NWMLS: Home prices are falling and inventory is soaring, but pending sales are bouncing back

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January market stats were published by the NWMLS yesterday. The King County median price of single-family homes fell year-over-year for the first time since March of 2012. Inventory is way up from a year ago, but pending sales started increasing year-over-year, so buyers may be coming back.

Before we get into our detailed monthly stats, here’s a quick look at their press release.

Homebuyers resuming search amid improving inventory, attractive terms
Home buyers around Washington state are making their way back to the market, hoping to take advantage of improving inventory, attractive interest rates, and more approachable sellers, according to officials with Northwest Multiple Listing Service.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said buyers “came out of the woodwork” after the holidays, eager to take advantage of better housing conditions. “Areas close to the job centers are seeing improved affordability from spring 2018,” he said, attributing it to lower interest rates, strong job growth, and adjusted pricing.

I’m not a professional used-house salesman like Lennox, but to me it seems like not a great idea to compare your clients to insects crawling out of the walls in a dilapidated home. But hey, you do you Lennox.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

January 2019 Number MOM YOY Buyers Sellers
Active Listings 2,820 -0.6% +126.9%
Closed Sales 1,224 -28.2% -2.8%
SAAS (?) 1.17 +24.9% +16.1%
Pending Sales 1,904 +38.8% +9.0%
Months of Supply 2.30 +38.3% +133.4%
Median Price* $610,000 -4.5% -2.9%

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Inventory fell half a percent from December to January, but was up 127 percent from last year. The last time there were over 2,750 homes on the market at the end of January was in 2014.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up 13 percent from a year ago, and more than doubled from December to January.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell 28 percent between December and January. Last year over the same period closed sales dropped 40 percent. Year-over-year closed sales were down just three percent.

King County SFH Pending Sales

Pending sales shot up 39 percent from December to January, and were up nine percent year-over-year.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Still a huge year-over-year increase in listings, but the growth did fall off a bit from December to January.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price changes dropped below zero for the first time in nearly seven years. I doubt we’ll see this continue to fall, but… maybe?

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

January 2019: $610,000
January 2018: $628,388
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle-area home prices drop to lowest point in two years — down $116,000 since last spring

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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.

1,093 comments:

  1. 501
    NW says:

    Aug 13, 2018: LLC from CA buys shack from deceased person: $392,000
    https://www.redfin.com/WA/Seattle/2402-S-Warsaw-St-98108/home/482379/nwmls-1336596

    LLC from CA remodels shack.
    https://www.redfin.com/WA/Seattle/2402-S-Warsaw-St-98108/home/482379

    Jan 25, 2019: time to unload, remodeled shack for sale @ $629,000. No takers.
    Feb 28, 2019: price changed to $599,000.

    Buyers, please do not enable a speculator.

  2. 502
    Justme says:

    RE: NW @ 489

    What a gem. That listing is amazing because it is the first time I have seen an OLD (1957) flat-top McMossBox being removated into a NEW (2019) flat-top McMossBox. I mean, the only thing missing is that the siding is not those ugly big plates of material that the new ones have. Wow, just wow. The pictures of the old house (in 2018) confirms the suspicion I had that flat-top McBossBoxes do not withstand the test of time very well. And I don’t understand at all why people are willing to pay high prices for these fugly boxes.

    NW, it was reported earlier that this architecture is called “NW modern”. My condolences :-).

  3. 503
    NW says:

    Sep 20, 2018: LLC buys creepy shack for $415,000
    https://www.redfin.com/WA/Seattle/6044-32nd-Ave-S-98118/home/478483/nwmls-1343357

    LLC gives a makeover to said/sad property.
    https://www.redfin.com/WA/Seattle/6044-32nd-Ave-S-98118/home/478483

    Dec 15, 2018: less than 3 months, LLC decides to unload @ $699,000. No takers.
    Feb 7, 2019: price changed to $689,000. No takers.
    Feb 21, 2019: price changed to $684,888. No takers.
    Feb 28, 2019: price changed to $679,888.

    Buyers, please do not enable a speculator. Make informed decisions.

  4. 504
    NW says:

    May 12, 2017: LLC buys shack for $549,000.
    https://www.redfin.com/WA/Seattle/5839-4th-Ave-NW-98107/home/494012/nwmls-1096580

    MArch 23, 2018: LLC tears down shack. Files construction permit for $395,746 with KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=2767800355, scroll to the bottom). LLC builds builder’s standard architectural masterpiece.
    https://www.redfin.com/WA/Seattle/5839-4th-Ave-NW-98107/home/494012

    Jan 9, 2019: time to unload @ $1,649,000.No takers.
    Mar 1, 2019: price changed to $1,599,000

    Buyers, please do not enable a speculator. Make informed decisions.

  5. 505
    David says:

    RE: NW @ 504 – That is a nice house.

  6. 506

    The Old Boeing Pensions Have Not Been Impacted By the New Lower [or non-existent] 2019 Retirement Plans Yet

    https://leehamnews.com/2018/03/19/pontifications-boeing-faces-thousands-of-retirements-in-next-five-years/

    But the retirement outflow is gushing fast lately and totally unpredicatable IMO. Watch this closely. The pensions need younger workers are they’re all eventually doomed.

    This could have a massive affect on current retired home owners still wanting to stay in Seattle.

  7. 507
    Eastsider says:

    RE: NW @ 504 – This is a new construction. I am surprised there is no HVAC in a $1.6m new home. Radiant Heat?

  8. 508
    redmondjp says:

    By Eastsider @ 507:

    RE: NW @ 504 – This is a new construction. I am surprised there is no HVAC in a $1.6m new home. Seriously?

    Yes, seriously! It’s also likely constructed using 100% OSB sheathing and subfloors – OSB should never be used in a home in this price range, when the additional cost to use actual plywood is only a tiny percentage of the final cost. Just because a home is bigger doesn’t mean that it is built with any higher quality (either in materials or construction methods) than your basic starter home out in Orting.

    Oh, I bet that house has one or more $25 “screamer” bathroom fans (bottom-of-the-barrel fans that make more noise than move any air) in it as well, instead of the quiet, powerful $150 fans that they should have used instead.

    But buyers don’t seem to care about these minor details – they are ooohed and aaaahed by the pretty staging and newness of it all. And besides, they’ll be able to live in it for 5-10 years and then sell it for a healthy profit (without doing any maintenance), right?

  9. 509

    BECU Increased Money Market Savings Rate by About 50%

    If you’re saving money you’ll be shocked how much the YTD interest went up in Feb 2019….its still too low to keep in a locked tax free box….but better than a kick in the pants to a retiree.

    The Home Buyers’ Nightmare is the Retirement Saver’s Restful Sleep…

  10. 510

    RE: redmondjp @ 508
    LOL redmondjp

    Yeah….the modular homes are made “indoors” on factory tooling with lower assembly tolerances than stick on site outdoor [in the rain] frame built. Green newer wood frames warps BTW, the rain makes it worse.

    But stick homes use 2×6 frames…so do modulars….the big difference is the high ceilings in Stick Homes guzzling natural gas or electricity in the winter…

    The codes are a joke…

  11. 511
    Notme says:

    The newness of it
    makes me want to pay millions
    except no, I won’t

    -a don’t-feed-the-speculators bubble haiku

  12. 512
    Notme says:

    You down with OSB?
    anything to pad profits
    well you know me

    -a speculator/builder bubble haiku

  13. 513
    NW says:

    RE: David @ 505

    Agree, that is a nice house.

    My beef is with an investor that buys a property for $549,000, invests $395,746 (+ other costs, but that is their business), and asks $1,649,000. That is $704,236, enough to pay whatever they need to pay and be left with a hefty profit. And no, I have no understanding for soft costs incurred by this LLC. As a construction company, you can make very good money sticking with construction stuff – not becoming a speculator.

    RE: Eastsider @ 507
    It says they have radiant heat & ductless HP-mini split. Don’t get me started on that eyesore (but easy peasy to install) ductless HP-mini split, tho’. Or the rest of the builder’s basics stuff I noticed in this house and other similar “high end” ones.

  14. 514
    NW says:

    Mar 14, 2018: LLC buys shack: $508,000
    https://www.redfin.com/WA/Seattle/3534-SW-Elmgrove-St-98126/home/469854/nwmls-1253831

    May 16, 2018: LLC applies for a $45,000 permit w/ KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=2695600285, scroll to the bottom).

    Nov 15, 2018: time to unload: $729,950. No takers.
    https://www.redfin.com/WA/Seattle/3534-SW-Elmgrove-St-98126/home/469854
    Jan 2, 2019: price changed: $719,950. No takers.
    Jan 17, 2019: price changed: $709,950. No takers.
    Feb 1, 2019: price changed: $699,950.

    Days on market: 106.

    Buyers, please do not enable a speculator. Make informed decisions.

  15. 515
    NW says:

    Aug 31, 2018: intrepid person buys shack: $385,000
    https://www.redfin.com/WA/Seattle/5303-32nd-Ave-S-98118/home/479463/nwmls-1337820

    Shack gets a facelift, building condition improves to “6 (Low Average)”, as per KC.
    https://www.redfin.com/WA/Seattle/5303-32nd-Ave-S-98118/home/479463

    Nov 29, 2018: unloading @ $599,000. No takers.
    Jan 1, 2019: price changed: $589,000. No takers.
    Jan 14, 2019: price changed: $579,000.
    Jan 28, 2019: pending inspection. Something goes wrong, back on the market. Oops.
    Feb 14, 2019: pending inspection again. Something goes wrong, back on the market. Oops.
    Mar 1, 2019: price is increased: $599,000. Because #sunny #spring #butterflies.

    Days on market: 92.

    Buyers, please do not enable a speculator. Make informed decisions.

  16. 516
    NW says:

    Regular folks selling their house:

    Nov 17, 2016: bought for $730,000.
    https://www.redfin.com/WA/Seattle/2301-Delmar-Dr-E-98102/home/137631/nwmls-1035367

    Mar 1, 2019: for sale: $815,000.
    https://www.redfin.com/WA/Seattle/2301-Delmar-Dr-E-98102/home/137631

    Quite a difference.

  17. 517
    N says:

    @ NW 515 – There was a time houses listed this much higher, especially within 6 months of the previous sale wouldn’t appraise. After the housing bust the feds were watching the appraisers really closely and no funny business was allowed. It used to be if a house sold within 6 months and was selling again the appraiser had to use that prior sale as a comp. Clearly, that isn’t the case anymore as it is quite common to see listings $100-300k higher within 6 months.

    Heck, in 2014 I had an appraiser refuse to appraise at contract price because he claimed upgrades don’t impact value and most the comps were apartment grade condos.

  18. 518
    NW says:

    Jul 31, 2018: LLC buys shack: $420,000
    https://www.redfin.com/WA/Seattle/14023-37th-Ave-NE-98125/home/111759/nwmls-1311850

    LLC applies for a $35,955 permit with KC
    (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=9324800285, scroll to the bottom). Improves shack to Grade 5 (fair), per KC.

    Mar 1, 2019: time to unload @ $699,950.
    https://www.redfin.com/WA/Seattle/14023-37th-Ave-NE-98125/home/111759

    Buyers, please do not enable a speculator. Make informed decisions.

  19. 519
    NW says:

    Jul 30, 2018: LLC buys shack for $540,000.
    https://www.redfin.com/WA/Seattle/1617-NW-87th-St-98117/home/100697

    LLC gives shack a facelift.
    https://www.zillow.com/homes/1617-NW-87TH-ST-98117_rb/

    10/31/2018: time to unload: $825,000. No takers.
    11/19/2018: price changed: $810,000. No takers.
    12/4/2018: price changed: $799,000. No takers.
    1/2/2019: price changed: $789,000. No takers.
    1/25/2019: price changed: $779,000. No takers.
    2/15/2019: price changed: $774,000.
    2/22/2019: pending sale.
    2/28/2019: sale fell through, oops. Back on market @ $774,000.

    Days on market: 121

    Buyers, please do not enable a speculator. Make informed decisions.

  20. 520
    NW says:

    Jul 18, 2018: intrepid couple buys shack from dead person: $250,000
    https://www.redfin.com/WA/Seattle/10231-1st-Ave-S-98168/home/181046/nwmls-1270832

    Intrepid couple give said shack a facelift. Bring it to Grade 6 (low average).
    https://www.redfin.com/WA/Seattle/10231-1st-Ave-S-98168/home/181046

    Sep 27, 2018, time to unload: $499,950. No takers.
    Nov 16, 2018: price changed: $469,000
    Dec 5, 2018: pending inspection. Oops, back on the market.
    blah, blah relisted, taken off market, back on market
    Feb 5, 2019: pending inspection.
    Feb 9, 2018: pending. Oops, back on the market.
    Feb 28, 2019: still @ $469,000.

    Days on market: 155.

    Buyers, please do not enable a speculator. Make informed decisions.

  21. 521
    NW says:

    Jun 21, 2018: intrepid person wins bidding war for ugly house in good location: $830,000
    https://www.redfin.com/WA/Seattle/8800-26th-Ave-NW-98117/home/165104/nwmls-1296133

    July 22, 2018 Intrepid person files $85,000 in improvements with KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=3526039226, scroll to the bottom)

    Feb 26, 2019: time to unload @ $1,249,000.
    https://www.redfin.com/WA/Seattle/8800-26th-Ave-NW-98117/home/165104

    Buyers, please do not enable a speculator. Make informed decisions.

  22. 522
    steven says:

    RE: NW @ 520

    does the permit reflect all the money put in for renovation and remodeling (not financial charges like insurance and interest but labor and materials?)

  23. 523
    NW says:

    RE: steven @ 522

    That is additional. But i do not have a detailed answer, because I have no patience or understanding for speculators.

    In the end, it is the final buyer that pays for it. And you, and me, because the prices around us are artificially inflated.

  24. 524
    NW says:

    Jul 6, 2018: intrepid person buys shack for $350,000.
    https://www.redfin.com/WA/Seattle/6701-40th-Ave-S-98118/home/173552/nwmls-1300562

    Intrepid person gives a facelift to said shack.
    https://www.redfin.com/WA/Seattle/6701-40th-Ave-S-98118/home/173552

    Feb 28, 2019: time to unload @ $575,000

  25. 525
    NW says:

    Feb 5, 2018: LLC buys ugly shack: $450,000 in Shoreline (“before” pics here: https://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=5422300050)

    July 8, 2018: LLC files $85,000 worth of remodelling stuff w/ KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=5422300050, scroll to the bottom).

    Feb 28, 2019: time to unload @ $925,000.
    https://www.redfin.com/WA/Shoreline/1522-N-146th-St-98133/home/81640

    Buyers, please do not enable a speculator. Make informed decisions.

  26. 526
    NW says:

    Aug 10, 2016: LLC buys shack in nice area: $555,000
    https://www.redfin.com/WA/Seattle/3703-W-Tilden-St-98199/home/128159/nwmls-969850

    LLC tears shack down, files for $472,222 in permits w/ KC (bottom of page here: https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=8941100080)

    “Magnolia masterpiece”, as per RE person, is born.
    https://www.redfin.com/WA/Seattle/3703-W-Tilden-St-98199/home/128159

    Feb 28, 2019: time to unload, asking $1,885,000.

    Buyers, please do not enable speculators. Make informed decisions.

  27. 527
    Justsomedude12 says:

    NW – Looks like lots of lipstick on lots of pigs out there.

  28. 528
    NW says:

    Jan 12, 2018: sold for $1,487,500.
    https://www.redfin.com/WA/Seattle/6808-Seward-Park-Ave-S-98118/home/490062/nwmls-1218530

    Feb 6, 2019: for sale for $1,650,000.
    https://www.redfin.com/WA/Seattle/6808-Seward-Park-Ave-S-98118/home/490062

    Let’s make that short stay worthwhile.

  29. 529
    NW says:

    May 21, 2018: investor buys foreclosed shack: $455,000 (“before” pics here: https://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=0795000180)

    Investor makes more investment in cosmetic repairs.

    Jan 31, 2019: time to unload @ $749,950
    https://www.redfin.com/WA/Seattle/11025-Occidental-Ave-S-98168/home/188581

    Time on market: 30 days.

    Buyers, please do not enable speculators. Make informed decisions.

  30. 530
    NW says:

    Sep 19, 2018: LLC buys shack (I sound like a broken record): $515,000
    https://www.redfin.com/WA/Seattle/6009-47th-Ave-SW-98136/home/154441/nwmls-1350928

    LLC takes 4 months for the facelift of said shack, white picket fence and all:
    https://www.redfin.com/WA/Seattle/6009-47th-Ave-SW-98136/home/154441

    Jan 25, 2019: time to unload: $839,000

    Buyers, please do not enable speculators. Make informed decisions.

  31. 531
    NW says:

    Mar 31, 2017: LLC buys shack: $685,000
    https://www.redfin.com/WA/Seattle/3966-2nd-Ave-NW-98107/home/303730/nwmls-1092698

    LLC tears down shack, files $412,585 of improvements w/ KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=1324300413, scroll to the bottom)

    “Lower price every week” AND AC “ready” (as per RE person) appears.

    Aug 31, 2018: time to unload: $2,000,000. No takers.
    Oct 12, 2018: price changed: $1,850,000. No takers.
    Nov 19, 2018: delisted.
    Jan 7, 2019: relisted @ $1,850,000. No takers.
    Feb 26, 2019: price changed @ $1,825,000

    Days on the market: 182

    Buyers, please do not enable speculators. Make informed decisions.

  32. 532
    NW says:

    Feb 1, 2018: LLC buys shack: $425,000
    https://www.redfin.com/WA/Seattle/9032-3rd-Ave-NW-98117/home/99968/nwmls-1231197

    LLC gives cosmetic facelift to said shack.
    https://www.redfin.com/WA/Seattle/9032-3rd-Ave-NW-98117/home/99968

    Dec 21, 2018: time to unload: $879,500. No takers.
    Jan 19, 2019: price changed: $869,500. NO takers.
    Feb 2, 2019: price changed: $859,500. No takers.
    Feb 12, 2019: price changed: $854,500. No takers.
    Feb 27, 2019: price changed: $849,500

    Time on market: 70 days

    Buyers, please do not enable speculators. Make informed decisions.

