The market is falling, and it’s falling fast. I studied the comps very closely. I priced the house where other houses were actually selling, ignoring where the comp were listing at. The pattern was clear, people pricing at 2007 levels were not getting any interest, dropping their prices aggressively, and sitting on a stale listing at the price near where I originally chose list at, with no dirty renters bothering to come back for a second sniff. Those going the chase-the-market-down route, seem to be paying a number of unnecessary mortgage payments and selling below what they would have got if they priced it correctly.

My advice: drop your price significantly and stop chasing the market, or you will never attract a dirty renter. Either that or call your dirty renters with offers back and plead with them to reconsider your house.

The market is just at very the beginning of a 5-10 year decline. That’s how long typical downturns last, and this is much worse than a typical downturn. Only morons chase the market down in this environment.

Peter – great idea! Also, when receiving an offer from a “dirty renter”, why not tell them they’re a loser? After all, it’s the truth, right? It’s just “shooting from the hip” which is fine and not objectionable at all. If they have a problem with the label, that’s their problem and they’re being intolerant of other views.

First Amendment! First Amendment!!!

Buyers have developed a nasty attitude that sellers must sell at any price. Got news for y’all. You want in? Now is a real good time. You wanna wait? You are going to pay more. ”

LOL! Now we see why you have this attitude. I’m betting it went like this:

1) List house, confident the market is going to be fine and you’ll sell. After all, your house is the best on the block, right?
2) No traffic. Mild concern.
3) Low-ball offers. Significant concern.
4) Search on Google for “Seattle real estate bubble”. Find this site.
5) Spew hatred on the “dirty renters” on this site that are waiting to buy and are “costing” you money by not buying your house.

In a market like this there are enough sellers that HAVE to sell for the amount of buyers out there. Once a buyer low-balls you and discovers that you don’t have to sell, they’ll just move on to someone else that does.

Again, choosing a name like “rentersarelosers” is NOT having a different opinion, and complaining about people’s response to you is NOT about them being intolerant. You’re just an offensive individual that’s pissed off that your paper profits have evaporated and you still can’t sell. You’re angry, and you need to take it out on someone. That says something about your character.

I’m a homeowner BTW, so don’t bother with the “you’re a loser renter” thing. You’ll have to find another way to direct your rage towards me….

Rhonda Porter discussed Jumbo financing on her blog. Check it out.

Jumbo Rates

For your sake, I hope you are a good day trader.

I was initially a fan because you represented the much needed ‘alternative opinion’… I now understand that you will disagree just for disagreements sake with traces of factoids to reinforce your chosen argument… a truly professional troll… I will skip your posts starting today.

Enjoy being ignored and good luck with the curse of genious.

You bring up an interesting topic. Did your agent suggest that you overprice your property? Or, did your agent suggest a reasonable price at the beginning of the listing, you elected to list higher and the market spoke to you in terms of lack of interest or time on market or a combination?

Just asking, because from the conversations I have with a couple excellent agents our office works with is that they are turning down listings from homeowners who are still in denial that the market has changed. At minimum, they have an understanding that if the initial price does not generate any interest they are immediately making a price “improvement.”

Did the agents presenting the offers to you suggest their clients hold off? Did you get any feedback from your agent in that regard?

One of the most frequent Bubbleheads on this blog, Biliruben, just received multiple offers on his house because it was presented and listed at a price to move. Maybe Biliruben can offer a glimpse into his conversations with his agent (in a general manner.) I don’t know what your price range was but his was under $350K IIRC.

Wht d y knw bt my nvstng gns? Nthng!

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Your investing genius astounds all of us. The market is so "licking" hot right now that you’ve had to lower your price multiple times AND you have not sold yet. Brilliant.

How did I know they were renters? Look at their address on the offer to purchase.

Ah.. If our buyers were renters, they were renting a house…

As far as the price goes, we have lowered multiple times, based on our listing agents recommendation (over 20 years experience here and always has 20+ listings)

That’s tough…

Hw dd knw thy wr rntrs? Lk t thr ddrss n th ffr t prchs.

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I have turned down 2 offers in May so far from wannabe homeowners that are back to their high priced 600 sq ft boxy bug infested rentals.

How’d you decided on the price your trying to sell for? (oh, and are you sure that you didn’t turn down move-up buyers? Can you really be sure they were renters? When we sold our place in CA we didn’t have any idea if the people making the offers were renters / or move ups..)

Rgrdng Kng Cnty clsd sls bng dwn 28% n prl, t wld b ntrstng t fnd t hm mny sllrs hv tld thr lwbll byrs t tk frggn hk wth thr slmbll ffrs.

hv trnd dwn 2 ffrs n My s fr frm wnnb hmwnrs tht r bck t thr hgh prcd 600 sq ft bxy bg nfstd rntls.

hv dvlpd rthr hgh dslk fr th crrnt wv f s clld “byrs”.

