I feel like an ad with this kind of message is more likely to add to the already high level of animosity toward software developers than it is to get people to sign up for a coding academy.

Also, learning to code at a code academy isn’t likely to be a magic wand that allows you to afford a home in Seattle. The median price of a house (i.e. single-family) in Seattle last month was $722,250. In order to afford a home that expensive at today’s interest rates you would need to earn about $140,000. According to Code Fellows’ own website (screenshot), the “average starting salary” of their customers is “$70K+,” only about half of what you would need to earn to afford the median-priced home.

Even in the cheapest part of Seattle—NWMLS area 385, Central Seattle SW / Beacon Hill—the median price was $559,950. If we take a more generous salary estimate of $97,000—the average software developer salary across Seattle according to Glassdoor (screenshot)—we still come up short of the $109,000 needed to make a home in SW Seattle affordable.

According to the third-party site Course Report, about 69 percent of Code Fellows graduates earned less than $80,000 after completing their courses. Six percent of their graduates did report earning $110,000 or more, so there is at least a slim chance that you might be able to afford to buy a home in the cheapest parts of south Seattle after completing the Code Fellows courses. More likely though, you’re not part of the lucky few and both you and your significant other are going to need to become software developers to afford a modest house in Seattle.

And of course that’s not even considering the question of how these newly-minted software developers are going to come up with over $100,000 to make a 20 percent down payment. It might be a bit difficult after spending over $20,000 on coding courses.

While the ad may be totally tasteless, at least Code Fellows was responsive to feedback. According to GeekWire, they have already pulled the ads.

The post High Seattle Home Prices Now The Subject Of Tasteless Bus Ads appeared first on Seattle Bubble.

From: GOD <f███offidiot@youarealoser.com>
Subject:

Message Body:
You are a f███ing idiot. You are like the rest of the broken clock con artists that keep preaching doom. You have been claiming Seattle is in a bubble for how many years now? Fact is you are pitching doom while misinforming the suckers who are naive enough to pay attention to your BS because you want to sell ads. Rest assured your ad sponsors shall be notified. Get a job loser.

That last bit wasn’t a hollow threat, either. One of my sponsors forwarded me what was sent to them:

Name: John
Email: [OBVIOUSLY_FAKE]@gmail.com

Comment: Do you think it’s a goo business idea to sell ads on a website tat has been fear mongering about a bubble in the Seattle real estate market since 2005? The site I am speaking of is seattlebubble.com

Why would any sane reasonably intelligent person who works in the real estate industry sell ads on a site that has been telling people since 2005 that Seattle real estate prices are too high?? I certainly wouldn’t deal with you based on your association with that site because quite simply, it makes you look like an idiot. Why would I trust your judgment???

Another sponsor confirmed getting a phone call from this fun-loving individual as well.

https://twitter.com/deraker/status/852354628108795904

It is probably safe to assume that “John” is not reading the site—or that he ever read anything more than just the title of the site, since I have been anything but a “broken clock.” It’s hard to imagine why someone who is constantly “pitching doom” and always believes that “real estate prices are too high” would buy a house in 2011 and explicitly call the bottom in 2012.

Of course, you would need to demonstrate a capacity for basic reading comprehension in order to understand that twelve years after it was founded, a site called “Seattle Bubble” is not necessarily still promoting the idea that the Seattle-area real estate market is in an overheated bubble.

Lately we have just been posting basic market statistics without a lot of in-depth analysis or insights, and certainly no “doom.” It has been a while since we explicitly addressed the question of whether or not we’re in another bubble, and at the very least this entertaining tirade of ignorance is a good reminder to revisit the subject with some thoughtful analysis. Look for that on these pages soon.

So anyway “John,” I just want to say thanks for the email!

The post I Love Getting Fan Mail! appeared first on Seattle Bubble.

So many great quotes here.

These Men Have Bid the Landlord Goodbye

200 Families in SOUTHEAST SEATTLE

Are Saving $28,800 Per Year

Each family saves on an average $144 rent money; most of them have a few chickens, the fresh eggs and one or two chickens a week to eat downs the grocery bill $5 or $6 per month.

These men would be pleased to have you call on them for any information, if you wish to buy a home with your rent money. Some of the citizens have a dozen or more chickens and have planted a few fruit trees. They are saving $6 to $10 per month on the grocery bill with the chickens and in two years will have more fruit than they can use. Remember

Remember… what? What are we supposed to remember? Because whoever wrote this ad couldn’t even seem to remember from one sentence to the next whether chickens save you $5-$6 or $6-$10 per month on groceries. Or how to complete a sentence, apparently. I’d also love to know where the rest of that $28,800 per year comes from, because the $144 in rent savings only comes out to $1,728 per year. And the most they’re saving with the chickens is about $520 it seems.

It would seem that suspicious math in real estate advertisements it not a new invention.

ARE YOU IN HIS GRIP

The Rent Payer Can Escape His Clutches Only By The Easy Payment Plan
If You Let Others Do Your Thinking You Will Soon Be in Their Clutches No Man In Seattle Paying Rent Need Be Poor in Ten Years
Wake Up
Savings Banks Pay 4 Per Cent.
Landlords Pay 7 Per Cent.
You Pay 15 Per Cent. In the Form of Rent

Those evil landlords, trying to profit off their investments! What jerks!

God Helps Those Who Help Themselves

There are hundreds of workingmen who never received more than $3.00 per day in Seattle who are worth from $5,000 to $50,000 because they have kept one or two lots they purchased fifteen or twenty years ago.

You Can Do the Same– You Can Make More on Two Lots

In Southeast Seattle in ten years than you can save in twenty out of $3 or $4 per day wages.

You Havs (sic) a Better Opportunity Now

All the natural resources here twenty-five years ago are not one-tenth developed. These natural resources and advantages, which have caused Seattle to grow in 25 years from 3,500 to 160,000 people, are here now, plus the millions invested by the great capitalists of the world, the men that have done more in building up Chicago, New York, Boston and all of the great cities of the United States. Jim Hill, Harriman, Morgan and Rockefeller are here with us, with unlimited capital and the greatest brains. They have put in millions and are putting in millions more. Factories, steamships, railroads and mammoth office buildings are being constructed.

Wait, so now the capitalists are “great” and “have the greatest brains”? What do you think the landlord is if not also a capitalist? And how do you propose to make money from an investment in land without also charging rent?

The more things change, the more they stay the same.

The post ARE YOU IN THE GRIP OF THE LANDLORD OCTOPUS?!? appeared first on Seattle Bubble.

I’ve been working on this hunt for quite a while, and recently put on a successful test run for my employer with a group of about 40 players. It was a blast for me and for my coworkers.

It’s a roughly two hour experience for teams of four to six players, designed to be challenging and fun. There are no photos to take and you won’t have to talk to strangers. All you need to win is your wits and speed.

Put together your team and sign up before July 27th to get the early bird price.

Questions, comments, criticism, insults? Feel free to let it all fly in the comments.

The post Love Puzzles? Sign Up For Tim’s Seattle Scavenger Hunt appeared first on Seattle Bubble.

It’s been almost a year since we last took a high-level view of the local housing market and considered whether or not we’re experiencing Housing Bubble 2.0. Let’s step back and take another look at the big picture.

Current Market Highlights

• standing inventory is at an all-time low
• new listings are at an all-time low
• pending and closed sales are middling
• prices are at an all-time high
• mortgage interest rates are still near all-time lows
• the Puget Sound economy is booming

The real estate market has been booming (i.e. plenty of sales, low inventory, and surging prices) for most of the last three years. This is likely due to a combination of factors directly related to real estate as well as the booming local economy. During the recovery since the last recession the Seattle area has seen strong migration, low unemployment, increasing wages, and heavy expansion of the local tech scene. Construction of new housing inventory and listings of existing housing has not been able to keep pace with the strong demand from increasingly wealthy home buyers.

Possible Storm Clouds

That said, there are a number of potentially worrying factors to keep an eye on in 2016:

• the stock market is down over ten percent from its mid-2015 peak
  • Amazon down 18 percent since late December
  • Microsoft down 10 percent since late December
• the Fed has begun to raise rates
• China’s continued collapse may drag down the US
• low and still-falling oil prices are a continued economic drag
• venture capital funding may be drying up, which will result in a slowdown of the tech startup scene

Is it a good time to buy or sell a home?

I am not your financial advisor. I do not know the future. You should not act on my opinions without doing extensive research of your own.

With that in mind, here are my thoughts on the current market. If I were in the market to buy a home right now, I would definitely be waiting. With economic uncertainty on the rise, home prices at an all-time high and selection at an all-time low, the only reason not to wait would be if you’re afraid that prices are going to continue to power substantially higher in spite of all the storm clouds on the horizon. Personally that is not a bet I would choose to make.

On the other hand, if I were thinking of selling my home right now, I would definitely take advantage of this crazy market. With competition from other sellers so low and demand from buyers still strong, just about any home that isn’t a total dump is virtually guaranteed to fetch a very high price today.

I think we may be in the midst of another housing bubble, but this time the booming economy is being propped up by a lot more than just high home prices. My analysis today is basically unchanged from last year.

I think we are probably in the early to mid-stage of another housing bubble, but it the foundations of this bubble are very different from the last one. When and if this bubble pops, it will not play out the same way the last one did. This time around we’re likely to see a slowdown in the overall economy (and the tech economy in particular) that triggers a slowdown in the housing market, rather than the other way around like last time.

Will a slowdown come in 2016? Who knows, but I think there is a non-zero chance that it will.

