March Reporting Roundup: Anxious Frenzy Edition

It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

To kick things off, here’s an excerpt from the NWMLS press release:

Frenzied Market Frustrating Buyers

Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. Figures just released for March show 11,408 pending sales during the month while only 10,505 sellers listed their homes for sale during the same period.

The multiple offer market has become commonplace on well-priced new listings, observed John Deely, principal managing broker at Coldwell Banker Bain. However, he cautioned, “Some sellers are pushing pricing boundaries and are not seeing the same action as their well-priced competition.”

Deely, a member of the Northwest MLS board of directors, said buyers are flooding into the Greater Seattle market due to abundant job opportunities. He also attributed the high demand to low interest rates and skyrocketing rents. “Some high demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” according to Deely.

Nothing like a little rent price scaremongering from a home salesman to kick us off.

Read on for my take on this month’s local news reports.

Seattle Times

Coral Garnick: Home prices in Seattle jump 18.9 percent from year ago

The median price of Seattle homes sold in March rose 18.9 percent over the year to $535,000 — the biggest jump in at least five years.

The number of available homes for sale has been at historic lows in recent months, helping drive up prices.

Multiple offers have become commonplace across the region because of the shortage of homes for sale. In March, King County had 1.3 months’ supply of homes, while Seattle had less than a one-month supply.

As the start of the spring season, March is typically a very good month for sales, Scott said. But coming out of a mild King County winter where sales didn’t slow down as they usually do, March’s sales have made the lack of inventory more severe.

It’s getting really old at this point, but the lack of inventory really is the main story in the Seattle housing market. Without more homes hitting the market we’re going to be stuck in this rut for a while.

Seattle P-I

As I mentioned yesterday, the P-I’s longtime real estate reporter Aubrey Cohen has moved on to another gig. While my opinion of the P-I has gone down dramatically ever since they dropped the print edition and basically became “Buzzfeed Light: Seattle Edition,” Aubrey always did great work there on the real estate beat. His efforts will be missed.

KIRO 7

Deborah Horne: Seattle housing prices skyrocket

That’s how longtime Realtor Carmen Gayton sees the for sale signs in nearly every Seattle neighborhood.

“Amazon, eBay, you name it, they’re all coming to Seattle,” said Gayton, “Which we’re happy about but it does cause a little bit of an issue with housing.”

Indeed business was brisk at this Open House on a Tuesday afternoon on Seattle’s Queen Anne Hill. A little too brisk for Chris Byszeski, a software engineer for Amazon.com.

“The trouble being that you see a list price and that’s probably not what it’s going for,” said Byszeski.

And he’s been looking for the last two months.

It really does stink to be a buyer right now, even if you’re making a sweet six-figure salary working for the biggest tech employer in the northwest.

KING 5

Travis Pittman: Tight Puget Sound housing market creating ‘buyer anxiety’

Buyer anxiety. Frenzy market.

Those are two descriptions about the current status of the Western Washington housing market given Monday by the Northwest Multiple Listing Service.

For those buyers who can’t win a bidding war, they’re left to try to find an affordable place to rent.

Good luck with that.

“Some high demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” said John Deely, a broker at Coldwell Banker Bain.

“Don’t throw your money away on rent!”

“Buy a home no matter how overpriced it may seem!”

Puget Sound Business Journal

Emily Parkhurst: Seattle-area home sales reach a fever pitch as rising rents drive millennials to buy

You may have hear that millennials don’t buy houses. The Great Recession and housing bubble scared them away.

For some, myself included, that’s true.

But for millennials who are watching their rents go up and up and up, buying a home is looking like a more attractive option.

Combine that with low interest rates and a flood of new people to the area, and you’ll see what’s currently playing out in Seattle.

I may have also heard that making generalizations about an entire group of people based on arbitrary birth year cutoffs is somewhat ridiculous. Or I may have said that. Just now. Articles about what “millennials” are or aren’t doing when it comes to buying homes are annoying and basically never insightful or interesting, in my opinion. Thankfully Ms. Parkhurst avoids falling too far into that trap, but she certainly skirted the edge.

Tacoma News Tribune / The Olympian

C.R. Roberts: Home prices sizzle in a real estate seller’s market

Prices are up, inventory is down and real estate officials seem stretched as they attempt to find the sturdiest metaphors to describe a sizzling seller’s market.

“The multiple-offer market has become commonplace on well-priced new listings,” said John Deely, principal managing broker at Coldwell Banker Bain, in a NWMLS release.

“Sellers are currently experiencing the role of Prince Charming as buyers vie to win the Cinderella title by escalating offer prices above market value, releasing earnest money and waiving contingencies normally used to safeguard the transaction,” he said.

Meanwhile, he continued, “the less fortunate ‘stepsisters’ are becoming shell-shocked after numerous failed attempts.”

Okay, John Deely lost points earlier for the rent price scare-mongering, but I will award him some consolation points for at least coming up with an original and colorful analogy.

(Coral Garnick, Seattle Times, 04.06.2015)
(Deborah Horne, KIRO 7, 04.07.2015)
(Travis Pittman, KING 5, 04.07.2015)
(Emily Parkhurst, Puget Sound Business Journal, 04.08.2015)
(C.R. Roberts, Tacoma News Tribune, 04.06.2015)


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.

80 comments:

  1. 1

    Quoting the KIRO article Above:

    “….Amazon, eBay, you name it, they’re all coming to Seattle,” said Gayton, “Which we’re happy about but it does cause a little bit of an issue with housing.”…”

    Who’s leaving Seattle?

    Burger King, Subway, McDonalds, any franchise, etc. for that matter….will be leaving Seattle 2017 because they cannot afford the $15/hr and the small competitors have until 2021 before they leave too?

