February Stats Preview: No Good News for Buyers

With another extra-long February in the books, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snohomish County Stats Preview

Sorry buyers, the glimmer of hope we saw in last month’s numbers has completely faded. Inventory was flat month-over-month, which is not a great sign for any potential spring inventory increases. Meanwhile, sales began their usual seasonal surge, and were up slightly from last year. Foreclosures continue to remain near their historic lows.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County increased 17 percent between January and February (a year ago they rose 15 percent over the same period), and were up 5 percent year-over-year. I still do not expect to see large year-over-year increases in sales this year unless inventory dramatically picks up from its current levels, which looks very unlikely any time soon.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish rose 9 percent month-over-month (vs. a 3 percent increase in the same period last year) and were up 11 percent from February 2015.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were down 7 percent from a year ago and Snohomish County foreclosure notices were up 5 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 23 percent from a year ago. I’m still surprised to see that around a hundred homes are being foreclosed each month in this market.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

Inventory was dead flat month-over-month King County, which means it’s down year-over-year even more than it was last month. In Snohomish County inventory was also flat from January to February, and still down big from a year earlier as well.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.


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.

149 comments:

  1. 1
    Blurtman says:

    Recent sale on the Sammamish incline. This GEM did not linger long on the market.

    20 211th Pl SE,
    Sammamish, WA 98074
    4 beds 3 baths 1,970 sift

    Built: 1984

    PENDING background check and approval by the citizens screening committee.
    $549,500
    Zestimate®: $509,335

    http://www.zillow.com/homes/for_sale/house_type/49088366_zpid/2-_beds/300000-_price/1075-_mp/any_days/2000-_built/47.608917,-122.054535,47.606584,-122.060147_rect/17_zm/0_mmm/

  2. 2
    Justme says:

    >>PENDING background check and approval by the citizens screening committee.

    Are you serious, is this for real?

  3. 3

    The unofficial number of active King County SFR short sales and REOs is under 75 for each.

    What’s amazing is that there are still some bank entities out there that are really bad at the process over seven years into the mess. They’re still costing themselves (or whoever they represent) money due to incompetence.

    Active data from NWMLS sources but not compiled by or guaranteed by the NWMLS.

  4. 4
    Erik says:

    RE: Kary L. Krismer @ 3
    Keeping King County SFR short sales and REOs low will help keep inventory low so prices can flourish. Up, up, and away!

    I’m waiting patiently until I can get double what I paid. May not be too much longer now.

    I gave buyers that visit this website and were smart enough to read my comments insider information and advised them to buy. Those that read my comments and didn’t buy need to pay now.

  5. 5
    GoHawks says:

    The “stock market is crashing” “Seattle is doomed in 2016” crowd got real quiet.

  6. 6
    Blurtman says:

    RE: Justme @ 2 – It’s a bit hush-hush, old boy. Undesirable types like Erik are always trying to get in. Can’t be too careful.

  7. 7
    Erik says:

    RE: Blurtman @ 6
    When I sell my condo and the market crashes, I’m gonna step into the golden east side gates of Samammish. Hopefully that won’t bring down your value too much. I’ll keep my dogs on a leash and limit it to 3 cars in the yard.

    I’ve been called “Trashy,” “Undesireable,” and “Unwashed” on this website. I can’t deny those accusations.

  8. 8
    tina says:

    Thanks for the posting. Can we have more data on the population trend, water usage, transportation cost(# people took buses last year, # of times car paid for 520 bridge etc) to actually see the growth of the city and also deep dive on the cause of the low inventory. It would help to see some long term trend. Thank you!

  9. 9
    SFraz says:

    RE: Erik @ 7 – Now that is funny!

  10. 10
    redmondjp says:

    One has to wonder if the dotcom 2.0 party is about to be over when Bill Gates says to short the unicorn startups: http://www.geekwire.com/2016/bill-gates-doesnt-like-unicorns-near-future-says-hed-likely-short-them/

    But there is no way that this will have a negative effect on local housing prices – in fact, if anything, the unemployed workers from Silly Valley will then move to Seattle in search of new jobs, driving up demand for local housing even higher to never-before-seen levels.

  11. 11
    SFraz says:

    From Dr. Housing Bubble:
    Big investors and hedge funds have largely left the building when it comes to investing in residential real estate. They started in 2014 and largely made a full exit in 2015. Today you have a bunch of aspirational house humpers trying to make their money on the edge of a frothy housing market. Flippers are flipping and families are overextending. While the tech sector hits a snag, you have the median priced house in San Francisco selling for $1.2 million. Many Millennials, the next large group of potential house buyers, are unable to buy because they are simply broke. They are living with parents as grown adults or have become one of the 10,000,000 new renter households over the last decade. With low rates, commercial banks have seen little need to beef up their lending. In fact, big banks are not growing their mortgage lending operations. Struck by low margins and new regulations (that should have been there in the first place), many non-commercial banks are taking up the slack. Now you can get a mortgage while sitting on the can or going zero down up to $2 million. What can possibly go wrong?
    http://www.doctorhousingbubble.com/big-banks-leaving-mortgage-market-share-of-loans-rocket-mortgage-poppyloans/
    Guess who is poised to take over Hillary’s treasury dept.? You guessed it. BLACKROCK team. The same Blackrock that gobbled up houses and turned them into rentals. Winning!

  12. 12
    Scotsman says:

    San Fran median $1.2M? My rain gauge says almost 4″ over the last 48 hours in Preston, including 2″ of snow/hail. When my home hits $1.2M (within 2 years?) it’s on the market and I’m off to eastern WA or other sunny points. I’m sure a soon to be famous startup will do just fine in my garage, a higher use than it sees now. ;-)

  13. 13
    Buyer says:

    What is your advice to buyers in this situation? Buy asap or wait?

  14. 14
    Justme says:

    RE: blurtman@6: I guess I knew you had to be jesting. Is Erik @7 one of the local jesters as well? He seems strangely real, but I guess that is exactly the art of jesting.

    Coming soon: “Real Housewives of the Issaquah Highlands”

  15. 15
    Buyer says:

    It seems odd to me that the inventory for King and Snohomish counties stayed exactly the same number from Jan to Feb. 1906 for King county and 1111 for Snohomish. Does this indicate some error in the data? Did you accidentally (or the tool you used) get the January stats for both Jan and Feb?

  16. 16
    Buyer says:

    RE: Buyer @ 13 – Also Based on the 2015 data inventory data that your provided, it seems the inventory is expected to be almost flat for Jan, Feb, and March before it starts to increase again in April. If you look at Snohomish county numbers in your chart, you’ll even see a month-to-month decline in inventory from January through March in 2015.

  17. 17
    TJ98370 says:

    U.S. Real Estate 25% to 60% Overvalued: Analyst

    http://fortune.com/2016/01/11/real-estate-bubble/

    “……….In other words, it doesn’t look like irresponsible mortgage lending is inflating real estate prices beyond their fundamentals, but that doesn’t mean another form of capital won’t. That’s what housing analyst Marc Hanson has been arguing for sometime now. Housing prices, he contends, are about 25% to 60% above what the fundamentals of the U.S. economy can justify, but the market is being propped up by “unorthodox. . .incremental demand using unorthodox capital.”

    This time around the unorthodox capital isn’t coming in the form of international investors piling money into the U.S. mortgage bond market, creating a doomsday machine that cranked out home loans with very little scrutiny, but from domestic institutional investors, folks buying second and third homes and serving as landlords, and foreign buyers stowing cash in American real estate………”

  18. 18
    Erik says:

    RE: Justme @ 13
    I am real. I was broke and living in a house without plumbing or electricity in North Everett. I fixed it up while living there then rented rooms out. I guess I really don’t have any shame. Never will I buy in a bad area such as North Everett again.

    Eventually the bank was trying to take my North Everett house. By reading this website and doing some thinking, I realized I was making the wrong decisions and creating my own hardship. I saw a lawyer and made some good decisions. I bought at the bottom of the bubble and made a windfall of money in only 2 years later. Now I am a poor man from the mean streets of North Everett with a little bit of savings.

    I since bought another condo in Seattle and I finished remodeling it. I’m living there now. So now I come on this site and try to get people to see what I saw.

    Lessons learned are this:
    -Lawyers are your best friend. When in doubt, use them to consult with on an hourly basis.
    -Don’t live in bad areas like North Everett. Nice areas appreciate much faster and create more happiness.
    -Buy a small house or condo that is cheap and easy to fix up.
    -There can be a lot of knowledge on this site. Read it so you can make the right decision.

    I think Blurtman is teasing me because I was poor for a long time. That’s the joke.

  19. 19
    GoHawks says:

    RE: Buyer @ 13 – just depends on your current situation. Are you in a lease/rental that you are happy with that has some time remaining on the lease? Looks like it will remain a challenging year for buyers through the summer and potentially into 2017. Inventory could instantly double overnight and we would still be in a strong seller’s market from a supply and demand standpoint. This is not cyclical, this feels transformation for the area. I know many on here will poo poo the Jr. S.F. talk, but look at all this is going on in our region. This is more than a simple uptick or constrained inventory. Our local economy has never been more diverse (yes, lots of it is tech) and our qualified buyer pool never deeper. It’s not like it’s zero down creative financing out there. 40% cash and most of the rest are 20%+ down payment types.

  20. 20
    Blurtman says:

    RE: Erik @ 18 – Do not underestimate the power of the Eastside.

  21. 21
    greg says:

    RE: GoHawks @ 19

    “”””””This is not cyclical, this feels transformation for the area. “”””””””””

    That has to be the most frothy bubble statement I have heard in years.

  22. 22
    Erik says:

    RE: Blurtman @ 20
    I took Eastside money and converted it into Seattle money as soon as I could. I plan to do the same thing next recession. I’ll buy sammamish land, sell it, and extract the cash.

    I think we are still in the expansion phase. I should buy a sammamish condo to flip in the eastsides face.

  23. 23
    Blurtman says:

    RE: Erik @ 22 – I think a lot depends on your long term view of this area. I’ve always felt there are similarities to Marin (not the weather, obviously, but long term, who knows?), especially the diversity of home styles on the Sammamish incline. I loathe the soulless cookie cutter megamansion developments, but there is an undeniable market for those homes from folks who like to go from work cubicle to home cubicle. But there is no reason why Seattle area communities can’t be priced similarly to their Bay Area counterparts, IMHO.

  24. 24
    ARDELL says:

    RE: Justme @ 14

    Erik is definitely real. I may be the only person here who can confirm that with firsthand experience.

  25. 25
    Erik says:

    RE: Blurtman @ 23
    Yeah, I’m just teasing. Sammamish is a beautiful area.

