Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

65 responses to “A New Year, A New Delusion of Price Recovery”

  1. Kary L. Krismer

    My guess would be the bank owned listings affecting things, but the upward trend in listing prices would also require that there be more normal listings going active the past couple of months than at the end of the year. That’s probably a safe bet for January-March, but I don’t really track such things.

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  2. ray pepper

    RE: Kary L. Krismer @ 1

    “there be more normal listings going active ”

    I would say that the NEW NORMAL will be REO’s setting the bar. People are quickly realizing that a short sale is not good for the family unit and they will save and save until Trustee Sale which will get pushed further and further out. So many people stopping payments and living for free for 3+ years that the banks are helpless without massive Fed intervention.

    An amazing 530 ACTIVELY listed properties in Pierce County listed under 100k on the market. Even the investors at the Trustee Sales are letting their listings go back to the Hard Money Lenders and taking their 20-30% haircut.

    The REO market will wreak havoc for years to come and the “conventional” home seller will not have a chance.. Patience everyone and as the big boys say…………….”keep your powder dry.”

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  3. Kary L. Krismer

    RE: ray pepper @ 2 – Maybe Ray hit on something. There might be fewer short sale new listings as more and more sellers realize that they are not worth the effort if the bank isn’t going to put in any effort.

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  4. softwarengineer

    Now I’ll Blog Like Scotsman [Bless His Heart]

    Why the economy is recovering in massive chunks, hiigher GDP and jobs galore. The stocks are shooting up too, just like Bernanke green shoots. Expect the RE market to really start moving up in price again now, its a blessing for our country and the Y generation will all be seeing six figure incomes any time soon, right out of college too :-)

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  5. Daniel

    Could you calculate correlation coefficients with and without a lag? My guess would be that sold prices just lag listing prices by the average time it takes to sell. I do not mean to say that there will be a substantial increase in “value” but maybe it is reasonable to expect more non-distressed new listings as we enter spring, which would be listed at a higher price and eventually also sell at a higher price.

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  6. Drshort

    For one, sales data is a 90 day average, but listings aren’t so you get a disconnect as new homes come on the market at the start of the year. The difference is stronger this year than last, but I think this is a mix shift more than an increase in seller delusion.

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  7. LA Relo

    My guess is that people know they won’t get asking price in this market, so they list it higher, expecting to come down to where they are willing to sell.

    As stated though, REOs and short sales *ARE* the market right now as far as prices, so a non-distressed seller is at a disadvantage.

    Which begs to question, why would someone not upside down, or facing foreclosure choose to list their home in this market? New job maybe? Or do they have a resetting ARM looming?

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  8. Bryan

    RE: Daniel @ 5

    This seems right. Looking at all of the charts, there is a 2-3 month lag evident in the correlation between the two lines.

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  9. jffj

    By Bryan @ 8:

    RE: Daniel @ 5

    This seems right. Looking at all of the charts, there is a 2-3 month lag evident in the correlation between the two lines.

    ding ding ding!

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  10. Ross

    I suspect there’s some sellers who’ve been holding off on selling during the downturn and are now seeing whiffs of a recovery and returning to the market with bubble fantasy pricing.

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  11. deejayoh

    Looks to me like the same phenomenon occurred last year, albeit less pronounced.

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  12. The Rug

    RE: LA Relo @ 7 – Considering how low interest rates are right now I wouldn’t fear an ARM reset right now.

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  13. Lurker

    We’ll get to see if the sold #s react the same way as they did last year too. With free gov money missing this time around I have my reservations.

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  14. James Baker

    Well come on, doesn’t it look like “Listed” is a leading indicator of “Sold”? That accounts for at least part of it.

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  15. » Home Prices in King County “Sold” vs “For Sale” Ask Ardell

    [...] The Tim over at Seattle Bubble asks if the variance between sold prices and asking prices indicates that sellers are “delusional” about what their homes are worth. Not really. It’s more a function of whether buyers in that immediate vicinity are willing to pay that much for a property, even if it is in fact “worth” that amount. Let’s use 98023 Federal Way compared to 98052 Redmond to note the large variance between two “immediate vicinities” vs the County-wide stats as a whole. [...]