    Sounds like one hades of more wages leaving Seattle soon than “Amazon, eBay, you name it”….and don’t give me that lame “they employ” more allegation or even “pay more” excuse….the burger flipper businesses have regional and site managers with good pay too, fleeing Seattle in droves by 2017….

    http://money.cnn.com/2014/06/24/smallbusiness/seattle-minimum-wage-franchisees/index.html

  2. 2

    KOMO actually had a pretty good report last night during its 4:00 broadcast. It’s a bit different than the one on their website and went into the fact that different areas are different and that it roughly depends on how close the property is located to downtown Seattle.

  3. 3
    Deerhawke says:

    To your point Kary, as our transportation system clogs up, I am hearing a new emphasis in sales presentations on commuting. The new buzzword seems to be “commutable time” and “average commutable time”.

  4. 4

    RE: softwarengineer @

    More on $15/hr Wage Flight from Seattle

    Firstly the lawsuit to stop the Seattle “$15/hr this month on franchises and not small business” lost.

    http://genprogress.org/voices/2015/03/19/35529/fast-food-and-big-business-lose-lawsuit-against-seattles-15hr-minimum-wage/

    That’s already bad news for franchise business flight from Seattle, snippet:

    “…Do note what actually happened in that general economy over that same time period. The US unemployment rate fell, over that year, from 6.6% to 5.6%. Seatac’s performance is, including the usual boundaries for error, actually the same as the US economy’s. Which isn’t all that surprising really as the minimum wage rise at Seatac affected 1,500 people (yes, that’s all) and we’d not expect to see any effect at all in macroeconomic figures from so trivial a change.

    However, we are seeing changes in the rather larger case of Seattle itself, as I predicted we would:

    “Though none of our local departing/transitioning restaurateurs who announced their plans last month have elaborated on the issue, another major factor affecting restaurant futures in our city is the impending minimum wage hike to $15 per hour. Starting April 1, all businesses must begin to phase in the wage increase: Small employers have seven years to pay all employees at least $15 hourly; large employers (with 500 or more employees) have three.

    Since the legislation was announced last summer, The Seattle Times and Eater have reported extensively on restaurant owners’ many concerns about how to compensate for the extra funds that will now be required for labor: They may need to raise menu prices, source poorer ingredients, reduce operating hours, reduce their labor and/or more.

    Washington Restaurant Association’s Anton puts it this way: “It’s not a political problem; it’s a math problem.”

    Restaurants are closing at higher than normal rates. And Seattle is already a fairly high wage place:

    “Regarding amount of labor, at 14 employees, a Washington restaurant already averages three fewer workers than the national restaurant average (17 employees).

    As Don Boudreaux likes to point out one of the reasons we don’t see large job losses (as opposed to small ones) from rises in the minimum wage is because we’ve had a minimum wage for a long time and have already lost a lot of jobs as a result.

    And there’s more such reporting going on too:

    “As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. The tough new law goes into effect April 1st. The closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.

    The shut-downs have idled dozens of low-wage workers, the very people advocates say the wage law is supposed to help. Instead of delivering the promised “living wage” of $15 an hour, economic realities created by the new law have dropped the hourly wage for these workers to zero….”

    http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

    I’d add too, the unemployment rate decrease in Seattle has nothing to do with mitigating the flight of franchise businesses from Seattle; it just means the “give-ups” have lowered the cooked book U3 figure. That’s it.

    The Seattle “One Flew Over the Cuckoo’s Nest Politically Correct Asylum” we now live in is worsening as the nut patients wildly allege its getting better. 19,000 people work for threatened franchises in Seattle BTW and yes, they’re on the flight chopping block now.

  5. 5

    Lest I Forget to Mention

    Snippet:

    “… It has been estimated that by 2045 robots will be able to perform every job that humans can….”

    http://insights.globalspec.com/article/788/robots-for-humans-addressing-the-engineering-challenges

    That clearly means that a 30 year mortgage loan today depending on people working in Seattle 30 years from now is a dead duck. Robots replacing Seattle jobs is already at banks, those machines that now read your checks, instead of humans. Farming with insourced immigrants is also a joke, automation can do it cheaper already for a plethora of food crops. The Army uses robots and drones now, why hire excess enlisted men? The internet, i.e., Amazon, is replacing mom and pa stores that can’t compete anymore. The list already goes on and on…..your job is next on the robot chopping block?

  6. 6
    m-s says:

    RE: softwarengineer @
    gimmeafreekinbreak. How about a bit closer to home than Forbes?
    http://www.seattletimes.com/seattle-news/politics/truth-needle-is-15-wage-dooming-seattle-restaurants-owners-say-no/
    Note OWNERS SAY NO (they actually asked), not Rush Limbaugh.
    re: Boat Street Cafe, “small employers”, etc.

  7. 7

    RE: m-s @
    I’m Not Saying They Can’t Make Money Paying Higher Wages

    They’ll just eliminate soup and salads from dinners, shrink hamburger patties down to sliced ham thick size; serve us more cheap Chinese tub fish instead of Alaskan wild. Forget Puget Sound fish, its uneatable already with heavy elements and fertilizer overpopulation contaminants….

    Hope you enjoy your $15 Subway lunch meat roll.

    You can also go to many downtown restaurants and if within walking distance, you won’t have to pay the $15 parking. Expect something like $20/plate with soup/salad and beverage tax and tip.

  8. 8
    Mike says:

    LRE: softwarengineer @ – just today my wife commented that she paid $6.75 for a milkshake in Ballard.

    Makes that $5 milkshake from Pulp Fiction seem quaint.

  9. 9

    RE: Mike @

    I Can Still Find a Great 16 Oz Rib-eye for $8.75 With Hand Cut Fries

    Boneless, juicy, tender, no extra fat, no grizzle and no bone waste… its the Interchange Bar Monday and Saturday special. Its hidden in back of the over-priced, small portion Kent Valley Denny’s….

    I eat all my steaks at restaurants, the grocery stores “Black Angus” at QFC has really gone down hill lately, its tough and full of grizzle. I also spend less where I get deals at restaurants and the steak quality is no comparison. There may be a few butchers that sell good steaks, but bring out your billfold…

  10. 10
    Rudolfo says:

    I think you mean gristle.

