Quadrant Homes to Cut 6% of Workforce

According to KING 5, Quadrant homes announced some major layoffs yesterday.

The slowdown in home sales nationwide has now hit one of the largest home builders in Washington state in the form of layoffs.

Quadrant Homes is cutting up to six percent of its workforce.

In an e-mail to employees, Quadrant’s CEO announced a formal reduction in force, brought about by home deal cancellations approaching 50 percent, forcing a production cutback from seven houses a day to five.

Quadrant Homes builds pretty much exclusively in the Puget Sound area, and is a division of local paper giant Weyerhaeuser. They’re the largest home builder in the Puget Sound.

In other words, it’s impossible to lay the blame for this on anything other than the popping of the local housing bubble.

(Don Porter, KING 5 News, 05.16.2008)

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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.

125 comments:

  1. 1
    budbrad says:

    Considering that most of the construction work is sub-contracted, this will have a ripple effect to all the small businesses that are vendors to Quadrant.

    It’s much more than just the 6% at Quadrant.

  2. 2

    YES BUDBRAD, THIS IS JUST THE TIP OF A MASSIVE SEATTLE ICEBERG

    And the Seattle Titanic economy is heading for its centerline.

    The unrealistic type realitors and a good portion of the overly optimistic mainstream media are busy rearranging the chairs on the Seattle Titanic before impact, like it makes any difference.

    Most of the construction (realitor and mortgage brokers too) work contract jobs; so they simply don’t show up on Seattle’s horrifying unemployment statistics [if they were reported correctly]. Undocumented immigrant construction crews don’t track on Seattle unemployment statistics after they’re laid off either.

  3. 3
    James says:

    A slowdown from seven houses to only five per day??? Hmmmm….don’t think I’ll get my lifevest just yet.
    I’ve closed four homes this week alone. Most of what I’m seeing are the Seattle folks trying to escape the ratrace/condo/postage stamp/crime infested city and moving to the outer limits for a decent size yard or acreage. Wish I’d bought 20 acres 10 years ago…I’d be RICH.

  4. 4
    Jonny says:

    Software engineer: could you move my chair over by the deck rail? Thanks.

  5. 5
    b says:

    James –

    Yeah, any business should be thrilled about a 30% reduction. I am glad you’ve closed four home this week, what were the MLS numbers so we can see what kind of houses are moving in this market, considering sales are off 30-40% in the area it should be informative for people who want to sell.

  6. 6
    Sniglet says:

    What percentage of the Puget Sound economy is real-estate related (e.g. appraisers, realtors, title office workers, mortgage brokers, loan officers, contractors, tradesmen, etc)? Do the jobs related to the housing industrial complex make up less of the economy than a Boeing or Microsoft?

    I am just wondering how big of an impact something like a 6% drop in ALL real-estate related employment would have on the Puget Sound economy vs a 6% lay-off at something like Boeing.

  7. 7
    jesse says:

    If you think this is the only round of layoffs from Quadrant you’re crazy. They still have projects in the pipe. Once these are done its walking paper time.

  8. 8
    Scotsman says:

    Well James, good for you! But I know they aren’t moving to the Eastern edge of Issaquah or Fall city, because we’ve now got twice as many homes for sale on my street as we had last Fall, and none of them are even getting lookers at the open houses. If you’d bought land out here 10 years ago you’d still have it- because none of the 7 parcels i know of are selling either- at any price.

    Maybe it’s the $5.00 diesel all us country guys need for our trucks that’s putting a dent in our home buying budgets…

  9. 9

    HI SNIGLET: GOOD QUESTION

    Here’s the answer from 2001 data [MSM purposely hides this data recently?], so I assume real estate and home construction hiding from unemployment statistics is much greater than a 55% economic impact today:

    “…Another broad category is finance, insurance and real estate. It was the only other category — besides government — to post job increases last year. It employs about 75,000 people and about 55 percent of all the workers in the state in this category are here….”

    See the proof:

    http://seattletimes.nwsource.com/html/businesstechnology/2001774646_dunphy26.html

  10. 10
    george says:

    Local headline:

    “Seattle Real Estate Better Off Than Myanmar”

  11. 11
    Rentersarelosers says:

    Well James, good for you! But I know they aren’t moving to the Eastern edge of Issaquah or Fall city, because we’ve now got twice as many homes for sale on my street as we had last Fall, and none of them are even getting lookers at the open houses. If you’d bought land out here 10 years ago you’d still have it- because none of the 7 parcels i know of are selling either- at any price.

    Maybe it’s the $5.00 diesel all us country guys need for our trucks that’s putting a dent in our home buying budgets…
    ……………………………………..

    Yup you got it. City homes and small fuel efficient cars are where its at.

  12. 12
    Ray Pepper says:

    Nice timing! I spent the day at Quadrant in Port Orchard..The Ridge. It was a ghost town with just one buyer that I saw in 3 hours. I was pre-viewing the homes that will be built in Gig Harbor. There are 400 people that are on the interest list in the new urban development adjacent to Costco, Target, YMCA, and a multidude of other shops in Gig Harbor .

    320k gets you 2700 sq feet and with options your about 350k. These prices literally smoke any and all other NEW competition in Gig Harbor. It has caused nearby Dwelling Company and Bennett to virtually be unable to sell any home.
    Bennett sold one (get this) Lease option and have a couple Contingents which are NOT worth the paper they are written on. In almost a year they have not SOLD 1 HOME!

    Yes, I’m licking my chops. I’m moving back to the Gig and renting out my 1940’s brick tudor in the next 6 months. The kids and myself like the idea of walking to Starbucks, Target, and my youngest is at the perfect age for us to do it. But, the blood has not quite become arterial yet for these builders. November-Jan 2008 I’m packing. Unless of course they accept my offer before then!

    Go Quadrant!

    Ray Pepper
    http://www.500Realty.net

  13. 13
    bitterowner says:

    Ray — Walking to Starbucks and Target? – now that’s what I consider a quality of life upgrade. I can feel your excitment.

  14. 14
    Ray Pepper says:

    Actually you can walk to Costco, Home Depot, Albertsons, Banking, and a load of other shops. What I find to be the MOST appealing (other then price) is the Brand New YMCA. Its the new state of the art facility that you can walk to in under 5 min. We have been a memebr of the YMCA for 10 years and this one is a MUST SEE.

    With the waiting list at 400 for Quadrant (for only 140 homes) it appears many will be packing the Tacoma Events center on May 31 for the Pre-Opening Event. It will be fun to watch how many actually show-up. I have four Buyers I represent and it appears where they show-up on the interest list is when their name will be called. I have NEVER attended a Quadrant event so it should be fun.

    Ray Pepper
    http://www.500Realty.net

  15. 15
    David McManus says:


    b // May 17, 2008 at 4:27 pm

    James –

    Yeah, any business should be thrilled about a 30% reduction. I am glad you’ve closed four home this week, what were the MLS numbers so we can see what kind of houses are moving in this market, considering sales are off 30-40% in the area it should be informative for people who want to sell

    I think the reason James hasn’t posted the MLS numbers for those deals is because they don’t exist. Typical realtor bs.

  16. 16
    Garth says:

    Get a clue bubbleheads, it is the poteintial that you will post infomation that will damage his reputation or affect his buyers on the internet that prevents him from posting the listing numbers.

    A realtor that posted his MLS numbers on this blog as they were closing would be the foolish one.

    David McManus, you can always post your address so we can comment on your house on zillow.