    I really don’t know what is going to happen, but I would refer back to the 18 year bubble cycle. This may be a long expansion period, but at some point something has to give. I’m sure Marin is much more beautiful because of the weather and it is near the Bay Area when that was booming. Seattle or the Eastside isn’t booming like the Bay Area. I don’t think it ever will because of the weather.

    We will see though, I could be wrong. Every bubble people always say “this time is different.” Seems to me that is what you are saying here.

  26. 26
    SFraz says:

    “When home flipping numbers go up, it is usually an indication that the housing market is in trouble,” said Matthew Gardner, chief economist at Windermere Real Estate, who was quoted in the report.

    “These sales artificially inflate home prices, making housing even less affordable for buyers and increasing the risk of a bubble,” said Gardener.

    Nearly 20 percent more homes were flipped than in 2005 in Pittsburgh and Memphis. Home flipping was above 2005 levels in Buffalo, New York; Birmingham, Alabama; Cleveland, and San Diego. Seattle and San Diego, however, saw a decrease from 2014 levels.”
    http://www.reuters.com/article/us-usa-housing-realtytrac-idUSKCN0W50CT

  27. 27

    RE: Justme @ 2
    Yes….

    And to think that whole area was cow pastures a few decades ago….LOL

    Soon, you’ll need a million in extra [“negative interest?”] cash in the bank to qualify as a buyer…..tied up cash you can’t spend too…can’t have another 2007.

  28. 28

    RE: redmondjp @ 10
    You’re Funny

    You say the Silicon Valley downturn won’t hit Seattle in the gut simultaneously? The horse’s head is separate from its tail? Wishful thinking that makes as much sense as a “brainless wood headed open border puppet politician” supporting amnesty having voter support….LOL

    I love it when the similar Seattle area real estate ESTABLISHMENT looks and acts like a dolt…..LOL….become intelligent businessmen and deal with facts. Lying isn’t working anymore.

  29. 29
    The Tim says:

    Erik is the new Meshugy.

  30. 30

    RE: SFraz @ 26
    I Totally Agree

    A friend of mine is also my adult son’s caregiver/landlord. He owns a lot of Seattle area rental real estate….how much wealth is the mortgaged RE worth? I told him to get ready for retirement [he’s 52]….CASH IT ALL IN NOW while prices are high and there’s hot grease is in the pan for FLIPPING. Professional con men GRAB the money while they can….that’s how they win and that’s why they FLIP.

  31. 31
    Eastsider says:

    RE: TJ98370 @ 17

    IMHO, the “affordability” of mortgage is the main driver of current home prices. That is the direct result of 3 rounds of QEs. When mortgage interest is at 3%, you can afford twice as expensive a house at 6%. When the FED adopts NIRP, your mortgage interest could drop to 1.5% which would allow you to afford a house twice as expensive again!

    No one knows when the music will stop. But when it does stop, all hell will likely break loose.

  32. 32
    greg says:

    By SFraz @ 26:

    “When home flipping numbers go up, it is usually an indication that the housing market is in trouble,” said Matthew Gardner, chief economist at Windermere Real Estate, who was quoted in the report.

    “These sales artificially inflate home prices, making housing even less affordable for buyers and increasing the risk of a bubble,” said Gardener.

    Nearly 20 percent more homes were flipped than in 2005 in Pittsburgh and Memphis. Home flipping was above 2005 levels in Buffalo, New York; Birmingham, Alabama; Cleveland, and San Diego. Seattle and San Diego, however, saw a decrease from 2014 levels.”
    http://www.reuters.com/article/us-usa-housing-realtytrac-idUSKCN0W50CT

    The flipper is getting squeezed from both sides. Developers are desperate and appear to be paying far more than one might expect. Consumers are desperate too and are buying anything close in regardless of value.

    And just as importantly , I a see a huge number of homes getting a full rehab before hitting the market. 10 years ago people just sold them rough and ready, now just about everything in my area is showing up with fresh trim, flooring upgrades throughout and fully staged. Consumers are just eating those homes up.. There is very little meat for flippers, very few homes suitable to flip are showing up.

    Perhaps the only reason Seattle numbers are lower is the supply of suitable materials, maybe the flippers are moving out of king county to find meaty bones…

  33. 33
    kenmorem says:

    By Eastsider @ 31:

    RE: TJ98370 @ 17

    IMHO, the “affordability” of mortgage is the main driver of current home prices. That is the direct result of 3 rounds of QEs. When mortgage interest is at 3%, you can afford twice as expensive a house at 6%. When the FED adopts NIRP, your mortgage interest could drop to 1.5% which would allow you to afford a house twice as expensive again!

    No one knows when the music will stop. But when it does stop, all hell will likely break loose.

    interesting math there.

    example: $100k mortgage, 30 years.
    6% = $600/mo
    3% = $422/mo
    1.5% = $345/mo

  34. 34

    RE: Buyer @ 13

    Wait how long? The answer is different depending on how long you are willing to wait?

    Wait 6 mos? No.
    Wait one year? Probably no.
    Wait 18 mos. hmmm…maybe, but not likely
    Wait indefinitely until the next “bottom”? Sure, why not?

    The market has an equal chance past the end of this year to go up or down, and that will continue to be the case until and if it does go down. It’s a 50/50 shot after the 5th year of an up-cycle. 2016 is the 5th year of the “up-cycle”. The up-cycle could last 7 or 8 years. Beyond that, not likely and can end anytime after the 5th year…which is this year.

  35. 35
    greg says:

    RE: kenmorem @ 33

    his math might be off, but it is still a valid point.

    If and when mortgage interest rates go up , they will strongly impact the market.
    When I mess with the numbers the amount of house I can afford drops as rates go up.
    so while today I can afford to spend 100 dollars with 4% loan if it hit 6% I might only be able to afford a house for $800.

    Mind you, I don’t see rates going to 6% anytime in the next 5 years. But then I did not think we would have a decade of QE either.

    Many cash buyers are not really cash, they have taken loans on other properties to buy the next one. Those loans get more costly just as they do for the average buyer.

  36. 36
    Eastsider says:

    RE: kenmorem @ 33

    Yes, you are right. The principle payments get in the way. But it does not change the fact that at 1.5%, you could afford much more expensive homes. There is a direct correlation between “affordability” of mortgages and home prices.

  37. 37
    Weasel says:

    Read an article the other day on Digg about the economic recovery and zip codes. The recovery has greatly benefited anywhere where there are tech companies, everywhere else has languished. I don’t think this is .com 2.0 (1.0 was more like a false start, and was probably good thing to shake out the fakes), tech is here to stay, companies have generally been built this time around on solid business cases, not the hot air and hype of .com version 1.

    So, those cities that got lucky or took a risk in previous decades giving a some new fangled tech company a break to move into town are the winners here. Cities that tried to hang onto manufacturing and industrial have largely missed the boat, those industries dont employ the masses of people they once did, economy of scale, automation, competition and efficiencies have consolidated them.

    The 2008 housing bust also shook out the dodgy deals, this time around its not built on crappy loans, its built on a strong tech economy thats generating real ca$h. China just sh1t the bed with its jacked up stock market, look at how much Australia’s mining based economy and New Zealand’s dairy farming (China *was* buying large amounts of dairy products like no tomorrow) have folded in on them selves, this is now flowing into other areas of their economies. Basically if you have anything to do with mining, and dairy farming or companies that support those things, its tough times ahead at the moment, the money has dried up.

    Thats not to say there will be downturns in tech and dips in the housing prices, but I think the trend here for the next few decades will generally be up for tech towns.

    I feel that if you didnt buy something over the last couple years you’re going to miss out, the cheap stuff in good places is long gone. Even in Puyallup where I live and commute into Seattle on Sounder – 1.5 years ago there were stacks of decent houses to be had in the low 200’s. Now you need to start at upper 200k into mid 300k range, and you wont even necessarily find something thats a convenient bus ride to/from Sounder, and not in the lahar or flood zones.

  38. 38
    Justme says:

    Erik @ 18: Thanks for the background story. When I asked about you jesting, I was thinking about what I recall of many of your postings the last several months that (to me) sounded like an over-zealous bubble-hypester, or maybe someone jesting about being one. So when I asked if you are “for real”, the question really was whether you mean everything you write, or not.

  39. 39
    SFraz says:

    Here’s the list of layoffs the analyst sees coming:

    **EMC Corporation (NYSE: EMC): Total Employees: 70,000: Between 15-20 percent layoffs = between 10,000 and 14,000 employees
    **VMWare, Inc. (NYSE: VMW): Total Employees: 17,000: Between 10-15 percent layoffs = between 1,700 and 2,500
    **Hewlett Packard Enterprise Co (NYSE: HPE): Total Employees 240,000: ~30 percent layoffs = 72,000
    **HP Inc (NYSE: HPQ): Total Employees 287,000: ~30 percent layoffs = 86,000
    **International Business Machines Corp. (NYSE: IBM): Total Employees 379,000: ~25 percent layoffs = 95,000
    **Cisco Systems, Inc. (NASDAQ: CSCO): Total Employees 72,000: ~20 percent layoffs = 14,000
    **Juniper Networks, Inc. (NYSE: JNPR): Total Employees 8,800: ~15 percent layoffs = 1,300
    **Oracle Corporation (NYSE: ORCL): Total Employees 132,000: ~20 percent layoffs = 26,000
    **Microsoft: Total Employees 118,000: ~15 percent layoffs = 18,000 (The company is letting go about 200 to 250 people every week, but none of these are ever announced.)
    **NetApp Inc. (NASDAQ: NTAP): Total Employees: 12,800: ~15 percent layoffs = 1,800
    **Symantec Corporation (NASDAQ: SYMC): Total Employees: 19,000: ~15 percent layoffs = 2,800
    **F5 Networks, Inc. (NASDAQ: FFIV): Total Employees: 4,500: ~10 percent layoffs = 450
    **Yahoo! Inc. (NASDAQ: YHOO): Total Employees 12,500: ~30 percent layoffs = 3,500
    **Yelp Inc (NYSE: YELP): Total Employees 3,671: ~30 percent layoffs = 1,000
    http://finance.yahoo.com/news/chowdhry-major-tech-layoffs-coming-113953335.html

  40. 40
    TJ98370 says:

    RE: Weasel @ 37

    “Read an article the other day on Digg about the economic recovery and zip codes. The recovery has greatly benefited anywhere where there are tech companies, everywhere else has languished. …

    Good point, but given the flat returns from the stock market recently, I would bet there is an increasing number of speculators (domestic and foreign) who have left the stock market and are buying property in an attempt to profit from increasing housing prices. This activity will decrease the availability of housing and drive prices up even more, methinks.

