December Reporting Roundup: “Buy Now, Don’t Wait!” Edition

It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

To kick things off, here’s an excerpt from the NWMLS press release:

Local real estate leader calls December "One of best on record"

Real estate brokers around Western Washington reported a strong finish to 2014. December’s sales outpaced the same month a year ago by double digits, according to new figures from Northwest Multiple Listing Service.

“December was one of the best Decembers on record,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate upon reviewing the latest statistics from the listing service.

Commenting on the combination of scarce inventory in some areas and expectations of rising interest rates, the head of one large real estate company advised, “Anyone thinking of buying a home should do it early in 2015!”

“Prices, interest rates, and rents will continue to rise,” stated Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he explained, adding, “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase.”

“Buy now! The price is only ever going to go up, up up!” Gee, now where have I heard that before…

YOUR NEXT HOME WILL NEVER COST LESS THAN IT DOES TODAY

Oh yeah only from basically every single real estate agent prior to the collapse of the bubble. But wait, didn’t home prices totally crash, while interest rates simultaneously fell to historic lows? Don’t you worry your pretty little head about that. Surely it could never happen again. Never ever.

Read on for my take on this month’s local news reports.

Seattle Times

Sanjay Bhatt: Flurry of year-end home sales brings strong finish to 2014

King County’s housing market ended 2014 with a flurry of sales, but with the lowest supply of active listings in any month going back more than a decade.

That crunch affected total sales: The MLS reported 24,393 sales of single-family homes for the year, 300 fewer than in 2013. In the previous five years, total sales volume climbed each year in King County.

The $440,000 median price of single-family homes in 2014 was 6 percent higher than in 2013, MLS data shows.

“I’m looking forward to 2015,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “It’s just going to be a very healthy, steady year. I don’t think we’ll see price increases off the charts.”

The initial version of the Seattle Times story focused primarily on the very slight decrease in annual sales rather than the crazy low supply of listings on the market. The story was updated before the end of the day to this version, which has a more complete view.

It’s interesting that Mike Gain gave the Seattle Times a much more toned-down quote than what he provided to the NWMLS for their press release.

Seattle P-I

Aubrey Cohen: Supply of homes for sale falls even more

It’s getting even harder to find a home to buy in the Seattle area, according to a new report.

King County had just 1.39 months’ worth of houses for sale, at the current sales pace, in December, the Northwest Multiple Listing Service reported Tuesday. That’s down from 1.74 months last December and 1.96 months in November, and well below the four to six months considered balanced between buyers and sellers.

Supply is even tighter in Seattle itself, at 0.86 months, down from 1.19 months a year earlier and 1.25 months in November.

“It’s phenomenal,” said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington.

Inventory fell because new listings ticked down slightly from a year ago in Seattle and countywide, while sales jumped 15 percent and 10.5 percent, respectively. O’Connor speculated that buyers are acting now because they see mortgage interest rates going up, along with prices.

Hmm, what happened to Glenn Krellin? Can’t say I’m a fan of the breathless tone of the quote provided by his stand-in Stephen O’Connor. I mean, tight supply is an interesting phenomenon, but calling it “phenomenal” has a strong positive implication that I doubt many home buyers would agree with.

Everett Herald Business Journal

Dan Catchpole: County housing market finishes strong in 2014

The housing market in Snohomish County and around metro Puget Sound finished strong in 2014.
Residential sales and median home prices climbed in December compared to the same month last year, according to data released Tuesday by the Northwest Multiple Listing Service.

But while more houses and condos sold, new listings did not keep pace. The county’s only has enough homes for sale to feed demand for about two months, according to NWMLS. King County has lowest supply of listings. It has less than six weeks of supply.

Hey, the Herald decided to post something this month. There isn’t much “meat” in their story, but it’s better than nothing.