The post State of the Seattle Housing Market: 2016 appeared first on Seattle Bubble.

I’m not a movie critic, and I don’t typically write reviews, but given how closely related the film’s contents are to the topics we have covered on this blog over the last ten years, I do want to share my thoughts and reactions to the movie.

When I started this site in 2005, I was a complete outsider to the world of real estate, finance, banking, and Wall Street. And yet, even I could immediately tell that something was incredibly wrong with the market and the overall economy that was building into an ever-increasing frenzy on the back of housing.

Given that I was starting from zero, it took me a few years to understand all of the underlying financial fraud that enabled everything to get so out of hand. In hindsight, I wish that I had made some big short bets in the years leading up to the collapse, but realistically I had neither the resources nor the knowledge to make a smart profit like that.

But there were some people who did.

Michael Lewis’ book “The Big Short: Inside the Doomsday Machine” tells the story of a handful of traders whose skeptical nature and financial intelligence allowed them to see behind the curtain and make huge bets on the inevitable collapse of the entire house of cards. Director Adam McKay has turned Lewis’ book into an engaging and interesting movie with some big-name stars driving each of the film’s three concurrent storylines.

I’m definitely not an expert in mortgage-backed securities and collateralized debt obligations, but I probably know more about the movie’s topic than 90 percent of the Americans. In order to make the confusing and convoluted subject more approachable, McKay intersperses the three narratives with amusing fourth-wall-breaking interludes from Margot Robbie in a bubble bath, Anthony Bourdain making fish stew, and Selena Gomez and Dr. Richard Thaler playing blackjack at a casino to attempt to explain things with plain language and metaphors.

I suspect that the style and the subject matter of this movie won’t play well with general audiences, but I loved this movie. It was hilarious, depressing, touching, and infuriating all at the same time. The performances from all of the major characters were believable and relatable, and the story was compelling throughout the movie’s 130-minute run-time even though I knew exactly how it would end.

I hope I am wrong and “The Big Short” is a huge success at the box office, because in my opinion everyone should see this movie.

Free Screening

The Big Short hits theaters on December 23rd, but you have one more chance to see it for free on me.

There will be another free screening of The Big Short at Regal Thornton Place (Northgate) on Tuesday, December 15th at 7:00 PM. I won’t be able to attend it myself, but I have a limited number of tickets to give away to Seattle Bubble readers. If you would like to attend and can commit to be there, drop a comment in this thread. Tickets will be first-come, first-served. Just use a valid email address in the comment form (only I can see it) so I can contact you with details.

Update: All the tickets are spoken for! Thank you!

The post Everyone Should See “The Big Short,” But Probably Few Will appeared first on Seattle Bubble.

Part 1: Statewide Form 22A—Financing Contingency: The Seller’s Perspective
Part 2: Statewide Form 22A—Financing Contingency: The Buyer’s Perspective

The statewide financing contingency form, Form 22A, present parties with some serious issues to consider. Prior pieces addressed seller and buyer concerns, but Form 22A also presents brokers with serious issues to consider.¹

The most complex issues for listing brokers may involve the seller’s decision to send a request to the buyer to waive their financing contingency using Form 22AR. Some attorneys believe that a seller’s request for waiver should frequently be sent simply because the waiver of the financing contingency would benefit the seller. In contrast, I would note that in practice I have seldom seen Form 22AR sent, either by my listing clients or sellers when I represent buyers. That calls into question why there is a difference between what some lawyers in Washington think should be done, and what actually occurs.

To analyze that question the first issue to be addressed is what does a seller gain sending Form 22AR? In most cases the seller gains absolutely nothing, even if the buyer waives the contingency. Since the vast majority of transactions close if they have made it 30 past mutual acceptance, there is no benefit for those sellers. But even if the buyer’s financing is a concern, Form 22AR can be sent and the buyer can ignore it, again conveying no benefit to the seller, unless the seller actually terminates the contract. The only time sending Form 22AR is clearly in the seller’s interest is when they have another better offer in hand that is not subject to inspection, or they happen to know the buyer’s financing is in trouble. Those are very limited situations, which most likely explains why I seldom if ever see Form 22AR used in practice.

So what should a listing broker do when the time comes where the seller has the right to send Form 22AR?² Some attorneys argue that brokers should routinely advise their seller to send 22AR simply because the waiver of the financing contingency could benefit the seller. In contrast, while there probably is no one “correct” practice, it is my belief that a broker should remind their client of the right to send Form 22AR shortly prior to the time allowed arriving, explaining any concerns they might have about the specific situation, and also remind their client that it may be prudent to seek legal advice. Although there may be no one correct practice, I believe it is fairly clear the decision to send Form 22AR is the seller’s decision, not the broker’s. Unfortunately it would not surprise me if many brokers fail to take any action, and simply allow the Form 22A deadlines to pass without giving Form 22AR a thought or mention.

In the prior pieces I discussed how if a seller’s house is vacant and has a large monthly mortgage payment, then the seller is going to be justifiably upset if a buyer’s financing fails. They would likely want to at least be compensated for the interest that they paid while the transaction was pending. In contrast, a seller who lives in the house and isn’t particularly concerned when they move out might not be as upset, and clearly would not be as damaged, absent a declining market. Ideally brokers would talk these issues out with their seller clients rather than simply presenting them with a form to sign.

Beyond considering their own situation, it is my opinion that the seller should be advised to at least consider the affect on the buyer of sending Form 22AR. As noted in the prior piece addressing buyer concerns, receiving Form 22AR can cause the buyer serious anxiety and concern. Sending Form 22AR 30 days after mutual acceptance could reignite any prior tensions that were created negotiating price and inspection, or even make them worse, and that could come back to impact the seller. For example, maybe the seller unexpectedly needs a delay in closing date because of a delay in receiving a loan payoff from their mortgage creditor, or maybe their new house will not be ready on time for them to move in. If that occurs after sending Form 22AR, then they may find it harder to get uncompensated favors, or even compensated changes from the buyer. Alternatively, the buyer might discover something about the house after closing, such as a water line break on a line the new neighbors say the seller had significant problems with before closing. A buyer who does not like a seller is going to be more likely to sue the seller over smaller amounts, and being sued is a horrible consequence of taking any action, particularly if that action conveyed no real benefits. Simply put, the seller should at least consider possible negative consequences to sending a buyer Form 22AR.

Turning attention to a buyer’s broker, they will have their own concerns when Form 22AR arrives, although those are much more manageable. A buyer’s broker will need to help their buyer client walk though the possibilities. How solid is their client’s financing? What will be the consequences if the financing contingency is waived and financing does fail? What will be the consequences if the buyer does not waive the financing contingency and the seller terminates the contract? The buyer will face some tough choices and the broker will need to provide advice and/or direct the buyer to other sources of advice, while at the same time recognizing the stress of having to make those decisions.

Finally, both the prior pieces have mentioned the possibility of a broker using “custom language” to get around some of the issues presented by Form 22A. I have described that option as being problematic and would be hesitant to recommend it. First, most agents are not qualified to draft such language, as evidenced by some brokers thinking they improve their seller’s position by crossing out the appraisal provisions of Form 22A.³ Even if drafted by an attorney, custom language can present concerns for the other party and their broker. Alternatives to such an important form need to be well thought out. For example, if a contingency does terminate after the mere passage of time, under what circumstances can a buyer back out if their financing is not going as planned? Drafting those provisions would not be easy, and therefore an improved financing contingency form will likely need to await the work of the drafters of the statewide forms.

Brokers in dealing with Forms 22A and 22AR should consider many different issues. While the areas of concern are different for a listing broker and the buyer’s broker, both probably should remind their clients of the option to seek legal advice, even if they had done so previously. The process of using Forms 22A and 22AR can have serious implications for the parties, so brokers should understand how the forms operate and the implications of the actions which can be taken after mutual acceptance.

Note: This piece is not intended to provide legal advice, and is merely the author’s interpretation of Form 22A and related forms. A party wanting legal advice needs to hire and consult with their own attorney regarding their own specific facts. That attorney’s opinion may vary from that of the author. In addition, brokers should consider consulting with their designated and/or managing broker.

The post Statewide Form 22A—Financing Contingency: The Broker’s Perspective appeared first on Seattle Bubble.

Part 1: Statewide Form 22A—Financing Contingency: The Seller’s Perspective

As discussed in the prior piece on Form 22A, the statewide financing contingency form in many ways heavily favors the interests of buyers. That is because absent drafting custom language, the financing contingency can remain as a buyer protection though the date of closing. After the passage of a specified period of time the seller can ask the buyer to waive the contingency, but the seller cannot force the buyer to do so. Therefore if a buyer cannot get financing, and their offer contains a non-waived Form 22A financing contingency, then the buyer will not be in breach of contract if they cannot close due to lack of financing. In most cases that means the buyer would get their earnest money returned. That sounds good for buyers, but even so, Form 22A does present some concerns for buyers.

The main drawback for buyers using Form 22A is the uncertainty of whether the seller will ask the buyer to waive the financing contingency after the passage of a specified number of days (default 30). Although seemingly is not a terribly common event, it is something that should be anticipated, and if it does occur the buyer will need to make a choice.