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  16. ARDELL

    It appears to be more of a function of people limiting how much they will pay for a home, and while that varies from one zip code to the next, the constant is that people are just not willing to invest in housing above a certain price point in large numbers. The high asking price to sold price is a function of the market being “top heavy”.

    It clearly is not that there are more sold “distressed properties” than for sale. 98023 has 50 distressed properties sold in 90 days and 171 for sale, as example.

    Someone who can afford to spend $900,000 is buying an adequate home for $650,000 instead. When the $900,000 was expected to become $1.3M, they bought to the limit of their affordability to gain maximum appreciation dollars. When the market is expected to be flat to down, they will buy an adequate home to suit their needs at $650,000 vs the $900,000 they can “afford” to buy.

    Per the stats in this post http://bit.ly/eN9Ocm it’s not so much that the sellers are delusional about their asking price. It’s more that people are limiting how much they will spend for a home, whether that house is “worth it” or not.

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  17. The Rug

    RE: ARDELL @ 16 – We looked at our debt, our retirement goals, our concerns about SSI solvency, and in the end chose to buy a house that was roughly 1/2 of what our approved limit was. We can’t guarantee the value of the house will go up in value in the next 5-10 years, so we’re limiting our exposure to risk.

    In the end we landed a home that had a location that was great for us, it fits our needs, and is actually of greater build quality than we expected, and by buying “Smaller” we’re disinclined to buy more random crap that we just have to find a place to store it.

    I expect nobody is selling their home right now that doesn’t have to for some compelling reason. Be it financial, health, or or environmental.

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  18. Scotsman

    “Any ideas what’s behind this trend? ”

    Anybody else notice the large number of medicinal marijuana ads now popping up on Craig’s List? You know, “Sour Diesel,” $60 dollar “donation” with free delivery by “volunteer” drivers? That’s my guess- either that or Pfft is winning the propaganda war.

    http://seattle.craigslist.org/skc/hab/2282368543.html

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  19. Hugh Dominic

    My first thought was that it was finally an influx of good inventory on the market with Spring. The homes on the market for 2H2010 were pretty bad.

    If that’s true we should see the sold average move up in a few months.

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  20. Leigh

    I’m going with Ardell’s thoughts. I’m in the Mount Tabor area of Portland and salivate over many gorgeous old Portland homes that are on the market. Granted I could only afford the property taxes on these beauties but one can dream about ‘em as long as they come with a gardener and housekeeper;O) Many of these homes would have gone for nearly a $million$ at the peak and now just sit listed for $700K +. It’s pretty crazy. Nothing seems to be moving in the upper range. And heck, not much moving in the middle range either. And a few more upper range homes just came on the market in the ‘hood…hmmmm, is that recast coming?

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  21. Ira Sacharoff

    RE: Scotsman @ 18
    So what’s your theory? Some medical marijuana users take a few bong hits and exclaim : “Dude! We should list this house for a million dollars!”

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  22. Julie Lyda

    There are several things going on here:

    1. A simple fact is that more higher priced homes sell later in the year. The 1st quarter is not a big selling time for higher priced homes, which affects sold SF.

    2. 76% of the inventory under $200K in King County are distressed properties dragging median down even further.

    3. Inventory quality is deteriorating, in the lower end homes. Homes are falling into disrepair. No money for fix ups. No flippers in the market snatching up homes, fixing them up and selling at higher prices.

    4. The SF in sales is influenced by “what is selling”. More homes are selling in the lower price ranges.

    5. SF of active listings goes up as nicer inventory comes on the market through the spring and summer months, followed by a drop off late fall/winter.

    Tim should definately update this graph in 3 and 6 months to see how it trends.

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  23. Scotsman

    RE: Ira Sacharoff @ 21

    You’re still alive after your comment on Ardell’s bottom?

    But yes, I’m pretty sure it’s those new $1.0M listings pulling the averages up. Either that or hope does spring eternal. . . in the spring.

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  24. Real World Express

    RE: softwarengineer @ 4

    The expectations of people keep getting reset by the “good news” about the economy. Unfortunately unless the average salary goes up to $200,000 per year….