Tacoma News Tribune / The Olympian

John Gillie: Median home prices jump nearly 10 percent in 2014 in Pierce County; 7 percent in Thurston

A tight housing market where demand is outpacing supply could drive prices higher for Western Washington homes and condominiums, real estate experts are predicting for the coming year.

Over the past year through December, median home prices have jumped by 6.41 percent in King County, 6.68 percent in Thurston County and nearly double digits, 9.76 percent, in Pierce County, according to new December 2014 statistics from the Northwest Multiple Listing Service.

The median home and condo sales prices in December in King County increased from $375,900 in December 2013 to $400,000 last month. In Pierce County, the median sales prices increased from $205,000 to $225,000 in that same period. Thurston County’s sales prices jumped from $224,950 to $239,975 from December 2013 to December 2014, said the listing service.

While home prices were moving the right direction for sellers, the market has yet to return to pre-recession highs, said Michael Robinson, residential investment specialist at Windermere Professional Partners in Tacoma. That high was $285,000. The low in February of 2012 was $185,000.

Robinson said that as long as interest rates remain low, the Pierce County market is affordable to many potential buyers.

“Prices, interest rates and rents will continue to rise,” said Mike Gain, chief executive of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he said. “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase,” Gain said in a news release.

And the bait has been taken. Buy now! Don’t wait!

Puget Sound Business Journal

Marc Stiles: Puget Sound region sees huge jump in million-dollar home sales in 2014

The prospect of higher interest rates spurred home-buying activity last month in the greater Seattle area, where the number of pending sales hit the highest level in nine years.

Sales of million-dollar-plus properties in King County jumped significantly last year. According to the MLS, nearly 2,000 homes priced at $1 million and up sold in 2014. That’s up more than 25 percent compared to 2013.

Reflecting the strong regional economy, the overall housing market is firing on all cylinders.

I rather doubt that sales volume has much to do with “the prospect of higher interest rates.” More likely it’s entirely due to the last bit quoted there: the Seattle area’s roaring economy.

(Sanjay Bhatt, Seattle Times, 01.06.2015)
(Aubrey Cohen, Seattle P-I, 01.06.2015)
(Dan Catchpole, Everett Herald Business Journal, 01.06.2015)
(John Gillie, Tacoma News Tribune, 01.06.2015)
(John Gillie, The Olympian, 01.06.2015)
(Marc Stiles, Puget Sound Business Journal, 01.06.2015)


About 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.

41 comments:

  1. 1
    Erik says:

    I see that people selling homes sometimes declare it is a good time to buy just to pad their own pockets. In the past they have been wrong. That said, with inventory at an all time low, I only see prices rising in our area as long as the tech industry keeps moving forward as it has been. What I have been praying every night for Google, Amazon, Oracle, or another code monkey operation to insert themselves in West Seattle. Please come and inflate housing prices here. I speak for the people of West Seattle when I say that we are willing to deal with your interpersonal skills if you help us increase our home values. We won’t make fun of you to your faces… I promise.

    Now come on little code monkey, you can do it, move on out to West Seattle. We’ll put in diet coke machines in and add a gaming station.

  2. 2
    Carl says:

    On the “buy now quote”, at least for Seattle area, I think that statement is almost always true if you look at 10 year time horizons. I don’t think there has ever been a 10 year interval where the end year has lower pricing than the beginning year. And if you are buying a house, that’s how long your time horizon should be. Otherwise rent.

  3. 3
    Erik says:

    RE: Carl @
    It costs a lot more money to own a house then it does to rent. If you bought in 2006, you could sell for the same price today in King County. That is 8 years of owning and a bad financial decision. Let me let you in on the secret to buying low and selling high… Look at supply and demand. If inventory is down like now, prices should go up. I keep telling you dummies again and again. It’s all about supply in demand!!! It is unlikely that prices will not go up a lot in 2015 when we are at record low inventory. The most likely scenario is that housing price in 2015 will act the same as they did in 2014. Look at the inventory curve you fools! It is the same every year and the median price curve is about the same those years. Why would 2015 be any different? I am getting tired of telling you regular people and code monkeys over and over again.

