RE: deprogram @ 45 -

Yes, if open minded means you find deep intellectual depth in the Spice Girls’ lyrics.

Stoners listen to the Spice Girls? Wow. You really are poorly informed.

Ira: Your suggestion definitely wins.

So, in your professional opinion, how much do I need to spend to get a worthy fixer with a Seattle zip code? I’m only looking south of the city center, wife works south of the city so her commute is a pretty big consideration.

Yes, if open minded means you find deep intellectual depth in the Spice Girls’ lyrics.

By waitingforseattletocool @ 41:

Additional 50% off before balanced – People who believe this are just smokin’ dope

As are the people buying now because they believe we’ve reached a bottom.

See, that’s what I think.

I’m not in any way considering buying now because I think we’ve hit bottom. I fully expect to lose a substantial amount to depreciation, and am therefore only considering houses at around half of the King county median. How much of a loss is 50% on 175k? I won’t like it, but I can handle it. A 50% loss on 375k? Not a chance.

Yeah, house prices may recover in 10 years. They may only fall another 30% in this market. They may fall further. Why couldn’t we see a rewind to inflation adjusted 80s prices?

I just refuse to consider all possibilities. Therefore I’m spending as little as possible (think 1.35x our combined gross).

I find it difficult to admit that I’m even considering buying – I wanted to wait at least another year, but the instability of renting is starting to cost me substantially in consulting dollars.

This false bottom is just an annoyance right now. I’m seeing MOM price adjustments on the bank-owneds that i’m looking at of 15-30k. Yes, once they drop into our price range they tend to disappear, but I’m starting to be glad of that.

We put in a serious offer on one house, yet someone bid far higher, ultimately ended up paying 20k more than our highest bid. Now, I’m looking at houses that are nicer and have more of the items on our checklist for 50k less than those people paid.

This is at the very bottom end of the market. These are not insubstantial adjustments. For every property that gets snatched away from us by someone with more means, another two fall into our price range.

As far as dope smoking goes – I hear it makes people more open minded. Hmmm. Not that I’d advocate anything like that, of course.

TACOMA, Wash.–(Business Wire)–
Russell Investments announced it will relocate its global headquarters to
downtown Seattle. The company will move into 1301 Second Ave. which, upon
occupancy in 2010, will become the Russell Investments Center.

http://www.reuters.com/article/pressRelease/idUS200974+09-Sep-2009+BW20090909

Good for Seattle; Bad for Tacoma. I think we all seen this coming. At least they stayed in WA. BTW, if I’m not mistaken, that’s the old WAMU building.

Additional 50% off before balanced – People who believe this are just smokin’ dope

As are the people buying now because they believe we’ve reached a bottom.

http://seattlebubble.com/blog/wp-content/uploads/2008/10/japanes-and-us-housing-bubbles.png

Seattle is the #1 city in the U.S. for commercial RE defaults. Rents are headed further down. House prices will track rents.

Balanced – NO

Headed for stability – Not in the next 6 months

20% off over the winter – NO

Additional 50% off before balanced – People who believe this are just smokin’ dope

RE: Scotsman @ 30 – Thanks Scotsman I was waiting for someone smart enough to blow a hole in the perception that a market where noone wants or can sell is some how balanced and headed for stability or even appreciation.

Wait, does ANYONE who posts to this site any more think this market is ‘balanced’ or ‘headed for stability’?

I’m probably the one who said I didn’t even look at shorts. Still don’t. I’ll consider them when I have a house of my own from which to comfortably take pot shots at the market.

The market segment I’m looking at is falling, slowly but surely. When I can buy a livable fixer for 2008 assessed tax values for the land alone… I’m in. My guess is that this point may be reached in a few months. Of course, that’s just my guess, but a bank-owned I’ve been watching dropped 13.5k off asking since I last looked at it. It’s rotten, and I don’t want it, but it’s nice to see [some] banks at least trying to move properties.

I wish the wannabe ‘investors’ would do themselves a favor and take a few years off, though. Maybe go back to school and take an economics class in the interim.

RE: Jonness @ 8 – Assuming I’m “Kerry” it’s surprising I’m better than average, since I don’t make predictions.

Sorry. I work with a guy named Kerry, and I easily confuse the spelling. I got it right in the post below that one though. :)

What I mean by your predictions being better than average is when you predict, you have a basis of logic that goes along with it (unlike Beeson). For instance, you’ve predicted the Case-Shiller for a particular month will be roughly a certain figure based on your knowledge of the way it typically tracks the MLS median which you already have in hand. That’s a prediction, but I think it’s a different class of prediction than you are thinking of.