    Sliders were once 10¢. Chicken wings were 19¢ each. A new car was once $280.
    I’m pretty sure times are always a-changing.

  11. 11
    boater says:

    By Mike @ :

    LRE: softwarengineer @ – just today my wife commented that she paid $6.75 for a milkshake in Ballard.

    Makes that $5 milkshake from Pulp Fiction seem quaint.

    Pulp Fiction is 21 years old. Inflation happens.

  12. 12

    RE: Rudolfo @

    Yes Rodolfo

    I think new car prices aren’t that bad, inflation adjusted….a 68 Charger went new for about $4500. Today it’s low 20s after rebates, discounts and such off it’s $28K MSRP base price [and it comes standard totally loaded to the gills, well beyond the 68 model]. The 68 came base with a 230 hp V-8, the 2014 came new with a 3.6 V-6 with about 300 hp and about 15+ mpg better fuel economy than the old gas burners. Minimum wage in 1968 was about $1/hr. Today its like $10/hr….

    I remember 1980 big cars with less options than they offer base today for like $18K for a big car with some luxury options [like an electronic dash]. The hp was like 150 with excessive catalytic converter plug too, gutless wonders. No wonder we all started buying 4 cylinders from Japan, what choice did we have back then?

  13. 13

    RE: boater @

    The Real Ice Cream Shakes at Shari’s

    Still come in those giant 24 oz stainless steel mixing mugs for like $5 [fantastic deal]. The rest of the food at Shari’s is dinky portions with salad/soup $3 extra….I can eat two of their dinners. The coupons Shari’s uses for discounts is buy two $2.50 pops or coffee and get $5 off a 2nd entrée [without soup/salad] free…..LOL what a joke….

  14. 14
    David B. says:

    RE: softwarengineer @ – OMG, some restaurants closed in Seattle last month! That’s *never* happened before!

  15. 15
    Eastside says:

    The Tim –

    Do you think the Eastside (Bellevue, Issaquah, Sammamish) is in a bubble again? I just checked and found a number of Sammamish homes have appreciated by about 18% a year over the last 2.5 years, while homes in more affordable Maple Valley have appreciated by 6% a year over the same period. I don’t think that 18% a year is sustainable, and can’t help but think there is another bubble going on in the Eastside.

  16. 16
    Deerhawke says:

    Question:

    How do you know when a blog is dying?

    Answer:

    When you have a geriatric so-called software engineer accounting for half the posts, wandering back and forth between repeating factless right wing rants and waxing nostalgic about food and cars. And nobody bothers to even tell him to spare us the drivel!

    Tim. It is time to fish or cut bait.

  17. 17
    Erik says:

    RE: Deerhawke @
    Sh!t or get off the pot.

  18. 18
    boater says:

    RE: Deerhawke @
    If you find another blog that doesn’t have this one’s dead weight please let me know. I agree with your sentiment.

    By Eastside @ :

    The Tim –

    Do you think the Eastside (Bellevue, Issaquah, Sammamish) is in a bubble again? I just checked and found a number of Sammamish homes have appreciated by about 18% a year over the last 2.5 years, while homes in more affordable Maple Valley have appreciated by 6% a year over the same period. I don’t think that 18% a year is sustainable, and can’t help but think there is another bubble going on in the Eastside.

    I think the comparison is invalid. What if i told you yakima had a 2% appreciation would you think all of king county was in a bubble? There are jobs being created at a faster rate in the eastside vs maple valley and the pay is high enough they can afford the higher housing prices vs choosing a longer commute.

  19. 19
    Blurtman says:

    RE: Eastside @ – The Zillow algo says my Sam Amish home has appreciated 12%/year over the last 10 years. It did flirt with the bubble high price several months back (14%), but settled down a bit. It is possible that adding the backyard underground bunker added value. Not sure.

  20. 20
    whatsmyname says:

    RE: Blurtman @
    Ha. You were probably just mocking the Zillow algo, but if your house is worth over 300% of its 2005 value, it is hard to believe it hasn’t fully recovered the “peak price” from only two years later.

    Tim, it looks like 2005 was a great time to buy after all.

  21. 21

    RE: Blurtman @

    The median home price for Sammamish in 2003 was $425,000. The median price in 2014 for those same homes (built in 2003 or earlier) is $642,000. 51% increase for the 11 year period = 4.63% annualized. Some of the recent appreciation in Sammamish for homes built after 2003 isn’t appreciation. It is the fact that the new construction homes cost more as new, and in many cases are much larger homes. I did include new construction homes in the 2003 pricing.

    Someone check my math. I’m on vacation and did that on my phone calculator. :)

  22. 22

    RE: Ardell DellaLoggia @ – Assuming I still know how to use my Texas Instruments BA-II calculator from the 1970s, that is 3.82% (it compounds–you cannot just divide).

  23. 23

    By whatsmyname @ :

    Tim, it looks like 2005 was a great time to buy after all.

    It really depends what you bought and where you bought. But I wouldn’t focus on price alone, particularly the deceiving median. Assuming you do want to focus on price, it was much nicer to be able to buy when things weren’t so hectic, and when you were more likely to get a decent discount on a short sale or REO (assuming you were open to such listings). But the herd mentality was such that few people thought it was a good time to buy during 2009-2012.

  24. 24

    RE: softwarengineer @ 4 – Wait, you can do that? Reply to yourself?? Tim, please reinstate some limits here…

  25. 25
    Blurtman says:

    RE: Ardell DellaLoggia @ – Thanks Ardell and Kary. You’re calculations are in fact closer to reality. I will remember not to start the day with a tumbler of Hennigans.

  26. 26
    whatsmyname says:

    RE: Kary L. Krismer @ – Kary, I was just having a little fun with the 200% increase. I think your points are valid, but that is because they reflect what I already thought.

  27. 27
    Mike says:

    By boater @ :

    By Mike @ :

    LRE: softwarengineer @ – just today my wife commented that she paid $6.75 for a milkshake in Ballard.

