Cheapest parts of King County still make up the largest share of sales, even as prices there grow the most

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It’s been a few months since we took a look at the in-county breakdown data from the NWMLS to see how the sales mix shifted around the county. I like to keep an eye on this not only to see how individual neighborhoods are doing but also to see how the sales mix shift affects the overall county-wide median price.

As of March, prices are up from a year ago in the low-end regions, flat in the mid-range regions, and down in the high-end regions. Meanwhile, the share of sales is tilting toward the low-end regions.

In order to explore this concept, we break King County down into three regions, based on the NWMLS-defined “areas”:

  • low end: South County (areas 100-130 & 300-360)
  • mid range: Seattle / North County (areas 140, 380-390, & 700-800)
  • high end: Eastside (areas 500-600)

Here’s where each region’s median prices came in as of March data:

  • low end: $379,000-$593,750
  • mid range: $615,000-$1,090,000
  • high end: $814,037-$2,586,183

First let’s look at the percentage of each month’s closed sales that took place in each of the three regions.

% of Total King Co. SFH Sales by NWMLS Area

The last few years have each followed a similar pattern: while sales in the mid-range regions maintain a fairly steady share of sales in the county each month, sales in the cheaper parts of the county (South King) surge in the winter and dip in the summer, with sales in the most expensive parts (Eastside) doing the opposite. Except for a big spike in Seattle in February, so far we’re seeing the same pattern this year.

The raw number of sales in all three tiers increased between February and March. Month-over-month sales were up 35 percent in the low tier, up six percent in the middle tier, and up 42 percent in the high tier.

Meanwhile, year-over-year sales were down in all three tiers. Compared to a year ago, sales decreased five percent in the low tier, fell seven percent in the middle tier, and dropped four percent in the high tier.

As of March 2019, 37.9 percent of sales were in the low end regions (basically flat from 37.8 percent a year ago), 32.0 percent in the mid range (down slightly from 32.6 percent a year ago), and 30.1 percent in the high end (up from 29.6 percent a year ago).

Here’s that information in a visual format:

Bank-Owned: Share of Total Sales - King County Single-Family

Here’s an updated look at the percentage of sales data all the way back through 2000:

% of Total King Co. SFH Sales by NWMLS Area since 2000

During the housing bubble that burst in 2008, South King consistently had the largest share of sales. We’ve seen the same thing over the last few years as prices have once again grown to astronomical levels. In the lead-up to the big 2008 bust, sales in South King fell as sales in Seattle gained ground. February’s spike in Seattle’s sales share could be a portent of a similar pattern, or it could just be a blip. We’ll see over the next few months.

Finally, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

Median Price of Single Family Homes Sold

All three tiers saw month-over-month gains in their respective median-median price, but only the low tier is currently at an all-time record high. Month-over-month, the median price in the low tier rose three percent, the middle tier increased eight percent, and the high tier gained nine percent.

Eighteen of the twenty-nine NWMLS regions in King County with single-family home sales in March had a higher median price than a year ago, while 23 had a month-over-month increase in the median price.

Here’s how the median prices changed year-over-year. Low tier: up 5.2 percent, middle tier: up 0.1 percent, high tier: down 4.7 percent.

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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.

815 comments:

  1. 751
    Justme says:

    Weekend inventory update graphs are up, please check the link

    https://twitter.com/coqumragep279/status/1129804666911334400

    Please follow and retweet. Data needs to be socialized with as many potential buyers and sellers as possible. More commentary soon to follow right here on SB.

    Buyer strike is alive and well, and causing more price reductions. Keep striking. Let’s bust this bubble, and good!

    #housingbubble #buyerstrike #bustthebubble

  2. 752
    Justme says:

    Weekend update, King County active inventory, graphical edition

    Commentary: This weekend is the weekend before the Memorial Day weekend, historically the absolute peak weekend for listing and selling houses in King County (Seattle and suburbs). But this year is special. The spike in inventory is extra large, and KC SFH active inventory peaked at 4325 houses for sale on Friday night. 2012 was the last year the KC SFH inventory exceeded the current count. That’s right, this week in 2013,2014,2015,2016,2017,2018 were all lower than this week in 2019. Why is this happening? Well, it is because lots of product is coming on the market, but even at the peak of buying season, product purchases are lest than 50% of what is being offered.

    Product sales continue to lag new listings, and many sellers are being left behind. Price reductions are commonplace, with 321 price reductions for KC SFH product the last 7 days. Many >4wk old listings are languishing on the market. There is little doubt that the bubble-bust is in full swing. There are lots of sellers, but not enough willing buyers at the prices being offered. Many buyers are on strike, refusing to buy at currently offered prices. Sellers have gone from “I think I’ll wait another year” to “Better get my house on the market before it is too late”. Still, many sellers are over-pricing the market by a significant amount, and their product is languishing.

