Here’s a few quickies to start off your Monday morning.
First up, Seattle’s market got a mention in the LA Times on New Year’s Eve while I was cavorting about the country. Note that this was a week or two before the NWMLS statistics for December came out, showing a year-on-year price decline.
It’s the kind of house that a year or two ago would have been snapped up in days: a refurbished rambler in a woodsy residential neighborhood minutes from downtown.
The asking price: $559,000.
But after seven weeks, Kristen and Al Dittmaier have not received a single offer on their Wedgwood home.
“I really believed there would be no problem selling,” Kristen Dittmaier said. “But the whole feel of the market has changed. We might have to drop the price.”
…
Of 20 major U.S. metropolitan areas, all but three — Seattle, Portland, Ore., and Charlotte, N.C. — experienced a decline in real estate values this October compared with last October, according to the Standard & Poor’s/Case-Shiller composite price index, released last week.Home prices have fallen most in the Midwest, Southwest, Florida and California. In Los Angeles, prices fell 8.8%; in New York City, 4.1%.
Seattle prices increased 3.3%, but that was the smallest year-to-year rise for the city in more than a decade. The annual appreciation in Seattle has been slowing for more than a year and a half. Some economists say it’s only a matter of time before Seattle joins the national slump.
Next up, Aubrey Cohen points out the “not-so-fine print on the conforming loan limit:”
It appears conforming loans still would be capped at less than $500,000, under the economic stimulus package deal announced last week.
The deal would raise the cap from $417,000 to 125 percent of a metro area’s median home price, with a ceiling of $730,000, according to Congressional leaders.
The Seattle area had a median home price of $394,700 in the third quarter of 2007, according to the National Association of Realtors. That would put the new cap at $493,375, an increase of $76,375 (18.3 percent) from the current level.
And lastly, get ready for a shock: slowing sales means lean times for real estate sales offices. Shocking, I know. But it’s really happening in Olympia.
A slower Thurston County housing market has been felt by not only buyers and sellers but also South Sound real estate professionals.
Exit Northwest Realty decided last month to vacate its 5,000-square-foot office on Martin Way in Olympia because it had become too expensive to rent in a slower market, co-owner and broker Steve Cahill said.
The real estate company had occupied the space for about 18 months, but now will retreat to a Shelton office while it looks for smaller, cheaper office space in Olympia, Cahill said.
“We have to change the way we do things and get leaner,” Cahill said.
Golly, if I didn’t know any better, I’d say the bubble around here has finally burst.
(Tomas Alex Tizon, Los Angeles Times, 12.31.2007)
(Aubrey Cohen, Seattle Real Estate News, 01.27.2008)
( Rolf Boone, The Olympian, 01.18.2008)
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18 responses so far ↓
1
deejayoh
// Jan 28, 2008 at 9:44 am
I just posted this over in the forum too - Case Shiller numbers for November will be out tomorrow. I expect them to be worse than October - probably around -1.5% MoM dropping the YoY figure to about +1.7%
2
gluten-freek
// Jan 28, 2008 at 10:15 am
Wow, real estate agencies rent office buildings? What about the intangibles of owning?
3
Joel
// Jan 28, 2008 at 10:48 am
Exit Northwest must be full of crappy, inexperienced RE agents, because we’ve heard oh so many times from agents at RCG that a housing slump would be good for the experienced, professional RE agents.
4
rose-colored-coolaid
// Jan 28, 2008 at 12:23 pm
Ah ha! But the final deception is this. It never was a bubble, but rather an egg. What you interpret as bursting, the wise (NAR?) among us witness as hatching!
Hmm, that sounds too crazy even to me. Alright Tim, have it your way. The bubble has burst.
5
vboring
// Jan 28, 2008 at 2:46 pm
yeah, so what now?
the story has broken. 60 minutes has done a bit on it.
only local newsproduct that depends on RE for advertising dollars continues to deny that it is happening. but they have no credibility left to erode, so who cares?
so, how are you going to keep it interesting?
predict when the seattle-housing-bubble-blog bubble will pop?
i appreciate the blog quite a bit, it just seems to have fulfilled its purpose. so, now what?
6
Matthew
// Jan 28, 2008 at 3:15 pm
The egg hatched alright…… and a black swan appeared!
7
johnnybigspenda
// Jan 28, 2008 at 5:12 pm
I think the question now is: ‘how LOW can she GO?’
8
MisterBubble
// Jan 28, 2008 at 5:30 pm
Oh noes! Hard times for real-estate “professionals”!
Whatever will we do??
I predict a surge in Avon “professionals”.
Burger-flipping “professionals” might also see market growth.
9
common1sense
// Jan 28, 2008 at 5:55 pm
Who is Exit Northwest Realty anyway? They help Puget Sounders move to California?
10
mike2
// Jan 28, 2008 at 5:55 pm
wow, so what they’re saying is that all the people I kow that are no longer working in the RE industry didn’t quit voluntarily? There was actually no work for them? Weird. Never would have guessed. I figured it was just that they’d made so much during the boom that they decided to take time off. Who knew?
11
S-Crow
// Jan 28, 2008 at 6:03 pm
Vboring says, ” i appreciate the blog quite a bit, it just seems to have fulfilled its purpose. so, now what?”
:)
12
alex
// Jan 28, 2008 at 6:52 pm
I’m eagerly waiting for 10-15% drops. If they drop 10% off of the 500k houses I want to buy, I’ll gladly shave off 10% off my own house I’m trying to sell, at http://www.brighter-moments.com/house/mainpage.htm
13
mike2
// Jan 28, 2008 at 8:01 pm
alex, throw in some slab granite counters, cherrywood cabinets and floors, some stainless steel appliances and get rid of highway 522.
14
common1sense
// Jan 29, 2008 at 8:21 am
Alex, why don’t you drop your price by 5% now, then in 2 weeks another 3%, and you’ll still have some dicker room. Many sellers will take your offer, but not if it is ‘contingent on your house selling’ ….
15
common1sense
// Jan 29, 2008 at 8:22 am
Mike for Pete’s sake, don’t you think it’s time for the glitz years to be over?
16
Finding the bottom
// Jan 29, 2008 at 8:56 am
It was remarkable that the person in the story was shocked that they couldnt sell their house.
It reminds me that the change in the public’s perception of the changing market still hasn’t taken root. After all, I read this blog daily to get my dose of economic reasoning, therefore I am reminded of the housing market problem daily.
But “normal” folks don’t really keep up with things like economics…That stuff is boring, right?
The question I have is what is the co relation between those who study and follow the trends and those that move like a tidal wave towards a goal. Is it possible to understand or even chart how the tipping point occurs? Does this make any sense at all?
17
alex
// Jan 29, 2008 at 10:36 am
mike2, you’re really mean!
I DO have hardwood floors, though! And you’d be surprised how much wilderness there is between me and 522 - I can’t even see it, and barely hear it.
Alsoooo… My Zestimate is 392k… I’d think 345 is very conservative.
18
Scuba Steve
// Jan 29, 2008 at 11:34 am
Give it enough time in the mainstream media. Just like people I know whose parents worked at Enron, they knew things were rough months before it hit the press. It takes the public a while to become aware of an issue sometimes.
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