  17. 17
    James says:

    “David McManus // May 18, 2008 at 8:35 am

    b // May 17, 2008 at 4:27 pm

    James –

    Yeah, any business should be thrilled about a 30% reduction. I am glad you’ve closed four home this week, what were the MLS numbers so we can see what kind of houses are moving in this market, considering sales are off 30-40% in the area it should be informative for people who want to sell

    I think the reason James hasn’t posted the MLS numbers for those deals is because they don’t exist. Typical realtor bs”

    Well Mr McManus,
    I’m not going to post the MLS numbers for you or anyone else….Some of us “typical” realtors are not going to sacrifice client information for the likes of a bitter blogger. Tell me, did you have a bad experience with a realtor? My point is very simple and perhaps was lost so I’ll repeat it: Completion of 5 homes per day is still good. And it seems as though my point about suburbia was confirmed above, considering there is a waiting list of 400 for 140 upcoming new construction homes. Gig Harbor might not be everyone’s cup of tea, but some would rather live with simple pleasures than worry about the safety of thier families. Additionally, with the projection of population growth in the Puget Sound area, where do you think all of these people will need to live?

  18. 18
    gitano says:

    The housing and the economy is taking a toll on other realted industries. For example, one of my friends does garage dorr instalation and he said he is hurting bad. He was doing 6 to 7 doors a day and now he is down to about 2 a day. Hard time paying his rent and he is a single father. This housing buuble is going to effect a lot more people as it continues to deflate. Thx for the great info Tim and empowering is with information.

  19. 19
    Mikal says:

    Thank you James for your point on poulation growth. The anti realtor stant is based on many realtors saying that now is always a good time to buy when it clearly isn’t. Your right about where all these people are going to live. The area is going to continue growing alot.

  20. 20
    Cougar says:

    Or could Quadrant Home’s be under Eco pressure and lawsuits?

    “SAEARAG’s outrage of Quadrant Home’s use of timber stolen from First Nations
    and endangered, Old Growth forests. Quadrant Homes currently sources Weyerhaeuser brand TrusJoist Lumber that is stolen without consent from the Ontario First Nation Traditional Territory of Grassy Narrows. The wood; stolen from Grassy Narrows is used to build each and every manufactured home created by Quadrant Homes.
    Seattle Rainforest Action Group Activists descended on the Quadrant Homes corporate headquarters in Bellevue, WA to raise awareness of Quadrant Home’s
    “use of wood stolen from The Grassy Narrows First Nation”, to build Quadrant Homes. Demonstrating outside the MBA Built Green PNW Conference where Housing Giant Quadrant Homes received an award forbuilding “GREEN”Homes; or in other words for GREENwashing the public into believing
    that Quadrant Homes are truly Green.”

    more in at; http://www.searag.org/

  21. 21
    redkardinal says:

    Ray,
    That area in Gig is nice. It is booming. They’ll need to do something about increasing the capacity of the roundabouts near the highway, especially with the increased traffic from the new hospital and all the new houses being built. I have been scoping out houses in the nearby gated community of Canterwood. Houses just aren’t moving there. There are a few new constructions in that community and one of the builders, RC Barrett, is overdue on property taxes on at least two his properties.

    Besides costing too much, those McMansions in Canterwood are just too big. Who the heck needs a 4000 sq foot home! Upkeep will be very costly. Heating costs will only get higher as the global demand on fossil fuels increase. I have been keenly interested on the few vacant lots there, but owners are asking for way too much. Ideally, I would build a modestly sized home (2000-2500) that is economical and efficient. My kids do not need a home entertainment system in their room. They need a bed, shelves, drawers and a desk with a laptop and those do not take up a lot of space. I have colleagues who live in those oversized behemoths who have started to work extra to keep up with their mortgage and utilities, not to mention the high property taxes.

    I am waiting for builders to make products that will fit my lifestyle and values, but I am not holding my breath. I am not trying to keep up with the Joneses. I am actually surpassing them with my retirement and savings, but nobody cares because we are in the age of bling. Until that time, I will just keep looking.

  22. 22
    David McManus says:

    No, James, I haven’t had a bad experience with a real estate “professional” in a transaction, but it is the “it’s always a great time to buy” attitude that really irks me. I’m sorry as if you feel I would talk “ish” about you if you actually posted the numbers of these closed sales. I just wanted to know where these were located, how long they were on the market, if there were any price reductions, etc. I have close relatives (realtors) who have worked for Windermere for 15 years now and even THEY say that business is VERRRRRY slow. You must be the special case, so congrats. Oh and my realtor relatives are now UPSIDE DOWN in their home that they bought a year ago. That is with 20% down. Maybe they bought their own BS. I feel that a lot of buyers have been taken advantage of by people in your profession over the past few years and now, sadly, are in over their head and more than likely will lose their homes due to a realtor’s advice. I have purchased a home, albeit 7 years ago, so save the renter comments. However, the next time someone says that real estate “ALWAYS GOES UP” in the future, I think it will be easy to point to the year 2008 and call BS on that. I shed no tears for anyone in the real estate industry right now. You reap what you sow.

  23. 23
    James says:

    David,
    Point made regarding those that “bought over thier heads.” Although it doesn’t give much of an endorsement for your real estate relatives. I’m certain that even they will tell you that King County is still in positive appreciation territory, although it is currently single digit. As for realtors advising client on affordability, it’s not the job of the realtor to approve mortages, and they should not be showing homes that are unaffordable. Affordability is the responsibility of the individual buying a home, or any other commodity for that matter. My advise to clients is to use a 22-25% debt-to-income ratio. The problem in the subprime mess is that too many people were “approved” for homes that they couldn’t afford in the first place….This has NOTHING to do with a realtor, and everything to do with greed and the “I want it all right now” attitude. Secondly, there were too many speculators looking to make a quick buck by “flipping” a house, as well as people taking ALL of thier equity out to purchase boats, vacations, etc…What IRKS me is that now they all want to place blame on everyone but themselves. To the folks that pulled all of thier equity via a second or third mortgage I would say, “You’ve already received your equity and have probably spent it.” I’m guessing that is the case for you and yours…So stop blaming and “inquire within.”

  24. 24
    Ray Pepper says:

    Yes, Red Kardinal you are dead on with all your statements. I love Canterwood as well but for my family the homes are not our fit. Plus, I’m not a golfer. Just keep an eye on THE GEMS across from Target. Its getting bloodier by the day! Quadrant will be the harpoon bringing property prices down down down along with the current economy. Go to the Quadrant Open House in Tacoma on the 31st. Lets watch the frenzy together!

    Ray Pepper
    http://www.500Realty.net

  25. 25
    David McManus says:

    “I’m certain that even they will tell you that King County is still in positive appreciation territory, although it is currently single digit”

    Case-Schiller says no so it doesn’t really matter what they say. I tend to go with their numbers than someone who has a vested interest (like the NAR) in making everyone believe that the market is hot, hot, hot and it’s never been a better time to buy. I’m glad that you feel the same way about flippers that I do. No disagreement there. Have you ever told a client that it wasn’t a good time to buy? Part of the reason for the subprime mess is also the pumping of values by appraisers, realtors, and lenders. Everyone in the industry has a share of the blame. To say that realtors are innocent and blame lies solely with lenders is a bit naive, don’t you think?

  26. 26
    deejayoh says:

    considering there is a waiting list of 400 for 140 upcoming new construction homes

    James –
    If you are referring to Ray’s comment in #12, go back and reread. Does “interest list” equal “waiting list”? Signing your name on a form for the builder to contact you doesn’t mean you’re ready to put down a deposit. These sound more like “hot leads” people with deposits in hand. If that’s the case, 3 leads for every home being built. Is that good?

  27. 27
    jon says:

    Case-Schiller will generally tend to underestimate the real appreciation in homes. Because it only looks at pairs of sales of the same house, it excludes new construction until the original owner moves out. Since new SFHs tend to be larger than old ones, it will not pick up the gradual movement of the market into larger homes. It will pick up the change in the larger homes once they sell, but that is different from the shift to larger homes. As a simple example, consider a market consisting of a single home for $100K. A year later another home is built for $200K. At this point, Case-Schiller shows no change in market value, because no trade has taken place, but the median price actually went up by 50%. Even if both houses are then sold for the orginal price, CS still show 0%, but the market is still up 50%.