    Absorption of product continues to be well below 50%, with SFH absorption to pending at merely 39% for the last 4 weeks. Clearly, many buyers are unwilling to participate at the current price levels. That pesky buyer strike, again. Buyers that find themselves competing with another buyer will do well in just withdrawing from bidding. Better yet, don;t do any bidding at all, and join the strike. The sellers had their seller strike in 2013-2018, and uninformed buyers engaged in panic-buying. No more. It is time to show the sellers who really sets the price.

    https://imgur.com/account/favorites/DJwONfZ

    2019-05-18 King County SFH active for-sale inventory 2017-2019
    2019-05-18 King County Condo active for-sale inventory 2017-2019
    2019-05-18 King County SFH active for-sale inventory ratio YYYY/2017
    2019-05-18 King County Condo active for-sale inventory ratio YYYY/2017

    The graphs compare 2017-2019 inventory on an hourly basis. 2017 was the year inventory was at a multi-year low for most of the year, a fact that was much ballyhooed by the sell-side and inflation-mongers of the property market. But the shoe is now on the other foot. Combine the increase in inventory with a much more realistic criterion that 1month worth of active inventory is all that is needed for a “balanced market”, the property market has shifted radically since March 2018 and continues to do so in 2019. Click the link and scroll to see the graphs. Click on each graph for an enlarged view. ESC and scroll to navigate.

    Many potential homebuyers in King County went on strike in April 2018, and over a year later, the strike is still going strong, with Case-Shiller index dropping for 8 months in a row in the expensive areas, while lower-priced subregions are having a small spring price bump, due to foolish or uninformed or priced-out buyers that are still overbidding on product in the lower-priced subregions.

  3. 753
    IssaquahResident says:

    Obvious bubble burst! Feel sorry for the uninformed buyers who pull the trigger these days.

  4. 754
    Realistic says:

    RE: Justme @ 752

    Thanks Justme. I am one of those buyers waiting on the sidelines for a better time to buy. However, I do have 3 observations that don’t quite align with the buyer’s strike theory and I’d like to hear what you and others think:

    1) Recently the weekly inventory swings (delta between highs and lows over one week periods) has been much larger than in the previous 2 years, which would mean more houses are going pending than in 2017-2018 during the same time frames.

    2) The spike this weekend is indeed very high but only if we consider the delta from the last week’s lowest point to the highest. Looking at the delta between the last weekend’s peak and today’s, the relative spike is a lot smaller than in 2018 and on par with 2017.

    3) The condo inventory line is barely increasing (it’s going almost sideways). A far cry from the 2018 trend. If this general trend continues the condo inventory this summer will be much lower than last year. If condos are supposed to be the equivalent of canaries in coal mines, as previously mentioned on this forum, they don’t seem to forecast a strong buyer’s market.

  5. 755
    David says:

    Seller’s Strike: Never sell below your asking price. Wait it out. Unless it is absolute crap.

    Be like Buffett: Sell when the price is high – otherwise, don’t sell.

  6. 756

    RE: Deerhawke @ 747

    Pretty much concur, though had good luck with a Seattle condo listing recently. Pretty much the same as you are saying. Sold to the first buyer in but took 5 days for that buyer to make the offer. They did their homework well beforehand. I wouldn’t call the condo market dead.

    Last weekend there was a 9 offer by review date here on an older single family in Kirkland that likely had the old $100,000 over asking cap on it. Priced at $1M. I know it sold for at least $60k over asking. I wouldn’t call it panic buying. Just a lot of people wanting the same house. Meanwhile a fairly identical house with fewer recent remodel items was sitting around when this one listed and is still sitting around now. So bright and shiny objects are drawing the bigger crowds. Of course with 9 offers…no inspection contingency.

    I’m a little quieter on detail this time of year because I’m too in the thick of it to share. I did correct that foreclosure error in the comments above. But I tend not to talk about the market in high season vs 4th and 1st quarter. Just wanted you to know that I concur for the most part with your post, as usual.

    Once I make my prediction for the year, as I did early this year, I don’t need to run the data while I’m juggling all the balls in the air.

  7. 757
    justsomedude12 says:

    By Realistic @ 754:

    RE: Justme @ 752

    3) The condo inventory line is barely increasing (it’s going almost sideways). A far cry from the 2018 trend. If this general trend continues the condo inventory this summer will be much lower than last year. If condos are supposed to be the equivalent of canaries in coal mines, as previously mentioned on this forum, they don’t seem to forecast a strong buyer’s market.

    This will probably get nitpicked by someone as somehow anecdotal, but I have saved searches on Zillow and Redfin for downtown Seattle condos, and the number of listings are up 70% over this same time last year. But again, that’s just the map parameters I’ve saved for what I consider downtown. I’ve kept the maps the same though, so it is an apples to apples comparison to last year.

  8. 758
    richard says:

    above 1m sfh and condo market is dying.
    suckers and rich amazonians compete for sfh below 1m sfh and think they got a deal. that’s it.
    my friend is selling his townhome in greenlake soontobe shithole due to high density residential constructions.

  9. 759
    Matt P says:

    RE: Justme @ 752 – Link not working anymore.

  10. 760
    Justme says:

    RE: Matt P @ 759

    Try this link as an alternative. Not sure why the problem occurs. I tested in incognito mode and experienced, like you, that the original link fails. May have something to do with how sharing and “favorites” are approved at imgur. Imgur can be a bit arbitrary sometimes.

    https://imgur.com/a/DJwONfZ

  11. 761
    Matt P says:

    By richard @ 758:

    above 1m sfh and condo market is dying.
    suckers and rich amazonians compete for sfh below 1m sfh and think they got a deal. that’s it.
    my friend is selling his townhome in greenlake soontobe shithole due to high density residential constructions.

    Ah yes, NYC, most dense city in the US – such a craphole.

