That said, you have to have someplace to live.One of the problems right now is that housing is overpriced compared to renting. But it is likely that difference will narrow and some of that narrowing will come from increasing rents. Unlike renting, once you buy a house with a fixed rate mortgage your housing costs aren’t going to go up dramatically.

Moreover the real value of your house to you doesn’t change except relative to other housing prices. If every house goes up 20% in value then you will have to pay 20% more for a replacement. If it goes down in value, you are going to have to pay less for the replacement. In fact, the lower the cost of the house you sell the less real estate fees you will have to pay for changing houses.

So if you already own a house, when to buy is largely irrelevant. If you have money in the bank and and want the best deal then you will have to wait a very long time. And you may find you are paying a lot more in rent than you are now before housing bottoms out.

The actual value of a house if you assume traditional relationships to income and rental costs may be as low as 50% of the peak sales price during the bubble. It may take a decade before that unravels. A lot of people are simply going to wait until inflation pushes prices back up to what they purchased their home at, regardless of how long that takes.

LMAO! and I could give a shi# about the PC police. Nobody wants to seem to admit that there are “sketchy” areas in Seattle because every nook and cranny has “gentrified”.

Sure…Seattle “ghettos” might not be on the same level as an area where you have to live your life sitting on the floor because of stray gunfire…but they still leave a whole hell of a lot to be desired. It’s all relative.

The bottom line is that people should buy a home they can afford and feel comfortable with and not feel pressured to buy something that maybe they can qualify for, but will leave them house poor. So, if nothing else, if Tim helps people like you hold out for a home that really makes sense for them, rather than get caught up in the bidding wars, then what he does here is a public service even if we don’t agree with everything he says.

Somewhere between the extremes is where the truth lies for most of us. Here’s hoping you find the home that makes sense for you in your particular situation. You’re the one who will have to live with it, after all, so it really doesn’t matter what anyone else thinks about it.

Angie’s just all bent out of shape again because *surprise*…there are actually people that DONT WANT TO LIVE IN COLUMBIA CITY OR ANYWHERE ELSE IN THAT GHETTO OF A NEIGHBORHOOD.

Having been to/through some of the worst ghettos in this country (South Chicago, Gary, 8 Mile area in Detroit, etc), I think your definition of ghetto might be skewed a bit. :)

There’s nothing wrong with wanting to buy. And if you can afford it and believe the downside risk is not too high or something you could stomach, more power to you.

I think most of us on here that don’t already would like to own a home someday. I wish you the best of luck in your search, I really do. I’m glad to hear that this site has helped you learn more about the market and how to find things out for yourself.

Why do we feel we need to buy? I’ll try to keep this short since I’ve said it a number of times before (and I really don’t want to rehash the same arguments again). Renting sucks. We had to move constantly before we last bought because of the whims of landlords. We have a kid and want to give him some stability again. Our rental house is awful (basement leaks like a sieve, no insulation, roof keeps leaking, etc), but I have been watching Craigslist for a new rental house big enough with a yard that will allow pets and is not on a busy street or other terrible spot in the areas we want to be, and those seem to be less common than the SFHs that fit the bill (yes, I have been looking, I promise). We took a hit on taxes this year. We are looking for a place to call our own again and to grow old in — we are not looking for short-term investments (will own for 10+ years). We’ve gone through a lot of changes in the last two years — deaths, learning disabilities, career changes, other incredible family stresses — and we really want to get settled on one thing we can control: where will we live and call home while our son is still in school and as we transition to empty-nesters? Can’t control anything else in life, but it will be nice to feel settled and secure on something. Is this emotional rather than analytical? You bet! But there you go.

And Angie, you will be happy to know that I have been watching around your area. The problem is most of what’s come on in your neck of the woods has teeny tiny lots and the commute to the kid’s school in Wallingford will be more difficult in the morning — but I am watching!

Cheers, the reluctant convert

There’s that privilege rearing its ugly head. No, they’re not all gorgeous bungalows with old world charm on spacious and well-landscaped lots, but for crying out loud, it’s not like everything outside of Wallingford is a freaking favela.