  28. 28
    James says:

    David,
    I’m not saying that lenders are competely to blame, although the subprime brokers have some culpability. I disagree with your comment about appraisors inflating prices. (appraisors would lose their license if they didn’t follow strict guidelines regarding local value of properties.) I’m suggesting that BUYERS often extend themselves farther than they should. (See comment about debt-to-income that I discussed earlier.) To your question about telling buyers it’s not a good time to buy; when I am showing homes to clients, it is NOT because I’ve solicited them and am forcing them to buy a home. Most often, they call to see a home that is listed. We discuss their needs AND budget, I make recommendations including checking at least three lenders (OF THEIR CHOICE), and come to an informed PERSONAL decision about price point and affordability. Are you suggesting that realtors should discourage people from buying homes? If you ran a casino would you tell people that gambling is risky? If you owned a bar, would you tell people that drinking is bad for them? I doubt it. If you don’t trust the NAR and clearly Case-Schiller doesn’t paint the true picture accurately, I suggest you goggle “Home appreciation in King County Washington,” as well as Sperling’s Best Places, or the Wall Street Journal. Now that I’ve answered your question, answer this: If you, in fact, purchased a home in King County seven (7) years ago, you benefit from RECORD home appreciation. Why so bitter? You are in an enviable position…perhaps even 100-125% more than you paid. My point is toward personal responsibility rather than blaming EVERYONE else for irresponsible choices.

  29. 29
    James says:

    Dejayoh,

    I’d be the happiest builder in the world if I had THREE potential buyers for every ONE home in my new development….:>)

  30. 30
    Chaina says:

    So what is meant by home deal cancellations? Is this buyers backing out from the offers that they have made or something else?

  31. 31
    Rentersarelosers says:

    James,

    I agree with you 100%, but you are going against the grain here.

    This is the Seattle Bubble Blog, a place for renters who missed the run up to have a group hug and pray desperately t that homes will come down to their measly price affordability.

    Won’t happen, Wa State is growing, there is always someone moving to this area that makes a crapload more than the losers here and will be picking up the bargains currently on the market. The renters here are destined to remain in their overpriced and rising rent bug infested rat traps listening to the headboard hitting the wall next door, while sucking up exhaust fumes from the street below. Oh and pray God the moron next door doesn’t start a fire or go “postal”.

    Life is good.

  32. 32
    LeftOverpricedSeattle says:

    “This is the Seattle Bubble Blog, a place for renters who missed the run up to have a group hug and pray desperately t that homes will come down to their measly price affordability.”

    Wow, that’s a pretty bold statement to put forth, especially with zero evidence to support your claim. I am a homeowner, one who benefited greatly from the saps that conned their bank into lending them way more than my previous home was worth (at least in my opinion). I am the first to admit I took the money and ran, far away, from Seattle, buying a home that is way better than the suburban home I had down south for a LOT less money.

    Life is good, for those of us who sold at the top and didn’t wait too long to sell, like a LOT of people who seem to be posting today. Prices are dropping, even in bulletproof Seattle. We’ve crested the top of the hill and are on the way back down, a lot faster than some people think. Every time a new piece of news comes out showing just how Seattle isn’t “different”, some of the people left holding the bag come out of the woodwork to try to convince themselves it’s not as bad as it’s starting to look.

  33. 33
    Rentersarelosers says:

    So what the F do you know about the local scene being so “far away from Seattle” ?

    And what is your purpose here, gloating that you sold at the top? And you have the nerve to call your buyer a sap?

    All I am saying is that I have seen the numerous price drops and the leveling out , and we have leveled out in my opinion.

  34. 34
    Everett_Tom says:

    Rentersarelosers said:

    All I am saying is that I have seen the numerous price drops and the leveling out , and we have leveled out in my opinion

    That’s not what the April NWMLS numbers, Case-Shiller or even many of the local papers say.

    And could you please cut back on the insults? Re-read Jame’s post. He manages to bring an different opinion which lacks much of the rudeness you exibit.

  35. 35
    Ray Pepper says:

    WOW Rentersare losers!!!!!!!!!!!! The bloggers here DO tend to advise everyone to wait, and on a Macro-level they are most-likely correct. But, Good LORD! There are GEMS that are popping up now that will make people ALOT of money. The fact is there are Builders/homeowners who MUST sell and the key is finding these homes .

    Wait yes…. I assure you there is no rush… But, GOOD GOD!…………. Always Look! When you educate yourself then you will be ready when you come across the GEM at the right Time. Know your area you like to Buy and watch. Timing is everything in Real Estate/Stock Mkt/Life. Always do your own DD………..But, always be ready!

    Here is some DD that I have done for all you BubbleHeads. MLS# 28071400 and 28056937. They just let one go for 325k. …But Shhhhhhhh. it hasn’t closed yet. If any of you can grind these 2 prices down to 300-320k you will make 50k in less then 5 years. I suggest these will be over 375k at a minimum. My DD is based on Quadrant, Bennett, all new home permits, and current standing inventory. These 2 are a GEM at 310k! Patience and hope they continue to sit.

    Tim, maybe you can start a column to the right of Realtors/Investors GEMS. Where after strong research from the blogger it could help your Buyers find a heck of a deal. Just a thought. Maybe you call it.. “The Gem of the Week. ”

    Ray Pepper
    http://www.500Realty.net

  36. 36
    Rentersarelosers says:

    Better Yet, I dare TIM to change his theme from bashing Seattle Real estate to creating a blog on as you say “Gems of the Week”. There are friggen screaming deals out there!

    But you Bubble losers wouldn’t recognize one if it slapped you in the face.

  37. 37
    Rentersarelosers says:

    And could you please cut back on the insults? Re-read Jame’s post. He manages to bring an different opinion which lacks much of the rudeness you exibit.
    ……………………

    Why? I wasn’t insulting James, I was just commenting how right he was, and how life is as a renter, did it hit home? Good!

  38. 38
    b says:

    Rentersarelosers –

    I am guessing you have not sold your house yet. How long has it been on the market now? The last time I recall you posting about it you had rejected an offer, dropped the price multiple times and still had no bites. Maybe your seething anger at your potential customers is what the problem is, are you sitting around at your open houses chiding the “losers” who have the gall to not pay top dollar for your shitbox?

  39. 39
    Rentersarelosers says:

    b,

    Is your avatar “skull and bones” a self portrait or just an example of your “cultured” background?

  40. 40
    bitterowner says:

    R.A.L.:
    I guess you might be correct about this site. If so, maybe you would feel more at home on the site where hostile curmudgeons who are seeing their home equity-linked retirement ‘savings’ dissolve in front of their very eyes gather for a group hug and pray that there will still be enough social security benefits to save the day.

  41. 41
    b says:

    Rentersarelosers –

    Thanks, I think your response just answered my question.

  42. 42
    EconE says:

    Rentersarelosers:

    “This is the Seattle Bubble Blog, a place for renters who missed the run up to have a group hug and pray desperately t that homes will come down to their measly price affordability.”
    _______________________________________________________________

    No…more like a group high-five that prices have started to turn downwards.

    key word…started.

  43. 43
    EconE says:

    and btw Rentersarelosers…what does my avatar say about me?

  44. 44
    cheapseats says:

    An ignore feature on here would be sweet. I respect differing opinions, but to come to a blog and just insult the blog readers, with no input of value, just takes away from the people on here who actually put thought into their posts.

  45. 45
    deejayoh says:

    I’d be the happiest builder in the world if I had THREE potential buyers for every ONE home in my new development….:>)

    Ever see Glenngarry Glenn Ross?

  46. 46
    Affluent Bitter Renter says:

    We should cherish “rentersarelosers”. We have so few trolls left, and we probably will lose RAL after his impending bankruptcy proceeding.

    Sleeping well at night, RAL? I certainly am.

  47. 47
    Ben says:

    Ray,

    I looked at those MLS numbers, and I get two places (or one, the picture seems the same) in Gig Harbor. I presume that you are saying that this is a **OMG**GEM** because you think that you can rent it or flip it or something, but most of the people who frequent this blog want to buy a place to live in.