Byrs hv dvlpd nsty tttd tht sllrs mst sll t ny prc. Gt nws fr y’ll. Y wnt n? Nw s rl gd tm. Y wnn wt? Y r gng t py mr.

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Chck t th stck mrkt, hldng jst fn, nt tnkng.

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apparently you missed Ira’s first sentence.., which references an area 0 miles away from the current discussion.

Right now in the Seattle area, you can rent a million dollar+ home for 3000 dollars per month or less. A mortgage payment for this same house would be 6500-7000 per month

r,

nt tht y hd t trvl 3000 mls t n f th mst dnsly ppltd cts n th plnt n rdr t fnd rntr tht sn’t lsr.

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r, myb, y jst mssd th bttm, rntr.

ftr ll, f y wr bttm spttr, y wld b mlt mllnr n th stck nd rl stt mrkts, bt frm wht ndrstnd, y r rntr.

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Just looked up another house in my neighborhood in Sammamish (didn’t want to use my house in this public forum). It’s history:

2004 – $5042
2005 – $5123
2006 – $5159
2007 – $5159
2008 – $5416

This is a 2% annualized increase. Of course, I’m sure some of the other owners around me "female dog" about how expensive their taxes are. Sure, it’s expensive in absolute terms, but in my neighborhood it seems that taxes are getting CHEAPER, in real terms, when compared to everything else we’re spending money on.

I think property taxes on the Eastside are highly dependent on the city that you live in and how much they want to add to the King County tax for their own city purposes.

YMMV.

:) My previous landlord told me their property taxes went up too, so that’s why they were raising the rent by $100 a month (5% increase). Well, turns out that the tax had gone up – by $100 a YEAR. They just wanted to increase the rent and not be the “bad guy” in the story. If they had just told me that 5% was the increase due to market price, I wouldn’t have been so annoyed. I guess they figure that most renters don’t know you can look this stuff up.

I’m not saying that your landlord’s taxes have *not* gone up, but have they gone up more than inflation? I recommend you check it out for yourself on the place you live in. Zillow will give you a number of years of history, and then check out the King County Assessors for what the 2008 taxes are. Edumicate yourself, so you can find out if your landlord is making this "chocolate" up.

Using a specific example of a house that I used to own in Issaquah, here is the property tax history:

2004 – $3149
2005 – $3453
2006 – $3641
2007 – $3641
2008 – $3864

That’s a little over 5% a year increase for the last 4 years running, which is hardly stagnant, but hardly rampant increases either.

In the example above, the house is an 1800 sq ft house, 3 bedrooms, 2 bathrooms. Kinda a medium sized family home in Issaquah and right in the middle of the pack when it comes to price (about $500K right now I would guess). A family in this house would likely be in the 25% tax bracket and so the cost of those taxes would be about $240 a month.

People always "female dog" about how expensive their property taxes are, especially if they bought in the bubble during lax lending standards and don’t pay them as part of their mortgage payment, but instead get a bill for $2000 twice a year.

Different area, but until King county starts seeing some major income growth, there’s no good reason to believe that an upward trend in rents is sustainable.

My plan is to start seriously looking after seeing 20% decline, knowing that we will likely see 10-20% decline after I buy. I figure by then (hopefully next spring) the psychology (i.e. panic at falling prices) will be such that buyers, though not getting a bargain, will be able to extract considerable concessions, both monetary and otherwise. I don’t want to wait too long, however, because (on top of personal reasons) I expect that at some point the mortgage industry is going to come to their senses and start asking rates that are commensurate with their risk.

Its a nice chart. So mortgage to rent ratio in seattle is 1.55. Thats a lot. What is the magic number? Should one wait for 0.85 (to account for home owner dues, taxes ….) or 1.1+ to account for supply demand in Seattle because of Microsoft, Boeing etc…

http://www.economist.com/finance/displaystory.cfm?story_id=11333030

Calculated Risk critique:

http://calculatedrisk.blogspot.com/2008/05/economistcom-on-rents-and-house-prices.html

First, make sure you add in HOA and taxes/insurance to your calculations. I know that some of the newer condos have ridiculous $500+ HOA dues, which are only going to increase over time (probably significantly since they are all built as "chocolatey" as possible). Second, it does not make sense to buy when prices are dropping with no end in sight unless either you think its the bottom right now or that its so much cheaper to buy that the difference makes up for any loss in price. Right now you are still probably going to be paying 2x rent for an equivalent condo, maybe even more if you want to consider maintenance, transaction fees, etc. Wait until it becomes basically equivalent, and that you don’t think prices will drop that much more, before entering this market. Just remember that in deep housing busts, like Texas in the 80’s and everywhere in the 30’s, at the bottom there is a decent premium to _rent_ compared to buying the same place because its less risky. RE agents will tell you that “you can’t time the bottom, just buy right now, blah blah blah” which is crap. The run up in prices was intense starting in 2003. Once we bottom this market and things return to normal, prices will appreciate at a normal rate. At that time waiting until 6 months after the bottom is not a big deal, prices are not going to rocket shot to the moon again for another 30+ years (long enough for everyone to forget).