  33. 533
    Justme says:

    RE: NW @ 525

    Shoreline McMossBox created by slapping some square boxes on the front of a last-century modern, reverse-convert part of 1st story into garage and slap another box on top of said garage. Only 85k !! Hide the original sloping roof in the photos because idiot buyers WANT that modern flat roof and don’t want to see the old sloped one.

    You can see how this OSB castle got created by looking at streetview. Then do the math: 450+85=925. Uh. No.

  34. 534
    NW says:

    May 4, 2018: some LLC friend we’ve encountered before buys shack: $450,000 (“before” pic here: https://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=7547300840)

    May 7, 2018 (wow!) LLC friend files $58,000 permit w/ KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=7547300840, scroll to the bottom)

    Dec 18, 2018: time to unload: $699,500. No takers.
    https://www.redfin.com/WA/Seattle/3850-18th-Ave-SW-98106/home/160404
    Jan 27, 2019: price changed: $689,500. No takers.
    Feb 12, 2019: price changed: $684,500. No takers.
    Feb 27, 2019: price changed: $674,500

    Days on market: 73

    Also, from description: “13 months Home warranty.” & “Receive $5,000 seller credit if mutual by 3/10/19.” Must be under some sort of pressure.

    Buyers, please do not enable speculators. Make informed decisions.

  35. 535
  36. 536
    NW says:

    RE: Justme @ 533

    Actually, when I saw the property, I thought of you. I knew you were going to comment on it :-)

  37. 537
    Justme says:

    RE: NW @ 535

    LOL, keep pushing my hot buttons :-). The economic and architectural damage to all of us is unfortunately already done. But keep’em coming, to prevent any more from being created.

    BTW, it would be fun if you checked redfin view counts before and after posting. Would give an idea of how many people got warned. I’ll watch for it.

  38. 538
    Matt P says:

    RE: NW @ 534 – Lovely location right behind West Seattle Recycling too. The smells probably enhance the value.

  39. 539
    NW says:

    By Justme @ 536:

    RE: NW @ 535

    BTW, it would be fun if you checked redfin view counts before and after posting. Would give an idea of how many people got warned. I’ll watch for it.

    Thank you for suggesting it. I’d do that, but I have a real life & a real job. I started this as a joke and I still cannot believe how inundated the market is with speculators. I will finish the cherry picking today (as I want to do a final count), and stop. I think I made enough of a point. Plus I took over the board, which is not fair and was never my intention.

    I could also do a list with what to look for & others can pitch in. Even better, we could created a crowdsourcing database, so others can look up properties & make informed decisions. Whaddya say? We can then take it global & charge a subscription (jk).

  40. 540
    NW says:

    RE: Matt P @ 537

    LOL & good catch.

    The smell is embedded in the price, I guess. Will delight future owners for free for generations to come.

  41. 541
    Eastsider says:

    If you are in the market and have not owned a home previously, you should read this.

    63% of millennials who bought homes have regrets—usually because they missed this one crucial step
    https://www.cnbc.com/2019/02/28/63-percent-of-millennial-homebuyers-have-regrets-heres-why.html

  42. 542
    randomseattledummie says:

    RE: steven @ 522 – The permit is a self reported value which people notoriously “estimate” to be extremely low. It basically just needs to pass the “sniff test” but is often off by 50-90% (always low).

  43. 543
    NW says:

    Feb 9, 2018: LLC buys shack: $260,000 (“before” pics can be found here: https://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=7549801470)

    July 5th, 2018: LLC tears down shack, files for $300,466 construction permit with KC (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=7549801470, scroll to the bottom)

    Architectural masterpiece is born in LESS THAN 4 MONTHS. Listing says it even include a “garage door opener”.
    https://www.redfin.com/WA/Seattle/5541-18th-Ave-S-98108/home/482144

    Oct 30, 2018: time to unload: $949,950.

    Days on market: 123

    Buyers, please do not enable speculators. Make informed decisions.

  44. 544
    NW says:

    By randomseattledummie @ 541:

    RE: steven @ 522 – The permit is a self reported value which people notoriously “estimate” to be extremely low. It basically just needs to pass the “sniff test” but is often off by 50-90% (always low).

    So the permits are way off – and the city does not care? Wow. Also, I assume these LLC’s accounting is also done under the table, to match the numbers? The same way they pay some of the workers?

    Stupid honest people – what do we know?

  45. 545
    Justme says:

    RE: NW @ 542

    Oy! The angularity of that McMossBox is killing me, But you knew that.

  46. 546
    Justme says:

    RE: NW @ 538

    Yeah, teaching people what to look for is a good idea. If you post a couple a day or only some days a week that might keep you from burnout.We don’t want burnout! I think the flurry this week has got people’s attention, and readers will recognize periodic postings from now on even if less frequent. Good job.

  47. 547
    Brian says:

    RE: NW @ 542

    People actually like this style? Looks two containers stacked on top of each other with some windows and a door cut in.

  48. 548
    NW says:

    Jun 1, 2015: intrepid couple buys shack: $650,000 (“before” pictures here: https://blue.kingcounty.com/Assessor/eRealProperty/Dashboard.aspx?ParcelNbr=6908200470)

    Feb 2, 2017: intrepid couple demolish shack.

    Oct, 18, 2016: intrepid couple files $491,759 permit w/ KC (scroll to the bottom of https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=6908200470)

    3,917 Sq. Ft. mansion is born. Finishes are still builder’s standard (cheapo Home Depot light cans, bathroom faucets & fans, no other light fixtures in the house, small windows for such an amazing view).
    https://www.redfin.com/WA/Seattle/6126-37th-Ave-NW-98107/home/162041

    Oct 4, 2018: time to unload: $2,750,000. No takers.
    Nov 4, 2018: price changed: $2,695,000. No takers.
    Dec 13, 2018: price changed: $2,595,000. No takers.
    Jan 23, 2019: price changed: $2,495,000.

    Time on the market: 149

    Buyers, please do not enable speculators. Make informed decisions.

  49. 549
    NW says:

    In other news, look @ this YUGE reduction:

    Apr 30, 2013: sold for $1,561,110
    https://www.redfin.com/WA/Seattle/1522-40th-Ave-98122/home/140374/nwmls-461211

    Oct 3, 2018: for sale: $2,560,000. No takers.
    https://www.redfin.com/WA/Seattle/1522-40th-Ave-98122/home/140374
    Jan 3, 2019: price reduced: $2,089,000.

    On the market: 150 days.

  50. 550
    Justme says:

    RE: Brian @ 546

    It just dawned on me what this architectural and constructional crime should be called:

    PNW Cubism = Pacific/Picasso NorthWest Cubism

    As for people liking it, are you kidding me? The barbarians love it. Anything that screams “I paid a lot for this house, and it is new new! NEW!” is all the rage. Any house that only has 90-degree angles costs double !!!!

  51. 551
    Joe says:

    RE: NW @ 532

    These speculators usually don’t live in the houses, yet they have to carry the mortgage and do the upkeep. These properties will drop every two weeks like clockwork. Problem is, they start with such outlandish prices they will follow the market down and never make a sale.

  52. 552
    NW says:

    Keeping with the YUGE price reduction subject, here’s another one: the house with the restroom in the living room and no closets in bedrooms. De gustibus non est disputandum.

    https://www.redfin.com/WA/Seattle/4800-Beach-Dr-SW-98116/home/154760

    Sep 6, 2018: on sale: $1,488,000
    Oct 8, 2018: price changed: $1,388,000
    Oct 23, 2018: price changed: $1,358,000
    Nov 28, 2018: price changed: $1,250,000
    Dec 10, 2018: price changed: $1,100,000
    Jan 3, 2019: price changed: $1,090,000
    Jan 10, 2019: price changed: $1,080,000
    Jan 17, 2019: price changed: $1,070,000
    Jan 24, 2019: price changed: $1,060,000
    Jan 31, 2019: price changed: $1,050,000
    Feb 25, 2019: price changed: $998,000

    Days on market: 177

  53. 553
    Brian says:

    RE: NW @ 548

    Wow only up 25% in 5 years? Unlike everything on the low end that is up 100%+, the higher priced properties don’t seem to have fared as well.

  54. 554
    NW says:

    Good for them. Maybe next time, stick with construction.

    By Joe @ 550:

    RE: NW @ 532

    These speculators usually don’t live in the houses, yet they have to carry the mortgage and do the upkeep. These properties will drop every two weeks like clockwork. Problem is, they start with such outlandish prices they will follow the market down and never make a sale.

  55. 555
    Jake says:

    Kind of a cool house tbh

  56. 556
    NW says:

    RE: Jake @ 554

    Go for it, then! They’ll make you a deal ;-)

    PS They’re not speculators, so doubly good.

  57. 557
    Don says:

    @NW

    Aside from the less than 1/10th of a percent owner built homes, and the ~1% of custom contracted homes, all the rest are built by speculators. Where else would they come from?

  58. 558
    NW says:

    12/23/2005, Seattle Housing Authority appropriates property from individual.
    3/1/2006, house on property gets demolished.
    7/31/2017, LLC gets property from Seattle Housing Authority (how & why; can I have a similar deal?).
    (https://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=7312400570, scroll to the bottom of the page)

    1/31/2018, LLC files $400,000 construction permit with KC (same link as above).

    Glorious house is being built.
    https://www.redfin.com/WA/Seattle/3200-SW-Juneau-St-98126/home/159581

    Sep 6, 2018: time to unload: $1,395,000
    Oct 11, 2018: price changed: $1,325,000
    Jan 25, 2019: price changed: $1,295,000
    Feb 15, 2019: price changed: $1,275,000

    On the market: 177 days.

    Buyers, please do not enable speculators. Make informed decisions.

  59. 559
    Matt P says:

    By Eastsider @ 540:

    If you are in the market and have not owned a home previously, you should read this.

    63% of millennials who bought homes have regrets—usually because they missed this one crucial step
    https://www.cnbc.com/2019/02/28/63-percent-of-millennial-homebuyers-have-regrets-heres-why.html

    I’ll save everyone the trouble of clicking the click bait link (I know you didn’t write the title East): millennials underestimate the ongoing maintenance costs.

    My speculation is that a lot of them don’t have any experience doing simple repairs on their own which can drive up costs a lot. Plus they are used to living in apartments where everything outside their unit is magically taken care of.

  60. 560
    Eastsider says:

    By Don @ 556:

    Aside from the less than 1/10th of a percent owner built homes, and the ~1% of custom contracted homes, all the rest are built by speculators. Where else would they come from?

    Camwest and many other spec builders built decent and affordable homes on the Eastside in the early 2000. Sadly recent housing bubbles attracted many fly by night speculators whose primary interest is making quick profits. Nowadays even if you are buying a new home, I strongly recommend you hire a good inspector to protect your investment.

  61. 561
    Jimmy Grant says:

    RE: Justme @ 549

    In a similar vein to your ‘McMossbox’ appellation, I’ve taken to calling these Millennial offspring of their Boomer McMansion parents ‘Happy Meal Boxes’.

  62. 562
    Realistic says:

    RE: NW @ 551
    I was already against the open kitchen fad… but open bathrooms? What were they thinking.
    And what a great location for the fridge… within a short hiking distance from the kitchen:)

  63. 563
    sfrz says:

    RE: NW @ 557RE: NW @ 532 – Thank you NW! You are, with your examples, blowing the fog off the Seattle Bubble. Cheers!

  64. 564
    redmondjp says:

    By Matt P @ 558:

    By Eastsider @ 540:

    If you are in the market and have not owned a home previously, you should read this.

    63% of millennials who bought homes have regrets—usually because they missed this one crucial step
    https://www.cnbc.com/2019/02/28/63-percent-of-millennial-homebuyers-have-regrets-heres-why.html

    I’ll save everyone the trouble of clicking the click bait link (I know you didn’t write the title East): millennials underestimate the ongoing maintenance costs.

    My speculation is that a lot of them don’t have any experience doing simple repairs on their own which can drive up costs a lot. Plus they are used to living in apartments where everything outside their unit is magically taken care of.

    Even worse, many homeowners (of diverse ages and cultures) in my neighborhood seem oblivious to the most basic of home maintenance items. I can take you for a 2-minute walk from my house to show you houses built in the early 2000s that have never had any paint or caulk applied since new, and have desperately needed both since they were new (due to architectural styles and construction techniques ill-suited for our wet, humid environment). Many of these homes will soon need significant exterior envelope repairs, and the master-bedroom french-door (stupid, unused) mini-decks are literally rotting off of the side of the second story in a few cases.

    I just laugh. The funny thing is, my 1977 crapshack rambler has actual cedar siding, well-protected from the rain by generous eaves, and I haven’t done a darn thing to my siding since moving in 20 years ago. Yes, the exposed south end of my garage gable isn’t looking too great, but when two neighbors re-sided their homes, I snagged enough matching, good cedar boards which match my house to redo that entire end, should I desire to.

    I learned maintenance as a kid from my grandparents and parents – my maternal grandparents lived in a farmhouse built in 1900, and it is still standing (in not great condition due to 25 years of poor property management while being used as a rental), with 40-year-old cedar shingles on the roof that my grandfather made himself from timber on the property. My dad operated several duplexes as rentals, so I’ve been snaking drains, fixing toilet flappers, and replacing electrical outlets and switches since I was a kid. It’s not hard, but it does take a bit of common sense.

    One thing, especially about having an older house with a yard and plants and trees – you’ll never have the same free time as you did while living in an apartment or condo. Like tomorrow – what am I doing? Hooking up the trailer to the SUV, and loading up the dozen or so downed tree branches (some as big as 5″ diameter and 20′ long) and bringing them down to the free branch dump day at city hall. That last snowfall wreaked havoc on trees in this area. That will probably take 2 hours and most of my energy for the day – I’ll come home and watch some golf on TV afterwards, thinking about how I should paint my siding some year (but not this year ;).

  65. 565
    Voight-kampff says:

    It seems obvious that the market is cooling, but despite the cooling, it is also obvious that our city has changed and grown tremendously over the past decade. Therefore, IMHO, It seems obvious that small, low priced, houses/condos will continue to do well as prices continue to to go up(albeit slower and slower). Whether people are relocating to here, or simply people wanting to afford staying here, things on the lower end of the price spectrum will increasingly have a larger buyer pool. I am an accidental investor, only ever involved in the lowest priced condos downtown, but the truth of this trend keeps proving itself year after year. I’m inclined to move to a less “hot” area, nevertheless I wish everyone well.

  66. 566
    Blurtman says:

    RE: Realistic @ 560 – Coming to new Eastside Pulte homes – kitchen in the bathroom:

    https://icdn2.digitaltrends.com/image/tinykitchenbathroom-1500×1000.jpg

  67. 567
    LessonIsNeverTry says:

    RE: Voight-kampff @ 563 – You could be correct. Anything is possible. However, past real estate plummets have taken everything out. Condos are often more overpriced relative to market worth despite [because of] their lower price point. Once low end SFH fall enough in price they hold up preferentially to many condos.

  68. 568
    LessonIsNeverTry says:

    By Blurtman @ 564:

    RE: Realistic @ 560 – Coming to new Eastside Pulte homes – kitchen in the bathroom:

    https://icdn2.digitaltrends.com/image/tinykitchenbathroom-1500×1000.jpg

    Please tell me the dishwasher is in the toilet. That will make my day.

  69. 569
    Voight-kampff says:

    RE: LessonIsNeverTry @ 565

    I should have clarified that I am only familiar with homes/condos in closest proximity to the downtown core. I believe they are the most likely to weather an RE downturn. Of course you are right, anything is possible.

  70. 570
    Matt P says:

    So, the grade that KC assigns to houses, does it really mean anything? For instance, if I’m deciding between 2 similar houses to put an offer on and one is a grade 6 and one an 8, should I go with the 8 all else being equal since I can’t inspect until I’ve made an offer?

  71. 571

    RE: Matt P @ 537
    Its Not Really a Residential District

    But the old Ranier Beer [Tulleys now?] factory valley area is an” industrial cement city nightmare” from your living room window….not a big home location except artists and odd balls? Maybe a view of the Seahawk Stadium makes the train tracks [with loud trains] OK….LOL

  72. 572

    RE: Matt P @ 568
    Go With the “8”

    The pundits know what they’re doing…LOL

  73. 573

    RE: Justme @ 502
    Lake Hills in Bellevue is Full of Old Flat Tops Built in the 50s for the Lower Classes

    Now they’re beautiful gems all of the sudden for the rich elite…LOL…I do hope they fixed your Bellevue Water supply, mine was rust brown in the late 90s.

  74. 574
    Justpassinthru says:

    @blurtman RE: Blurtman @ 564

    Ha. That picture! I’m dying over here. Hilarious. You can cook your eggs while taking care of business. Sanitary.

  75. 575
    Bumble says:

    By randomseattledummie @ 541:

    RE: steven @ 522 – The permit is a self reported value which people notoriously “estimate” to be extremely low. It basically just needs to pass the “sniff test” but is often off by 50-90% (always low).

    RE: randomseattledummie @ 541

    Why do they do that? What do they get from underreporting? Seems like they might want the number to be as HIGH as possible to secure the highest tax basis possible, thereby minimizing capital gains taxes on the sale profits.

  76. 576
    Justme says:

    Weekend update, King County active inventory, graphical edition.

    Click the link, click an image in the folder, then click once more for enlarged view. Use back-button to navigate. The graphs compare 2019,2018,2017 inventory on an hourly basis. 2017 was the year inventory was at a multi-year low for most of the year.

    King County SFH active for-sale inventory 2017,2018,2019 on 2019-03-02
    King County Condo active for-sale inventory 2017,2018,2019 on 2019-03-02
    King County SFH active for-sale inventory ratio YYYY/2017 on 2019-03-02
    King County Condo active for-sale inventory ratio YYYY/2017 on 2019-03-02

    https://imgur.com/user/justbubble/favorites/folder/6374525/20190302kingcountywaactiveinventory

    Editorial: Overall, inventories are again rising this week, and they are over 2X the levels of both 2017 and 2018 at the same date. But this week there is another pronounced spike upward for inventory. Multiple factors are at work. Sellers and their agents are eager to get their houses listed. The weather forecasts for the weekend have indicated weather that is generally more open-house friendly than the last several weekends. Selling prices are dropping and existing listings are getting price reductions. March 1 means it really is high time to get the product listed if a seller wants to beat the competition.