    I have never met somebody who wants to live in Gig Harbor. I sure as hell would never live there. So why is this a **OMG**BBQ**GEM** exactly?

  48. 48
    Ben says:

    Oh – and RentersAreLosers – I own a place right now. I don’t rent. And I know for a fact that others on this board have owned before or own right now too.

    I would give you advice about how to have more credibility on this board, but everybody already hates you and I don’t think that you come here for intelligent discourse. If I am wrong, let me know without being a hateful troll and I will learn something.

    And before I forget, I find it amusing that anybody would think that the price declines are over. On education hill new construction has only just started to reduce prices in the past few months, and for some of these places that just means that they have just done a reduction 2 months after raising their wishing prices. There are still oodles of fat to be trimmed in this market. I think that sales will return to a more normal place once sellers figure out how much of a discount will move inventory.

    The fact is that there is a substantial quantity of housing in this area that was only affordable at current prices when you could get funny money liar loans or pay 50% of gross on housing. Now that money has dried up, the number of people who can:

    a) Afford to buy now and
    b) Believe that they won’t lose money buying now

    Is very small indeed. Some sellers will just decide not to sell anymore. But there are some who cannot do that:

    a) People who are being foreclosed
    b) People who already bought another place (people really do this)
    c) New construction

    These categories will slowly inch their prices down until stuff moves, and drag the value of everything else down with it.

    Why am I here? I want a bigger house, and I want to know as much about the local market as possible. I don’t think that I can time the bottom, but I can certainly avoid making a gigantic boo boo.

  49. 49
    Joel says:

    Case-Schiller will generally tend to underestimate the real appreciation in homes.

    True when the market is going up, but when the market is going down it underestimates the depreciation because homebuilders tend to cut prices sooner and faster than your average joe.

  50. 50
    NotaBull says:

    Rentersarelosers said: “This is the Seattle Bubble Blog, a place for renters who missed the run up to have a group hug and pray desperately t that homes will come down to their measly price affordability.”

    RAL,

    Umm. No. I own a house and have rented before many times and have a household income at about $250K. I’m open to the opinions of others, and attempt to have a civil discourse with those that are willing to be civil. You, however, are just an asshole and are full of hatred towards others.

    BTW, how’s the house sale going?

    It’s going badly, isn’t it.. So sad… You must really be kicking yourself for not selling it last year. I hope I haven’t touched a nerve there, when I just mentioned that your house sale is going bad and your paper profits are evaporating.

    I don’t want to keep pushing your buttons, but how’s the house sale going? Bad?

    One final thing: Any scumbag renters interested in your house yet? Is the “renters are losers” sign on the lawn having any impact on traffic at your open houses?

    Oh, and did I mention you’re an asshole? Yes, I did.

    House sale.

    Going badly.

    Profits.

    Evaporating.

  51. 51
    alex says:

    James @28: “Are you suggesting that realtors should discourage people from buying homes? If you ran a casino would you tell people that gambling is risky? If you owned a bar, would you tell people that drinking is bad for them?”
    ===============

    In defense of his “buy buy buy!” professional stance, James puts forth an analogy showing that buying RE is a risky pleasure, just like drinking or gambling. This has got to be the most amusing quote of the week :)

  52. 52
    tacomarenter says:

    People seem be interchanging Gig Harbor and Port Orchard. They are not even close to the same. Port Orchard is about 30 minutes past the Narrows Bridge. You would be crazy to commute to Seattle (or even Tacoma) from there. You could take the ferry over but ugh. There are few if any jobs in Port Orchard or Gig Harbor. So why would anyone want to put a 300K+ house there? It may be bigger than a house in Gig Harbor or North Tacoma but your quality of life is zilch.

  53. 53
    old timer says:

    @ #3
    “Wish I’d bought 20 acres 10 years ago…I’d be RICH.”

    Rich, maybe, and if so, I know you wouldn’t have ‘enough’.
    When it comes to chasing money, there is never enough.

    Lives are destroyed trying to disprove this elemental law.
    We begin to see the wreckage piling up around us now.

    Still, the pursuit of ‘enough’ will continue until the very counting of it all will exceed a lifetime.
    And that amount will not be enough, even then.

  54. 54
    James says:

    Well this is going badly…Maybe we can go back to a more constructive discussion.
    For renters, my humble opinion is that if you want to own a home, there are deals out there. First step is check your credit history, meet with at least 2-3 lenders, determine your debt-to-income ration (include any auto loans, student loans, credit card debt, etc.) Also, determine what your future earnings vs. future goals will be in the next few years. If you have children, your debt-to-income ratio is critical (Those little guys are pricey!!!) Finally, chosing your location is extremely important and should reflect your lifestyle, after all, if you love the city you will want to live close. If green acres and a hobby farm is your dream, that won’t happen in Bellevue. Select a realtor in your location, if that agent isn’t working on your behalf, find a new agent.
    For sellers: Determine the true market value of your home. A local agent that has sold homes in your area in the last 6 months should be able to provide comps. Ask the agent to identify open house dates for currently listed properties, then go take a look at them. Before listing, make sure EVERYTHING is show-ready. If there is defered maintenance, get it done. Hire a landscaper if your yard is in need. De-personalize the inside of the house, fresh paint is always a quick and inexpensive way to brighten a room. Be show ready ALL THE TIME, and have your home available for showings when the BUYER wants to see it, not when it’s conveninent for you.
    My advise for both buyers and sellers, remember that everything is negotiable.

  55. 55
    The Tim says:

    My advise for both buyers and sellers, remember that everything is negotiable.

    Indeed. Including the question of whether or not to even use an agent at all.

  56. 56
    NotaBull says:

    “In defense of his “buy buy buy!” professional stance, James puts forth an analogy showing that buying RE is a risky pleasure, just like drinking or gambling. This has got to be the most amusing quote of the week :)”

    I SUPPOSE that if you sold cigarettes you should tell people they could get cancer? Insane! Only a wussy, pathetic liberal would suggest such a distortion to the free market!!!!

    I understand his point, but it misrepresents recent history. On the way up, it was “fine” for Realtors(TM) to tell you that prices only ever seem to go up (wink wink, you can’t lose!). They became economists, telling you about never ending appreciation and various statistics regarding people moving to King County, and the Growth Management Act.

    On the way down, Realtors(TM) want to reduce their role. Now, they’re just people making deals happen. Now, they’re just transaction monkeys with negotiation skills. Now, they seem to know nothing about the economy and where prices may go. It’s shoulder shrugging by most Realtors(TM) these days. There are exceptions, but they’re just that: exceptions.

    All this is rather obvious, to the reasonably intelligent observer, but I believe most Realtors(TM) actually believe they’re constantly doing the right thing. They have to drink their own Kool-Aid because if they don’t, who will?

    James @28: “Are you suggesting that realtors should discourage people from buying homes?”

    James, are you saying that Realtors(TM) should neither encourage or discourage people from buying homes? Pick one of the following. Realtors should:

    1) Always encourage people to buy homes.
    2) Always discourage people to buy homes.
    3) Encourage when “things” look good. Discourage when “things” look bad. “Thing” being the likely direction of future prices. Economist stuff…
    4) Neither encourage or discourage people from buying houses.

    I pick (4), personally, but I think most Realtors have picked (1).

  57. 57
    James says:

    Alex,
    Glad I could amuse you. Perhaps I should have used oil or tech stocks as a better analogy. ( I lost in the tech bubble, and gained it all back X10 in natural resouces.) Don’t buy now, Alex, it’s a really bad time for a buyer..way to volatile….. Ten years from now will be better for you. There, is that acceptable? I know a lot of people that don’t want the responsibility of home ownership, and that’s perfectly fine for them. However, I really don’t see the need to throw a wet blanket on other people’s goals and dreams….Unless, God forbid, “RentersareLosers” is right and I’m on the wrong blog…In which case, I’m sorry to invade the pity party.

