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News Quickie: Snohomish Building Boom Over

First up in today’s news quickies is word from Snohomish County that—guess what?— the housing boom has ended. No, seriously. The party is over.

Snohomish County’s housing boom is over.

Builders are laying off workers, houses are staying on the market longer, and the overall number of permit applications has dropped by hundreds compared to last year.

“Nearly every developer has or is contemplating layoffs, and it’s because of the slowdown in the market,” said Mike Pattison of the Master Builders Association of King and Snohomish Counties.

“The housing peak is over,” said Todd Britsch, president of Bothell-based New Home Trends, which tracks new construction. “These type of frenzies come around every 20 years.”

Instead, the region will see a normal and healthy housing market, Britsch said.

“The market is going into — and homebuyers need to understand this — a normal, sustainable, healthy housing market, and we’ll see an average appreciation of 3 percent a year for the next three or four years. Then we’ll start this cycle all over again. In five years, we may reach 10 percent a year.”

And what evidence does Mr. Britsch bring to the table to support his claim that we are transitioning to a “normal, sustainable, healthy” market? Nothing! That’s right, no evidence whatsoever. But the article is definitely heavy on optimism. It’s full of all kinds of quotes from builders and realtors about “natural cycles” and “fantastic numbers.” You keep the faith, boys.

(Jeff Switzer, Everett Herald, 10.07.2007)

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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.

9 comments:

  1. 1
    S-Crow says:

    Unfortunately, the local Snohomish town paper The Tribune, announced last week the historic Snohomish lumber mill (next to Harvey Airfield) was laying off, if memory serves me correctly, 120 of it’s roughly 145 employees effective immediately and was essentially slowing operations severely until inventory is worked through and the building market rebounds.

    FWIW- Received in two purchase transactions to our office yesterday and both were WAY below list prices and included robust incentives.

  2. 2
    James says:

    NAR has a commercial running during the current ALCS (Indians vs. RedSox) games. My favorite quote – “If we didn’t buy now, we would’ve missed the opportunity.”

  3. 3
    notabull says:

    “FWIW- Received in two purchase transactions to our office yesterday and both were WAY below list prices and included robust incentives.”

    S-Crow, can you give approximate locations (city is fine, whatever is OK with you) and the % that “WAY below” is? I’m a buyer on the sidelines and it’s interesting to me to watch the difference between asking price and selling price. Thanks! :)

  4. 4
    patient says:

    “and homebuyers need to understand this”

    Oh yeah, and why is that? Sorry Todd, the time when scare tactics was working is over.

  5. 5
  6. 6
    redmondjp says:

    Thanks for the link, Q!

    If you read the article it also mentions that the governmental overlords have prohibited this business from changing or modernizing their facility. Not that it would help their sales any, but anything a company can do to become more efficient will help them to survive through the down times.

    Business & government — gotta have both. Can’t we just all get along?

  7. 7
    Seattle Man says:

    Do you know the average age of readers of this blog?

  8. 8
    deejayoh says:

    A significant number of developers in the heart of the housing boom frenzy of 2005 had gone out the year before and negotiated for land, Britsch said. Property prices reflected the expectation of 30 percent in profits a few years down the road. That worked until 2005.

    “Developers paid so much for the dirt that what they need to charge for the lots isn’t what the consumer is willing to pay,” Britsch said.

    This makes no sense. Greg Wharton explained to us how the price will rise purely because costs are higher, didn’t he?

  9. 9
    laxtosnoco says:

    Seattle Man, I would post the median age, but folks on this blog would only criticize the median for being skewed upward by a change in mix toward higher end/older baby boomer types.

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