    But what about the uptake of product? Looking back on the last 7 days, just like last week, there is little hope for those looking for an early spring price bump to reverse 8-9 months worth of continuously falling median prices. For three types of conventional listings (SFH+townhouse+condo), there was (1-week rolling values sampled this morning) 895 new listings, 555 new solds (closings from ~4wk old
    pendings), and 61 new pendings. What stands out here is the incredibly low number of new pendings at 61 as of ~8am today.

    Let’s face it, it is a full-on buyer strike, and the strike is working. Prices are dropping. Product is languishing on the shelves. The weather has had some effect on buyer activity, but this is not just weather. The ratio of newpending/newlisting under 7% is EXTREMELY low. With the more friendly weather this weekend, the pendings would have to (?) rise next week, but a lot would be needed to get anywhere close to “normal” conditions.

  77. 577
    Matt P says:

    RE: Justme @ 574 – I agree that no one is buying, but I think it has more to do with the absolute crap that’s available right now as the posts have shown the last couple days. It’s all speculators and flippers trying to dump their shoddy remodels and not finding any takers. Maybe things will change in the coming weeks and real homeowners will start listing their properties for sale.

  78. 578
    ess says:

    By Voight-kampff @ 563:

    It seems obvious that the market is cooling, but despite the cooling, it is also obvious that our city has changed and grown tremendously over the past decade. Therefore, IMHO, It seems obvious that small, low priced, houses/condos will continue to do well as prices continue to to go up(albeit slower and slower). Whether people are relocating to here, or simply people wanting to afford staying here, things on the lower end of the price spectrum will increasingly have a larger buyer pool. I am an accidental investor, only ever involved in the lowest priced condos downtown, but the truth of this trend keeps proving itself year after year. I’m inclined to move to a less “hot” area, nevertheless I wish everyone well.

    Small single family houses on “traditional” size lots as a percentage of the housing in the Puget Sound area (small is in the eye of the beholder, but I would suggest a single family house under 1300 sq feet is small these days) is dropping as developers can either not afford or are unwilling to construct that size of single family housing.

    As a result it will be more difficult for middle class first time home buyers to purchase their first “traditional” home as there will be more and more potential buyers that would benefit from buying a house that size chasing less and less product.

    Hopefully those who rent as a strategy to lower costs, and totally reject buying a home when it makes personal and financial sense won’t regret it at retirement time when inflated rents overwhelm paltry retirement income. I would rather end up with some equity (as most long term homeowners do), rather than have to spend my golden years attending “affordable” and rent control housing rallies demanding that other individuals subsidize my housing costs.

    Voight – are you getting dinged by the LID in downtown Seattle?

  79. 579
    Eastsider says:

    RE: ess @ 576 – I am generally for homeownership. But to tell people to buy into the hottest RE bubble is irresponsible. Do you advise people to buy a home in Tokyo, London, NYC, San Francisco, and Vancouver?

  80. 580
    justsomedude12 says:

    RE: ess @ 576 – Stocks outperform real estate.

    Rather than having a bunch of money tied up in a home, renters can invest that money in a virtually no fee S&P 500 index fund and will do great. They will have a big pile of money at retirement. They can live off of the earnings this pile of money generates, without even having to spend the principal. They could also use some of this money to purchase a home free and clear in many nice places around the country if they wish.

    Of course some renters choose to spend their extra money on travel, nice cars, handbags, or whatever. But that is their choice. They choose those things over net worth.

    Please stop with the scare tactics about renters being doomed.

  81. 581

    RE: Matt P @ 575

    For single family housing in an area with great schools, that usually happens when you are about 60 days from the end of school. Not sure when school will end this year given the snow days. Often you see these come on in April with a request to stay after closing until the end of school. Fairly common to have a ton of post occupancy closings from April through end of school year.

    A couple of things I read but was too busy to answer at the time.

    I think it was Brian who asked how photos are removed from the previous listing(s) and asked if someone bribed someone. :) Used to be (and still is in many places) that the seller can put interior photos out as an “ad” to sell, but those would no longer show once the ownership changed hands. That was always true until Redfin started showing the interior photos after closing. They were the first to do that and are still prohibited from doing that in some markets. The NEW owner never gave permission for people to look IN his house.

    These days the trend is to put more info in the hands of consumers, so we have a slightly opposite rule now in our local market (this is different if you are looking in WA but not this immediate area where old rules still apply)

    The new owner and the new agent who are selling the property are not the same people as that old listing, so no, they didn’t need to bribe someone. ANY one who buys a house can request that the inside of their house no longer be shown to the public at large. Agents will still see all photos for a few years inside the mls, but any new owner can request all but the main photo be removed from public sites, and they often do. Their agent can’t request it or encourage them to request it. But they can, as the owner, insist on it.

    Another…I think it was Eastside…said his perception was this site was to support home ownership and the new swarm of “not REIC” soapboxers were not in keeping with the site. Not the case. We are the intruders, not them. A “Bubble” Blog, any Bubble Blog, is a place for the Just Me, Joe, sfrz and the like to scream from the rooftops for a buyers strike to pop the bubble. That was the original intent of all Bubble Blogs. The Tim was after all a would be buyer wanting prices to go down when he started this blog, but he didn’t create what a Bubble Blog is. Usually hating agents goes hand in hand with hating buyers who buy and don’t go on strike to push prices back down. Tim tried to change the name of this blog so it could be as you are saying your perception is, but as I recall he put it to a vote and came back with a no. In any case the Bearish and Buyer Strike people DO belong here more than bulls. I’m just happy you’all are part of the REIC as back in 2005 when Bubble Blogs were prevalent, only the real REIC got knocked over the head. I’m glad for the company. LOL!

    Absolutely we want balance and data and as much info as possible, but that includes all fanatical “bubbleheads” and even more so. Let them keep on with the mission. It’s important and part of the balance. No need to bash them. The higher prices go the louder they will be, and rightly so.

  82. 582
    ess says:

    By Eastsider @ 577:

    RE: ess @ 576 – I am generally for homeownership. But to tell people to buy into the hottest RE bubble is irresponsible. Do you advise people to buy a home in Tokyo, London, NYC, San Francisco, and Vancouver?

    To reiterate what I previously stated

    “Hopefully those who rent as a strategy to lower costs, and TOTALLY REJECT buying a home when it MAKES PERSONAL AND FINANCIAL SENSE won’t regret it at retirement time when inflated rents overwhelm paltry retirement income”.

    As I said, any purchase of a home has to make personal and financial sense. In addition – the comment was directed at those who rent regardless of the situation because they are convinced that it is always bad to rent at all times in all situations. OVER TIME – in MOST cases – that has not been proven to be a good strategy. If people foolishly buy at the top – they may have to wait a few years for the market to recover, as has been the case for last 100 years of Seattle real estate.

  83. 583
    ess says:

    By justsomedude12 @ 578:

    RE: ess @ 576 – Stocks outperform real estate.

    Rather than having a bunch of money tied up in a home, renters can invest that money in a virtually no fee S&P 500 index fund and will do great. They will have a big pile of money at retirement. They can live off of the earnings this pile of money generates, without even having to spend the principal. They could also use some of this money to purchase a home free and clear in many nice places around the country if they wish.

    Of course some renters choose to spend their extra money on travel, nice cars, handbags, or whatever. But that is their choice. They choose those things over net worth.

    Please stop with the scare tactics about renters being doomed.

    In a perfect world – the entire tenant community would be investing huge amounts of money into the stock market (which of course never goes down unlike real estate), and they will have oodles of money when they retire. Reality tells a different story. A large percentage of individuals in this country would have to borrow money or sell assets if a paltry four hundred dollar unanticipated expense appeared. A majority of Americans are living pay check to paycheck and not amassing anything except more debt. More people in the US have more credit card debt than savings. Furthermore, most individuals in this country don’t even have enough money to retire at the same income level that they were living on when employed (and unable to pay that 400 dollar unanticipated expense). One of the great issues that will face this country is the lack of savings for retirement by retirees.

    Your scenario of the affluent stock investing tenant is the dream tenant for landlords. I certainly encourage you to spread your wise words of wisdom amongst your contemporaries, and I hope they show up the next time when one of my (unfortunately only two) rental houses is available.

  84. 584
    Notme says:

    Not saying buy! now!
    just trying to help renters
    who have lost courage

    -a peak-helpfulness bubble haiku

  85. 585
    justsomedude12 says:

    RE: ess @ 581 – It’s really a comparison of savers/investors vs. spenders, not owners vs. renters.

    Savers/investors will end up with a nice net worth. Spenders likely won’t. Doesn’t matter so much whether they rent or own.

    That group of people you mention who live paycheck to paycheck and can’t even afford the most minimal emergency expense includes homeowners. I’ve read those articles, same as you have.

    This has been discussed on here before. The savings effect of home ownership comes through the forced savings of paying down principal on the mortgage. If renters save/invest that portion of their money (and yes, some do), they will do very well. It doesn’t matter how many renters actually do this, the point is that they can if they choose. And if they don’t earn enough to do this then they wouldn’t be able to purchase a home anyway so it’s a moot point. So we’re not talking about low income people here, we’re talking about the people who earn enough to have the choice.

    Renters who blow their savings are in the same category as homeowners who do a cash out refi and blow all that money. They are the spenders, and they probably won’t end up with much net worth.

    But my contemporaries that you mention like to party, so you’d better insist on a hefty damage deposit :)

  86. 586
    ess says:

    By justsomedude12 @ 583:

    RE: ess @ 581

    But my contemporaries that you mention like to party, so you’d better insist on a hefty damage deposit :)

    What a shame – and here I had such high hopes…………

  87. 587
    Brian says:

    RE: Ardell DellaLoggia @ 579

    Thank you for replying to me Ardell! I was afraid my question got lost. But my question was more centered around the previous listing links being removed from the transaction history. How does one get those removed? Maybe the answer is the same. They just ask Redfin to remove them or something. Wish they were permanent though.

  88. 588
    randomseattledummie says:

    RE: Matt P @ 568

    It means very little. It is more a reflection of an assessors opinion who walked by the house upwards of 6 years ago depending on the cycle of their rounds. You can do a LOT to a home and not need permits or less scrupulous homeowners could do more and not get permits. In many municipalities over 6 years you could legitimately do a roof, siding, windows, paint, kitchen, and bathroom with no permits or maybe an over the counter plumbing permit and the king county assessor would have no clue bringing your house from a 4 to an 8. Aka what they say is somewhere between meaningless and outdated. Sometimes they’re randomly right whatever their numbering system means.

  89. 589
    randomseattledummie says:

    RE: Bumble @ 573

    The permit value has nothing to do with your IRS taxes. Most larger permits have fees that vary based on project value.

    Disclaimer: not a cpa/lawyer/architect/etc

  90. 590

    RE: ess @ 581
    Great Blog ess

    I had a fellow come up to me in Covington and tell me I should get rid of my Dodge Charger and replace it with an electric car….I simply asked him, “What do you drive?”….he pointed at a gasoline powered truck. I then told him, “I’ll get one when you do”. Hypocrites tell ya anything, even when they don’t believe themselves….LOL

  91. 591
    justsomedude12 says:

    https://www.marketwatch.com/story/at-cpac-talk-of-phasing-out-fannie-mae-and-freddie-mac-2019-03-01?mod=hp_realestate

    The article basically talks about getting back to less generous loan standards (i.e. raising down payment requirements, lowering maximum loan amount). But it’s a very short article so feel free to read for yourself.

    “Heritage’s Joel Griffith said while state zoning and environmental regulations are affecting the housing supply, the federal government is driving up prices by subsidizing loans with Fannie FNMA, and Freddie Mac.”

  92. 592

    RE: Brian @ 585

    I would need a few examples (at least 3 and preferably 5) to give an answer. Usually it has to do with the way the address was stated a bit differently or a typo in the parcel number. But since I don’t get my info from public sites I can’t answer accurately without some examples to check.

    When inside the system I check the history 4 different ways so I never have this problem. Even when the info is semi-accurate it needs further research as in the recent case here where someone thought a prior sale was in fact a sale when it wasn’t. I was able to explain why it appeared that way even though the property had not sold for decades.

    So there are always a few valid reasons, but if you are seeing it fairly often, try to come up with a list of 3 to 5 in one comment so I can abide by the rules that only agents are subject to where we can’t single out and discuss another agent’s listing, but rather answer more generally without the spotlight on just one. Or if you have only one then you can email it to me ardelld@gmail and I can answer privately vs publicly.

    I’m 99% sure it’s not because someone at Redfin is being bribed to hide it. :) So let’s get to the bottom of this if we can so you don’t have this perception.

  93. 593
    LessonIsNeverTry says:

    By ess @ 581:

    1. Yes, stocks can decline far more rapidly and deeply than housing. Liquidity is the key here. I can get my cash out any time. And move it to whatever market I want…. including housing. I can do that in two days between account, in seconds within.

    2. Reality tells us that, excepting the perfect timing of buying at a bust and selling at boom, the stock market easily outperforms the housing market.

    3. People who buy houses instead of renting are a self selected group. To save for a downpayment they likely skew more responsible than renters in aggregate. You can’t compare the two groups without controls. “Reality tells a different story.” – Indeed, just likely not the one you are selling.

    4. Being a landlord or a home owner makes sense most of the time. The tax benefits are real. Appreciation is usually marginal over inflation (outside of boom times). Maintenance is manageable. It is forced savings. It saves on rent. If you ignore the 7.2% exit fee for closing costs and realtors it is even better. However, that fee will likely be gone within the next ten years as the internet blows up realtor world. Anyway, the point is, for a more stable and conservative life, being a homeowner is the best choice 9 out of 10 times. We just aren’t in one of those times now.

  94. 594
    Eastsider says:

    By ess @ 580:

    To reiterate what I previously stated

    “Hopefully those who rent as a strategy to lower costs, and TOTALLY REJECT buying a home when it MAKES PERSONAL AND FINANCIAL SENSE won’t regret it at retirement time when inflated rents overwhelm paltry retirement income”.

    I don’t believe most tenants rent as a ‘strategy’ and they don’t ‘TOTALLY REJECT buying a home’ either.

    You statement makes no sense in expensive cities such as NYC, San Francisco, Vancouver. And Seattle too.

  95. 595
    Notme says:

    Must buy at peak, else
    you’re TOTALLY REJECTING
    buying home ever

    -a REIC-propaganda-strawman bubble haiku

  96. 596
  97. 597

    RE: randomseattledummie @ 586

    The Grade normally would not change based on a remodel as the grade is not about whether or not you have a new kitchen. So saying bringing it from a 4 to an 8 doesn’t make much sense. Normally a 1 to 4 would be a cabin or other structure built below minimum standards. The Grades I have seen are 6 to 13. I’ve never seen a new construction at 6 as it likely reflects a good standard of long ago.

    Since they are referring to building grade, if it was built as a 6 in 1953 then it usually will stay a 6 unless the structure is torn down. Tract housing built in more recent times are usually grade 8 to 10 depending on the builder and materials used. If you buy an 8 and do a $150,000 remodel, it will usually still be an 8.

    As to “permit value” being used to show the value add, not everything you do to improve your house requires a permit. Also the stated value is more likely to be on the low vs high side as it will impact the amount you pay for taxes while you own it after the improvement. Even if you are selling it, you don’t want to inflate the taxes, so those who are adding the permit value to the purchase price are not really making a lot of sense. Clearly there are many things done that didn’t require a permit like new carpet or pretty much any new flooring like tile or wood.

    Each jurisdiction has a slightly different take on what does and does not require a permit and not everyone gets a permit even when they should.

    The most interesting thing about tax values the moment is that some are selling at 1.4 times tax value and due to recent massive increases in some places, others are selling at or less than tax value. So it’s pretty clear that the tax value took a sideways turn in the most recent changes. For the most part they taxed the rich more than the poor as we saw when some neighborhoods went up 24% in one year while others only went up half that. If you are comparing two houses in the same neighborhood, that usually will work. But if you are comparing one in Renton to one in Redmond…it will not compute.

    In my answer 579 to Matt 575 I forgot to explain why often the surge of best inventory is around 60 days prior to the end of school or 60+ with a post occupancy arrangement.

    The buyers’ lender usually only allows up to 60 days for the buyer to occupy the home after closing without raising the interest rate to an investor loan. So if a seller put their home on market now and didn’t want to leave until the children’s school year was over, that usually wouldn’t work out well if you just try to extend the close date or close soon and try to do too long of a post occupancy period. Too long for the buyer to lock their rate and occupy in the time frame lenders require.

    The last day of school is usually around the 14th of June but was as late as the 26th of June one year due to snow days. Too long of an escrow causes the rate to be too high if you build the rate lock cost into the rate. Or the low rate will have too high of an APR. So the surge in inventory for single family homes in good school districts tends to fall into a pattern balancing buyer and seller needs with the lender rules and the last day of school.

    Buyers usually don’t know that rate locks cost money as there is an automatic lock for some period and the cost is hidden until the time is abnormal. That varies by lender. Many automatically lock for 30 days or to closing, which is more though I have seen some do a mandatory 60 day regardless of close date. You buy rate lock extensions, sometimes in blocks of not less than 7 days and at other times not less than 14 days for the same reason as the 30 vs 60. Rate lock extensions can be pretty pricey depending on amount of loan and some other factors.

    Once in awhile you see a seller come on market too early in the year thinking they can stay through June and asking for several months of post occupancy. If everyone agrees without understanding the havoc it can wreak on the buyer’s loan…it can turn into a big mess. So look for inventory surge for SFH especially Eastside to be 60 to 75 days or so in advance of the last day of school.

  98. 598
    Matt P says:

    Using the NY Times rent vs buy calculator and conservative settings favoring rent (rent growth below inflation, high maintenance and property taxes, high investment growth rate), and it all comes down to the price appreciation of the house. With 0% appreciation over a 10 year hold period, it’s borderline whether I should rent or buy. Buy would cost more than I currently play, but I’m prepared to pay more to live in a nice place anyway. I’ve been renting some dumps or places too small.