The buyer’s first option would be they could waive their financing contingency. If they do so and later cannot get financing, then they would likely lose their earnest money.¹ A buyer’s reluctance to waive would presumably be greater the larger the earnest money originally offered. While it does not seem terribly unfair for a buyer to waive their contingency, it should be noted that a buyer’s inability to get financing can be completely unrelated to their credit situation. Back in the summer of 2007 a relatively small financial crisis created a situation where several lenders simultaneously simply quit lending, even on fully approved transactions. Buyers were left to scramble to find new lenders, and many of those buyers needed to negotiate additional time to close. The future is uncertain, and there are many reasons financing might fail totally unrelated to the buyer’s situation.

The buyer’s other alternative is to do nothing and preserve the financing contingency. That decision would mean after the passage of three days the seller could terminate the purchase and sale contract. Typically the seller would only terminate if they had a better offer in place, or at least had a very strong belief that they could get a better offer. Unfortunately the buyer would probably not have good information on the existence of other offers. In addition, by that stage of the transaction the buyer will likely have developed some attachment to the property and have spent around $1,000 in inspection and appraisal costs. In addition, the buyer may have given their landlord notice or be in contract to sell their existing house. The point is allowing the seller the right to terminate the contract could create a lot of difficulties and anxiety for a buyer. And those concerns will last through closing, because if the buyer does not waive their financing contingency, then the seller’s right to terminate the contract survives until closing.

Compared to the risks placed on the seller with Form 22A, these buyer concerns are considerably different. While a seller might have some emotional anxiety regarding a buyer getting financing, a seller’s risks are mainly financial. In contrast, absent a large earnest money the buyer risks are less financial and more emotional. A buyer waiving their financing contingency will worry about their financing and their earnest money. A buyer not waiving the financing contingency will worry about the seller backing out, the loss of the money spent on inspections and an appraisal, and possibly where they will live if the seller does back out.

Hopefully the buyer was aware of Form 22A’s provisions at the point in time when they signed the purchase and sale contract. My suspicion though is that like many sellers, many buyers may not be completely familiar with the operation of Form 22A. Fortunately those buyers who erroneously thought their financing contingency would automatically expire after 30 days seemingly would not have much to worry about if they promptly waive the contingency. Other buyers who have not thought the process out would be affected.

Beyond the risk related to a seller sending Form 22AR, Form 22A in its current format does not serve the interests of buyers that well. If a buyer wishes to use a financing contingency, the standard form does not allow a buyer to make as strong of offer as possible. Absent custom language there is no option for a buyer to have the financing contingency in their offer automatically terminate after a specified number of days.² Having such an option in the standard forms would allow for a stronger offer and differentiate one buyer’s offer from other offers. Having this choice available would also benefit sellers because they could accept an offer with better terms, or negotiate those terms with buyers who did not offer them. Most importantly perhaps, the buyer would know what they were in for from mutual acceptance, and not have their future risk dependent on a seller deciding to ask the buyer to waive their contingency.

Quite frankly, I do not find the buyer’s financial risks to be all that significant compared to the risks a seller takes when accepting an offer with a Form 22A contingency. I continue to believe that Form 22A benefits buyers more than sellers, but the buyer’s stress after receiving a request to waive the financing contingency cannot be disregarded. A buyer receiving a request to waive their financing contingency will be facing an important choice at what might be only a week or two prior to the closing date. Seemingly it would be much better if Form 22A’s terms for requesting waiver either did not exist, or were terms negotiated as part of getting to mutual acceptance. What we have now is a process where the seller can poke and annoy the buyer near the end of the transaction, but the buyer does not have to respond. That simply is not a well thought out process. Hopefully both buyers and sellers know what they are getting into when they agree to use Form 22A, but undoubtedly many do not.

Note: This piece is not intended to provide legal advice, and is merely the author’s interpretation of Form 22A and related forms. A party wanting legal advice needs to hire and consult with their own attorney regarding their own specific facts. That attorney’s opinion may vary from that of the author.

Part 3: Statewide Form 22A—Financing Contingency: The Broker’s Perspective

The post Statewide Form 22A—Financing Contingency: The Buyer’s Perspective appeared first on Seattle Bubble.

Most offers written within the Northwest Multiple Listing Service area use what are referred to as the “statewide forms,” a collection of real estate forms which can be selected and completed by real estate brokers and others. While some attorneys might argue those are not the best forms, they are in general well balanced between the interests of buyers and sellers, and serve the parties well. In contrast, there is one form, the Form 22A financing contingency, which some argue heavily favors the interests of buyers, and which I would argue is poorly drafted. The vast majority of non-cash offers in our area contain Form 22A.¹ This piece will address the financing contingency from a seller’s perspective, while future pieces will look at the contingency from the buyer’s side and then from the broker’s perspective.

The intended purpose of a financing contingency is somewhat obvious. If a buyer cannot complete a purchase due to an inability to obtain financing, and their offer contains a non-waived financing contingency, then they will not be deemed to be in breach of contract. In most cases that means the buyer would get their earnest money returned, and the seller would simply be out of luck. In many ways the application of Form 22A is just that simple, but in application it can be more complex.

The most misunderstood aspect of Form 22A may be that a form providing for the default 30 day financing period is not a 30 day financing contingency. Form 22A containing the default 30 day period terms does not expire merely with the passage of time, and may continue up to the closing date. That means that an offer providing for only a 20 day contingency period may not be better than an offer containing 30 or 40 day periods. That is because after the expiration of the specified number of days the seller only has the right to send the buyer a Form 22AR “Right to Terminate” notice, which in effect asks the buyer to waive their financing contingency. If the buyer does not waive the contingency within the next 3 days, then the seller has the right to terminate the contract, but they cannot force the buyer to waive the contingency. If the seller does terminate, then the buyer gets their earnest money returned. Unless the seller has a better offer in hand, preferably not subject to other contingencies, the threat to terminate the contract is likely little more than an empty threat.² If the buyer does not waive, that leaves the seller subject to the contingency through closing.

How this affects a seller depends on their situation. If the seller’s house is subject to a large mortgage, and they are not living in the house, then interest paid while an offer is pending could be significant. Similarly, if buyer cannot get financing and the property is later foreclosed or the seller faces higher tax consequences from selling in a subsequent year, those losses could also be significant. In contrast, a seller living in a house free and clear of any mortgage debt might not suffer any significant loss if a sale falls through. Absent drafting custom language, there is no way around the seller bearing whatever risks they face if the buyer does not waive their financing contingency.

There is one major exception to the financing contingency surviving through closing if the buyer does not voluntarily waive the protection. The buyer can involuntarily waive their financing contingency, and one way of doing so is by not applying for financing in a timely manner. Unfortunately for sellers the July 2015 form changes made such a waiver much less likely. Prior to the July amendments a buyer was required to apply for financing within 5 days of mutual acceptance, and failing to do so resulted in waiver of the contingency. The act of applying was commonly thought to mean actually submitting a formal loan application to a loan originator. Under the new version, “application” is now a defined term, and a loan “application” is no longer really a loan application. Instead an “application” is merely the submission of certain basic information to a loan originator without any instruction to actually start the loan process.³ In making this change the intent was apparently to use the same definition of “application” as the new rules of the Consumer Financial Protection Bureau (“CFPB”). Unfortunately those rules serve entirely different purposes, and envision a buyer possibly making “application” with multiple lenders. Without a specified deadline for a buyer to actually start loan processing, sellers are now offered less assurance that a buyer will obtain a loan in a timely manner.

The July revisions did give sellers one additional right, but those revisions were not well thought out or terribly valuable. After a specified number of days (default 10) the seller can now send a Form 22AL, and that requires the buyer to return a Form 22AP. The latter form, if returned by a buyer, lets the seller know what information the buyer has given their lender, such as tax returns, and also a warranty that they have provided everything the lender needs. It also gives express permission to contact the lender. If the buyer does not return the form, the seller can terminate the contract, with the earnest money again going back to the buyer. If the buyer returns the form with information which raises significant concerns, the seller is powerless to take any action to terminate the contract. Thus the process leaves the seller with relatively little additional power.

This Form 22AL/AP process demonstrates a failure of the statewide form drafters to understand not only how real estate brokers operate, but also what sellers need to know. Two weeks into a transaction neither listing brokers nor sellers really need to know that a buyer submitted their paystubs and tax returns to the loan originator. That is the type of information that a listing broker and seller might want to know before the seller accepts a buyer’s offer. Obtaining that detailed information after mutual acceptance is pointless at best, and really provides the seller with little in the way of additional protections.

If the above analysis makes it seem as if Form 22A greatly favors buyers, then that is because in many ways it does. Not even mentioned is the fact that Form 22A does not contain any provisions requiring timely notification that a loan was denied. But even though Form 22A does greatly favor buyers, it also does not manage to serve the needs of buyers well. Buyers have their own risks and concerns using Form 22A. That will be the topic for the next piece.

Note: This piece is not intended to provide legal advice, and is merely the author’s interpretation of Form 22A and related forms. A party wanting legal advice needs to hire and consult with their own attorney regarding their own specific facts. That attorney’s opinion may vary from that of the author.

Part 2: Statewide Form 22A—Financing Contingency: The Buyer’s Perspective
Part 3: Statewide Form 22A—Financing Contingency: The Broker’s Perspective

The post Statewide Form 22A—Financing Contingency: The Seller’s Perspective appeared first on Seattle Bubble.

Here’s how the home appears on Redfin, with up-to-date data from the MLS:

And here’s how it appears on Zillow, notorious for their poor data quality:

Actual price: $1,138,900
Price on Zillow: $1,199,000

The price was dropped $60k eight days ago (November 4), but Zillow still has not been updated to reflect the correct pricing.

