December Stats Preview: New Record Lows For Inventory

December is done, so let’s take a look at the local housing market stats for the month. Short story: Record-low inventory and sales falling just slightly.

Here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snohomish County Stats Preview

Sales came in weaker than last year, and also fell from November to December. Listings dropped to new all-time lows in both counties. Foreclosures are still at their historic lows.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County fell four percent between November and December (a year ago they rose 19 percent over the same period), and were down one percent year-over-year.

Both counties saw wild swings in the year-over-year sales numbers, from huge double digit gains in November to down slightly in December.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish fell five percent month-over-month (vs. a 37 percent increase in the same period last year) and were down five percent from December 2015.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were down 28 percent from a year ago and Snohomish County foreclosure notices were down 34 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 10 percent from a year ago. They’re basically bouncing along the bottom at this point.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

Inventory fell 26 percent between November and December in King County, and was down 7 percent from a year ago.

In Snohomish County it was the same story: Listings down 27 percent month-over-month and down 23 percent year-over-year.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

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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.

74 comments:

  1. 1
    sleepless says:

    So… 2017 is continuation of 2016? Housing prices to rise at least 10% by the end of the year? I wonder, what about the apartment glut? How new apartments flooding the residential market will affect SFHs?

  2. 2
    GoHawks says:

    RE: sleepless @ 1 – hard to see prices not rising 6-10% when we have a one months supply of inventory.

    Maybe the apartments will impact condo demand some, but do many single family home shoppers want to live in an apartment tower?

  3. 3
    Lils says:

    RE: GoHawks @ 2 – I’m still skeptical on further growth. I discussed the possibility of a new foundation and MIL/ADU for my basement for a total of 200K with a couple of architects…and for that number… It’s just not worth it even if I can double my Greenlake house’s square footage. Maybe I’m risk aversive but I hate to be underwater during construction if something did.. pop.

  4. 4
    Deerhawke says:

    The smart money stopped buying apartment dirt and permitting it more than two years ago. There really will be an apartment glut and at some point that must have some effect on SF home pricing.

    But developers have built their proformas on rents at $3-3.50 psf. So a 1000 sf 1bedroom + den apartment may come with the first month free, but it is still $3000 -3500 — plus $100 per month for a parking space, plus $50 per month per pet, etc.

    People who can afford it are still going to look at a SF home as a much better deal and a much better lifestyle. There is going to be some effect but it is going to be indirect and delayed.

  5. 5
    Hugh Dominic says:

    New and (relatively) cheaper apartments draw more people into the city’s urban villages. The urban villages then thrive and create trendy shops and restaurants that people want to live near. The SFR in the city, which are often within walking distance, are then even more attractive to urban buyers. (Not the cul-de-sac crowd; they go live in Kent or Issaquah.)

    The supply of SFR in Seattle is stable or falling. The Mayor and Council are doing everything they can to destroy it. Their vision for Seattle is that we will warehouse as many people as possible in micro apartment units. As each block is torn down for apartments and row houses the remaining SFR supply gets more expensive. I don’t see prices falling unless there is an economic shock (AMZN stock crash? Transportation disruption? Earthquake? City leaders finally win their war on business and shut them all down?).

    Although I think they will have to slow their appreciation. 10% YoY is crazy and unsustainable. My wager for 2017 is a 3.5% price gain, which will be a short but nice respite after 2016’s crazy numbers.

    But we have not yet heard from Kary. I would like to hear his opinion as we ring in the new year.

  6. 6

    RE: Hugh Dominic @ 4 – My Magic 8 Ball is broken this century. Second one in a row!

  7. 7
    Deerhawke says:

    By Hugh Dominic @ 4:

    New and (relatively)
    Although I think they will have to slow their appreciation. 10% YoY is crazy and unsustainable. My wager for 2017 is a 3.5% price gain, which will be a short but nice respite after 2016’s crazy numbers.
    .

    Maybe we will have a split market where people come to view apartment living as the norm and single family housing close to the urban core as a real luxury item.

    Developers will continue to put up multi-story apartment buildings close to the new urban transportation nodes, creating mini neighborhoods in just a few years. Check out what has happened and is happening in the Roosevelt neighborhood. The area between Roosevelt Avenue and I-5 was all little bungalows until 3 or 4 years ago. Now it is all multi-story apartment buildings, all built in advance of the opening of the new station in 2021.

    Meanwhile in Wallingford and Greenlake there are signs all over the place fighting the mayor’s so-called Grand Bargain. People who live in a single family neighborhood are really going to battle to keep the neighborhood’s character. No duplexes or triplexes allowed. Will prices go up? Of course. Two new houses in Greenlake recently sold off the market for $1.9 million. Who could have seen that coming?

    So the apartment glut may represent some opportunity for well heeled buyers but if they want to buy a house in the city, the price is going to continue to rise.

    I think 3.5% is low, but it is hard to believe 10%+ is sustainable. I think we will see something in the range of a 6-8% price increase in 2017.

  8. 8

    If apartments start getting too overbuilt and the glut gets too bad we’ll probably see conversions to condo, maybe even before the building is completed.

  9. 9
    Deerhawke says:

    Kary, more developers would already be building condos if they could. There is a lot of money to be made there if it were possible. This is really the missing middle in the Seattle real estate picture.

    But right now the problem continues to be getting construction defect liability insurance. Without that insurance, no bank will lend. But insurers will not issue policies given our condo defects laws and our cadres of lawyers who try to make a single faulty window into a million-dollar lawsuit.

    Condo developers can easily make the decision to turn their projects into apartment projects, but it is virtually impossible to do it the other way around. They are built to similar standards, but there is a completely different level of construction documentation.

    I thought that the first wave of apartments built after the recession might be good candidates for condo conversion, but they were all quickly sold to pension funds and other long term, low risk investors (TIAA-CREF, etc) so that is not going to happen.

    I am not hopeful we will see much change on this front. Political will is lacking in Olympia to tackle this problem. What a surprise.

