Seattle Bubble

• NWMLS: Prices and Sales Volume Down, Listings Up in July
• Puget Sound Counties June NWMLS Update
• NWMLS: Sales, Prices Bump Up Ever So Slightly in June
• NWMLS: Inventory Level, Sales UP, Prices Down
• What happens to listings?

Jump to the bottom to add your comment. ↓

132 responses so far ↓

• 1 mukoh // Jul 17, 2008 at 3:17 pm

  IMHO Banks have increased their extensions and refinancing to people who are on the edge of losing. Saw at least 120 bank headed properties in my particular target come back to sellers with new deeds, same bank, and or modification of loans.

• 2 deejayoh // Jul 17, 2008 at 3:23 pm

  Do you think people might have been trying to beat the change to reporting CDOM? I am not sure how that worked, but possibly people wanted to reset the clock?

  of course, we don’t seem to be seeing the listings coming back online now, so that probably puts a fork in that theory

• 3 [troll] // Jul 17, 2008 at 3:25 pm

  Vlntry sllrs r ls dlstng, why cmpt wth th dsprt sllrs?
  t shld rslt n mr blncd mrkt nd stbl t hghr prcs n th nr trm.

  Myb th bttm rlly ws n Jnry Fbrry 2008?

• 4 Lake Hills Renter // Jul 17, 2008 at 3:27 pm

  Maybe it’s sellers banding together to teach us reluctant buyers a lesson. Pull their houses off the market and make prices go up. That’ll teach us!

  At least, that’s the idea according to at least a few realtors.

• 5 [troll] // Jul 17, 2008 at 3:31 pm

  Lk Hlls Rntr,

  Fr cryng t ld t’s nt cnsprcy!

• 6 jon // Jul 17, 2008 at 3:35 pm

  My theory is that these are the houses that are STI and can’t be shown on MLS anymore, but they aren’t sold either.

• 7 james // Jul 17, 2008 at 3:39 pm

  As an agent, I know of several sellers that are tired of the current market. Most don’t have to sell, they’d just like to sell. Some are sick of “lowball” offers, some want to wait for a more favorable market. Some are on vacation and have given up on the idea of selling this year. You can’t force sellers to give away thier equity, even if it was only paper equity. The market is quite literally, dead. As a agent, we haven’t seen the bottom yet, and prices should continue to drop.

• 8 mukoh // Jul 17, 2008 at 3:39 pm

  Its also the FNMA guidelines up to $500k. Banks modifying loans to keep people afloat and modification of the same loan to FNMA guidelines instead of foreclosing it. For later sale to them backed by the good old printing press. It is back to 2001-2002 FNMA buying 90% of the loans. :)

  Strongest owners will get modified the weakest of the weak will have to go to the court house steps and run away from there.

• 9 AndyMiami // Jul 17, 2008 at 3:43 pm

  Rentersarelosers // Jul 17, 2008 at 3:25 pm

  Voluntary sellers are also delisting, why compete with the desperate sellers?
  It should result in a more balanced market and stable to higher prices in the near term.

  Maybe the bottom really was in January February 2008?

  GET OFF DRUGS…whatever you are on. And if you are not on drugs, then you should try them…

• 10 Captain Kirkland // Jul 17, 2008 at 3:46 pm

  RAL-

  I find you quite entertaining. Your constant bottom call is hilarious.

  As for the delistings, I’ve known a few people that have delisted so ‘they don’t have to sell when the market is bad’. Presumably, it will be a better time to sell after their house has dropped 40% in value.

  Great chart Tim.

• 11 Garth // Jul 17, 2008 at 3:46 pm

  The CDOM / STI change is the best guess I think.

  A neighbor told me they sold their house about 3 months ago, it showed STI for a while, then MLS made changes and it looked as though it never was listed and then this week it showed up as sold and the new people moved in.

• 12 The Tim // Jul 17, 2008 at 3:49 pm

  jon @ 6:

  My theory is that these are the houses that are STI and can’t be shown on MLS anymore, but they aren’t sold either.

  Wouldn’t STI listings be counted as pending sales? Perhaps an agent can clear this up for us.

• 13 Thomas B. // Jul 17, 2008 at 3:57 pm

  Interesting. I’ve noticed a new townhouse development that was completed about a month ago add signs stating that they were for lease. I also noticed an apartment to condo conversion add signs that they were leasing (those have been on the market for over a year now). I think a lot of developers realize the soft market and want to get some money out of their projects. I was actually thinking about moving into one of the townhomes.

• 14 TheHulk // Jul 17, 2008 at 3:59 pm

  RAL is getting more and more delusional by the day. Its outright funny and kinda sad at the same time.

  That said, put yourself in the RALs shoes….

  Realtor : comps in your area sold for 300K
  RAL: My house is so much better maintained, plus my lovely upgrades! Didn’t you see my lovely basement. Mom! didn’t you show him the basement. It must be at least worth 550K.
  Realtor: (Aw shucks this person is such an idiot, but I need the bloody 3% for my OWN mortgage) Yes sir, your house is indeed lovely but this is a tough market.
  RAL: (Sticks fingers in his ears lalalalalalalala)
  Realtor: Yes sir you are completely right. We must list it at 550K
  … 2 months later, no offers
  Realtor: Maybe we should bring down the price a tad. How about 500K.
  RAL: Are you nuts? I wont go any lower than 530K!!
  Realtor: (sighs) lets go with 530K
  RAL: (Surfs the web finds seattlebubble and rants a little)
  … 2 months later no offers except one for 250K which would make RAL 50K underwater.
  RAL: (Desperately watches the news for anything remotely positive, as soon as he sees something comes and rants here.)
  … Yesterday:
  Realtor: The market is really tanking. We haven’t received any offers at all. I even hinted at higher interest rates to the 5 people who came to see your house (hides a smirk since 3 of them were looking for directions to the much nicer house a couple of miles away). Maybe we should relist at 200K in a couple of months.
  RAL: (banging away at his keyboard, barely looking at his agent, ranting away on Seattlebubble) Yeah yeah whatever. (RAL starts shouting “RentersAreLosers, RentersAreLosers…)
  Realtor: (ooooookkkkk) slowly steps out and swears to god never to come back to RALs dump again.