  41. 41
    greg says:

    By SFraz @ 39:

    Here’s the list of layoffs the analyst sees coming:

    **EMC Corporation (NYSE: EMC): Total Employees: 70,000: Between 15-20 percent layoffs = between 10,000 and 14,000 employees
    **VMWare, Inc. (NYSE: VMW): Total Employees: 17,000: Between 10-15 percent layoffs = between 1,700 and 2,500
    **Hewlett Packard Enterprise Co (NYSE: HPE): Total Employees 240,000: ~30 percent layoffs = 72,000
    **HP Inc (NYSE: HPQ): Total Employees 287,000: ~30 percent layoffs = 86,000
    **International Business Machines Corp. (NYSE: IBM): Total Employees 379,000: ~25 percent layoffs = 95,000
    **Cisco Systems, Inc. (NASDAQ: CSCO): Total Employees 72,000: ~20 percent layoffs = 14,000
    **Juniper Networks, Inc. (NYSE: JNPR): Total Employees 8,800: ~15 percent layoffs = 1,300
    **Oracle Corporation (NYSE: ORCL): Total Employees 132,000: ~20 percent layoffs = 26,000
    **Microsoft: Total Employees 118,000: ~15 percent layoffs = 18,000 (The company is letting go about 200 to 250 people every week, but none of these are ever announced.)
    **NetApp Inc. (NASDAQ: NTAP): Total Employees: 12,800: ~15 percent layoffs = 1,800
    **Symantec Corporation (NASDAQ: SYMC): Total Employees: 19,000: ~15 percent layoffs = 2,800
    **F5 Networks, Inc. (NASDAQ: FFIV): Total Employees: 4,500: ~10 percent layoffs = 450
    **Yahoo! Inc. (NASDAQ: YHOO): Total Employees 12,500: ~30 percent layoffs = 3,500
    **Yelp Inc (NYSE: YELP): Total Employees 3,671: ~30 percent layoffs = 1,000
    http://finance.yahoo.com/news/chowdhry-major-tech-layoffs-coming-113953335.html

    RE: SFraz @ 39
    why do people even read what Trip has to say ?

    Trip is wrong more than a coin flip. He heads a one man band investment firm that grabs attention by making big and bold claims. This is the same dude who said Apple is done innovating , the same dude who felt Google should stick to the web and that Android was a going to lose to apple….

    Trip likes to get free press by writing click bait investor alerts. These claims of layoffs are no different

  42. 42
    Matt says:

    Serious question – millenial here, 28 yrs old. Graduated into the recession. Left Seattle for jobs elsewhere when there were none. Didn’t have money to buy a home in 2010-2013. Now I have money. Now I have 100K for a down. Recently, I moved back. Now, I find myself completely priced out and no matter how much I bid I just get overbid. Is it too late for others like myself? I’m a Native and the whole trend of Californians migrating here has left me with nothing but disgust and hatred in my heart. Considering leaving this place altogether but I don’t want to give up. What do you folks recommend?

  43. 43

    RE: Weasel @ 37

    The discount for weakness is where you will see the gaps when the market turns. In a buyers’ to balanced market the discount for busy road or electric towers nearby or a whole list of negatives is a whole lot steeper than in the period of low inventory we have had for some time.

    This will translate into houses bought for “too much”, because the comps did not have these weaknesses, will go down a lot more than homes without weakness. While there have been fewer buyers for the homes with weakness, there have still been enough buyers to have bid ups on those or for those to sell equally as high as the homes without weakness.

    Not everyone will feel the pinch of the decline to the same degree, even in the hottest of areas.

    Just picked up my “HOT Neighborhoods” March issue of Seattle Magazine. Always a fun read.

    http://www.seattlemag.com/issue/march-2016

  44. 44
    ESS says:

    An interesting article down below from Marketwatch regarding the salary requirements need to purchase a house in various cities.

    Note the salary one needs to afford a house in Seattle (and I don’t know if that includes the Puget Sound area or just Seattle) is in the upper middle of cities in the US. And of those cities on the West Coast, only Portland, Oregon is a city where one doesn’t need as much income as Seattle, and prices are escalating quickly there so the salary requirements in that city should be rising as well.

    SF leads the list of most expensive. Takes a hefty salary to afford a house in SF/Bay area. For Bay area residents, Seattle and area housing must be viewed as a bargain.

    http://www.marketwatch.com/story/the-salary-you-need-to-afford-a-home-in-these-25-cities-2016-03-03?dist=countdown

  45. 45
    GoHawks says:

    RE: greg @ 21 – Greg, I’ve been here 30 years and I’m hard pressed to remember a time seeing this area transform as much as it has in the past 3-4 years. 6,000 new residents a month, one single company in downtown Sea hiring 15,000 employees, potentially in back to back years, and more urban core development than any time in our history. Are there negatives (traffic etc) sure, but the area as we know it has changed more than in a traditional business cycle.

  46. 46
    GoHawks says:

    RE: Matt @ 42 – Matt, are you only focusing on a specific area, or are you looking in multiple neighborhoods/locations?

  47. 47
    Matt says:

    RE: GoHawks @ 46

    I started looking in Northgate/Greenwood/Ballard like your typical 20’s moron that has to stay close to the cool things and social scene. Gave up on that a month ago. Unfortunately I work out in Redmond (No I don’t work at Msoft) – everything East side is even more unaffordable. I’m single, no family to support. Right now since moving back I’m just staying with family, but it’s driving me crazy – although I can save a lot of money. Renting right now seems like it’d just erode my ability to further build a down, but with already 100K saved up I really don’t see any point in saving any more – as I wouldn’t even be able to afford the mortgage payments if I put more down – prices just keep appreciating and there’s nothing I can do about it. I’ve just been shopping for your generic crowded 3 story townhome. Maybe it’s time to leave? Everywhere I used to hangout is infested with tech-bro transplants . Sorry for rambling/ranting. I know it reeks of entitlement to expect a house at my age right now compared to the rest of my peers – it just seems like I worked hard and saved for nothing. I’ve been looking at South Seattle/Beacon Hill properties too but the same issue there…. I really don’t want to have to move to lynnwood/everett/Renton – just commuting from Bothell is a nightmare.

  48. 48
    Erik says:

    RE: Justme @ 38
    I am pretty sure that housing prices will keep going up. How do I know this?

    Firstly, 18 years is the most common time interval between housing price peaks. We are at 10 years.

    There are 4 stages to a housing bubble as follows:
    1. Recovery
    2. Expansion
    3. Hyper-supply
    4. Recession

    I don’t think we are in recovery any longer based bidding wars and inflated prices. Skipping forward, Hyper-supply cannot be because inventory is hyper-low. Obviously we are not in recession.

    Deductive reasoning tells me we are in the expansion phase. The expansion phase can last quite a while and prices often increase quicker the further we get into the expansion phase.

    I guess the real question is when do you think we will be in the hyper-supply phase? Well, inventory is very low and I’m guessing it will be for years longer in Seattle. We have the global attention of investors now. I think this thing is just gaining speed. Buy or get priced out forever. I’m probably gonna buy another if I can find a good deal.

    So, ya… I’m saying something I seriously believe in a jestures fashion I suppose if that sentence makes any sense. If I was buying a place to live, it’s a no brainer. Just buy one. You’ll get a chance to make some money in a few years if you wanna sell for a profit. Just don’t by in bad places like north Everett.

  49. 49
    Deerhawke says:

    Matt, you need to expand your horizons a bit.

    In the early 90’s when my family and I moved here, we found a really reasonable rental in Wallingford and loved it. But after the run-ups of the late 80’s caused by the dreaded Californicators (mainly from LA in those days, not the Bay Area) we couldn’t afford anything there. It was too chic. So we sacrificed and found ourselves looking in down-market Greenlake, which was about 10-20% less because it had more rentals, more hippies and students, was less convenient, less chic, didn’t have any restaurants, etc. Everything we were looking at in Wallingford was $200K and we managed to find a bigger house on a double lot in Greenlake for $165K.

    If you have $100K to put down, I think you can still find something below 85th Street in Greenwood or in parts of northwest Ballard. I think the sub-$500K price point still exists there, although you will have a lot of competition.

    But if not, look at Maple Leaf and Shoreline. And if all else fails, just keep heading north. Edmonds is a cool place and I think your money will go a lot farther there.

    Alternatively, go south. It was not long ago that the urban pioneers who were willing to take a few risks and live among minorities were buying for cheap in the Central District. Now the CD is just an extension of Capitol Hill. The gentrification boundary these days is down around Hillman City. If you want to get in front of it, you can buy a pretty nice old Craftsman on a largish lot for less than $400K. I looked at a house on a double lot (8000 sf +) in Brighton this week for $380,000. In a decade, they will be taking the bars off the windows and that area near the Othello station will have doubled in value– or more.

    It is not the end of the world if you can’t live in Capitol Hill or Wallingford.

  50. 50
    Deerhawke says:

    Tim, you say “If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.”

    It would be really helpful to have here, every month, new listings and pendings. I know you have a problem using pendings to gauge demand, but it is still a useful indicator for looking at trends, especially if you can compare that to new listings.

  51. 51

    RE: Deerhawke @ 50

    Listed in Feb and went Pending in Feb are just as much a part of Feb “inventory” from a supply and demand standpoint, and should be added to the listed in Feb and not sold as of month end.

    If inventory is “down” but double the amount went pending during the month…then the number of homes to buy went up and not down.

  52. 52
    Erik says:

    RE: The Tim @ 29
    Ya ya ya… I’m meshugy again. I wasn’t on here when this legend named meshugy frequented this site.

    Do you say that because I bash north Everett frequently? I lived there longer than you pal. I want to warn others not to fall into the trap of buying in north Everett, spanaway, etc. because they will likely not see price appreciation like they would in Seattle or on the east side. Everett is full of pain killer addicts and child predators. People are far better off buying a smaller place in a nicer area. I have no idea what north Everett house is worth, but now may be a good time to sell and get out. You could probably pocket $100k to use as a down payment on a new house in a nice area with good schools.

    Everett always tells residents they are about to do this or that and become a nice place. That will never happen because nice areas don’t want Everett people. Sorry, I vote no to relocating your child molesters to alki beach. When I can afford a better life I do. You should consider it too.

    If you trade up, it will just look like you made a good move by using your profits as a down payment for your next home. Nobody will say “I told you so”. I think you are from kenmore and you turned out great. Raise your kids there.

  53. 53
    Mike says:

    By SFraz @ 26:

    “When home flipping numbers go up, it is usually an indication that the housing market is in trouble,” said Matthew Gardner, chief economist at Windermere Real Estate, who was quoted in the report.

    “These sales artificially inflate home prices, making housing even less affordable for buyers and increasing the risk of a bubble,” said Gardener.

