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Seattle Times RE Roundup

The Seattle Times has had a good handful of real estate stories in the last few days, but none of them have been interesting enough to merit their own post. However, now that I’ve got a little collection of them in the inbox, here’s a roundup with snippets from all four.

Jane Hodges, Buying on a budget out of reach for some after state program cut:

Of course, there are still many options for first-time buyers, including FHA and VA loans, interest-only loans, conventional loans (with higher rates) and 40-year loans.However, Myrick said lenders in general are showing signs of returning to stricter lending criteria — and that may make shopping increasingly hard for first-time buyers.

“In some ways, though, it seems lenders are going back to the old-school math.”

By that, Myrick said, she’s referring to the percentage limit of total debt to gross monthly income that lenders will generally approve.

In the past, she said, lenders didn’t want to loan to a borrower whose total debt (including housing costs) would account for more than 36 percent of total monthly income.

In recent years that limit adjusted up to the current 45 to 50 percent range as lenders got increasingly creative — some say lenient — about packaging mortgages for buyers. Some lenders make loans to borrowers at the 65 percent level — and that, Myrick said, is a loan type that will likely vanish.

Will first-time and middle-income buyers increasingly sit out the market?

“That’s hard to answer,” Myrick said. “There are two issues: There’s the payment comfort level of the borrower and the question of approvability from the lender.”

Some borrowers may be willing to take on interest-only or higher-interest loans in order to secure a home and cross their fingers that their incomes will either rise or they’ll have refinancing options later.

Others may find that the terms under which they can buy are not attractive enough to warrant an offer.

“Cross your fingers,” now there’s a sound financial plan. Awesome.

Bob Young, Affordable rentals vanish as apartments go condo:

Julie Martin has daily headaches and sleepless nights.Her apartment in West Seattle’s Delridge neighborhood is going condo and Martin, a single mother, is stressed about finding a new home near her daughter’s school and her job at the local YMCA.

It won’t be easy. Vacancies in the Seattle area have sunk to their lowest level in years and rents are climbing.

Renters across the Puget Sound region are feeling a similar pinch. Nearly 7,000 apartments in the area were converted to condos last year.

Never mind the piles of “investor” condos and homes that can be found on Craigslist. Renters are feeling a pinch, because we say so.

Bob Young, Developer’s proposal disappoints Seattle officials:

When Seattle city officials sold the Alaska Building two years ago, they expected developer Kent Angier would turn the 15-story office tower into downtown housing.That’s what Angier said he was going to do and what he indicated on a proposal to buy the Alaska Building.

Now Angier plans to convert the historic building into a Marriott hotel. Mayor Greg Nickels is disappointed, along with some City Council members, who thought they had a commitment from Angier to bring market-rate housing to the northern edge of Pioneer Square.

Sounds like a smart developer to me. By the time they’d be able to finish any kind of apartment or condo project, the downtown market will likely be absolutely flooded with all of the projects that are already in the pipeline.

Sharon Pian Chan & Ashley Bach, Megahomes multiplying, but how big is too big?

In an area with little land to build new houses, residents are fighting the megahome — McMansions that balloon to the edges of their properties, three-story giants that block views from quaint craftsman bungalows.Seattle is considering new laws to limit the size of houses replacing those torn down on single-family lots. In Bellevue, residents came to a meeting with city staff Wednesday night to complain of huge homes that block out the sun and “overpower” the neighborhoods.

Those advocating restrictions say megahouses hurt the character and scale of single-family neighborhoods.

I’ll bet those same neighbors haven’t been complaining about how the “character” of their neighborhood was changed by skyrocketing house values the last few years. Go figure.

(Jane Hodges, Seattle Times, 06.09.2007)
(Bob Young, Seattle Times, 06.10.2007)
(Bob Young, Seattle Times, 06.14.2007)
(Sharon Pian Chan & Ashley Bach, Seattle Times, 06.14.2007)

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

13 comments:

  1. 1
    Ravenor says:

    Seattle megahome scaremongering

    The Seattle Times story starts out:

    “In an area with little land to build new houses, residents are fighting the megahome — McMansions that balloon to the edges of their properties, three-story giants that block views from quaint craftsman bungalows….Seattle is just beginning to consider reducing the size allowed for single-family houses that replace demolished homes. About 330 single-family homes were torn down from 2003 to 2005, and most were replaced with larger homes, according to the city’s Department of Planning and Development.”

    Yes, that is a huge wave, 330 homes in two years in a city of more than a half a million residents. What a joke…I guarantee that there are quite a few homes in Seattle that are just one story wood-siding tract homes. If someone builds a bigger house in your neighborhood, get over it…

  2. 2
    wreckingbull says:

    We need these McDoodies to serve as future multi-family communes. I say bring them on!

  3. 3
    Lake Hills Renter says:

    I don’t know about teardowns, but new construction in Bellevue/Redmond is pretty much 100% McMansions from what I’ve seen. There’s a lot right across from Microsoft that would be comfortable for one McMansion, but they’ve managed to squeeze three of them on there, right down the street from a new subdivision of twelve new huge houses. I see this everywhere I go to, even places like Duvall, Maple Valley and Orting. I can’t tell you the last time I saw a huse go up with less than 4 bedrooms.

  4. 4
    Eleua says:

    I don’t get the McMansion thing in the PNW.

    If one of the reasons we are “special” here in the PNW is all the outdoor amenities and “great climate,” why put all your money in something that puts more of the outdoors under a roof and locked behind walls?

    I can understand if you live in Dallas, and you need a 4500sf house on a 1/4 acre lot, because you are housebound for all of July-Sept, but here…?