  Very much tongue in cheek people, very much tongue in cheek.

• 15 [troll] // Jul 17, 2008 at 4:00 pm

  fnd y qt ntrtnng. Yr cnstnt bttm cll s hlrs.
  GT FF DRGS…whtvr y r n. nd f y r nt n drgs, thn y shld try thm
  ………….

  Y r bnch f cndscndng hls.
  Yr pnns r vld whl ppsng pnns r nt.

  Gld m ff th mrkt s dn’t hv t dl wth y mmtr dchbgs.

• 16 jon // Jul 17, 2008 at 4:01 pm

  “Wouldn’t STI listings be counted as pending sales? ”

  I’m not sure, but STI has not yet reached the Purchase and Sale agreement. I think after P&S it is a pending sale.

• 17 [troll] // Jul 17, 2008 at 4:03 pm

  ThHlk

  Wll dn. Brv.
  Wrng n ll cnts bt wh crs.

• 18 AndyMiami // Jul 17, 2008 at 4:04 pm

  I find you quite entertaining. Your constant bottom call is hilarious.
  GET OFF DRUGS…whatever you are on. And if you are not on drugs, then you should try them
  ………….

  You are a bunch of condescending a holes.
  Your opinions are valid while opposing opinions are not.

  So, does that mean you are on drugs..

• 19 mukoh // Jul 17, 2008 at 4:05 pm

  Jon,
  STI is already with signed around and mutually accepted P&S agreement in escrow.

• 20 laxtosnoco // Jul 17, 2008 at 4:08 pm

  Interesting post. I think you’re probably onto something about people who don’t have to sell taking their houses off the market.

  Still, given the much higher inventory and slow sales, shouldn’t we expect to see more de-listings? Many listing agreements expire after a set period of time (ex. 90 days), so by default you should see more de-listings as the agreements expire. Also, it would be interesting to see if those expireds quickly pop back on the market with a new agent/price. Someone with access to the MLS could sample a batch of de-listings to see what happens to them a few weeks later.

• 21 The Tim // Jul 17, 2008 at 4:11 pm

  Still, given the much higher inventory and slow sales, shouldn’t we expect to see more de-listings?

  I certainly think we would, but what was interesting to me was the dramatic jump from May to June. Inventory has been high and sales slow all year, but June in particular saw a big bump in “delisted” homes.

• 22 deejayoh // Jul 17, 2008 at 4:11 pm

  Glad I am off the market so I don’t have to deal with you immature douchebags.

  Why did you delist your house if the bottom was Jan/Feb?

• 23 Scotsman // Jul 17, 2008 at 4:12 pm

  What!?! RAL delisted! Sell now, or own it forever!

  I think those that don’t absolutely need to sell are waiting. After the election, when hope and change are in the air, the Spring bounce of 2009 will let them sell at a significant profit over current prices. Or maybe not. Maybe by then Seattle’s market will look more like CA. and AZ.

  In my area, several homes have de-listed, and are now for sale by owner. I guess every 6% one can save helps. But there are still no sales.

• 24 Sandy // Jul 17, 2008 at 4:21 pm

  I have to second the opinion of those who think “voluntary” sellers are pulling their homes. We’ve seen some of that in my area and if you put yourself in these sellers shoes for a minute, it will make sense. In Snohomish county market times have been extending. Now we have had a lot of sellers that have been on the market for 6 months or more. That’s a long time to have your home on the market. If you are on the market thinking you’re going to get some great price for your home, it might be worth it to put up with the hassle. But if you have now had 6 months to watch your house not only NOT sell, but to have to keep dropping prices to stay competitve, then you have to be pretty motivated to stick with it.

  So yeah, I think some of those folks are giving up. I think a lot of people were hoping for a spring bounce that didn’t materialize.

• 25 Everett_Tom // Jul 17, 2008 at 4:22 pm

  Glad I am off the market so I don’t have to deal with you immature douchebags.

  Actually the easiest way to avoid dealing with us… is not to come to this site…

• 26 Please Buy My House, Idiot Renters! // Jul 17, 2008 at 4:24 pm

  “What!?! RAL delisted! Sell now, or own it forever!”

  "golly", and I was just about to make an offer on his house…

• 27 TC // Jul 17, 2008 at 4:36 pm

  If the number of listings went down in 1 month that may be because people took their home off the market.

  That is probably a good thing. Hopefully it will help the market stablize.

  But I don’t understand if people don’t have to sell why do they list their list and ask such a high price?

• 28 Garth // Jul 17, 2008 at 4:37 pm

  Any time you alter the meaning / remove an option from a database that is used for historical reporting like this, there is bound to be some sudden impact affecting the report.

• 29 deejayoh // Jul 17, 2008 at 4:43 pm

  Good point Garth. Methodology change is probably a factor - especially since “delists” is the number that is backed into.