    People like to make interesting predictions like when Tim showed inventory skyrocketing and then plotted actual values against his prediction. The sad truth for some of you is that the same thing that happened last year will happen this year. Tim also predicted a top for housing prices. I certainly don’t see what evidence supports that. Show me the evidence!! The only reason it seems he predicted that was he read some stuff an “expert” wrote and looked at momentum of housing prices. That’s weak. Look at inventory and interest rates. That is much more telling than reading some “expert” opinion and observing that prices were falling.

  4. 4
    Shoeguy says:

    RE: Carl @

    Has there ever been a ten year interval in housing where QE Infinity and ZIRP has gamed the numbers the way they are today?

    Interest rates at record lows, yet mortgage applications are in the toilet, first time home buyers are non-existent, and investor levels are triple their historic norms.

    Yea, this is a sustainable “recovery”.

    I forgot, Seattle is “different”. How did that work out last time?

  5. 5
    Erik says:

    RE: Shoeguy @
    These aren’t Nike Air Jordans, these are homes and buyers are hungry when they get pushed out by investors. Prices will continue up in 2015 because demand is up and supply is down. This trend will likely continue this year and next.

  6. 6
    Shoeguy says:

    RE: Erik @

    Mortgage apps and first time home buyer participation, coupled with endless Millennial interviews refutes your point that buyers are hungry for houses.

    First time buyers are even less hungry and less interested in feeding off of investor leftovers after they pushed house prices up 20%.

  7. 7
    whatsmyname says:

    RE: Shoeguy @
    This is what happens when you get trapped in an unthinking meme.

    Carl’s point was that there hasn’t been a 10 year period that didn’t end with higher prices. When you disdainfully scorn at “different,” and ask what happened “last time,” you are the one on the wrong side of your snark. The last 10 year period we can look at ended in higher prices – just like every other 10 year period we can look at.

    Btw, we’ve covered mortgage apps before. Mortgage apps include sales and refinancings. Refinancings are a lot more numerous when rates are moving significantly down than when rates have been down for a while. The reason for this should be intuitively obvious. So the question becomes: Given that mortgage apps are a very flawed proxy for sales numbers, and that we have actual sales numbers available, why would one choose the less accurate number for one’s argument?

  8. 8
    Mike says:

    By Shoeguy @ :

    RE: Carl @

    Interest rates at record lows, yet mortgage applications are in the toilet, first time home buyers are non-existent, and investor levels are triple their historic norms.

    Where do you get this idea that first time home buyers are non-existent? Of the homes that sold around my block recently, the ones for $550K, $615K, $625K, $710K and $850K all went to FTHB’s. The 2 at $930K and $975K… well, they went to move up buyers. So there is still a market for starter homes sold to first timers in some areas.

  9. 9

    Reality is as Positive or Negative as Anyone’s Wild Allegation Predicative Attitude

    One of the errors I see in assuming selling houses with loan mortgages in the $500-700K Range isn’t just “hey, look at the $60K average household income in Seattle”. Let’s run some Bankrate affordability assumption numbers in for first time home buyers, something none of you real estate bulls are doing [but should] that I’ve seen:

    “…

    Gross Monthly Income

    Wages:

    $ 5000

    Investments / Dividends:

    $ 0

    Alimony received:

    $ 0

    Other:

    $ 0

    Total monthly income: $ 5000.00

    New Home Info

    Down payment:

    $ 5000

    Loan term:

    years 30

    Interest rate:

    % 4.5

    Today’s Rates

    Homeowner’s insurance:

    $ 3000

    per year

    Real estate taxes

    $ 6000

    per year

    Monthly Expenses

    Car payment:

    $ 200

    Alimony paid:

    $ 0

    Credit card payment:

    $ 200

    Other debts:

    $ 500 (Student Loan)

    Total monthly expenses: $ 1650.00

    Total monthly expenses (including insurance and real estate tax payments)