  10. 10
    ESS says:

    By Deerhawke @ 7:

    By Hugh Dominic @ 4:

    New and (relatively)
    Although I think they will have to slow their appreciation. 10% YoY is crazy and unsustainable. My wager for 2017 is a 3.5% price gain, which will be a short but nice respite after 2016’s crazy numbers.
    .

    Maybe we will have a split market where people come to view apartment living as the norm and single family housing close to the urban core as a real luxury item.

    Developers will continue to put up multi-story apartment buildings close to the new urban transportation nodes, creating mini neighborhoods in just a few years. Check out what has happened and is happening in the Roosevelt neighborhood. The area between Roosevelt Avenue and I-5 was all little bungalows until 3 or 4 years ago. Now it is all multi-story apartment buildings, all built in advance of the opening of the new station in 2021.

    Meanwhile in Wallingford and Greenlake there are signs all over the place fighting the mayor’s so-called Grand Bargain. People who live in a single family neighborhood are really going to battle to keep the neighborhood’s character. No duplexes or triplexes allowed. Will prices go up? Of course. Two new houses in Greenlake recently sold off the market for $1.9 million. Who could have seen that coming?

    So the apartment glut may represent some opportunity for well heeled buyers but if they want to buy a house in the city, the price is going to continue to rise.

    I think 3.5% is low, but it is hard to believe 10%+ is sustainable. I think we will see something in the range of a 6-8% price increase in 2017.

    These events are also taking place up north in Shoreline and South Snohomish County. Light rail will be a financial embarrassment unless density numbers are increased dramatically. Thus there have been significant changes to various local plans and its corresponding zoning to allow increased density. The nearby neighbors who bought thinking they were purchasing in a quiet suburban area never had a chance. Regardless of their protestations – here comes apartments and density.

  11. 11
    ESS says:

    By Hugh Dominic @ 5:

    New and (relatively) cheaper apartments draw more people into the city’s urban villages. The urban villages then thrive and create trendy shops and restaurants that people want to live near. The SFR in the city, which are often within walking distance, are then even more attractive to urban buyers. (Not the cul-de-sac crowd; they go live in Kent or Issaquah.)

    The supply of SFR in Seattle is stable or falling. The Mayor and Council are doing everything they can to destroy it. Their vision for Seattle is that we will warehouse as many people as possible in micro apartment units. As each block is torn down for apartments and row houses the remaining SFR supply gets more expensive. I don’t see prices falling unless there is an economic shock (AMZN stock crash? Transportation disruption? Earthquake? City leaders finally win their war on business and shut them all down?).

    Although I think they will have to slow their appreciation. 10% YoY is crazy and unsustainable. My wager for 2017 is a 3.5% price gain, which will be a short but nice respite after 2016’s crazy numbers.

    But we have not yet heard from Kary. I would like to hear his opinion as we ring in the new year.

    I did read that increased density produces more goods, services, shops, bars and other amenities that attract especially the younger rental crowd, which increases the cycle all over again for even more density.

    And I agree with your assessment that not only is SFR supply is falling, but the new SFR stock is only for the well to do. The 1000-1500 sq ft SFR is simply not being built in this area at this time.

    An example of an interesting planned urban village is Mill Creek. Adjacent to the retail area there is high density housing, and the retail area appears to be thriving. Only a few really big developments, as well as green space and a park in that area make for an attractive living environment. And for those who want a single family house – they have to look a bit further away.

    As to “affordable” micro apartments, they remind me of yogurt and other products that have shrunk dramatically over the years in order to keep the price down. Yes, micro apartments are “affordable”, but as per a sq. foot cost they are some of the most expensive places to rent in the city.

    As at price increase for the next year – I make no prediction. Much depends on factors that we know little or nothing about.

  12. 12
    Erik says:

    RE: Deerhawke @ 9
    I know someone that built an apartment complex in new castle. When the apartments weren’t being rented as planned, he switched them to condos and sold them. This was back in 2003. Has things changed?

  13. 13
    Umka says:

    High and always rising HOA fees kill the condo business.
    I would never buy a condo just because of HOA fees, which you have zero control over.

  14. 14
    justme says:

    By Deerhawke @ 9:

    They [apartments] are built to similar standards, but there is a completely different level of construction documentation.

    Can you elaborate? What kind of documentation? Any examples online? Who requires the documentation? I’m not aware of any construction documentation being provided to condo buyers, whether apartment conversions or not. Which is why I ask.

  15. 15

    RE: justme @ 14 – There were articles floating around about this last year. I’m a bit skeptical it isn’t just industry propaganda to get the legislature to do something to give them protection, but I’m not sure either way.

    Here’s one of the stories about it.

    http://www.kiro7.com/news/investigates/law-meant-to-protect-wash-homeowners-instead-pushing-up-condo-prices/265540875

    And another:

    http://www.bizjournals.com/seattle/news/2016/04/06/uw-study-aims-to-find-out-why-so-few-condos-are.html

  16. 16
    justme says:

    RE: Kary L. Krismer @ 15

    What you are saying does not exactly answer my question, though. My question is simply WHO demands documentation, and of what. My *guess* is that banks, builders, developers and maybe even condo owners (through their HOA) want to insure themselves against losses that stem from construction defects. And that *insurance companies* are the ones that that demand documentation before insuring anything.

    As for apartment-condo conversions specifically, the sticky problem may be the bridge loan that an apartment owner may need from a bank while a building is being emptied of renters and sold to individual condo owners.

    So now I have written my own answer. If I am mistaken I hope someone will clarify.

    As for documentation, one would think that since 2008 bubble crash, any construction project would be equipped with cameras and recordings of all aspects of the construction process. But maybe not.

