Predictions for April

Alan

The end of April is rapidly approaching. Does anyone have any predictions on how the real estate stats will turn out?

I think the YOY increase for April will be less than March. Bellevue and Ballard will remain strong.

Prices at the edges are falling. Here is a house being offered at $106/sqft and 25% less than the 9/2006 sales price.

http://www.redfin.com/stingray/do/printable-listing?listing-id=618668

EastSider

My guess is that most of eastside (especially Bellevue, Redmond, Kirkland, Issaquah & Sammamish) will continue to remain strong. Hi-tech employees are still outbidding each other on these homes -- even older homes in some of these areas are being listed for well over $300/sq ft.

I'm still not seeing light at the end of the tunnel :evil:

hesotriflin

EastSider wrote:

My guess is that most of eastside (especially Bellevue, Redmond, Kirkland, Issaquah & Sammamish) will continue to remain strong. Hi-tech employees are still outbidding each other on these homes -- even older homes in some of these areas are being listed for well over $300/sq ft.

I'm still not seeing light at the end of the tunnel :evil:

Yup, still a lot of eager beavers sippin on kool-aid around here.

GetReal

Not sure about hi-tech employees, though. I work at MS and, after scouring the market and looking at houses for a couple of months, decided that the prices are way over the top and the market is liable to burst. Paying 4.5K a month for mortgage is something that can be affordable to only stupid or a few rich employees.

Everyone I know at MS decided to wait 1-2 years to see where the market goes. Even though some people may still afford those houses, you really gotta be dumb to buy in this market and if you can count money (and the time you've spent to earn that money) you may realize that if you buy now you may lose 50K compared to a year from now. The 50K does not seem like a big deal compared to the whole house price, but when you think in real terms 50K means that you could have driven in a new BMW if you just waited a year.

EastSider

GetReal wrote:

Everyone I know at MS decided to wait 1-2 years to see where the market goes.

My recent experience with MS employees has been different...
-> Those who don't have a home are actively looking for one (some have already placed offers on multiple homes unsuccessfully & are still trying)
-> Some of those who already have a home are upgrading OR are considering buying a second home as an investment

And none of my MS friends are in very senior or very-high paying positions.

-> I know one guy who joined MS 2 years ago (out of college) & just bought a $700K home, after outbidding 7 people.
-> Another MS guy "auctioned" off his home -- he listed it at $450K & the highest offer he got was $495k. All the offers were from MS employees.

EastSider

Not to start of a racial debate, but.....

My observation has been that most of the people who come to a open-house (or a new construction site) on the eastisde seem to be from outside the US. I guess this is understandable given that MS hires so many engineers from outside the country.

blueskitten

Here's my view "from the trenches" as a current seller. After 30 days on market in a desirable neighborhood, a price reduction from an already-competitive price we have no sale as of yet. A LOT of foot traffic and a couple of serious nibbles, but no takers yet. We were/are the lowest priced property in our neighborhood, but a lot of inventory went up right about the same time ours did. Ours is the only unit under 250K that is still for sale, but a lot of the inventory that finally sold had been up for a couple of months... average days on market are at about 45. Still strong, historically speaking, but a lot longer than the past couple of years in Magnolia when properties flew off the market as soon as they were posted. Buyers are being much more patient and selective now.

I think that April will show a relatively high number of pending sales (lower than 2006 and possibly 2005, but still historically strong). If people have been getting their asking prices, we're still looking at 10% annual appreciation in the entry-level condo market for my neighborhood, and I would think that other close-in desirable neighborhoods are in the same boat.

Regarding inventory, overall there is definitely a lot more available than last year, but inventory numbers are stable for properties that are comparable to mine (I've had a redfin search I've been watching since last fall). Over winter there were always about 45 to 50 1+ bedroom properties <250K between downtown and Northgate. Mid-March to early April showed a gradual increase to 60, and now there are in the low 50s again. There are a lot of new condo conversions that are starting to hit the market, though, particularly in Capitol Hill and First Hill. Things could be nasty by late summer if these conversions keep coming.