Here’s the listing history on Redfin:

And here’s the listing history on Zillow:

It’s interesting that while Zillow usually shows the complete history for every listing, the 2008-2009 attempt to sell this home on Zillow has mysteriously disappeared from Zillow’s history. Also, why is the listing agent constantly delisting the home and relisting it with a new MLS number every time the price is dropped? The only reason you would do that is if you were attempting to game the “new listings” alerts that some agents and consumers receive.

Lastly, this home is also a great example of how inaccurate Zillow’s “Zestimates” can be.

The home is currently priced 29 percent below its “Zestimate” of $1,606,525, and 21 percent below the low end of the “Zestimate range,” and yet it has been sitting on the market unsold for four months in one of the hottest real estate markets Seattle has ever seen.

If the value of Spencer Rascoff’s home was really anywhere near its $1.6 million Zillow Zestimate, there is no doubt that it would have been snatched up almost immediately at its July price of just under $1.3 million.

Zillow is missing a large portion of the listings, they take a long time to receive listing updates like price changes and pending sales, and their price estimates are basically worthless. They are good at one thing: selling ads to real estate agents.

I am not a fan of Zillow because they do a disservice to home buyers. If you want to miss out on listings and get incorrect information in this fast-paced, highly-competitive market, by all means, use Zillow. But if you want to see all the homes with accurate prices and listing statuses, instead please use Redfin, Estately, Windermere, John L. Scott, or any of the other MLS-powered home search sites.

[P.S. – I fully expect this to be manually corrected by Zillow staff or Spencer Rascoff’s listing agent now that I have published this post, just like they did when I pointed out their inaccurate data on my home. That obviously doesn’t change the systemic data quality problems that Zillow has been plagued with for years.]

[Update: About half an hour after I published this post, the listing was manually updated on Zillow, as I predicted.]

The post Zillow Can’t Even Get the Listing Details Right on CEO Spencer Rascoff’s Own Home appeared first on Seattle Bubble.

Here’s what it looks like for King County single-family homes and condos.

The last two quarters (April through September) of this year have seen the hottest local real estate market as far back as I have reliable data.

At 81.8, the latest King County heat index is nearly double the average during the last bubble (42.6). As with the last bubble, the condo heat index is even more out of control, coming in at 115.6 in the third quarter (88 percent higher than the 61.4 average during the last bubble).

Based on this measure, we are well into another bubble at this point. That said, there are still many factors that are very different from last time, so the only thing I know for sure is that this one won’t end the same way the last one did.

If there’s enough interest, I can compile this chart for other counties as well. Also: If you’re a Seattle Bubble Member, check the shared spreadsheet folder for the full data behind this chart.

[P.S. – I apologize for the light posting recently. It’s been very busy for me personally lately. Plus my dog died, so there’s that.]

The post Seattle Housing Market Hotter Than Ever in 2015 appeared first on Seattle Bubble.

https://www.youtube.com/watch?v=20n-cD8ERgs

“Suzanne Researched This” became a big inside joke among those who didn’t buy the hype at the peak of the bubble. This commercial was so egregious that even Slate wrote an article headlined “The Nastiest Wife on Television.”

About a year after this ad aired, I happened to catch a radio show segment that was basically the real world “rest of the story.” Suzanne Researched This: Part 2

Well, we bought a house two years ago, and ever since we bought the house it’s always been “we bought it because you wanted it,” and every time we have financial struggles, it’s my fault because we bought a house that he said we shouldn’t buy, so… that’s… I guess the stresses of the house are getting more intense because our interest is going up so it’s been sort of like the past month I’ve been hearing him talk a lot about that.

Here’s the full audio of the cringe-worthy Dr. Laura call:

On a related note, this 2006 “Real Financial Heroes” video is a pretty great skewering of homebuying mania. For context, it’s a parody of a series of Budweiser ads from the time called “Real American Heroes” that used the same style and music.

“Top Ramen tastes a lot better when you eat it off a granite countertop.” Classic.

The post Friday Flashback: Suzanne Researched This appeared first on Seattle Bubble.

There are a few relevant portions of the report that address single-family zoning.

From page 21 of the report:

MF.1 Increase the amount of land zoned for multifamily housing

The HALA Committee recommends devoting more land to multifamily housing especially in areas near amenities and services such as transit and schools. Any increase in development capacity should be tied to requirements for providing affordable housing.

There is a wide range of circumstances that present good opportunities to add or expand multifamily zoning in ways that complement neighborhoods, leverage existing resources and help the environment. New multifamily zoned land should be prioritized near green belts, open space and parks; near schools and community centers; and within walking distance of the frequent transit network. While an increase in multifamily zoned land to spur production of new multifamily housing is not expected to immediately decrease rents in the short-term, ensuring a growing supply of larger multifamily housing across the city can help to stem rent increases over the long-term. This strategy, which is expected to impact 6% of Seattle’s Single Family zones (3% in urban villages and 3% in the walksheds described above) should be viewed as an investment in Seattle’s overall housing market affordability for both current and future generations.

Strategies to preserve quality affordable multifamily housing and mitigate displacement must be a critical component of any plan for short- and long-term growth. There is risk of some increased displacement pressure in areas that are upzoned (that is, where zoning is changed to increase development capacity on a site). However, linking upzones directly to a requirement for affordable housing responds to some of the need that is fueled in part by growth. Additional strategies focused specifically on mitigating displacement will also be needed.

In my opinion, there’s no way that re-zoning just six percent of the land in Seattle that’s currently zoned for single-family is going to be sufficient for the kind of growth Seattle is expecting over the next few decades and is in fact already experiencing.

However, while the report doesn’t seem to be suggesting an actual re-zoning of most of Seattle’s single-family areas, it does recommend things like “increasing supply of accessory dwelling units” and “allow a broader mix of lower density housing types within single family areas.”

From page 24 of the report:

Increase Access, Diversity and Inclusion within Single Family Areas
Approximately 65% of Seattle’s land – not just its residential land but all its land – is zoned single family, severely constraining how much the City can increase housing supply. Among its peer cities, Seattle has one of the highest percentages of land dedicated exclusively to detached single family structures and a small number of accessory dwelling units. The exclusivity of Single Family Zones limits the type of housing available for sale or rent, limits the presence of smaller format housing and limits access for those with less income. Seattle’s zoning has roots in racial and class exclusion and remains among the largest obstacles to realizing the City’s goals for equity and affordability. In a city experiencing rapid growth and intense pressures on access to affordable housing, the historic level of Single Family zoning is no longer either realistic or sustainable.

SF.1 Increase Supply of Accessory Dwelling Units and Backyard Cottages
SF.1a Remove Barriers Code Barriers to Accessory Dwelling Units and Backyard Cottages
Although both Accessory Dwelling Units and Backyard Cottages are allowed in Single Family zones, several of the associated land use regulations are deterring their production in significant quantities. Some of the land use code regulations that are in place function as a barrier for a homeowner to take on adding an accessory unit to their home. The same code barriers may not be providing a strong public policy benefit. Therefore, in order to boost production, the City should remove specific code barriers that make it difficult to build ADUs and DADUs:

• Remove the parking requirement. Currently, an off-street parking space must be created for an additional ADU or DADU.
• Remove the ownership requirement. Allow both the accessory and principal unit to be rented. Currently, the owner must live in one of the two. The ownership requirement is a barrier to securing financing to build an ADU/DADU. Explore the opportunities and implications of Unit Lot Subdivision which would allow separate ownership of the primary dwelling and the accessory dwelling.
• Allow a single lot to have both an ADU and a DADU. Currently only one is allowed.
• Make minor modifications to remove barriers within existing development standards for DADUs, such as height limits, setbacks, maximum square footage, and minimum lot size to ensure constructability.

Removing these barriers is expected to boost production of ADUs and DADUs to levels in the range of 5% or more of all single family lots within 10 years, which could produce 4,000 or more new homes.

Oooh, 4,000 new homes in ten years! An even more impotent “solution” to housing shortages than dumping imaginary “sitting around” foreclosures on the market.

SF.2 Allow a Broader Mix of Lower Density Housing Types within Single Family Areas
The City should allow more variety of housing scaled to fit within traditional single-family areas to increase the economic and demographic diversity of those who are able to live in these family oriented neighborhoods. The broader mix of housing would include small lot dwellings, cottages or courtyard housing, rowhouses, duplexes, triplexes, and stacked flats. Although a broader variety of housing would be permitted, the total amount of “massing” or building area on a single lot should remain the same (excluding ADUs and DADUs). This does not eliminate the option of single family housing; rather, it increases the opportunities for more efficient use of very limited land resources. The program could take the form of land use code changes, or it could begin as a pilot program with a limited time period and a maximum number of units.

SF.4 Oppose Neighborhood Conservation Districts
During 2015, a proposal to establish a Neighborhood Conservation District program was brought for Council consideration. The program would allow groups of property owners in single family areas and lowrise multifamily zoned areas to establish conservation design guidelines that would be specific to areas as small as a block or two. As proposed, the guidelines would limit architectural style of new development in those areas and the program would set up an additional review panel that would need to give approval before building permits could be issued for infill development or alterations. The HALA recommends that the City not establish a Neighborhood Conservation District program as currently proposed. Such a program could reduce the areas of the city available to increase housing supply and affordability, and is thus at cross purposes with other recommendations in this report. The program could make approvals for new housing more time consuming and expensive. The program could also be used to limit the diversification of lower density areas of the city by creating a new avenue for existing homeowners to oppose the addition of new infill housing in their neighborhoods.

