Mr. Brody,

Please note error in the March 10 edition of the Kitsap Sun. In your “West Sound Home Sales” table on page A3, the median sales price for Kitsap County for Feb 07 is listed as being $255,000. This contradicts data provided by the Northwest Multiple Listing Service (NWMLS). According to the NWMLS the median sales price in Kitsap County for Feb 07 was $285,000. This results in a 11.23% decline in median price since Feb 07 as opposed to the 1% decline that you published.

http://afferentinput.blogspot.com/2008/03/puget-sound-housing-whats-sound-bubble.html

In Pierce Co, median SFH was off -7.4% YOY and -8.9% from the peak set in Aug 07. The Piece Co condo market was even worse. Median condo price was off a whopping -14.2% YOY. The condo market peaked in Feb 07, so that’s also the percentage off from the record.

Ugly, ugly #s. I’ll try to get some figs up on my blog.

Thanks for sharing your story on your house buying experience (hopefully!). It’s a nice reminder that while numbers and statistics are important, people are behind them. My wife and I are going though a lot of the same gyrations you’ve been, and it’s nice not to fell quite so alone.. :)

We are in the final negotiations on a house in North Seattle that has everything we want (huge lot, charm, house size, etc), and thanks to all of you here, I think the final price is going to be about 15% under list (at least that will be our final counter-counter offer). Please wish us luck and hold the snarky comments.

Comp me, baby!

I hope you’re wrong but I’m not foolish enough to declare that you’re wrong. Besides, I like a little mystery so I don’t mind waiting to find out.

Tim,

Volatility in median prices? Absolutely. I keep an eye on the homes that sell in Magnolia and hit the occassional open house to get a semblance of my micro-market. It’s definitely not scientific but I am amazed by some of the things I see. For instance, http://www.redfin.com/stingray/do/printable-listing?listing-id=1526563 At $458 per foot, the agent who listed this house is either the most optimistic salesman of all time or flat out crazy.

Plenty of boomers are watching their retirements in their stocks and property evaporate, and quickly at that. There’s plenty of homes for sale in the best parts of Seattle, just at high prices. The closer the rest of the country gets to the screaming point, and we’re headed there fast, the more Seattle will join the necktie party. When it finally sinks in to boomers that the richest generation in history is going to enjoy its golden years in the gutter, watch out below on home prices.

Feb: +14.5%
Jan: -5.5%
Dec: +16.1%
Nov: +15.3%
Oct: +14.0%
Sep: +24.5%
Aug: +1.9%
Jul: -4.5%
Jun: -2.9%
May: -11.3%
Apr: +11.4%
Mar: +1.9%
Feb: -11.3%

All over the place. That’s why I tend to look at county-wide numbers rather than individual neighborhoods. When the sample size is larger it gives us a better idea of what’s going on in the market as a whole.

Median is a poor measure in a changing or declining market, so forget about it making sense until things shake out a whole lot more. Also, there are always people willing to catch the knife in any market because they are either foolishly optimistic or stupid. Many folks don’t even read the newspaper (online or off) with any regularity and are probably completely oblivious to what is going on in the real estate market, despite actively participating in it. They just have a vague notion from a few years ago that real estate is always upupup. These are the people who bought Pets.com stock at $100 because it had fallen from $150 and was a “good buy”, the shoe shine kid told them so.

Anyway, just like the path on the way up the fall will take a very long time. I expect it to be at least 4-5 years before we reach a bottom, or level off at the bottom. The fact we continue to decline from peak shows the bubble has popped, the RE market does not “double top” like a stock index might. For some reason people expect that 5 years of huge price appreciation should be wiped away in a few months because the appreciation stopped, this isn’t the stock market and that won’t happen. Patience.

West Side Billy – would you mind posting a few MLS links of these houses that are near you? Those of us looking for under $650 in the “first world” — it feels very much like dog eat dog. Are these houses that are sitting forever over $650K? I think it’s the upper-end Seattle houses that are experiencing the pricing pop (and I never thought I would ever talk about $650K as if it were low-end housing!). Thanks~

Jess, most of them are still well north of $650k. Those that aren’t:

One of the ugliest houses I’ve ever seen.
Goofy house. “Lake View” is a huge misnomer. The view is of the neighbor’s patio with a peak of the lake.
$110k markup for new appliances and counter tops.
Flat roof house. Too close to Aurora to be considered a good location.
Not sure about this one. Other than the small lot it seems like a reasonable place. Has had one smallish ($8k) drop in price.

I’m a homeowner and a real estate attorney so I’ll also admit to being biased. I’m obviously rooting for Seattle’s real estate market to remain resilient in the face of all these negative factors. That said, I tell all my clients that there’s no telling what’s going to happen. If there selling, I tell’em to price right and make the place look great. If they’re buying, I tell’em to low ball. And low balling isn’t limited to price, it can mean early possession, delayed closing, seller carry back, contingent on sale, heck, contingent on anything. I just negotiated a lease option with terms we never would have gotten 6 months ago let alone in ’05. I suppose it’s all relative.

Best Regards

Search: so easy a caveman can do it

“I love pink ponies, they are sooooo special. I like combing their hair and accessorizing them!!!”

Michael, I was very hesitant to believe it as well. I thought Seattle was immune because of geography, economy, etc. The reality is that this market is in BAD shape. It doesn’t take a rocket scientist to understand that Increased Listings + Decreased Sales + a decrease from the peak of XX% = a failing market.

I don’t know what field you’re in, but I sure hope you aren’t investing in real estate!

“Seattle is doing fine, and there are many indicators that this summer will heat up, not as much as it has in the past four years, but enough so that it isn’t negative numbers.”

Ouch Michael; I think you will be quoted quite a bit in the next 6 months, and not in a respectful way.

Buddy; there is no more cheap money….and that was the only way people could buy.

Here is the list of the fastest growing cities in America:

http://money.cnn.com/2007/06/27/real_estate/258_fastest_growing_cities/index.htm
Many of them that are ranked higher than Seattle have already seen significant drop in their home prices.

The first world is the Ballard-Wallingford-Fremont-Greenlake-Phinney world, where properties just don’t stay on the market for very long at all, and price reductions, if any , have been slight.

There are several houses within spitting distance of me (and I live in the first world, as you define it) that are 150+ days on the market with 0 activity. Another relatively new listing that keeps getting pulled from the MLS and relisted with a $1000 reduction. The houses that I’ve seen sell were value priced (i.e. less than the area comps) and generally the better properties.

Secondly, you talk about Boeing and Microsoft’s business slowing down and that affecting us. Sorry, but Seattle is still growing (another reason rentals and housing sales are still moving), Google has moved an office here, Yahoo has moved an office in Seattle, there are many other companies that feed this area than just Boeing and Microsoft, and thats why the economy here isnt as bad as many places in the rest of the country.

The housing markets outside and around Seattle like SNoqualmie are quite low and flat, but that is because they rely on the Seattle/East Side overflow. Seattle is doing fine, and there are many indicators that this summer will heat up, not as much as it has in the past four years, but enough so that it isnt negative numbers.

So do not think Seattle has a bubble, remember it is a sealocked city like Boston and San Francisco, and is receiving alot of growth these last couple years, so the housing market here will always be fairly strong or better than most cities.

Cheap money gone….