  58. 58
    NotaBull says:

    “Well this is going badly…Maybe we can go back to a more constructive discussion.”

    James,

    Your advice, while all very reasonable and thought through, is about as useful as reminding a sick person – for the one thousandth time – to drink plenty of fluids. Pretty much everyone on this site is educated in the local market, where they would like to live, etc. You’re not dealing with 20 something first time buyers who don’t have a clue about financing, inspection contingencies, escrow and all the rest of it.

    I have nothing against real estate agents and have used them whenever I’ve bought and sold houses over the years. I do however think the audience here is expecting something a little more than you can obtain from a quick Google search and an evening watching HGTV. Your advice is pretty standard, if you don’t mind me saying, and it would be nice to get some more depth and insight from those “in the trenches” as it were.

    People on this site, by the very nature of their attendance, are looking for additional sources of information on top of what the NAR or the media can tell us. If that weren’t the case, nobody would be here.

  59. 59
    James says:

    NotaBull,
    I’m not a financial advisor, I just play one on TV. Wish someone had always told me exactly what to do to make the most profit and land on easy street.

    I understand what you are saying about realtors who pressure people to make a sale. My advise is to find a realtor that has your goal in mind, or don’t buy or sell your home. Consider realtors nothing more than a commodity broker, buy or sell your commodity and never deal with them again. And by the way I pick Door #4. I will gladly broker a deal if there is a need and desire by both parties for the transaction…I don’t want to force a sale/purchase on ANYONE.

  60. 60
    NotaBull says:

    “I know a lot of people that don’t want the responsibility of home ownership, and that’s perfectly fine for them.”

    James,

    People on this site that are not buying right now are not avoiding home ownership because they don’t want the responsibility. If they wanted to rent forever, they would not be here because they would have no interest at all in real estate.

  61. 61
    James says:

    Notabull,

    I’m not sure what more you are looking for from me. I do respond well to direct questions, just like all the other parasite realtors.

  62. 62
    Sniglet says:

    First step is check your credit history, meet with at least 2-3 lenders, determine your debt-to-income ration (include any auto loans, student loans, credit card debt, etc.)

    Actually, there is only ONE thing you need to consider when considering the purchase of a new home: would it cause you undue financial or psychological hardship if the home you buy were to drop 50% in value. So long as a 50% price drop won’t unduly cause problems, then just go ahead and buy, and enjoy living in a nice home that you own.

    However, if you think that a significant price drop would really cause you to lose sleep at night, then maybe buying isn’t for you. Real-estate prices are highly volatile, (dropped 40% in Manahattan in early 90s, 80% to 90% in Japan during ’90s, with many more examples around the world).

    Of course, the fact that we are just now beginning to see a global unwinding of credit, there is a far greater likelihood that real-estate prices will be much lower in the years ahead than we’ve seen for quite a while. As investors and lenders continue to tighten lending criteria, the pool of buyers will keep shrinking and squeezing the over-all real-estate market even more.

    I am not saying that it is inevitable that Seattle area real-estate will fall by 50% in the next 4 years. However, I do believe it is probable (even highly so). At any rate, it would be foolhardy to buy without at least mentally preparing oneself for the very real possibility that we could see a 50% price drop.

  63. 63
    NotaBull says:

    “I’m not sure what more you are looking for from me. I do respond well to direct questions, just like all the other parasite realtors.”

    I’m just trying to help you adapt to the tone of the blog. The standard advice makes you seem like a standard realtor and that’s not going to get you very far around here. Most people here are sick of the NAR and the standard talking points. So I guess I’m just recommending that you take a look at what you’re going to post, and if you might hear the same thing at an NAR convention, then consider the audience a little more and perhaps modify your post.

  64. 64
    James says:

    “People on this site that are not buying right now are not avoiding home ownership because they don’t want the responsibility. If they wanted to rent forever, they would not be here because they would have no interest at all in real estate.”

    Notabull, At the risk of getting “bashed,” if you are looking to buy a home, traditionally the best time of year to buy is Fall and Winter. However, we have seen some CNN driven downward pressure and there ARE sellers that need to sell. I, of course, believe we have already seen the market correction. The NAR numbers for the next few months will tell us if that is acurate. People are nervous and the market in other parts of the county are weak. Having said that, our market is less volatile. We have good employment, new transplants from EVERYWHERE moving to the Seattle area. Poeple will ALWAYS be buying and selling real estate. Hope that helps. Buying is never an easy decision and should be a personal one. Don’t wait for someone else to tell you what you should do.

  65. 65
    The Tim says:

    However, we have seen some CNN driven downward pressure…

    James, do you honestly believe that the downward pressure we’re seeing on prices right now is due to negative media attention?

    Really?

  66. 66
    NotaBull says:

    “However, if you think that a significant price drop would really cause you to lose sleep at night, then maybe buying isn’t for you. Real-estate prices are highly volatile, (dropped 40% in Manahattan in early 90s, 80% to 90% in Japan during ’90s, with many more examples around the world”

    Real-estate prices, on the whole, are not highly volatile. There are and have been pockets of volatility at almost every time in history. Even more rarely, the pockets are huge (like the entire US, for example). But on the whole, and across a large period of time (like when you own a house), real estate prices are just not highly volatile.

    If everybody considered the strong likelihood of a 50% decline before they bought a house, nobody would ever buy houses. I don’t disagree with the principle of your post that you should be prepared to lose some money in the generally rare event that it declines in value. If your scenario pans out in Seattle and prices drop 50%, will you consider that it might lose 50% in value before you purchase? So you’d be considering the likelihood of a 75% total decline in price?

  67. 67
    economist says:

    Even if both houses are then sold for the orginal price, CS still show 0%, but the market is still up 50%.

    No the whole point is that the market isn’t up. The market mix has just changed.

    If town X has 100 houses worth 200K each, and than someone builds 100 houses worth 400K each, the average (and median) price of the houses rises to 300K. But that’s not a rise in the market. Nobody’s house has become more valuable.

  68. 68
    James says:

    Other things for buyers to consider is that the VAST majority of sellers in our area want to believe that we won’t ever see ANY correction here. And unfortunately for the buyers, these are NOT distressed sellers. The lucky buyers will leverage a 3-5% reduction on an already reduced price. I sit in the office and hear it all….mostly sellers are not even counter-offering a “low ball” offer. I saw one seller that was asking $759K get an offer of $650K. They responded with a counter offer of (get this) $825K along with a note that read, “you started it.”
    Needless to say, everyone was emotionally charged and nothing more happened with that buyer on that property. The sales vs. asking price is relatively easy to obtain, as I’m sure most of you know. The numbers don’t lie, even though you think realtors do.

  69. 69
    Sniglet says:

    Real-estate prices, on the whole, are not highly volatile

    Real-estate prices are volatile, just not necessarily in short time frames. You can experience many decades of price movement in one direction or another. When you look at the price studies that span hundreds of years, it is striking how great the oscillations are (both up and down). Over the LONG haul real-estate price appreciation is about 0. But you can have periods (lasting decades) when prices appreciate at substantial rates, followed by other time periods where they fall a great deal.

    The main point is that although real-estate price changes don’t move as quickly as stocks or commodities, they do move and by significant percentages (just over longer time horizons).

  70. 70
    Ray Pepper says:

    James. Notabull, Tim……..I took the time to read all the blogs between my last entry and Tims. My analysis:
    1. Mow my lawn and make it look nice before I sell.
    2. Find a Realtor who will work for me.
    3. Don’t find a Realtor do it on your own.
    4. Realtor=parasite
    5. Anger
    6. Don’t Buy…Rent

    ** In thinking back every blog I read here has these same elements with an occassional cornball thrown in.**

    Makes me even more push for……….” TIMS GEM of THE WEEK” Come on people. I slowed down with my self promotion Gig. Bring us something we don’t already know. Like someone who is doing some leg work and found a hell of a deal but can’t buy it because they have a dreaded C O N T I N G E N C Y .