Personally, I make a lot of predictions because I’m more accurate than Nostradamus. Here is my latest prediction:

The median price will go down this winter compared to the current month and back up again next Spring compared to the winter low. The great bear will slay the bull again before it makes another run. The blood will run knee deep in October.

LOL, just funning around of course. :)

Wait. Find a nice rental. Ditch any debt, save some cash. You’ll know the bottom when you see it because it won’t get up off the floor for many years….

In reality these numbers mean very little either way. Just as how NWMLS medians and C-S don’t help you value your house, county wide absorption rates and inventory levels mean nothing to anyone. You need to get specific as to your property.

Also, it’s exactly what you’d expect. Higher prices bring higher supply and lower prices lower supply.

By Kary L. Krismer @ 14:

Zip is wrong. There’s over 1100 short sale actives in King County, SFR alone, and almost 350 REO actives. I think the former number might be dropping.

Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

Interesting. Zip is the only source I know of where a consumer can actually request “short sales” as a filter. I guess they must be using a text string look up. Do you know if there some “consumer friendly” rule from the NWMLS that protects us from seeing the short-sale field that I think they added some time back?

Have you tried Estately? I’m not aware of any simply because I seldom visit such sites.

So I’ll stick by my contention, the amount of “sellable” inventory is less than what is posted by NWMLS.

If the pending sales numbers are “useless”, the “inventory” numbers should be reduced by some amount to account for those buyers who realistically expect to close on a transaction within a 45-90 day period.

I think it’s a good point. Someone here was noting that they don’t look at short sales, and we have a lot of buyers that don’t. Right now no first time buyer would be. So that is basically irrelevant inventory for a lot of buyers.

On the absorption rate issue, I’ve always preferred looking at comparing solds to inventory, not pendings to inventory.

Market value is often defined as the sales price, unless there is a good reason to the contrary.

As far as the shadow inventory being distressed, why isn’t it on the market? The reason it’s not on the market is because it is not really distressed. I have a friend who owns his home without any underlying obligations, debt. He’d like to sell, yet he is unwilling to sell at the prevailing prices. I guess he values the place more than the market. Distressed? Not in my opinion. By the way, no seller gets as much as they want for a home… If you ask any seller, they always wanted more. They might be happy with the deal, but a higher selling prices is always desired.

RE: deejayoh @ 19 –

You can filter on Redfin with by checking “exlude short sales”.

In my quick glance by a few zip codes, the difference amounted to roughly 10%.

yes, but not for the whole county. Redfin limits you to 500 results.

You can filter on Redfin with by checking “exlude short sales”.

In my quick glance by a few zip codes, the difference amounted to roughly 10%.

I wasn’t trying to address the shadow inventory issue, which I place as part of the overall distressed inventory.

As I mentioned, I am sure one can get a large discount to market if they are able to acquire a distressed property.

Some agents will put the list price HIGHER than current market value because if the prices was lower, then the agent would have to disclose that it’s now a short sale. Sometimes it’s the home OWNER who requests to start out at a higher price.

I am still hearing that some market areas are 50% short sale or REO as a percentage of all available inventory.

I am also hearing that there are plenty of agents who are part timers (and not in the loop re: mls rules) or otherwise not well managed by their broker who are putting homes on the market at incredibly low prices and not stating in the MLS that it’s a short sale, which attracts a huge number of walk throughs.

Zip is wrong. There’s over 1100 short sale actives in King County, SFR alone, and almost 350 REO actives. I think the former number might be dropping.

Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

Interesting. Zip is the only source I know of where a consumer can actually request “short sales” as a filter. I guess they must be using a text string look up. Do you know if there some “consumer friendly” rule from the NWMLS that protects us from seeing the short-sale field that I think they added some time back?

So I’ll stick by my contention, the amount of “sellable” inventory is less than what is posted by NWMLS.

If the pending sales numbers are “useless”, the “inventory” numbers should be reduced by some amount to account for those buyers who realistically expect to close on a transaction within a 45-90 day period.

In a philosophical sense it may be possible to postpone reality until we die and the Inevitable Fact trumps all other imagined “facts”. But regarding Real Estate in Bellingham I think there are 4 stages:

1) For Sale
2) For Sale (price reduced)
3) For Rent
4) Foreclosed

There is always a white knight in the future. The current horse being bet on is the 2010 Winter Olympics in BC. Canadians over the last few decades have done a significant amount of buying/building in Blaine (right on the border) and in Sudden Valley, in our despoiled watershed above Lake Whatcom. And the Looney is at a high point.

But the jobs aren’t here, the mythical wealthy retirees didn’t show up in hordes, the Californication slowed dramatically for obvious reasons and any recent transplants from sunny climes got the shock of their lives this past winter. If they imagined a mild weather location.

