I think they are pumping 500 Realty in between lead generation calls. And Yes, you nailed it. 500 Realty is a cult. It seems to have gotten a following like the movie Rocky Horror. Everyone wants to bring down the Realtor profession and they see 500 Realty and Red Fin as the drivers.

I suggest Tim block the entire 500 Realty office(were only there 3 more weeks anyway). Tukwila here we come!

I’m beginning to think that 500 reality some kind of cult. Ray’s “employees” are so devoted to him that they will go to any length to continue praising his profound genius.

I had the same thought. Many of the RE professionals seem to express amazement that Ray is able to do what he does for only $500. If he runs the business like a cult (and many small businesses are run like a cult) that might explain how he can keep costs down.

That’s funny! I was getting quotes of $125-150 a SF back in 2002 for our five-acre lot. Ya know what I did? I put a nice Karsten 2000 SF three-section MF house on it – for $90K, set on a 42′x50′ slab. We figured it was about paying off the debt rather than impressing somebody – and it’s a nice house too.

Perhaps I spoke to soon regarding material costs, but I was under the impression that lumber had had it’s own “bubble” recently, and that any savings would come down to whether your initial estimate was done recently or not.

Researching it though, I see that (wholesale)lumber rices have been falling steadily from their peak in about 2005 to early 2006- by about 30-40% (?)

But I do think Locusts point about economies of scale, i.e purchasing power of the larger developers comes into play, and you probably won’t be able to see the full benefit of that slide in prices.

I know some folks who built a home in Auburn just last year (as an investment-to sell) Cant’ remember the exact final cost but it wasn’t much under the current market price of such a home (slim profits).

I think the idea of holding off a while longer or so to allow contractors to become more competitive is a good idea. Same goes for the price of the parcel-I imagine chances are that will go down some as well.

Somebody should pull Ray’s image off of 500Realty’s site and provide him with some gaudy Kim Jong-il-worthy photo-shopped sunglasses!

iva La Ray. Viva La Ray.

“At 85th and Aurora I’ve been told there is enough dirt for another thousand units.”

and a good supply youngster gang members ready to provide some graffiti art gratis!

Don’t forget about all of the women with dubious morals to occupy you at night…

I can tell that you are commenting from within Ray Pepper’s office network. That means that you are most likely an employee of 500 Realty. Please stop trying to pretend that you’re just some Average Joe that enjoys Ray’s comments.

If you and others insist on continuing this charade, I will have to ban your office IP from commenting.

Give it a year. Commercial is slowing sharply.

Markus – have you considered waiting a few more months (one more summer)? It gives you 12 more months to save, and contractors should be fighting for business.

So Puyallup is getting hit? – well during our yearly Seattle pilgrimage, we’ll spend a week with family there. I’ll drive around and stop at “info tubes”.

We are in construction now on a new house. Lumber prices are down substantially, and subcontractors are less busy than before so pricing there may benefit some. However, there is a lot of commercial work going on in Bellevue and Seattle, so concrete work and other trades like that are not going down in price. I think the serious slowdown in new residential building makes this time as good as it is ever going to be anymore for building your own home.

That said, it’s still pretty expensive because you are never going to achieve the economy of scale that the mass production homebuilders like Quadrant achieve in their subdivisions, nor will you want to settle for that level of quality and generic finishes if you have a choice financially. I would expect to pay $250 per square foot for construction cost of something nice, if you work through a general contractor.

are all prime contenders.. take your pick

I want to have a pole on the next bank to fail. I have my money on Lehman but WAMU is looking none too healthy. Wells Fargo boasts a AAA credit rating but so did a lot of those Mortgage backed securities that killed Bear. It’s a tough call but I’ll put my (rapidly depreciating) dollar on Lehman.

I thought the wholesale price of wood and materials are falling? I think that has been said in previous postings. I’m planning subcontracting 80% the work out. I’ll be building a small home by todays standard (2,200 SF). My plan is to have the least expensive house on the street.

Has anybody looked at the actual price of construction verses sale price? I see previous posts that a new home sells for $X00,000, but what did the house actually cost to build and how is that build price affected by the bubble?

and a good supply youngster gang members ready to provide some graffiti art gratis!

Don’t bet on it Markus. For one, many of these materials come from Asia, and with the continuing slide of the dollar…..

Also, I wouldn’t be surprised that when both suppliers and retailers like Lowes / HD see themselves getting squeezed, they will raise prices further.

Hopefully you didn’t budget this too long ago either, as prices on goods have been rising steadily for a while.

I drove past many recently built neighborhoods. You could tell the houses where cheaply built, even approaching them from a good distance.

Couldn’t believe how close they were together, a few feet at most! Everything seemed flimsy and crowded about them-even the fences where erected right up against the sidewalks, as if having a three foot strip of green-belt was too much of an infringement on the profits of the developer.

Many of the fences where covered with graffiti, as were a few areas of sidewalk.

I imagine these homes where not long ago selling around $300K, perhaps a bit more. I couldn’t help but put myself in the shoes of a homeowner couple who has to pay $2500 or so a month for the privilege of coming home to that every day (and probably after an hour commute).

Wasn’t exactly worthy of a commercial for the bliss of homeownership.

I feel very, very lucky to have seen the signs early enough to get out while the getting out was good.