    Makes that $5 milkshake from Pulp Fiction seem quaint.

    Pulp Fiction is 21 years old. Inflation happens.

    Right so why is SWE so fixated on how expensive restaurant food is in Seattle? It’s not that expensive.

  28. 28
    redmondjp says:

    By Mike @ :

    By boater @ :

    By Mike @ :

    LRE: softwarengineer @ – just today my wife commented that she paid $6.75 for a milkshake in Ballard.

    Makes that $5 milkshake from Pulp Fiction seem quaint.

    Pulp Fiction is 21 years old. Inflation happens.

    Right so why is SWE so fixated on how expensive restaurant food is in Seattle? It’s not that expensive.

    It’s all relative I guess . . .

    For my family of four with two young grade-schoolers, it typically costs between $50-60 to eat at either of a couple of our favorite Eastside drive-ins: Burgermaster and Spud’s (fish & chips). That’s not exactly what I call inexpensive. We can eat some good-quality steaks at home for less than that (buy them fresh; dry rub seasonings; grill and enjoy).

  29. 29
    Cap''n says:

    So. The topic was broached. We’ve seen a busy the Tim slowing down the posts at a time when a bubble argument is actually worth considering. I love this site. I have been tracking for the last five years. I don’t want to see it go away. But I get it, Tim. You need to enjoy the quality home you bought at The Bottom. I don’t want you to ride off Shane style. But if you do, thanks for everything. You really created an important outlet and community. Like the band I used to be in, it’s so hard to imagine life without it. But it goes on. So this is both my plea to continue, and my gratitude if you don’t.

  30. 30
    Voight-kampff says:

    I’ve been coming to this site since it started, and it has helped inform some of my RE decisions. The comments used to be a very active back and forth, from many different perspectives. It is now much slower, with fewer perspectives. I often wonder if this change in the comment section is indicative of the current “bubble” being much different than the last one.
    I wish I could figure out exactly what it is indicating… I guess that’s why I keep coming here! :)

  31. 31
    boater says:

    Well one thing that happened is the new redesign puts recent posts at the bottom of the page. It makes it a pain to find where the conversations are.

    That an i have no interest in wasting my time listening to irrational posts by SWE and bipolar posts by Erik. They seem to have chased away the rest of the posters.

  32. 32

    By Voight-kampff @ :

    I’ve been coming to this site since it started, and it has helped inform some of my RE decisions. The comments used to be a very active back and forth, from many different perspectives. It is now much slower, with fewer perspectives. I often wonder if this change in the comment section is indicative of the current “bubble” being much different than the last one.

    I think part of it is that people complain more the first time a price is reached (e.g. gas at $3.00 a gallon) than subsequent times. So that’s the lack of as many bears.

    On the other side, we no longer have a situation where local prices didn’t fall for a period of 20 years. Also, many people are still underwater, so we don’t have as many bragging about their gains. So that’s the lack of as many bulls.

  33. 33
    Blurtman says:

    RE: Ardell DellaLoggia @ – Hi Ardell, do you have data on year to year median prices changes for Sammamish? As over the long term, home prices only go up (nominally), if you buy during a period of out of bounds price increases, what might that mean over the long and short run when you go to resell?

  34. 34

    By boater @ :

    Well one thing that happened is the new redesign puts recent posts at the bottom of the page. It makes it a pain to find where the conversations are. .

    This is OS and browser dependent. I don’t know all of the possible options, but in a Windows environment using the Chrome browser you still get recent comments on the side IF you have your browser aspect ratio wide enough. If it is too narrow the comments will appear at the bottom.

    In an Android environment using the Chrome browser I’ve yet to find a way to get recent comments on the side. It means I no longer visit this site from a mobile platform. Which is ironic since I think Tim made the changes to be more mobile friendly.

  35. 35
    whatsmyname says:

    Would Bach have felt right at home here?

    https://www.youtube.com/watch?v=vtW7cu56MRs

  36. 36
    Seattleboomerang says:

    Well, anecdotally we are returning to the Seattle Metro area after 6 years abroad. My DH is on a good salary and we have plenty of savings so we are ready to buy. However, we are not the only ones. Our Real Estate agent has two other sets of buyers also looking with budgets of 1.4 and 1.6 mil. However, there is no inventory. We all want to be in very close in neighborhoods on the Eastside to be close to work. We are homing in on an area where my husband’s commute and all the schools we need would be within 5-10 minutes. He has done a long commute for many years and we want that to change.

    We bought property in 2000 in a popular close-in Eastside neighborhood. We built a house and sold it in 2009 and had equity. Unfortunately I don’t see the current situation as a bubble as I am aware of a number of well compensated people looking for a home. Many of the favorite Eastside neighborhoods have become very attractive to Chinese and other Asian buyers coming in with all-cash, driving up prices. In fact a Chinese buyer bought our home in 2009. Tim has a tendency to pooh-pooh these purchases as just 6% of all sales. However, the Chinese buyers are focusing in on the same neighborhoods that are popular with the highest paid American professionals. We are now close to being priced out of some neighborhoods we could have bought in just a couple of years ago. This will have a cascading effect with high-paid professionals moving into the next tier of neighborhoods and driving prices up and so on.

    I think we are just seeing the beginning of the Chinese buyers. All the high-end real estate agents have at least one Chinese native speaker on their teams and the Chinese are now planning and building their own developments on the Eastside. They know what Chinese buyers want and are building to those requirements. Vancouver and L.A. have (or had, in the case of Vancouver) a much higher number of actual sales to Chinese buyers and Seattle is becoming more and more popular. Unless the law changes as it did in Canada regarding investment visas for immigrants this could be a permanent change in the Seattle market.

    This is not the bubble of the early 2000s built on dodgy mortgages. Also I don’t read much mention on here of the devaluation of the dollar that happened after 2008. 850k bought you a luxury home in many neighborhoods in 2005, now the same home sells for 1.2 mil or more.