Until I see good paying jobs or a climate like San Diego’s I see RE decline our City of Subdued Excitement.

And your steadfastness and clarity on Pending Sales is only found on your website, Seattle Bubble. Thank you for your news Tim, its really only found here.

With a 1/2 trillion in commercial loans going sour later this year, even all the kings horses and men of Barney Franks, trying to put the FHA uncontrolled growth Humpty Dumpty back together again, the same way it cracked to pieces in the first place, won’t make Seattle Home Prices stabilize.

My hat is off to you kind sir.

Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

There are 9400+/- homes on the market in King County, a good portion of which are short sales.

Given the low probability of these short sales offers being accepted and closed, doesn’t this effectively reduce the level of “sellable” inventory?

The MOS based on pending sales is about 4 months. The MOS based on closed sales is about 6 months. Using either number, it seems at a glance like a relatively stable market in the short term. Those expecting a 20% drop in the market in the next two months are just wishful thinking (unless you can pick up a distressed sale).

According to Zip, there are only ~330 short sale listings out of 9600 total SFH listings – that’s only about 3% of the total. Also only 86 foreclosures. Both of these numbers may be a low due to inaccurate listings, but its unlikely that there are 2 or 3x that many hidden distressed listings as it seems counterintuitive that one would minimize exposure for a home they HAVE to sell.

but I agree with your premise about market outlook.

Curious – are you just annoyed or do you actually predict “reality strikes B’ham”?

I just wrote a piece at SREP where I basically said the market is healthier than it was in January, but not at healthy as July, 2007 (which I described as possibly too healthy).

I would be curious to see a seattlebubble RE agents who post predictions vs RE agents who post predictions in the newspapers.

Then again, I like Kary’s ethics rule of not allowing agents to make predictions at all. Even though I’ve greatly enjoyed reading the predictions of such notable bubble posters as Ray Pepper, David Losh, and the like. It provides a certain insight to be able to see how people in the business truly think.

Perhaps we could start an accuracy meter. We collect predictions of these guys back to just before the market cracked up. Then we give an accuracy rating for all the predictions they made. Tim can put a link (clickable dashboard displaying median RE agent accuracy) to the list from the home page. This way we know who the RE agents are with the best and worst prediction skills. This could be helpful to people on the fence and considering purchasing a house.

I’ll start the list.

Beeson: 0% accuracy
Kitabayashi: 0% accuracy
Steve Tytler: Better than average
Kerry: Better than average
Ira: Better than average

OK. It’s probably too much work to complete the list and build the dashboard, but it was a fun idea while it lasted.

IMO, this guy is a disgrace to the profession and tarnishes the names of good hardworking RE agents like Ira. Imagine spending your life fighting for your clients’ best interests and then picking up a newspaper and seeing your profession being represented in this manner. It’s got to be extremely frustrating.

Our society financially rewards cons, crooks, liars, and psychopaths while punishing honest people. The message being sent to our children is to grow up and become a dishonest thief so you can have more than the next guy. The more you have, the more respected by others you are. So do whatever it takes to be better than your neighbor.

IMO, it’s a terrible message and is the exact opposite of spiritual living. I mean, if you want lots of materials, go for it. But the price paid is to become a member of the walking dead.

The worst thing about this Beeson guy is, after years and years of monthly bottom calls, he’ll eventually be right. Then, I suspect, he’ll downplay all the bogus calls and trumpet his correct call from the rooftops. It’s a cheap con game IMO–pseudo-expert.

Sorry for this post, but that U thing is just pushing it too far.

Given the low probability of these short sales offers being accepted and closed, doesn’t this effectively reduce the level of “sellable” inventory?

The MOS based on pending sales is about 4 months. The MOS based on closed sales is about 6 months. Using either number, it seems at a glance like a relatively stable market in the short term. Those expecting a 20% drop in the market in the next two months are just wishful thinking (unless you can pick up a distressed sale).

1606 (or whatever) sales sound good compared to the 1500 something the year before, but the year before we considered that number a great sign of weakness. In a hot market that could be 2500 or even possibly 3000. So I think they’re over-hyping the significance of that number, and also over-hyping the significance of the price change (although again, part of that is because the NWMLS doesn’t report just non-distressed sales).

Wow. Makes the SBB look like the NY Times and the Herald the local PennySaver. Which is pretty much what it is…

“The truth will out…” This winter, spring, doesn’t matter…. people are broke, joblessness increasing, lending tight. Homes are plentiful and overpriced. For rent signs are proliferating, even after 12,000 WWU students return.

For sale. For rent. Foreclosed.