  17. 17
    justme says:

    RE: Kary L. Krismer @ 15

    I did not really want to get into a lengthy discussion of the condo construction defect law again, but I still would like to make another related observation:

    I think that the prevalence of apartment rather than condo construction during 2008 to2016 was not so much because of construction-defect condo lawsuits, but rather that there were few qualified condo buyers after the crash, general price depression in condos, AND a new supply of renters from foreclosures and age-related demographics. In 2016, the apartment bubble is about to burst, and apartment builders/owners will gear up their effort to revise condo construction-defect laws to reduce the cost and effort and risk related to converting their apartments to condos. I think this is quite predictable.

  18. 18
    justme says:

    RE: justme @ 17

    I guess what I am trying to say is that builders/developers will point at the 2008-2016 high apartment unit completion count and the low condo unit building completion count and claim that this is because of the condo construction-defect laws. That may be effective propaganda, but the real reasons may be market conditions more than any law.

  19. 19

    RE: justme @ 18 – Keep in mind I started this discussion by saying what might happen if apartments get overbuilt/glutted. So I agree it depends on market conditions.

    FWIW, the condo market in Seattle never got terribly bad, or at least not as bad as I expected based on what happened in the 1980s. But I don’t think that it’s been so good since 2007-2008 that it would attract much in the way of new units (either converted or new construction). Not really a market I’ve looked at though for about 6 months.

  20. 20
    justme says:

    RE: Kary L. Krismer @ 19

    Noted. And thanks for the good historical perspective!

  21. 21
    openticks says:

    Here you go. Makes you wonder if Seattle is indeed growing at this pace or there is foreign buyers jacking up the prices just like Vancouver B.C. And if that, will such investigations stop the flow.

    http://www.seattletimes.com/business/real-estate/sec-charges-local-developer-defrauded-investors-in-eb-5-visa-fundraising/

  22. 22
    justme says:

    More news of Seattle rents dropping, this time from Zumper and HBB. Data probably has some big-complex and downtown bias.

    – Seattle, WA sunk two spots to the tenth most expensive rental market. Prices for one bedroom units were down by 2.2% to $1,790 while two bedroom units were down 3.6% to $2,400. Prices for one bedroom and two bedroom units are still up 8.5% and 5.3% compared to last year.

    rank +/- city 1br:price/MM/YY 2br:price/MM/YY
    ——————————————————————-
    1 0 San Francisco, CA $3,350 0.6% -4.0% $4,510 0.2% -2.6%
    2 0 New York, NY $2,980 -0.7% -9.1% $3,400 0.0% -10.5%
    3 0 Boston, MA $2,250 0.4% -5.9% $2,600 0.8% -2.3%
    4 0 San Jose, CA $2,170 -1.4% -1.4% $2,600 -1.5% -7.1%
    5 -1 Oakland, CA $2,090 -5.0% -5.4% $2,560 -4.8% -3.0%
    6 0 Washington, DC $2,030 -2.9% -5.6% $2,640 -1.5% -7.7%
    7 0 Los Angeles, CA $1,990 -2.0% 3.6% $2,880 -3.7% 3.6%
    8 1 Chicago, IL $1,860 2.2% -5.6% $2,510 2.0% -4.6%
    9 1 Miami, FL $1,800 0.0% -1.1% $2,500 0.0% -0.8%
    10 -2 Seattle, WA $1,790 -2.2% 8.5% $2,400 -3.6% 5.3%

    http://www.zumper.com/blog/rental-price-data

  23. 23
    justme says:

    RE: openticks @ 21

    Tibetan Chinese alleged fraudster Lobsang Dargey operating in Seattle, collecting funds from China investors. Who would have thunk?

    This may be a good time to remember that The Vancouver bubble was rampant with fraud. I refer you back to this comment:

    https://seattlebubble.com/blog/2016/09/09/nwmls-sales-listings-august/#comment-257567

  24. 24
    Stu says:

    By Umka @ 13:

    High and always rising HOA fees kill the condo business.
    I would never buy a condo just because of HOA fees, which you have zero control over.

    I respect this opinion but note that prices for supplies and labor also long term only go up. This will impact the SFH owner who has the unfortunate circumstance of needing to do home repairs, especially true if the previous owner didn’t take as good of care of the SFH as expected or if something simply unexpected occurred. With the HOA, you have a shared cash reserve that pre-exists your ownership. The HOA also has superior buying power than the SFH owner based on the sheer scale of purchases.

    The issue with HOA costs relates to shared amenities and services. Gyms, pools, saunas, etcetera, are expensive to maintain and are generally underutilized. A waste of money.

    My condo complex only has 21 units and we have no amenities outside of a single elevator. My fees haven’t gone up in 3 years and I’m getting approximately one month’s HOA fee returned because we had a sizable surplus this year.

  25. 25
    justme says:

    RE: Deerhawke @ 4

    >>The smart money stopped buying apartment dirt and permitting it more than two years ago

    When did you realize? Did you post about it here?

  26. 26

    By Stu @ 24:

    By Umka @ 13:

    High and always rising HOA fees kill the condo business.
    I would never buy a condo just because of HOA fees, which you have zero control over.

    I respect this opinion but note that prices for supplies and labor also long term only go up. This will impact the SFH owner who has the unfortunate circumstance of needing to do home repairs, especially true if the previous owner didn’t take as good of care of the SFH as expected or if something simply unexpected occurred. With the HOA, you have a shared cash reserve that pre-exists your ownership. The HOA also has superior buying power than the SFH owner based on the sheer scale of purchases.

    The issue with HOA costs relates to shared amenities and services. Gyms, pools, saunas, etcetera, are expensive to maintain and are generally underutilized. A waste of money.

    Not entirely. Remember, the issue was control. Some HOAs might let a place run down to the point where the repairs will cost a lot more money because additional repairs will be necessary (or not have the complex looking good at the point in time you want to sell). Some HOAs might do things more frequently than what some owners want (e.g. remodeling the lobby when the complex is less than 5 years old).

    So unless you’re on the board, and are effective on it, you do give up a lot of control compared to living in a SFR property. On the other hand though, if you live in a 10 story building the roof repair might cost you only 10% of what it would cost to replace the same square footage in a SFR building. And your share of the building exterior might be more like if you had a SFR building which somehow had only one exterior wall. So there can be savings, but the issue was control.