    With only negative 1% appreciation over 10 years, it’s clearly better to rent. If appreciation is positve, 1% it starts to lean heavily to buy, at 2% definite buy, and at the historical norm of 3% or anything past that, it would be stupid not to buy.

    Unless there’s a catastrophic housing collapse again where prices don’t recover for 10 years or rents suddenly drop precipitously, the only thing I’ve lost is some opportunity cost of living in a crappy apartment and saving money like I currently do.

    Is there anything else I’m not considering?

  99. 599
    Matt P says:

    RE: Ardell DellaLoggia @ 595
    Thanks, what’s the difference between condition (which usually say average or good) vs the grade.

  100. 600
    ess says:

    By Eastsider @ 592:

    By ess @ 580:

    To reiterate what I previously stated

    “Hopefully those who rent as a strategy to lower costs, and TOTALLY REJECT buying a home when it MAKES PERSONAL AND FINANCIAL SENSE won’t regret it at retirement time when inflated rents overwhelm paltry retirement income”.

    I don’t believe most tenants rent as a ‘strategy’ and they don’t ‘TOTALLY REJECT buying a home’ either.

    You statement makes no sense in expensive cities such as NYC, San Francisco, Vancouver. And Seattle too.

    Everything is relative – what was once expensive is now a bargain. Years ago, people were shocked that houses in Seattle were selling for one hundred thousand dollars or more. The same arguments were made – housing prices were too high – it was crazy to buy at those prices, housing prices can’t go any higher, housing prices are outstripping salaries etc etc. But nothing like a few years to pass, a few healthy doses of inflation, and housing shortages (primarily a function of misguided government policies) to transform what was expensive to even more expensive. I would assume those at that time that rejected buying those hundred thousand dollar houses regret it now.

    Once again – recall that no matter when a person purchased a house in Seattle – if they held on long enough, that house was worth more money. Depending at what time of the economic cycle they bought, will determine how many years that house will be worth more. But if the past is any indication – housing prices will increase over time, as will the cost of most other other goods and services as well as salaries. What the extent of that increase and over how many years is subject to conjecture. What is certain that over time – the dollar’s purchasing price will erode, and that erosion will be evident in the price of all goods and services, including houses.

    A bonus for increased housing prices are the restrictions and other requirements that governments on all levels placed on the construction of housing – especially single family housing, as well as its attempts to increase “affordable housing”. Government activities are a major culprit for those looking to purchase or obtain by renting “affordable housing”. For example, locations such as SF, NY and London have aggressive rent control policies and the result are artificial shortages of housing and increased expenses for the majority of renters not covered by rent control policies. Restrictive land policies in Puget Sound are one of the prime culprits of increased cost of housing, according to a UW study that has been cited here before.

    There are numerous reasons to rent and not buy. I would never encourage anyone to buy a residence regardless of numerous of circumstances. But if one is going to remain in an area for a number of years and rejects outright the thought of buying a residence because ” renting is always better” as has been presented in a number of articles, that is short sighted at best.

  101. 601
    Justme says:

    >>Once again – recall that no matter when a person purchased a house in Seattle – if they held on long enough, that house was worth more money.

    Jesus Murphy, this claptrap again.

  102. 602

    RE: Matt P @ 597

    I don’t use or rely on condition codes. They are of little to no value when pricing properties. You can google that from the assessor’s website but after a lot of reading you likely will end up with the same conclusion as me. Since I am in the house, I don’t need the County to tell me the condition as it usually does not reflect reality unless there was a recent inspection to close out a permit. Even then not as much value to consider it as grade. I have only been in a Grade 13 once. By County definition 13 is “Mansion” and 12 is “Luxury” and 11 is “Excellent”. But in my experience most not too old are 8 good, 9 better or 10 very good. I’ve seen more 11s but that has more to do with new requirements than better builder. The same builder that was 9 and 10 has become an 11 just because the codes provided the mandatory upgrade on something.

    I look at it but often I see an 8 that is really a 7+ or a 9 that is practically a 10 vs practically an 8. So you have to fill in the blanks because two 8s won’t really be equally as good depending on whether or not it just barely made the grade or just missed the next level up. In my experience this most important in homes built from 1990 to 1996 than other periods of construction.

    As to your question “Is there anything else I’m not considering?” Think Bezos. While due diligence is always important as to projecting a good or bad move as to buying a house, reality is that more men lose more money due to mistakes made with their women than their calculations and timing. The big brain made great decisions and then their little brain caused them to lose half the wealth they accumulated using the big brain. Not a small matter. Huge amounts lost in divorce more than most of the things you guys talk about here trying to be smarter than the average bear. Historically men have lost way more money due to divorce than due to the markets.

  103. 603
    justsomedude12 says:

    RE: ess @ 598 – The graph below shows 30 yr mortgage rates over the last 45 years or so. The low rates of recent years have been a tailwind for home prices. This tailwind of decreasing rates no longer exists, as rates can’t really go any lower. They can only stay the same or increase. If they stay the same, it’s still no tailwind for home prices. If they increase, it’s a headwind that’s roughly proportional to the size of the rate increase.

    And I understand that rates tend to increase due to economic expansion, thus in theory people will be getting salary increases, but it’s not a one to one relationship. Increases in interest rates increase the monthly cost of a mortgage much faster than the wages of a prospective homebuyer are increasing. For instance mortgage rates can easily rise by 1% within a year, increasing the monthly payment on a mortgage required for a $600K house by a large amount. But it’s highly unlikely that the roughly 1/3 after-tax income earmarked for housing costs of the potential buyer has increased at the same pace.

    I’m not saying there’s going to be another 2008 or anything, I’m just saying that home prices have been propelled upward by low interest rates, but that is over now that rates are essentially as low as they can go. This is an key factor, and it can’t be ignored.

    https://www.macrotrends.net/2604/30-year-fixed-mortgage-rate-chart

  104. 604
    ess says:

    RE: justsomedude12 @ 601

    I’m not saying there’s going to be another 2008 or anything, I’m just saying that home prices have been propelled upward by low interest rates, but that is over now that rates are essentially as low as they can go. This is an key factor, and it can’t be ignored.

    —————————————————————————————————————————-

    Absolutely correct – as your chart indicates – rates are near historic rates over the past 47 years or so. For those who bought their houses years ago at much lower prices but much higher interest rates, it has been a chance to lower their house payments significantly. And for those on the cusp of affordability, any significant rise of interest rates knocks them out their desired market.

    But that is only one part of a complex equation.

    I would suggest other factors that have increased the cost of housing over the decades including but not limited to

    Governmental policies such as land use, permitting issues, affordable housing schemes, mitigation requirements, and other statutes and programs that increase the cost of developing new housing.
    Natural boundaries in places such as Puget Sound that limit future development, and a finite number of available single family houses in desirable Puget Sound locations.
    Location of tech businesses such as Amazon and Microsoft that produce well paid employment opportunities, and those employees can afford to pay higher prices for housing.
    The rise of a wealthy class of individuals that can still afford the relatively high prices of single family housing in desirable areas and can pay all cash if needed.
    Single family neighborhoods that successfully oppose upzoning proposals.
    Increased traffic which in turn encourages the wealthy to pay higher prices in more convenient locations near employment opportunities.
    The increase cost of building supplies due to all sorts of factors such as environmental issues, shortages, tariffs and other factors.
    The shortage of skilled labor to build the housing.

    And I am sure there are other factors – and they all increase the cost of housing. How much rising interest rates will be a factor in any downturn of housing – don’t think too many individuals know for sure. For many “normal” buyers – interest rates are a major factor. On the other hand, interest rates are irrelevant to the multi millionaire that simply must have that one million dollar plus centrally located Seattle residence in an all cash deal.

    Will there be pain during the next recession and downturn of housing prices for some homeowners? Of course there will be. But remember – most homeowners and landlords survived 2008 which was one of the greatest housing debacles as of World War 2. And most of them will survive the next economic and housing downturn, whenever it arrives.

  105. 605
    justsomedude12 says:

    RE: ess @ 602 – Yes indeed, there are several reasons for the rise in home prices over the last few years. But interest rates is the one that can go the other way rather quickly and substantially, reducing affordability and thus putting downward pressure on home prices. Of course no one knows when interest rates will increase. But we do know they’re not going lower. They’re either staying the same, or going up. Thus, no more tailwind of declining rates that the housing market has enjoyed since the 1980’s.

  106. 606
    AnonCow says:

    RE: Ardell DellaLoggia @ 600 – Hats off to you Ardell for pointing this out ;-). But WA is a community state, so what’s a guy to do if a house is bought after marriage anyways?

  107. 607
    ess says:

    By justsomedude12 @ 603:

    RE: ess @ 602 – Yes indeed, there are several reasons for the rise in home prices over the last few years. But interest rates is the one that can go the other way rather quickly and substantially, reducing affordability and thus putting downward pressure on home prices. Of course no one knows when interest rates will increase. But we do know they’re not going lower. They’re either staying the same, or going up. Thus, no more tailwind of declining rates that the housing market has enjoyed since the 1980’s.

    I agree that the benefits of these amazing mortgage rates have had a part in powering the housing market. Many, even potential buyers, have no knowledge of the history of mortgage rates over the time period that the chart you procured demonstrates. Thus when mortgage rates climbed to 5% recently, there was much public angst as to rising mortgage rates even amongst potential buyers. Yes, compared to 3.9% or 4%, but 5% is still historically low. I also don’t see much room for significant mortgage rate decline in the future for a variety of factors. Thus other factors will cause housing to increase in value over the next number of years, the primary cause being good old inflation.

    Add to the above list in my comments in 602 – that of state taxing policies. For example, states with no state income tax, or excessive other state taxes are the beneficiaries of emigrants from states with state income tax and excessive taxes. Florida is a beneficiary of tax refugees from the northeast. We in the Puget Sound area have our fair share of Californians. And Texas is getting American immigrants from all over. That movement of individuals helps support the real estate market for the net migration states. For Washington State, that of course can change if a state income tax is instituted.

    As an aside, from an investment standpoint, these amazingly low mortgage rates are benefiting our friend’s son, who recently purchased rental property in his Southwest town. He bought a house for slightly less than one hundred thousand dollars, financed by these these incredibly low mortgage rates. His rental house rents for one thousand dollars a month. Just about every landlord, especially in Seattle, would believe they were in investment heaven if they could generate one thousand dollars rent per month for every one hundred thousand dollars of investment housing that they owned.

    Which begs the question – are prices in Puget Sound too high, rents too low, or do other factors such as demand, lack of supply, as well as other factors drive the market. Probably a combination of all three – with the primary focus on the latter.

  108. 608
    Justsomedude12 says:

    RE: ess @ 604 – Yes, when mortgage rates return to a more historical norm of 7%-8%, buyers are going to freak. Due to the actual increase of their monthly payment, and the psychological impact of them thinking that even 5.5% is high since they’ve only known a world where rates are between 4%-5%.

  109. 609

    RE: justsomedude12 @ 583
    You Check the Oil On Your Car

    When its low you add more. Whether you’re a renter or own a home, you still must check your saving account level…add more if its dwindling. It must always grow with more savings too, with the pathetic interest savings rates. In time you will reach your goals..

  110. 610

    RE: ess @ 604
    Interest rates Used to be Locked Into the House Even After It was Sold

    Not any more.

  111. 611

    As If the RE Market in Seattle Isn’t Unsettling Enough

    Now its Takata air bags Needing Replacement in Almost All Cars/trucks….folks, this crappy Japanese engineered “shrapnel exploding bomb passenger side air bag” was known about for a decade…why does my 2014 Dodge Charger need to replace it now? We need to engineer our own safety parts in America, the Japanese make junk and lie about it too!

    I just called Auburn Dodge and was put on the “waiting list” [unknown length, I guessed approx. 1-4 weeks, it could be MUCH LONGER] for the millions of parts in the Takata backlog….they’ll call me back when the village “foreign engineered” idiots replenish their “just in time Toyota Damning Method customer service inventory”….its not an emergency ASAP? Engineer these in America now….the Japanese failed and throw that Toyota Damning Method in the trash too.. Thank God the potentially exploding bomb isn’t on the driver’s side…but still, this is HORRIFYING.

  112. 612
    uwp says:

    By justsomedude12 @ 603:

    But interest rates is the one that can go the other way rather quickly and substantially, reducing affordability and thus putting downward pressure on home prices. Of course no one knows when interest rates will increase. But we do know they’re not going lower. They’re either staying the same, or going up. Thus, no more tailwind of declining rates that the housing market has enjoyed since the 1980’s.

    I had to check and make sure these weren’t comments from last year.
    Or five years ago.
    Or a decade ago.

  113. 613
    Justsomedude12 says:

    RE: uwp @ 609 – Ever the snarky bubble pusher.

    But yes interest rates have been incredibly low for a decade now. The effect on home prices is evident.

  114. 614
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 595

    I have seen instances of tax value being way off for homes in the same development for extremely similar homes. I don’t know the exact process of how they arrive at the value but I just assume there is a lot of human error and the real “oversight” is homeowners appealing. Nobody is going to appeal a low tax valuation so those won’t get fixed for a while. Personally when making decisions I give zero credibility to what the tax assessed value is as it could be 60% low or 30% high or sometimes by dumb luck 100% spot on but it it like throwing darts at a dartboard for me and I am bad at darts.

  115. 615
    uwp says:

    By Justsomedude12 @ 610:

    RE: uwp @ 609 – Ever the snarky bubble pusher.

    But yes interest rates have been incredibly low for a decade now. The effect on home prices is evident.

    Yeah, mortgage rates have been below 7% for almost the entirety of the last 20 years, but I am glad you are here to tell us what “normal” is.

    Lord knows the 80’s was very “normal” and comparable to today. Who cares what my home value is when I can put my extra savings in 11% CDs?

  116. 616
    randomseattledummie says:

    RE: Matt P @ 596

    Outside of Detroit can you find many examples of housing prices going down in major metropolitan area when looking at 10 year windows. Even in the last great bubble housing prices were up over every 10 year period you could evaluate. Seems like with a 10 year window buying is always a better choice.

  117. 617
    Justme says:

    RE: ess @ 604

    >>Thus other factors will cause housing to increase in value over the next number of years, the primary cause being good old inflation.

    That same bullshit you repeat over and over again. When forced low interest rates and QE has ended, there is nothing there to support the current overpricing of assets anymore. Prices must and will drop as soon as the supply of greater fools and cheap unsound debt has been exhausted. We have now reached this point, and prices are dropping. Wage inflation is a drop in the bucket and cannot sustain the massive overpricing of assets.

  118. 618
    Justsomedude12 says:

    RE: uwp @ 612 – Well I think we would all agree that the last 10 years of QE has not been normal, and the next 10 years will not be more of the same (i.e. the same amount of additional QE).

    If it is, it means things have taken a huge turn for the worse and we’re all screwed. The only things of value will be food, gasoline and firearms. Mad Max style.

  119. 619
    Don says:

    Any guesses about how long it will take for this to become a prepper’s thread?

  120. 620
    Justsomedude12 says:

    RE: Justsomedude12 @ 615 – I’m digging my bunker as we speak. :)

  121. 621
    uwp says:

    By Justsomedude12 @ 617:

    I’m digging my bunker as we speak. :)

    Just another part of the REIC, encouraging folks to buy land to build their own bunker!

    ;)

  122. 622
    Don says:

    Bunkers can be upgraded and flipped. ADU and DADU bunkers are on the horizon. MossBunkers in the wings.

  123. 623
    uwp says:

    By Don @ 619:

    Bunkers can be upgraded and flipped. ADU and DADU bunkers are on the horizon. MossBunkers in the wings.

    ABU and DABU?

  124. 624
    Don says:

    Must be an interesting story behind the heating system here [2716 1st ave N on Zillow].

    Year built would suggest it once had an “octopus” oil furnace, long gone by now, but the substitute is electric wall units “cadet ” style, dollar eaters extraordinaire, and noisy to boot, but inexpensive to install.
    The place has some cool windows and other features, and really deserves a decent boiler and radiant heat system for the price they are asking.
    The Japanese knock-off porch roof kinda departs from the original look, too.

    @uwp, when the shootin starts, semantics no longer count, right?

  125. 625

    RE: randomseattledummie @ 614

    Tax Value is not the value of your house but it’s not nothing either. It’s one thing you look at as a buyer or seller because the 1 time in 500 you should have and didn’t is worth trying to understand some of it.

    The one time I saw an agent not look at it when pricing he got 45 offers. NOTHING was selling at less than tax value at the time and he priced at 25% under the tax value. He so missed the mark by not at least taking a peek that many people relying on the asking price were duped and it was an expensive sucker punch.

    At the time most all buyers were doing pre-inspections before sellers were starting to make them available. The property sold at the correct relationship to tax value at roughly $300,000 over asking. So it didn’t impact the price the seller received. But that one seller agent who didn’t even peek at tax value or try to understand the relationship caused at least 10 to 20 people who didn’t have a remote shot at it to pay for a pre-inspection at roughly $500 a pop. So other people’s $5,000 more or less was just unnecessarily flushed down the toilet.

    It’s not of huge value to look at the tax value, but it isn’t something to completely ignore either. I understand them better than most people and so better know the application process. But even if you don’t, take a peek at least. It could tell you something you need to know.

  126. 626
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 625

    I think the part of this which I agree with is that some agents don’t know their arse from elbows. You seem to be tying this to them not looking at the tax assessed value and I would tie it to that agent not being good at their job. Maybe this situation was when things were selling in hours and they just wanted to get a bidding war going so the list price never mattered anyway. Without more facts I couldn’t tell you.

  127. 627

    RE: randomseattledummie @ 626

    It was in the Seattle Times it had so many offers. :) I think it was an honest mistake by the agent that could have been prevented had he just at least glanced at the tax value.

    You may not know how to take tax value into consideration properly…but that doesn’t make it worthless to all people.

  128. 628
    steven says:

    RE: Ardell DellaLoggia @ 625

    if anagent misses the mark so blatantly off, he/she just needs to look for a new job. It shouldn’t take a look at the tax assessment to guestimate the market value. Even remotely knowledgeable home buyers are able to assess the market price somewhat; hence the 45 offers.