    Nearly 20 percent more homes were flipped than in 2005 in Pittsburgh and Memphis. Home flipping was above 2005 levels in Buffalo, New York; Birmingham, Alabama; Cleveland, and San Diego. Seattle and San Diego, however, saw a decrease from 2014 levels.”
    http://www.reuters.com/article/us-usa-housing-realtytrac-idUSKCN0W50CT

    Coming out of a period where millions could not afford to keep, let alone maintain their homes it’s not unexpected that there would be a lot of rehabbing and flipping going on. The housing stock in my neighborhood when were shopping 4 years ago was abysmal. Everything needed hundreds of thousands in repairs. Today you can actually buy a turn key home albeit they cost double what the run down dumps cost 4 years ago.

  54. 54
    MD says:

    RE: Matt @ 47 – Do you *need* to own a house, or do you just *want* to own one? And if you just *want* to own one – why?

    A house is a huge liability. If you don’t need one, I don’t understand why anyone would be chomping at the bit to get themselves in 30 years of debt. And the job market is strong now, but it won’t always be. It’ll suck to be out of a job and still paying a mortgage…

  55. 55
    Erik says:

    RE: Matt @ 47
    Yeah, you are smart to stay out of lynnwood/everett/Renton.

    I’ll sell you my 2 bedroom 1000+ sf condo over the water in alki for $500k. Nice area, nice remodel, and ready to sell at anytime. My place is always for sale. Otherwise, I will wait until I can get $650k in 3 years and add another $150k to my pouch.

    Neighbors across the way are selling for $535k. You could buy that one. Mine is a nicer remodel and I will sell it for less if we don’t get realtors involved taking my profit.

  56. 56
    SFraz says:

    RE: Mike @ 53 – The zombies still roam the streets with Blackrock vampires. Paint, new windows and some Lowe’s box cabinets.
    Thousands Of Foreclosures Sit Off Market In Seattle Area
    “And there is a potential supply of lower-priced homes in the region. Those are the 4,300 foreclosed homes from Everett to Tacoma that are now owned by banks, according to RealtyTrac.”
    http://kuow.org/post/thousands-foreclosures-sit-market-seattle-area

  57. 57
    Mike says:

    By SFraz @ 56:

    RE: Mike @ 53 – The zombies still roam the streets with Blackrock vampires. Paint, new windows and some Lowe’s box cabinets.
    Thousands Of Foreclosures Sit Off Market In Seattle Area
    “And there is a potential supply of lower-priced homes in the region. Those are the 4,300 foreclosed homes from Everett to Tacoma that are now owned by banks, according to RealtyTrac.”
    http://kuow.org/post/thousands-foreclosures-sit-market-seattle-area

    Point being flipping in itself, even at elevated levels is expected coming out of the bubble. The lower priced homes will come on the market at some point, but they’re still going to be in the neighborhoods hit hard with foreclosures 7 years ago – not the same neighborhoods that passed their 2007 price peaks 2 years ago.

  58. 58
    Mike says:

    By Deerhawke @ 49:

    If you have $100K to put down, I think you can still find something below 85th Street in Greenwood or in parts of northwest Ballard. I think the sub-$500K price point still exists there, although you will have a lot of competition.

    NW Ballard south of 85th still has a few decent properties sold in the last year under $500K, but there’s also a big heroin problem in that part of Loyal Heights near the elementary. A house on 24th north of 83rd is supplying the local addicts and it’s causing a lot of theft problems. Maybe that’s an opportunity?

  59. 59
    Erik says:

    RE: Mike @ 58
    Sounds like a great opportunity minus the heroin addicts and thefts.

  60. 60
    Matt says:

    RE: Deerhawke @ 49

    Deerhawke – thanks for contributing your experience. While prices definitely list for prices I can afford, you are right – competition is fierce. On one I fell in love with, I had family assistance to go $70k over offering and we still couldn’t get it. My job is unfortunately located near Duvall/Novelty Hill, and just commuting from Mill Creek (where I currently stay) is atrocious. And here’s where the entitlement kicks in….a general aversion to suburbs/with a strong preference for neighborhoods with a feeling of community, it’s very cliche. Do you think that the situation you experienced in the 80’s is very similar to conditions now? To my (limited) understanding I’ve thought that globalization has warped a lot of sector economics – at least with housing, institutional/foreign buyers wasn’t a large factor, in addition to historic low (and persistant) nill interest rates making money very cheap to borrow… In addition to this phenomenon of people flocking to a handful of major metros.

    RE: MD @ 54

    MD – Good question – and it’s probably that I just emotionally want one. I consider myself a fairly rational person and was surprised at how heated/emotional I would become going through the process. My only reasonable explanation I suppose – would be that for the price range I was hoping for (300-450k) and renting out a room or so, the mortgage payments would still be well under what the current market rentals are. I fought tooth and nail to move back here, and planned on planting roots, but now I’m not so sure… I have a job interview in the Midwest lined up….maybe i’ll head there before techies/foreign investment sets it’s sights there.

  61. 61
    Deerhawke says:

    Matt, the situation in the 80’s is very much the same as now. Except now the level of resentment/anger directed against foreigners (really Asians) is much less than the level against Californians then.

    That anger against Californians was an adolescent reaction by a small town forced to grow up quickly. You have probably never heard of Emmett Watson, but his Lesser Seattle columns really resonated for people then (I am sure there is a Wikipedia page).

    Now we don’t have debates about whether all these transplants will affect the availability of lutefisk. In fact we don’t care about lutefisk, but just hope that if we get more Asians moving here, we might finally get a decent Szechuan restaurant in Seattle.

  62. 62
    Erik says:

    RE: Deerhawke @ 61
    I’d take an Asian over a Californian anyday. Asian people usually aren’t entitled, lazy, trust fund babies. Californians are rude and entitled. Plus they think they are cool because they are from that state.

    I haven’t heard a dislike for Asian people moving in. Keep the Californians out! They ruin entire areas like cock roaches.

  63. 63
    Blurtman says:

    RE: Erik @ 62 – There is a bit of north-south friendly rivalry in California with ample use of stereotypes . LA being glitzy, phony and vacuous, Bay Area being stuck-up pseudo intellectual tree huggers. The state has incredible natural beauty. Many of my friends there are from elsewhere, although a few are natives. In CA, at the top of the undesirable transplants list are folks from NY and NJ. Those long RE should encourage The Californios northward migration. Perhaps creative zoning can keep them in Everett.

  64. 64
    TJ98370 says:

    Housing the loser in February jobs report

    http://finance.yahoo.com/news/housing-loser-february-jobs-report-170118849.html

    Jobs are good for housing. No question. That is why some Realtors are dancing a jig around Friday’s unexpectedly high gain in the February employment report……..

    ……Dig deeper into the numbers, however, and you hit a pretty negative one: Wage growth, or lack of it.

    It was lower than expected in February and chronically lower than home price appreciation. Home prices soared 6.9 percent in January compared to a year ago, and the gains are only getting larger. They are fueled not by increased wages and demand but by a serious lack of supply in markets across the nation……

    ……”The economy isn’t getting the same bang for the buck from job creation as it used to. February’s job surge didn’t translate into higher pay,” said Nela Richardson, chief economist at Redfin, a real estate brokerage. “For housing, as low inventory pushes prices up at a fast clip, the mismatch between fast-growing home prices and slow-growing incomes continues to be a huge obstacle for would-be buyers.”

  65. 65
    wreckingbull says:

    By The Tim @ 29:

    Erik is the new Meshugy.

    Even though Meshugy was a hopeless cheerleader, at least he was a decent guy, even to his harshest critics.

  66. 66

    By TJ98370 @ 64:

    Jobs are good for housing. No question. That is why some Realtors are dancing a jig around Friday’s unexpectedly high gain in the February employment report……..

    I think people really fail to understand what is good and bad for agents. For me the main difference between 2009 and 2015 was just a different set of issues/headaches. Neither market was “better” than the other. I would much prefer to practice in a more balanced market, but we slipped from one extreme to another fairly quickly.

  67. 67
    Erik says:

    RE: wreckingbull @ 65
    Yeah, I’m probably I little trashier than Meshugy.

    Let’s see how it plays out for me…

  68. 68
    Erik says:

    RE: Blurtman @ 63
    Like I’ve said before, New Jersey is the worst. I’ve seen the Jersey Shore. I know what you people are all about. I have no idea how you crept into Sammamish.

  69. 69

    RE: Erik @ 68 – Have you seen El Paso?

  70. 70
    Erik says:

    RE: Kary L. Krismer @ 69
    El Paso Texas? No. I need to see more of the world. I haven’t gotten out much.

  71. 71
    Blurtman says:

    RE: Erik @ 68 – I paid a lot of money for diction classes. Even so, I lost out on a few homes when I said “wawtuh” and “cawfeee”.

  72. 72
    Matt says:

    RE: Deerhawke @ 61

    Deerhawke – I have familiy in Vancouver – no doubt you know how Real estate is up there. Foreign investment thankfully isn’t as far reaching down here, but it’s scary to think that it could. While vancouver is corrupt to the core in it’s Real estate market – here we not only just have Asians – we also have Californians, other transplants, limited supply, a booming tech industry, etc all contributing to the soaring prices. I will wait it out, it’s probably the best decision for now. Rates can’t stay this low forever.

  73. 73

    By Erik @ 68:

    RE: Blurtman @ 63
    Like I’ve said before, New Jersey is the worst. I’ve seen the Jersey Shore. I know what you people are all about. I have no idea how you crept into Sammamish.

    Hey! I’m from New Jersey! New Jersey is the worst? Come and say that to my face! Don’t I sound like a Presidential candidate?

  74. 74

    RE: greg @ 35
    They Buy Gold the Same Way

    Then sell it so they don’t lose their 2nd mortgage business.

  75. 75

    RE: Ira Sacharoff @ 73
    I Always Knew Ira Ran a Secret Server

    Ira uses it for his best jokes!

  76. 76
    Azucar says:

    By Erik @ 67:

    RE: wreckingbull @ 65
    Yeah, I’m probably I little trashier than Meshugy.

    Let’s see how it plays out for me…

    If/when it doesn’t work out, you can always move back into your parent’s basement like you did a couple of years ago when you short sold your house and were laid off.

  77. 77
    Buyer says:

    RE: GoHawks @ 19 – Thanks for your response. So, your advice for me is to wait as long as I am satisfied with my rental house and I know that I can stay in it for a while? Wait until the market slows down and more options become available?

    Is that what you wanted to say?

  78. 78
    TJ98370 says:

    It is Bubble—Like Again

    http://thehousingbubbleblog.com/index.html

    “Rising home prices are bringing more house flippers out of the woodwork, and that may be a sign of an overheating housing market. The number of active home flippers last year was the highest in nearly a decade, and it is only growing. Home flipping can push prices artificially higher, especially in markets with the tightest inventory. ‘When home flipping numbers go up, it is usually an indication that the housing market is in trouble,’ said Matthew Gardner, chief economist at Windermere Real Estate in Seattle, who was quoted in the RealtyTrac report……..”