  27. 27
    Ross says:

    By Umka @ 13:

    High and always rising HOA fees kill the condo business.
    I would never buy a condo just because of HOA fees, which you have zero control over.

    A well managed condo saves it’s members money, through economies of scale on repair and well planned maintenance. Of course, the million dollar problem is how to pick a condo that is well run and will continue to be well run. Perhaps an impossible problem.

  28. 28
    sleepless says:

    By Kary L. Krismer @ 6:

    RE: Hugh Dominic @ 4 – My Magic 8 Ball is broken this century. Second one in a row!

    Can you remind us what you predicted for the 2016? I am just wondering, how close / far off were you?

  29. 29

    By sleepless @ 27:

    By Kary L. Krismer @ 6:

    RE: Hugh Dominic @ 4 – My Magic 8 Ball is broken this century. Second one in a row!

    Can you remind us what you predicted for the 2016? I am just wondering, how close / far off were you?

    Are you kidding? I thought it was fairly well known here that I don’t make predictions. Thus my comment on the length of time the magic 8 ball has been broken.

    My position is that there are simply too many variables, many of which are not even local or national and thus have nothing at all to do with our local market. I would also note that even if you accept the ability of economists or other professions to make predictions (I don’t) that very few real estate agents have that training or education.

  30. 30
    sleepless says:

    RE: Deerhawke @ 9 – Probably that is not such a bad thing to live in an apartment as long as rents remain affordable. Think of it this way. The roads are not getting any better, being stuck in traffic for 1+ hours commutes from suburbs, who needs that? I, for example, currently walk to work in DT Bellevue, I rent on Bellevue Way very close to DT, it is a 15 min walk. I am pretty happy with my current rent and i don’t have to worry about the maintenance and other stuff (my landlord just got hit with HOA increase of 20% as well as assessment of $4200 for the condominium we rent, he also had to do $2K+ renovation and fixes before we moved in). The current “glut of the apartments” allowed me to have my rent at the same level as the last tenant paid for 1.5 years. If the trend continues, I would renew my lease 1.5 year down the road at the same or close price. I walk to work. My “commute” is 15 min each way. I hardly drive, only once a week when we do groceries. With todays uncertainty in the job market who knows where my next gig will be. You cannot beat flexibility of moving at will as well “short commutes”. If i were to buy, i would only afford something at least 40+ min away stuck in traffic. We have only one child and a small family of three. We rent 3br 2 bth which is more than enuf for your family.

  31. 31
    Deerhawke says:

    I worked for a large and rapidly growing building firm a few years ago. I did a feasibility study on doing condos. We basically determined that :

    1) if you were going to be using bank funding you needed contractors general liability insurance (CGL).

    2) CGL for condo complexes — if available– was ten times the cost of the same insurance, $ for $, on rowhouse, townhouse construction. So basically a $250,000 condo cost as much to insure as $2.5 million deluxe townhouse. I kept saying, “Wait, that can’t be right. Are you sure you are not off by a decimal point…. ummm hold on a second…” And the answer came back, “No, no. That is right. That is correct.”

    And then I heard the terms. Policy paid up front before construction (not on a monthly basis) with a million exclusions and loopholes.

    Basically the insurance companies were saying that if you are stupid enough to buy something with 350 pages of exclusions, they would sell it to you, but they would want their dough up front so they could then wash their hands of you.

    One of my colleagues described it as an Emperor’s new clothes policy for very big, very real dollars.

    3) When you asked insurance brokers and condo lawyers why these policies had gotten so expensive, they pointed to the fact that 100% of the condo developers who built since the mid 90’s had been sued. Not some, not many, not most–100%. And that includes the very best builders with the very best envelope consultants and the very best and most up-to-date practices and documentation, including photo documentation.

    4) The lawsuit/insurance problem had cascaded throughout the supply chain. From architects and engineers all the way down to carpet installers, all of them said they either would absolutely not work on condos or would only work if given a blanket waiver by the builder, a bond in case they were sued and , oh yes, paid double or triple.

    So we concluded that the only real way to build a condo in Seattle was to do it without bank funding (or at least without American bank financing) and to have the whole thing part of a foreign operation that could not be sued in US courts.

    We will see how things turn out for Insignia, but that seems to be Nat Bosa’s business model.

    I think the lawyers will still come after him in a couple of years, because on something that big, there is bound to be something imperfect. On the other hand, if there is no real possibility of recovery (ie. no money to be made), the lawyers may just conclude that Nat Bosa built the perfect building after all.

  32. 32
    sleepless says:

    By Stu @ 24:

    The issue with HOA costs relates to shared amenities and services. Gyms, pools, saunas, etcetera, are expensive to maintain and are generally underutilized. A waste of money.

    Spot on. They are not just underutilized, they are also mediocre compared to the club gyms (Big names like LA Fitnes, Fitness 24, Golds Gym or your local mom&pop gym). You would probably pay less for the club membership and get more amenities. And, most importantly, you have a choice. You don’t need a gym you don’t go there or don’t sign up. Not much the case with HOA…

  33. 33
    David B. says:

    By Stu @ 24:

    The issue with HOA costs relates to shared amenities and services. Gyms, pools, saunas, etcetera, are expensive to maintain and are generally underutilized. A waste of money.

    Bingo. Most relevant of all: I, personally, have no need or desire for such things. When I was condo-shopping, things like gyms and pools were the kiss of death. Particularly outdoor pools; it’s only rarely hot enough here to really want one anyhow. When I found a condo with no such “amenities,” I bought it.

  34. 34
    David B. says:

    RE: ESS @ 10 – Building more density in in-demand areas, whatever its drawbacks (no policy of any sort is drawback-free) beats the pants off the San Francisco solution of building as little as possible new housing of any sort (then trying to cure the resulting symptom with rent control, then wondering why housing costs remain so exorbitant).