  129. 629

    RE: steven @ 628

    “Hence the 45 offers”

    I feel very badly for the 30 or more people who thought the $580,000 asking price had some validity. I feel badly that so many people paid for pre-inspections and wasted their money. It sold for $900,000. So not only did the one agent who listed it at $580,000 miss the mark but 30 or more agents wrote competing offers based on the $580,000 asking price who capped their offers at $650,000 thinking they were making great offers.

    My offer with my client was 3rd from top. About 7 to 10 of us knew the real value.

    A quick peek that the tax value was over $700,000 would have at least caused him pause to list it at $575,000.

    You have no sympathy for all of the people relying on the asking price? Tax Value is not supposed to be the real value…it is supposed to be 80% or so of real value. This so an upswing won’t cause a ton of value appeals.

    Today I am seeing some houses sell for slightly under the tax value because they upped it so much last year. But at that time nothing was selling for less than tax value.

    You don’t look at Zillow or Redfin Estimate or Tax Value to value the property, but you certainly look at all of them after you value it as a checks and balances measure. You do have to know what % of tax value the immediate area sells for generally. That is a fairly reliable metric even though one neighborhood may sell at 1.17 X AV while another sells at 1.4 X AV. To not do the math to double check is like not peeking at Zillow or Redfin Estimate before you list the property (they change their value after you list). You don’t copy it…but you don’t not now it either.

    The Seattle Times article never said it was listed too low. It acted like the market was actually that robust…hence the 45 offers. Most of them were a waste of time and money for no good reason.

    You may not want to care about Tax Value…but it really does have meaning if you know how to parse it all down to its parts.

  130. 630
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 627

    Are you referring to the teardown near golden gardens where the seller was I believe a church after the owner passed away and the listing agent did not realize that the land was zoned for townhomes and they listed it based on the value of the structure not the value of the dirt?

  131. 631
    ess says:

    Significant wage increases for thousands of Boeing employees.
    This wage increase will also put pressure on wages in related fields
    Good news for landlords and those selling real estate

    :https://www.seattletimes.com/business/boeing-aerospace/boeing-machinists-union-wins-mid-contract-pay-raise/

  132. 632
    Eastsider says:

    By ess @ 631:

    Significant wage increases for thousands of Boeing employees.
    This wage increase will also put pressure on wages in related fields
    Good news for landlords and those selling real estate

    Now there is no doubt you are a bubble monger! LOL.

  133. 633

    RE: randomseattledummie @ 630

    No. It was on The Eastside. Usually the Tax Value is based on current use and not what it could be, so I don’t think that would have helped in the case you mentioned. In those cases usually the first builder sets the price floor. That’s why it’s important to watch what the builders are doing right now. Land Value goes first when the builders stall. As we know, the value of land can go down to almost nothing if no one can or wants to build on it. So when that support goes missing, as it did in 2007 and 2008, the market can’t help but follow.

    The one I am talking about has a height restriction, so you really couldn’t tear down the one story with basement and make it a two story with basement. I guess anything is possible but it would be against the neighborhood CC&Rs there. So not likely a tear down lot for that reason.

  134. 634
    ess says:

    By Eastsider @ 632:

    By ess @ 631:

    Significant wage increases for thousands of Boeing employees.
    This wage increase will also put pressure on wages in related fields
    Good news for landlords and those selling real estate

    Now there is no doubt you are a bubble monger! LOL.

    Nope, just a realist!!

  135. 635
    Justsomedude12 says:

    RE: ess @ 631 – Agreed, now is a good time to sell.

  136. 636

    RE: Justsomedude12 @ 635
    Actually, I Told Landlords 2017 Was the Peak Time to Sell

    $Cash$ in if you’re older [60+] I suggested….stay in landlord business on the long-haul if you’re younger, especially if you were brought up on a farm [or worked construction] and know how to fix things, without old age health problems too. 2017 had my 140 unit HOA dotted with many open houses fetching higher and higher offers [like up to $300K listed] on a “MSRP $120K” modular [its loaded with options BTW] with land…today its ZERO. Ardell is right though, any home in can be sold with the $CASH$ or lease agreement with owner…it doesn’t have to be an open house listed one. The loan risks are so high now, I imagine $CASH$ sales will soon out-number mortgage loans’ sales, if they haven’t already…[I assume a home you got from inheritance, cheap foreclosure or a cheap family sweetheart deal are included in the data count too].

    All the data is the average price.

  137. 637

    RE: ess @ 634
    Last I Read last Week

    Was about 2-3K engineers left at Seattle Boeing….its all been outsourced to Japan, even the “Boeing Frontiers Magazine” talks about Japanese Overlords running the company now…we used to have like 10-15K American engineers at SPEEA. Boeing sold out to the NWO and unplugged our Seattle Area Manufacturing Engineering skills and experience. This is good for Seattle RE? LOL

  138. 638
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 633

    I typically find your comments to be very well thought out and insightful but this just seems entirely wrong. Land value does not change based upon the improvements on it. That is why the assessors office splits it into 2 values (land and improvements) and you can have a total crap shack that is “worth” 2 million dollars because the dirt under it is more valuable than the current usage.

    Look on a major road that has a mix of “tear downs” next to vacant lots, next to new construction large apartment buildings (key being that they stayed as one parcel so no townhomes/condos/rowhomes) and compare the price per square foot on the dirt of the appraised land values. It will be extremely close for all of them.

    Maybe I misunderstood your statement “Usually the Tax Value is based on current use and not what it could be” but I am not sure how else to interpret that.

  139. 639
    ess says:

    By Justsomedude12 @ 635:

    RE: ess @ 631 – Agreed, now is a good time to sell.

    Other than price – which will go up over time, there are other reasons that it may be a good time to sell, especially for mom and pop landlords in the Puget Sound area.

    Every regulation that is implemented by the city, county or state that increases the amount of work a landlord must do, increases the risk of their investment. or skews the market by implementing artificial barriers to raising prices to offset expenses is a disincentive to continued ownership. It comes to a point that there are other investments that can produce the kind of income that a long term owner with significant equity can realize without all the hassle and liability. This is particularly true in a rising interest environment which presents opportunities for relatively safe investments that can equal or exceed the return of investment as compared to rental housing.

    While renters, many who have never operated a business and have no or minimal understanding of the business side of owning rental property, may rejoice in all the requirements and restrictions placed upon landlords to increase access to rentals and “affordable housing”. That celebration may be short lived. The abandonment of the rental market by the mom and pop landlords often results in those properties sold and redeveloped at much higher prices, the lack of developing lower and middle class rental markets, as well as the domination of corporations in the rental market arena that are only interested in the bottom line and refuse to work with marginal renters as have many mom and pops have done in the past.

    https://www.bisnow.com/national/news/property-management/institutional-landlords-mor

    So you are right – it may be a good time to sell, but the results may not be so great for tenants in the long run.

  140. 640

    RE: randomseattledummie @ 638

    I actually said the opposite of that. What COULD be on it not what is on it.

    But thanks all for the chat. My point is only that you shouldn’t totally ignore tax value but rather try to understand it somewhat. As I said, it’s only relevant one time in 500, but worth at least a peek. If your offer is 2x tax value, as example, you at least want to try to figure out why that is. Some things you don’t want to ponder for the first time after you own it. Better to at least look at it prior to offer.

  141. 641

    RE: ess @ 639 – I Beg to Differ on One Point ess

    Old Folks Being Priced out of Landlord Investments

    Will increase housing supply as they sell to grab up the last of the “old money” for their possible likely nursing home years. Extracting past heydays’ “old money” [large wages, much cheaper health care and pensions] for their retirement $CASH$ today and that lowers prices. Think about it, it shifts the $CASH$ from RE.

  142. 642

    RE: Ardell DellaLoggia @ 640
    We Do Know This About Taxes in 2018

    Most households generally paid less federal income taxes, albeit the “rich elite” refunds got smaller due to the top 5% [$250K/Yr+] grabbing up most of the tax deductions that were eliminated and trickled down by Trump to the bottom95% household incomes…it may hurt the rich elites’ feelings and guess what, the bottom 95% of household incomes could care less too…LOL

    There’s always a yin to a yang…

  143. 643
    Justme says:

    RE: ess @ 639

    >>Other than price – which will go up over time, there are other reasons that it may be a good time to sell, especially for mom and pop landlords in the Puget Sound area.

    Then sell already, for Pete’s sake. What are you waiting for?

    >>Every regulation that is implemented by the city, county or state that increases the amount of work a landlord must do, increases the risk of their investment. or skews the market by implementing artificial barriers to raising prices to offset expenses is a disincentive to continued ownership.

    Oh boo freaking hoo. It is soooo hard to be a rentier, and get all those undeserved price gains on top. Price gains that all taxpayers and all recent buyers have paid dearly for.

    >>The abandonment of the rental market by the mom and pop landlords often results in those properties sold and redeveloped at much higher prices,

    More nonsense. You could sell to a family, you know? There is also the fact that it is unlikely that any flipper or teardown terrorist would buy your shack, since they are unable to unload their current product at the profit to which they have become accustomed.

    TL;DR: Stop whining and sell your crapshacks already.

  144. 644
    whatsmyname says:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

  145. 645
    Matt P says:

    By whatsmyname @ 644:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

    Which had nothing to do with our dominance. We dominated because the Nazis and the Japanese destroyed the manufacturing centers of the rest of the world, then we destroyed theirs and we were all that was left.

  146. 646
    ess says:

    By whatsmyname @ 644:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

    The recent rise of the fed rate has made money markets once again a semi palatable location to store short term monies. Finally a win for savers!

  147. 647
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 640

    Right and I am saying that the LAND assessed value is based on what COULD be on it (highest and best use) NOT the current improvements.

    For example:

    You have two “identical” parcels at 10,000 sq ft that are 2 blocks apart. Both have identical homes on them yet one has land that is tax assessed at 2 million and the other has land that is tax assessed at 500k. The difference is that the 2 million dollar land assessed parcel has been upzoned to allow for an apartment building or other higher and better use whereas the 500k assessed land assessed parcel is still only zoned as single family. The land is assessed based upon highest and best usage, not currently.

  148. 648
    Justsomedude12 says:

    RE: ess @ 646 – Something we agree on. Cheers.

  149. 649

    RE: randomseattledummie @ 647

    I just checked two that are less than one block apart and one can be mixed use and the other not and both have single family homes on them and there is no difference. I don’t know how anyone would expect a single family home owner to pay taxes as if there is a mixed used building on his lot vs his home.

    What you are saying should not be the case unless maybe a permit was filed to build the mixed use building and is in progress.

    If some random upzone increased someone taxes on their home to that degree, they should consult an attorney.

  150. 650
    Blake says:

    By Matt P @ 645:

    By whatsmyname @ 644:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

    Which had nothing to do with our dominance. We dominated because the Nazis and the Japanese destroyed the manufacturing centers of the rest of the world, then we destroyed theirs and we were all that was left.

    Thanks for posting this. Beat me to it!

    Yup… anyone who points to data trends from 50 years ago without ANY context is a pin head! The world has changed A LOT… especially the role and position of the United States!

    But the one trend you should pay attention to is the business and debt cycles. Sh!t happens… almost like clockwork. It is happening again now.

  151. 651
    randomseattledummie says:

    RE: Ardell DellaLoggia @ 649

    I just checked a bunch of places in Seattle where one side of the street is zoned for presumably townhomes and the other is zoned still as single family and both existing improvements are similar older single family homes and universally the land zoned for a higher usage has somewhere between a 60 and 100% higher tax assessed value per square foot of land.

  152. 652

    RE: randomseattledummie @ 651

    Interesting. I just checked some in Kirkland with that exact scenario regarding townhomes can be built on one side of the street and not on the other and the land value is exactly the same.

    I think they can raise the land value 60% to 100% as you are saying if they at the same time reduce the value on the improvement side by calling it $1,000 as an obsolete structure. But I don’t think they can raise their taxes by 60% to 100% based on what could be built there. Is the total tax value about the same when they get done? In Kirkland they may do that if they are going to bring the value on the house down to $1,000. I see some like that fairly often, but not due to upzoning. More due to land value appreciation generally.

    In any case, yes, ignoring tax value might be better for some people than trying to understand it and there is no one uniform application. But when you are valuing property you don’t not look at it at all regardless of how much you want to pooh pooh it after looking at it. You might just learn something you need to know. I won’t change my stance on that as I have seen it work well often. Not always, but often.

    If you are in a development of houses all built at the same time by the same builder and the assessor is showing the land value as lower on the house you are buying even though the lot is the same size, it is wise to figure out why. That why is something important to know and you can’t just ask the County. You have to find the shortcoming. Again, just better to do that before you buy it than after. Good advise whether you agree or not.

  153. 653

    RE: Ardell DellaLoggia @ 652

    P.S. The link under my name in recent comments shows the answer to why some areas can have home prices that don’t appear to be sustainable based on wages in the area. Some may not agree with that either from some of the comments I read here, but that doesn’t make it less true.

    You don’t have to agree with me all the time. I read all of the comments whether I agree or not as sometimes I learn something. Speaking of which:

    SWE – interest rates do stay the same for 30 years as they did in the old days. That didn’t change. It’s only not true if someone doesn’t get a 30 year mortgage which was less often the case when you and I were young. :)

  154. 654
    whatsmyname says:

    By Matt P @ 645:

    By whatsmyname @ 644:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

    Which had nothing to do with our dominance. We dominated because the Nazis and the Japanese destroyed the manufacturing centers of the rest of the world, then we destroyed theirs and we were all that was left.

    Some effect, yes; but far less than in the previous decade. In the mid-50’s to mid-60’s, (West) Germany and Japan were not only producing for domestic consumption, but were exporting automobiles to the the USA among other places. France was testing nuclear bombs, Britain was a significantly larger world empire than now, and an aggressive Soviet Russia was expanding its economic influence even into the America’s.

    Also, low Fed fund rates, two recessions, no Mad Max collapse.

  155. 655
    S-Crow says:

    Commented quote from Ben himself today at his Housing Bubble Blog:

    ‘First time buyers continue to incur larger and larger amounts of debt to buy a house—in November, 2018, 40 percent and 12 percent of agency first time buyers had a total debt-to-income ratio above 43 percent and 50 percent respectively. Forty-three percent is the maximum level set by the Bureau of Consumer Financial Protection (BCFP) for private lenders. So how is it that government agencies like FHA, Fannie Mae, and Freddie Mac can ignore the BCFP’s 43 percent rule? The answer is that the same day the BCFP promulgated the 43 percent rule in January 2013, it also issued the “patch” which exempted government agencies from the rule. Since then, FHA, Fannie, Freddie, and the VA have taken advantage of their exemption. For example, FHA’s exception percentage has risen from about 40 percent to 60 percent.’

    ‘The house price boom, now well into its 7th year, has been driven by 2 punchbowls: Easy monetary policy which applied equally to all types of buyers, and: Loosening mortgage underwriting standards by government agencies, which has almost exclusively been aimed at first-time buyers.’

    ‘The result; unsustainable house price increases, particularly for entry level buyers.’

    —————

    If you are like me, I re-read that a few times and it’s sobering because it is something I’ve talked about before.

    And this, folks, is what is going on in the trenches and what I call the “financial dryrot” in housing communities across the USA. A week ago I met with a financial advisor and we were discussing housing and how the walk-a -ways are still taking place and the walk-a-way and short sale “veterans” are back as current “homeowners.”

    We both concluded that the old stigma associated with not following through with what you signed on your contracts/Deed of Trust is lost and is probably one of the more destabilizing factors in real estate today.

    And there is no way to un-ring that bell.

    S-Crow

  156. 656
    Matt P says:

    By S-Crow @ 655:

    Commented quote from Ben himself today at his Housing Bubble Blog:

    ‘First time buyers continue to incur larger and larger amounts of debt to buy a house—in November, 2018, 40 percent and 12 percent of agency first time buyers had a total debt-to-income ratio above 43 percent and 50 percent respectively. Forty-three percent is the maximum level set by the Bureau of Consumer Financial Protection (BCFP) for private lenders. So how is it that government agencies like FHA, Fannie Mae, and Freddie Mac can ignore the BCFP’s 43 percent rule? The answer is that the same day the BCFP promulgated the 43 percent rule in January 2013, it also issued the “patch” which exempted government agencies from the rule. Since then, FHA, Fannie, Freddie, and the VA have taken advantage of their exemption. For example, FHA’s exception percentage has risen from about 40 percent to 60 percent.’

    ‘The house price boom, now well into its 7th year, has been driven by 2 punchbowls: Easy monetary policy which applied equally to all types of buyers, and: Loosening mortgage underwriting standards by government agencies, which has almost exclusively been aimed at first-time buyers.’

    ‘The result; unsustainable house price increases, particularly for entry level buyers.’

    —————

    If you are like me, I re-read that a few times and it’s sobering because it is something I’ve talked about before.

    And this, folks, is what is going on in the trenches and what I call the “financial dryrot” in housing communities across the USA. A week ago I met with a financial advisor and we were discussing housing and how the walk-a -ways are still taking place and the walk-a-way and short sale “veterans” are back as current “homeowners.”

    We both concluded that the old stigma associated with not following through with what you signed on your contracts/Deed of Trust is lost and is probably one of the more destabilizing factors in real estate today.

    And there is no way to un-ring that bell.

    S-Crow

    I still never understood why homeowners should be forced to pay for a home they no longer live in. For everything else, you can give up whatever it was you used the loan for – car, business, etc. I still think it should take a lot longer to come off your credit though. If the bank wants to make a risky loan, then that’s their problem, but for now, they have far too much power.

  157. 657
    Justpassinthru says:

    RE: S-Crow @ 655

    Wow, great post S-Crow. Thanks for sharing!

    How could anyone be staying afloat with 43% debt to income ratio and purchase a home? My throat tightens up just reading that. That is so house/life poor. What happened to the 30% rule???

    Approving loans above 43% should not be happening. They are setting borrowers up to fail. If there are not huge raises on the horizon to give them some breathing space, those borrowers will have no choice but to walk away. This really starts to paint a picture of how some people are able to get into these overpriced homes while the rest of us shake our heads. It’s a house of cards.