Obviously not every property is going to be perfect, and calling them "chocolate" is probably overkill if favelas are your reference point. But KC has a LOT of properties on the market, and people keep citing that as a reason why housing should crash NOW, but the reality is that many of those properties are not good properties to potential buyers – especially at their listing price, and even more so if they’re out in BFE and you want to live in Queen Anne or Magnolia. There are a lot of great houses in the Seattle area, and when they show up on the MLS at a reasonable price, people bid on them and close fast. That’s what Jess is experiencing. If my memory serves for her criteria, there are about 40 properties that would “qualify” and most of them have glaring issues. Not favelas, but not worth $650k either.

Um…yeah…OK. (Did George Orwell write economic theory, too, and I just missed it somewhere?)

EconE, you’re so cute when you get all racist ‘n "chocolate". In fact, I actually meant to include north end ‘hoods in that comment, too, know what I’m talkin’ about, homie? Bothell, Lynnwood, "chocolate", even Northgate (how about that gang shooting in the parking lot last week? Dag.) Obviously not good enough for West Side Billy–or you, you precious litle thing.

Why? Are you planning to sell your house soon? Otherwise, it seems that you are just cheering for higher property taxes.

I did not mean for it to come across as a put down or insult. What I meant is that you seem to really want to buy a home, so why are you letting a slight price difference make you lose bidding wars? You already have decided to buy right now anyway, so a 3-5% premium should not make a difference unless you are at the very end of your affordability range (which I hope you are not). It certainly sucks, but the price difference is probably worth your mental health.

Angie’s just all bent out of shape again because *surprise*…there are actually people that DONT WANT TO LIVE IN COLUMBIA CITY OR ANYWHERE ELSE IN THAT GHETTO OF A NEIGHBORHOOD.

Angie, Are you all that surprised that even in a faltering market there will be properties that have bidding wars? Do you really believe that since there are sporadic bidding wars on appropriately priced (for the moment) houses, the market must still be strong? Jess’ difficulties in finding a suitably priced property and the fact that the few she is able to find result in bidding wars simply confirm that affordability is still too low and that prices will need to drop even further. As per comments above, I have no issue with those who simply acknowledge (granted, for reasons that I don’t understand) that they want to blow lots of cash on a property and not worry about the loss. People do it all the time, albeit on a smaller scale, with fancy cars, vacations, big screen TV’s, jewelery, etc) and don’t expect to get any return on their purchases. If you can afford to drop much dinaro on a depreciating asset and it fulfills your life’s dreams, then who am I or anyone else to question? It is the fallacy that now is such a great time to buy from a financial standpoint that is absurd, not simply the idea of buying a house now.

Most of my married coworkers have non-working spouses.

There are a lot of people who read the NWMLS press releases and believe them word for word. They are out there shopping, ready to offer over listing price, on a good property. These are not people who are otherwise idiots, or irrationally obsessed, or anything of the sort. They just look at the last 5 years and reset what they think is “normal”. If anything, the other 4 bidders are more likely the irrationally obsessed ones. Jess has obviously done her research and deserves credit for that.

Yep, she’s done her homework and knows what “should” be happening. However, the fact is that she’s still being outbid. It’s a real estate market and someone, or many someones, are still willing to meet or beat the advertised prices.

As for the 10,000 properties in KC… probably 9000 of them are "chocolate". Utter and total "chocolate".

There’s that privilege rearing its ugly head. No, they’re not all gorgeous bungalows with old world charm on spacious and well-landscaped lots, but for crying out loud, it’s not like everything outside of Wallingford is a freaking favela.

Among other aspects of the housing bubble, I’ve never figured out why a bank accepts two incomes as surety for a mortgage. Relationships break up, and by relying on two people to pay the mortgage you double the chances that unemployment or illness will impact a household’s ability to pay a mortgage. Normally, having a working couple serves an insurance function – one person can be laid off without eliminating household income (and I’ve known several couples where one does the high-risk entrepreneurial thing while the other holds the boring, stable job with health insurance). Relying on two incomes to pay a mortgage is its own form of real estate speculation.