  35. 35
    Hugh Dominic says:

    By sleepless @ 27:

    By Kary L. Krismer @ 6:

    RE: Hugh Dominic @ 4 – My Magic 8 Ball is broken this century. Second one in a row!

    Can you remind us what you predicted for the 2016? I am just wondering, how close / far off were you?

    Sorry I was not active here last year. And as a caveat I have no scientific basis for my prediction. I’m just making it up on a hunch.

  36. 36
    ess says:

    By David B. @ 33:

    RE: ESS @ 10 – Building more density in in-demand areas, whatever its drawbacks (no policy of any sort is drawback-free) beats the pants off the San Francisco solution of building as little as possible new housing of any sort (then trying to cure the resulting symptom with rent control, then wondering why housing costs remain so exorbitant).

    Perhaps – but try telling that to an irate owner who currently has a multi story mix use residence abutting his once peaceful suburban property, while foolishly relying on the local comprehensive plan that can be changed every few years. Another problem for some homeowners is that they bought next to large peaceful undeveloped properties to enjoy a somewhat rural experience. Yesterday’s peaceful woods or meadows can be transformed into tomorrow’s intensive mixed used development, especially in this environment.

    My policy has always been to buy close, but not too close to areas that may be slated for future development, as well as in the middle of a developed area. In that way I can take advantage of new conveniences such as light rail, better bus service, or new retail outlets, but not be in the middle of all the excitement. Furthermore, my current modest residence is surrounded by bigger and much more expensive properties, so when bad things happen – they take the lead in fighting them off. And bad things usually don’t happen in areas of expensive properties in the first place, a valuable lesson I learned from past experiences.

    It will be interesting to see if various single family residential areas will actively fight the coming densification that may be slated for a number of Puget Sound areas. With the urban growth management act in place, increasing demand for all types of housing, and a light rail system that is in desperate need of residents living near it for it not to be a total financial embarrassment, there will be more and more places that will be considered a density in demand area

  37. 37
    Hugh Dominic says:

    By Deerhawke @ 7:

    Developers will continue to put up multi-story apartment buildings close to the new urban transportation nodes, creating mini neighborhoods in just a few years. Check out what has happened and is happening in the Roosevelt neighborhood. The area between Roosevelt Avenue and I-5 was all little bungalows until 3 or 4 years ago. Now it is all multi-story apartment buildings, all built in advance of the opening of the new station in 2021.

    Meanwhile in Wallingford and Greenlake there are signs all over the place fighting the mayor’s so-called Grand Bargain. People who live in a single family neighborhood are really going to battle to keep the neighborhood’s character.

    Ah, now this is an excellent topic. The Roosevelt upzone was a neighborhood plan and left a lot of SFR intact. The Mayor’s HALA plan upzones ALL SFR in urban villages, which is a very large area, and is being inflicted on the neighborhoods rather than originating from them. Naturally that is creating backlash in places like Wallingford and West Seattle. I am very interested in how that turns out. If HALA zoning moves ahead (due 2018) then the city’s SFR stock will take a hit when and if the next multifamily housing boom hits.

    I say “when and if” because HALA includes a very significant variable: the Mandatory Housing Affordability (MHA) component. MHA adds a ~$20 per sq ft tax on all development on essentially every multifamily property within the city limits. The city leaders, in their usual wisdom, believe that development will continue unabated and money will pour into their affordable housing fund. Back in real life, it seems more likely to me that development will come to a halt as developers figure out when and how to absorb that impact through higher rents and higher priced townhouses, and shift their attention outside the city in the meantime. Thus the existing housing becomes less affordable once the new units (built without the tax) are absorbed.

    I’m sort of surprised that HALA/MHA have not been a centerpiece of discussion on this blog, as I can think of no single policy that will have a greater impact on our local housing and development dynamics. Even ST3 and its massive taxes and transit lanes pales in comparison.

  38. 38
    Anonymous Coward says:

    By sleepless @ 29:

    We have only one child and a small family of three. We rent 3br 2 bth which is more than enuf for your family.

    How many 3+ bedroom units are being built on the Eastside? Here in Seattle, it’s close to nil, which is why I’m generally long-term bullish on SFRs in accessible neighborhoods. We seem to be building lots and lots of expensive two bedroom apartments for young professionals. The city seems to have put no thought into what’s going to happen when they decide it’s time to have a couple of kids. In your case, unless the East side is adding lots of 3+ br units, I’d anticipate your 3br/2ba rent to diverge from 2b rents within 5-10 years.

  39. 39

    RE: justme @ 22
    Keep Buying Those Giant Utility Burning New Houses on Postage Stamp Lots…Kent Has Plenty

    The Milenials can live with mom and dad until they inherit the house [or mom and dad die of stress…LOL]….especially on $12-15/hr lower tier Boeing and normal “slave labor rates” warehouse pay Amazon forks out today.

    http://www.thedailybeast.com/articles/2017/01/05/the-media-s-favorite-millennial-is-a-55-year-old-comedian.html

    Our Republic’s electoral majority Deplorables are sick of the “Fake News” on how rich Millenials are….

  40. 40

    By ess @ 35:

    By David B. @ 33:

    RE: ESS @ 10 – Building more density in in-demand areas, whatever its drawbacks (no policy of any sort is drawback-free) beats the pants off the San Francisco solution of building as little as possible new housing of any sort (then trying to cure the resulting symptom with rent control, then wondering why housing costs remain so exorbitant).

    Perhaps – but try telling that to an irate owner who currently has a multi story mix use residence abutting his once peaceful suburban property, while foolishly relying on the local comprehensive plan that can be changed every few years.

    That can be a real issue. Although not suburban, years ago my wife had a listing of a very nice large early 20th century house. Halfway down the next block there was multi-family housing. More than one potential buyer mentioned that as a big turn off.

    Also when I show houses to buyers I’ll always point out if they are near multi-family housing. Your chance of noise issues goes way up in those situations–particularly car alarms.