    I’ll still keep reading here though even without the Gem of the Week. Just a sick fascination with watching how many ways we can say the same thing.

    Ray Pepper
    http://www.500Realty.net

  71. 71
    James says:

    The Tim,
    I believe the media has more influence than it deserves.
    Again, check the numbers…that’s where the details are facts.

  72. 72
    James says:

    Buy the following (I did 8 years ago):

    MDGRX
    quote83.95 +2.22 +2.72%

    Previous Close 81.73 Category Specialty-Natural Res
    Net Assets 325.11 Mil Dividend Yield 0.00%
    Morningstar ratings: Minimum Initial Purchase 1,000
    Risk Average 1 Year Return 47.03%
    fyi Rating 3 Year Return 39.20%
    fyi Return Above Average 5 Year Return

    Morningstar average risk, has seen a great return.

  73. 73
    b says:

    James –

    More of the same talking points. Seattle population growth, while the highest in a long time, was still only 1.3% last year or about 6000 additional people. Seattle’s population as a whole is only about 50k people above the level it was at in 1968, and the city is much more dense now. According to the same source, “Seattle’s 3.4 percent growth from 2000 to 2006 was good for 127th place among U.S. cities with at least 100,000 people.”

    The job base in Seattle is certainly good, but it is also good in other “high tech” areas like silicon valley (price declines), San Diego (price declines), Boston (price declines). Seattle is going to catch up and will probably surpass those areas since their job bases are equal or better than Seattle metro. I imagine it will be hard for AMZN and MS to attract top talent if they can live in Mountain View for the same price as Bellevue.

  74. 74
    b says:

    I sit in the office and hear it all….mostly sellers are not even counter-offering a “low ball” offer. I saw one seller that was asking $759K get an offer of $650K. They responded with a counter offer of (get this) $825K along with a note that read, “you started it.”

    Who can hold out longer, the person buying the house or the person selling the house? I live in Silicon Valley and heard stories like these about the beginning of last year. Guess who capitulated first?

  75. 75
    James says:

    “Who can hold out longer, the person buying the house or the person selling the house? I live in Silicon Valley and heard stories like these about the beginning of last year. Guess who capitulated first?”

    b,
    Location, location, location.
    I know there are some great deals to be had in Phoenix right now too..

  76. 76
    Cougar says:

    “Guess who capitulated first?”

    Priceless! :)

  77. 77
    b says:

    James –

    Location location location is great until price declines hit your location location location. There is a very small minority of buyers who will place an insane premium on a certain spot if they can live a mile or two away from it for hundreds of thousands less. Just like how the bubble prices spread from the city out, the declines spread from the outskirts in.

  78. 78
    NotaBull says:

    “Location, location, location.”

    Although many Realtors like to say that it’s all about the 3 L’s, I strongly disagree with this and have pioneered a way of looking at properties. It’s the 4 L’s: Location, location, location, location.

    In this new world, the only thing that keeps prices up is the location because of the additional weighting of location as a part of the overall valuation. In fact, if a given house was $300K in 2000, and $600K today, the 4 L’s model would allow it to keep its value more easily than the 3L’s model. After all the house has not moved, and so the current location is no different to the previous one. But I digress..

    If the same house was currently listed at $1M, we’d have to seriously consider adding another L or two.

    Similarly, the PNW has pioneered the LAME prinicples of real-estate. LAME is what allows our prices to hold up while all others go down.

    -Lakes
    -Acts (Growth Management)
    -Microsoft
    -Environment

    No city is as LAME as Seattle, except for perhaps Redmond.

    (BTW, I own a house in the area and love it, before anyone decides to tell me to leave if I don’t like it, or to stop being a bitter renter, or some other pointless diatribe)

  79. 79
    deejayoh says:

    The sales vs. asking price is relatively easy to obtain, as I’m sure most of you know. The numbers don’t lie, even though you think realtors do.

    I appreciate your point that a “lowball” strategy is probably not effective – but I also don’t see any broad advocacy of that strategy on the blog . However, distressed or not – sellers do seem to be following the market down.

    Here’s what I see:
    – According to Ardell over at RCG – the “Median sold price in April of 2008 was $451,250 and median asking price at time of sale was $459,925”. Not sure if that is a statistically valid way to look at it, but lets assume it is and SP/AP = 98.1%. Selling at a discount.
    – According to Ziprealty, 4,928 of the 11,610 listings on the market for SFH in KingCo – or 42%, are “price reduced” .

    So, the numbers tell me that over 40% of sellers drop their prices to attract a buyer, and when they do get a buyer, they are still selling at ~2% less than asking price. We also know that that asking price is, based on which index of the market you want to look at – somewhere between 3-7% off of the peak last summer. And all those indices are headed sideways or down. None are showing price appreciation.

    You seem to have access to the numbers (BTW, this info that is NOT easy for most of us to obtain) – why not use them to make your point?

  80. 80
    James says:

    b,
    Perhaps you should invest in another commodity rather than housing. ( I suggested one earlier.) A house is more than an investment, it’s your home. Location IS important for a million reasons that you already know so I won’t go into them.
    It seems as though most folks on the blog want to sit like buzzards and wait for sellers to write you a check for the priviledge of taking their home.

    I would ask you and others here if you have ever been “fired” by a realtor?
    When this happens, a seasoned agent that has been providing guidance and council and showing you house, after house…after house, and yet, you want to do nothing but complain about pricing, financing, location, paint color, square footage, etc, etc, etc. Then you want to make insulting offers, which the agent knows will be nothing short a disasterous.

    The “firing of the client” occures like this:
    Agent: “Perhaps another agent would be a better fit for you.”
    Or
    “It seems that we are not a good fit to work together on your goals.”
    Or
    “There is an agent in my office that Specializes in the type of property you are looking for.”

    This is the point that the agent sends you over to the “Newbbie” in the office, because they are tired of dealing with you and it will never result in a sale anyway.

  81. 81
    Tsuru says:

    This is the point that the agent sends you over to the “Newbbie” in the office, because they are tired of dealing with you and it will never result in a sale anyway.

    This is just pure unadulterated laziness on the part of an RE Agent. A client that is “too much work” gets sent to the office “newbie”. And you wonder why people say that RE Agents don’t earn their commission?

  82. 82
    Everett_Tom says:

    Why? I wasn’t insulting James, I was just commenting how right he was, and how life is as a renter, did it hit home? Good!

    No you weren’t, I was trying to point out that James seems to understand how to have a heated, but civil discourse, unlike yourself.

    As for life as a renter? I was an owner for 4 years, and I can tell you that renting has been great. No property tax to pay, no house repairs, no maintance cost… It’s been wonderful. And we’ve saving quite a bit too.. it’s like the best of all worlds..

    When the market settled down we’ll buy again.. but we’re in no rush. :)

  83. 83
    b says:

    James –

    You apparently fail to remember that it is a home which actually costs money. You know, that stuff you get in your commission checks that buys you SUVs and food. People will certainly pay a premium, or subtract a certain amount, depending on the location. However, the range of that premium is small when considering areas around it and is bounded to house itself. Sorry, but there are only so many suckers who would consider spending $100k more to live in Ballard rather than Fremont to be a good deal for the same house, or vice versa. You can carp about location all you want, but in the grand view of things the location premium will not insulate you from an overall housing downturn. It will just let you charge slightly more for your declining asset than someone else, just like it always has. If “location location location” was all that you needed to stay afloat forever, then its curious that things have turned so sharply in San Diego and Silicon Valley.

  84. 84
    patient says:

    Of all the lame scare tactics out there I think James just took the lead with the warning that you can be fired of your agent if you don’t quickly buy into the largest best documented and proven housing bubble ever. Eh, sorry if I’m not trembling.
    Btw James, the agent works for the buyer not the opposite. He can quit but not fire.

