Seattle Bubble

Here are a few recent stories that have been covered elsewhere and are worth at least mentioning here.

Latest foreclosure statistics: Seattle P-I, Foreclosures in Seattle higher, but much lower than nation’s

The Seattle area had about twice as many foreclosures in May as it did a year earlier but continued to have a far lower foreclosure rate than the country as a whole, according to new reports.

King and Snohomish counties had a combined 881 trustee-sale notices and bank repossessions in May, one for every 1,219 households, according to RealtyTrac, an Irvine, Calif., company that tracks foreclosures. The area’s rate put it 148th out of 229 metro areas the company ranks.

FHA tries to ride in to the rescue housing bubble (they’re a little late for that). Coverage:

• Seattle Times, Number of FHA loans jumps locally
• Seattle P-I, FHA is waiting to give you a loan

The much-vaunted commercial real estate market is apparently showing signs of weakness as well: Seattle Times, Commercial real estate brokers worry about Seattle buildings

After climbing for years, are office lease rates in downtown Seattle getting ready to turn south?

Some commercial real-estate professionals think so.
…
More than 2 million square feet of new office space — the equivalent of 1 ½ Columbia Centers — will come on the market in greater downtown next year. Almost none of it is pre-leased.

And lastly, Christine Gregoire is taking her turn beating the dead horse that is Countrywide. Where was she when they were busily pumping the housing bubble up with all of these ridiculous loans? Not running for re-election, that’s where. Coverage:

• Consumer Smarts (P-I Blog), State wants to yank Countrywide’s license
• Seattle P-I, State accuses Countrywide of bias
• Seattle Times, State accuses Countrywide of discriminatory lending
• Rain City Guide, What do Governor Gregoire’s actions mean for local Countrywide employees and short selling homeowners?

Did I miss any recent stories that should have been included?

(Aubrey Cohen, Seattle P-I, 06.13.2008)
(Elizabeth Rhodes, Seattle Times, 06.13.2008)
(Aubrey Cohen, Seattle P-I, 06.16.2008)
(Eric Pryne, Seattle Times, 06.26.2008)
(Phuong Cat Le, Consumer Smarts (P-I Blog), 06.25.2008)
(Phuong Cat Le, Seattle P-I, 06.26.2008)
(Susan Kelleher, Seattle Times, 06.26.2008)
(Jillayne Schlicke, Rain City Guide, 06.25.2008)

We’ve been focusing more on original content here lately, which means that as articles crop up in other local news sources, we haven’t been posting every single one. Of course, there are some interesting things being said about the local housing market in other news sources, so it’s good to touch base with them once in a while.

So, here are excerpts from some of the interesting real-estate-related articles that have been printed elsewhere in the last week.

[Read more →]

Here’s a minor roundup post for you, with a few stories from the last few days that are worth a brief mention:

After selling just 17 out of 114 units, an in-progress condo complex near Seattle Center will instead be completed as “luxury apartments.”

In recent months, developers have shelved plans to convert several Seattle apartment buildings to condos and changed some new projects from condos to apartments. Another example of a new apartment project that was once condos is Aspira, a 37-story tower at Stewart Street and Terry Avenue, by Los Angeles developer Urban Partners.

Developers have attributed the shift to a glut of announced condominium projects, skittishness among the investors who fund condo towers, and an apartment supply that’s shrinking because of conversions and a lack of new construction since the dot-com meltdown in 2001.

Apparently, the Skagit County real estate market is even more special than Seattle, because up there, real estate agents claim that the worst is already over.

Despite continued fallout from the subprime mortgage markets and growing talk of a recession, local real estate professionals believe that the worst may already be over for the Skagit County housing market.

Looking back, the low point came sometime in spring 2007.

And also entertaining is this one from today’s New York Times: Feeling Misled on Home Price, Buyers Sue Agent (also reprinted in the P-I).

CARLSBAD, Calif. — Marty Ummel believes she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.

What makes Ummel different is that she is suing her agent, saying it was all his fault.

Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

They’re also talking about this one over at the Seattle Real Estate Professionals blog today.

Here’s a roundup of some local real estate stories that came out this weekend.