  41. 41
    Deerhawke says:

    I think the mayor has bitten off way more than he can chew when it comes to single family neighborhoods. People are going to really battle to maintain the character of their SF neighborhoods. The real answer to the density is to deal with the lack of condos and to have a more surgical approach to rezoning.

    The MHA so-called transfer tax, as Hugh Dominic noted, is shockingly high and will only really pencil in the more affluent neighborhoods. Why would someone build apartments or townhouses in Hilman City or South Delridge if they have to pay those kind of taxes? It doesnt pencil. Queen Anne and Capitol Hill? Problematic but not an impossibility, but consumers will have to pony up.

  42. 42
    Umka says:

    By softwarengineer @ 38:

    RE: justme @ 22
    Keep Buying Those Giant Utility Burning New Houses on Postage Stamp Lots…Kent Has Plenty

    The Milenials can live with mom and dad until they inherit the house [or mom and dad die of stress…LOL]….especially on $12-15/hr lower tier Boeing and normal “slave labor rates” warehouse pay Amazon forks out today.

    This is a sad true. We need modest houses. Not the giant castles that are being built lately.
    Small young American families do not need huge houses.
    The large Chinese families do….

  43. 43
  44. 44
    Eastsider says:

    I realize ST3 has passed. BUT our civic leaders may still want to investigate the feasibility and potential of ride sharing in solving our future transport needs. It may be a more effective solution than ST3 at a significantly lower cost. Are we “fighting the last war”?

    3,000 Ride-Sharing Cars Could Replace 13,000 New York City Taxis
    https://mishtalk.com/2017/01/05/3000-ride-sharing-cars-could-replace-13000-new-york-city-taxis/

    “Ride-sharing services have enormous potential for positive societal impact with respect to congestion, pollution and energy consumption,” says Rus (Professor of MIT’s Computer Science and Artificial Intelligence Laboratory). “It’s important that we as researchers do everything we can to explore ways to make these transportation systems as efficient and reliable as possible.”

  45. 45
    Anonymous Coward says:

    RE: Eastsider @ 43 – There’s very little opportunity for graft in MIT’s vision of ride sharing services…

  46. 46

    RE: Eastsider @ 43 – I saw that earlier and was skeptical. It appears they are using a system where the ride-sharing car picks up more than one person/group at a time–sort of like the Shuttle Express vans at the airport. That obviously would require fewer vehicles, and has nothing to do with whether the vehicle is a taxi or Uber.

    The bigger implication there might be for buses. Imagine if the bus system was more like Uber where you would tell an app where you wanted to go and when you needed to be there and it would then let you know when and where to get on a bus. The routes could be dynamic and flexible during non-peak hours. The main problem I would see with that is how to keep people from missing their bus.

  47. 47
    Eastsider says:

    RE: Kary L. Krismer @ 46

    I believe you can already elect to ‘share’ your ride in Uber for a lower fare in many cities. The carpooling system provides schedule flexibility and point-to-point transport that is unavailable in mass transit today. I expect the cost of such rides to become competitive against buses when autonomous cars are used. ST3 takes 2-3 decades to implement. In that timeframe, it will likely become a dinosaur of the past era.

  48. 48

    RE: Eastsider @ 47

    I see that option, but have never chosen it. I always wonder if it means you have to wait for someone else near where you are to want to go near where you want to go.

  49. 49
    ronp says:

    RE: Lils @ 3 – If you can double a GrnLk houses square footage for only $200K, do it anytime. Better to do it in a recession though. But either way if you live inthe house five to seven years from now, you will be fine.

  50. 50
    jon says:

    I’ve always thought of the self-driving cars as synergistic with rail/bus rather than competing with it. As Ardell points out, to share a ride end to end you have to wait for someone near your current location to want to go to a location close to where you want to go. In that case, you share the cost of that vehicle and tolls with one other person. The alternative is to take a more immediate trip to your local station, where there would be a short wait to get on the train or bus, possibly transfer, and then walk or take another ride to your final destination. The cost of bulk of the trip is shared with more people, and there is less total wait time. You could have a system where you transfer between small vehicles at random locations, but that seems less appealing than waiting in an established station for a scheduled train/bus.

  51. 51

    By Eastsider @ 47:

    RE: Kary L. Krismer @ 46

    I believe you can already elect to ‘share’ your ride in Uber for a lower fare in many cities.

    Imagine the possibilities after New Years Eve!

  52. 52
    Brian says:

    The only thing “softwareengineer” posts is angry, grammar-error-filled rants against millennials. Get over it, man. Your posts are not worth reading anymore.

  53. 53
    kenmorem says:

    By Brian @ 52:

    Your posts are not worth reading anymore.

    were they ever?

  54. 54
    I'm just here so I won't get Fined says:

    RE: Brian @ 52

    Amen.

  55. 55
    uwp says:

    30 year mortgage rates dipping back under 4%.

    Nobody tell justme.

  56. 56
    Just Tom says:

    Can we stop with the whole “uber and/or autonomous cars invalidate public transit” thing?

    First they don’t. You still have the problems of scale when it comes to dense, urban environments. It doesn’t matter if it is your car or a taxi or an uber or whatever. The problem is that when a million or so people want to converge every day on the same small area in a car they each need a lot of square footage at least 100′ square (16′ x 6′) but in practice more since folks get real upset if two vehicles actually make contact. We’ve got what, at least 300,000 people coming into downtown Seattle every day x 100 sq ft. Well damn, that’s a square mile of real estate just for cars. Should be enough room for ’em all if we just get rid of all this pesky sidewalk, office, and retail space.

    Second, the costs of these ride-sharing companies are massively subsidized. Uber loses money on every single fare; it’s predatory pricing to stifle competition funded by investment dollars chasing growth. These subsidies can’t last forever and the service priced at a level that would actually be profitable/sustainable would suddenly look way less attractive to many users. Yes, driver’s wages are the most expensive piece. No, autonomous vehicles will not make up the difference. You’ll just replace those wages with fleet acquisition and maintenance costs (currently absorbed by the employee drivers themselves.) Who is going to enforce the cleanup fee when Drunko vomits all over the back seat? Do you think the next fare will appreciate being the one to discover such a mess? Also I’m sure prices wouldn’t skyrocket and service levels plummet once a city becomes reliant and contractually-bound to a rideshare company. (And this analysis ignores the truly massive subsidy – free access to the shared resource that is our highway system.)