  Interesting if you look at San Diego, even though inventory growth has slowed/stopped - price drops are still accelerating.
  Inventory below is from BMIT, prices from Case Shiller

  YoY Change | Inventory | Price
  Jan-07 | 5.9% | -4.2%
  Feb-07 | 1.6% | -5.0%
  Mar-07 | 2.1% | -6.0%
  Apr-07 | 3.3% | -6.7%
  May-07 | 0.0% | -7.0%
  Jun-07 | -1.4% | -7.3%
  Jul-07 | -3.6% | -7.8%
  Aug-07 | 0.6% | -8.3%
  Sep-07 | 4.1% | -9.6%
  Oct-07 | 5.1% | -11.1%
  Nov-07 | 12.1% | -13.4%
  Dec-07 | 18.0% | -15.0%
  Jan-08 | 20.3% | -16.7%
  Feb-08 | 18.8% | -19.2%
  Mar-08 | 13.9% | -20.5%
  Apr-08 | 5.6% | -22.4%
  May-08 | 0.3% | na
  Jun-08 | -7.6% | na

• 30 Jillayne Schlicke // Jul 17, 2008 at 4:44 pm

  I would like to see an overlay of homes that were listed as “short sale” or “preforeclosure” that were “taken off the market.”

  Stale? Sure, there are some sellers who are giving up. How many others went to auction in June?

• 31 Joel // Jul 17, 2008 at 4:46 pm

  But I don’t understand if people don’t have to sell why do they list their list and ask such a high price?

  Fishing like that was part of the bubble mentality and still persists to some degree as sellers are slow to learn how the market has changed. During the bubble people would see their neighbors selling their house for some ridiculous price and think “Gee, I don’t really need or want to move, but if I could $X dollars (where X is some really high amount) for my place I could move up/buy a boat/construct a 20 ft. tall murder-bot.” So they would list at their way high price and because of the housing bubble a good lot of them got their asking price. Some people just haven’t gotten the memo that the market has shifted.

• 32 Everett_Tom // Jul 17, 2008 at 4:48 pm

  TC,

  When my wife and I were out looking (last year ), we met a few of the sellers. Many of them wanted a little more room (new baby, new dog, looking to garden more), or would like to live closer to X (where X was a child’s school, someones work, etc..). They didn’t have to move, but it would “be nice”.

  From what he said before, I think RAL is like that. He doesn’t have to move, but wants to retire somewhere other then where he currently lives..

• 33 Joel // Jul 17, 2008 at 4:49 pm

  Oh I forgot to ask: I thought that the whole STI change was only for sites mirroring the NWMLS data like Redfin and ZipRealty and wouldn’t change the way the actual MLS worked. Is this right or did I read it wrong?

• 34 Lake Hills Renter // Jul 17, 2008 at 4:52 pm

  RAL: You are a bunch of condescending a holes.

  My god, that has to be the most ironic statement i’ve seen in a *very* long time.

• 35 rose-colored-coolaid // Jul 17, 2008 at 4:57 pm

  Rentersarelosers

  You are a bunch of condescending a holes.
  Your opinions are valid while opposing opinions are not.

  Glad I am off the market so I don’t have to deal with you immature douchebags.

  Some of the comments about you have been a little harsh, but come on. You picked a name that is certain to offend the 35% of the population who rent their home. No matter how awful a thing someone says to you, they are only insulting one person. So grow a little skin maybe.

• 36 Alan // Jul 17, 2008 at 5:04 pm

  RAL,

  What is your thinking on when you will relist your house?

• 37 Greg Perry // Jul 17, 2008 at 5:08 pm

  On the Eastside inventory absorbed at the highest level in 4 years, dropping from 8.3 months to 6.5 months.

  In June the MLS changed accounting status by eliminating ACTIVE STI by changing it to PENDING STI. I believe that all Pending status’ are now counted as PENDINGS. This could account for a dramatic drop in ACTIVES and rise in PENDINGS.

  I think in the long run, this will be a good move. Personally, I didn’t like ACTIVE STI and believe when they sell they should go to PENDING.

  I believe the playing field shifted slightly and will take a few months to balance out.

  That being said, anecdotally, I have seen a spike in activity on the Eastside. In May, before the MLS change, Redmond’s PENDING count was above last year’s PENDINGS. We’ve sold a lot of listings out of our office in the last month. Personally, I have 5 in escrow. I had a good first quarter, a soft 2nd quarter, and activity is currently good. The toughest segment on the Eastside is the high end.

• 38 Greg Perry // Jul 17, 2008 at 5:17 pm

  I don’t know. I always thought losers were someone who bullied others and called them names.

  Funny.

  So much emotion here around renting and home ownerships. It’s really somewhat a symbiotic relationship. Renters need landlords……landlords need renters.

  Anyone who needs to make themselves bigger by putting someone else down isn’t really very big at all…….

• 39 Greg Perry // Jul 17, 2008 at 5:26 pm

  Jillayne, “How many others went to auction in June?”

  In my main tracking area (Eastside), this would a very few. Other areas with higher AR’s, especially influeneced by new construction plats, would likely have a higher number. I don’t see any practical way to track them, however.

• 40 EconE // Jul 17, 2008 at 5:38 pm

  Don’t worry RAL.

  When you relist your home, I’m sure you’ll still get enough for it to be able to get a nice beachfront place…

  In Haiti.

• 41 Richie // Jul 17, 2008 at 5:59 pm

  I was planning to buy a nice SFH in early June. I looked 15 houses ranging from $450,000 to $920,000 in 98103 and 98115. Believe me all those house listed under $595,000 were ugly or in heavy traffic areas. I have waited a month to see the market condition. I am surprised to see that none of them has been sold. Two were off the market. A few drop $10,000 to $50,000. My personal experience confirmed the corporeity of the author.

  I am going to wait four to six months before I make a decision.