Frankly the recommendations in this report seem pretty tepid to me. I have no doubt it will be met with extreme opposition by all the typical NIMBY groups, regardless.

The post Mayor’s Affordability Committee Releases Tepid Growth Recommendations appeared first on Seattle Bubble.

If Seattle’s population keeps growing, there is a hard housing reality that we’re going to have to face: the death of the single-family home.

As of 2013, roughly 43 percent of Seattle’s housing stock is made up of detached single-family homes. That’s already a minority, but if Seattle is going to be able to continue growing, that number is going to have to go a lot lower.

With 7,776 people per square mile, Seattle is currently the tenth most dense city in the country despite being only the twenty-second most populous. However, if Seattle is going to keep adding more people into the limited space we have available, we’re going to have to kiss an awful lot of our single-family housing goodbye.

Apparently Seattle Mayor Ed Murray’s “Housing Affordability and Livability Advisory Committee” has similar ideas, according to a report published last week by the Seattle Times:

Leaders of Seattle Mayor Ed Murray’s panel on housing affordability rushed Tuesday to temper the group’s position after a draft report surfaced that included a recommendation for doing away with single-family zoning.

But some city officials say the idea of opening up Seattle’s traditional neighborhoods to more development is worth discussing.

Councilmember Tom Rasmussen, one of the council’s staunchest neighborhood allies, says the panel’s draft recommendation wasn’t far-fetched, and Councilmember Mike O’Brien says such changes wouldn’t need to be very dramatic.

“We’ve heard that some members of the committee have been advocating for that for a long time,” Rasmussen said. “I’m not at all surprised it was included.”
…
In the recent draft of its recommendations, the committee argued for converting Seattle’s single-family zones into “low-density residential zones” allowing more types of housing, such as “small-lot dwellings, cottages or courtyard housing, duplexes and triplexes.”

But, not everyone seems to be on board with the idea. A follow-up report published today by the Times indicates that Councilmembers Sawant and Licata are already preparing a competing proposal:

Seattle Mayor Ed Murray’s housing-affordability task force won’t publicize its final recommendations until 11 a.m. Monday, but two City Council members have already lined up in support of a competing proposal.

Councilmembers Kshama Sawant and Nick Licata are scheduled to take part in an 11:30 a.m. news conference unveiling the alternative drawn up by Jon Grant.

I’m going to stand by my April assessment about the future of single-family housing in the city of Seattle:

Either Seattle’s population growth will dramatically slow down again in the near future, or we’re going to be tearing down a lot of single-family homes to make space for more townhomes and condos.

Update: Here’s a follow-up post with the details on the final report that was released this morning: Mayor’s Affordability Committee Releases Tepid Growth Recommendations

The post Seattle Preparing to Say Goodbye to Single-Family Zoning? appeared first on Seattle Bubble.

The Seattle-area housing market could use an injection of inventory. It’s on a tear right now, fueled by high demand and low supply, and hooked on low-interest rates.

And there is a potential supply of lower-priced homes in the region. Those are the 4,300 foreclosed homes from Everett to Tacoma that are now owned by banks, according to RealtyTrac.

More than 4,000 houses added to the market would be a rush – that would be two-thirds of what the region sells in a single month.

But these houses are just sitting around.

There are a few big problems with this piece.

Problem 1: RealtyTrac data is misleading

KUOW’s report is based on data from RealtyTrac, and RealtyTrac overcounts foreclosures. When most people think of a “foreclosed home” they are usually talking about a home that has actually been repossessed by the bank and sits empty (i.e. a bank owned home). When RealtyTrac gives data on foreclosure counts, they’re giving a total number of homes that are in “some stage of foreclosure (default, auction or bank owned).”

Here in Washington State, there is no public notice of default, so RealtyTrac’s numbers only count “auction” (i.e. homes that are scheduled for a bank auction according to the publicly-filed Notice of Trustee Sale) and “bank owned” (i.e. homes that have actually been repossessed by the bank via a Trustee Deed). If you look at the Washington State foreclosure timeline, you’ll see that any given home progressing at the fastest possible rate through the foreclosure process is going to sit in one of those two states between day 90 and day 281. Therefore, RealtyTrac’s data is a snapshot of 191 days—over six months—of the foreclosure pipeline.

Any snapshot of the foreclosure pipeline at a given time that includes both homes that have received a notice of trustee sale and those that have actually been foreclosed will include the last four months’ worth of homes that received a notice of trustee sale and the last two months worth of trustee deeds. Running those numbers for King / Snohomish / Pierce gives us 3,087 notices of trustee sale March through June and 698 trustee deeds¹ in May and June, for a total of 3,785 homes progressing normally through the foreclosure pipeline as of the end of June. Again, this number assumes every home is moving as quickly as possible through the pipeline, which we know is not true since there are many ways to delay and extend the foreclosure timeline.

In other words, 4,300 sounds about right for the number of homes progressing normally through the foreclosure pipeline right now. These homes are not “just sitting around,” as claimed by KUOW. In fact, more than 3,000 of them are not yet even bank owned, meaning they are likely still occupied by the delinquent borrowers.

Problem 2: 4,300 homes is a drop in the bucket

According to NWMLS data, there were 6,472 closed sales (SFH+condo) in King / Snohomish / Pierce in the month of June. At the end of the month there were 9,710 homes on the market. That gives us a mere 1.5 months of supply for the three-county metro area.

Even if we assume that the 4,300 homes cited by RealtyTrac are “just sitting around” (which they are not) and were able to be immediately added to the market, increasing inventory from 9,710 to 14,010 would result in an increase of just 0.7 months of supply. Granted, 2.2 months of supply is definitely better than 1.5, but keep in mind that six months of supply is considered a “balanced market” that favors neither buyers nor sellers. 2.2 months of supply is still deep in sellers’ market territory.

In order to bring the Seattle-area housing market back into balance at the current level of demand, an additional twenty-nine thousand homes would need to be listed for sale—nearly seven times the claimed 4,300 homes that are “just sitting around” (but aren’t really).

A Better Headline

Frankly, 4,300 homes in some stage of foreclosure in the Seattle metro area is not news. If KUOW really wanted to run a piece about it though, the headline should have been “Thousands Of Homes Progressing Normally Through The Foreclosure Process In Seattle Area”

Are there a few homes here and there sitting empty for longer than the typical foreclosure process for one reason or another? Sure. Is it “thousands of homes”? Nope, no way, not true, just no.

Update: See the response from RealtyTrac VP Daren Blomquist at comment #9 below, and my response to him at comment #20.

¹I had to make a calculated guess at Snohomish deeds of trust since they lump all deeds together in their online records search

The post KUOW Misses the Mark on Foreclosures appeared first on Seattle Bubble.

We recently lost our second offer on a home to a all case buyer. I know that many other buyers have been at this longer than a year and spent far more than we have but before I get to that poverty point I would like to show everyone what is going on.

The first time we made many mistakes such as: inspection contingency upon acceptance of offer, financial contingency, asking for rent from the owner if they wanted to stay past closing. Our first realtor was not informed and we just used wisdom from previous house buying experiences on the East Coast. So, the second time we made an offer, we came in extremely strong.

Here are the facts that I would like to share with you to expose what we see as a scam.

• House: ~3,000 square foot 5-bedroom home Ballard in great condition with an asking price ~$850k
• We offered $10K over asking with an escalation clause up to $77K over asking.
• We gave $30K as earnest money and allowed the seller to talk half upon acceptance of our offer.
• We allowed the seller to stay in the property for 2 months after closing – rent free.
• We spent $430 for a partial inception and sewer scope.
• We dropped all contingencies – another words we would loose our 30K if our financing didn’t come thought or we changed our minds.

So tell me – how is our offer not as good as cash? So what is the short answer? Listing agent and real estate agencies in general are uses financing offers to drive up the amount for cash buyers – thus making the seller’s agent’s commission higher and they will get it 2 weeks sooner.

How can a hard working person, smart with their money, buy a home. Currently Seattle is on sale to China or the super wealthy for the highest cost at the middle classes expense.

Your thoughts?

It’s super frustrating out there right now for buyers. Unfortunately it’s a lot more difficult to predict the likely outcome of the frenzy this time around. Back in 2005 when I started Seattle Bubble the market was very similar, but it was obviously being propped up by a bunch of dangerous, unsustainable stuff like risky mortgages and financial derivatives.

This time around, as the reader points out, all-cash buyers are driving much of the frenzy. It’s very difficult to compete with, and also highly unlikely to collapse in a spectacular bursting bubble like last time.

What’s your advice for this reader? Sit it out for a year or two? Keep trying until maybe, two dozen offers later, they finally land a house? Lower their standards?

If you’ve got a question you’d like to get thoughts on from me and the community here, drop me a line.

The post Reader Question: Is Seattle just for the super wealthy now? appeared first on Seattle Bubble.

There’s no denying that Seattle has been booming lately, thanks largely to serious growth in the local tech economy—unbridled growth at Amazon, the continued growth of local Silicon Valley outposts (e.g. Facebook, Google, etc.), and even the migration of large tech employers from other cities in the metro area into Seattle proper (e.g. Expedia)… you get the idea.

All of this adds up to the fastest population growth Seattle has seen since 1900-1910.

If Seattle’s population keeps growing, there is a hard housing reality that we’re going to have to face: the death of the single-family home.

As of 2013, roughly 43 percent of Seattle’s housing stock is made up of detached single-family homes. That’s already a minority, but if Seattle is going to be able to continue growing, that number is going to have to go a lot lower.