    Buffet was right. This tide is going to be heading out soon and OH BOY do we have some skinny dippers. What are these lenders thinking?

  158. 658
    S-Crow says:

    RE: Justpassinthru @ 657 – Don’t forget that those ratio’s are based on Gross Income, not take home pay which makes it worse. Realistically, they are paying over half their take home pay just to pay the mortgage, not including utilities, cable and maintenance costs. Never mind gas and food and Amy’s club soccer dues.

  159. 659
    pfft says:

    By Matt P @ 645:

    By whatsmyname @ 644:

    The recent and current Fed funds rate is travelling the same territory as most of the mid-1950’s to mid-1960’s, the time of America’s peak economic dominance.

    https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

    Which had nothing to do with our dominance. We dominated because the Nazis and the Japanese destroyed the manufacturing centers of the rest of the world, then we destroyed theirs and we were all that was left.

    Not true at all.

  160. 660
    pfft says:

    By Justpassinthru @ 657:

    RE: S-Crow @ 655

    Wow, great post S-Crow. Thanks for sharing!

    How could anyone be staying afloat with 43% debt to income ratio and purchase a home? My throat tightens up just reading that. That is so house/life poor. What happened to the 30% rule???

    They are actually more like guidelines than actual rules.

    Many people spend almost 50% of their income on housing.

  161. 661
    Blurtman says:

    RE: Matt P @ 656 – “We both concluded that the old stigma associated with not following through with what you signed on your contracts…”

    Oh, tut, tut, tut,….

    Please recall Tishman Speyer walking away from a ginormous loan while still being able to raise funding afterwards. And the Wall Street banks being absolved of all their crimes and bad debts.

    Puhlease…

  162. 662
    BudgetedHomeBuyer says:

    It is hard to feel like the bubble has started to pop under the $500k house range.

    https://www.redfin.com/WA/Brier/22252-34th-Ave-W-98036/home/2802305

    This house went pending in just over 24 hours. When we talked to our realtor about touring it before the open house and making an offer he said we had to view it immediately and the only inspection would be us watching a video of their 2016 pre-inspection.

    Who on earth buys a house with a pre-inspection from 2016 via video…

  163. 663
    BudgetedHomeBuyer says:

    RE: S-Crow @ 655

    Thank you for this post! We are preapproved for a mortgage of 47% debt to income ratio. I can see how people get tempted because they get the emotional feeling of “being priced out forever” but I cannot imagine the financial stress of that mortgage.

  164. 664
  165. 665
    Deerhawke says:

    By Deerhawke @ 271:

    RE: Ardell DellaLoggia @ 267

    We had parts of this explained a year or two ago by a representative of Estately. He said that their numbers represented only single family homes and definitely not townhouses. Perhaps they also swept in some single and double-wides on SF lots, by mistake. If they did then, they probably do now as well. I don’t have access to the MLS fine data that you do Ardell, but the differential of 300-350 units seems best accounted for by whether you exclude (Estately) or include (Redfin) townhouses.

    Looking at the Estately inventory figures for 2018 and 2019, you can construct a rough graph. I arbitrarily chose the middle of each month and came up with this.

    2018
    Jan 1223
    Feb 1181
    Mar 1390
    Apr 1816
    May 2299
    Jun 3065
    Jul 3768
    Aug 4114
    Sep 4827
    Oct 4787
    Nov 4092
    Dec 3205

    2019
    Jan 2675
    Feb 2349
    2/20/19 2317

    Many commentators on this site have said that you wouldn’t really know what is going on until the spring market starts to roll. Maybe that is true, but you can still read these numbers in a couple of ways.

    The YOY perspective is normally the best and most consistent. If you go that way, the headline is “Inventory Doubles Since Last Year!”

    But perhaps this is one of those inflection points when the MOM stats are worth paying attention to. In that case, the headline is “Inventory Halved in Six Months!”

    The buyers that I am meeting seem a bit hesitant and confused. They are out looking and want to buy, but don’t want to jump in too quickly. They don’t want to catch a falling knife, but also don’t want to be left behind if the market takes off again.

    There is nothing that focuses a buyer’s mind more than a seller’s market. And there is nothing more confusing to buyers than a buyer’s market.

    NWMLS releases its figures today, but early indications seem to show we have hit a plateau of inventory of around 2500. Today is 2494.

    Perhaps the snow caused a lot of spring listings to be delayed. Maybe that means the spring market is going to be the early summer market.

    Still and all, I don’t see us getting back to the inventory figures we saw in October and November anytime soon.

  166. 666

    RE: S-Crow @ 658
    New Home Buyers Think the Mortgage Payment Doesn’t Need MASS $CASH$ help for Subsequent Home Maintenance

    Boy are they in for a surprise.

  167. 667

    RE: BudgetedHomeBuyer @ 662
    If You Need a Home Inspection Clean Report to Make That Over Priced Home Buyable

    You’re naive about home inspection accuracy and putting way too much “price emphasis” on something that is most likely less than 5% of the homes value, not 100%. Ask those agencies that are thriving that “buy any home”….ugly ones with remodeling lists as well.

  168. 668

    Seattle Real Estate Tax Burden Conundrums

    If you did your 2018 income tax 1040 early Feb and expected a refund about now….its delayed. The new tax law adds confusion and furloughs are delaying administration. Be patient Bubbleheads, its on the way…

    https://themilitarywallet.com/tax-refund-delays/

    I just got my property assessment from Kansas City for property taxes….they increased my home/land value 10%. No wonder the flippers are barraging me with offers to sell without home inspection…jobs galore in Kansas…they even offer Millenials $CASH$ if they move to Kansas:

    https://www.cnbc.com/2018/01/03/us-towns-that-offer-financial-incentives-to-live-there.html

  169. 669
    Matt P says:

    By BudgetedHomeBuyer @ 662:

    It is hard to feel like the bubble has started to pop under the $500k house range.

    https://www.redfin.com/WA/Brier/22252-34th-Ave-W-98036/home/2802305

    This house went pending in just over 24 hours. When we talked to our realtor about touring it before the open house and making an offer he said we had to view it immediately and the only inspection would be us watching a video of their 2016 pre-inspection.

    Who on earth buys a house with a pre-inspection from 2016 via video…

    There definitely seems to be a floor on the market.

  170. 670
    ess says:

    By BudgetedHomeBuyer @ 662:

    It is hard to feel like the bubble has started to pop under the $500k house range.

    https://www.redfin.com/WA/Brier/22252-34th-Ave-W-98036/home/2802305

    This house went pending in just over 24 hours. When we talked to our realtor about touring it before the open house and making an offer he said we had to view it immediately and the only inspection would be us watching a video of their 2016 pre-inspection.

    Who on earth buys a house with a pre-inspection from 2016 via video…

    You have found out what I have noticed for months in this latest market- that lower priced houses (anything under 500K – isn’t that crazy to think of lower priced to be under 500K!!) are scarcer and scarcer in South Snohomish County. There may be more houses for sale in the Puget Sound area as a result of the slow down- apparently there are less houses for sale on the lower end, at least in this neck of the Puget Sound woods. This trend is also confirmed nationally, that “starter” houses are in very short supply.

    There are advantages to living in a smaller house other than lower a mortgage and taxes. Because our house was smaller and only one story, I have been able to remodel and paint the inside, paint the outside, have a new roof installed for a more modest cost, clean gutters myself and take care of other issues and limit the amount of junk that we accumulate. It is amazing how much junk people don’t need when one doesn’t have the space for it.

    Furthermore we are surrounded by houses that are worth considerably more. It is also of great comfort to me in this era of upzoning, density pressures, and never ending proposals to increase property taxes, to be surrounded by neighbors who have houses that are worth a great deal more than the one we are in. Why? when the next “great” government plan for destroying neighborhoods by upzoning , plans to build “tiny villages”, sanction homeless encampments, or keep on raising taxes is presented – my neighbors in their 750K – one million dollar houses will be leading the fight for me as they have much more to lose than I do.

    Having owned a few houses for a number of years, my philosophy has been “buy the smallest house you can happily reside in. but buy in the best (how ever that is defined for any indivual) neighborhood one reasonably can afford”. May not work for everyone – but it sure has worked for us! Plus if we decide to relocate – this house will make a great rental, because it is exactly the size of house that many renters want.

    Good luck on house hunting.

  171. 671

    RE: Matt P @ 669
    If You Open the 2nd URL On My Blog Above You’ll Also Note

    The average per capita pay in Washington DC and Seattle are both about $3300/mo GROSS [where the Hades is all that high tech $CASH$ some of the Bull Bubbleheads still brag about?]. That about $20/hr folks, grim pay in my book for $2000/mo 1 bdrm apartment rents…Kansas City with its $80K 3 bdrm SFHs on 1/2 acres [about $600/mo rents] also sports $3300/mo average per capita pay too, just like the Sanctuary Cities. Jobs galore in Kansas too. Pot’s legal in Missouri which is just 5 miles from Kansas City, KS. The fun goes on and on in Kansas…LOL….my daughter has turned into a happy party animal there with hoards of friends there, no wonder.

  172. 672

    Amazon Teaming With Robot Home Delivery Soon

    https://www.wbaltv.com/article/man-who-invented-segway-teams-with-fedex-to-build-delivery-robot/26691223

    At a theater near you…soon AMZ will be run by robots? LOL Employees are horrified?

  173. 673
  174. 674
    Justme says:

    RE: Deerhawke @ 665

    >>early indications seem to show we have hit a plateau of inventory of around 2500.

    Wishful thinking (plateau) and factually wrong (the number). Redfin right this hour says 2870 SFH for-sale active inventory in King County.

    >>Still and all, I don’t see us getting back to the inventory figures we saw in October and November anytime soon.

    Uh, probably well before October, I would say. Readers who are not familar with the seasonality of inventory are referred to my weekend update graphs. Most recent edition to be found here:

    https://seattlebubble.com/blog/2019/02/08/nwmls-home-prices-are-falling-and-inventory-is-soaring-but-pending-sales-are-bouncing-back/comment-page-3/#comment-279075

    TL;DR OP is just more REIC propaganda. Buyer strike still in effect.

  175. 675

    The Moderate Democrats are Screaming and Kicking for the OBP Theater Exit Doors and Voting Trump Hillary Alleges

    I wonder why?…LOL

  176. 676
    Justpassinthru says:

    RE: pfft @ 660

    If buyers are putting themselves in a situation where they are spending 50% of their income to buy a home, they may want to start looking at getting some more income. When you use a dti online calculator and bump it up to even 44% it says your debt is too high and recommends you to consider bankruptcy.
    Seriously, the irony.

    If you are in the market, run your numbers. Don’t think once in that dream home you will just figure it out and make it work with anything above a 40% dti. You better have a good growth plan to get more income coming in or a larger down payment before you sign on that dotted line. These banks don’t care about you, or that you will put yourself into bankruptcy paying your mortgage. They know that the house is the last thing you will stop paying before you walk away.

    Sickening that this is where we are again.

  177. 677
    Market Psychologist says:

    http://mynorthwest.com/1295504/millennials-home-buying-study-bankrate/

    I believe the results of this study were already posted, but this article uses local examples, which are just crazy examples of millenials who drank the “buy now or be priced out forever” Kool-Aid.

    “I didn’t tell you this yet but I actually moved out of my house and I’m Airbnb’ing the whole house, full time, because I’ve had these regrets and these struggles with trying to staying afloat and to have some sort of social life,” Sullivan said. “So that’s sort of the newest chapter in this home owning.”

  178. 678
    pfft says:

    By softwarengineer @ 667:

    RE: BudgetedHomeBuyer @ 662
    If You Need a Home Inspection Clean Report to Make That Over Priced Home Buyable

    You’re naive about home inspection accuracy and putting way too much “price emphasis” on something that is most likely less than 5% of the homes value, not 100%. Ask those agencies that are thriving that “buy any home”….ugly ones with remodeling lists as well.

    I have little faith in home inspections. I know someone who bought a house and the home inspector said the furnace was old but working. Might need some work. Gas company came and shut the fugging thing down on the spot. Was a CO danger.

  179. 679
    Matt P says:

    By Market Psychologist @ 677:

    http://mynorthwest.com/1295504/millennials-home-buying-study-bankrate/

    I believe the results of this study were already posted, but this article uses local examples, which are just crazy examples of millenials who drank the “buy now or be priced out forever” Kool-Aid.

    “I didn’t tell you this yet but I actually moved out of my house and I’m Airbnb’ing the whole house, full time, because I’ve had these regrets and these struggles with trying to staying afloat and to have some sort of social life,” Sullivan said. “So that’s sort of the newest chapter in this home owning.”

    Saw this. That house will do her good. She wasn’t saving before obviously since she regrets not being able to go out to brunch or take trips or have a “social life” (like you actually need money for that there are things to do besides drink and that are free), so at least now she’ll get some equity out of her bad decisions. No sympathy at all.

  180. 680
    ess says:

    RE: Market Psychologist @ 677

    In the second example provided in the article, the remorse of owning a house adjacent to Aurora Ave is not the home ownership experience per se, but that the location of the house is in the middle of a homeless population that is causing all sorts of problems for that particular homeowner. Any remorse should be focused on her own local government, and how their actions and inactions have created problems for this and other homeowners by their unwillingness to enforce vagrancy and drug laws, and crack down on this particular problem.

    As to the Portland example, there is a major article in today’s Seattle Times addressing the rental affordability crisis in that city. So a person who rhapsodizes about her “cheap rent” is probably more the exception than the rule in that area, as Portland is aggressively attempting to create “affordable housing”.

    Struggling to save for a down payment and either paying for or learning to do upkeep on a house is not endemic just to Millennials. Many individuals and families in prior generations struggled to obtain their first house, and often those houses were much smaller than what individuals expect to purchase today for their first house at age 25 or thereabouts.

    Once again – the maxim is true – if you wish not to buy, then rent. Millennials, like everyone else must be aware that there are negatives and positives for either direction that they choose.

  181. 681

    RE: Justpassinthru @ 657

    “What happened to the 30% rule???”

    The 30% rules is about housing payment including Principal + Interest + Taxes + Insurance. Mortgage payment. For a condo they include the HOA dues in the “front end ratio” of housing payment even though not paid in the mortgage payment.

    Historically it wasn’t 30% for the front end it was 28% with the total dti (the 43% that S-Crow is talking about) at 36% including the mortgage payment. The DTI includes car payment, credit card payments, student loan payments, all debt payments.

    The 28% front end for mortgage and 36% back end for total debt including mortgage allowed 8% for debt payments outside of the mortgage.

    This is important because if your debt outside of the mortgage was 10% instead of 8% then they dinged you on the front end by allowing 26% vs 28% for the mortgage payment. That prevented you from taking on too much total debt to income.

    28%/36% ratios are still fairly valid. If you have a lot of other expenses that are not debt like high child care or high expenses for a special child, then people usually go down to 20% to 25% on the front end.

    If you have zero other debt they used to still not let you go past 28% on your mortgage payment as it was a 30 year mortgage and they assumed you would acquire debt during that time even if you had no car payment or credit card debt at present.

    In the early to mid 90’s they stretched that to 33%/38% allowing for only 5% other debt and up to 33% for mortgage payment as long as the back end didn’t go over 38%.

    VA and FHA have always been different and higher than the above conservative, conventional ratios.

    Of course everything went sideways in the previous bubble years with subprime going as high as 75% on the back end with mitigating circumstances. Predatory lenders would push the back end without asking by giving novice buyers a letter with a pre-approved purchase price that automatically only qualified them for sub-prime. In most markets the Finance Contingency protected against that type of Predatory Lending by having a Rate Cap in the Finance Contingency. This area had removed that buyer protection years before, and that is why so many more were tricked into subprime loans with back ends of 60% to 75%.

    I confronted a Predatory Lender when I first moved here back in 2004 as to why they gave the young lady a pre-approval with a 60% back end ratio. Their answer was they made more money on subprime and the files were easier to process. And that was a Charitable Organization. I explained it to the buyer and changed her price accordingly. But this is one of the reasons why the buyers of the homes were not always complicit in the credit crisis. They asked how much they could afford and the lender told them. Many agents counsel buyers to see a lender first to see how much they can afford. Then the buyer relied on that answer all too often.

    Between that and WA taking out the max cap on rate, by the time they found out they were sub-prime at high rates they had no legal out to get their Earnest Money back.

    This is why it is important for every buyer to understand front end/back end ratios and do their own calculations vs getting a home price from a lender. Nothing wrong with 33%/38% ratios or 28%/36% ratios. These numbers are decades old but should still be considered max unless the high back end of 43% is a credit card or car payment that is near the end of final payment. Usually you can go as high as 50% back end if 12% of that are debts with payments of 10 months or less left on them.

  182. 682
    Sfrz says:

    RE: ess @ 680 – rule #1 when buying in seattle, don’t buy on Aurora. That road has been a side show for decades.

  183. 683
    ess says:

    By Sfrz @ 682:

    RE: ess @ 680 – rule #1 when buying in seattle, don’t buy on Aurora. That road has been a side show for decades.

    Isn’t that the truth. Aurora avenue was a dump when I arrived here years ago. Looks the same – but the activities there are even worse than when I lived in the U District. Probably as a result of Chubby and Tubby closing (for all you old timers).

    We always walk and drive the neighborhood before we put an offer on a house. One can sense if it is going to be a future problem. Wonder if that person did that. I would certainly want blocks and blocks of well maintained houses between me and Aurora Ave!

  184. 684
    Sfrz says:

    RE: S-Crow @ 655 – @SCrow! Great comment today over on the HBB. It was euphoria when buyers were begging for a chance to purchase with absolutely no safeguards, sending love letters and flowers. Now when the market is favoring buyers, there is huffing and puffing when those offers come in that don’t reach sellers’ high altitude expectations. Where are the cheers for the buyers? Only angry defiant huffs that their get rich quick plans are evaporating. Reality checks are being issued with a sprinkling of cold hard facts. RE is nose diving worldwide.

  185. 685
    Justpassinthru says:

    RE: Ardell DellaLoggia @ 681

    Ahh, thanks Ardell for clarifying.