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  25. HappyRenter

    RE: Real World Express @ 24
    I think that one reason why wall street is doing well could be that people decided to put their savings into the stock market instead of into a home? But, that’s just a guess. I might be wrong. If this is true, we might see an anti-correlation for a while: Dow and S&P keep going up while real estate prices keep going down.

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  26. ARDELL

    RE: The Rug @ 17 -You are not alone in that. In addition to buying less than they can “afford”, some of my clients are going with a 15 vs 30 year mortgage for the earlier payoff and lower interest rate. One closed today at 3.75% with one discount point.

    Honestly, people who aren’t house poor are much happier! :)

    As to “nobody” selling their home that doesn’t “have to”, I don’t find that to be the case. There are many people making sure their current house is a good long term fit, vs the one they currently own. Most everyone is making sure that the home they own right now will suit their needs almost indefinitely, if need be.

    No more “stepping stones” to something else. Find a good place and call it “home” for the long haul. It’s definitely the age of “what’s right for me” vs “keeping up with the Jones'”

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  27. Chuck C

    I can think of at least one good reason someone may list a home now – get rid of it before values fall further!!!

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  28. Leigh

    RE: HappyRenter @ 25

    Nah, stock market is doing well because most companies are multinationals. So when China and India continue to grow their consumer class, you know the middle class USA used to have, then these companies do well. Saw today that IMAX is growing BIG TIME in China thanks to their new found disposable income. Coca-cola expanding to Mongolia, no joke. The profits GM is posting are from their Chinese plants and dealerships.

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  29. Blake

    Sellers are ever optimistic – hope springs eternal – and the deals that are being closed the last few months were bargain hunters buying value in the midst of the weak winter.

    We know that blue line will turn south… but what will that red line do? and when?

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  30. Won't.I.Am

    By ARDELL @ 26
    No more “stepping stones” to something else. Find a good place and call it “home” for the long haul. It’s definitely the age of “what’s right for me” vs “keeping up with the Jones'”

    So what happens to all of the “starter homes” then?

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  31. The Rug

    RE: Won’t.I.Am @ 30 – Someone buys them, then remodels them to be less starter home-ish. Build additions etc.

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  32. ARDELL

    RE: Won’t.I.Am @ 30

    The investors will buy them and rent them out to people who are saving for their “can stay in it 7 to 10 years” home.

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  33. David Losh

    RE: Leigh @ 28RE: HappyRenter @ 25

    Yes the stock market is doing great things, and those things will continue.

    Real Estate will be relegated to the hedge against inflation that it always has been, maybe much less.

    You are buying a fixed living expense that you can end up owning out right with no mortgage payment. However, if you can save more than what you can pay off there is a higher rate of return.

    There is something to be said about having a stable living situation, but at the same time if you are paying an extra $100K for stability you could get that same result with a rent to own.

    The family home is an investment in your financial security. These graphs are showing losses. These are consistent losses that haven’t even begun to settle.

    After June all the stimulus money will dry up. Congress, or the Fed, will be living on actual budget dollars. For the past three years the Fed has dumped in more , and more, money to spur the inflation that, in theory, would jump start the housing market. All we got for our money was speculation in commodities, which are transient rather than assets, like Real Estate.

    I don’t want to high jack this thread because there is a discussion on the global economic thread for this, but these graphs are very clear about the losses. It’s much, much more than what buyers, and sellers are doing. There is a global market place that is trillions of dollars ahead. Right now that should merit some strong consideration.

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  34. David Losh

    RE: ARDELL @ 32RE: The Rug @ 31

    The stepping stone concept will continue. People will buy what they can afford, and build equity by “forced savings” of extra mortgage payments.

    There has never been massive appreciation without inflation. Real Estate will go back to the hard work asset it always has been. People will buy starter homes, fix them, rent them, sell them, or pay them off. Equity will return to Real Estate by retiring mortgages.

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  35. David Losh

    RE: ARDELL @ 32

    No investor is going to tie up money for 7 to 10 years on starter homes that are losing money. That will be a mom, and pop operation that will remain a constant.