With 7,776 people per square mile, Seattle is currently the tenth most dense city in the country despite being only the twenty-second most populous. However, if Seattle is going to keep adding more people into the limited space we have available, we’re going to have to kiss an awful lot of our single-family housing goodbye.

No American city with 10,000 or more people per square mile has more than 25 percent of their housing as single-family. Here’s a look at population density versus single-family housing share for the 50 most populous cities in the United States:

If Seattle keeps adding people at the rate we’ve seen in the last few years, by 2030 the population will shoot up to around 900,000, equating to a density of 10,727 people per square mile. Even if none of the housing built to accommodate the population growth during that period is single-family homes, today’s single-family housing stock would still equate to roughly 31 percent of the total housing we’ll have in 2030.

I contend that this is not practically possible. Either Seattle’s population growth will dramatically slow down again in the near future, or we’re going to be tearing down a lot of single-family homes to make space for more townhomes and condos. Either way, it looks like the next ten years will be a very interesting time for Seattle.

The post Kiss Single-Family Homes Goodbye if Seattle Keeps Growing appeared first on Seattle Bubble.

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

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

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

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

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

Here’s what concerns me the most:

• $745k for a townhouse. In Fremont.
• The home sold for $100k over list price with multiple offers at that level.
• The buyer cites that he “felt good about the potential future appreciation” as partial justification for paying so much.

I still don’t think we’re likely to see another big price crash (yet) but stories like this one definitely scream “housing bubble” to me.

The post Warning: New Housing Bubble Ahead appeared first on Seattle Bubble.

Here’s a selection from the conversation that ensued:

Comment by Ben Jones

I’ve called this the ‘it’s not 2000-pick your year’ excuse. Sure, house prices are up up UP! There are people camping out for pre-construction houses, multiple offers over asking, investors running wild. Shortages, man, shortages! But; there are not the exact circumstances of the pick your year.

The bubble is in the minds of the participants, and it couldn’t be more clear. All the proof you need is in the prices. It doesn’t matter how you get there.

I disagree with the premise that “all the proof you need is in the prices.” If that were true, then New York and San Francisco have basically been in a perpetual housing
bubble since the middle of the twentieth century. There is a lot more to recognizing a housing bubble than just the prices.

Comment by bink

“more all-cash buyers, almost no zero-down buyers”

Since home price increases aren’t being built on top of suicidal financing like last time, we’re not likely to see a dramatic burst when things finally slow down.

So he thinks that those all-cash buyers will just sit things out instead of stampeding towards the exits like a stock market crash? At least with mortgages the home owners can’t just liquidate. They need to find a new place to live. “Investors” do not.

First, many all-cash buyers are purchasing a home to live in themselves, not as an investment. Those buyers would have no reason to “stampede toward the exits” if the housing market were to soften again.

As for investors, the only reason they would be looking for a way out would be if rents were to also take a dive, which is only likely in the case of another overall economic crash. I’m not saying that we definitely won’t see another economic crash, but if we do, where would these investors be moving their cash to? Certainly not back in the stock market…

Comment by sleepless_near_seattle

From the comments:

“Something else that’s different this time around is that the price to own has not diverged as much from rents. Rents have been growing at double digit rates in neighborhoods near downtown Seattle like Capitol Hill for a couple years now. During the last boom, home prices were about the same but I’d guess rents were 60-70% of what they are now.”

Doesn’t this scream out to anyone that we are in a much worse bubble than we were 10 (wow, has it been that long?) years ago?

Comment by Rental Watch

Doesn’t it scream that we have a shortage of supply?

If both rents AND homes prices are going up substantially faster than inflation or wages, doesn’t that seem to be evidence that there is not sufficient supply of any type of housing?

Comment by sleepless_near_seattle

I don’t know for sure. What I do know is that I’ve started writing letters to “owners” of vacant houses in Portland. What I’m finding is that they are everywhere if you look closely, here in a supposedly low inventory, “everyone is moving there” city.

I would love to see some actual data on these supposedly empty homes that are “everywhere.” I realize the commenter was talking about Portland, but this is the same old discredited “shadow inventory” myth that perma-bears have been clinging to for years. If you had a vacant house to sell right now, what possible rational reason would you have not to sell it in this market?

For perspective on where Ben and most of his commenters are coming from (and to explain my use of the term “perma-bears”), in early 2012 when I was saying that “I suspect that we’re basically at ‘the bottom’ for home prices,” here’s what Ben was saying:

It’s difficult to understand where we are with the global housing bubble, because the media ignore it. So anyone interested has to glean what they can from various sources. IMO, many countries or entire regions are either at all time highs, or just barely off the peak. I don’t have time or space to post them all…

I read the NAR economists saying prices were up in the US in almost every state. I don’t know about that, but even if it’s true, they are up in Jakarta too. So what? What should matter is are house prices too high. Are lending standards where they need to be. Again, if ‘affordability is at an all time high’ as the NAR says, how come the govt is doing all the lending at under 4% with little to nothing down?

I don’t see how this situation isn’t ringing alarm bells around the world. I guess it is, but not many are listening.

The focus of Ben’s blog is typically on the “global housing bubble,” which he seems to believe is still going strong. I’m not making any particular claims about anything global since the focus of my blog is local, but I do try to do my best to stay aware of what’s going on in the big picture.

To reiterate my point, I do think we are currently in the beginning stages of another housing bubble. However, I think that it is building up very differently than the one that inflated 2004-2007, and will therefore have a very different outcome than the last one. I don’t yet know what that will look like (no one does), but I strongly suspect it will not include a dramatic increase in inventory, a flood of foreclosures, and rapid decreases in home prices.

The post Housing Bubble 2.0: The Perma-Bears Respond appeared first on Seattle Bubble.

To answer the question of whether or not we are in another bubble, let’s compare and contrast the present frenzy to what the housing market went through during the Great Housing Bubble.

What’s The Same This Time

• home prices rising at double-digit rates year-over-year
• low inventory
• homes sell fast & for over asking
• stock market hitting new all-time highs
• low interest rates

What’s Different This Time

• more all-cash buyers, almost no zero-down buyers
• no crazy loans (neg-am, fog-a-mirror, interest-only, etc.)
• home price to income & price to rent ratios not as far out of whack
• overall economy still on relatively weak footing (e.g. GDP)
• interest rates at rock-bottom
• affordability index not as low (thanks to low rates)
• buyers are typically more cautious, e.g. not likely to waive inspection
• builders focusing on rentals, few SFH & condos being built
• less cheerleading from media & home salespeople

The net result of all this is a market that may be in early stages of another housing bubble, but it feels different, and it’s not likely to end the same way as the last one.

This time around it seems like rather than “fear of missing out,” home buyers are just frustrated and tired.

Since home price increases aren’t being built on top of suicidal financing like last time, we’re not likely to see a dramatic burst when things finally slow down. However, since interest rates have been so ridiculously low for so long now, it is likely home prices will be more sensitive to the inevitable borrowing rate increase when it does come.

Over the next month I’ll be posting some detailed, data-backed looks into some of the topics listed above. Let me know if there’s a particular item of interest to you.

The post Welcome to Housing Bubble 2.0 appeared first on Seattle Bubble.

Note the house to the left, and the relatively small front yard. Now take a look at the primary listing photo for this house, being sold by Jon Cacabelos of Real Home Network:

What. The. Hell.

How is this even legal? Not only did they make an insultingly poor attempt to erase the house next door, but they’ve somehow made the front yard appear two or three times bigger than it really is.

And it’s not just the primary photo. The deception continues in the back:

The fact that NWMLS heavily fines agents who blog or tweet about another agent’s listing (even with positive comments), but they allow garbage like this is a great example of why I still have a hard time respecting them as an organization, and why I’d never want to join as a member myself.

The post Turning Listing Deception Up To Eleven appeared first on Seattle Bubble.

Area real estate professionals and politicians want to clear something up.

Now is a good time to buy and sell real estate in Snohomish County, no matter what people may be hearing about the national market.

The panel of industry experts held a town hall meeting in Lynn­wood on Thursday for that purpose that drew about 200 people.

“There is no shortage of information or opinions, and so many reports seem to conflict with each other,” said Ron Sparks, a moderator of the panel and a vice president at Coldwell Banker Bain. “It’s no wonder people are confused.”

The local economy is strong, unemployment is low, rental prices are increasing faster than the price of homes, interest rates are low, inventory is good and “safe, stable financing” is available, Sparks said. It’s not a bad time to sell, but sellers need to be more flexible at the negotiating table, he said.

Many of the speakers, including Sparks, pointed the finger of blame firmly at the media, which he said are confusing the public by publishing headlines designed to appeal to emotions and reports that “mix and match” local and national information. Sparks compared the real estate market to the weather: What’s happening in San Diego isn’t helpful here.

The answer, he said, is to take media reports with a grain of salt, look for the source of the data cited and work with a local real estate expert.

That darn media!

Here’s what I wrote about this nonsense at the time:

Yeah, it’s that dog gone confusing media. If not for them, the housing market would be just peachy. Give. Me. A. Break. Talk about grasping at straws.

Note that Seattle-area home prices peaked in July 2007, nearly a year earlier.

The post Friday Flashback: “It’s no wonder people are confused.” appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Last month’s #1 and #2 homes both went pending. Last month’s #3 is still on the market, but got pushed off the list.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 10
Average number of beds: 2.5
Average number of baths: 1.2
Average square footage: 1,093
Average days on market: 72

Inventory of non-short sale homes under $200,000 in Seattle dipped again from January to February, following the same trend as overall inventory in the county. Beds, baths, and square footage also all fell, as did average days on market.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: February 2015 Edition appeared first on Seattle Bubble.