Of course, since real estate always goes up…

Is there a way to respond to someones post directly? I find that some of the posts are articulate or not, and would like to post directly to thier comments.
Is that possible?

WestSideBilly is correct. Currently the comment structure is “flat” as in, there is no way to reply directly to another person’s comment except to quote it before what you’re saying. The format is like this:

<blockquote>this is what I’m quoting or replying to</blockquote>

The Tim -

Is there a way to respond to someones post directly? I find that some of the posts are articulate or not, and would like to post directly to thier comments.
Is that possible?

This is probably the best way. The black lines are the blockquote function. Copy/past the text in between a [blockquote] and [/blockquote] except replace the [] with . I hope that makes sense.

There are a lot of people who read the NWMLS press releases and believe them word for word. They are out there shopping, ready to offer over listing price, on a good property. These are not people who are otherwise idiots, or irrationally obsessed, or anything of the sort. They just look at the last 5 years and reset what they think is “normal”. If anything, the other 4 bidders are more likely the irrationally obsessed ones. Jess has obviously done her research and deserves credit for that.

As for the 10,000 properties in KC… probably 9000 of them are "chocolate". Utter and total "chocolate". Overpriced (pink pony pricing), run down, tiny lots, no parking, 5′ high basements that account for half the sq footage, 30 year old beat up appliances, etc… or are cheaply built townhouses/condos that will fall apart in 5 years.

When you really specify what you want, and you want to be in particular areas, it gets to be slim pickings. So yes, good properties in good neighborhoods come on the market and still get bidding wars. The crappy houses sit on the market, with their pink pony pricing, and don’t affect the median price until the owner finally gets sick of having two mortgages and lowers the price. This is a slow process.

…..How many working-age couples do you know where only one spouse works? Aside from those with pre-school children, I’ve never met any.

Perhaps that is a mandatory condition when you choose to live in a metropolis like Seattle. Over here in Hicksville, (Kitsap County) it is not uncommon for a single income family to have the required finances to buy a house. Of course we don’t have the culture or prestige of being sophisticated urbanites……………

I am ready to buy right now and I will put my money where my mouth is. You have the right attitude and know what you want. Be patient and keep scouting for the right house to make your home. The most important thing for me is to be able to sleep at night and not overextend myself financially. I had the big house with the white picket fence and lost it in divorce. I finished raising the kids living in an apartment, paid for their college, weddings, and now have grandchildren. Missing my own “space” I am in search of the right home for me, just not at the cost of siphoning my retirement account! “Hey look it’s grandma living in a tent in the back yard….” Jess, don’t be afraid to door knock or get to know the neighbors in the area you want to live in. People are our best reference. Keep looking~

Is there a way to respond to someones post directly? I find that some of the posts are articulate or not, and would like to post directly to thier comments.
Is that possible?

Freddie and Fanny are in a world of hurt. The odds of the cap getting raised on jumbo loans are the same as the odds of winning the Lotto.

The subprime boondoggle that is going on right now is going to feel like a Swedish massage compared to the ARM resets coming up in the spring of 08. This party is just getting started. Foreclosures are going to skyrocket next year.”
————————————————————————————————————
Speaking of winning the Lotto, if your ARM is based on the 1 year Treasury, your rate is headed down about 2% at the Spring reset.

I’ve been meaning to say thank you for all of your input. It’s good to hear from people who are out there braving the market right now. If it weren’t for your posts I’d think that the mid-high SFH market was soft, perhaps even in town. I, too, await the eventual day that my family and I can find a reasonably priced place to call our own.
In the in-town “entry level” market, I’ve seen a similar story: tiny, over-priced, neglected houses that count the unfinished basement as nearly half the living space, or tacky townhouses, on 85th NW and built to last ten years or less. Anything that is even 1/4 decent is scooped up quick as you please. Blargh.
I’ve recently made my desktop background one of the images of the impending mortgage reset schedule. I find it helps when I start itching to search redfin. ;}

Cheers,
Lilblackbird

God forbid Seattle become another San Francisco… An expensive theme park for tourists and a deracinated urban elite. U Village on steroids. Ugh. I don’t think I want to stick around long enough to watch that happen.