  12. 762
    Erik says:

    Ardell sold another condo for me. She got the highest price ever in the complex. When I bought the unit, it was probably the worst unit in the building. I did a nice remodel and paid a special assessment for the new owner that I heard about being planned for this winter. I like clean deals and I wouldn’t want to dump someone else with an assessment when I knew it was coming.

    This condo was smaller than some of the other units in the building with one outdoor parking spot. Other larger units have 2 indoor parking spots. The view is nice, but again, not the best in the building. I believe that we got the highest price of any unit sold in the building because I did a nice remodel and didn’t cut any corners. I paid the special assessment ahead of time. Ardell did a great job staging the condo and took some amazing pictures. Ardell is an excellent agent and I totally recommend her to anyone that likes selling quickly for a great price.

  13. 763
    David says:

    I just visited a housing development in White Center that is literally on the same street as disguised Section 8/Public housing – all mixed together. These sfh’s are $750k.

    NOTHING would make me feel better about my life than living in a house I am paying $750k for and living next to someone who gets theirs basically for free. Because NOTHING instills pride of ownership like a neighbor who almost certainly will never spend a thin cent on anything maintenance related.

    And you get to listen to them ululate to Allah 5 times a day.

  14. 764

    RE: David @ 763
    The Data isn’t There for Trending

    Of course it isn’t, its embarrassing and could cost Open Border Party (OBP) politicians a loss. But I noticed that even Habitat for Humanity gives free homes to foreign immigrants at a much higher rate than legal citizen poor. The OBP board at this particular charity [?] picks the lucky lottery winners???..

  15. 765

    RE: Erik @ 762
    Great News Erik

    Now ya get a backyard for your new baby? I’m so happy for you ;-)

    Yes I’ve always recommended Ardell for the job…she rarely misses the small details…

    I

  16. 766

    RE: David @ 755
    Trump Did the Same Thing

    All flippers that make big bucks do it…

  17. 767

    RE: softwarengineer @ 765
    Hey Erik

    I have good news too! My 30 YO daughter and husband are coming to Seattle from Kansas City next month for a ten day visit….they live in my Kansas house there and it will be their’s soon too….time for prime rib and caviar…LOL

    Their life in Kansas City has been great too, he sings in a Celtic band and she knows all the lyrics too ;-)

    Life is good!

  18. 768

    Seattle Has the Answer to Open Up More Condo/SFH Real Estate land Availability

    Close all the cemeterys and replace them with building lots….

    https://www.msn.com/en-us/news/us/washington-state-braces-for-eco-friendly-human-composting/ar-AABzXSk

    I hope the old cemeterys aren’t Poltergeist haunts building lots…LOL

  19. 769
    Eastsider says:

    By Erik @ 762:

    I did a nice remodel and paid a special assessment for the new owner that I heard about being planned for this winter.

    Just want to note that pre-paying special assessment is uncommon in condo sales and it probably has something to do with your unit getting the highest price ever in the complex. Subtract the special assessment and your unit is probably sold at the same price as the other units.

  20. 770
    Eastsider says:

    By Deerhawke @ 747:

    Closed on a home I built this week.

    Is it a different market from Q1-2018? You bet. Instead of being pre-sold as we normally are, we had to go through that old sales exercise of broker’s open, open house, etc. Dozens and dozens of agents and their buyers came through before three offers materialized. Sold in a week, closed all-cash two weeks later. And the sale price in $/sf was just a tad bit below Q1-2018 levels.

    Just one data point for you.

    I don’t mean to over-generalize from my experience. But I will tell you that the single family market this spring is doing fine.

    It is not the panic buying market that came to a crescendo in Q1-2018. Buyers now feel that they have a bit of time to make an offer. But if they feel that the property is special, they give themselves a few days to think it over, and then don’t hesitate a lot. Their agents make the effort to ask if there is anyone else interested and if there might be other offers to compete against. Then magically all the offers show up on the same day within a few hours of each other.

    Are there some properties sitting that would not have in 2017? Definitely.

    Poor location, poor access, poor light, no views, no charm, confused floor-plan, cheap build, me-too architecture, weird architecture, no creativity, inconsistent design theme, the same old 2015 finishes, the same damned boring modern box, , etc. etc.

    In 2017, it was all selling and selling fast– buyers knew that they didn’t have much choice and looked past the deficiencies.

    2019 is not a desperate market. It is a more balanced, normal single-family market.

    Certainly looks like a soft(er) market to me.

    – Presales are gone.
    All cash buyer! I bet nearly all your previous sales were to buyers with loans.
    – Sold price is below 2018Q1. Your worst margin in 5 years?
    – I see new constructions in Kirkland on crappy lots that are literately under the powerline and some even come with the tower! These builders and their buyers are going to lose money.

    Not saying the market is bad for sellers (yet) but good days are over.

  21. 771

    RE: softwarengineer @ 767
    Here’s the Junior/Senior College Money to the U of W Alternative Use

    https://www.realtor.com/realestateandhomes-detail/1126-S-49th-Dr_Kansas-City_KS_66106_M75465-10217

    Its really a 1500 SF 3 bdrm with weight room play area attached and piano included…the garage was remodeled…check out the back yard for kids to play in….GIANT, compared to Seattle….