Bottom line prognostication: April closed sales and pending sales down 10-20%, sale prices up 5-10% in the entry-level market. I have no idea what's been going on in the SFH or luxury condo markets.

anforowicz

EastSider wrote:

Not to start of a racial debate, but.....

My observation has been that most of the people who come to a open-house (or a hew construction site) on the eastisde seem to be from outside the US. I guess this is understandable given that MS hires so many engineers from outside the country.

I think this is a valid observation. In my opinion a significant part of real estate market on the eastside is fueled by immigrants who had no previous experience with real estate in their home countries.

I came to work for Microsoft 2 years ago from Poland. I had no previous experience with a real estate market and no previous experience with living in the USA. It seemed reasonable to assume that the prices and appreciasion I am seeing are normal. I almost bought a house in 2006, but found this blog prior to making a serious offer.


Lukasz

Lake Hills Renter

Mark me down as another MS employee making a decent salary that has decided to wait a while to buy. I know of a couple of fellow Microsofties that bought last year, but I don't hear anyone at all talking about it now. I don't know a few who have recently or are trying to sell.

It's funny, Eastsider, but my experiences are almost exactly the opposite of yours.

sniglet

I too am yet another Microsoft staffer who has decided to rent. In fact, I sold my Bellevue house in 2003 because I was worried about the market back then. Unfortunately, I don't see much of a change in real-estate enthusiasm amongst my colleagues.

I am just amazed at the number of major remodels people are doing, and know a lot of people who have recently upgraded, or bought new homes. Oddly, some people go around cooing about how they got great cash-back rebates from the sellers (i.e. the sellers gave them $5000 or $1000 at closing). Why they view this kind of disfunctional market behaviour as if they got some great deal rather than evidence of rot is beyond me.

I seem to be on a different planet than most of my colleagues. When they talk about a bidding war on a home, the huge amount of high-end McMansions going up, or getting a sweet rebate from seller, they see evidence of how strong our economy is. When I look at these same facts I just get even more frightened as to how this will all end.

But then, I find it hard to buy into the general idea (pervasive in the Microsoft culture) that technology is changing everything, and is an end in itself. Sure, I am proud of the products I help make, but I don't delude myself with thinking this will lead humanity to some "new era" of peace, prosperity, and fulfillment.

deejayoh

Count me as microsoft renter #3.

I agree that people here seem to have their heads in the sand about the RE market - but I think a lot of Microsofties can tend be narrow and very very deep in their knowledge, meaning they are smart and know technology - but don't have a lot of concern about other things.

Not trying to paint too broad a brush stroke there - but I certainly see that sort of behavior

GetReal

I can imagine cases of MS employees who don't follow the market and instead listen to their RE agents (who, as in my case, always say that everything is hunky dory and Seattle is a very very special place). However, those that at least check a few facts here and there, and those that actually work for a living (unless they are stupid or absolutely have to buy a house) would not buy now (maybe in 2006, but not now).

People at MS play with ESPP, 401K, stocks ... I don't see many of them being stupid enough to lose 50-100K within 1-2 years. It just doesn't make sense. Many new people here come with no equity and actually have to work for a living.

I may be in a different MS crowd than some, but that is what I see right now. Those that think would not buy, period. Even my chiropractor (who just moved from CA where he had a >1 million house) said that he would wait 1-2 years due to market conditions.

sniglet

By the way, any Microsoft employees on this board can join a distribution list I set up to discuss economic issues. The DL is "resg".

The people on this DL are pretty sober minded (i.e. not the usual bullish crowd), and we have had a couple brown-bag lunch chats.

EastSider

Lake Hills Renter wrote:

It's funny, Eastsider, but my experiences are almost exactly the opposite of yours.

Hmmm...maybe it's because most of my MS friends are new to the US (recent immigrants) & they seem to be thinking differently about the housing market?

ayles

sniglet wrote:

By the way, any Microsoft employees on this board can join a distribution list I set up to discuss economic issues. The DL is "resg".

The people on this DL are pretty sober minded (i.e. not the usual bullish crowd), and we have had a couple brown-bag lunch chats.

Can I join if I am a v-?

sniglet

ayles wrote:

Can I join if I am a v-?

Yes. Just go add yourself to the DL.