    Calculate Clear All

    Available Mortgage Limits:

    Available mortgage payment: $ 150.00
    Affordable home amount: $ 34604.17

    Golly gee this typical example of today’s average household income qualifies for a $35K home….LOL

    http://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx?wages=5000&investment=0&alimony=0&other=0&downPayment=5000&term=30&interestRate=4.5&homeownerInsurance=3000&realstateTax=6000&carPayment=200&alimonyPaid=0&creditcardPayment=200&otherDebts=500&show=true

  10. 10
    Weasel says:

    When it comes to buying or selling a house, you’re in it for one of two reasons – 1) Somewhere to live that’s yours. 2) You have this crazy idea that its all about being an investment.

    If you’re in it for option 1, then all that matters is if the current time makes sense for you.
    If you’re in it for option 2, then you can debate about when the “right time” is until the end of time, but you shouldnt let you’re “investment” concerns influence people that fall under option 1 so much, if at all. All option one should care about is that its a place they want to be, makes sense for them to buy, and that its not a lemon.

    I just bought a house, it made sense for us for all the right reasons – location, type of house, and $500 a month cheaper than renting the much crappier house we were in. We’re not planning on going anywhere anytime soon. What its worth in 10, 20 or 30 years I care the least about.

  11. 11
    Eastsider says:

    RE: Carl @

    The “buy now quote” is just a sales pitch by real estate agents. I think you will agree that money today is going to worth less in 10 years. At 2% inflation, today’s dollar will lose close to 1/5 of its value in 10 years time.

    If you buy today, you are getting a much better value compared to 10 years ago. But it does not mean that today’s prices are a steal. The key for home prices has always been affordability.

    As to the supply-demand claim by Erik, again it is not a universal truth. Your supply and demand curve can turn on a dime. Otherwise, gold, oil, stock (and house) prices should not drop in prices so drastically in so short a timeframe.

  12. 12
    boater says:

    RE: softwarengineer @ – yes yes and as we’ve all pointed out to you many times the average income is not the average buyer in Seattle. The average income is buying outside Seattle proper where housing for that income us affordable.

  13. 13

    RE: Eastsider @

    Yes Eastsider

    Pfft was bringing out the point that the inflation dragon has been downed with $50/bbl oil today. The problem isn’t how inflation is calculated, so much as how the past high oil price increases pushed up food, medical insurance, tuition, etc., etc….way beyond a lot our reach. When all of us make retirement planning, we’ll need to plan for the prices that suck our fixed income dry, that we have to buy, not just the low inflation calculation method used which does not impact us.

  14. 14
    Carl says:

    RE: Shoeguy @ – So the answer is “no”. Never been a 10 year period where housing is down. Doesn’t really matter “why” its never been down to me. I am confident the politicians will find a way to prop up the market. They always do . . . .

  15. 15
    Carl says:

    RE: Erik @ – Hard to tell whether you are agreeing or disagreeing with me. But am still looking for that 10 year period where prices are lower at the end than at the beginning. And of course, my caveat is that I am not taking into account inflation at all – just using raw median dollar values. If you take into account inflation, I am sure housing hasn’t kept up during many decade periods.

  16. 16
    Carl says:

    RE: Shoeguy @ – If buyers are not hungry for houses, why are prices higher now than a year ago? Even if it is cheap money and bad gov’t policy, the bottom line is that there are buyers willing to pay more now than a year ago.

  17. 17

    RE: boater @

    Yes Boater

    The yin and the yang to this dilemma is using general affordability allegations for the “horrifyingly high priced” average priced Seattle area home for first time home buyers with “skin in the game” [they need approved borrowing on the assumption their employment is stable]. Even most of the stock in the cheaper Seattle area suburbs are way out of the first time home buyers reach. My neighborhood is the cheapest type home buying in SE King county, yet has a bankrupt HOA for maintenance loans [our dues income apparently won’t get us loans anymore with tighter banks] and multiple empty bank owned foreclosures [out of a 110 unit base] that sit like that forever. Realtors that live in my neighborhood [for the same reason I do] tell me that as bad as it is, the homes in my neighborhood are the most sought after [approved mortgages] units in the area. As bad as it is, it’s the best we’ve got.