I still don’t get what is so bad about renting. Half of my childhood was spent in a rental and I didn’t notice any difference. We lived in one place for a few years, then moved onto another for a few more. Same neighborhood, same school. My parents made a bundle in real estate later. They were the dreaded flippers. They are retired now and are renting probably for the rest of their lives. They’d rather collect 5-7% interest and appreciation in foreign currencies. A home is just an indoor space. Take the emotion out of the decision making and everything is clear.

The .gov can only do so much to protect the housing market. The bottom line is that housing has become unaffordable in most areas, and the only thing that is going to solve the problem is for prices to come down. They can delay the inevitable, and sellers will be reluctant to lower prices, but the increases in inventory are going to eventually cause prices to fall.

The situation in the financial markets has only begun to play out. The bond market is in dissarray, banks are being squeezed, and the majority of ARMs have yet to reset. We’ll see how this plays out, but its not looking good.

Households include single people and single-parent families, as well as retired people. For households including both a working age husband and wife, the norm is that they both work.

Really isn’t that obvious? How many working-age couples do you know where only one spouse works? Aside from those with pre-school children, I’ve never met any.

Who knows, Seattle could (thats a big stretch) hold strong. No one truly knows whats going to happen Seattle has held strong so far and homes are starting to sell. Good luck to the fence sitters I was once in your shoes.

If you are stressing out this much about just buying a house, I would hate to see what happens once you own it! I think you have waaaay too much invested in the idea of home ownership, and it would probably be better to just forget about it for a year, not look at anything, and come back with a fresh perspective. If you are not willing to do something like that then you need to just buy now whatever you can for whatever price, and gain the status you crave. Trying to buy something rationally that you are irrationally obsessed with is just going to make you go crazy.

See: http://www.seattlehousecleaning.com/house-keeping-aboutus/house-keeping-aboutus.aspx

I’m not knocking running a cleaning business, but this is the first I remember Mr. Losh mentioning anything other than his history as a ‘contractor’ or ‘real estate investor.’

David Losh — I have no bone to pick with you. I am not an agent/pro-RE nor a die-hard bubble-head. But this comment has irked me:

“The people talking about Wallingford and Maple Leaf are perfect examples of the perfect storm. Both properties they are lamenting are pretty much crap. They are well presented to the market place and buyers fall all over themselves to buy them. At the same time some really good properties sit on the market.”

I can tell you that I have personally seen every SFH that fits the needs of my family and is worth looking at on the MLS in the zip codes 98103, 98113, 98105, 98115, 98125, and 98117 (i.e. not on N. 85th or some such problem). Do you really think that someone who visits this blog regularly would not be super-analytical and thoroughly research the market and properties? Do you really think that we (that is, we who read more than the RE section of the paper) would be so easily swayed by BS staging, marketing fliers, and granite f—ing countertops that we would overlook “really good” properties? Please show me some good examples that have 3+ bds, at least 1800 ft2, lots bigger than a postage stamp, and are not on busy streets or next to gas stations.

Sorry everyone (and David); I am a woman scorned today.

Kind of the flip side of the goose that lays the golden eggs?

Jess, yikes, that sucks. I wish you better luck soon. You too Olaf.

Whos your Agent?

Whats the address of subject property that you missed out on? How about the one in Ravenna?

Sounds to me like your Agent is NOT on the ball. Your offers are lacking in some respect?

Losing out on two deals in this mkt? I would look at myself and my agent and ask why have I lost out on both these “over priced deals”.

Sometimes the “entire” story must be told.

http://www.500Realty.net

I wonder if dark income has any relation to black swans.

Funny, I’ve found buying and selling to both be easy. It’s buying low and selling high that I find to be the tricky part.

Granted, I’ve only been involved in two properties from purchase to sale.

Our most current theory about the structure of the universe is based on something that is unobservable and may not actually exist. If it can happen in physics, it can certainly happen in real estate finance. The funny thing about physicists crazy ideas though, every once in a while they come up with things like nuclear bombs and nuclear bombs are hard to ignore. (Note: Some observers claim that the real estate industry has developed their own bomb. It is sometimes known as ” creative financing”.)