    Investors have so many opportunities today that it’s ridiculous. Residential housing is done. Let’s talk commercial for just a minute.

    Four years ago in 2007, after the crash I called a local agent about a commercial space in Lake City to ask what kind of manufacturing they did there. He laughed at me. He told me it didn’t matter. Well four years latter the place is still there, it just looks a lot more tired.

    What happened in the United States is that every body thought that every inch of dirt was worth a million dollars. It’s only worth a million dollars if you can get a return. If you can’t develop for sale to get mortgages, to sell, then you are stuck with sweat equity.

    Investors, smart investors, are putting money into commercial, and business loans.

    I would be thrilled to discuss business opportunity at any time, any where. Name me a business that is doing really well. Why are there so many businesses doing really well? It’s a recession. People are laid off. OMG!!!!

    Investor dollars have way too much opportunity to be sitting in a small time residential housing unit that are a dime a dozen.

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  36. ARDELL

    RE: David Losh @ 35

    I saw at least 4 last week that should just be bulldozed. :)

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  37. ricklind

    RE: deejayoh @ 11RE: deejayoh @ 11 – 1)The numbers posted are for qtr 3 2010, we’re in qtr2, 2011. 2) There is a considerable lag between listing prices and sale prices even in 2 qtr delayed charts. ding, ding 3) with this lagging indicator it is impossible to even know current market price much less predict price movement except maybe from “personality.” 4) knowing current market prices will allow interprtation of these values from 6 months ago. Best, Rick. An amateur who tries to understand markets.

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  38. Michael B

    It seems that the short sales are getting impatient. I saw one listed at $280, not moving for 3 months, now dropping to $220. Another was $290, now $260, all in the last few weeks. Sellers are starting to panic because they want to sell before spring. Sellers go on Redfin, too. Just look on Redfin at the homes that have dropped their price within the last 30 days – some with very significant drops. Possibly the bankers know something the market hasn’t quite digested – lot’s of foreclosures coming on the market soon? When Spring comes, the competition will be much higher, with about the same number of buyers. It seems that even many foreclosures are still priced too high for this market.

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  39. Kary L. Krismer

    By Michael B @ 38:

    It seems that the short sales are getting impatient. I saw one listed at $280, not moving for 3 months, now dropping to $220.

    That sounds like one of two things. First, it’s possible that either the agent or the seller thought the house was worth more than it was. Second, since you mention it’s a short sale, the agent may be using the scheme that I’ve complained about a lot–automatic price reductions that get the property to a price point where the bank won’t accept it. There are apparently clock hour courses that push the automatic price reduction scheme.

    If you remember the property, can you go back and look to see if there’s a pattern of regular drops? If so, it’s the second.

    BTW, I would point out that if this property is in King County, it wouldn’t affect the median.

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  40. Pegasus

    Perhaps there is a problem in getting an appraisal that will verify fantasy housing prices for the sellers’ pricing and the actual sale prices have to be lowered to get funding?

    Perhaps the sellers knowing they are selling in a buyers market are giving themselves some wiggle room to give the buyers a really large “bargain” price to counter the low-ball bids that are occurring.

    Also we know that the banks are listing homes for ridiculous prices and then suddenly dropping them to create a bargain price that attracts buyers. Are the graphs based upon the original listing price or the final listing prise?

    Lastly since the sellers know that this time of year the real estate market is very slow the listings appearing now really may have expectations of selling in the “hot” summer selling season that their agent is promising and are being priced in accordance with this anticipation? They may be putting up a dream price much like Zillow’s fantasy “make me move price” while expecting a long wait. There is a discernible pattern that is definitely a lot stronger in the summer for sales.

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  41. David Losh

    RE: ARDELL @ 36

    The problem with bull dozing today is getting the return on construction costs.

    These charts are showing price per square foot. That price per square foot is reflecting some new construction costs. As existing structures continue to come in at lower, and lower prices new construction will feel expensive. If, or when, new construction starts having to be maintained, or has defects, or is showing to be of lower quality, and lower resale than existing then we will have another round of foreclosures.

    Even though there is some high quality construction, even with spot lots, the buyer had better be well aware of what value that property has.