    I don’t want to be pessimistic for the New Year, but there is hope even in the average home price neighborhoods and the non-existent inventory. It’s the assumption that this paradigm will always be a stable assumption in the future that get’s as risky as the stock market. Buy a high end home to flip if it’s a good choice for you, but it’s also my assumption that even with the many success stories on Seattle Bubble doing this, there’s probably far more affordability failures no one likes to talk about., especially in Seattle.

  18. 18
    Carl says:

    RE: Eastsider @ – Yes, you are right. My statement didn’t account for inflation. If housing can just keep up with inflation, I think you can count that as a “win” if you enjoy where you are living. If housing prices increase 3% a year and CPI is 2.5%, then you should be quite happy. A house is a home, not an investment (other than the forced savings of principal paydown).

  19. 19

    RE: Carl @

    Old Money and Riches Go to the Lucky Few

    The extremely low inventory means that even the lucky few will have to squabble who gets them.

  20. 20
    Econdunce says:

    I’m not too savvy about supply-demand concepts, nor about the affect of mortgage rates on the value of homes. All I know is that there were 14 bids on a place I recently purchased, most of which reportedly had pre-inspections. The home was small, mostly appealing to FTHBs, but not cheap.

    Who knows wnether all of the potential buyers would have qualified to buy the place, but when was the last time anybody sold anything that had 14 folks vying to buy? Clearly, pockets of the market are strong. And does it really matter whether investors or owners are buying? An investor’s money is just as real as an owner who’ll be living there, and creates the identical demand. Finally, it’s not clear to me that investors aren’t apt to hold and maintain a place as long as the average FTHBS in this market, and I’m not sure investors are any more apt to default….

  21. 21

    RE: Erik @
    I don’t know what’s going to happen. What’s going to happen isn’t as obvious to me as it is to you. But with low inventory, two things can happen.
    1. Prices will continue to rise until that no longer be sustained.
    2. Inventory will rise to meet the demand.
    I don’t see any evidence to suggest that the market is going to suddenly crash, but inventory has been really low for a long time, and it can’t stay that way.

  22. 22
    Erik says:

    RE: Ira Sacharoff @
    I was trolling again… What I want to know is will prices increase as long as inventory is below equilibrium? Seems pretty logical to me that prices increase until we reach equilibrium.

    Btw, drinking gin and tonic tonight. Haven’t had a beer since we last talked about it besides sorghum beer, which really isn’t beer.

  23. 23
    boater says:

    RE: Ira Sacharoff @
    #2 is a statement of hope not fact. Supply is government controlled via regulations . See San Francisco for an example of where government regulations have keep supply from meeting demand for over two decades. Outlying areas may offer an inferior alternative to help.

  24. 24
    boater says:

    RE: Carl @ – Shiller of Case-Shiller has done a few reports I believe showing for the US as a whole housing prices have averaged a gain equal to inflation. Of course that s an average meaning high demand areas (typically the coastal cities) have beat inflation and the inland areas have not.

  25. 25

    By boater @ :

    RE: Ira Sacharoff @
    #2 is a statement of hope not fact. Supply is government controlled via regulations . See San Francisco for an example of where government regulations have keep supply from meeting demand for over two decades. Outlying areas may offer an inferior alternative to help.

    I think he’s discussing supply in terms of number of houses for sale, not total number of houses in existence.

  26. 26
    Shoeguy says:

    By Carl @ :

    RE: Shoeguy @ – If buyers are not hungry for houses, why are prices higher now than a year ago? Even if it is cheap money and bad gov’t policy, the bottom line is that there are buyers willing to pay more now than a year ago.