  85. 85
    b says:

    patient – I think his choice of words speaks volumes about how he treats his victi^H^H^H^H^Hcustomers.

  86. 86
    Everett_Tom says:

    I would ask you and others here if you have ever been “fired” by a realtor?

    Nope, but after looking for a few months we told our Realtor that we were finished looking for now. We didn’t fire her, she didn’t fire us.. we just decided that the market was turning and we’d rather wait.

    Though based on the number of agents we encounter at open houses asking if we had an agent, it wouldn’t have been hard to get a new one if she _HAD_ “fired” us.

  87. 87
    Jeff says:

    notabull:

    Your 4L model reminded me of the ‘7 minute abs’ guy from ‘Something About Mary’

    http://youtube.com/watch?v=EzxJy-7ggx0

  88. 88
    James says:

    Patient and b,

    No professional would waste countless months on someone that has no intention of buying. You won’t be able to buy a new BMW for $500 any time soon either. Good luck to all of you that are serious about buying a home, first home or otherwise. Some of you will wait and that is certainly a choice. And could very well be a good choice for you.

    Perhaps another agent would be a better fit for this blog.

  89. 89
    EconE says:

    I thought that due to the fact that prices doubled that there are no longer the “three most important” factors, but rather the “six most important” factors.

    I believe that it’s now…”Location, Location, Location, Granite, Hardwoods, Stainless Steel”.

  90. 90
    patient says:

    James, the price of BMWs have not been inflated by a price bubble. Price increases on cars have stayed pretty much with or below inflation. Since there is no need for a correction on cars I don’t think anyone here expects one. Home prices on the other hand went bananas when money become easy to get and a correction is to be expected.

    Well, if the NAR and co. keeps touting that it’s a good time to buy due to a it being a buyer’s market you must expect that the few buyers that takes the bait will want to use the buyer’s advantage. I.e the very points that you redicule in one of your post above. So yes, I would definately choose another agent if I was going to use one.

  91. 91
    Lake Hills Renter says:

    James, I for one value your differing opinion since it is proffered without insults or assumptions, unlike some others recently. The problem is, however, that virtually everything you put forth has already been proposed and debunked numerous times. If you have hard data backing up your assertions, then I and I am sure others would love to see it. But countering the same positions every few months gets a bit tedious, thus the occasional short treatment from some. NAR talking points (as an example) are useless here, unless backed up by objective data that can be analyzed, studied and discussed.

  92. 92
    Mikal says:

    James, some of these people are so opiniated that it is pointless to preach. Their right and that is that. Some of them suggest that you are on the wrong blog because if you don’t agree with them then they don’t want to hear it. George Bush anyone. It is interesting. You would have to be out of your mind to make an offer on a house right now.

  93. 93
    NotaBull says:

    Mikal said: “James, some of these people are so opiniated that it is pointless to preach. Their right and that is that.”

    Correct, it is their right to be opinionated.

  94. 94
    James says:

    Someone asked earlier for data regarding sales prices:

    For those that want to see information on ASKING PRICE vs. SOLD price, the easiest way is (eekkkks dare I say it:) talk to your realtor. They have that information shortly after closing.

    Another way is to use King County.Gov website. Dept. of Assessment / eSales Search System.
    It’s a bit cumbersome, but if you know the area, address, or better yet, the parcel number, this site will give you the scoop on the home vintage, sf, sales price and when it sold.
    This, of course, is only historical data and is of little value except to see trends somewhere other than the NAR or the Media.
    If you’ve narrowed your search to a particular neighborhood, it could give you additional ammunition in your negotiation if a similar home sold for a significantly different price.
    If you are working with a reputable agent, he/she will have this info and as your “Buyer’s Agent,” will already have it available for you to review.

  95. 95
    MacAttack says:

    “I’ve closed four homes this week alone” Well, on the other hand, I close a home every day.

    And I check the knob, too, in order to make sure it’s firmly closed. Then I go to my non-REIC job.

  96. 96
    James says:

    MacAttack,
    Good luck to you also. I have my pension from the corporate world and am doing this for the shear enjoyment…. But I must say, this blog isn’t all that much fun.
    Just trying to assist some of the folks here that want to learn something and might have an open mind. Thanks for setting me straight.

  97. 97
    Mikal says:

    If you are looking for open minds keep looking. If you are looking for bitter people that are never wrong, well, you have come to the right place. Now guys, pigeonhole me. I don’t plan on selling anything and have zero vested interest in the real estate business. So good luck.

  98. 98
    NotaBull says:

    “Just trying to assist some of the folks here that want to learn something and might have an open mind.”

    The issue, as I and others have attempted to pass on to you, is that you are bringing the same standard points and information that most on this site already know. Telling us to go and see a number of lenders to see how we qualify, or to make sure to remove clutter prior to selling is a little basic. Like I said, this is 30 minutes of Google time, and an evening of HGTV.

    BTW, you can find sales history (and tax info) in one nice little package on Zillow.com. I think Redfin.com has this too. I sometimes get these mixed up though…

  99. 99
    James says:

    Sorry NotaBull,
    Even RE agents don’t have the crystal ball.
    Zillow has only recently attempted to get their facts correct on SF, auxillary buildings, additional shop space, etc. etc. In my opinion, Zillow is a sorry resource.
    Seems to me that if we are in a “Buyers Market,” it would be time to consider flying off that fence post and doing something about it.
    When we move to a Seller’s Market, which I believe is a short time from now, you will REALLY have something to complain about.
    Hard data in my recent transactions indicate a 3-5% negotiation OFF the asking price, whether there has already been a price reduction or not.
    The old trick of adding closing costs and points back into the sale price is back too. I don’t need to tell you that that negates that 3-5% off.
    Best of luck in buying. Incidentally, those that want to own a home and can’t afford this market should consider relocating to a less expensive part of the county…..The Midwest and South are BARGAINS.

  100. 100
    Mikal says:

    Probably because they don’t have the same employment base.

  101. 101
    James says:

    Exactly. No one get’s it ALL.
    If I find a desperate seller willing to write a check to someone willing to take thier equity…I’ll let y’all know.

  102. 102
    singliac says:

    James,

    I’m curious…how many houses did you close on today? I’m so glad that you were magnanimous enough to come here to help us understand this complicated business of real estate. Honestly though, thanks for the comic relief. Keep assuming that we’re poor and bitter. We’ll keep watching prices fall.

  103. 103
    James says:

    Singliac,

    All Six of you? That’s not likely to worry anyone. You can rearrange the data in any way you like and keep hopeful that one day a deal will come your way. This is an interesting website though…the founder begging “donations” in order to give you false hope and arrange data in one comprehensive site that you can pick apart. Wouldn’t you rather be sitting in your OWN living room, or working in your OWN garage, building your OWN equity instead of making the mortgage for your landlord? It’s a good thing this website takes PayPal…Who’s fooling who?

  104. 104
    James says:

    Singliac,

    BTW, no closings or sales today for me…Although or office had two listings cancelled…the owners have decided to stay. Guess they didn’t get the offers they were looking for.
    Our office had two new listings over $1.2M and I’m told that offers were submitted on three homes that have been on the market for 30-45 days.
    Also, two of the five “nebbies” that went back to their day jobs last Fall are returning to RE…Hmmm…what does that tell you? In our industry, it speaks volumes. Spring is traditionally better anyway, so I’m sure there’s nothing to worry about.

  105. 105
    patient says:

    I guess commenters like James fills an important role in giving this site a chance to once again counter the same old rants from agents. It’s probably helpful for newcomers who don’t venture into the archives. For the more seasoned readers though it’s more like, sigh here we go again another Lawrence Yun deciple going on about the bottom is here, you’ll be sorry when the market suddenly turns, take advantage now! etc,etc. I’m sure the ones that “took advantage” in San Diego the last six months are thrilled.