    What’s the point of building any new roads anyway? I was watching the Jetsons the other decade and it got me to thinking that rather than invest in any new infrastructure for cars or trains we should just wait until we all have flying cars. Flying cars don’t need asphalt or bridges.

  57. 57
    Eastsider says:

    RE: jon @ 50

    Instead of speculation, here is info about UberPool in NYC –

    https://www.uber.com/nyc-riders/products/uberpool/
    – uberPOOL is the smartest way to commute in Manhattan. Ride to or from work for as little as $3.
    – uberPOOL is available 24/7
    – Even if you don’t get matched with another rider during your uberPOOL ride, you will still pay the upfront fare you see in the app.
    – Please be prepared to meet your driver as soon as the car arrives. As a courtesy to your co-rider, your driver will only wait 1 minute.

    Here is a recent news story on rideshare carpooling –

    Hindsight 2016: Carpooling picked up with UberPool, Lyft Line and Via
    http://www.chicagotribune.com/bluesky/originals/ct-hindsight-transit-rideshare-bsi-20161230-story.html

    “Shared rides gave passengers a travel option between the price of public transit and traditional cab or Uber trips — letting customers weigh how much they are willing to pay to skip the bus. A DePaul University study released this summer found that UberPool rides were quicker, but CTA rides were generally far cheaper.  

    A ride from Union Station to John Hancock Center on Thursday afternoon would cost an estimated $4.54 for a shared ride or $10.31 for a traditional UberX ride. A Lyft Line ride would cost an estimated $5.22, or a traditional Lyft ride for $10.24. All Chicago Via rides cost $3.95 when customers pre-purchase credits.”

    Of course the carpooling business model will evolve and improve over time. Once autonomous driving takes hold, I believe it will make buses obsolete.

  58. 58
    Brian says:

    New Seattle Times article on housing:
    “Seattle-area home-price gains slow, but number of houses for sale at record low”
    http://www.seattletimes.com/business/real-estate/seattle-area-home-price-gains-slow-a-tad-but-new-low-in-houses-for-sale-is-bad-sign-for-2017/

  59. 59
    jon says:

    RE: Eastsider @ 57 – I’m thinking mostly of the routine commutes to and from work rather than the occasional intra-downtown short hops. The issue with commuting is the congestion choke points every city has. There will be a lot of different options available to a scheduling algorithm, including to pair you with another commuter or send you to a train station. If the train has a dedicated lane, then that is probably going to be faster, and will certainly be cheaper. So that is where the volume will go. Self-driving cars will increase the use of trains because they solve the problem of getting to your final destination when you get off the train. That last segment could benefit from the ride-sharing as described in the article, since you are travelling between a train station and an office building.

    Another factor is that electric vehicles are going to force a shift from gas taxes to per-mile tolling, which will then include congestion pricing. This is going to making driving to/from a city in a care more expensive, and so that will also cause people to prefer trains.

  60. 60
    sleepless says:

    By uwp @ 55:

    30 year mortgage rates dipping back under 4%.

    Nobody tell justme.

    I see that quickly reverse if the FED wants to crash the Trump economy. Mortgage rates will rise if the FED keeps raising rates. And the FED will keep raising them if it doesn’t jump on the Trumponomic wagon. If it does though, say, Trump can promise Felon Yellen another 4 years of “Chair”, she can very well can allow rates to stay lower for longer. Then the sheet show should continue for a bit longer.

  61. 61
    sleepless says:

    RE: jon @ 59 – What about “flying”, will the “flying” cars “obsolete” driverless cars?

    https://www.youtube.com/watch?v=5G4Qduvn5og

  62. 62
  63. 63
    Hugh Dominic says:

    RE: Eastsider @ 57 – Testify. The only ways self driving cars unload congestion is if people use them in ways they are not expecting to right now:

    – they offer dynamic route ride sharing (like Kary said)
    – they fly
    – they drop you off at the train station

    The way people *think* they will work is like an unmanned, and therefore cheaper, taxi. It hovers nearby you until you summon it, picks you up and drops you off at the door, the goes back to invisibly lurking nearby. But you have to think of the traffic created by swarms of empty cars constantly repositioning themselves and looking for a free waiting spot or en route to another passenger as if guided by an occult hand. That is a new kind of traffic that we don’t have today, other than the scale of the current taxi fleet.

    As I mentioned elsewhere, mine will be bigger than 16×6. It will have a couch, fridge, and desk for me to use while it crawls through the traffic.

  64. 64
    ESS says:

    By Brian @ 58:

    New Seattle Times article on housing:
    “Seattle-area home-price gains slow, but number of houses for sale at record low”
    http://www.seattletimes.com/business/real-estate/seattle-area-home-price-gains-slow-a-tad-but-new-low-in-houses-for-sale-is-bad-sign-for-2017/

    Reviewing the article and the accompanying chart of sales – the East Side had a dramatic price increase – 19% in one year. Almost Vancouver BC price increases before the implementation of the tax on foreign buyers. The article documented one sale where the prices escalated dramatically with many offers within a short time.

    It is interesting to note that sales in that area are so strong. Does anyone know if this is a result of a dramatic increase of foreign buyers making the market more competitive. or just a classic example of supply and demand. Or is it just the construction of new expensive houses in that area that skew the numbers higher. One wonders if figures that categorize the price per square foot and age of the property that was sold would be a more useful tool in figuring out what is going on in that area.

    It is interesting to note that although a vast number of apartments are going to be entering the market in 2017, the enthusiasm for single family houses and townhouse remains particularly strong on the East Side. If there is truly a correlation between the following factors: increased apartments units entering a given market – which will affect rents in a negative way- which affects the price of housing in a negative way, those buyers have either not been informed of those factors, or are choosing to ignore those relationships.