    Buyers were more hungry and were willing to pay more for housing in 2006 than they were in 2005. That didn’t mean that things were sustainable or that people were being rational.

    Also, the type of buyers buying these homes is incredibly important. This is why first time home buyer participation being half of what it historically has been is a concern for everyone, and why foreign all cash buyers are warping median home prices for conventional buyers, (which is why mortgage applications are at 1993 levels right now).

    I’m sorry, I was in the camp that saw that 2006 wasn’t sustainable in any way, and I’m in the camp that sees that our current trajectory isn’t sustainable either. Will there be a 2008 style correction this time around? Probably not, unless all of that QE money printing bites us in the ass, but come on, is a 5.2:1 home price to median income ratio really sustainable in the long run?

  27. 27
    Jen says:

    RE: Erik @ – Thanks for calling us “code monkeys”! Now that I know that there is a “cool” dude like Erik living in West Seattle, I will try to avoid West Seattle at all cost. I will also tell my follow “code monkeys” not to inflate the price in West Seattle, because then you will have to deal with people like Erik in the future.

  28. 28
    m-s says:

    RE: Jen @
    Hi-
    Try not to take it personally; Erik is an equal-opportunity insulter.

  29. 29
    boater says:

    RE: Jen @ – don’t let Erik ruin west seattle for you. It’s a fun place.

    Kary at some point the city will need to add units if it wants affordable housing.

  30. 30

    By boater @ :

    RE: Jen @ – Kary at some point the city will need to add units if it wants affordable housing.

    If you just want to focus on Seattle, probably 5 years ago! ;-)

    There is a lot of construction going on outside of Seattle. I don’t think we’re at 2007 levels, but it’s significant.

    As to Seattle, it would be nice if Tim would do a piece on what the current construction of multi-family is. Condo/Apts and volume.

  31. 31
    whatsmyname says:

    By Shoeguy @ :

    I’m sorry, I was in the camp that saw that 2006 wasn’t sustainable in any way, and I’m in the camp that sees that our current trajectory isn’t sustainable either. Will there be a 2008 style correction this time around? Probably not, unless all of that QE money printing bites us in the ass, but come on, is a 5.2:1 home price to median income ratio really sustainable in the long run?

    Seattle home price to median income is significantly lower than most European cities, Canadian cities, Mexican cities, and major US Cities, (includes apartments all round). It’s even worse in the 3rd world: http://www.numbeo.com/property-investment/rankings.jsp

    BTW, What camp were you in during 2012?

  32. 32
    Blurtman says:

    RE: Carl @ – Inflation adjusted home prices.

    Yawn.

    http://b-i.forbesimg.com/rickferri/files/2013/05/Housing-Fig11.jpg

    Focusing on nominal values is just a hand job at a luv you long time massage parlor.

  33. 33
    Shoeguy says:

    By whatsmyname @ :

    By Shoeguy @ :

    I’m sorry, I was in the camp that saw that 2006 wasn’t sustainable in any way, and I’m in the camp that sees that our current trajectory isn’t sustainable either. Will there be a 2008 style correction this time around? Probably not, unless all of that QE money printing bites us in the ass, but come on, is a 5.2:1 home price to median income ratio really sustainable in the long run?

    BTW, What camp were you in during 2012?

    I was in the “thank goodness house prices are starting to return to normal by falling in line with historic median incomes again….wait, what kind of deal is Obama and the HUD working with Blackstone and other institutional investors???” camp in 2012.

  34. 34
    Saffy The Pook says:

    By Jen @ :

    RE: Erik @ – Thanks for calling us “code monkeys”! Now that I know that there is a “cool” dude like Erik living in West Seattle, I will try to avoid West Seattle at all cost. I will also tell my follow “code monkeys” not to inflate the price in West Seattle, because then you will have to deal with people like Erik in the future.

    You don’t need to stay out of West Seattle, you and your colleagues just need to avoid Erik’s property. Find out who’s the owner of any property you’re looking at and if the first name is Erik, you can be certain there are hidden deficiencies. Walk away.

