the end.

What I’m most interested is in what’s going on NOW. That we do know, it’s reflected in both the monthly MLS reports and casual observation of what is selling and for how much. There’s no doubt that the Seattle market is very hot right now…at worst it’s just a hair behind the record #s of 2005. In some areas, such as Ballard, it’s gone far beyond 2005. The only place things seemed to have cooled off are more remote areas of King County. The bidding wars are happening and prices continue to climb at a rapid pace.

Looking at the “price reductions” listings on Zip realty doesn’t tell you much…the most important think to look at is the relationship between the market value of a house and what it sells for. In every part of Seattle that is going up right now, some faster then others. Someone mentioned Greenlake/Wallingford….that area had a 23.83% increase in sales last month and the YOU prices are up 14.89%. So you can see that “price reductions” on Zip Realty don’t tell you much. USualy the houses are insanely over priced and get shaved down. But still sell at huge profits…

From my own observations in Ballard,it’s clear we’re going to see another month of big gains when the June MLS report comes out. Fall might be when this whole thing starts to cool….but that’s what happened last year and look were we are now!

They were saying that in San Diego a year or two ago too.

San Diego is borded to the south by Mexico and to the north by Mountains. The only area to build out is to the Northeast (the desert baby!).

If you’ve ever been to San Diego, you know it has near perfect temps year round, about 65-79F, but ONLY near the coastline.

The other areas near downtown (Escondido, Oceanside, Vista, Fallbrook, etc), all require a 1-2.5 hour commute into downtown. And if you live in those areas, you are still paying $550K for an average house.

My point is that while we would like to think Seattle is different, it’s just not. It was just late to the game and is going to experience a similar downslide soon.

While Seattle was slow to the party, it’ll most likely follow the other drunks out at the same time. Ok, maybe he forgot his keys – but he’s not staying the night either.

So you can blather on about supposed bidding wars that aren’t happening, and imagined price increases – but what we obviously have here, folks, is a day of reckoning.

And no, it won’t be different here either.

From Bubble Markets Inventory Tracking, yesterday.

“RIP: San Diego

It has been just 2 months since the post, Code Blue San Diego, when we passed the historic inventory height of 19,250. 2 months and 3,000 additional homes later, we now pronouce our Canary officially dead.

It took 6 years from the peak of last bubble in late 1989 to the previous peak inventory in July 1995. This time it took 27 months, just a mere 965% increase from historic record low to the current new population adjusted record high inventory, 22,203. This increase averages out to a 35% increase per month. Of course, this is helped tremendously by 23 straight months of sales decline.

Meanwhile, percentage of reduced listings on the MLS is now 36.4%. In addition, median home price has been falling since November 2005, and year-on-year appreciation is now 0.4%, finally edging on negative territory.

Soft landing? Well, there’s always cryogenically frozen canaries, I suppose.”

What a conincidence! It probably went for so much because it’s a craftsman style house on a nice street. Nice landscaping and seemed to be in good shape…but did look small.

If you look at the Wedgewood stats from the MLS you’ll see that it’s one of the tightest markets in Seattle. Last month there was a -2.96% drop in inventory and a 4.39% rise in pending sales. The median price is up 35K from last year. Definitely a seller’s market…

UCLA Anderson Forecast Calls for Real Estate Slowdown in California; No Statewide or National Recession Seen

Leamer, who does not expect real estate prices to fall significantly, notes that sales volume is what typically drops, and drops more precipitously than prices, as the price cycle lags behind the volume cycle. The number of homes sold will drop as owners decline to sell in a weak housing market. Prices, however, should hold. The real decline in the housing market, Leamer says, will come in “residential investment,” which includes construction of new homes, repair and remodeling, and brokerage commissions on the sale of new and existing homes.

“We do not predict a recession, nor do we predict a substantial decline in average nominal home prices,” Ratcliff says. “This forecast it based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss.”

I have data going back about a year…i generally track 3 bedroom houses in the Loyal Heights area of Ballard. Overall, what I’ve seen is that prices exploded last Spring, then leveled for a while and the exploded again this Spring and are still rising. Houses in this area are about 70K more then this time last year.

The best data to look at is the NWMLS monthly reports. They correlate with my own findings. Ballard’s median price is over 50K higher then last year and rising.

that certainly is an astounding number of bid-ups.

Just about everything gets bid up…probably about 90% of the houses around here go for more then asking.

seattle/snoho is ratcheting up quickly. Took us a few months to go frm 8K-9K and now barely a month to go from 9K to 10 K.

Anon above- my only celebrating will be buying a house i can afford w/o a suicide loan.

So I’m not surprised your agent was surprised. Probably been a while since she’d seen that in that area.

But Ballard is still pretty hot so I think M’s stats might be correct.

I also think it’s just a matter of time (weeks now?) before Ballard joins the rest of Seattle in the “under-bidding wars”.

That’s my prediction: 3 weeks tops and Ballard’s going under.

Can’t wait to see if I’m right! End of July and it’s all over for Ballard.

Over 160 entries! astonishing. Last time I checked was late winter and there were like 20.

Anyway, either way you slice it, things are looking better all the time!

It’s the ONLY part of Seattle where the price-reduceds are under 20%.

I noticed the same thing. Even 98103 (greenlake, wallingford) has around 20%, and I’d rather live there, and I have for years.

It’s the ONLY part of Seattle where the price-reduceds are under 20%.

I’m watching Ballard closely now because when Ballard goes, this baby’s sealed.

It’s the last card in this House of Cards.

Anyone who’s looking at Ballard in any other way is delusional.

these are just the folks capitalist christian is talking about on the next thread.

can’t sell/can’t move..doomed to live forever in a teeny tiny “house’ with a humungous mortgage.

Well Meshugy, I guess since you joined the flock of overbidders just like the saps that paid over 100K on a price listed at 449K, I’d say this’ll end when you take a look at your monthly finances and realize you were an utter fool for dumping so much silly money into an overvalued asset…

Enjoy!

I also notice alot of new townhomes and condos for rent on craigslist. And every street I drive to work and back has both for sale and for rent signs.

There are also a consipicuous number of vacant homes, both new and old just sitting. I’d imagine these will be back on the market or replaced with higher density units at some point.

Well he told us in the first weekend he had 3 inspections from seperate buyers set up, we had no idea though it would go over 100k..

this market makes me sick sometimes, we are staying on the sidelines for a while.

The first price is asking, the second is the sold price.

7316 16th Ave 499,000 442,500
8038 26th Ave 424,950 460,000
7735 20th Ave 400,000 458,000
7310 17th Ave 475,000 481,000
8049 26th Ave 459,000 449,000
2832 NW 73rd 449,950 515,000
2849 NW 66th 439,000 435,000
7554 25th Ave 395,000 426,000
7547 23rd Ave 439,950 506,000
7053 26th Ave 409,500 506,500
7056 Dibble 475,000 450,000

Three of these houses were underbid…but they were obviosly overpriced. Dumps on crummy streets so I’m not surprised. All the others saw significant overbidding. The house on 7053 26th went for nearly 100k over asking!

At this point it’s pretty clear to me that Ballard is actually more competitive then last year. I thought we might see a slowdown this year, but instead I’m finding that there are less single family homes for sale. The few that are for sale are getting 10 or more offers and going for as much as 100k over asking. I’ve also noticed lots of landlords are dumping their crummy rentals for big $….so it’s getting harder and harder to find anything to rent around here. Pretty crazy…I’m not sure when we’ll see the end of this.