• 42 mike2 // Jul 17, 2008 at 6:25 pm

  Interesting. This is what happened right before the bloodbath started in DC Metro. Asking prices were relatively stable - down slightly. The following season sellers got motivated and REO inventory started to rise sharply.

  Can’t happen in Seattle.

• 43 Mark // Jul 17, 2008 at 6:34 pm

  Greg Perry,
  What is your sense of what the mortgage industry is like? How hard is it for potential buyers to obtain loans? What kind of down payments are the lenders looking for? How about credit scores? Are you seeing many or any people being kept out of the markets that would like to buy for any of the above reasons or any other reason? I’ve been told by a friend that is looking to buy a home that Bank of America told them King County is now considered a declining market. Have you heard this also? TIA

• 44 [troll] // Jul 17, 2008 at 6:41 pm

  ’v bn tld by frnd tht s lkng t by hm tht Bnk f mrc tld thm Kng Cnty s nw cnsdrd dclnng mrkt. Hv y hrd ths ls?

  THT S LD F CRP. TH TYP F RMR MNGRNG XPCT T TH STTL BBBLBRN ST. BSLTLY FLS.
  ……………………………

  cn // Jl 17, 2008 t 5:38 pm

  Dn’t wrry RL.

  Whn y rlst yr hm, ’m sr y’ll stll gt ngh fr t t b bl t gt nc bchfrnt plc…

  n Ht.

  THNKS FR BNG TR BBBLBRN.

  GD LCK T Y T.

• 45 obama08 // Jul 17, 2008 at 6:43 pm

  I have two friends who were trying to sell their houses during the typical Mar-May period. They are looking to relocate within King County, not moving outside of the area. They were not in a position where they were forced to sell, foreclosure, jobless, etc. But they didn’t have any luck selling their place during the spring so they figured they would just pull it off the market for now. Their rational was, it’s summertime and they just want to chill and not have to deal with keeping the house in tip top shape all the time and being bothered by having to show the place. It’s summertime and people want to have fun, so those numbers don’t surprise me. If they don’t have to sell that is. My guess is that most of these however, including my friends, will eventually be back on the market later this year or next. Hope that anecdote is helpful y’all.

• 46 Greg Perry // Jul 17, 2008 at 6:49 pm

  “Can’t happen in Seattle.”

  MIke 2, you have a point. One of the key indicators to watch is inventory absorption (supply /demand AR’s). As inventory builds, naturally prices should fall, however there as a “lag”. Prices are slower to fall at first and then they fall at an increasingly faster rate, if the AR’s continue to build, or remain flat with high months of inventory.

  On the other hand, as inventory becomes tight, prices tend to rise at a faster rate than they fall because of the competition factor.

  Of course that scenario could happen in Seattle, however, at this point I’m not all that uncomfortable with AR’s in core areas in price ranges $700,000 and below. More likely, a bloodbath may come in the high end.

  Outlying areas with high AR’s will struggle until the excess inventory is absorbed. New construction absorption particularly will be important to watch.

  We cannot just look at supply numbers to understand a market.

• 47 RAL=Choad // Jul 17, 2008 at 7:03 pm

  Cool, he’s yelling. Now maybe he’ll just go back to the PI’s blog where he belongs.

  The Tim, keep on keepin on.

• 48 Greg Perry // Jul 17, 2008 at 7:07 pm

  Mark,
  It’s absolutely true that buyers again have to qualify for their loans. For me the mortgage climate is uncannily similar to pre 2000 conditions before the financial institutions lost all risk aversion.

  Several buyers this year have come in with substantial down payments. Those who don’t have the case are going FHA which requires 3% down, but will allow gifts. Credit scoring is affecting the end interest rate.

  I’ve completed 3 buyer transactions this month and the lending process was very smooth.

  But, you know I never did have fringe buyers. My buyer pool has always been solid. Over the years, by choice, I served only a few hand picked investors.

  BOA is not a big factor in local mortgages. I don’t have specifics, but most financial institutions consider the tri-county area as a region. For instance, Pierce and Snohomish certainly affected what Eastsiders could get for raised FHA loan limits.

  A mortgage professional like Rhonda could fill in the details.

• 49 [troll] // Jul 17, 2008 at 7:12 pm

  RL=Chd // Jl 17, 2008 t 7:03 pm

  Cl, h’s yllng. Nw myb h’ll jst g bck t th P’s blg whr h blngs.

  Th Tm, kp n kpn n.
  …..

  ws rspndng t 2 psts, t vd cnfsn sd cps. ws NT yllng.
  By th wy wht’s wth yr hndl? Dnglbrry sms mr lk y.

• 50 david losh // Jul 17, 2008 at 7:35 pm

  My impression is that agents are less inclined to take over priced listings today.
  Listing agents don’t make money if a property doesn’t sell. Price reductions haven’t been working.
  We are in a declining Real Estate market. You don’t need BOA to tell you that.
  Prices have gone down significantly these past couple of months. I’ve seen a lot of houses in the low $300K range. You just didn’t see that a year ago.
  I also agree about the condition of the properties on the market, they look like crap. With lower prices sellers have the take it or leave it attitude to presentation. They are listing for less money so they figure the buyer should pay for the condition.

• 51 david losh // Jul 17, 2008 at 7:42 pm

  I was worried there for a couple of days, but Renters are Losers is back!
  This is how it works. You get upset, everybody piles on, the comment count goes up. and Tim has a more viable format than any other blog out there.
  The more viable the format the more attractive to advertisers, media, and blog links. Keep up the good work.

• 52 Mark // Jul 17, 2008 at 7:51 pm

  Thanks Greg and David, I was wondering about the declining market thing in relation to what kind of down payment they might require.