    As evidence that these buyers are serious and not only off-shore investors, this article shows many are settling and bringing their families to the neighborhoods with the best schools on the Eastside.
    http://www.seattletimes.com/seattle-news/bellevue-schools-meet-greet-high-tech-immigrants/

  37. 37
    boater says:

    If commute time really is the prime driver on price King County should create heavily incentives for spread out campuses. Maybe a huge tax on buildings or lots holding more than 200 employees in a building. The goal would be to create more short commutes and spread out the number of desired communities.

  38. 38
    Saffy The Pook says:

    Re: Chinese buyers

    With the Chinese economy slowing (at least its rate of growth), wealth creation there should also slow over the next several years. There’s also the possibility that the Chinese gov’t will further lessen support for the RMB vs. the USD, making it more expensive for Chinese buyers. Lastly, I wouldn’t be surprised if our legislature looks north for some tax concepts and imposes a surcharge on foreign buyers. The repubs may be against taxes in general but they look somewhat more favorably on them if they protect “hardworking Americans”.

  39. 39

    RE: redmondjp @ – My Suggestion

    Yes Redmondjp

    Most food out is more expensive….eating solo makes cooking at home too much work. I’m a solo diner, so eat out every day and find the deals and best quality for me.

  40. 40
    Saffy The Pook says:

    By boater @ :

    If commute time really is the prime driver on price King County should create heavily incentives for spread out campuses. Maybe a huge tax on buildings or lots holding more than 200 employees in a building. The goal would be to create more short commutes and spread out the number of desired communities.

    I think the market is already doing this. Every major tech firm is splitting itself across both sides of the lake so they can compete for talent without the black eye of a long commute.

  41. 41
    Seattleboomerang says:

    I think it’s the perfect storm of short commute times (and no bridges) good quality of life and excellent schools that is driving many areas on the Eastside. We lived in Seattle too in the 90s and would happily live there except work is on the Eastside. Our eldest is about to start high school, we love being with our kids so want to enjoy the next decade before they are all through high school. Commute time becomes more of a priority.

    I also think it is somewhat of a myth that people are somehow wildly different depending on where they live around Lake Washington. I find most people have the same priorities and contrary to stereotypes have found people to be very welcoming and friendly in the Seattle metro area.

  42. 42

    RE: Deerhawke @

    Deerhawke

    When did you buy your house? Is it underwater?

    Insulting me won’t change those fundamentals.

    I’ve always said buy now if you really want to, just don’t tell everyone what a deal you got paying bubble prices for it.

  43. 43
    Seattleboomerang says:

    Yes, I also wonder if some of policies regarding visas for investment will be revised. They seemed one of the methods to attract investment after the crash. I also sadly see the American landscape changing where many cities just are places for high paid workers or the independently wealthy. Seattle’s window for retaining an economically diverse population seems to be closing. Now I hear of people investing in Burien and other South Seattle areas you wonder if in the future the working class will all be in communities far outside the city with little access to public transport (sorry, “Mass transit”).

  44. 44
    enatailurker says:

    RE: boater @ – But that would create massive sprawl, and probably increase traffic congestion and total commutes. You get a job in some Redmond low-rise building, buy a house, and then when you need a new job, you are suddenly commuting to Bothell, thanks to this “spread out.” A better solution to long commutes is denser development and better mass transit. It baffles me that we don’t have an Eastside train running from Auburn to Everett.

  45. 45

    By Seattleboomerang @ :

    Our Real Estate agent has two other sets of buyers also looking with budgets of 1.4 and 1.6 mil. However, there is no inventory.

    Several years ago Ardell mentioned that it wasn’t really a good idea for an agent to have two clients looking for the same properties. I don’t consider that an absolute rule, but do agree it can lead to issues. In this market, however, the problems should be fairly obvious.

  46. 46
    Seattleboomerang says:

    We are all looking in different neighborhoods so no conflict of interest.

  47. 47

    RE: Blurtman @

    Still on vacation until tomorrow night, but here’s the quick version using the same parameters of Sammamish homes built in 2003 or earlier starting at 2003.

    425k, 462k, 525k, 625k 630k, 600k, 521k, 539k, 529k, 528k, 605k, 642k required disclosure…stats compiled by me on vacation in L.A. and not published by The Northwest Multiple Listing Service.

    When I do Sammamish I like to exclude the homes built after the builders migrated there when they ran out of land closer in. It gives a truer version of appreciation and decline than the numbers inflated by some of the larger, newer construction that takes the 2014 median up to $720K vs $642k. The difference is not appreciation relevant to someone with a home built in 2003 or prior which represents the majority of people who are thinking about selling.

  48. 48
    Seattleboomerang says:

    Article on local commute times http://www.bellevuereporter.com/news/299598961.html#

  49. 49

    RE: enatailurker @

    Monorails

    Is all we have room for now and building them is an arm and a leg. We could put in more ground rail systems and a couple new freeway systems besides I-5 and I-405 by bull-dozing MASS houses and business buildings….but that’s counterproductive too. Similarly overcrowded places like New York built underground subway systems, but that was back when we manufactured stuff and had money for long infrastructure tunnel boring. Kiss those days good-bye.

    Nope, the only answer for Seattle is depopulation.

  50. 50
    David B. says:

    RE: Kary L. Krismer @ – For me, the timing of when to buy again was mostly due to personal factors and had little to do with the overall state of the market. I would have loved to be looking in a market like 2010’s — but in 2010 I wasn’t ready to buy a home, for a variety of reasons.

    I only arrived at that point last year, and several times decided to say “bag it” and continue renting because of the poor inventory. Then decided to give it one more shot (mainly because I wasn’t seeing any attractive rentals I could envision staying in for a number of years, and didn’t much like the rental I was then in) and basically got lucky and was first in line (yes, there were multiple offers) for the best thing I had seen since I started looking.