  186. 686
    Market Psychologist says:

    https://www.seattletimes.com/business/real-estate/market-turnaround-king-county-home-prices-take-biggest-one-month-jump-ever/

    But prices are down in Seattle massively except for the less desirable areas. Same with the Eastside, generally

  187. 687
    Brian says:

    RE: Market Psychologist @ 686

    Can’t that just be because more higher end prices sold last month than the month before?

  188. 688
    sfrz says:

    RE: ess @ 683 – Most likely was a FOMO buyer that stood in line with his love letter, instead of scoping out the hell hole behind the privacy fence.

  189. 689
    Foobar1 says:

    RE: Market Psychologist @ 686

    Talking ’bout Eastside, I went to an open house for the house below. It felt like a gold rush moment. About 15 different families while I was there for 20ish minutes. The house was a good location, but looked “duct taped”, structurally.

    https://www.redfin.com/WA/Redmond/18441-NE-24th-St-98052/home/503816

    That tells me Eastside has a lot or buyers with good money.

  190. 690
    Justme says:

    RE: Market Psychologist @ 686
    RE: Brian @ 687

    I agree the median rise is due to south county buyers bidding up the by now very overpriced low end so that the median moved. The higher-priced areas all have median price drops, as can be easily looked up from the mapped regions in the article. Once the south-county potential buyers realize what is happening, they will withdraw from the market until prices in south county start dropping again. Buyer strike works, as can be seen from 2018 price action. Just say no. Anyone that buys into the “hot spring” propaganda will be sorry.

  191. 691
  192. 692
    uwp says:

    LOL!
    Now they want to blame the mix.

  193. 693
    Brian says:

    Do people not check if their link was just posted three messages up?

  194. 694

    RE: pfft @ 678
    Yeah…the Electric Furnaces Break Down too

    To get a HOA code compliant one installed in 2016 it cost me $8000 for the base model….I have noticed about a $100/mo savings with the new furnace [peak $330/mo PSE bill in winter down to $230]…LOL…the dam_ thing pays for itself, it just takes 24 years to get your money back assuming the efficiency doesn’t degrade with time [it probably will IMO].

    As a Nuclear Engineer we would not consider 24 year payback a good cost model for building reactors….more like 15-20 years before payback..

    All the “new” energy saving gadgets in the world just do two things “cost ya money and fall apart”…

  195. 695
    ess says:

    By Brian @ 691:

    Do people not check if their link was just posted three messages up?</blockquote

    Good news should be celebrated by having it repeated.

  196. 696

    RE: ess @ 690
    Yeah…They Call This Winter the Solar Cycle Downturn

    Whatever that means?…we need more data from the sun, before we “jump to wild assumptions” about the recent cause of temperature cooling on Earth. I saw the snow at 4AM this morning when I was getting a glass of milk…it was 30.6 degrees this morning in Kent too….King Morning News down played the snow [showing 42 degree highs today]…but the traffic “Milenial guy” showed a “curved” sloped freeway off ramp with frozen ice on the pavement. LOL…IMO, he was being sarcastic from his grin…

  197. 697
    ess says:

    RE: softwarengineer @ 694

    It is winter in March!!!!

    When I see that it snows – I hide in my house. Not going to share the road with people who have no idea how to drive in ice and snow.

  198. 698
    Justsomedude12 says:

    RE: Market Psychologist @ 686 – From the article:

    “Despite a shift in single-family home values, condo prices continue to fall — down 8.4 percent from a year ago across King County, the biggest decline in seven years. The median condo across the county sold for $380,000, down from a record high of $466,000 last spring. The number of condos sitting unsold more than tripled in the past year while sales continued to decline.”

    What’s that saying about condo prices relative to the overall market…is it that condos tend to be the first to fall and the last to rise? Not being snarky or sarcastic, just honestly can’t remember. The condo decline is just so stark that I wonder if we might glean something from it.

  199. 699

    RE: Brian @ 687

    King County 3 or more bedrooms regardless of whether condo, townhouse or single family.

    January 31% over $800k; 18% over $1M
    February 32% over $800k; 19% over $1M

    Drawing no conclusion there. Just a quick run of the numbers to answer your question before I head out to stage a property. If you want to see it some other way I can run it when I get back late this afternoon or this evening.

    Required Disclosure: Stats in this post are not published, verified or compiled by The Northwest Multiple Listing Service.

  200. 700
    ess says:

    RE: Justsomedude12 @ 696

    What’s that saying about condo prices relative to the overall market…is it that condos tend to be the first to fall and the last to rise? Not being snarky or sarcastic, just honestly can’t remember. The condo decline is just so stark that I wonder if we might glean something from it.

    —————————————————————————————————————————-

    Probably that more prospective homeowners in the Puget Sound area favor single family residences other than condos to reside in, especially when they marry and have kids.

  201. 701
    Deerhawke says:

    By Justme @ 689:

    RE: Market Psychologist @ 686
    RE: Brian @ 687

    Buyer strike works, as can be seen from 2018 price action. Just say no. Anyone that buys into the “hot spring” propaganda will be sorry.

    Actually, anyone who listens to this poser will be sorry. Justme is a talker, not a player.

    https://www.seattletimes.com/business/real-estate/market-turnaround-king-county-home-prices-take-biggest-one-month-jump-ever/

    The news here is something I did not anticipate until a month or so from now. All of those potential buyers who joined the temporary buyers’ strike, all of those who were “afraid to catch a falling knife”, all of those who said they would “wait to see how things go during the next few months”– well, they will be at next weekend’s open houses.

    As for me, I started negotiating on two projects in November and pulled the trigger in February. I sure am glad I got them under contract before this Seattle Times article came out.

  202. 702
    Justsomedude12 says:

    RE: ess @ 698 – I don’t know, people have been getting married and having kids for all eternity, it’s nothing recent. The condo drop has taken place over the last 12 months.

  203. 703
    ess says:

    By Justsomedude12 @ 702:

    RE: ess @ 698 – I don’t know, people have been getting married and having kids for all eternity, it’s nothing recent. The condo drop has taken place over the last 12 months.

    Right – but supply and demand – the demand is obviously greater for houses than condos in this market at this time.

    What will be interesting will be the reaction of developers when the state condo liability law is either repealed or amended to get condo development going once again. Will there be a push for middle class condos, especially if the trend as noted in the article continues.

  204. 704

    RE: Ardell DellaLoggia @ 681
    Let’s See Now

    If ya make the average household income per capita pay of like $20/hr with an average 1.2 per capita pay per Seattle area household [eliminates guys like Bill Gates skewing and over-inflating the average household income] last I heard a few years ago….you do the math and pack the moving truck to get the Hades Out of Seattle if you aren’t the lucky devil owners on top of the house of cards…

    I know in the 80s and even 90s it was DINKs [double incomes no kids] that were buying up new homes, its changed folks [because of the 75% divorce rate in King County in the 90s?]…whatever caused it, most homes are owned by singles and most home.

    The results in some urban centers were bleak. Seattle, for instance, has the biggest wage-based housing gap.

    https://www.usatoday.com/story/money/personalfinance/real-estate/2018/03/31/ownership-home-buying-tips-women-single-income-households/462633002/

    I’ve noticed dating in Seattle since my divorce in 1994 that most homes are bought by Seattle area men….or men “mostly” get them after divorces….its just raw data based on “skills and experience”, not political partisan against females IMO and EEO’s opinion too….

    “…Men can afford nearly 150% more homes than women. Colorado Springs, Miami, San Diego and San Jose also topped the list with significant gaps. For instance, in Colorado Springs men can afford 122.5% more homes than women, while further down the list in San Diego, the difference is still a significant 68.5%….”

    Ya see why Seattle’s $1M homes need prenuptial agreements before marriage? LOL

  205. 705
    ess says:

    RE: Deerhawke @ 701

    Well – good for you Deerhawke, I hope it works out.

    Last night I attended a speech by Mathew Gardner, chief economist for WIndemere and on a variety of other economic advisory councils. He also lectures at the UW. He presented a cautious but upbeat prognosis for the next two years.

    Mr. Gardner is a excellent and entertaining speaker, and I encourage those who are interested in his perspective of the local real estate market to take advantage of any lecture that he is presenting. Even if you disagree with some of his conclusions – it will be time worth spent.

  206. 706
    Marc says:

    The Seattle Times article totally misses the boat and I now understand why they usually do. They appear to be based on the NWMLS press release instead of the county breakouts that the NWMLS publishes 1 to 2 days later and which Tim uses for his monthly post on NWMLS stats.

    Well, here’s a preview of the February recap for King County (single family homes only, no condos) which will be published later today at NWMLS dot com under the News & Info page (as of right now they’re still showing January).

    Total Listings – UP 110% year over year
    Pending Sales – DOWN 5.5% year over year
    Closed sales – UP 1% year over year
    Median Price – UP .78% year over year (that’s under 1%)
    Months of Supply – 2.01

    In my opinion, the tide is turning in favor of buyers and we are in the last throws of the seller’s market.

  207. 707
    Justsomedude12 says:

    RE: ess @ 703 – I think it might be quicker and easier for condo owners to push the eject button than it is for single family home owners. I think that’s what they’re getting at with that saying about condo prices being the first to fall. (If that is indeed the saying)

    Could explain the larger drop in condo prices and greater increase in condo inventory relative to the market as a whole.

  208. 708
    Marc says:

    RE: Marc @ 706 – Actually, let me say that differently. The Seattle Times might get the breakouts early since they have the numbers for sub areas of the MLS. However, they don’t clearly emphasize the most relevant data which, in my opinion, is the county-wide year over year rate of change. A lot of people have been hung up on the “decline since last spring’s peak” and while that is very interesting, it’s not that useful of a comparison because the time periods are too disparate and comparing absolute numbers don’t give a true sense when or why a change in trend is occurring, i.e., comparing spring to fall or winter in any given year is seldom a fair comparison.

  209. 709

    RE: Justsomedude12 @ 698

    In the 90s the Condo Buyers Heard This Joke in Seattle

    Buying a Condo is like catching Herpes….LOL

    The dam_ things got converted to run down apartments and the condo owners lost their shirts over the long haul [they became worthless]. Erik is aware of this too….he never keeps the Condos too long…

    Buying Indian Reservation Land on a 75 year lease is another dead end….30-40 years from now the high property tax assessment [its valued the same as normal land] is a joke, when no one will buy it…

  210. 710
    Marc says:

    By Marc @ 706:

    In my opinion, the tide is turning in favor of buyers and we are in the last throws of the seller’s market.

    That was a bit too strong. I think the tide is turning toward a more balanced market. It may be a good while before we see a true “buyer’s” market. In the last bubble it took a long while for that to happen if only because sellers spent the first year or two after the peak figuring out the tide had turned and their prices had to come down significantly if they wanted to sell (as economists would say, house prices are “sticky”).

    Of course, buyers also had no idea what was occurring or how long it would take things for things to shake out. My guess is that the next time around is not that far off and both buyers and sellers will get wise more quickly because of what we all learned in the Great Financial Crisis that accompanied the 2008-09 recession.

  211. 711
    Justpassinthru says:

    Well, a bump in buyers and sales make sense.

    1.) Interest rates are down
    2.) SFH are down $116k from last year.
    3.) Jobs still holding steady
    4.) It’s spring, the hottest time to buy/sell homes

    Of course that is going to pull some buyers off the sidelines. This is still a desirable area with high salaries. But, let’s keep our eye on the bigger picture here. The bigger picture being the real estate market across the country. The Las Vegas area has been dropping like a rock with no end in sight. All of California is still in the toilet. If the rest of the real estate markets keep declining then Seattle will be pulled right back down. If this was just a temporary blip on the economy then we should see this good news spread across the country. Let’s watch and see what happens.

    I’m still thinking the crazy household debt has to catch up to people here sooner or later. Credit card interest rates are now averaging 18% interest and households have the highest credit card debt ever. Ouch.

    Seems like a good moment for buyers to jump
    in though if you are ready/able to.

  212. 712
    Justme says:

    RE: Deerhawke @ 701

    >>Actually, anyone who listens to this poser will be sorry. Justme is a talker, not a player.

    I’m renting, which means I’m shorting the housing market. I’m not a player that tries to make people overpay for housing, that much is true.

    But Deerhawke is definitely a player. He has been talking since prices started dropping last April that he was not buying any more teardowns and was selling all of his new McMossbox projects. But here he is again, he could not help but reveal that he has actually been negotiating two more teardowns last two months. Widowers and orphans beware.

  213. 713
    Justme says:

    RE: Brian @ 687
    RE: Ardell DellaLoggia @ 699

    Brian, with Ardell’s data you have the 50% and 32% and 19% percentile points on the Feb 2019 cumulative distribution. But to get a better understanding you would need a list of every sales price for Jan and Feb. Then you could make a graph and really see. Perhaps Ardell will generate a list if you ask nicely. Some place like pastebinDOTcom is a nice place to exchange data.

  214. 714
    richard says:

    Below are some interesting excerpts from recent NWMLS report(http://www.northwestmls.com/News–Information/page/Latest-Press-Release) on Seattle housing numbers, which is source of Mike Rosenberg’s Seattletimes article ” Market turnaround? King County home prices take biggest one-month jump ever ”

    1. “The rise in inventory is largely due to investors who are selling because they believe the market has peaked and they want to unload their properties before interest rates rise too far,” said OB Jacobi, president of Windermere Real Estate.
    My comment: it is good sign, it shows that majority of non-investor still hold off selling the house until it will be too late. It is usual pattern in housing correction, the investor rush to the exit first when the profit is still there and non-investor house owner will hold wait-and-see attitude and believe the downward pressure is temporary.

    2.Prices on single family homes (excluding condos) rose 5.4 percent from the same month a year ago. In the four-county Puget Sound region, prices increased in Kitsap, Pierce and Snohomish counties, but decreased about 2.9 percent in King County, dropping from $628,388 to $610,000. Prices for single family homes in Kitsap County, where there is only about 1.7 months of supply, surged nearly 14.7 percent when compared to a year ago.

    But Mike Rosenberg’s article, he claims that “But in February, home prices bounced back as the median sale rose by $45,000 from the month prior, according to new data(refer to NWMLS report) released Wednesday.”

    My comment: I didn’t find the $45000 median sale increase in NWLS report. The comment by NWMLS report shows the SFH price for king county decreased y-o-y but Mr. Rosenberg said otherwise. I am confused.

  215. 715
    Matt P says:

    RE: richard @ 714 – I’m very skeptical of that article. There is not enough volume in King county to raise the median 45k when all of Seattle dropped. Anxiously awaiting the update from Tim.

  216. 716
    richard says:

    In Mike Rosenberg’s article (https://www.seattletimes.com/business/real-estate/market-turnaround-king-county-home-prices-take-biggest-one-month-jump-ever/) , he wrote:

    “But in February, home prices bounced back as the median sale rose by $45,000 from the month prior, according to new data released Wednesday. It was the first time in eight months that prices actually went up, on a month-over-month basis”.
    “And while prices usually grow in February coming out of the winter doldrums, this year’s bump was triple the average increase from the previous five years. It’s an ominous sign for buyers, given that prices almost always rise the most in spring, which is just around the corner”.

    Mike emphasizes a lot on this month-over-month median price jump. Experts here, any insight on why is that. My guess is sales may concentrate more on high-end houses, which tend to have price reduction more frequently because their initial listing price is usually unrealistically high. and buyer may see these price reduction as a buying opportunity. Lower-end house is not worth buying to many buyers even though price is lower. To me, using median price jump as a trend predictor seems inadequate or misleading.
    Mike’s scare tactic words(“ominous sign for buyer”) enhanced my impression he is indeed a REIC propagandist.

  217. 717
    uwp says:

    By richard @ 716:

    Mike emphasizes a lot on this month-over-month median price jump. Experts here, any insight on why is that. My guess is sales may concentrate more on high-end houses, which tend to have price reduction more frequently because their initial listing price is usually unrealistically high.

    Yes, the median price is influenced by the mix.
    We have discussed it on this very website literally dozens of times.

    The NWMLS press release is up, but still waiting on the full breakouts for the stats. The monthly “pendings” matching “new inventory” will be sad news for our Buyer’s Strike™.

    Anyway, February was a weird month, so I wouldn’t take too much from it.

  218. 718
    Deerhawke says:

    By Justme @ 712:

    RE: Deerhawke @ 701

    I’m renting, which means I’m shorting the housing market. I’m not a player that tries to make people overpay for housing, that much is true..

    You really believe you are shorting the housing market by renting? Seriously? Why not really short the market by living at a hotel?

    You really don’t see that you are just participating in a different part of the market?

    If you want to short the real estate market, go short some REITs or the stocks of publicly traded companies like Lennar or Pulte. If you really think we are headed for a great real-estate meltdown, you could trade mortgage backed derivatives. Let us all know how that works out for you.

  219. 719
    IssaquahResident says:

    To get through the noise of SeattleTimes and NWMLS reporting, one can actually look at the report and find the row of their interest
    https://www.nwmls.com/library/CorporateContent/statistics/KCBreakouts.pdf

    For me, Eastside is down 5.26% YOY to 900K. MOM it’s also down about 10K. Inventory is significantly higher and pendings are lower.

    In other categories, the downtrend is also very noticeable.

  220. 720
    kenmorem says:

    justme’s seattle times commenting name:

    justbubble
    There is no market turnaround. The jump in the median is on thin Feb volume coming from Dec-Jan pending contracts, with some ill-informed buyers in lower-priced areas bidding too high. The higher-priced areas all have median price drops, as can be easily looked up from the mapped regions in the article. Once the south-county potential buyers realize what is happening, they will withdraw from the market until prices in south county start dropping again. Buyer strike works, as can be seen from 2018 price action. Just say no. Anyone that buys into the “hot spring” propaganda will be sorry.

  221. 721
    uwp says:

    RE: IssaquahResident @ 719 – That’s from last month.

    EDIT: Nevermind, I needed to clear my cache. Annoying!

  222. 722
    Marc says:

    RE: richard @ 714 – Rosen is correct that the MOM went up $45k since January median for King County single family homes was $610,000 and February’s was $655,000. However, I’d bet dollars to donuts that this is more attributable to a change in mix than to true dramatic appreciation month to month.