• 53 Rhonda Porter // Jul 17, 2008 at 7:52 pm

  Mark, I’ve found that FHA has really become a very popular mortgage right now…especially since the release of DU 7.0 which has much tougher guidelines than before.

  Even though FHA will allow as low as a 3% down payment, we are going to be seeing 20% down FHA mortgages. For one, FHA does not slam borrowers with a higher rate if their mid credit score is 719 or lower.

  Sellers would be wise to consider FHA buyers…even if their home is priced over $600k since the FHA limit for King County is currently $567,500.

• 54 budbrad // Jul 17, 2008 at 7:52 pm

  On Microsoft’s conference call today, they reported significant exposure to……..losses in mortgage-backed securities. Seems some of that huge chunk of cash in their register went into CDOs, which may be written down.

  Like (some) people have been saying… this mortgage crap is EVERYWHERE.

• 55 Mark // Jul 17, 2008 at 7:57 pm

  THAT IS A LOAD OF CRAP. THE TYPE OF RUMOR MONGERING I EXPECT AT THE SEATTLE BUBBLEBRAIN SITE. ABSOLUTELY FALSE.
  …………………………..

  Cool, now your yelling!
  And how would you know it’s false? Other than your assertion that it’s false!

  Here’s a good one that you posted last week, RAL:
  “I enjoy the freedom of stock trading, no inventory, no whiney assed employess, no problems.”

  Anyone surprised that you can’t get along with “whiney assed employess”, and had to escape into the privacy of your home to trade stocks online?

  You’re a nut job RAL! It isn’t everyone else, it’s you!

• 56 Rhonda Porter // Jul 17, 2008 at 7:57 pm

  I’m just checking out my pipeline…right now, 50% of my business is FHA, including jumbo-FHA with LTVs (for FHA) from 90-97%. This is a significant increase for me and I’m glad I “cut my teeth” on FHA/VA loans.

• 57 Sniglet // Jul 17, 2008 at 8:02 pm

  I’ve been told by a friend that is looking to buy a home that Bank of America told them King County is now considered a declining market. Have you heard this also?

  This is absolutely true. Rhonda Porter (a well known mortgage broker-blogger in our area) has confirmed this. In fact, I believe WaMu has a similar policy towards King County.

• 58 Rhonda Porter // Jul 17, 2008 at 8:11 pm

  Gee Sniglet…thanks. I think WaMu and BOA prefer the term “soft” vs. declining. It’s way flufflier.

• 59 economist // Jul 17, 2008 at 8:14 pm

  Many of them wanted a little more room (new baby, new dog, looking to garden more), or would like to live closer to X (where X was a child’s school, someones work, etc..). They didn’t have to move, but it would “be nice”.

  That means that if they take the house off the market, that’s one less seller and one less buyer, so it makes no difference.

• 60 Rhonda Porter // Jul 17, 2008 at 8:14 pm

  Add Wells Fargo to the list too.

• 61 Greg Perry // Jul 17, 2008 at 8:17 pm

  Thanks Rhonda

  I always appreciate your contribution!

• 62 [troll] // Jul 17, 2008 at 8:21 pm

  Mrk,
  nd hw wld y knw t’s fls? thr thn yr ssrtn tht t’s fls!
  …………

  Dd y try skng Bnk f mrc?
  Hll n, y wld rthr b cndscndng &qt;chclt&qt; twrds m.

  dd tlk t Bnk f mrc.
  D yr hmwrk ‘ll by.

• 63 Scotsman // Jul 17, 2008 at 8:36 pm

  RAL- get your home back on the market, take what you can get, and get out of town! Retirement calls, and you’re gonna haave a heart attack if you’re still here next spring when the sh$t is all over the fan. Plus, the rain will be back in a couple of months, and you know how that goes…. Love ya baby!

• 64 [troll] // Jul 17, 2008 at 8:36 pm

  Mrk
  nyn srprsd tht y cn’t gt lng wth “whny ssd mplyss”, nd hd t scp nt th prvcy f yr hm t trd stcks nln?
  …………….

  ftr 35 yrs f sprvsng yng knw t ll’s lk y gt trd f bbysttng.
  N mr whny ssd mplys.

  Thnks fr brngng tht p gn.
  pprct yr dlgnc.

• 65 [troll] // Jul 17, 2008 at 8:42 pm

  RL- gt yr hm bck n th mrkt, tk wht y cn gt, nd gt t f twn! Rtrmnt clls, nd y’r gnn hv hrt ttck f y’r stll hr nxt sprng whn th sh$t s ll vr th fn. Pls, th rn wll b bck n cpl f mnths, nd y knw hw tht gs…. Lv y bby!
  ………..

  RFLM! Thnks mn. t wll b jst fn, n hrt ttcks hr, hv prctclly n mrtgg, cn py t ff wth th blls n my wllt.

  Th rn….h th rn…….. nvr mnd t’s smmr nw nd t’s grgs t thr. Wll dl wth ths mv t th sn stff n “rnr” tms (jst rnd th crnr.)

  Y ll wld mss m f lft :-)

• 66 mikal // Jul 17, 2008 at 8:46 pm

  Harley is right about the lack of tolerance to others opinion. It is fun to see how excited RAL gets alot of you. What a bunch of dorks.

• 67 magnolia44 // Jul 17, 2008 at 8:49 pm

  something to be said for not giving up..look at the donation button on the site..Tim refuses to give in like many sellers… he might reach his goal, he might not. What an interesting irony how many months has it been?

• 68 Yaoyao // Jul 17, 2008 at 8:59 pm

  Rhonda Porter // Jul 17, 2008 at 7:57 pm

  I’m just checking out my pipeline…right now, 50% of my business is FHA, including jumbo-FHA with LTVs (for FHA) from 90-97%. This is a significant increase for me and I’m glad I “cut my teeth” on FHA/VA loans.