    Prices in Kansas City are holding steady the last year and property tax is like down to $490 every 6 months….it was $512 last year…schools included. They have a dinky state income tax that is chump change compared to “our property tax minus their property tax and state income tax together”…Ben’s wages have been sky rocketing and they easily live on one income in my family estate planning…Milenial Women all want to be housewives at home [70% polled]. They make Seattle pay with Detroit house prices and moderate temperatures too [similar to Seattle weather, a bit hotter in summer but all homes in Kansas have central air]. Period.

    I love Seattle, but its become a hard place to afford [degreed or not]. Accept it and keep the your kids out of your basements….LOL

  22. 772
    Joe says:

    RE: Justme @ 751

    Whoa Daddy! That’s one heck of an inventory spike.

    The interesting part is, I was looking at inventory on Trulia in Woodinville. I was struck by how many new houses showed up in the listings. I had the definite sense something was going on. Then I saw your graph, which confirms sellers are coming to market in droves because prices have peaked and are now on the downslide.

    I remember the last bubble in 2007. Prices started out strong in Spring 2007, then by Fall everything fell apart and there was a HUGE panic as price cuts started permeating the system. Prices dropped a good 20% in a few months.

    We still haven’t seen that panic drop yet, so don’t buy anything until it happens. It will happen, most likely this Fall. People who buy now could see an immediate loss of 20%. We are at the same spot as Spring 2007 in terms of market dynamics.

  23. 773
    Joe says:

    RE: David @ 755

    How can I wait? Prices are dropping while I’m sitting on an empty house with $4000 per month carrying cost. If I don’t sell before Fall that’s another $40,000 out of my pocket as I hold over Fall and Winter, and there’s more than a good change that prices are much much lower next Spring. Buyers can just wait and rent because they have no skin in the game.

  24. 774
    Deerhawke says:

    By Eastsider @ 770:

    By Deerhawke @ 747:

    Closed on a home I built this week.

    Is it a different market from Q1-2018? You bet. Instead of being pre-sold as we normally are, we had to go through that old sales exercise of broker’s open, open house, etc. Dozens and dozens of agents and their buyers came through before three offers materialized. Sold in a week, closed all-cash two weeks later. And the sale price in $/sf was just a tad bit below Q1-2018 levels.

    Just one data point for you.

    I don’t mean to over-generalize from my experience. But I will tell you that the single family market this spring is doing fine.

    It is not the panic buying market that came to a crescendo in Q1-2018. Buyers now feel that they have a bit of time to make an offer. But if they feel that the property is special, they give themselves a few days to think it over, and then don’t hesitate a lot. Their agents make the effort to ask if there is anyone else interested and if there might be other offers to compete against. Then magically all the offers show up on the same day within a few hours of each other.

    Are there some properties sitting that would not have in 2017? Definitely.

    Poor location, poor access, poor light, no views, no charm, confused floor-plan, cheap build, me-too architecture, weird architecture, no creativity, inconsistent design theme, the same old 2015 finishes, the same damned boring modern box, , etc. etc.

    In 2017, it was all selling and selling fast– buyers knew that they didn’t have much choice and looked past the deficiencies.

    2019 is not a desperate market. It is a more balanced, normal single-family market.

    Certainly looks like a soft(er) market to me.

    – Presales are gone.
    All cash buyer! I bet nearly all your previous sales were to buyers with loans.
    – Sold price is below 2018Q1. Your worst margin in 5 years?
    – I see new constructions in Kirkland on crappy lots that are literately under the powerline and some even come with the tower! These builders and their buyers are going to lose money.

    Not saying the market is bad for sellers (yet) but good days are over.

    1) Clearly 2019 is a softer market than Q1-2018. That was a market of pure buyer desperation and could not last.

    On the other hand, 2019 is a much more vibrant market than Q-2, 3 and 4 of 2018 when a lot of people kept looking, but were much more hesitant to commit. A lot of talk then about catching a falling knife. Not so much now.

    2) Pre-sales are rarer, but not gone. I am negotiating one now. It depends on:
    a) the neighborhood and what inventory is in that neighborhood
    b) how special the individual lot and property is, and
    c) the reputation of the builder and his/her connections to agents who know how to do pre-sales

    3) Yes, no question the all cash, no contingencies, close in 2 weeks buyer went to the head of the line and got a discount. All cash was a much more common scenario in 2016, 2017 and Q-1 2018 than now.

    4) For me, around the same margin as 2017 sales and Q-1 2018 sales. There is some gamesmanship about pricing. I marked the house up 2% more than it should have been. The seller came in 3% low. As a result, he got the 1% discount he deserved for an all-cash, non-contingent, quick close offer. If he had waited another 3-4 days in putting in his offer, he would have been beaten out at full price by an offer that required financing.

    5) I am more than glad to let other builders take the powerline lots, the busy street lots, the sunken lots, etc. etc. and then finance them with hard money. They may do OK in a rapidly rising market, but will eventually get a Builder’s Darwin Award.

  25. 775
    David says:

    By Joe @ 773:

    RE: David @ 755

    How can I wait? Prices are dropping while I’m sitting on an empty house with $4000 per month carrying cost. If I don’t sell before Fall that’s another $40,000 out of my pocket as I hold over Fall and Winter, and there’s more than a good change that prices are much much lower next Spring. Buyers can just wait and rent because they have no skin in the game.

    If they can sell $750k houses in White Center in an island of Muslim infested streets of free housing – you are going to lose that bet.