    I think the year over year comparisons are much more telling and the trend that jumps out to me is the significant and sustained year over year increases in total inventory that started in February 2018. To be fair, this is a comparison to a base year that saw the all-time lowest inventory (at least per MLS records of the past couple decades).

    The real test will come this summer because as you can see in Tim’s Total Inventory chart near the top of this page, that’s when inventory was beginning its approach to its peak in late summer/early fall. If we continue to see inventory doubling on a YOY basis over those months, the wheels will come off this market quickly.

    I don’t think that will be the case and the inventory gains will slow down to something more like 40% to 50% YOY increases during the summer and early fall months. But, I think they’ll pick back up in late fall and into December-January. The end result will be an inventory chart that peaks in August or September and then drops off much less so than usual and looks more like a gently sloping plateau through January 2020 before returning to the usual spring incline.

    This will help cap YOY price appreciation at slightly negative to max 2% for most if not every month of 2019.

    That’s my two cents.

  223. 723
    whatsmyname says:

    RE: Deerhawke @ 718 – I’m using the excess balance in my checking account to short the bond market.

  224. 724
    Justme says:

    I think I figured out what happened to the product mix and why the median sold price went up mo-mo from Jan to Feb. It looks like it is wrong to claim that South King County (SKC) is where the selling action has been, although that specific narrative has been floated by multiple media outlets.

    Here is map (*) that shows closed sales counts broken down by subregions for the last 4 weeks. It turns out that northern KC (NKC) and Eastside (ES) had the most sales. Now, NKC and ES generally has prices that are higher than the county median, but at the same time NKC and ES have had falling prices that made certain buyers bite in Dec/Jan. So with more of the transactions coming from NKC/ES, there was a sudden jump in the median, but the jump occurred because of the significant price reductions at the higher end of the market caused more higher-price product in the sales mix.

    I also took a quick glance KCBreakouts.pdf from today, and I think it confirms what I am saying above.

    So: I think bubble-mongers have started celebrating prematurely. Some opportunistic buyers pulled the trigger in Dec/Jan, but they did it exactly because the median sale price DROPPED in the higher end areas. That caused a countywide median increase, but there was no real price bump in February, just a product mix change.

    (*) https://imgur.com/zWVX2lu

  225. 725
    Market Psychologist says:

    RE: Justme @ 724 – Nice work! Totally agree.

  226. 726
    Jake says:

    It’s pretty hilarious how much influence each one of these Seattle Times articles has. I got an alert today with like 10 price increases on new townhomes. I don’t think that’s a coincidence.

  227. 727
    Eastsider says:

    The market bull’s celebration is probably premature. I am pretty certain the CS Seattle home price index will drop YOY by May despite lower mortgage rates.

    As to homebuilder share prices, Toll Brothers stock went from $45.01 a year ago to $35.51 today, a drop of 21%. This housing market today is clearly a lot more challenging for homebuilders.

  228. 728
    ess says:

    By whatsmyname @ 723:

    RE: Deerhawke @ 718 – I’m using the excess balance in my checking account to short the bond market.

    Interesting – when I look at my checking account – it is always short

  229. 729
    Brian says:

    Anyone who is an active home buyer like me will realize that Seattle Times article was complete fluff due to different mixes as others like justme have stated. I have not seen increased activity at open houses or homes flying off my search results within 2 days of listing like you’d expect if there was enough competition going on to driving up prices that much.

  230. 730
    k says:

    Justme @ 724 , good point, Seattle + Eastside SFH sales share per nwmls numbers:
    Feb – (476(Seattle)+379(Eastside)) / 1417(kc total) > 60%
    Jan – ( 350(Seattle)+322(Eastside)) / 1224(kc total) < 55%

  231. 731
    richard says:

    RE: Marc @ 722 – thanks.

  232. 732
    Justme says:

    RE: k @ 730

    Thanks. But not only Seattle vs Eastside, but also Everything vs South KC

  233. 733
    whatsmyname says:

    RE: ess @ 728
    You can still join the ranks of the financially sophisticated. Use your Costco card to arbitrage the beverage shelf in the fridge, foiling the profiteers of the SBIC, (Safeway Beer Industrial Complex).

  234. 734
    richard says:

    I keep wondering who these buyers are? can you give any input?

    my profile of those buyers are (excluding Chinese buyers since they are mostly investor/speculators)

    1. 28-38 years old, amazon/msft/fb/google worker. feel they are the center of the world, they deserve the tech bubble salary they earned. A couple with no kids or a couple of parents to be.

    2. raised in east or west coastal areas and house always go up is a religion to them.

    3. liberals(anti-trump type), tech smart but not necessarily financially savvy(meaning believe media and follow the trend). even though they are liberal but it does not mean they believe socialism since think house can boost their ego and social status.

    4.very confident , positive , recession is very foreign to them and they never read this blog :)

    I always think the housing price is proportional to available credit and millennials’ finance dumbness(and ego+greed :) ).

    Sorry if someone take it personally, I just want to find the truth.

  235. 735
    IssaquahResident says:

    Justme, it would be great if you could post your findings in the comments of the SeattleTimes “article”. Let us know when you do so and I’m sure people from this blog will put a like on the comment to bring it up.

  236. 736
    Ross says:

    By richard @ 734:

    I keep wondering who these buyers are? can you give any input?

    my profile of those buyers are (excluding Chinese buyers since they are mostly investor/speculators).

    1. 28-38 years old, amazon/msft/fb/google worker. feel they are the center of the world, they deserve the tech bubble salary they earned. A couple with no kids or a couple of parents to be.

    2. raised in east or west coastal areas and house always go up is a religion to them.

    3. liberals(anti-trump type), tech smart but not necessarily financially savvy(meaning believe media and follow the trend). even though they are liberal but it does not mean they believe socialism since think house can boost their ego and social status.

    4.very confident , positive , recession is very foreign to them and they never read this blog :)

    I always think the housing price is proportional to available credit and millennials’ finance dumbness(and ego+greed :) ).

    Sorry if someone take it personally, I just want to find the truth.

    Most software engineers make a good salary, but are also good at math and have a better understanding of recessions, inflation and similar concepts than the typical buyer. Your bias doesn’t help you find the truth. Republicans tend to have math problems. One of the reasons the deficit explodes more under republican leadership than democratic leadership (even while republicans claim to be the party of fiscal restraint (they aren’t))

  237. 737
    Marc says:

    RE: richard @ 734 – Richard, nobody can answer that question for you because there is no data source that collects it. The reality is there all kinds of buyers buying for all kinds of reasons and sellers selling for a plethora more.

    I get a Fox News vibe in your phrasing that implies a search for evidence to support a narrative. I would caution against injecting politics into real estate analysis. The reality is both parties tax and spend like drunken sailors and the only difference is which one holds the white house, senate, and house of representatives at any given time. If McCain had won he would have had more or less the same response to the Great Recession as Obama and it was the massive bail outs and quantitative easing that have brought us to where we are today.

    Hard as it is to believe, we’re in the soft landing and have been for years. The next recession will be ugly but more bail outs and further easing will be promptly set loose and the can will be kicked even further down the road. Japan has laid out our road map with its massive debt and all this talk about Modern Monetary Theory (MMT) is furthering that eventuality. And so it will go for years and years until one day, several decades hence, the marks realize they’re being conned and all that debt cannot and will not be re-paid printing press or not.

    That will be the big one. And it too shall pass.

  238. 738
    uwp says:

    By whatsmyname @ 733:

    RE: ess @ 728
    You can still join the ranks of the financially sophisticated. Use your Costco card to arbitrage the beverage shelf in the fridge, foiling the profiteers of the SBIC, (Safeway Beer Industrial Complex).

    You’re technically shorting everything you want but haven’t bought yet, if you think (not very hard) about it.

  239. 739
    Deerhawke says:

    RE: Eastsider @ 727

    Great point. If you really believe the for sale housing market is going to dump, then by all means short the market by shorting publicly traded home builders– or at least the weakest of them. There is a means to do this via the equities market. If you got the timing right (and that is key going short) you might have made a statement and made some money too.

    But renting is not shorting housing. It works during certain parts of life (college, early adulthood, maybe when you are very old) and certain parts of the economic cycle (when it is much more advantageous to rent than to buy). But do it for too long or because you are afraid to step up to the plate and you will miss out.

    Justme. A lot of builders like me also own rental housing. We may not understand the motivation of lifelong tenants, but we sure do like them to rent from us, accept annual increases in rent and thereby provide stable cash flow.

    Some might call that shorting the renter.

  240. 740
    whatsmyname says:

    RE: uwp @ 737
    Exquisitely phrased; especially the parenthetical.

    RE: Deerhawke @ 738
    I like to think of that as going long on the renter.

  241. 741
    Justme says:

    RE: IssaquahResident @ 735

    Done, posted as comment on the Seattletimes article. Looking for some thumbs up ;-).

  242. 742
    Deerhawke says:

    RE: richard @ 734

    I am a new home builder. My buyers are generally 32-50. Almost all have a bachelor’s degree but advanced degrees are common. They have backgrounds in engineering, tech, math, physics, software, finance, law, medicine or some interesting combination thereof. They are from all over the US (NYC, LA, SF and Silicon Valley, Houston, Austin, Research Triangle, Madison, Boston, Chicago, etc) as well as France, Australia, England, Japan, China and India. Gay, lesbian and straight couples. Same race and mixed race couples. Most are either liberal or liberal with a pragmatic libertarian bent. None seem interested in the BS that Fox News is flogging this week. I don’t get the impression that many are religious in the traditional sense. They all seem quite technologically knowledgable and read fairly broadly. They work really hard and play hard (often out in the mountains) when they get a chance.

    You seem to think that they are fools. Let me assure you that they are not.

  243. 743
    Brian says:

    Fair bit of new listings today despite the snow. And it’s only Thursday.

  244. 744
    Joe says:

    RE: Justme @ 724

    I wouldn’t call people who bought in Jan/Feb “opportunistic buyers”. In my mind they are more accurately called bagholders. Prices are a falling knife at this point in time. Looks like stocks are ready to head back down again too. Of course, these price drops happen when the economy is headed towards recession. The Atlanta Fed is forecasting only .3% GDP growth for this quarter. The are usually miss on the high side, so we could be in a recession already with layoff announcements coming soon.

  245. 745
    richard says:

    RE: Deerhawke @ 741RE: Deerhawke @ 741 – Hi Deerhawke and Marc,
    thank you for your valuable data and comment.

    First, i acknowledge i made a mistake by naming liberal(anti-trump). Actually i am not a trump supporter and i think both parties are totally corrupt and have zero interest in addressing my concern as a middle-class wage, sub-mid-class-housing renter.

    Your buyers seems can by age be broken down in to 32-38(millennials) and established home owners(38-50, have history of owning house and may save decent downpayment). For me, i am more interested the millennials , because if the housing goes down as I wish, this band is most vulnerable.

    your statement is quite passionate by picturing the diversity , high energy of your clients. I guess i want to know what underlying reasoning of buying a home. Is it like a good investment, FOMO or else.

    I don’t think they are fool(afterall they can earn some decent down payment for such pricy house, right?). I just don’t think they make a good financial decision if they bought your house in the last three years. I believe in the last housing crash, there are also people like your clients, smart, knowledgeable but happen to make a unsound decision when it come to housing.

  246. 746
    pfft says:

    Who the hell shorts the bond market?

  247. 747
    dariakus says:

    As a 40-something with a great job and zero debt, I can shed some light on why I’m a full time renter, and will be for the foreseeable future.

    Owned a house in Florida that I purchased at the absolute peak of the market in 2006-07. Bad decision, possibly should have seen it coming. The house almost immediately plummeted to less than half what we paid for it. Still isn’t recovered to this day.

    Job transferred me out of state. With the crash, rents were way down too. We couldn’t rent the house for half of what it would take to cover the mortgage so we ended up in a short sale situation.

    That closed in 2010/2011 and was thus on my credit report until last summer, preventing me from buying a house. Now that I’m clear to buy, I can’t save a down payment fast enough even though I’ve been saving up a pretty massive one for years.

    I’ve got several kids. We can’t move into some cardboard box, and even those cost half a million *at least* unless you move an hour away from town. But if I’m commuting an hour+ to work and my kids all have to give up their various extracurricular activities and whatnot, it’s not worth it.

    So we rent. I’m in a nice five bedroom house in Kirkland for nearly a thousand dollars a month less than a mortgage payment would be on a house further away. Even if my rent goes up a hundred bucks a year (which is average in the current market but starting to slow) it won’t hit that differential.

    Housing will stabilize at some point for some time in that decade, perhaps. My kids will be moving out and we’ll need less house. Situations will change and maybe we’ll buy eventually. But with our current lifestyle choices, combined with the very responsible fact that we’re maxing out our retirement funds every year and are on track to retire with millions by 55, I just don’t feel any pressure to buy in a market that’s continually screaming away from my grasp. Why put myself in that much debt? Not worth it.

    And before anyone says “we’ll just use your 401k,” just stop. :)

  248. 748
    Marc says:

    RE: Deerhawke @ 741

    Deerhawke, the NWMLS’ 2018 year end report says there were 28,269 single family home sales in King County (not counting 7,857 condo sales). How many of those were yours?

  249. 749
    richard says:

    Who is the most vulnerable in the coming housing downturn (if there is any downturn at all)?

    First of all, I have no strong data to back my conclusion. This is based on my limited observation and my logical thinking.

    In the last housing downturn, who is most vulerable in the housing crash? The answer is easy in hindsight: subprime borrowers. The question now is who is the most vulnerable in today’s Seattle housing market. I am bold enough to offer an answer: the 28-38 year old millennials home owners.

    Wait a minute, have you heard the REIC has been repeating the same statement in the media: This time is different, the lending standard is tighter and the borrowers all have solid job and good credit score … and by the way, the Seattle job market is stronger than ever. So What am I talking about?

    Yes, put the REIC’s BS excuse aside, millennials will be the crack of the home owner class, especially those who bought house in the last three years. There are also a group who bought between 2010 and 2016, they probably will be doing allright even if there is 20-30% crash in Seattle housing market since they have a lot equity to cushion the blow. So for a middle-class renter like me, in my mind, the only realistic hope to afford to buy or to have substantial buying opportunity is betting these millennials home owner will fail and fail miserably. That sounds dark and selfish, but what else I can hope for, a recession? Maybe. Actually recession and millennials failure are interconnected. Below are some major reason to support my hope or my conclusion.

    1. Most millennials are first-time and leveraged home buyers. They may not have a sound financial footing to start with. They may underestimte the cost fo owning a house as recent KIRO7 radio program demonstrated: 2/3 of millenial recent buyers regret buying a home.

    2. Millennial home owner maybe mentally unfit to staying in the same place for a long time. Millennials are intrinsiclly more intended to be mobile and not accustomed to stay in sub-condition house for a serious long time(for them, it is like doing time in jail). In not-so-nice words, millennial are unfit for living a stable boring life and will be tired of commiting big finance resource on a house. They aspire traveling, outdoor activites and colorful social life. The home owning is opposite to all of that: It drains you financially, emotionally and physically. If the housing market condition does not allow you to sell without taking a loss, it will be extremelly painful for millennial. They will be first to hand over the key and give up.

    3. Divorce. They got to divorce,right(statisitcally speaking:)? When they have children, the cost and energy for raising children will drain them even more financilly and physically. The previous freedom they enjoy as a renter is long gone. They are dead in millennial sense. The couple will argue and then they divorce. But they may not be able to divorce because a down housing market may not allow them to do divorce financially, so they will be sperated in the same house, literally two prionsers in their own house. High housing cost may reduce divorce rate and birth rate, which is an interesting social phenomenon. let us wait and see if this will happen.

    4.On the positive note, well, the millennials are young they may work their way up and improve their finance year over year. They may pay off their debt and even upgrade to a nicer house in the future. It may well be that case that certain millennials will elevate to higher level of the food chain and accomplish all these. But statisitically speaking, most of them just keep their nonoutstanding salary and compensation.

    5. How about FANG+Microsoft? Millennials of these companies will have good paying power to pay off their mortgage. This statement is related to how you view the tech boom in this town. First of all, this boom has been going on for quite some time and due for a correction. The catalyst to prick the bubble may well be the corporate debt mentioned by media nowadays. I encourage you to check the balance sheets of FANGM. If I remember correctly, the liability/asset ratio of Amazon,Apple, Microsoft are 75%,70% and 66% respectively, Netflix’s ratio is about 80%, and Facebook and google has lower ratio around 20%. Usually 40% is deemed healthy. I am surprised to see Apple has such high liability/asset ratio since it is one of the most profitable company. If Apple has such heavy debt load, how about the rest of fortune 500 companies? In short, I doubt these great companies can keep increasing their employee’s compensation level given their already balooning debt. At some point, something gotta give and Seattle job market will cool down. Can it 2020? That is very possible if you follow recent earning report from major U.S. companies.

    I wish in the last three years, millennials are the other major buying force besides Chinese. The more leveraged they are, the better chance I have as a renter in the next housing downturn.

  250. 750
    richard says:

    A future crash senario I hate to see

    continue my last post about millenials. This is a darker future senario for renter. Let’s pray it won’t happen(but i am not optimistic about it).

    Let’s say the show goes by according to my wish, you know, the millenial fail to keep up with the payment and the housing market crash. Can I gain on their loss? Well, I hope so but I have to be intellectually honest to myself and readers in this blog. I have to mention the elephant in the room: GOVERNMENT INTERVENTION!.

    If the crash happens in the next 5 years. Millenials is in danger of losing their homes, what the government will do? Given the millennials are the backbone in these rich costal cities, if the government want to bail them out , which is immoral by the way. What I can think of is that the government and bank will try to restructure their loan term. Since when millennials bought their house in the last three years, they already have got very low rate so it is hard to refinance in a lower rate. Given the high debt level the dumb millennials committed themselves to, the restructuring might be
    1. Increase loan term to reduce monthly payment.
    2. PRINCIPAL REDUCTION!!(extremely immoral for renter like me)
    If that happens, I hope the renters will not keep silent and voice your strongest objection. let’s wish the crash happen but the debt restructuring not happen.

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