    All that said, I didn’t expect inventory to get even tighter. I thought last year was pretty much rock-bottom, and that it might coast along at rock bottom for another year or two but wouldn’t get much worse. Yet “getting worse” is just what seems to be now happening. Makes me glad the whole process is over for me.

    If I hadn’t found my current home, I’d doubtless be pretty annoyed at my housing situation right now. In the mid-2000’s at least there was a good selection of reasonably-priced rentals available so there was an obvious option for sitting out the madness. Not so this time.

  51. 51

    By David B. @ :

    RE: Kary L. Krismer @ – For me, the timing of when to buy again was mostly due to personal factors and had little to do with the overall state of the market.

    Ideally that’s the way it should be.

  52. 52
    ronp says:

    @Seattleboomerang have you thought about finding something you can tear down? This is sort of in the range — https://www.redfin.com/WA/Bellevue/11116-SE-4th-St-98004/home/510068 , obviously contractors are busy and hard to find a good one. in my area of NE Seattle, you need 500K to buy something to tear down and another 600K construction budget to make it resell-able for 1.1 million or so. Here is an example — http://www.zillow.com/homes/fsbo/Seattle-WA-98105/48848513_zpid/99565_rid/days_sort/47.670053,-122.273425,47.666628,-122.27938_rect/17_zm/0_mmm/?view=map (click on the next photo to see the “after” view).

  53. 53
    Weasel says:

    By softwarengineer @ :

    RE: enatailurker @

    Monorails

    Is all we have room for now and building them is an arm and a leg. We could put in more ground rail systems and a couple new freeway systems besides I-5 and I-405 by bull-dozing MASS houses and business buildings….but that’s counterproductive too. Similarly overcrowded places like New York built underground subway systems, but that was back when we manufactured stuff and had money for long infrastructure tunnel boring. Kiss those days good-bye.

    Nope, the only answer for Seattle is depopulation.

    Replace monorail with high speed (100+mph) rail out of the city to some place else, the hipsters can have the inner city apartments, the rest of us can live somewhere nice.

  54. 54
    redmondjp says:

    By ronp @ :

    @Seattleboomerang have you thought about finding something you can tear down? This is sort of in the range — https://www.redfin.com/WA/Bellevue/11116-SE-4th-St-98004/home/510068

    You do realize that the light rail line is going to go right by this house, right?

    I love how they spin it in the ad: “Possible sound wall to be built by SoundTransit to help w/ noise! Next to future East Main Light Rail Station.”

    Wow, add $250K to the price for that privilege!

  55. 55
    ronp says:

    RE: redmondjp @ – ah, no, I did not! I just quickly looked for something cheap in Bellevue! lol.

    Regardless, a tear down is not a bad idea, just a bit risky and stressful.

  56. 56
    Erik's Step Dad says:

    By softwarengineer @ :

    RE: redmondjp @ – My Suggestion

    Yes Redmondjp

    Most food out is more expensive….eating solo makes cooking at home too much work. I’m a solo diner, so eat out every day and find the deals and best quality for me.

    Cool story bro…

  57. 57
    Ryan says:

    Just pulled the trigger on buying a townhouse in Fremont for $745k. Haven’t closed yet so don’t want to link to the MLS. Thought I would share my thinking on why I bought and what the situation was like.

    List was for around $650k. Property had multiple offers, most within a few $k of the accepted price. List to accepted offer in about 7 days. Three quarters of a mil for a townhouse seems insane but we feel good about the purchase for a few reasons:

    – My office is on the same block as the unit, can’t beat that commute
    – I’ve lived in Fremont for years and want to stay for the long haul both a resident and business owner
    – The unit was unusual in a number of ways, all good. Exceptional build quality
    – Units sold nearby with same square footage for similar price that are absolute garbage (3807 Fremont Ave N I’m looking at you)
    – We wanted a house but didn’t have the capital to buy and then remodel, most things in our geographic range needed work
    – I felt good about the potential future appreciation of the property due to being so close to all of the major tech employers

    On the downside it’s definitely on the high end of what anyone paid for a townhouse in Fremont and there is no way around the fact that it’s insane amount of money. If tech is in a bubble it still feels like the early stages of the bubble and we didn’t see the situation improving. Mid term (5 year range) it seems that traffic will get drastically worse as everything under construction comes online, so it seemed smart to set up our lives not to have to leave the neighborhood.

    Just one perspective from someone helping to inflate both the tech and housing bubble.

  58. 58
    Rudolfo says:

    Appreciate the multi-tasking, Ryan. : )

    Thanks for the post. Definitely interesting to read your thoughts.

  59. 59

    RE: Weasel @

    Yes Weasel

    Eastern Washington has plenty of land to migrate to….so does Bellingham or South Olympia [they are blue areas seeing migration increases now too]. But the inner Seattle city “hipsters” [as you call ’em] would be doubly horrified if the Amazon and eBay jobs just plain moved out of the congestion altogether to the less populated Puget Sound edge areas. The centralized real estate would suffer, but you wouldn’t need the high speed train either.

    Tax us to death with concurrent high rent and we eventually vote with our feet, out of Seattle. Ask California and New York.

  60. 60

    RE: redmondjp @
    The Trouble With Trains

    You still “mostly” have to commute to a train station, then schedule the next arrival and pay out like $15 a ticket too….probably adding an hour or two to your commute, especially round trip.

    The other major problem with trains, they rarely are close to you or your job.

  61. 61

    RE: Ryan @

    Yes Ryan

    You made an intelligent and honest decision to buy what you did and aren’t trying to put lipstick on the pig either. Good for you and I wish you luck.

  62. 62
    Seattleboomerang says:

    JonP and RedmondJP yes we might consider building, we’ll wait and see when we finally relocate. We built on our lot in downtown Kirkland last decade so already have a good idea of pluses and pitfalls. We loved our architect so would definitely use him and his firm again.

    In terms of due diligence before buying another major project to be aware of is the extra power lines that will be needed across the Eastside, they will be through the Woodridge community and then Bridle Trails and Rose Hill (so basically where they currently run but just more so). The route was finalized recently after lots of community input.