  26. 776
    Blurtman says:

    Cracker box house worth 8.7% per year more since March 2016 because…..?

    Well because.

    Price trolling to see what bites. Besides the house.

    Date Event & Source Price Appreciation
    May 9, 2019
    Price Changed
    NWMLS #1433560 $699,900 —
    Apr 29, 2019
    Price Changed
    NWMLS #1433560 $724,900 —
    Apr 4, 2019
    Listed (Active)
    NWMLS #1433560 $739,000 —
    Mar 28, 2016 Delisted
    NWMLS #896609 — —
    Mar 28, 2016 Sold (MLS) (Sold)
    NWMLS #896609 $555,000 —

  27. 777
    Erik says:

    RE: softwarengineer @ 765
    Thank you SWE. Ardell is awesome.

    We need a yard since I’ve acquired a dog and a son now. I do like condos, so I’ll move into one when I older and my situation changes.

  28. 778
    Erik says:

    RE: softwarengineer @ 767
    That’s awesome SWE. Your daughter is lucky to have you as her father.

    I met a guy from Kansas City in grad school at uw. He liked Kansas City more than Seattle, so he moved back to get his PhD in mechanical engineering there. His dad was an engineering professor at university down there, so I’m sure that has something to do with it.

    Anyway, your daughter is coming back to see you and that’s great!

  29. 779
    Erik says:

    RE: Eastsider @ 769
    Subtract the special assessment and my unit is still the highest priced unit my a good margin. I believe it’s more my remodel, paying the special assessment ahead of time, and having Ardell stage and sell it for me. Ardell is an expert stager, best I’ve ever met.

    I paid a designer for an hour consultation up front, which really helped me choose the right finishes. That helped too.

  30. 780
    OA says:

    RE: Eastsider @ 769

    Haters gonna hate lol.

    Erik – Congrats on the sale and making money!

  31. 781
    Ardell DellaLoggia says:

    RE: Eastsider @ 769

    The only difference was paying it in advance or at closing. Same net. But a higher price to say amount due zero. Smart move on Erik’s part.

  32. 782
    Eastsider says:

    RE: OA @ 780 – That’s one hateful comment…

  33. 783
    Eastsider says:

    RE: Ardell DellaLoggia @ 781 – Most assessments transfer to new owners but Erik’s case may be different? If special assessment is included in sales price, he will be paying extra taxes (and commissions lol)… I would credit buyer at closing.

  34. 784
    OA says:

    RE: Eastsider @ 782

    You know what I mean. You’re pretty quick to try to discredit him saying he got the best price.

    It’s ok to celebrate another man’s success.

  35. 785
    Erik says:

    RE: OA @ 780
    Thank you. I work very hard at it.

  36. 786
    OA says:

    RE: Eastsider @ 783

    Lol dude you’re so full of yourself. You don’t think all of this was considered before listing it?

    You’re obviously the smartest guy in the room, they should’ve hired you as a consultant.

  37. 787
    Erik says:

    RE: Eastsider @ 783
    New owner would have owned the unit a few months and had to pay a special assessment. If I sold and stuck the new owner with an assessment, I would totally be within the rules. I wouldn’t want to be treated like that if I was a buyer so I don’t treat others like that. I believe that you make more money if you treat people well in real estate deals vs trying to only get a better deal.

  38. 788
    sfrz says:

    RE: Erik @ 787 You aren’t treating him nice. You treated yourself nice. Don’t break your arm adjusting that halo.
    You both came to the table. You both made the decision. You made money. Ardell made money. He got an airbox to store his possessions in that he will regret in a few months.

  39. 789
    Joe says:

    Just got back from another tour of Woodinville open houses. Absolutely dead. Checked out six houses and only saw two other people all day. The residents had moved out of all the houses.

    People holding these high priced empty homes will have to keep dropping prices until they get buyer interest. In order to avoid following the market down for years, some smart sellers will take some pretty sizable price drops and move on. The rest will watch their empty houses sit and suffer the related financial anxiety. Greed is not good. It will add stress to your life and shorten your lifespan.

  40. 790
    sfrz says:

    RE: BacktoBasics @ 741 – YES, There is something wrong with flippers making fast casino cash. Flipping within 1-2 years should be slapped with a massive capital gains tax. You buy it, you keep it for your H.O.M.E. This is bubble madness talk. It will end very badly.
    This frenzy is all cooked up by the central banks, as are the multitude of bubbles being juggled right now.
    Jesse Colombo’s current bubble list:

    “Here is the list of dangerous economic bubbles that I am warning about:

    The U.S. stock market bubble
    U.S. Housing Bubble 2.0
    The U.S. commercial real estate bubble
    The global property bubble
    The U.S. higher education bubble
    The U.S. auto loan bubble
    The U.S. healthcare bubble
    The U.S. restaurant bubble
    The tech startup bubble
    The global bond bubble
    The derivatives bubble
    The ETF and passive indexing bubble
    China’s housing bubble and debt bubble
    The emerging markets bubble
    The commodities bubble
    Canada’s housing bubble and debt bubble
    Australia’s housing bubble and debt bubble
    New Zealand’s housing bubble
    The art, wine, and spirits bubble”

  41. 791
    Ardell DellaLoggia says:

    RE: Eastsider @ 783

    You are a bit confused on the facts here and I can’t give the detail as that is confidential info. Suffice it to say that your negative comment #769 aimed at Erik is just dead wrong in this case. Also your suggestion to credit the buyer is wrong as well. The buyer’s lender would not have allowed that nor would it have worked in any case. Couldn’t possibly be done the way you suggest.