• The Times and the P-I give Redfin some free advertising by covering their list of Seven Tactics for Selling Your Home.
• According to the Times, local builder Quadrant Homes (owned by Weyerhaeuser) is impervious to the housing market slowdown.
• From the sounds of Phuong Cat Le’s report in the P-I, I’m not the only one that thinks that few will qualify for the mortgage “rate freeze.”
• Also worth mentioning is a weekend column in which Steve Tytler repeated his prediction that home prices will “drop about 10 percent to 20 percent over the next year or so” then “flatten out.”
• Lastly, check out this article in the Times about the especially slow market in south King County.

It’s interesting how much the general tone of news articles have changed in just the last six months. I think the local consciousness is finally starting to realize that Seattle may not be magically immune to the housing bust after all.

While I was enjoying a relaxing weekend with my visiting brother-in-law, playing a copious amount of Xbox 360 and Wii games, the local press was going into overdrive with the real estate booster articles. It’s not worth my time or yours to have separate posts for each of them, so here is a link roundup. (Danger: Sarcasm ahead.)

The first three reports in today’s roundup were spawned by an upbeat report on the local condo market that was released by none other than our hero, Glen Crellin.

Elizabeth Rhodes, Condos a bright spot in housing market:

Overlooked for years as a significant housing source, condominiums are now a rapidly growing presence providing a ray of sunshine in an otherwise gray local housing-sales scene.

The condo market is healthier than the detached-house market, and prices are holding their own. Those are the key findings from an analysis released Friday of the Seattle-area condominium market by Glenn Crellin, director of Washington State University’s Center for Real Estate Research.

It was pointed out to me by a reader that the online edition of the Times article was peppered by as many as six ads for local home sellers (I never see ads, thanks to Firefox + Adblock Plus). See a screenshot to the right (click to enlarge). The ads are clearly determined by scanning the text for keywords, but it was still amusing that ads for Prudential Realty, Polygon (houses), John F. Buchan (houses), Olive8 (condos), Brix (condos), Bellevue Towers (condos), The Burnsteads (houses), and ZipRealty were covering the page as people viewed the upbeat report about how great our market really really is. Really.

Aubrey Cohen, Seattle’s housing holding up in market:

The Seattle area’s housing market is stronger than the nation’s, and condominiums have held up better than houses. Still, the market is slowing, economists said at a forum Friday.

Thank the economy for the area’s vigor, Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said at the annual forecast breakfast sponsored by Williams Marketing, a Seattle firm that works with housing developers.

Hmm, Williams Marketing… now where have we heard that name before… Oh yeah, only in about every P-I real estate article, that’s where. So, the Washington Center for Real Estate “Research” is teaming up with a condo marketer to tout our area’s great market? How terribly surprising.

Debra Smith, Condo prices in county up 65 percent in 7 years:

Buyers balking at buying a condominium take note: It’s a better investment than people often think, according to a report released Friday.

The price of condos in Snohomish County rose nearly as fast as single-family homes, and in King and Pierce counties, condos performed better, according to the report by director Glenn Crellin of the Washington Center for Real Estate Research at Washington State University.

Psst… here’s an investing secret: Past performance does not guarantee future results. Pass it on.

Elizabeth Rhodes, Rebound talk is big at Realtors annual gig:

Lennox Scott has worked through many market cycles in the decades he’s been in real estate and predicted many months ago that the Seattle market would slow.

So he’s not surprised that it has. Nor is he particularly worried about, calling it no more than “an adjustment phase.”
…
Florida’s Palm Beach County, north of Miami, currently has a 50-month supply of homes for sale.

Las Vegas is also in dire straits for sellers with a two-year supply.

Both had market forces Seattle never had: runaway homebuilding plus thousands of investors who flooded those markets hoping to get rich quick by buying and flipping houses.

Ahh, the old reliable “compared to the absolute worst markets in the country, we’re not half bad” argument. Is it just me, or does it seem like Lennox Scott has turned the volume up a few notches on the “don’t call it a real estate bust” album? He’s being quoted all over the place lately.

Mike Benbow, Housing glut less severe in the Northwest:

Under normal circumstances, Conerly said, first-time buying candidates save for a down payment, work on clearing up their credit and eventually jump into the market. “In 2002, there were cheap mortgages and people were able to buy a year or two ahead of time,” Conerly said. “We weren’t creating additional demand, we were just borrowing from the future.”