  63. 63
    David B. says:

    RE: softwarengineer @ – If Bellingham or Olympia had a good selection of tech jobs I’d probably have moved to one or the other of them. But I looked, and the selection is bleak. Even if I did luck out and find something, when it went away (and jobs don’t last for life these days like they did 25+ years ago) odds are I’d probably have to move to the Big City anyhow for my next job. So I passed on those two options.

  64. 64
    David B. says:

    RE: softwarengineer @ – Regarding your rant on trains: BS.

    You don’t have to commute far to a train station if you purchase or rent a home a short walk or bike ride away from one (which you should, if rail commuting is important to you).

    Sounder commuter rail goes to Downtown Seattle, which has more jobs (and orders of magnitude more tech jobs) than _all_ of the Olympia or Bellingham areas do, so betting on finding a rail-friendly job has better odds than betting on a job on those other two areas.

    I just checked the fare table at http://www.soundtransit.org/Fares-and-Passes/Sounder-fares and the fare from Lakewood to Seattle (the most distant, expensive ride you can take on Sounder) is $5.25, a far cry from $15. Auburn to Seattle (a more representative fare) is $3.75.

    Obviously you don’t like this area. It’s within your right not to — and to complain about it (but stick to the facts or expect others to call you on it). I also suggest you consider exercising your right to move elsewhere rather than staying here and becoming increasingly bitter about it.

  65. 65
    Mike says:

    RE: Ryan @ – over the past few months I’ve been looking at the kinds of places you bought. I already own an old money pit in the north Ballard area and after 3 years of shoveling a ton of cash into it $745k for a new town home sounds relatively affordable. Quick math on that says it would save over a thousand dollars a month and give me some of my free time back.

    My wife however is loathe to give up her large garden so it hasn’t been an easy sell.

  66. 66
    Blurtman says:

    RE: Ardell DellaLoggia @ – Thanks Ardell. Using these rough numbers, YOY change is 9%, 14%, 19%, 1%, -5%, -13%, 3%, -2%, 0%, 15%, 6%. So if you bought in 2005 or 2006, the seller would have expected a pretty good gain based upon the bubble rise in prices. And 2005 prices didn’t recover until 2009-2010, and now up 22% in 2014. So the five years and out homeowner who purchased in 2004 and even 2005 could have been underwater when they sold five years later, but OK if they held on, ceteris parabus. Quick calcs on my part as well, caveat.

  67. 67
    Erik says:

    RE: Ryan @
    Fremont is my favorite place in the state. If I could afford to buy there I would. Enjoy your purchase. If it means anything, I don’t think you’ll lose on that. I think Fremont will just get super expensive.

  68. 68
    Cap''n says:

    No commenter lashing out at a 745k condo purchase in fremont? I appreciate the civility. The kool-aid goes down like Bordeaux these days. But I will join. Cheers. Hope it all works out.

  69. 69
    Blurtman says:

    RE: Cap”n @ – Busy formulating a counter offer. My ceiling is $1 million. Thanks to commenter for the lead.

  70. 70

    RE: David B. @

    Were You Born in Seattle?

    Most likely not. Most current Seattle residents weren’t.

    You have no idea what it was like to travel I-5 at 70 mph on rush hour. Live in Lynnwood when it was mostly forest. I didn’t cause all the trees to be mowed down, the recent overpopulation did [and the bad decision to put Microsoft and Boeing both on the same congested freeways when it was just Boeing]. Even attending high school here when there was room and the schools taught us math and science wonderfully with the same amount of students as today with half the teaching staff. Cruising the “Gut” on Colby in Everett in our American Graffiti muscle cars and meeting at Herfy’s to socialize and find a party. Its all gone now, the parties in the woods, the live bands and the wonderful seventies with love and giving .

    Unfortunately, to escape to a unpopulated city that I remember in my past, like Kansas City, means changing and giving up one thing overpopulated cities provide [besides tech jobs I don’t need as a retiree this year]….that’s likely better social services for my special needs son [this may not last though]. Perhaps Kansas has them like Seattle, I’m not sure [but I doubt it]….but to change anything like that is very risky, stressful and requires lots of attorney fees too [or being your own attorney representative for the disabled]. I raised an autistic individual all my life and believe me, it was two jobs, and most of my friends don’t know how I did it. Perhaps living in Seattle when it was far less congested and much better is how I did it?

  71. 71

    RE: David B. @

    Thanks for the Fare Updates

    I saw the tickets from Kent to Tacoma for $15 and assumed they’re all about that expensive.

    So what? You say move closer to train? Spend 10% of the cost of a new house in closing paperwork, new house settlement costs and moving ; let alone the massive cost to stage your old house to move? Approximately $50K-100K to save $500/yr to be closer to a train? Now…..how do you get 90% of the jobs close to the train too? The tooth fairy? Luck? How do you get a decent unit with a 20% normal inventory out there, without paying all the inheritance your deceased dad left you? How do you move period, when your house is still underwater and you have saved almost nothing?

    The world is a general place, not everything happens the way it happens to you. Best of luck to you though and I hope your luck continues.

  72. 72
    David B. says:

    RE: softwarengineer @ – Where, exactly, did you see tickets for $15 from Kent to Tacoma? That’s so out of whack with Sound Transit’s currently published fare structure that I doubt it every was a routine fare. Either it’s an incorrect claim, or it was some sort of special excursion service, not routine service.

    You sound like you’re discussing moving closer to the train yourself. Why? You already mentioned you’re retired. No need for you to commute. And in the case of retirees, most of them are at a stage in their lives where they can downsize. Moving to a smaller home at the same time moving to one closer to transit could well end up paying for itself, even with transaction costs.

    Social services: You mean all those extra government services we have over and above what those low-tax Red States you praise furnish can actually (gasp) serve useful purposes? Who’d a thunk it!

    90% of jobs near rail: Complete strawman. I never claimed that.