    Erik did a great job. He’s an awesome seller. If I ask him to do 2 things, he does 3. If I ask him to do something, he does it ASAP. He makes a lot of money at doing this, but he works extra hard at it too.

    This type of assessment is never carried forward to the buyer. That’s all I can say. You are talking about a different kind of assessment. Not sure where you are getting the info about it being “uncommon” but no, not correct. I’ll put my 29 years of first hand knowledge on that against wherever you are getting your info.

    Just say “That’s great Erik” and don’t try to read something into it that isn’t based on fact in order to turn it into a negative outcome. It was a great outcome, and a bit unexpected given where everyone here is saying the condo market is at present. Even in this condo market, some great things do happen for sellers like Erik.

    Sorry Erik. I usually wouldn’t speak up on a private matter, but hopefully was able to defend you against the negative comment without giving away any private info. You are awesome!

  42. 792
    sfrz says:

    RE: Ardell DellaLoggia @ 791 – Let me help you with that 4th paragraph, since you are on the SEATTLE BUBBLE BLOG, not THE SEATTLE INVESTORS’ BLOG:
    “It was a great outcome, [for Eric and me] and a bit unexpected given where everyone here is saying [the facts of the US housing bubble]the condo market [is tanking] is at present. Even in this condo market, [which is tanking] some great things do happen for sellers like Erik.[some FB is a bagholder].

  43. 793
    Erik says:

    RE: Ardell DellaLoggia @ 791
    Thank you Ardell. You are an awesome agent. We did good and brought a great product to the market. The new owner will be very happy. My guess is the value of that condo keeps going up in value because it’s a unique product in a great location. Every condo we sell seems to raise the value of the units in that complex.

  44. 794
    David says:

    Most open houses are usually dead air.

    By Joe @ 789:

    Just got back from another tour of Woodinville open houses. Absolutely dead. Checked out six houses and only saw two other people all day. The residents had moved out of all the houses.

    People holding these high priced empty homes will have to keep dropping prices until they get buyer interest. In order to avoid following the market down for years, some smart sellers will take some pretty sizable price drops and move on. The rest will watch their empty houses sit and suffer the related financial anxiety. Greed is not good. It will add stress to your life and shorten your lifespan.

    1By Joe @ 789:

    Just got back from another tour of Woodinville open houses. Absolutely dead. Checked out six houses and only saw two other people all day. The residents had moved out of all the houses.

    People holding these high priced empty homes will have to keep dropping prices until they get buyer interest. In order to avoid following the market down for years, some smart sellers will take some pretty sizable price drops and move on. The rest will watch their empty houses sit and suffer the related financial anxiety. Greed is not good. It will add stress to your life and shorten your lifespan.

  45. 795
    Erik says:

    RE: Joe @ 789
    Thanks for the tip Joe, I’ll check out Woodinville real estate and maybe get something for cheap. Everywhere else appears to be a hot market this year. Not as hot as the past few years, but still hot. The past few years has been insane.

  46. 796
    S-Crow says:

    Glad that Eric was able to sell at this time. Making a net profit after taxes is the cherry on top. If Eric want’s to share more details about why he’s chosen to sell at this time on a public forum/blog, it’s up to him.

    There’s nothing inherently devious or wrong with flipping property. It carries risk. Flipping also has a finite timeline or ideal window. It serves a purpose and improves homes/condo’s etc. Howevever, people in this industry love to talk “game” about the money and they rarely see what escrow see’s and that is the losses. I’ve got clients that have made $2Mil+ on flips in aggregate and have also dealt with flips in default and foreclosure, in this market, today. So, it’s not all the gravy train as too many in the real estate industry want to peddle.

    Regarding the market:

    People apparently have a very short memory. 7 mos ago the market locally and in some major markets across the county, including the mortgage industry (refi’s specifically) experienced substantial slowing (ie “sales slowing”) due to rates over 5%+. I got into a debate with an agent recently who does not have my experience in working in a few real estate cycles or obiouvsly my escrow perspective in closing transactions so I just stuck to some basics and I eventually centered on one question: Why are rates at sub 4% today and why did rates need to drop? Which lead to a follow up question and that was ” what was the trigger?” How will it impact the housing market? Why did banks like Wells Fargo, Homestreet Bank and some lenders consolidate operations, lay off staff, sell off servicing and close offices?

    Even more recently I was talking to a Broker face to face about people buying at peak or even post peak and the resulting problems if they are levered heavily (which includes a substantial cohort of first time buyers).

    Also, I understand people want to latch onto Pendings as a sign of market momentum. That’s a slippery slope. I’ve had four sale fails in the last two and a half weeks or so and a couple of them were well into the closing period. They were all pending. Solds and sold prices are the ONLY firm data I use including list to sale price ratio’s. Obviously seeing what people are doing in our own closings tells the story of the market in real time.

  47. 797
    steven says:

    RE: S-Crow @ 796

    sorry, i was just wondering about few of the comments you made.
    Making a net profit after taxes is the cherry on top.
    I mean if there is no net profit, doesn’t that mean you lost money overall? it’s not a cherry but bare minimum for a profitable business? is there other benefits that i don’t know about in flipping?