  ==========================
  97% jumbo loans? When will FHA need taxpayer bailout? Bastards.

• 69 Rhonda Porter // Jul 17, 2008 at 9:03 pm

  Yaoyao, FHA jumbos are really tough to qualify for since the payments are higher with upfront mortgage insurance and monthly mortgage insurance. In fact, all FHA mortgages have mortgage insurance–even if you’re putting 50% down and the mortgage insurance remains for a minimum of 5 years unless the home owner refinances out of FHA.

  Just this week, FHA modified the mortgage insurance to be “risk based” so those with higher credit scores and more down payment are rewarded, those with lower credit scores and less skin in the game have to pay slightly more.

• 70 Rhonda Porter // Jul 17, 2008 at 9:04 pm

  Greg, thanks for thinking of me.

• 71 Sniglet // Jul 17, 2008 at 9:23 pm

  Rhonda,

  What is happening with mortgage insurance these days? I keep hearing horror stories about how insurers are raising rates and black-balling vast regions of the country. Is tightening of mortgage insurance having any impact locally, or is the Seattle area considered “healthy” by insurers, and therefore exempt from their tightening elsewhere?

• 72 Mark // Jul 17, 2008 at 9:27 pm

  Mark,
  And how would you know it’s false? Other than your assertion that it’s false!
  …………

  Did you try asking Bank of America?
  Hell no, you would rather be a condescending "chocolate" towards me.

  I did talk to Bank of America.
  Do your homework ‘lil boy.

  RAL

  I feel like I’m trapped in some sort of Abbott & Costello routine with you.
  I asked Greg if he had heard Bank of America considered King County a declining market.
  You blast back that it’s a load of crap spread by the bubblebrains.
  I ask how you know it’s a load of crap.
  You reply that you have asked Bank of America, and tell me to do my homework.
  It looks like you and I asked the exact same question - and you blast me for it.

  Thats why people act like a condescending "chocolate" towards you.
  It’s you RAL, not everyone else!

• 73 Everett_Tom // Jul 17, 2008 at 9:37 pm

  Many of them wanted a little more room (new baby, new dog, looking to garden more), or would like to live closer to X (where X was a child’s school, someones work, etc..). They didn’t have to move, but it would “be nice”.

  That means that if they take the house off the market, that’s one less seller and one less buyer, so it makes no difference.

  Yea, except that I suspect the buyer who is left is in a lower price range, due to the lack of “move up equity” those who don’t have were looking to get..

• 74 [troll] // Jul 17, 2008 at 9:41 pm

  N Mrk, y sd:
  nd hw wld y knw t’s fls? thr thn yr ssrtn tht t’s fls!
  ……….

  Y ddn’t thnk frst, tht hd lrdy vrfd my nf.
  Y mpld tht t ws jst my ssrtn tht t ws fls.

  s nglsh thrd lngg fr y? frth? r r y jst “chld lft bhnd”?

• 75 jesse // Jul 17, 2008 at 9:52 pm

  Agree with obama08. It’s a pain in the @ss to keep a property staged. We’ll see massive pressure in the fall when WaMu and all the others stop the paycheques. Anyone who thinks that high inventory causes lower prices is a fool. The destination is undisputed; inventory only influences how fast prices correct.

  I love the comment above. “it will be a better time to sell after their house has dropped 40% in value.” LOL so true.

• 76 patient // Jul 17, 2008 at 10:05 pm

  Great post The Tim! When analyzed like this it shows that in this scenario the shrinking inventory is yet another sign of the ever softening market not a strengtening one as you could be fooled to believe.

  I talked to a guy at work who de-listed his SFH on the Eastside ($600k range) after zero offers in six months. He is going to re-model the bathrooms to try raise the appeal and re-list in Sep. even though the home is in nice condition and less than 10y old. My guess is that he will have to eat the re-modeling costs and at least another 5% off the price for what he could have sold it for this spring if he lowered the price to where he got offers. I think he might be close the watermark due to a heloc and tries anything else than a price below the loan amount.

• 77 darth_z // Jul 17, 2008 at 10:15 pm

  Chill out people. RAL is suffering of what’s called HOMALLUCINATION Syndrome!!! You guys should have pity on him.

• 78 Rhonda Porter // Jul 17, 2008 at 10:26 pm

  Sniglet, MI rates are on the rise…horror stories might be a stretch. I was comparing a FHA mortgage to conforming w/mi and conforming has the better payment…we’ll see if we can get it approved conforming or if we have to switch to FHA (payment difference was small–but who doesn’t want a lower payment)

• 79 what goes up comes down // Jul 17, 2008 at 10:30 pm

  Greg from what you write it seems everything is peaches and cream. I guess I don’t get that — unemployment going up, foreclosures going up, inflation going up?

  I mean last year people — mostly in RE — were saying we would never be where we are now — and either they were flat out liars or idiots — any market whatever it is returns to the trend line — that is why there is a trend line.

• 80 Mark // Jul 17, 2008 at 10:36 pm

  RAL,

  I directly asked a real estate professional if he had heard that BoA considered King County a declining real estate market. That was enough to get you foaming at the mouth again. I responded by asking how you knew that was not true, other than by your own assertion. Your response was that you had asked the same question of BoA and advised me to do my homework.

  Now, once again, you and I asked the exact same question, you assert that you asked BoA, and I asked someone whom I believe to be a competent real estate professional. When I asked the question though, you became unhinged.

  Now which part of that don’t you understand? Tard!