    Why not just move to another less expensive place?

    Why live in the PNW if you are just going to stay in your media room and watch a plasma TV? I can do that in Dallas for 1/4 of the price.

  5. 5
    EconE says:

    My feelings on McMansions is that they completely ruin the character of a neighborhood.

    Down in So. Cal., the first place to experience the McMansionization process was Beverly Hills when there was an influx of extremely wealthy Iranians after the Shah was overthrown. There The residents didn’t like it (The McMansions which were dubbed “Persian Palaces”) but there seemingly weren’t any regulations and at that time…money talked. Houses were built pretty much lot line to lot line and they stood out like sore thumbs. The trend continued to the point where HPOZ’s (Historic Preservation Overlay Zones) were created. There were votes of course, but the HPOZ’s won in the neighborhoods that I know of.

    My neighborhood in L.A. has an HPOZ and if someone want’s to actually do a full demolition of a house the house must be “in character” with the surrounding houses. There is no particular “style” that they must follow (Tudor, French Provicial, Georgian, Mediterranean) but even the “new” construction that I recently witnessed down the block actually looks like a Mediterranean that was built in the 20’s rather than some 21’st century recreation.

    Most people actually don’t tear the house down as it would then be considered new construction (more $$$ and more hassle for the permit) so they take everything down but one wall and then it is just considered a remodel. After the “remodel”, some then take out the last wall that was remaining and then add on to that as another “remodel”. The houses still must be in line with the other houses in the neighborhood however.

    If you think that you are fine with McMansionization…just wait until your neighbor builds some gaudy monstrosity next to your current or future house and you’ll probably start thinking differently.

    just my 2c….sorry for rambling.

  6. 6
    ocrenter says:

    just did a comparison of the inventory/sales pattern between SD vs. Seattle, exactly the same curves, just a full year behind. check it out at Bubble Markets Inventory Tracking

  7. 7
    Eleua says:

    I can’t wait to hear the caterwauling by all the McMansion/Hummer types when energy costs double again.

  8. 8
    Ravenor says:

    I don’t think that people building homes with more space than they need or can use is a good thing. With respect to Elua’s comment, when it rains from October to May every year, having some space indoors can be a good thing. Portland’s reputation as a place for bookstores and libraries is because that’s what people there do all through the rainy season.

    Putting more houses on a particular lot size means less lawn that needs to be watered in the summer, fertilized, mowed, etc…I believe building codes in Washington require drainage systems so that rainfall filters into the ground rather than going into storm drain systems. I know that is the case in Clark county.

  9. 9
    Eleua says:

    True. If the winters around here are oppressive, then more indoor space might work. I’ve lived in New England, and I can tell you that the winters here are a paradise.

    My overall point is: if the reason people move here is for the outdoor amenities, why divert the bulk of your resources to remaining indoors? Move to Dallas or Chicago if you want to do that.

    It would be like living in the Florida Keys and not having a boat. What would be the point?

  10. 10
    chris says:

    I can understand if you live in Dallas, and you need a 4500sf house on a 1/4 acre lot, because you are housebound for all of July-Sept, but here…?

    Eleua said, “Why not just move to another less expensive place?

    Why live in the PNW if you are just going to stay in your media room and watch a plasma TV? I can do that in Dallas for 1/4 of the price.”

    That’s it, I”m taking the Dallas job offer and following both of my kids who’ve already moved to Dallas precisely because it is more affordable.

  11. 11
    explorer says:

    Tim sez: “Never mind the piles of “investor” condos and homes that can be found on Craigslist. Renters are feeling a pinch, because we say so.”

    Not sure I understand what that means. As someone who is actively looking due to an imment condo conversion, there is very little that is reasonable out there. The overvaluation of condos and the net loss of apartments over the last two years is

    Nearly every single investor condo being rented is priced accornding to their mortgage. Most renters are balking at it, myself included. You see many of the same listings pretty much every other day. A one bedroom apartment that rented for $750 to $800 last year, rents as a conversion for $1100 to 1200 or more now. And you are very lucky if anything like partial utilities and parking are not charged extra. This has crossed over to the shrinking number of apartments that are left. The newer buildings, especially, are way overpriced for what you get.

    If that does not sound bad to a SFHomeowner, remember what the median income is in Seattle, and how rents used to follow it. Rents are now following mortgages instead, it appears to me.

    The new “cheap” one bedroom is a mold infested POS under $800. You can also expect that for a bottom floor, sunless MIL.

    Anything remotely worth it is snapped up within hours. It’s like New York City or Chicago out there. I feel like I am dealing with real estate cattle rustlers…

    You can move to the ‘burbs and likely still get something worth your hard-earned money, but you will pay dearly in the commute time, either by car or busline.

  12. 12
    Jane Dunn says:

    Quote: “I’ll bet those same neighbors haven’t been complaining about how the “character” of their neighborhood was changed by skyrocketing house values the last few years. Go figure.”

    Actually, I bet they are complaining! Property taxes increase as well as the skyrocketing house values. The skyrocketing house value is only worth something if you want to sell it. It is a big reason that “reverse mortgages” have come into being. Often an Elderly person who owns their place outright is overwhelmed by the skyrocketed property tax.

    I also ditto the comment above about how there may be rentals out there but the rents have risen to cover the mortgages of condo conversions and so called “real estate investors”.

  13. 13
    EconE says:

    Explorer Said:

    [b]LOTS OF STUFF[/b]

    Oh Puh-leeeeze. You just haven’t learned the fine art of negotiation. Do you really think I took the “best” deal I could find? Maybe I should hold a seminar for you guys.

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