    Even more recently I was talking to a Broker face to face about people buying at peak or even post peak and the resulting problems if they are levered heavily

    do you mean you were discussing about what would happen if they were levered heavily, or what would happen because you see a lot of lenders with high leverage? (i mean are they levered heavily or not based on your experience)

    Why are rates at sub 4% today and why did rates need to drop? what was your answer to this btw? thanks for all your help

  48. 798
    Eastsider says:

    By Erik @ 787:

    RE: Eastsider @ 783
    New owner would have owned the unit a few months and had to pay a special assessment. If I sold and stuck the new owner with an assessment, I would totally be within the rules. I wouldn’t want to be treated like that if I was a buyer so I don’t treat others like that. I believe that you make more money if you treat people well in real estate deals vs trying to only get a better deal.

    Seriously what’s your point. Your are required by law to disclose any assessments to the buyer. Paying prior or after has nothing to do with being ‘nice’. The end result is identical. Except you now pay extra excise tax (and commissions) for being ‘nice’.

  49. 799
    Eastsider says:

    By OA @ 786:

    RE: Eastsider @ 783

    Lol dude you’re so full of yourself. You don’t think all of this was considered before listing it?

    You’re obviously the smartest guy in the room, they should’ve hired you as a consultant.

    You would be surprised most sellers don’t consider potential excised tax saving. There is no reason to be rude and hateful.

  50. 800
    Eastsider says:

    RE: Ardell DellaLoggia @ 791 – Of course I don’t have specific info on this sale. I was just pointing out in general special assessments can/do carry forward to buyers. The buyers assuming the assessments will simply pay lower prices for the units. In certain loans, eg. FHA, there may be restrictions that require special assessments to be paid off before closing. But as a cash buyer, there is nothing to prevent you from assuming the assessment and pay a lower excise tax and commissions. I have seen condos with $80k assessments and few sellers could afford to pay off the $80k. For SFHs, sewer cap (another assessment) is also carried forward in majority of sales. In all these cases, you can save a lot in excise tax and commissions by selling at lower prices.

  51. 801

    RE: Erik @ 795
    Our Public Schools Are Way Too Expensive and Subpar

    For 20 times the Property Tax budget of Kansas St K-12 Public Schools, Wash St rates 19 and Kansas St Rates 15 in the country. This Sanctuary State state totally squanders all the money on teaching English free in the classrooms and excluding math/science at the same time. It is what it is. You may want to look at private or home schooling Erik. I went to Kent’s Public School Phoenix Academy Computer Based Training (CBT) to replace Kentlake High. Once they get to a Community College the OVERPOPULATION diversity impact budget stealing stops.

  52. 802
    Armk says:

    RE: S-Crow @ 796

    You mentioned seeing flips going into default and foreclosure in this market. If one wanted to pick up one of these distressed properties, is there a way to target them specifically? Essentially, any way to narrow down the search for these distressed sellers?

  53. 803
  54. 804
    Brianna says:

    RE: Armk @ 802 – If you have an account on Zillow.com, you can see properties that are in default.

  55. 805
    Justsomedude12 says:

    RE: S-Crow @ 796 – Yes, this housing market is dependent upon mortgage rates of 5% or less to stay afloat. No bueno.

  56. 806

    RE: Justsomedude12 @ 805

    It didn’t stay afloat at 5%. This market thrives at 4% or less…give or take.

    To some extent that depends on future expectation. 5% expected to go to 7% vs 5% expected to come back down to 3.875%. Two very different results.

  57. 807
    Justsomedude12 says:

    RE: Ardell DellaLoggia @ 806 – Agreed. I was speaking generally, and probably being a bit generous that the market could even handle an increase to 5% without being negatively affected.

  58. 808

    RE: Eastsider @ 800

    A complex topic for sure. Answering generally.

    Sewer Assessments are usually a 15 year carry from date built. Those tend to be passed through to the buyer in the earlier years, but not when there is only 18 mos or less left on it.

    Condo Assessments for a full renovation such as new siding and windows and roof all at the same time, and some other upgrades added, are really not the normal condo “assessment” for repair and replace. They are a decision by the owners to upgrade the building value and not simply spending Reserves on what they were collected to cover. Usually those are also a 15 year payout and are handled the same as the sewer assessment noted above.

    Normal Condo Assessments are for when the cost to repair replace exceeds the Reserve Study expectation. Those are usually lump sum payments all at once or spread into payments of a much shorter duration. Often the item is repaired or replaced from Reserves and they have sufficient funds on hand to make the repair. The Special Assessment is just to replenish reserves and only for the amount in excess of the expectation when collecting funds from normal dues payments. Those are usually paid in full by the owner at closing, even if they were allowed to make payments.

    You said, “The buyers assuming the assessments will simply pay lower prices for the units”. That is not the best strategy in most cases as the discount will exceed the special assessment amount. Same as a house that needs new carpet. The discount the buyer wants for the mess they are seeing is much more than the cost of new carpet. Passing things through to a buyer follows the same rules as flippers. except in reverse. They want twice as much off the price as the cost to pay/fix. You pay much more in discount than the small percentage of tax and other costs if you pass it through.