Speculators were increasingly investing in houses, with many people entering the market to quickly resell the house for more money, a technique called flipping.
…
After overbuilding in 2003 and 2004, building eased up. In 2005, the number of new homes dropped to about 58 for every 100 new people, which is a number pretty close to normal demand. Last year and this year, the number has dropped even further, to about 42 per 100, which is well below normal demand, Conerly said.

Nationally, there are about 1.5 million houses too many, Conerly said, adding he doesn’t expect a turnaround in the national housing market until 2009. “We’re not working off the overhang very fast,” he said.

But he said things are different here, mostly because we’ve been under-building relative to our population growth for two years.

“We’ve not fully worked off the number of houses we built, but we will work it off faster than the national average,” Conerly said. “This area is going to have continued growth for quite some time.”

This article has the least amount of cheerleading of the bunch, and at least offers some actual statistics and doesn’t just parrot the usual real estate mantras. However, we’re still being fed the “better than the national average” and “continued growth” type of lines, apparently intended to ease any fears that we will experience a downturn at all. Given the figures they gave about the rate of building 2003-2007, and assuming that the present rate of building and population growth keeps up (a big assumption), we’re still looking at 3-years’ worth of new construction oversupply. But don’t worry, we’ll work it off “faster than the national average,” so everything will be okay.

(Elizabeth Rhodes, Seattle Times, 11.17.2007)
(Elizabeth Rhodes, Seattle Times, 11.17.2007)
(Aubrey Cohen, Seattle P-I, 11.16.2007)
(Debra Smith, Everett Herald, 11.17.2007)
(Mike Benbow, Everett Herald, 11.19.2007)

Sorry, I got nothin’ today. So instead of a real post, here are some links to recent posts on other local real estate blogs that you might be interested in reading and commenting on. What with 50-100 comments on most posts here lately, I thought maybe we could spread the comment love around a bit. Enjoy, and be nice.

On Rain City Guide by Jim Reppond: The Sky is Falling! The Sky is Falling!

Yes, real estate is somewhat cyclical. And at times there are market fluctuations. But the human tendency to gravitate towards fear, as well as to not look at things in historical perspective, makes people think things are much more dramatic and dire than they are in reality, IMO.

Hey, wait a minute, that post looks familiar… I love it when the real estate sales offices circulate informal talking points memos like these.

On Redfin Seattle Sweet Digs by Katrina Munsell: Can Price Drops Give you Carpal Tunnel Syndrome?

That’s exactly what I was thinking as I was compiling this week’s list of Eastside price drops greater than $25,000. If this trend keeps up, I’ll be able to tell you pretty darn soon.

On Urbnlivn by Matt Goyer: You weren’t featured in the Seattle Times

There’s a number of condo projects that email me every week about how they were featured in the Seattle Times when in fact all they did was buy advertising in the Seattle Times.

On Home Forum Extra by Becky Bisbee: National outlook gloomy for 2008

At the National Association of Realtors convention here, the big question on everyone’s mind is: When will the real-estate market rebound?Economist John Tuccillo is predicting the end of 2008 or beginning of 2009 for the nation as a whole.

However the Virginia-based consultant and former NAR chief economist stressed that “there are hundreds of thousands of real-estate markets, so it doesn’t matter what the national picture is.”

What really matters to buyers and sellers is what’s occurring in their own area.

On Open House by Devona Wells: California baby selling local mortgages

Two of my co-workers received an ad in the mail last week in an envelope that is white, slightly over-sized and addressed in black ink using a pretty, occasion-type font. It would be easy to mistake the presentation for a wedding invite.Open it, however, and there’s a picture of a cute baby gazing at you from the cover of a card. A birth announcement? No, an attempt at mortgage marketing.

On SeattleBubble? by Tim Dunn:

…oh wait, blog-spamming realtor Tim Dunn hasn’t posted since September. I wonder why?

Update: In response to a comment on his most recent post, Mr. Dunn indicates that he hasn’t posted lately because he has been “very ill.” I would like to extend my best wishes of a speedy recovery to Mr. Dunn. That is all.