  106. 106
    James says:

    patient,
    You’re probably right in that it might not be a good time to buy. As you know the DOW was down almost 200 points today. But the mutual fund that I suggested might be a good investment yesterday…is up another 1.47% today. That’s 47% annual return this year. Just free advise…take it or leave it.
    I’m an old duffer (or am I still a coot, I’m not sure?) that doesn’t know what he’s talking about.

  107. 107
    David McManus says:

    And I make a killing with SRS this past year.

  108. 108
    calzoneous says:

    james, stay. you’re one of the few on this thing that adds insight.

  109. 109
    Rentersarelosers says:

    I thought that due to the fact that prices doubled that there are no longer the “three most important” factors, but rather the “six most important” factors.

    I believe that it’s now…”Location, Location, Location, Granite, Hardwoods, Stainless Steel”.
    ………………….

    A good comment, a sure sign of the “entitlement generation” who wants it all right now.

    For me, the most important is Location first and home layout second, and that is what I have always looked for in the 1/2 dozen homes I have owned in my lifetime.

    Compared to home prices, adding Granite, hardwoods and stainless steel are cheap and can be done at one’s convenience and choice of color, brand etc. That is basically “decorating” in my opinion.

  110. 110
    James says:

    Thanks Calzoneous. I appreciate the compliment.
    Well, today I learned some info that people on this site might find useful. For the most part, our area has not seen many forclosures. The exception is possibly the Bonney Lake/Sumner areas. Alot of overbuild and some subprime resets that appear to be driving some disressed properties. I’m not sure if any of you want to commute that far, or where everyone is located. Keep in mind that light rail is available in Sumner. (BTW, I don’t work that area…but if you check on-line, you should be able to find an agent that can help.) When I said, everything is negotiable, the obvious is listing commission. What is more significant is that some agents will assist in “kicking in” if you and a seller get close during negotiations. I believe that if a buyer and seller are $5K-$10K apart, and it looks like it might be a deal-breaker, the agents on both sides should “pony up” as it were to make the deal happen. (Note that none of that is ever on any of your charts and data, but it does occur..ASK FOR IT if you need too!!! Find an agent that doesn’t NEED that full commission (hint, older, seasoned Lexus driving agent). I will, in fact, search more areas for the “GEM of the Week,” but overall I must say that I’m not really seeing many true bargains. Forclosure properties tend to get snarfed pretty quickly by investors, and of course the dreaded agents with captial and the desire to own rental properties. I really do want to be helpful here, I remember how hard it was to buy a home. Good luck to all of you.

  111. 111
    EconE says:

    Renters Are Losers.

    HEY DUMBSHIT.

    that was TIC.

  112. 112
    deejayoh says:

    Keep in mind that light rail is available in Sumner.

    um, the “Sounder” is decidedly NOT light rail.

  113. 113
    James says:

    deejayoh,
    Point made on the Sounder, but it could get better.
    Where EXACTLY do you want to live?

  114. 114
    deejayoh says:

    not in sumner! but I agree that there are plenty of foreclosures down in Pierce, and prices dropping quickly

  115. 115
    Everett_Tom says:

    For the most part, our area has not seen many forclosures.

    James,

    can you be more specific? What does that mean? We haven’t seen many compared to last year, last month, Nevada, Boston, San Deigo, Paris,etc.. What’s the trend like, what do the last few data points (i.e if it’s last year, what about the year before that, etc). People on this site like data, like percentage change, or the absolute number, and enough info to see if the change is normal, or out of the ordinary…

    Also What’s “our area”? I’m in Everett.. does that include, or not include me?

  116. 116
  117. 117
    James says:

    Everett Tom,
    I am talking about King and Pierce county on this, but I suspect Everett wouldn’t be much different than King County.
    Unfortunately, the data for distressed sale, short sale or bank owned is difficult, even for a agent to get. Simply put, unless it’s published as such, it might be impossible to determine distressed. I’ve heard that 1 in every 550-600 listings in King County could be considered “distressed.” Pierce County is more of a buyers market in that potentially 10-15% may be in distress. Keep in mind that “Distressed” can mean someone living paycheck-to-paycheck, and still making their mortgage payment. A sure sign of a “short sale” would be indicated on the MLS or agent notes which would say something like, “Final sale subject to lender Approval.” Short sales can take a very long time to close and banks typically can take WEEKS to accept or counter an offer. If you have patience, it’s worth the wait, in that you could potentially get a significant % off the price. Of course, as you might expect, there is a real resistance to published this kind of data. That said, Western Washington is not in the same position as say, Detroit or Cleveland. I know I’m sounding like a broken record here, but real estate is local, and if a property looks like it will be a pre-forclosure or short sale, it typically gets scooped up by the inside crowd if it has potential for re-sale or rental. Unfortunately the hard data is only determined once it’s sold/closed….too late for bargain hunting. Trend data from last year shows no significant forclosure change (less than 1.6% from what I am seeing). Perhaps a sign of reset loans. I really don’t believe we are going to see the level of short sales that have happened in other parts of the county, and I’m not aware of any courthouse step transactions here either. Our area (Seattle metro and surrounding) still have the ability to buy and we did not see the massive subprime problems that affected other areas. Although a sign of change could be bank owned listings. BECU still lists their bank owned properties on their website, currently nine properties there, most of them in Pierce County….not a significant change from recent month/year.

  118. 118
    James says:

    Everett Tom,
    Sorry, I also wanted to point you toward “Realty Times” for some of the trend data you want for your area. You’ll have to sift through some of the realtor cheerleading, but the trend data published there is expected be accurate.

  119. 119
    James says:

    County forclosure can mean probate, which has nothing to do with county auction property.

  120. 120
    cheapseats says:

    Not sure what is considered many foreclosures, I guess it is not significant compared to other locales; From a Seattle Times article http://seattletimes.nwsource.com/html/localnews/2004402311_foreclosureman09m.html

    “according to the Recorder’s Office, King County had 1,356 foreclosure notices in the first quarter of 2008, compared with 887 in the first quarter of 2005. Snoho went from 482 to 666. Pierce County went from 663 notices to 1,287”

  121. 121
    patient says:

    cheapseats, I don’t know if it’s considered high either but I think it’s about 1/3 of the volume of homes sold in the first quarter. Not to say that 1/3 of sold homes were foreclosures but that the foreclosure rate is about 1 to 3 the selling rate which sounds significant to me.

  122. 122
    Everett_Tom says:

    James,

    Thanks for the verbose response, the discussion on distresses sales was interesting. Though now I’m a little confused, because again I think we’re talking about different things. You stated

    Trend data from last year shows no significant forclosure change (less than 1.6% from what I am seeing).

    But if I look at the raw data that Alan posted (Thanks Alan!) for king county, all the percentages are significantly higher. For instance, The March Kind County Data has a 70% increase year over year (from 320 in the range of 4/1/2007 – 4/30/2007 to 545 in the range of 4/1/2008 – 4/30/2008). Do you mean that 545 is only 1.6% of the total houses sold, and if not where does that come from?

  123. 123
    James says:

    Remember also that county forclosure could mean that a homeowner isn’t current on property taxes and an “investor” has come forward to pay them. This doesn’t mean much except a guaranteed interest payment for that investor when the owner either pays his tax (which now includes a hefty interest rate payment), or sells it and the back taxes also include that interest payment. The investor gets his money from the county either way. If that property gets taken by the bank, the investor is in a good position to get it cheaper, quicker. In King county it is unlikely to see any property that is being sold for pennies on the dollar because of the back taxes, because here the bank owns the house. That IS happening in other parts of the county though.

  124. 124
    Alan says:

    Notice of Trustee sale is probably a good measure of financial distress. It is true that some of the filings are for people who have died, but I don’t think that is most of them. I am also leaving out another filing that indicates bankruptcy.

  125. 125
    Alan says:

    You can look at the NTS notice to see why it was filed. Sample it yourself. I’ve never seen anything other than foreclosure for non-payment of a loan. I’m sure they are there, but I don’t look at every filing.

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