    Yes, Erik, there are consequences.

  35. 35
    Long time reader, first time poster says:

    By whatsmyname @ :

    By Shoeguy @ :
    Seattle home price to median income is significantly lower than most European cities, Canadian cities, Mexican cities, and major US Cities, (includes apartments all round). It’s even worse in the 3rd world: http://www.numbeo.com/property-investment/rankings.jsp

    I have serious misgivings about the usefulness of those numbers. Not only are they assuming $0 down on a 30-year mortgage, but they are also assuming the average household has disposable income of 1.5 times the average net salary. Really? In Seattle? No way it’s that high.

    Beyond that, though, they are estimating prices by using the entire area’s average sq.ft. cost but then calculating for a 90 sq.m (970 sq. ft.) house. Again, I don’t see how that can work here.

  36. 36

    By Saffy The Pook @ :

    You don’t need to stay out of West Seattle, you and your colleagues just need to avoid Erik’s property. Find out who’s the owner of any property you’re looking at and if the first name is Erik, you can be certain there are hidden deficiencies. Walk away.

    That’s a bit extreme. If you want to avoid his property you can just look for Eriks who previously had a transaction with someone named Ardell.

  37. 37
    whatsmyname says:

    RE: Long time reader, first time poster @
    I think you have some valid concerns. These statistics are pretty broad, and necessarily so since they are trying to get impoundable information across a broad spectrum of countries. The 90 meter house is small, and the implied price is therefore also lower than what we generally see in the areas people here like to talk about, although less so when you consider that condominiums are a part of the market.

    After tax household income of 1.5X average salary intuitively seems wrong because averages tend to skew high. This would seem to assume income and payroll taxes for 2 FT workers when the average household has fewer FTE’s, (1.5?), aggravating the problem further. Still, the other countries and cities in the list are burdened in the same way, so I don’t think the comparative issue suffers, and the comparison was my point.

    But since we are going that way, we wind up with the average vs median conundrum again. I see a lot of value in using the median versus using the average. However, I think we lose a lot of that value when making median to median comparisons. Up to 40% of this market is rentals. If 3/4ths of that population isn’t in a financial position to buy, then the median homebuyer (includes condos) is at the 65% level for income. Considering this site is focused on single family, how much of the King County owner occupied is condos? (and not the top end ones) Surely, over 10%. That would put us above 70% income for the 50% SFR. So mathematically, the median income should get you into the bottom 25, maybe 30% of King County houses. (Now consider the stratification between Northern Seattle, Eastside, Southend, and you know where your median earner has options). I don’t know how it could be different, although I am sure someone will tell me.

  38. 38
    whatsmyname says:

    RE: Shoeguy @
    King County prices went up faster and by more dollars in 2012 than in almost any previous calendar year. If you were in the camp that saw that as fundamentally the right thing in the market, plus you anticipated government instigated supply constrictions, there was only one thing to do. So tell me……. what kind of house did you buy?

  39. 39

    It’s interesting to note that everyone quoted believes interest rates will rise. But so far, it’s just the opposite. I wonder what that might mean for future values…

  40. 40

    By Craig Blackmon @ :

    It’s interesting to note that everyone quoted believes interest rates will rise. But so far, it’s just the opposite. I wonder what that might mean for future values…

    Many, many people have been predicting a rise in interest rates at least for the last couple of years. Really low interest rates can’t last forever, so at some point they’ll be right. Just as the inventory of homes for sale can’t remain insanely low forever. I just wish I could predict when.

  41. 41

    RE: Ira Sacharoff @ – Exactly right Ira. Like you, I also wish I could predict when – you know, like most other real estate brokers… ;-)

    My point: They’re not rising yet, just the opposite. So will that be fuel on the housing market fire? Well, I’ve seen enough, I’m ready to answer that question. Here’s my 2015 forecast…

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