  79. 79
    Erik says:

    RE: Azucar @ 76
    Hahaha. I moved in to my parents basement for about 2 months because I sold my condo, got laid off, was finishing grad school, and my mom was hounding me to move back home. There was a lot going on and I wanted some downtime to collect my thoughts. Oh yeah, plus I stayed there when my condo was being sold. At the time I had my credit cards maxed out and couldn’t afford both my mortgage and rent on an apartment.

    This time I have more money and I will just move into an apartment when I go to sell.

  80. 80
    TJ98370 says:

    As Arnold says in The Terminator – “I’ll be back..….”

    Home flipping up as profits hit a 10-year high, RealtyTrac says

    http://www.marketwatch.com/story/home-flipping-up-as-profits-hit-a-10-year-high-realtytrac-says-2016-03-03

    The average gross profit from flipping homes hit a 10-year high of $55,000 in 2015, RealtyTrac said Thursday. That represented a return on investment of 45.8%, up from 44.2% in 2014 and 35.3% in 2005……

  81. 81
    Erik says:

    RE: Ira Sacharoff @ 73
    After watching the jersey shore on mtv, everyone unanimously agreed that New Jersey is the arm pit of the United States.

    I only type that from afar because I know I won’t get stabbed. If we were face to face, I would be polite to your face and them talk badly behind your back Seattle style.

  82. 82
    GoHawks says:

    RE: Buyer @ 77 – Buyer, it is to wait for the right opportunity if you are in a decent place with a rental or your parent’s home. Don’t just buy something for the sake of doing it, it’s a big commitment obviously. It’s very frustrating out there for buyers, but it’s early in the year to throw in the towel completely on the entire area.

  83. 83
    Erik says:

    RE: GoHawks @ 82
    That sounds like a bunch of touchy feely bs to me. If buyer thinks they can turn a profit in 2 years they should. That has been my plan of attack and I have built a lot of down payment up for my dream home. These idiots on here have decided they will make 1 shot and one kill. This isn’t a race, it’s a marathon. The equity they build is free money. Waiting on the sidelines will only make their situation worse.

    Anybody that paid attention last bubble, people that short sell or foreclose will be rewarded. There won’t be any recourse to foreclosing if this bubble pops again.

    Buyer, just buy something you don’t mind living in a couple years. Sell it and you will likely profit $50k atleast. At that point, you can save your money and rent. If the bubble pops again, you’ll have a big down payment to buy the place you want. If it doesn’t pop, you have $50k to spend as you like. The odds are in your favor and there really aren’t any repercussions if you stop paying your mortgage.

  84. 84
    TJ98370 says:

    RE: Kary L. Krismer @ 66

    Hello Kary,

    It’s been awhile since I visited Seattle Bubble. It’s nice to know that you and Ira (with his sense of humor) are still around. I’m amazed that some of my stuff is still on this site in the Forum and that Mushugy is still being mentioned. I was really impressed with Eleua’s posts back then. Do you remember him? Whatever happened to him? He really seemed to have a handle on what what was really going on with the banking industry during the inception of “The Tim’s” blog and the backlash resulting from the real estate bubble of the 2000 – 2008 time frame. Back then all Realtors (and associates) were shills and everyone was against the “mainstream” media. Those days are gone and I’m beyond that stage now. Now I am dealing being an old fart with retirement issues

    What brought me back to Seattle Bubble was an acquaintance told me that a nephew of his bought a house in “West Seattle” for $310 K and linked me to the Redfin site. Holy Shirt! I was amazed! I grew up in a neighborhood with houses like that in Kitsap County that are going about for 1/3 to 1/2 of that at this current time. I understand that with real estate it’s location, location, location. But again, Holy Cow! Something is seriously out of whack!

    I really feel for the younger set just starting out. It was difficult for us starting out in Kitsap in the early 1980’s, even with me having a technical degree in Mechanical Engineering, but it looks to be nearly impossible in the Seattle area these days.

  85. 85
    Sam says:

    https://www.redfin.com/WA/Redmond/25626-NE-39th-Way-98053/home/446351
    20+% increase in 18 months. Is this a joke?

    Eastside is on fire.

  86. 86
    Buyer says:

    By Erik @ 83:

    RE: GoHawks @ 82
    That sounds like a bunch of touchy feely bs to me. If buyer thinks they can turn a profit in 2 years they should. That has been my plan of attack and I have built a lot of down payment up for my dream home. These idiots on here have decided they will make 1 shot and one kill. This isn’t a race, it’s a marathon. The equity they build is free money. Waiting on the sidelines will only make their situation worse.

    Anybody that paid attention last bubble, people that short sell or foreclose will be rewarded. There won’t be any recourse to foreclosing if this bubble pops again.

    Buyer, just buy something you don’t mind living in a couple years. Sell it and you will likely profit $50k atleast. At that point, you can save your money and rent. If the bubble pops again, you’ll have a big down payment to buy the place you want. If it doesn’t pop, you have $50k to spend as you like. The odds are in your favor and there really aren’t any repercussions if you stop paying your mortgage.

    This sounds as a plausible plan, but I don’t think it will be easy for me to go back to renting after settling for a while in a house that I owned. What I prefer is to buy a house and just settle in it and be happy to stay there waiting for market to recover again if it crashes at any point of time.

    On the other hand, it seems it will be impossible for me to buy a good quality house that satisfies my needs in the areas that I prefer (Redmond, Sammamish, Bellevue) in this tough market. To be able to buy something good in these areas, I’ll have to bid at least 10-15% over the listing price and waive inspection, appraisal, (and probably even the financing) contingencies .

    If I want to buy a good house that satisfies my needs, I have to go up to Bothell or even Mill Creek (I live in Redmond now), but I am still not sure if that will be a good idea since I work at Microsoft in Bellevue/Redmond and will have to commute from there everyday. I am also not confident if buying in that area will be the best investment of my money. What do you think?

  87. 87
    Buyer says:

    By GoHawks @ 82:

    RE: Buyer @ 77 – Buyer, it is to wait for the right opportunity if you are in a decent place with a rental or your parent’s home. Don’t just buy something for the sake of doing it, it’s a big commitment obviously. It’s very frustrating out there for buyers, but it’s early in the year to throw in the towel completely on the entire area.

    Thanks GoHawks for the clarification. I am really not sure what is the best thing to do. I can’t stop thinking about this day and night. This is causing me a lot of stress and even preventing me from sleeping at some nights.

    It all started when the owner of our previous place told us that they will not renew the lease because they want to move back to their house. We then felt the necessity of owning a place to settle in (we have 3 kids, two of them go to school).

    We have been in the market for 10 months. We toured tens of homes (if not hundreds!… I can’t remember). We made more than 8 offers (I can’t remember the exact number) … bidded higher, waived contingencies, etc.

    A month ago we made an offer on one house that didn’t attract many people. Our offer was accepted which made us glad in the beginning because we finally had an accepted offer, but then we felt that we may have overpaid without getting a house that satisfies all our needs… and therefore we walked away from the contract :(. Our logic was that we shouldn’t buy anything just to buy .. we should only buy something that we really love and fulfills our current and future needs. Walking away wasn’t an easy decision for us. It was an extremely stressful experience for our family. We now sometimes kind of regret the decision (not because we loved that house, but because we still can’t get anything better and fear that we will not get anything in the near future).

    We have a lot of stress now … not sure what to do … Keep looking? or Give up and stay in rental until prices go down (or we save more money)? …. or Go crazy and bid very high on the homes that we like (bid 100K higher as some people are doing) which may make it very tight for us? or buy anything for now and then upgrade to a better house if the market becomes better in the future?

    :( :(

  88. 88
    Anonymous says:

    RE: Buyer @ 86
    Would you be willing to buy loads of AMZN stock right now? If you answer yes, go buy a house. If you answered no, keep renting.
    Millions with family are renting, nothing wrong with that.
    if making $$ is your priority then invest in something else. Real estate is an easy way to make money but not the only way. If a house is important to you for raising a family, rent one instead.

    I am exactly in same boat as you and my gut feeling told me to continue renting until market correction happens. Feel free to trash me over market correction.
    If the recent tech valuations, oil prices, presidential debates etc are not a sign that something is wrong, then I don’t know what else to say…

    Just my .02

  89. 89
    Azucar says:

    By Erik @ 83:

    RE:
    Anybody that paid attention last bubble, people that short sell or foreclose will be rewarded. There won’t be any recourse to foreclosing if this bubble pops again.

    Buyer, just buy something you don’t mind living in a couple years. Sell it and you will likely profit $50k atleast. At that point, you can save your money and rent. If the bubble pops again, you’ll have a big down payment to buy the place you want. If it doesn’t pop, you have $50k to spend as you like. The odds are in your favor and there really aren’t any repercussions if you stop paying your mortgage.

    What you describe above (buying as prices are racing higher, selling when they get to their highest point, then when they crash buying at the bottom and doing the same thing again and again) is called “timing the market”. Everyone (except apparently you) knows that it is difficult if not impossible to reliably time the market. You might get lucky once or twice, but there is no surefire way to know when the market will tank.

    Not everyone wants to move back into their parent’s basement like you did, especially if they have kids.

  90. 90

    By TJ98370 @ 84:

    I was really impressed with Eleua’s posts back then. Do you remember him? Whatever happened to him?

    Yes I remember him, and no I don’t know what happened to him. Of all the bears at the time he was the one that actually had a reason to be bearish that was rather accurate, and went far beyond just thinking prices were too high or more than what someone was willing to pay.

  91. 91

    It took me a while to remember the name of Eleua’s blog page–I could only remember Bainbridge. He apparently gave it up in 2011.

    http://clearcutbainbridge.blogspot.com/

  92. 92
    Saffy The Pook says:

    By Erik @ 70:

    RE: Kary L. Krismer @ 69
    El Paso Texas? No. I need to see more of the world. I haven’t gotten out much.

    You can say that again.

  93. 93
    GoHawks says:

    RE: Buyer @ 86 – Thanks for your transparency Buyer. Walking away while under contract is a tough decision, but there is no perfect house. All will have some form of a drawback, regardless of price point. It’s whether or not you can live with the drawback(s).

    That is interesting buyer psychology, if there are multiple offers you want to bid, then a non-bidding war happens you win and then you don’t want the house. People always want what they can’t have.

  94. 94
    GoHawks says:

    RE: Anonymous @ 87 – a correction will happen, but it will be interesting to see if it comes after another 12-15%. Prices pull back 5% and the bears on here will say I told you so.

    Like many with the stock market, runs up 130% and then pulls back 13% and people on here shout “crash.” Now down 5% year to date, but hardly a crash especially in light of a massive 5 year run.

  95. 95
    Eastsider says:

    By TJ98370 @ 84:

    I really feel for the younger set just starting out. It was difficult for us starting out in Kitsap in the early 1980’s, even with me having a technical degree in Mechanical Engineering, but it looks to be nearly impossible in the Seattle area these days.