• "Shadow Inventory" Conspiracy Theories Are Nonsense
• Shadow Inventory Gut Feelings, Rumors, & Anecdotes
• Undocumented Shadow Inventory Scarce in King County

Despite all of the data I brought to the table to support my claims that shadow inventory was a non-issue, there were still many commenters who chose to believe that banks were in fact sitting on large amounts of foreclosed homes that would spill out on the market any day now.

At the time I wrote those posts in late 2013 King County was seeing around 550 notices of trustee sale and roughly 250 new MLS-listed foreclosed homes hit the market each month.

If there was ever a time for banks to unload a bunch of foreclosed homes they’ve been sitting on for years, now would be that time. Inventory is at its lowest level on record, home prices are nearing their previous peak levels, and buyer demand is still strong.

As yet, over the past 30 days there have been just 147 newly-listed foreclosed homes (via this Redfin search). As of December, King County saw a little more than 300 notices of trustee sale. That’s a 45 percent decline in foreclosure notices and a 41 percent decline in MLS-listed foreclosed homes since late 2013. The foreclosure pipeline continues to chug along just as you would expect it to with zero evidence of any bank shenanigans.

If we couldn’t put the “shadow inventory” myth to bed before, I think it is 100 percent safe to do so now. Sorry if you were holding out hope that home prices would collapse again when a flood of bank-owned homes finally hit the market. We all have to give up our fantasies eventually.

The post The Shadow Inventory Myth is Dead appeared first on Seattle Bubble.

2008: Empty 1,475 square foot lot.

2011: Foundation

2014: 1,687 sqft, 3-bed, 2.5-bath modern home

The resulting home sold last June for just under half a million dollars. Here’s the listing description:

From this cool modern stand alone home you can walk to all the restaurants, shops & bakery in the heart of Columbia City. Enjoy city views from the floor to ceiling windows and also from the large deck off the m. bedroom. The spacious 2 car garage is wired for your EV vehicle, but you can also enjoy a short walk to the bus line or the Light Rail. Lake Washington is just a few minutes to the east. The kitchen features a large island and Pental quartz countertops. Welcome to your new home.

Smart feature to wire the garage for EVs, even though they redundantly advertised it as “wired for your electric vehicle vehicle.” Can’t say I’d ever spend half a million dollars on a skinny house wedged into such a tiny lot, but it’s probably better than sprawl.

The post How-To: Turn a 1,475 sqft Lot Into a Half-Million-Dollar Home appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

It’s a clean sweep by Rainier Valley this month, as the prices of the cheapest non-dump homes climbs up closer to the $200,000 mark.

Two of last month’s homes have gone pending, while the third was taken off the market without selling.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 12
Average number of beds: 2.6
Average number of baths: 1.4
Average square footage: 1,332
Average days on market: 114

Inventory of non-short sale homes under $200,000 in Seattle dipped slightly from October to November, following the same trend as overall inventory in the county. Beds and baths both inched up, square footage was basically flat, and days on market shot up.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: January 2015 Edition appeared first on Seattle Bubble.

It’s that time of the year again. Time to kick off a few “Top 10 of 2014” posts. First up: the most-viewed individual posts published this year. Note of course that this only counts how many times people clicked through to each post’s individual link, excluding all the views they may have received on the front page.

10. 08/12: Another Real Estate Bubble? Price to Rent Ratio Shoots Up
9. 09/22: A Chinese-Driven "Real Estate Boom" in Seattle? No.
8. 10/24: Real Actual Listing Photos: Quality Workmanship Edition
7. 02/27: Undervalued to Overvalued in Less Than a Year
6. 04/17: Affordable Home Price Just Above Actual Median Price
5. 08/22: Listings Detective: $4M Bellevue Home w/ 16-Car Garage
4. 05/13: Cheapest Homes: May 2014 Edition
3. 05/16: Thousands of Seattle Homes to End Up Literally Underwater
2. 03/04: Sleazy Kirkland Brokerage Rips Off Redfin Design & Code
1. 01/09: Seattle Still Not a "World Class City"

The most-viewed post of 2014, with more than twice as many views as the #1 post published during the year was Foreclosure Timeline in Washington State, which was published in October 2013. This isn’t too surprising, since I wrote that post specifically to be a timeless reference, and it ranks very well for Google searches of related terms.

The post Top 10 Most-Viewed Posts of 2014 appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

You might recognize the #3 home this month from our most recent edition of Real Actual Listing Photos. It’s been on the market for 61 days, but was not quite in the top 3 cheapest homes last month. This is the only listing photo:

One of last month’s homes has gone pending, while another was taken off the market.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 12
Average number of beds: 2.4
Average number of baths: 1.2
Average square footage: 1,136
Average days on market: 78

Inventory of non-short sale homes under $200,000 in Seattle dipped slightly from October to November, following the same trend as overall inventory in the county. Beds and baths both inched up, square footage was basically flat, and days on market shot up.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: December 2014 Edition appeared first on Seattle Bubble.

Here’s an excerpt from their press release:

Surefield is dramatically lowering buy-side commissions to bring the U.S. residential real estate market up to date with its peers around the globe. Now sellers don’t have to automatically pay a 3 percent buyer’s agent commission to get buyers into their home because Surefield is using 3D home-tour technology to get them into the home online.
…
It is a common misperception that the services involved in buying a home are free. The cost of a buyer’s agent comes from the sale of the property, which means the cost indirectly is paid by the buyer in the form of a higher sales price. In many countries, buyers contact listing agents to view homes. If they use a buyer’s agent to represent them, they write a fee into the offer. Even more common, buyers hire real estate attorneys.

Like most consumers, I am all in favor of improving efficiency and consequently reducing cost in the home-buying process. What Surefield is doing with their new commission structure is similar to what Surefield founder David Eraker attempted to do when he first launched Redfin way back in 2004. The idea was that buyers could use Redfin’s technology to find homes on their own and work directly with listing agents to avoid paying a buyer’s agent commission at all. Redfin faced extreme pushback from the industry and shifted to their current model as a brokerage with salaried agents.

It will be interesting to see if Surefield is better received by the industry than Redfin was nearly ten years ago. The goal of reducing commissions paid by buyers and sellers is a noble one, but it is also very difficult to pull off with so many entrenched interests still controlling so much of the industry.

Surefield’s full press release is reproduced below.

Surefield Modernizes U.S. Home-sale Practices

Virtual 3D home tours get buyers into homes faster with less hassle, sellers save up to 75% in commissions

SEATTLE — Nov. 13, 2014 — Surefield, the first residential real estate brokerage to put sellers first, is dramatically lowering buy-side commissions to bring the U.S. residential real estate market up to date with its peers around the globe. Now sellers don’t have to automatically pay a 3 percent buyer’s agent commission to get buyers into their home because Surefield is using 3D home-tour technology to get them into the home online.

Globally, commission rates for countries with similar gross domestic product per capita are between 1 percent and 2.5 percent. The seller usually only pays for his agent, who also gives home tours to potential buyers. In the United States, the customary total commission rate is 6 percent and the seller pays for his and the buyer’s agent.

It is a common misperception that the services involved in buying a home are free. The cost of a buyer’s agent comes from the sale of the property, which means the cost indirectly is paid by the buyer in the form of a higher sales price. In many countries, buyers contact listing agents to view homes. If they use a buyer’s agent to represent them, they write a fee into the offer. Even more common, buyers hire real estate attorneys.

Surefield has developed a proprietary, virtual 3D home tour system using computer-vision technology, giving buyers the most realistic, remote tour of a home, enabling a new level of commission savings with no trade-offs. Because buyers can view homes remotely 24/7, Surefield embraces this efficiency and passes on the savings. Sellers save big by cutting the typical 3 percent buyer’s agent commission, while still enjoying full seller representation for a total commission of 1.5 percent; other full-service brokers cost between 4.5 percent and 6 percent. This means on a $500,000 home, sellers save up to $22,500 in commission.

“The U.S. real estate industry has been operating as a quasi-cartel for far too many years, just look at the high commission rates as proof of tacit collusion. Surefield’s goal is to deliver the same level of transactional efficiency to U.S. consumers that is found in other developed countries,” said David Eraker, Surefield CEO. “Residential real estate is sold successfully all around the world without automatically prepaying for the services of a buyer’s agent. We are bringing that practice to United States to give sellers more freedom in marketing and accurately pricing their homes, and giving buyers access to homes around the clock.”

According to the National Association of Realtors, 92 percent of home buyers use the Internet to search for homes for sale, and the majority of them find the home they purchase by themselves. But without a home tour, buyers can’t get a feel for the layout of the home, or look at every nook and cranny. Before Surefield, buyers needed an agent to tour homes for sale. Surefield’s virtual 3D home tour is the first and only service to show the entire home inside and outside. The home tour simulates walking through the home, giving buyers a realistic look at the flow and surroundings so they can make smarter decisions during their home search. As a result, sellers receive inquiries from more serious and qualified buyers.

Surefield currently operates in the greater Seattle area, but plans to add more markets. Interested in Surefield in your area, email and let us know: contact@surefield.com.

About Surefield
Surefield (www.surefield.com) is a Seattle area residential real estate brokerage that combines proprietary virtual 3D home-tour technology with experienced full-service agents to help home sellers attract more serious buyers with less hassle, and save up to 75 percent in commissions. The company is backed by 500 Startups, Portland Seed Fund and Jaan Tallinn as well as angel investors.