Sounds like Bothell in the early 80’s.

Starting in the low 400k for Ballard condos? Seattle is further behind the curve than I thought (or the builders up there are morons). They finally completed a couple of new towers here in downtown San Jose. These units would’ve been low 600k about 2 years ago, due to being right downtown and “luxury” high rises. They are both now starting at low 400ks and not moving at all. I drive by one every night and there are usually about 5 lights on out of 15 stories of condos. I can’t imagine anyone buying a 400k place in Ballard unless their plan was to flip it right after the building completed.

Based on the lack of activity in/around them, I suspect most of the properties listed as “SOLD” are not being lived in. So yes, lots of speculation going on in those Ballard condos – same with Belltown, Bellevue, Pioneer Sq, etc.

“Vincent Healy, owner of Clearpoint Appraisal in Seattle, said he started to notice trouble signs, such as longer market times and some price drops, in summer 2006.”

I sensed a real changing of the winds in Fall of 2006 and while most people feel that sometime in mid to late 2007 was our crest, I feel it was earlier. This is based upon closings in our office, longer market times for housing and what I deem to be the bell-ringer, the first time we viewed the start of list price reductions taking place—something that just didn’t happen for months and months and months.

the assumption was that people would “flip” a property before the ARM expired is gone. bankers are finally starting to look more closely at whether people can actually afford the debt they are taking on – buyers ought to be looking at this too.

a national media consensus is forming that the American public and the American government have been living beyond their means for a long time and short-term thinking (and financing) is ending. but as others have pointed out, changing expectations is a slow thing (as is austerity).

I am expecting prices to drop across the board because there just arent that many rich people that can afford $3 to $5,000/mo for housing. Incomes here are just not that high even without a significant recession.

There are a few millionaires but not nearly enough to support the “luxury condo” boom. I have my doubts there are enough people to support the “$650k Greenlake fixer” either…

I like to think of the whole real estate run-up as a fancy leveraged pyramid scheme. The 200K condo guy relies on some new idiot (most likely some poor soul who has been told, look how much you are losing in rent, home prices never ever fall, plus you can buy this with 0 down etc.) to buy his condo for 230K. The condo guy has 30K more so he buys the formerly 400K townhouse for 450K (I made 30K on a condo, ooooh I can make so much more on a townhouse). The townhouse guy gets the formerly 600K house for 700K and so on and so forth.

Now, the condo guy cant get the loan (not that he would want to in this market) and thus the whole scheme collapses. Now that the music has stopped its time to return to reality. I wouldnt be surprised to see bigger markdowns on pricier houses simply because people cannot afford to get loans the way they did before. After this collapse who is going to think that someone earning 50K can afford a 500K house?

People here are still pricing houses thinking hmmm it grew so much from 06 to 07, This is a bad market, the economy has tanked, it will only grow 50% as much this year. Believe it or not, you guys missed the boat. In Seattle it sailed away mid 07. If you really want to sell your house, start pricing it near the figure in that locality around the start of 07, or gasp even lower. Someone might actually buy it (even at that exorbitant price). Most likely you will have to go lower.

Long term prices will return back to that fine balance between annual salary, rent and house monthly payment on a fixed mortgage. I dont know what that exact amount would be, but I am sure Tim with his wonderful charts would be able to let us know.

This would be like a house that could have sold for $600k last week selling for $20k this week.

A couple years ago people could say that the real-estate problems were just a “central valley”, or “inland” issue. Then, it was “just an East Bay” problem. Now, I hear people saying, “well San Mateo and San Jose might see declines, but San Francisco proper will be fine”.

It’s just timing, that’s all. Seattle and Bellevue will get a major hair-cut, it just might take a little longer.

**While you are here.** We had no sales in Kirkland for 500 Realty for we were NOT open yet!!

If you wish to stay silent then please stop. Its painting a bad picture of myself per Tim. We do NOT need your assistance.

Ray Pepper

I can’t imagine anyone buying a 400k place in Ballard unless their plan was to flip it right after the building completed.

Those days are over here too. I think it’s just momentum that’s building all the condos/townhouses in the Seattle area now. The builders have to finish processes they started during the good ol’ days, or else lose even more money.

If you are saying most of the jobs in seattle (which are HQ jobs) that is probably more accurate

Wamu jobs will be “consolidated”; branch peons will stay with different name tags (anyone remember “Seafirst”?) and the fat cats that stick around will be offered a move to Denver, SF, or an east coast city. They will be absorbed; there is too much money to be made from the existing customers. The creditors and stock holders will be given the finger. Good ol’ capitalism.

The majority of Bear’s 14k employees will be gone by the end of the year according to many reports. If WaMu were to be bought out by the Fed something similar would certainly happen.

I don’t doubt that. I was only disagreeing that the jobs would be “be gone in a heartbeat”, as in the employees come to work one day and the doors are locked.

Starting in the low 400k for Ballard condos? Seattle is further behind the curve than I thought (or the builders up there are morons). They finally completed a couple of new towers here in downtown San Jose. These units would’ve been low 600k about 2 years ago, due to being right downtown and “luxury” high rises. They are both now starting at low 400ks and not moving at all. I drive by one every night and there are usually about 5 lights on out of 15 stories of condos. I can’t imagine anyone buying a 400k place in Ballard unless their plan was to flip it right after the building completed.