    Mind you, many of these young college grads also have a large student loan debt to pay off!

  96. 96
    Erik says:

    RE: Saffy The Pook @ 91
    I haven’t gotten out much.

  97. 97
    Buyer says:

    RE: GoHawks @ 92 – Yeah. I think we went through that psychology that you mentioned. Anyways, that became past now and there is no way to change it now.

  98. 98
    Buyer says:

    Folks. What do you think about buying in Bothell or Mill Creek area for someone who works in Bellevue/Redmond? Is it going to be a good investment of our money to buy in that area?

  99. 99
    Dave says:

    RE: Kary @69

    My neighbor recently moved to El Paso, TX and sold to a lovely Chinese woman who promptly turned the house into a rental. I’m getting ready to build a nice new fence, maybe a wood finish vinyl this time.

  100. 100

    Seattle Real Estate Will Soon Totally Depend on Boeing Seattle Getting All Its High Paying Full Time 737 Parts Manufacturing Back from Japan [they make almost all the parts BTW]

    Whether we like it or not. We can’t keep up this $190B deficit with Japan and don’t end up like Africa. Now lets move on to the $500B China and $38B Mexican trade deficits that can’t go on…..

  101. 101
    ESS says:

    I have questions for both real estate professionals and potential home buyers. But let me start with the following premise:

    Real estate is hot both in the more desirable areas of Seattle and the East Side (Bellevue, Redmond, etc.) as well as Shoreline and South Snohomish County.

    Both areas are extremely competitive as both areas get multiple offers on houses. I know because of what I read about Seattle and the Eastside, and I know of Shoreline and South Snohomish County because I reside near a house that had multiple offers within a few days of being listed. The difference obviously is the cost of the housing, up north it is much cheaper per square foot to purchase a house and the lots are also more spacious. Not included is Puget Sound waterfront, which is in a different category.

    So I ask the following questions of everyone –

    Are the potential buyers bidding on single family houses in Seattle and the Eastside totally separate from the potential buyers in Shoreline and South Snohomish County? What percentage, if any of the potential buyers in Shoreline and South Snohomish County are discouraged potential Seattle and Eastside buyers that have redirected their attentions to less expensive areas?

    If there are folks that were looking to purchase a single family residence in Seattle or the Eastside that have redirected their attentions to Shoreline and South Snohomish County, how many rejections do they go through before trying to purchase in other areas such as Shoreline and further north? Is there a number of times in which a potential buyer will go through the process before giving up altogether, and move on to a less expensive area? Or is everyone different – some have more fortitude than others to put up with constant rejection and keep on trying in the desired area?

    What percentage of those who are unsuccessful in purchasing a single family residence in Seattle or the Eastside refuse to look elsewhere, have their hearts set on a particular city or even neighborhood, and continue to rent apartments or single family houses in the area they were unable to purchase?

    Do the real estate agents suggest Shoreline/South Snohomish County as an alternative to purchase, and what kind of response is received from their clients?

    What is the biggest drawback to Shoreline/South Snohomish County if the price is affordable for the potential client – Transportation? Stuck out in the Tulies? Less clubs and nightspots? Cultural? Schools? People want a more urban experience? Other?

    Are real estate professionals or potential buyers in the Shoreline/South Snohomish County factoring in the future light rail system that (allegedly) will be built in seven or so years? Is that system on anyone’s radar yet, other than the bigger developers that are looking to buy near the future stations?

    Any other thoughts along these lines?

    Thank you for your responses.

  102. 102
    Blurtman says:

    Escape to Barrington Park.

    $1.18 million for a wonderful new home, done al la tagliatore biscotto, on a generous .15 acre lot.

    Astound your family and friends!

    Let Murray Franklyn put it to you. (FYI – we weren’t the ones that went bankrupt.)

    http://www.zillow.com/homes/215-214th-Ave-NE,-Sammamish,-WA-98074_rb/

    215 214th Ave NE,
    Sammamish, WA 98074
    2 beds 3.5 baths 3,905 sqft
    Lot: 6,534 sqft

    Bargain priced at only $1,179,990!

    Won’t last long!

  103. 103
    WaitThisOut says:

    Rentability of single family homes is horrible in Eastside. Horrible. People who are buying inflated are in for such a rude awakening when things go south. Single family homes will nosedive. No one is willing to pay $3900 in rent in Sammamish or even north Redmond.

    Such was the case in 2006 where rent and mortgage differential was out of whack.

  104. 104
    WaitThisOut says:

    I do not understand this. How can there be a $100K increase in estimate in 3 months?

    https://www.redfin.com/WA/Redmond/16731-NE-124th-St-98052/home/450175

  105. 105
    SFraz says:

    RE: WaitThisOut @ 104 – Paint is very expensive. ;)

    I have been waiting for almost 2 years, and will continue to wait. What we are seeing in the financial and real estate market is unprecedented. We are witnessing a YUUGE experiment, that I fear will end in chaos. We can’t say this is like the last time, because we haven’t been to this rodeo before. There are so many bubbles in the world markets, it’s staggering.
    I would rather rent than be stuck with a 30-year mortgage and be upside down ANY DAY. I have owned for over 25 years, and am sitting on the profit of my blood, sweat and tears. It is a relief to rent. No worries about the upkeep (roof, plumbing, etc.). No lawn & garden issues. Let someone else deal with it. I am enjoying my weekends for a change.

  106. 106
    redmondjp says:

    RE: Blurtman @ 102 – Pshaw! I see your Sammamish house, and raise you this identical-sized house, but in Redmond:

    Grasslawn Estates (Quadrant ‘Claim Jumper main entree size’ homes)

    7130 149th Ave NE
    5BR
    4BA
    3,940 SF
    8,438 SF Lot
    $1.599,900

    https://www.redfin.com/WA/Redmond/7130-149th-Ave-NE-98052/home/104004033

    Bonus: you get the 4′ x 8′ stormwater detention vault access grating (not a sealed cover – a grating) right in your front yard – keep your kids away from that, as any Hot Wheels they drop in there will be forever in Davey Jones’ Locker!

    Oh, for those who can’t believe the price, 15 months ago, this house and the three others in the same development, were starting “in the low 900s.” Bubble? No way! This is the new normal. It’s different this time. Really. Buy one of these while you can, as supply is extremely limited.

    And as your new neighbor, I’ll even bring you a plate of delicious home-made Christmas cookies later this year (a tradition I started with my now-wife when I first moved into this neighborhood 18 years ago). I even make up halal cookie plates for my Muslim neighbors.

  107. 107
    SFraz says:

    NOW IT’S WORSE THAN WHEN LEHMAN BROTHERS COLLAPSED IN 2008
    Just check out these three facts:
    1) The pile of toxic corporate bonds in the US, what is euphemistically called “distressed” debt, went up 15% in February alone.
    2) The number of rated US companies with “distressed” debt rose 9% in February to 353. That’s up 128% compared to a year ago.
    3) The last time the pile of “distressed” debt had soared to this level was in November 2008. And the last time the number of “distressed” issuers had shot up to these levels was in October 2008.
    Lehman had declared bankruptcy in September 2008.
    Oh yeah; the mantra is that now everything is “contained”. And The Big Short could not possibly be the Best Picture of 2015, compared to that frozen tundra thing about poor Leo being mauled by a digital bear.”
    Pepe Escobar March 1 at 1:33pm
    I think we’re gonna need some popcorn for this show.

  108. 108
    Anonymous Coward says:

    Regarding the frustrated buyers, I get the sense that there are a fair number of buyers who try size up the market by looking at list prices rather than transaction prices. Aka, they try to answer the question of “can I afford what I want where I want it” without actually looking closely at very recent closed sales. In hot areas, some realtors/sellers use a strategy of listing on the low side to ensure an emotional bidding war. If the buyer isn’t aware of this, they’ll think “oh, in the last 2 months we’ve seen 5 houses on the market which we like and all of which are in our price range, we’re certain to find something.” If they didn’t check the actual closing price on those 5 houses, they’re in for certain heartbreak.

  109. 109

    By Anonymous Coward @ 108:

    In hot areas, some realtors/sellers use a strategy of listing on the low side to ensure an emotional bidding war..

    No disagreement with anything you wrote, but sometimes emotional bidding wars just happen. It depends a lot on what the buyers who look at the house have been through in the recent past, and there’s no way a seller or agent could know that type of information. It also depends on how much money those buyers have. If two or more of them recently lost out on a property AND both have a lot of cash on had so that appraisals are not an issue . . ..

  110. 110
    GoHawks says:

    RE: SFraz @ 107 – SFraz, are you short the stock market/financial markets? Putting your money where your commentary is, or is this just chatter? A tip of the cap if you are backing up the gloom and doom talk.

  111. 111
    mimitheden says:

    RE: ESS @ 101

    Hi Ess, Longtime Realtor here. My experience has been that many if not most buyers shopping in Shoreline or South Snohomish County in an ideal world would prefer to live in Seattle or the Eastside but know going in that they can’t afford to buy there. Or, they prefer to buy more house for less money in exchange for a longer commute. It’s not that they’ve been out bid so many times that they are moving to the other areas, but that they know it’s not going to work going in because list prices on the Eastside or much of Seattle are higher than they are approved for to begin with.

    Many who work in Redmond or Bellevue but are not qualified to buy a home in that area (or don’t wish to spend that much) choose to look in lower priced areas that are still somewhat commutable to the Eastside. Not usually Shoreline or south Sno Co but more like Renton, Bothell, or Carnation/Duvall (yes, I said Carnation and Duvall!)

    For those who are not willing to move outside their target location, but cannot afford (or don’t want) to buy in that area, most will continue to rent. But that’s not easy either with sky high rents and low rental inventory.

    When I am consulting with new buyer clients we always discuss their wants and needs including location. Depending on their situation sometimes Shoreline or South Snohomish County will be suggested. How they receive that suggestion usually is largely dependent on their commute. Schools are always a factor for families. Future light rail is not a major consideration since people are living in the present more than imagining future commute options.

    By and large, home buyers are pretty well educated in advance about which areas they are willing to consider as more affordable options. If they don’t find what they want in those areas, we branch out farther.

    I hope that helps.

  112. 112
    Blurtman says:

    By redmondjp @ 106:

    RE: Blurtman @ 102 – Pshaw! I see your Sammamish house, and raise you this identical-sized house, but in Redmond:

    The gauntlet has been thrown, then. The city of Sammmamish will rise to the occasion. Bully!

  113. 113
    Deerhawke says:

    Redmondjp, that Redmond house reinforces every negative stereotype I have about the Eastside.

    Not sustainably built, but big and meant to be impressive to those who have no taste. There really is no single design theme. On the outside, it is faux-craftsman meets tract house. On the inside, it is Italian meets French meets Home Depot. Truly crappy landscaping.