• 81 economist // Jul 17, 2008 at 10:42 pm

  Yea, except that I suspect the buyer who is left is in a lower price range,

  No, the buyer who left is the same person who gave up selling the house.

• 82 Rhonda Porter // Jul 17, 2008 at 10:46 pm

  what comes up goes down…this time last year, my business came to a halt and I began to notice underwriting issues early in 2007… I was always concerned about the crappy mortgages lenders (like me) could do. “last year” I wouldn’t say peaches and cream. I doubt Greg would either.

• 83 Yaoyao // Jul 17, 2008 at 10:52 pm

  Rhonda,
  Could you lay out the cost of a guy getting a 97% FHA mortage? What is his upfront cost? How much skin does he really have in this game? If the market tanks another 10%, how much motivation he has to walk?

  Then I’d know whether or not FHA will end up lile Fannie/Freddie, w/ potential trillion dollar cost. Your number that 50% of your loans are FHA really scares me. Of course, maybe the portion of FHA loans in the entire current market may be much smaller.

  It’s kind of funny and sad to see how Fannie/Freddie were supposed to save the market and then need saving themselves. How do I really know if FHA is in the same bucket?

  Thank you for your professional perspective.

• 84 Rhonda Porter // Jul 17, 2008 at 11:08 pm

  Yaoyo, FHA only requires a 3% investment from the buyer (3% of the sales price). The seller can contribute up to 6% of the closing costs and prepaids.

  I don’t see Fannie or Freddie saving the markets. And FHA won’t pick up everything either.

  I did factor in how many transactions I can’t do right now…I’m turning away more people than I’m getting approved.

• 85 Yaoyao // Jul 17, 2008 at 11:17 pm

  Rhonda,

  Earlier in the year when conforming jumbos were approved, at the time the Congress expected Fannie/Freddie to pick up the loans and securitize them(thus saving the market), no?

  I’m not quite sure about the difference between FHA vs Fannie/Freddie. Is FHA not leveraged that its loans have to fit in a budget?

  From what you see, how much has loan volume dropped this year vs last year? If the dropoff is sharper than the sales volume drop, I expect the difference is people w/ cash buying houses.

  Thanks again. Your perspective is very informative.

• 86 Yaoyao // Jul 17, 2008 at 11:21 pm

  Reading up on FHA:
  http://en.wikipedia.org/wiki/Federal_Housing_Administration

  “In 1965, the Federal Housing Administration became part of the Department of Housing and Urban Development (HUD). Since 1934, the FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages. Currently, the FHA has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.[1] The Federal Housing Administration is the only government agency that is completely self-funded. It operates solely from its own income and comes at no cost to taxpayers. This department spurs economic growth in the form of home and community development.

  During budget planning for 2008 HUD had been projecting $143,000,000 budget shortfall stemming from the FHA program. This is the first time in three decades HUD had made a request to Congress for a taxpayer subsidy. Even though FHA is statutorily required to be budget neutral, the GAO is projecting taxpayer funded subsidies of half a billion dollars over the next three years, if no changes are made to the FHA program.”

  I think that answers my question.

• 87 Greg Perry // Jul 17, 2008 at 11:22 pm

  WGUMCD,
  If you follow my postings on various blogs, including my own, http://www.425realty.com, you’ll see that I am a market realist.

  On 10/23, I wrote this on the 3rd quarter 2007 market changes. To date I know of no other local RE professional that called this: http://blog.seattlepi.nwsource.com/realestate/archives/124285.asp

  On 1/21, I encouraged Sellers not to take a “Spring Mark Up”. Others called out for other ideas.
  http://blog.seattlepi.nwsource.com/realestate/archives/129941.asp

  In April I wrote a piece on a study that I did on Bellevue 530. This study showed the relationships between OLP (original list price) LP (list price) and SP (sales price). This showed the result of Sellers trying to take the spring mark up.

  http://www.workingforyou.typepad.com//realestate/2008/04/its-finally-cle.html

  and the 2nd part

  http://www.workingforyou.typepad.com//realestate/2008/04/nwmls-area-530.html

  On June 2, I wrote this piece about “Chasing the market down” I don’t think any other RE professional has come close to approaching this subject.: http://blog.seattlepi.nwsource.com/realestate/archives/140217.asp

  And many, many posts and comments on the proper use of absorption rates in analyzing markets.

  A common myth and misconception is that there is only one market. The real market for a buyer or a seller depends on location, price, and even house style, and can be quantified by absorption.

  So no, it’s not rosy. Some areas and price ranges are holding up better than others. Some areas and price ranges are very challenged.

  Thank you for asking the question. I detecting sincerity in it. This thread started as a very interesting topic and degenerated into a petty school yard name calling mess.

  If you take the time to read and study some of these studies and conclusions, at the very least, they’ll give you some food for thought, whether you agree with them or not.

• 88 shawn // Jul 17, 2008 at 11:55 pm

  RAL, no one can damage your reputation to the extent that you do to yourself. What you clearly miss is that it is not your message we don’t like, but your delivery. RAL if you want to argue with intellectuals then learn the art of arguing, or at least become self aware.

• 89 Buceri // Jul 18, 2008 at 4:46 am

  We touched on this a few months ago when inventory “highs” were discussed.

  Indeed, there was going to be a point where the “voluntary” sellers were going to give up, leaving the “must sell” out there. It starting to play out.

  And as far as pricing, there is no “leveling”. Entry level means entry level and a $250K-$300K loan is not “entry level”. I know; in Seattle we don’t know any different; but that is changing. My daily e-mails from Redfin and Zip show a ton of “reduced price”.

  ………………………………………………………………….

  Now for the morning ritual - open Yahoo Finance and read the headline that confirms the economy is recovering, and as RAL claims, the bottom was in Jan-Feb!!!!!