    One wonders if the types of apartment units that will be entering the market, which I assume are primarily higher end one and two bedroom apartments have a weaker correlation to the pricing of single family houses as a result of availability as one would have expected? Are the two markets significantly unrelated? Or is it just “irrational exuberance” before a correction of all housing prices.

    I would also be interested in knowing if the number of households increased or decreased in the area YOY compared with the number of available single family houses for sale. An increase in the number of households YOY should also put pressure on prices for a declining number of available houses for sale. As far as I know – the area’s population is still increasing, so theoretically there should be more households chasing less single family houses for sale.

    I have noticed that the number of houses for sale in my area of interest is declining, and the number of modestly priced houses for sale is declining. Also the operational definition of “modest” appears to be changing upward.

    Conclusion? This spring will be a very interesting time for sales of single family house in this area.

  65. 65
    GoHawks says:

    RE: ESS @ 63 – ESS the number of modestly priced homes are declining because of tear downs and substantial price increases. The $500,000 home in 2013 is now $850,000 in some areas.

    Rough search, but it looks like in the entire City of Bellevue there are around 15-20 active listings below $1,000,000 (single family). Bellevue is a huge geographic area and it’s not all fancy. 10,000’s of thousands of homes to only yield 15-20 “affordable” options.

  66. 66
    Brian says:

    Relatively speaking, there have been a good bit more new listings this week in my search. Encouraging, but expected following the holiday slowdown.

  67. 67
    uwp says:

    By sleepless @ 60:

    By uwp @ 55:

    30 year mortgage rates dipping back under 4%.

    Nobody tell justme.

    I see that quickly reverse if the FED wants to crash the Trump economy. Mortgage rates will rise if the FED keeps raising rates. And the FED will keep raising them if it doesn’t jump on the Trumponomic wagon. If it does though, say, Trump can promise Felon Yellen another 4 years of “Chair”, she can very well can allow rates to stay lower for longer. Then the sheet show should continue for a bit longer.

    Hasn’t the GOP been complaining about low-rate policies for the last 8 years?

    I suppose they flipped on just about everything once Trump got elected anyway.

  68. 68
    Eastsider says:

    By Hugh Dominic @ 62:

    RE: Eastsider @ 57 – Testify. The only ways self driving cars unload congestion is if people use them in ways they are not expecting to right now:

    – they offer dynamic route ride sharing (like Kary said)
    – they fly
    – they drop you off at the train station

    The way people *think* they will work is like an unmanned, and therefore cheaper, taxi. It hovers nearby you until you summon it, picks you up and drops you off at the door, the goes back to invisibly lurking nearby. But you have to think of the traffic created by swarms of empty cars constantly repositioning themselves and looking for a free waiting spot or en route to another passenger as if guided by an occult hand. That is a new kind of traffic that we don’t have today, other than the scale of the current taxi fleet.

    As I mentioned elsewhere, mine will be bigger than 16×6. It will have a couch, fridge, and desk for me to use while it crawls through the traffic.

    You underestimate the power of technology and big data. Google, Apple, Facebook, Microsoft, Amazon already keep track of your schedule and movement, with or without your knowledge. There is no need for a swamp of cars lurking nearby. The system will predict demand more accurately than weather forecasting today. Just as Uber was unheard of a decade ago, the future transport model will be far more efficient than today’s public transport. That future is probably a decade or two away.

  69. 69
    Hugh Dominic says:

    RE: Eastsider @ 68 – I work in that field and find that big data and machine learning are more often overestimated than under. I expect it to reduce the wait time for a taxi, but not ease congestion. The algorithms will predict that everyone wants to go to work between 7:00 and 8:30, the fleet will position itself accordingly, and the traffic will ensue as normal.

  70. 70
    Eastsider says:

    RE: Hugh Dominic @ 69 – Initially you are probably right. But over time, the system will improve. This happens in so many areas – from games such as chess/go, to Jeopardy! and self driving cars. They are not intractable problems, at least in practice.

  71. 71
    Hugh Dominic says:

    RE: Eastsider @ 70 – I guess my point is that if everyone wants to be in a car by themselves at the same time, there’s nothing Big Data can do to ease congestion versus today. If every car in the city were cloud-controlled and synced to traffic signals that would help, but that is so long off it’s not worth discussing.

    Big Data can reduce the added congestion that we will get from self driving cars that remain on the road after they have dropped off their passengers (who would otherwise have parked).

  72. 72
    Ryan says:

    RE: sleepless @ 32 – Eh, for the gym aspect, having it just an elevator button press away makes it far more usable for me, particularly when it’s 18 freakin’ degrees outside. Heh. No, not as nice as a full-service gym, but getting there is half the battle. :)

    The pool and hot tub thing I personally don’t care much about, but if your building is practically a hotel (mine has gotten worse and worse – our HOA green lit it without restrictions), having those things helps sell a place to the short-term renter set.

  73. 73
    Ryan says:

    RE: Hugh Dominic @ 71 – You also need cyclists, pedestrians, wild life, and mother nature to operate under the Hive Mind AI as well. :)

  74. 74
    Green-Horn says:

    RE: Eastsider @ 47

    I agree 200% with Eastsider and have been annoying friends and acquaintances being a tiresome evangelist for this kind of thing. I was a fan of rail mass transit, but new technologies promise to offer something much better well before the next sound transit project is finished. Seattle had an opportunity to pilot a smart road network that serves everybody in the region and promotes another leg for export business from the regional economy. Instead the unimaginative and short-sighted Seattle voters have chosen obsolete 20th century technology that will be inadequate to make much difference for the areas traffic woes instead of leaping ahead and making the region a pioneer in public flexible autonomous mobility.

    Like the Erie Canal, which was opened just as rail transport started to conquer the land, Sound Transit 3 will be obsolete the day it launches and will have a very short life before it’s replaced by something that serves our citizens and economy better.

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