How much have these costs gone up? Where did you get this information from?

My landlord has told me his property taxes on our Bellevue home have gone up. He’s also griped about how expensive it is to get things fixed or replaced these days. He was appalled at the costs of fixing the drainage in the back-yard (i.e. heavy rains were leaking into the basement).

I also have colleagues who gripe about the price of contractors and property taxes in the East Side. There is plenty of anecdotal evidence that taxes have gone up in the last few years as well as the costs of labour for maintenance. Even the prices for lawn care have risen!

http://www.housingtracker.net/affordability/

Unfortunately they haven’t updated since Q3, 2007 but we are still way out-of-wack.

The difference is still high, historically speaking, and I’m pretty sure you will continue to see the difference decrease over the next year or two. Rents may decline or stagnate for short periods of time, but the overall trend long-term is up. So it’s a short term game. Rents will likely be lowest when there is a lot of inventory and housing is the worst. So this will continue to look like a bad time to buy. Ultimately you have to take the long term view, and eventually you’ll have to bite the bullet and get into the game. Now, however, is probably a little too early.

How much have these costs gone up? Where did you get this information from? Is this speculation, or do you have some information to back it up with. Not trying to be combative, but trying to figure out if this is actually true or not.

Rents will have to increase a LOT in the Eastside before they start becoming more expensive than owning. Things have gotten way out of whack over the last 15 years.

Also, don’t forget that home-owners face rising costs too. Property taxes and maintenance costs have been going up on the Eastisde quite a bit. It’s not as if home-ownership costs are static.

Lastly, keep in mind that we have seen this exact scenario play out in nearly every other market that was transitioning to the down-side. Rents always rise RIGHT at the top of the market, when rental inventory is taken away as landlords try to cash in with condo conversions and SFH sales. It is only after the downturn has picked up in earnest that many of these condos and SFHs come back on the “shadow” rental market that rents start to come down again.

The irony is that rising rents is a sure sign that housing prices are about to take a dive.

Also, in the even of a disaster, as a homeowner, you deal with it. As a renter, you can leave and find something else. (I’m still fixing stuff from a hurricane three years ago. Think: earthquakes, floods, freakish blizzards.)

So, looking for something at your level or above means you will pay even more than you do now when you consider the other costs of ownership. Factor in the extra costs, consider the benefits, too, then see how it works out for you.

It’s really nice to have your own place, I’ll admit, and not be at the whims of a landlord. But it comes with a lot of responsibility. It’s not just , “Call the landlord to fix it, ” anymore.

Mirtika

Meanwhile, yesterday I drove behind another WA plate (just about one a month in the past year) here in Central Florida. “Parkland Chevrolet in Tacoma” was the plate frame (and they look like the type that will fit right in here in FL!!!)

It’s not a major reason, its the only reason. Everything else is just greasing the skids.

Beautiful land scarred with McMansions and Starbucks! It really takes a lot to upset me and I’m not anything close to an environmentalist.

You are now. Sort of like how people suddenly become believers in constitutional rights when the police arrest them and accuse them of doing things they didn’t do.

Yes indeed.

Build on…

Is this the right time to buy a condo/town house if the mortgage payments are similar or few hundred dollars more than the rent I am paying?

It is interesting though if you drive right along the county line in Woodinville/Bothell how the houses within 5 blocks North include significantly more sprawling Mc Mansions than 5 blocks to the south. Zoning?

Is this why I’ve never met anyone that lives there? Are they stuck? Those poor people…

Snoqualmie ridge is a sad place. I have never understood the desire to live out of town quite a ways AND live right next door to someone in a bland suburb. I can understand wanting one of the two, but not both together – that just seems pointless.

The interesting thing about watching the market here is that it’s not as homogeneous as most people think. You’ve got the rampant McMansion overbuilding in the SW & SE parts of the county, condo conversions in Edmonds, craptastic row houses on the outskirts of Lake Stevens and Everett, all of the way up to the cul-de-sac developments in Arlington/Stanwood. Interestingly, all of the MLS areas of the county are seeing similar price and volume declines.

I don’t think property taxes really explain why people have been moving to Snohomish, it’s really more about affordability. Taxes are a little lower here but not as much as some on this board have suggested. Mostly the reason taxes appear higher in King is because the home values are higher. You take two homes the same price in both counties and taxes are different, but not enough to justify what it would now cost in gas to do the driving. However, houses have been cheaper than King and that is the attraction for most people. It also bears mentioning that Snohomish county is not just a bedroom community for King. We have a pretty strong job base here too and a lot of residents who also work in Snohomish county.

I agree with your assessment that Snoqualmie Ridge is an abomination. I drove out to the falls a few weeks ago with my family who was visiting from out of town and I literally wanted to start crying as a I drove through there. Sickening, really. Beautiful land scarred with McMansions and Starbucks! It really takes a lot to upset me and I’m not anything close to an environmentalist.