    You’re right — I haven’t lived here since the 1970s. Another strawman. I worded my discussion about the characteristics of this area in the present tense. Living in the Seattle of the 1970s is not an option — like it or not, you can’t travel back in time. Your choice is whether or not to live in the Seattle area of 2015.

    As an aside, I think the memory of the early 70s and the Boeing Bust still does strongly color many long-time residents’ conception of this region. It was an anomaly in many ways — a time when the local real estate market was depressed compared to national norms.

    As I’ve written before, the normal state of the Seattle housing market in recent decades (ever since at least the late 80s, when I first lived here) has been to be more expensive than national norms yet less expensive than the most pricy markets. I don’t see that general price point changing.

    Waiting for a return to Boeing Bust conditions is waiting for Godot.

  73. 73
    Cliff says:

    Re: Fremont Townhouse for $745K.
    Ryan, I realize you would have no way to know this, but 3807 Fremont had a large rebate credited to the buyer at the time of the sale. 38th and Fremont is also a very attractive location. It is not only just two easy blocks to everything but it is on a wide street with bike lanes and plenty of parking in the area. The views from the top floor of that unit were very good (not to mention the roof deck) and it was very light. It had cheap cabinets and no storage but other than that was very nice. The building itself was good construction from a reputable builder. Lots of stairs though, so not for everyone!

  74. 74
    Litener says:

    Well, the frenzy is indeed happening. I just sold my town home on Beacon Hill for well over list. Multiple offers, bidding war, etc. And yeah, lots and lots of stairs. After getting it ready to sell, I’m really just kinda over stairs for a while.

    And now I have to turn around and buy a new home inside this market.

    *rolls eyes*

  75. 75
    Mike says:

    Apparently bubble 2.0 has popped. This house sold for $1 Billion dollars last year (according to Zillow) and is now on the market for just $690K.

    http://www.zillow.com/homedetails/1811-N-52nd-St-Seattle-WA-98103/49115130_zpid/

  76. 76
    Ryan says:

    @Cliff I currently live near those units and have a few complaints about them. They look really shoddily constructed for one, the yellow is absolutely atrocious as well. They are cookie cutter, not site specific at all. The overall location is desirable if you discount that you are wedged in between two arterials. I know it’s not concrete construction above the base since I watched them go up, the noise in there is going to be awful.

    My main beef though is that the developer puts signs up everywhere, and just leaves them. We have two in the trash cans of our apartment (I didn’t put them there) that the city won’t haul away, and I’ve seen three more litter the street nearby. Broken and kicked over after the sale is completed. Same developer left signs all over for a different complex near the library. Same font, same design, same crappy green. They raze the neighborhood, fill it with crap and can’t even clean up their litter. Despicable.

  77. 77
    Cliff says:

    @Ryan, You should contact the developer directly. Hardydevco.com. It may be the RE firm selling the homes that is at fault here with the signs. I doubt the developer wants to be a bad citizen. It is such an easy problem for them to solve. The pictures of 3807 that are included with the listing are of a different unit so unless you have visited the unit during the sale process it would be hard to judge. I did visit it. Noise was not a factor at all. A very pleasant, if somewhat impractical space if you have much “stuff”. Actually, each of the 10 townhomes is different and they are very site specific. No two are the same as to the layout. 3807 was the biggest and the tallest. I agree that the yellow is a questionable design decision. The exterior painting quality is also very poor, and there are some things not very well thought out. I think the prices they got were fair for the current market, given the location. I found something lacking in every townhouse I have seen and overall I found the Fremont Ave. townhomes to be of similar quality to other new builds, which is to say they try and make them look better than they are.

    The biggest issue with the upper end price point is going to be who is buying these. Older people are not going to like all the stairs and lack of storage and are younger people going to have the finances to pay the upper end prices? On the flip side I doubt there is a better place to invest than Fremont. There will always be strong demand in comparison to other areas. Even if you don’t get the appreciation I doubt you will lose on it absent an overall cratering of the economy. And being able to walk to work is practically priceless!

  78. 78
    Ryan says:

    @Cliff I will do that. The fact that I’ve seen that occur with two different projects from the same developer (or RE marketer) though does not lead me with warm fuzzies. One would only need to walk down the street the development is on to see multiple signs scattered about in tatters. Thanks for the link I will call them.

    You are right that I didn’t tour them, maybe I would have been impressed from the inside but color me deeply skeptical. It could come down to taste or just impossibly high standards, but I think that the current design trend that these are part of is inhumane.

    Take a look at a nearby complex built a decade ago:

    http://johnstonarchitects.com/projects/multifamily/fremont-lofts/

    If all the new construction was that well thought out I bet people would have different feelings about Ballard turning into a sea of townhomes and condos. It seems that the closing price between the cookie cutter crap and well architected projects is not enormous either which is the part that frustrates me more.

    All said and done it could be that I am just mad at the world for it’s lack of taste, but every project that goes up that even resembles 3807 makes me quite sad.

  79. 79
    igoy says:

    RE: Ryan @ – can attest to quality (or lack thereof) of build. Toured these with a contractor friend in the area not to buy but just see what’s going up.

    Definitely a lot of shortcuts taken in materials and craftsmanship.
    But to most buyers it’s tough to notice.
    Also he had the same comment about how poor the construction crew was to the neighbors.
    Same developer will be razing the next door house….

  80. 80
    John Deely says:

    Re: March Reporting Roundup: Anxious Frenzy Edition

    Tim, would you consider changing you opinion of me, “Nothing like a little rent price scaremongering from a home salesman to kick us off.” as a scaremonger and my motivations?

    Check out the story from King 5 yesterday and the testimony from a renter at 46 sec.

    Sawant, Licata push plan for Seattle rent control

    Hundreds packed Seattle City Hall Thursday night to hear plans to bring rent control to Seattle, and vent about their own difficulty affording a place to live.

    http://www.king5.com/story/news/local/seattle/2015/04/24/seattle-rent-control-plan/26287037/

    Thanks for the point add on my Prince Charming analogy!

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