Happy Labor Day. For whatever few people happen to be hanging around here today, here’s an open thread to talk about whatever you feel like (within the bounds of the comment policy).
Labor Day Open Thread
Posted by The Tim on September 1st, 2008 at 2:36 PM · 12 Comments
Categories: Open Thread
Tags: open_thread
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12 responses so far ↓
1
Ben
// Sep 1, 2008 at 3:48 pm
It appears to me that a lot of people are hearing the press and RE folks say that the market is now a “down market”. It is interesting that with the income to house price ratios we have right now, that people would still believe that.
I must admit that I have basically given up on looking at houses. I cannot see how to buy one and not lose my shirt doing it over the next few years.
2
The MD
// Sep 1, 2008 at 9:38 pm
Ben,
If you buy now, yes, you will lose your shirt (this is considering the average home or condo). Property values still have a LONG way to drop before we reach bottom. Remember, Seattle lags the nation in economic trends by 9-12 months. We are just getting started here.
The bottom line is this… property values MUST and WILL (without question) return normal ratios in consideration to average household incomes. Its quite simple, and a science of economics. Depending on healthy regions in the country, its anywhere from 2.3 to 1 on the low side up to 5.8 to 1 on the high side. Right now, we’re sitting between 7.3 to 1 and 9.1 to 1 in Seattle, depending on the area. That is simply outrageous, ridiculous and not sustainable. This is only a “gut instinct,” but I expect Seattle sale prices to average household income to come down to a ratio of 4.4 to 1 to 5.3 to 1. It doesn’t matter if you are considering the lowest of the low-end properties or the highest of the high-end properties in Seattle, property value to income ratios are the bottom line with sustainable and HEALTHY RE markets.
Hang tight, and DO NOT BUY ANYTHING unless of course you get a killer deal. We’re going to go through a market correction (its already beginning to happen), but I have a “hunch” :) we’re going to take a little longer to correct than most other markets.
3
Buceri
// Sep 2, 2008 at 5:37 am
Inventory shaved 500 units to start September.
4
Greg
// Sep 2, 2008 at 7:40 am
I’m wondering (for all of the real estate agents out here) what makes something a bedroom for MLS purposes?
I recently toured a house where the owners have an illegally (no permits) converted a portion of a garage into a “bedroom”. The room is detached from the rest of the house (meaning you have to walk down an outside staircase to get to the bedroom) The room is in a corner of the unfinished garage, and while it has a closet area, there are no closet doors. There is no window in this room for egress in case of fire.
Is this really a bedroom or has the listing agent misrepresented the listing? Can I complain to anyone if it was misrepresented?
There were a bunch of other “truth stretches” for this listing to, such as the parcel size was overstated by about 2 acres, the square footage of the house exceeded what was shown on the county assesors page, unpermitted garage conversions were performed, and the hot tub was shown as included on the real estate listing but the owners explained they were taking it with them.
5
david losh
// Sep 2, 2008 at 7:45 am
Housing activity fell for a 16th consecutive month, declining 2.3 percent to a seasonally adjusted annual rate of $357.8 billion. That was the lowest level since March 2001, the start of the last recession.
When did housing become the main gauge of our economy? How did we become a builders economy? Are crappy housing units sold at premium prices really a good thing for America?
6
WestSideBilly
// Sep 2, 2008 at 9:26 am
David -
Expensive housing is a bane to everyone as individuals and to the economy. I’ve argued that with people who think $400k for a starter home is reasonable, to no avail. When people can’t get started, others can’t move up, and everybody loses.
Unrelated: You can tell SB is getting more popular because of how many forum threads the spam bots started in the last 48 hours. :D
7
softwarengineer
// Sep 2, 2008 at 10:33 am
PUBLIC RADIO PROPAGANDA
I was listening to the alleged “neutral” Seattle area public radio and was horrified. They alleged [incorrectly] that some Seattle/Spokane areas are going up in prices the last year.
I suppose in a legal sense, their allegation wasn’t an all out lie, its just Tim’s charts make it clearly sound like one and documented as a clear lie too.
Public radio too, pathetic!
8
cheapseats
// Sep 2, 2008 at 10:48 am
I heard an NAR add on “The End” today, stating that contrary to the media, it was once again a good time to buy real estate in the greater Seattle area.
9
The MD
// Sep 2, 2008 at 4:14 pm
Cheapseats,
Its ALWAYS a “good time to buy!” If the market is going up then, “hurry up and buy because things are only getting more expensive!” Or, if the market is going down then, “hurry up and buy because things are on the cheap and markets only go back up!” Its all a bunch of BS. The best time to buy is when one can TRULY afford the home when compared to one’s salary.
10
TJ_98370
// Sep 2, 2008 at 4:37 pm
Greg, #4 -
I ran across something similar once. I toured a house where the garage had been converted into a bedroom, but they left the garage door as is! From the street it looked like the house had a garage but in fact it was a bedroom. The “extra” bedroom was not listed on the specs. The owners said that having the bedroom / garage saved them some money on taxes. As I toured the place I remember thinking that Mr. County Assessor had to be pretty stupid to not be able to see beyond this ruse.
.
.
11
TJ_98370
// Sep 2, 2008 at 6:33 pm
I did not mean to imply that our dedicated, hard-working county officials are stupid. It’s just that I remember thinking that at the time as I was touring this “open house”.
12
Kevin
// Sep 3, 2008 at 9:34 am
adding link to this article - http://finance.yahoo.com/tech-ticker/article/52640/House-Prices-Still-Too-High-Despite-Collapse?tickers=fre,fnm (House Prices Still Too High Despite Collapse with price to rent and price to income ratio analysis)
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