    This is what $1.6M gets you over there?

  114. 114

    By Deerhawke @ 112:

    Not sustainably built, but big and meant to be impressive to those who have no taste. There really is no single design theme. On the outside, it is faux-craftsman meets tract house. On the inside, it is Italian meets French meets Home Depot. Truly crappy landscaping.

    You should start an on-line service to write marking remarks for agents. Then retire after you create iOS and Android apps and sell the company.

  115. 115
    Eastsider says:

    By Deerhawke @ 112:

    Redmondjp, that Redmond house reinforces every negative stereotype I have about the Eastside.

    Not sustainably built, but big and meant to be impressive to those who have no taste. There really is no single design theme. On the outside, it is faux-craftsman meets tract house. On the inside, it is Italian meets French meets Home Depot. Truly crappy landscaping.

    This is what $1.6M gets you over there?

    Unbelievable! A builder trashing another builder’s project. Really?

    Disclosure: I have zero relation to Quadrant.

  116. 116
    redmondjp says:

    RE: Deerhawke @ 112 – You have to realize that a significant number of buyers of these homes on the Eastside are from foreign countries; that has some bearing on their preferred architectural and interior design styling.

    I do my best not to get wrapped around the axle about such things – let the market decide, I say. I do envy the interior square footage however, although the property taxes alone will be close to my current monthly payment.

  117. 117
    whatsmyname says:

    RE: redmondjp @ 115 – Yikes! If you don’t mind having to look at it, well OK. I’m only guessing, but I think you could get something similar in Auburn for three dollars; plus you could have SWE for a neighbor.

  118. 118
    Justme says:

    ESS/Deerhawke, you have both mentioned Shoreline, but what do you think of Lake Forest Park relative to Shoreline? The distance to downtown is about the same, but what else?

  119. 119
    ess says:

    By Justme @ 117:

    ESS/Deerhawke, you have both mentioned Shoreline, but what do you think of Lake Forest Park relative to Shoreline? The distance to downtown is about the same, but what else?

    I think Lake Forest Park is a great place to have a single family house. Not only is it close to Seattle and Lake Washington, but the lots appear to be good sized, farily private, and there are lots of trees. I guess that is why they call it Lake Forrest Park! We occasionally drove through LFP, and if you love lots of trees and a non urban environment – that might be an area to look around.

  120. 120
    Cornix says:

    I will chime in as a buyer of modest means aiming for a house price of $350,000 or less (which I think is actually quite a lot and took us years to save up for). We are not looking outside of Seattle proper due to many reasons, mostly commute length. I begin my shift downtown at 7 a.m. and my spouse begins in the UW area at 6 a.m. and is often on call after business hours. We both do not have parking available at work so we must commute via transit. I would rather my beloved not have to catch a bus in the dark at 4 a.m. each morning to make it to work. We also do like to see each other, so having a 3 hour round trip commute would seriously affect our happiness. It’s not worth it.

    We can wait it out and we’ll have to as we cannot compete with escalations and bidding wars. We also cannot risk waving inspections, hidden (or known!) issues, or a large amount of work needed on a home we purchase. We’d like a small, comfortable, place to live within a reasonable travel time to our jobs and no major issues. I believe the going rate for those types places are $500,000+ even in the further reaches of the city, not including all the incidentals that will inevitably come up.

    At this point we have accepted being priced out and that will remain the case if house prices rise 1% or 1000%. If nothing changes, we’re still in the same place we are now, so no real loss.

    I must say though, those Redmond houses are like cartoons! I’d feel like I was on a movie set walking into those giants, and not in a good way.

  121. 121
    TJ98370 says:

    Wow, Cornix. You are an epitome of what is wrong with Seattle real estate these days. What appears to be happening is that speculator – investors, betting that increasing real estate prices will net them a profit, are pricing you out.

    There are a lot of smart people that visit this site and if I am wrong, I hope they will chime in to correct my errant thinking.

    This may be a simplistic explanation, but I believe there is a lot of speculator – investor owned funds sloshing around the globe being invested in whatever promises to net a profit. Right now, with a flat stock market, buying Seattle real estate, with its appreciating values, promises a good return relative to alternatives, and the speculator – investors are piling in from all over the globe. It appears that residential real estate in Seattle has become an investment vehicle for the well-off, not an actual place for families to live.
    RE: Cornix @ 119

  122. 122
    Cornix says:

    RE: TJ98370 @ 120 – I think you are correct. Things are very volatile investment-wise in other sectors, and land has intrinsic value. When we first started looking we saw many places that would be bought after a crazy feeding frenzy only to be rented out 3 months later. It’s frustrating for us, but understandable for folks with lots of money to park their cash in property.

    I also think that folks who have high incomes and proceeds from previous high dollar sales are coming in at a very fast rate. If we had sold a house in the Bay Area, a $550,000 Beacon Hill bungalow would look like an absolute steal! I do not see an end to more of those types of buyers coming in.

    That said, we are not owed a home or a chance at home ownership. It would certainly be nice since we have a wonderful community of friends and truly enjoy living here, but we can have that in an apartment too.

  123. 123
    HomeImprovement says:

    RE: Cornix @ 121

    Out of context, but you seem a very level headed person Cornix. Rare breed these days…

  124. 124
    GoHawks says:

    For those that feel a correction is coming/due, which do you feel will be the main reason why:
    1. Excess inventory
    2. Decrease in buyer affordability/demand
    3. Global/domestic economic shock (stock market selloff etc)

  125. 125
    Blardian says:

    RE: Anonymous @ 88 – “If the recent tech valuations, oil prices, presidential debates etc are not a sign that something is wrong, then I don’t know what else to say…”

    Let’s start with a fact: if you believe you can outsmart the market – beat consensus – then you’re a fool. It’s been proven beyond reasonable doubt that you’ll sometimes get lucky, but over any long run will lose betting against market consensus. Now let’s look at each of your three indicators leading to your self-evident bear mentality:

    1. Tech valuations. High valuations are the market’s way of saying “this industry has a very bright future.” The consensus bet is on big future growth. By extension, the market believes Seattle’s local economy has a bright future.
    Bull: 1; Bear: 0.

    2. Oil prices. Look at futures, even 10+ year futures are barely tracking inflation. If you honestly believe the price of oil will go anywhere near its $1xx/bbl highs anytime soon, go buy oil futures, you’ll make a killing if you’re right. But that’d be a stupid thing to do because the market believes these low prices are here to stay and it’s probably right.
    Bull: 2; Bear: 0.

    3. Presidential debates. You must be young or forgetful to see any economic meaning in political campaigns. Politics as usual, nothing more. Politics, by definition, focuses on contentious unsolved issues. If there were any solved issue (e.g. political action X yields economic result Y), it would by definition no longer be a political issue. To let political beliefs influence an economic decision is yielding rationality to emotion.
    Draw.

    Final score:
    Bull.

  126. 126
    Buyer says:

    RE: GoHawks @ 124 – I am not sure if a correction will happen soon, but if something happens I think it will start with a decrease in buyers affordability (and therefore demand) followed by excess in inventory.

  127. 127
    Erik says:

    RE: Buyer @ 126 – that’s stage3, thats hyper supply. Time to sell when that happens.

  128. 128
    Buyer says:

    I was looking at home prices in Vancouver, BC Canada. Very scary compared to what we have in Seattle. Anyone knows the history of it? Did it go through something similar to what we are going through today? What are the chances that housing in the Seattle area will reach a similar level to Vancouver, BC (given the geographical proximity).

  129. 129
    Cornix says:

    I have no idea what the future of the Seattle housing market will bring. Financial decisions are deeply colored by emotions, especially when it comes to home buying and ownership. Predicting the emotions of many thousands of unknown individuals is not something I think I can do. I have been married nearly a decade and still don’t always get it right with a known entity!

    I do think that there are many people out there who have a lot of money to spend, either from high wages or existing wealth, who need places to stash their cash and/or families. Until that trend plays out, I don’t see much changing.

  130. 130
    GoHawks says:

    RE: Cornix @ 129 – Cornix, you are probably right. Short-term, prices could really shoot up this spring.

  131. 131
    tina says:

    RE: Buyer @ 128

    Part of the reason for the price soaring in Vancouver is its immigration policy. That can not be duplicated in seattle. However, seattle sits between Bay area and Vancouver. I still would believe that many people would move here because of the relatively “low” house prices, especially now it is harder for the start ups to survive.

  132. 132
    ess says:

    By Buyer @ 128:

    I was looking at home prices in Vancouver, BC Canada. Very scary compared to what we have in Seattle. Anyone knows the history of it? Did it go through something similar to what we are going through today? What are the chances that housing in the Seattle area will reach a similar level to Vancouver, BC (given the geographical proximity).

    There are some similarities and differences between Seattle and Vancouver from what I have seen having lived and worked in both cities.

    Vancouver is the premier west coast destination for the entire country of Canada. Except for Victoria, if one is going to “go west young man” in Canada, it is to Vancouver. Others may take “go west” as heading to Edmonton or Calgary, but the Canadian oil patch is in serious trouble. And Victoria, a nice sleepy regional town, doesn’t match up to the world class environment that is Vancouver. The United States has a variety of Pacific Coast cities to attract newcomers, and some of those cities have better weather. Of course the US population is ten times the size of Canada’s so that may equal out in the end as there are many more Americans that can head west.

    Vancouver, has about the most moderate climate of any major city in Canada. If you are a Canadian looking for fairly mild winters who wishes to reside in a big city and doesn’t like small towns, Vancouver is your ticket.

    Vancouver, like Seattle is bound by geographic restraints. They just aren’t building too much higher up the mountains in North and West Vancouver, and new growth is highly concentrated into specific areas of the lower mainland by their own version of a fairly aggressive land management act. The actual size of Vancouver BC is approximately half of that of Seattle, thus probably contained less single family houses to choose from than Seattle before Vancouver’s latest real estate boom. Plus other nearby communities such as Richmond BC (which is the largest Chinese majority population city outside of China) has much of its land tied up in agricultural trusts and is off limits to any type of development.

    Vancouver, like Seattle is considered a desirable area to reside in for both winter and summer sports activities by a youthful crowd.

    Vancouver indeed does/did have a liberal immigration policy for those with money. And with the second largest Asian community (now possibly the largest) on the West Coast, Asian immigrants felt right at home in Vancouver BC and surrounding areas. Seattle also has a flourishing Asian community which has attracted many Asian newcomers, but the primary areas where Asian real estate money is going to in the US is New York and California. If Seattle and area had the same percentage of Asian buyers that Vancouver and area has recently had, prices in Seattle would be much higher. Purchase of housing by immigrants from Asia and elsewhere has been a real factor in driving prices.

