Wow, lots of stories in the local papers this weekend about the slow housing market. Too many to post separately, so here’s a roundup of the weekend news. Let me know if I missed anything.
Everett Herald: Snohomish County builders slash home prices
Mike Pattison just took his own advice and bought a new home in the Silver Lake area.
He bargained hard for a lower price and even convinced the builder to throw in furniture.
“I’m a believer in our message,” said Pattison, who works for the Master Builders Association of King and Snohomish Counties. “It’s a great time to buy.”
Todd Britsch also makes another appearance in this article to repeat his “double digit appreciation returning soon” prediction. Fun times.
Lynette Avery and her family used to go out for dinner every Friday. They’d take turns choosing the place – Red Robin, a pizza parlor or a nother family-friendly spot.
But in May, they were forced to move out of their Bucoda home because they couldn’t afford their mortgage payment. The family settled into a Tumwater rental.
“It was devastating,” Avery said of losing her home.
While it’s certainly sad when people lose “their” homes, what is more sad to me is how many people allowed themselves to be brainwashed into thinking that jumping head-first into a dangerous loan in order to overpay for a house was more important than financial prudence and patience.
Seattle Times: Homebuilders in region hurting despite what you see
It’s hard to find physical evidence that homebuilders in the Puget Sound area are suffering through what may be the worst downturn since the 1970 Boeing bust.
Gun-shy buyers aren’t unique to the new-home market, and that’s the problem. As the mortgage industry has staggered, foreclosures have risen, and prices have dropped throughout the market. Buyers for all types of homes sit on the sidelines.
Cumulatively, all these factors are causing a major decline in new-home construction here because new-house buyers mostly are move-up buyers. If they can’t sell their present homes, they can’t move up.
Wasn’t it just a year or two ago, as the housing markets in Florida and SoCal were just starting to go bust, that we were assured that builders here had learned from the mistakes made in those markets, and would not be facing such a dramatic slowdown? I wonder what ever happened to that.
How many construction cranes did you count the last time you drove through downtown Seattle or downtown Bellevue? Ten? Twelve? More?
Count them while you can.
The credit crunch and related economic woes are drying up the development pipeline in the region’s two commercial hubs. More than two dozen projects are on hold, many because developers say they can’t borrow money to build.
“It’s a different world now,” says Seattle land-use economist Matthew Gardner. “The banks have shut their doors.”
Different, yes. Unforeseeable, not really. But unfortunately, gung-ho builders were only interested in listening to the rosy predictions of people like Mr. Gardner, and ended up setting themselves up for this.
Sometime around the end of the year, the first residents will move into Bellevue Towers, Bellevue’s tallest skyscrapers.
They may have plenty of elbow room for a while.
The twin, 42-story luxury condo towers are nearly finished. But just over one-third of the 539 units have been sold.
“We had hoped to be two-thirds sold by now,” Scott Eaton, a principal with developer Gerding Edlen, said recently. “It’s a different world.”
The financial crunch is squeezing builders of new for-sale housing of all types, including those big new condo towers rising toward the sky in downtown Seattle and downtown Bellevue. More than 2,300 condo units are under construction in the two city centers, according to figures compiled by principal Dean Jones of the condo-marketing firm Realogics. Almost all are scheduled for delivery within the next year.
So far fewer than half have been sold. In some projects barely one-quarter of the units are spoken for.
Note that this is only counting units in the “city centers.” Who knows how many more there are in the surrounding neighborhoods and towns. So either a large number of condos will be eventually converted to rentals, pumping up the rental supply, or there are going to be some crazy deals on condos in a couple of years. Either way, it looks like a win for affordable housing.
Update: One more from the Seattle Times this morning: Stalled projects, scarred neighborhoods
A crater-sized hole near Green Lake. A derelict corner in Lynnwood. A sorry shopping mall in Kirkland.
Retail development projects, slowed or stopped by a flailing economy, are revealing themselves as blights on neighborhood business districts.
You can add one in my neighborhood to that list, as the developer of the long-promised “Kenmore Village” is having trouble finding an anchor tenant and is putting off the project, waiting for the financial crisis to settle and the housing market to improve. They could be waiting quite a while.
(Debra Smith, Everett Herald, 10.26.2008)
(Diane Huber, The Olympian, 10.26.2008)
(Elizabeth Rhodes & Stuart Eskenazi, Seattle Times, 10.26.2008)
(Eric Pryne, Seattle Times, 10.26.2008)
(Eric Pryne, Seattle Times, 10.26.2008)
(Stuart Eskenazi, Seattle Times, 10.27.2008)