    Several neighborhoods in Seattle have mammoth single family homes in more affordable areas. You drive down the street and see these huge structures in a two bedroom one bath neighborhood. At the time, I’m sure, developers thought the whole neighborhood would catch up, but today, and ten years from now, those properties will just fall into disrepair. Why would you maintain an over priced albatross?

    Investor dollars are going to go where the money is immediately. Housing units are high risk, low margins, and always have been, except in the past ten years. In ten years however the world got over built with housing, so new construction is even less attractive today.

    This is good news for families who want to build equity, step up, and trade in housing units. Great wealth will be made in the next ten years, but you need to be smart, and follow a logical game plan. In other words you need to pick through what’s worth having, and what to ignore.

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  42. softwarengineer

    RE: Real World Express @ 24

    Yeah, Obama/Bush/Clinton all infer $200K per year is Middle Class….LOL, it Must be Nice Being the Rich Elite

    Geeeeeeeee…..that means only 2.67% of American househlds are Middle Class and above…ALL Dem/Rep Presidents are all buffoons on that one.

    Article in proof [for Pffft]:

    http://www.mybudget360.com/how-much-does-the-average-american-make-breaking-down-the-us-household-income-numbers/

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  43. deejayoh

    By ricklind @ 37:

    RE: deejayoh @ 11RE: deejayoh @ 11 – 1)The numbers posted are for qtr 3 2010, we’re in qtr2, 2011. 2) There is a considerable lag between listing prices and sale prices even in 2 qtr delayed charts. ding, ding 3) with this lagging indicator it is impossible to even know current market price much less predict price movement except maybe from “personality.” 4) knowing current market prices will allow interprtation of these values from 6 months ago. Best, Rick. An amateur who tries to understand markets.

    How is this even remotely related to my post? My point was that the charts Tim posted show the Blue line rising in the first quarter of 2010, similar to what is showing this year. Each of the four charts he posts shows the same thing.

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  44. No Name Guy

    RE: David Losh @ 35

    Doesn’t that depend on what an investor is tying up their money for? If you’re looking for a quick capital gain (or even a 5-10 year time horizon capital gain), sure, residential property would SUCK in today’s environment.

    But what about for income for the long haul?

    Cash purchase a REO or short sale or a desperate seller in modestly decent shape for say….150k, put another 10k into quick fix up and rent it. What’s a 3 bed, 1 bath house in say….Lynnwood, MLT, south Everett rent for? $1000, $1200 a month? I don’t know (I’m asking – not really believing the Zillow rent estimate of the 3 BR / 1 bath dump across the street from me in Lynnwood at $1165). If the WAG is close to being right, that’s 12-14k a year gross. Back off 3k for taxes and insurance, set aside another 2k for expenses, repairs, etc. On the lower number, (12k year in gross rent income) that’s 7k net income on 160k invested. 4.4% yield compared to practically nothing on CD’s, squat on money market, less than that for a typical dividend yield. Play all kinds of “depreciation” games and pay diddly squat in income taxes in the near term….

    Even if you’re into it for 200k at 7k net pre tax income that’s still 3.5% yield.

    And if you’re in it for the long haul income, the near term price movements don’t matter (except to use to wait for a better entry point). 3.5% yield isn’t sexy, but hey….cash in the pocket talks.

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  45. HappyRenter

    By David Losh @ 33:

    RE: Leigh @ 28RE: HappyRenter @ 25
    There is something to be said about having a stable living situation, but at the same time if you are paying an extra $100K for stability you could get that same result with a rent to own.

    The family home is an investment in your financial security. These graphs are showing losses. These are consistent losses that haven’t even begun to settle.

    I’m not sure I follow all of your thoughts. I don’t think that owning brings a stable living situation. We have friends who bought a home 10 years ago. 3 years ago they moved to California but still decided to keep their house in Seattle. On the other hand, I know people who have been renting the same place for decades. Job and family situation can force you to move. Also, it needs to be said that you need to be in a stable financial situation BEFORE you buy.

    I see a home as something that gives me a certain personal satisfaction, because you can do with it whatever you want in terms of upgrades. But I don’t consider it as something that gives me stability. Only a stable job gives me stability. But maybe I missed the point of what you were trying to say.