    Vancouver, like Seattle is voicing concerns about those working individuals who can’t afford to buy a house in Vancouver. They either move far out (ex to Langley, BC and area), or they buy a condo.

    I have witnessed both real estate boom and bust times for both cities, and that will probably continue in the future. I recall when Canadian unemployment was so high that an employment colleague of mine up there sold his house for about five thousand dollars less than what he had paid a few years previously when he had arrived. Not a great deal of money by today’s standards, but this was a number of years ago when the house had been purchased for under fifty thousand dollars Canadian. That house in that area would sell for close to one million Canadian at this time. Seattle of course had its famous Boeing bust, where property could be had for give away prices, and at that time I was involved in my first real estate investment as a young college whippersnapper.

    What will happen in the future to Seattle? No one really knows, but the conservative guess is that modest priced housing both for rent and for sale will be in short supply over the next few years.

    But, as they say, anything is possible, and that is what makes life so interesting!!

  133. 133
  134. 134
    Anonymous says:

    RE: Blardian @ 125
    i dont get what you’re trying to imply.
    With your analysis, what I wrote in a sentence profiles me as a BULL mentality and I shouldn’t act bearish for real estate.
    I get your analysis, it’s a good one, but not sure what your point is or if you’re defending something?

    Bear or bullish, i don’t worry too much about the technicalities. My goal always has been getting the biggest bang for the buck on everything I buy. In the current market, I find it very hard that it’s going to happen that way.

  135. 135
    Erik says:

    How do I search for homes for sale and filter only USDA approved loans?

  136. 136
    ess says:

    RE: mimitheden @ 111

    Thank you for your response and insights. Most informative!!

  137. 137
    Buyer says:

    I found a good Single Family home in Sammamish. It looks good and attracted many buyers during the Open House although the price is high. It seems it will have a bidding war. I’ll bid my max and try my luck and see if it will work this time.

  138. 138
    ess says:

    By GoHawks @ 133:

    20% year over year price gains. Yikes.

    http://www.seattletimes.com/business/real-estate/king-county-home-prices-hit-a-new-high/

    The article indicated that the prices were inflated by new construction which tends to be more expensive. Wonder how much that affects the overall statistics?

    But I don’t think anyone here is really shocked by those statistics. What I am looking forward to observing is the major spring sales season and if the market is still as strong as it has been.

    BTW, when do real estate professionals consider the spring real estate season to actually begin? Is it springtime for real estate sales yet?

  139. 139
    Deerhawke says:

    When the spring season starts is really up to the weatherman. If it is a lovely warm winter, Valentines Day. If it is cold, wet and miserable, then it is St. Paddy’s Day.

    For new construction, I like to come on the market the first week of April. This gives the early birds a chance to set the price comps for the new year’s market.

    New construction definitely has an impact on pricing, but not as much as you might think. As I have commented before, a lot of the new construction inventory is pre-sold (or more accurately, pre-bought) so it never makes it into the MLS statistics.

    From what I am seeing, everybody is holding on to their homes and asking for top dollar. There is not much inventory and everything on the MLS incites a feeding frenzy.

    Cornix, I think you should look really hard at the area around the Othello Station. It is an area that is not fully gentrified and so there are still some opportunities there. Yes, it is still a bit rough but that area is changing fast. You and your wife would both be able to take light rail to work now that Husky Station is set to open.

  140. 140
    ess says:

    RE: Deerhawke @ 139
    New construction definitely has an impact on pricing, but not as much as you might think. As I have commented before, a lot of the new construction inventory is pre-sold (or more accurately, pre-bought) so it never makes it into the MLS statistics.

    Thanks for the info and insights, Deerhawke.

    One learns new things every day! I had not realized that new construction is pre bought, and those transactions are not reflected in the MLS stats. Or as you say, it is a strong market.

    I would imagine some people are staying put because they have housing at a fairly decent price if they bought some years ago, and any move in a hot market, after expenses may end being a lateral move, unless they are willing to spend a great deal more money.

  141. 141
    GoHawks says:

    Poll question……….the next 15% move in local real estate prices will be higher or lower?

  142. 142
    Buyer says:

    RE: GoHawks @ 141 – Unless a major economy crash happens, I believe it will be 15% higher.

  143. 143
    Green Horn Investor says:

    I’ve been thinking of pulling some chips off the table (my savings held in stocks) and putting it in Seattle real estate. I had been considering this all last year and I regret not having made the move then before the disappointing developments on Wall Street.

    Never invested in real estate before. However my sense from the limited inventory together with the increasing traffic gridlock means that the appreciation and gentrification of closer in neighborhoods will continue. The reluctance to permit and build more quickly and increase density together with the inability to offer real transit alternatives to connect farther sprawling areas indicates to me that we can likely expect Seattle to grow more like the Bay Area or Vancouver before values eventually stagnate.

    We all argue whether the appreciation of real estate values in our market is sustainable, but over the next 2 – 3 years I expect Seattle real estate to surprise to the upside. This past year it was well into double digits. Outside of catastrophic surprises, I see no reason for this to slow down. Any catastrophic surprises would probably actually hit the stock market even harder than regional real estate values.

    Can any of you recommend any resources, things to read, people to contact about this? What else should I be considering? What questions should I be asking to select an agent or broker that is qualified to advise me specifically on investment properties? Not sure I’m ready for the responsibility and work of becoming a landlord… Maybe should start by reading “Becoming a Slumlord for Dummies.”

  144. 144
    ESS says:

    By GoHawks @ 141:

    Poll question……….the next 15% move in local real estate prices will be higher or lower?

    Higher for the following reasons in no particular order

    The job market is strong, including well paying tech jobs and those people can afford to buy
    There has been a net increase of new residents in the area putting pressure on the housing market
    There has been a net increase of new businesses, including tech businesses in the area
    There isn’t much in the way of single family housing lots for builders to build on
    The millenials are either emerging from their parent’s basements, and the married ones are starting to think about settling down and having a kid or two and buy a house
    Rents are supporting the prices of housing, and new rental construction is on the luxury level that won’t afford much rent relief to those in lower incomes.
    Rents will be increasing as cities as Seattle and other cities view property taxes as a way to raise money for not only ongoing expenses and to use property tax initiatives to implement solutions to every problem in the world. And when property taxes go up – rents go up, because tenants, not landlords ultimately pay for tax increases.
    Mortgage rates are really low, and don’t appear to be rising in the next year. And if they do, rates are still at historic lows for home buyers.
    Deductions related to owning one’s own house are not likely to be repealed, and they are especially important to those higher income earners. And if tax rates go up with the next president, those deductions will be even more important to the upper middle class and couples without children.
    Immigration by foreigners to the US is at an all time high. Immigrants tend to reside in metropolitan areas. Seattle and area is in the top 20 areas of the US in terms of population and is a magnet for foreign newcomers
    Transportation is bad and getting worse. Individuals and families are going to want to live in the Seattle area and close in suburbs to avoid longer and longer commutes.
    The US is a safe haven for much of the world to invest in. Chinese money will still arrive at our shores, even if the Chinese clamp down of foreign transactions.
    There are still multiple offers on many houses in the Puget Sound area that are snapped up right away. That means that for every house sold with multiple offers – others are still looking for a house to purchase.
    For many Californians that have owned housing in the hot real estate markets of California for years, buying a house in the Seattle area with the proceeds of their sales still often leaves half a million to one million dollars to finance vacations during the rainy season. Lots of problems in California, and for many, lots of reasons to leave.

    Of course the above is only a guess. Prices could go down if there is a major economic recession, Amazon goes out of business, Boeing moves all its operations to right to work states, we have a major earthquake, North Korea makes good on its threats etc etc. But I have a feeling that this real estate market for the time being is for real, and prices are going to continue to go up before they go down.

  145. 145
    minitheden says:

    RE: Green Horn Investor @ 143

    Green Horn Investor, I’ve been a real estate investor for 14 years now (Realtor for 18 years). It’s not for everyone, but can be very lucrative for those who are smart about it, willing to take calculated risks and ride it out long term. I’d be happy to fill you in on what I have learned. Much of it was learned the hard way! I like to try to help others avoid the mistakes I made long ago. The upside is accumulation of passive income, tax benefits and appreciation to take me through retirement and hopefully a legacy for my family. Not sure if there is a way to PM each other on here. Let me know if you’d like my email.

  146. 146

    By ess @ 140:

    RE: Deerhawke @ 139
    New construction definitely has an impact on pricing, but not as much as you might think. As I have commented before, a lot of the new construction inventory is pre-sold (or more accurately, pre-bought) so it never makes it into the MLS statistics.

    I’m not so sure the extent that’s correct, but I’m also not sure it matters. The percentage of new construction this year compared to 2014 & 2015 wasn’t all that different, to the extent we’d be talking significant change in mix, but what likely would be different would be the pricing. Builders can suck up the people who get frustrated with multiple offers and raise their asking prices with the frequency of gas station price changes.

    Vague reference to statistics are of NWMLS statistics which are not calculated or guaranteed by the NWMLS.

  147. 147
    Deerhawke says:

    Kary, first I wanted to get back to you on your suggestion.
    —————-
    “You should start an on-line service to write marketing remarks for agents. Then retire after you create iOS and Android apps and sell the company.”
    ————–

    I will give it some thought but always was convinced that the random capitalization/punctuation, frequent occurrence of malapropisms and arresting use of oh-so poetic mixed metaphors ( “a sylvan glade where the hand of man has never set foot…”) were a kind of secret code known only to capital-R Realtors.

    Second, part of the reason that new construction is not making more of an impact on median prices is precisely because what I estimate is 25% of the new construction is not being reflected in MLS statistics. On the other hand, the counter-argument may be that 25-50% of the low-end tear-downs don’t make it onto the MLS either.

    I have bought 50-60 properties in Seattle since 1997, but only 3 off the MLS– all on a Friday afternoon or during a holiday.

  148. 148

    By Deerhawke @ 147:

    Kary, first I wanted to get back to you on your suggestion.
    —————-
    “You should start an on-line service to write marketing remarks for agents. Then retire after you create iOS and Android apps and sell the company.”
    ————–

    I will give it some thought but always was convinced that the random capitalization/punctuation, frequent occurrence of malapropisms and arresting use of oh-so poetic mixed metaphors ( “a sylvan glade where the hand of man has never set foot…”) were a kind of secret code known only to capital-R Realtors..

    Well clearly I saw some talent there. The only thing missing was the random abbreviation/shortening of words.

  149. 149
    redmondjp says:

    RE: Kary L. Krismer @ 148 – What I’m still waiting for is the Listing Description For Dummies book. You know, the one that gives you the translation of all of the codewords, such as ‘cozy’ = tiny, ‘charmer’ = tiny + decorated like grandma’s house, ‘peek-a-boo view’ = view when the wind blows the neighbor’s trees, and so on . . .

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