    You said “But as a cash buyer, there is nothing to prevent you from assuming the assessment…” By the time a building goes to Cash Buyers Only due to a major issue, the discount is well above the assessment amount. For the most part when we talk about the market and market expectations, we are not talking primarily about all cash buyers.

    Highest Price usually follows fewest negatives. Special Assessment (not necessarily a new sewer assessment on a single family home) is just one of the issues a seller can get in front of to achieve highest price. But that doesn’t work if they are the ONLY unit doing that as the other units selling at lower prices, that are passing the assessment through to the buyers, will drag down the appraised value. So it’s really an issue that you have to give thoughtful consideration on a case by case basis as part of the listing strategy.

    In any case, what you are saying is 90% incorrect for most of the condo market and 100% incorrect in this case.

  59. 809

    RE: steven @ 797
    Why Did Rates Drop?

    My guess is its a new paradigm with no more Obama Quantitative Easing [welfare to banksters]…what was true during a debt driven economy on crutches may ignore interest rate hikes, but eliminate the QE and have a self energizing economy with more tax revenue investing has stirred the old model up.

    Correct me if you have another opinion, its a good question no one can really figure out.

  60. 810
    Deerhawke says:

    RE: Erik @ 795

    Erik, congrats.

    You took a risk, thought it out carefully and then put in a lot of hard work to come out ahead. Good for you.

    There are those who want something for nothing and are bitter and angry when they get nothing rather than something. Those folks are currently over-represented on this site. I would not be so blunt in my criticism, but they are twisting information about this market in a way that will lead others into poor choices like they did.

    What would you consider your business model here? Buy a condo that has basically good bones and good location but is run down and in need of a lot of TLC, new appliances, etc.?

  61. 811
    uwp says:

    By my count on the sidebar, inventory grew this past week (Monday 5/13 9:00am – Monday 5/20 9:00am) by 239 SFH, or ~6%. Last year over the same week (5/14 – 5/21) inventory grew by 387 SFH or almost 17%!

    I was promised a “BLOCKBUSTER, but it seems like a pretty tame week compared to 2018.

  62. 812
    Realistic says:

    RE: uwp @ 811

    I have a similar impression and I mentioned this earlier. I noticed 3 things in Justme’s charts that counter the buyer strike theory. To recap:

    1) Recently the deltas between weekly highs and lows have been much larger than in the previous 2 years, indicating that more houses are going pending than in 2017-2018 during the same weekly periods.

    2) The spike last weekend was indeed very high but only if we consider the delta between the recent lowest point and the highest. Looking at the delta between the last two peaks, the relative spike is a lot smaller than in 2018 and on par with 2017.

    3) Since April 1 the condo inventory line has been going almost sideways. If condos are supposed to be the equivalent of canaries in coal mines (as previously mentioned on this forum) they don’t seem to forecast well for buyers.

  63. 813

    RE: uwp @ 811
    Assuming Your Data Read is Correct

    The general picture may be foggier than some think. Even cheap areas like Kansas City are price stalled, its a national trend. Part of the problem, IMO, is lack of comparison “bang for the buck” and assuming the Seattle price increases are the “fun goes on and on”….you know the definition of assume….LOL

    Sometimes status quo is the lazy man’s method of doing an analysis all wrong….be careful of assuming the past history differences don’t make any difference….they do. Financial Advisors not recommending American Stocks as 100% of investments the last decade is another gross error. Hades, long-term equity investing doesn’t depend on a business MBA to be correct, raw data trends is much better, especially YOY. Do it yourself IOWS and do it right.

  64. 814
    Justme says:

    RE: uwp @ 811

    Dear buyers and strikers, don’t fall for uwp’s numerical sophistry. The intraweek inventory count runup from bottom to peak for last week was about 20% higher in 2019 than in 2018. Uwp likes to play propaganda games, so instead he picked Monday the week before and straddled two weeks with his measurements, getting a number more to his liking.

    But ask yourself, why would Mon-Mon be a good period to check? Inventory tends to bottom out on Wed (or Tue) and peak on Fri night. If you want to get an indication of how many sellers are joining the market, the runup from Tue/Wed to Fri night is the most interesting number.

    Caveat: I have not checked uwp’s numbers. I’m just going by what he is saying.

    For visuals, please refer to https://imgur.com/a/DJwONfZ . Ascii data is available on the blog front page sidebar.

  65. 815

    RE: Realistic @ 812
    I Imagine You Currently Own a Seattle Area Condo?

    Many buyers [especially families] don’t want a condo. The HOAs at condos muck it up too, they don’t fix ’em up right IMO, because they don’t know how….this causes structural degradation in a decade or two. My HOA thinks a 50% violation rate is cute, but is risking a major law suit, especially if the HOA Board isn’t on the violation list. My HOA wasted $20K trying to get liens [illegal BTW] on the all 140 units for their fraud water line replacement…it wasn’t needed, its been 5-10 years and we still have water…LOL…the realtors have taken over my HOA’s violations rate and they never write up important ones [just front yard listing pictures], like an illegal furnace [water heater, water valve, sump pump and dishwasher water source to code etc, too] installed without a state inspection sticker, making any RE contract null and void…Hades I bought my “listed” house with an uninspected Rich’s Stove [no metal placard state inspection sticker] and the shyster Realtor reported me to the State, after I grabbed the listing from him….they don’t care about illegal contracts? What good are HOAs anyway?

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