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  46. Urban Artist

    This house I think has the problem that some houses have,being more house than people need.
    The price keeps dropping on this one. I’m not sure why it is not selling I’ve seen worse houses going for more. I could put my whole family in the closet. http://www.redfin.com/WA/Seattle/3008-NE-115th-St-98125/home/111564

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  47. ARDELL

    RE: Urban Artist @ 46

    A common “must have” for many people is “at least 3 bedrooms on one level”. Master down and other bedrooms UP is often “better received” by the market than Master up and other bedrooms down. Most people prefer that the Master Bedroom be on the same level as “the children’s” bedrooms.

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  48. Kary L. Krismer

    By ARDELL @ 47:

    Most people prefer that the Master Bedroom be on the same level as “the children’s” bedrooms.

    That depends on how old the children are, and how much noise the couple makes. ;-) :-D

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  49. ARDELL

    RE: David Losh @ 41

    My “bulldoze” comment is more about that “2 bedroom; 1 bath” house with tons of deferred maintenance being functionally obsolete and needing too much money than is worth anyone putting into it, without at least 3 usable bedrooms once completed. Better bulldozed than empty collecting mice and mold.

    The Seattle #FAIL is in not building townhomes with 3 vs only 2 bedrooms up. That “3rd bedroom” on the garage level two flights down from “Mom and Dad” makes the average Seattle townhome a two bedroom and not an option for most families. Even though they say “3 bedrooms”, who is going to stick their 3 year old two flights down and behind the garage?

    Why does every builder do that? Why no (or few) newer townhomes with 3 bedrooms up? I’m sure there would be a market for a newer townhome with 3 bedrooms up at a higher price point than the current townhome and lower than a full, new home. Why the avoidance of a 3 bedroom up townhome in Seattle?

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  50. ARDELL

    RE: Kary L. Krismer @ 48

    I agree as to Master down and other bedrooms UP. But you usually don’t want the kids on the same level as the stove and front door and the parents upstairs. It borders on parental negligence, at least in the minds of most people.

    In high volume there are enough buyers and buyer preferences to absorb all housing types. But in reduced volume, if you did a study of homes lingering on market, you would find a higher proportion of homes without 3 bedrooms on one level in the Active vs Sold pile.

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  51. Urban Artist

    I totally agree on the bedroom issue. I have two kids and having one or two bedrooms on a different floor is a deal breaker. I have run into so many houses that say they are 3 or more bedrooms and one is in a partially finished basement. I hate basement bedrooms, but that just might be me.

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  52. Kary L. Krismer

    RE: ARDELL @ 50 – I was just joking–that didn’t require a response.

    I will say though that when we were looking for a house we were having a hard time finding places we liked with bedrooms on different levels–something we needed for my MIL, who was moving in with us. The separate bedroom had to be on a level she could access too, which made it more difficult. We even started considering one of those electric chair things that go up stairs.

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  53. ARDELL

    RE: Urban Artist @ 51

    I always value a basement at $10 to $25 a square foot and value the house without the basement “features” as to what is there. A little boost for the bath on that level, but only if the bathrooms above are insufficient as in one bath up and 3/4 bath down.

    A finished basement is an “extra” like a pool or a tennis court, the way I do a valuation. The “old school” appraiser rule of thumb is all extras on a combined basis can’t exceed 10% of the value of the home without them.

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  54. ARDELL

    RE: Kary L. Krismer @ 52

    When there are 4,000 buyers in a month, there will be at least one “Kary facsimile”. But when there are only 960 buyers in a month…not as likely. Reduced volume increases the negative factor of “not at least 3 bedrooms on one level”.

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  55. ARDELL

    RE: Urban Artist @ 51

    The worst is “one up, one main, one lower”. If the agent noted which floor the rooms are on (not a mandatory data field) you will be able to see that in the listing detail on Redfin. Not sure which other sites carry that data in the feed.

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  56. Kary L. Krismer

    RE: ARDELL @ 54 – Actually, we were looking for 3 bedrooms on one level and one on another. And that’s what we ended up with.

