Aubrey Cohen is on a roll lately, doing a great job of reporting what’s really going on with the Seattle-area real estate market, instead of just painting the rosy picture that agents and builders would like to see printed. Here is Cohen’s latest, on the drastic price-cutting measures that builders just outside Seattle are taking to clear their stagnant inventory.
Karen Waters thought she got a good deal last March when she paid $425,000 for a new house in the SouthRidge at Silver Creek development near Puyallup.
After all, the price was about $100,000 less than buyers had paid builder Centex Homes for similar houses on the block the previous fall. By February, however, neighboring homes were selling for about $350,000.
“I totally wished I would have waited,” Waters said last month.
The Seattle-area housing market has held up better than many, largely because it did not have as much overbuilding as places such as Las Vegas and Phoenix. Still, the local market has slowed and builders are taking dramatic steps to clear out housing inventory in suburban areas.
“The reality is, our real estate market is in the tank,” said Don Dutton, managing broker of Windermere Real Estate’s Puyallup Office.
Overbuilding deserves the biggest share of the blame, he said.
Read the whole thing. This is exactly the kind of thing that was happening in Florida and California 1-2 years ago. This is great news for those of us that don’t care to live in Seattle or Bellevue proper. No, it hasn’t hit downtown Seattle yet, and I don’t expect things to get as drastic in Seattle proper as they are and will further out.
This article demonstrates that the “running out of land” and “we didn’t overbuild” arguments really only make sense if you are talking about Seattle proper. Even then, it’s debatable whether we’ve overbuilt the condo market or not. I suppose in a year or two we’ll find out.
(Aubrey Cohen, Seattle P-I, 04.16.2008)
Update: A reader pointed out a similar article in the Everett Herald this weekend: Why Snohomish County builders aren’t building.
Drive through newer residential areas in Marysville and witness what happens when buyers stop buying houses and developers keep developing.
Empty lots line roads and the edges of cul-de-sacs. Many have sidewalks, utilities and roads, but no houses.
The supply of buildable lots and new homes ready to be sold in Snohomish County has ballooned to nearly a three-year supply, according to New Home Trends, a real estate research and consulting firm.
That means headaches for developers who bought land at sky-high prices a few years ago and now can’t sell it. It means builders are applying the brakes on new-home construction and off-loading what they’ve already built.
Of course the Herald article goes on to quote various “experts” (such as real estate agents), who say that it’s just a “breather,” a “normal market,” and that “the market is coming back.”
Sure it is. Any day now.
(Debra Smith, Everett Herald, 04.16.2008)