  “Citigroup reports 2Q loss of $2.5B as more consumers fail to make their loan payments”

  NEW YORK (AP) — Citigroup says it posted a $2.5 billion loss and laid off more employees in the second quarter as it struggled with surging loan defaults.

• 90 economist // Jul 18, 2008 at 5:02 am

  “Yea, except that I suspect the buyer who is left is in a lower price range,”

  No, the buyer who left is the same person who gave up selling the house.

  Wait I minute, I misunderstood you. “Left” vs “is left”. :-)

  The point is that if someone who pulls their house off the market was going to buy a similarly priced property, it makes no difference because he’s just playing musical houses. His house won’t be sold but he won’t be buying either.

  What makes a difference to the market is when someone changes their exposure. That is, moving from a renter to an owner-occupier (or vice versa), or up- or downsizing. Or buying or selling an investment property.

• 91 TC // Jul 18, 2008 at 6:18 am

  Buceri,

  I think that entry level is different to each person. It depends on their situation and what they have for a down payment.

  Some people start off smaller with a condo and then bump up to a house in a few years.

  Still the beginning homes in this area are still less expensive then other places.

• 92 TC // Jul 18, 2008 at 6:23 am

  Also these houses that have reduced prices, they could be lower for a few different reasons.

  They could be forclosures and short sales. Also the seller could be asking way too much for the property or they really have to sell it.

  Also the information that receive from the media about the banks and lags behing what is currently happening. It seems like that has been discussed on this site.

  Seattle is not that different than other places. It will probably or has already experienced some drop off. However I think that people will still buy whenever the time is right for them.

  I guess that is my 2 cents.

• 93 Buceri // Jul 18, 2008 at 7:13 am

  TC - Seattle IS expensive. The US is more than California, NY, Boston and very, very few other places where RE prices are higher. Job growth is higher in the South where housing is much cheaper and population growth is much higher than in the PS area.

  With regards to entry level, I know everyone is different. But 9 out of 10 times, entry level is someone young with not much to put as a down payment.

  “However I think that people will still buy whenever the time is right for them” - Sure; but if those people were informed, they would never buy now. But economic news are “boring”.

• 94 TC // Jul 18, 2008 at 7:35 am

  Buceri,

  That is your opinion, I think that many people buy when the time is right for them. You have no idea if those people are informed,

  Many times entry level is buying a condo and staying in it for awhile then moving up. I did that and now many other people that have done that. The price you are quoting is for a SHF and that number will be different in different places.

  You can say don’t buy, your opinion. Things work out in the long run and you make money some things and may lose moeny somewhere else.

  I am sure that if ask most people that their investments have gone up and down over the years, that is why people diversify their investments.

  Some people have real estate and some people have other investments.

  The areas you are taking about have lower home prices and people move to those areas. Seattle is growing and people are still moving into the area. There are many great things here and people will keep coming. Home prices will go back up.

  Everything I said is my opinion and everything you said is your opinion.

  RE prices will be different in different places as these areas have their own things going for them.

  I have not read anywhere that now is not the time to buy. Many the people that are buying are busy living their lives and try to make the best decision at the time.

• 95 Captain Kirkland // Jul 18, 2008 at 8:05 am

  TC- Ask the people if who bought in So Cal two years ago if that was the ‘right time for them’. Had they been more educated, they would be a lot better off financially than they are now.

• 96 TC // Jul 18, 2008 at 8:19 am

  Actually I just moved up here some Southern California. Are you from Southern California or have you purchased a place there?

  Captain Kirklnad your point is weak. You are comparing other places to Seattle.

  Southern California had one of the largest run up in prices in the nation. Southern California is a very desirable place for people to live, at least the part that I lived in. So just like when an area such as California sees such a larger run up and then they see large fall. California will come back. I know many people who have homes in that area and they are not worried. In fact they have been having homes sell again. However they have been creamed with foreclosures and short sales. There are some great bargins and people are scooping them up.

  Your house is what it is worth when it is sold. I am sure that people in California lost money just people have lost money all over the country,

  Seattle had a run up but not as much as some of the other places.

  I remember your remark awhile back about somewhere in Arizonia.

  I am sure that you think Seattle is doomed. If is it it will come back. There are some great bargins in this area. Many you should go get one and buy it below market value and then keep it for a awhile.

  Right now is not the time for you to buy great for you.

  Back to point many people make decisions that are right for them. Just as you are deciding not buy at this time.

  You can be a side chair speculator all you want. I am sure that you will have some comment to come back with.

• 97 TC // Jul 18, 2008 at 8:21 am

  But I get the feeling that I am getting into a circulair argument with you.

• 98 Everett_Tom // Jul 18, 2008 at 8:22 am

  The point is that if someone who pulls their house off the market was going to buy a similarly priced property, it makes no difference because he’s just playing musical houses. His house won’t be sold but he won’t be buying either.

  What makes a difference to the market is when someone changes their exposure. That is, moving from a renter to an owner-occupier (or vice versa), or up- or downsizing. Or buying or selling an investment property.

  I’m amazed you caught that 5am… :)

  I guess it depends on how you view the market, I find Greg’s assertion that there are “multiple” markets (as expressed in one his comments above) compelling. Following that. I’m assuming the person selling would be buying a higher priced house (since they’d be using their equity). I’m sure that’s not always the case, but I believe it’s true most of the time.

  The two (so a very small sample size!) sellers we actually talked with about this were looking to go from a 3 bedroom to a 4 bedroom place.. I’m assuming that means they’d be in a higher price range. We heard of other sellers moving for these reasons, only though our Realitor (R).