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  57. ARDELL

    RE: Kary L. Krismer @ 56

    Bingo!

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  58. David Losh

    RE: HappyRenter @ 45RE: No Name Guy @ 44

    If you are looking for the family home to become a rental to cash flow great. The stability comes from a set mortgage payment on a property you control, your land lord is the bank, and you have rights to the property.

    However, as an investor looking for a return, today, you would be paying a set price when the price of a like kind property would be declining.

    Housing units are going down in price. Rents will be going down. The housing market was over built, globally. Next we are going to see over building of apartments, and rental housing. Investors will actually build to rent, rather than sell.

    Builders build. That’s their business. It won’t be stopped by a little thing as lack of demand. Builders will build rental units, and the glut of existing housing units will become less, and less attractive as investments.

    You as a single person, or couple will be able to buy, pay off, rent, and hold. To an investor there is little incentive to tie up cash and lose the opportunities that cash can buy.

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  59. Macro Investor

    “list prices are on the rise while sale prices continue to fall”

    Why not just keep it simple? New sellers are always praying for that one dumb buyer who overpays. Be patient. If the listing is over 30 days old, bargain hard and if they aren’t reasonable… just say “next” and walk.

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  60. Jonness

    OMG! it’s Steve Tytler’s famous stairstep theory in reverse!. And those stairs are steep. :)

    http://www.oftwominds.com/blogmar11/phase-shift-housing3-11.html

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  61. Cristian

    By Urban Artist @ 51:

    I totally agree on the bedroom issue. I have two kids and having one or two bedrooms on a different floor is a deal breaker. I have run into so many houses that say they are 3 or more bedrooms and one is in a partially finished basement. I hate basement bedrooms, but that just might be me.

    Basement bedrooms are a sad joke. Whenever I assess the $/livable sqft price of a home, I use the public records which usually don’t include the basement as finished living space. This helps me stay away of Ballard homes, currently having an asking price around $400/livable sqft.

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  62. lne

    This report out yesterday
    (http://www.msnbc.msn.com/?id=11881780&q=flawed+housing+data&p=1&st=1&sm=user) says NAR data is flawed (I know. Unprecedented, right?). Seems to me the alleged problems could contribute to the patterns Tim highlighted on these graphs.

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  63. CMDCMF

    Ardell #26 – you are spot on! We’re looking in W. Seattle – seek to buy less home than we can afford and ensure it is a place we can live in happily for 10, 15, 20 years or more. We have every reason to be patient, until the right house in the right neighborhood becomes available.

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  64. CMDCMF

    Some observations from an active buyer to be in W. Seattle:
    1. Any short sale or foreclosure property we’ve looked is, at best, in distressed conditioned. There are homes that have deferred maintenance going back 10 years or more. These homes are way beyond simple updating and cosmetic repair. Any price advantage would be more than consumed by necessary rehab.
    2. Non-distressed properties sometimes, but not always, are in better condition. Maintaining a home properly is expensive and time consuming, but still the downright disrepair and neglect of many for sale properties never ceases to amaze me.
    3. Market priced, well maintained properties in a good location sell quickly. Note I don’t say updated, just well maintained. Trick is finding them…
    4. There must be a college degree, issued by some accredited university, in real estate prose, poetry and fiction. Many listing descriptions are downright misleading, if not a misrepresentation of the house described. The Tim – have you ever done a posting on this topic?
    5. There must be a college minor in real estate photography. See #4 above.
    6. Though a knowledgeable RE agent is helpful in finding and previewing active properties, the unvarnished and quantitative judgement about property desirability and price lies with me.
    7. What’s with the moss growing on so many roofs here? Antidote to global warming?
    8. My parter and I are patient, willing to look long and hard for the right house in the right location.
    9. Meanwhile we rent in a home that’s pretty neglected by its owner, with minor repairs and maintenance completed by me. I can’t help myself.
    I’ll post more observations as we move forward.

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  65. Kary L. Krismer

    RE: CMDCMF @ 64 – The moss is worse in years of heavy rain, or if it wasn’t treated in the prior year. Untreated it can greatly reduce the life of a roof.

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