The post Surefield Expands from 3D Tours in Attack on Commissions appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only one home from last month (#2) has since gone pending.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 15
Average number of beds: 2.3
Average number of baths: 1.3
Average square footage: 1,154
Average days on market: 82

Inventory of non-short sale homes under $200,000 in Seattle dipped slightly from October to November, following the same trend as overall inventory in the county. Beds and baths both inched up, square footage was basically flat, and days on market shot up.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: November 2014 Edition appeared first on Seattle Bubble.

Today’s “Guess the Price” guest star is 3724 Corliss Ave N in the southern third of North Seattle’s Wallingford neighborhood, close to the Burke-Gilman Trail and Gasworks Park.

This round’s home hit the market on Tuesday with an asking price of $599,950.
…
Our home this month is not bank-owned, a short sale, or a flip. It sits in Wallingford, where the median price of single-family homes sold in August was $682,000.

Your guesses ranged from $469,999 to $650,000. The average price guessed was $595,317, and the median guess was $599,950. Here’s the plot of all the guesses, with the final close price & date marked in green:

According to the NWMLS, the home sold on October 29 (just five weeks after listing), with a closing price of $620,000. The closest guess was a dead-on guess of $620,000 by SeattleJo. Congratulations!

Here’s the difference between the average guess and the final sale price in our contests so far:

1. Your guesses were 2.2% lower than the sale price.
2. Your guesses were 5.5% higher than the sale price.
3. Your guesses were 10.5% lower than the sale price.
4. Your guesses were 10.0% higher than the sale price.
5. Your guesses were 2.8% higher than the sale price.
6. Your guesses were 2.4% lower than the sale price.
7. Your guesses were 13.6% higher than the sale price.
8. Your guesses were 4.0% lower than the sale price.

After going way too optimistic on the last one, the crowd slightly underestimated this time around.

Stay tuned in the next few weeks, when we’ll kick off another round of Guess the Price.

The post Guess the Price Round 8: We Have a Winner! appeared first on Seattle Bubble.

For a heaping helping of crazy listings from all over the world updated five times a week, tune into Looney Listing. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Madison Park home boasts soaring spaces, volumes of light, clean lines, & custom finishes: contemporary & timeless.”

I also love how there is an “open house” on Sunday from 1PM to 4PM but the address is “undisclosed.” Feel free to wander around Madison Park searching for this home!

“Quality workmanship in this completely remodeled home…”

The photo itself is perfectly decent, but the cropped portion I’ve shown at left shows an interesting definition of “quality workmanship,” in my opinion.

“There are no remarks available.”

There are no remarks available.

“Attn: Hurry, hurry. .! Don’t miss out this opportunity. .. !!”

Note: This listing is not selling a Taco Bell. Also, definitely hurry because I’m sure after 116 days on the market it’s bound to go any day now.

“Diamond in the rough!! Large Rucker Park Craftsman home in need of tender loving care.”

It’s worth pointing out that the neighborhood is called “Rucker Hill,” not “Rucker Park.”

“Historic home in Snohomish in walking distance of doentown.”

Ahh, quaint doentown Snohomish.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Quality Workmanship Edition appeared first on Seattle Bubble.

Home sales drop, not prices

Prospective homebuyers who’ve been frustrated by too much competition for too few homes — your time is now.

But don’t expect to find widespread price breaks, because home prices are up.
…
Increasing inventory is giving buyers more clout, said Lennox Scott, chairman and chief executive of John L. Scott Real Estate.

“We’re adjusting from a frenzied market back down to a strong market,” Scott said. “Buyers have selection.”
…
“I’m amazed the market was basically on steroids for as long as it was,” [Windermere Ballard assistant manager Bob] Melvey said. “It makes sense it’s going to have to take a rest. But even with this absorption rate, it’s not as if the market has tanked and the sky is falling.”

It’s a two for one deal! Classic Elizabeth Rhodes and classic J. Lennox Scott.

This article is built 100 percent on data talking points and quotes from home salespeople. Zero input from any serious economists, academics, or researchers, just a very lightly rehashed press release. It was an extreme disservice to Seattle Times readers at the time, but hey at least we get a laugh out of it eight years later.

Aubrey Cohen’s article about the same data in the Seattle P-I was considerably better. I can’t find the original article on the P-I website anymore, but here’s part that I quoted in my post at the time.

It’s a buyer’s market, if buyer’s loaded.

More and more home sellers are chasing fewer and fewer buyers, but those who did buy in October paid more than buyers did the month or year before that, according to housing statistics released Tuesday.
…
“They keep saying it’s a buyers market,” he said while looking over a Montlake home last month. “Prices haven’t changed. I don’t see any reduction.”

Zand, who is planning to move back to the area from San Jose, Calif., said prices have declined there.
…
The statistics show the market is returning to normal, said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

Glenn Crellin’s analysis at the time wasn’t all that on point in my opinion, but at least Aubrey talked to buyers and an economist, not just salespeople.

Here’s what I had to say about all of this at the time:

Is it possible that while the housing market collapses in the rest of the country, Seattle just “returns to normal”? Sure, anything is possible I suppose. However, with the inventory still increasing YOY at a faster rate every month, and sales still on the decline, I have to wonder what mysterious force is going to stop these trends once the market has become “normal”?

So much for that orderly return to normal.

It would be good keep all of this in mind as you think about the current market frenzy…

The post Friday Flashback: “The Market is Returning to Normal” appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only one home from last month has since gone pending. This is the first month in quite a while that all three homes are bank owned.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 18
Average number of beds: 2.2
Average number of baths: 1.2
Average square footage: 1,157
Average days on market: 60

Inventory of non-short sale homes under $200,000 in Seattle actually increased quite a bit from September as overall inventory in the county dropped slightly. Beds and baths are mostly unchanged, square footage dipped slightly, and days on market shrank.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: October 2014 Edition appeared first on Seattle Bubble.

Despite this, a few week later when we shared some early adoption numbers on the feature, there were two Seattle-area “Coming Soon” listings on Zillow (both were removed later in the day).

I commented at the time that I was “a bit surprised to see [agents] openly flout the rules like this, given how fine-happy the NWMLS has been in the past.”

While I find it somewhat odd that a blogger who has never been a member of the NWMLS (or even a real estate agent at all) would know more about NWMLS rules than member agents, apparently ignorance of the rules is exactly what’s going on. I received this email last week from a local real estate agent who shared their experience with “Coming Soon” and the NWMLS:

Within a matter of days of the “Coming Soon” feature having come online with Zillow, I posted a listing that I would soon be actively marketing on the NWMLS (within 5-7 days or so). As I am an active user for certain market territories, I wanted to try it out.

To make a long story short, someone red flagged the property I posted as coming soon, reported me to the NWMLS. At the request of our Managing Broker, even before having received the complaint from the NWMLS, I removed the property from Zillow altogether and thought that was the end of it. Within a matter of hours of removing it from Zillow, our office received notice of the infraction along with a request for an immediate explanation of my wrongdoing.

Our office responded, including a response from me, and we waited. Waited and waited… until last week. $5,000 fine! Half of which was suspended on the assumption that I made no further wrongdoing of any kind for one year.
…
I got my hand caught in the cookie jar. That’s fine, and certainly not something that I’m arguing. My issue at hand is that the NWMLS is on a “money grab”, if you will. That fine is massive in comparison to just about any other infraction in the traditional legal system (e.g. traffic infractions, DUI’s, assault, etc.).
…
I’m actively proceeding with an appeal to the MLS, even after having been warned that by simply appealing my penalty – and that costs another $500 to do that – could in fact increase the $5,000 figure that was levied.

The agent asked to remain anonymous since their appeal is yet to be heard by the NWMLS board, but I will say that they are not one of the agents that I called out in my July post.

According to the Bureau of Labor Statistics, the median earnings of a real estate agent is only $42,000. I’m sure it’s higher here in the Seattle area with our higher home prices, but I suspect $5,000 (or even $2,500) is a non-trivial sum relative to what most agents’ earn in a year.

The NWMLS is a private organization, and obviously they can enforce whatever rules and fines they choose, but given that they essentially have a local monopoly, it seems valid to question whether their fines are reasonable and fair. I think agents using Zillow’s “Coming Soon” feature are doing their customers a disservice, but what exactly does the NWMLS accomplish by levying $5,000 fines against agents who are ignorant of the NWMLS rules forbidding its use?

The post NWMLS Levys Big Fine for Using Zillow’s “Coming Soon” appeared first on Seattle Bubble.

I connected with the Rebls team a few months ago and have had a few conversations with its founders Bryan Copley and Jeff White. What they’re doing is an interesting and unique approach to buying and selling. On the surface it sounds a lot like Zillow’s “Make Me Move” (a.k.a. “Subject Me To Endless Pitches From Real Estate Salespeople”), but Rebls is going much further, and putting much more control in the homeowner’s hands.

Rebls aims to improve the home buying and selling process for everyone by making more homes available and empowering consumers to take control in a way that isn’t possible in the current real estate market.

They’ve been testing their site and building out core features for a few months, and as of today they are launching in “open beta” for all King County homeowners and home searchers. Create an account for free and try out the site for yourself.

In the midst of planning their big launch, the team at Rebls took the time to respond to some questions I sent their way. The full interview is below.

What is Rebls doing that’s new, different, and interesting?

Rebls is revolutionizing the way homes are bought and sold. In the current market, it’s too stressful and expensive to find out if you can sell your home. We’re changing that by enabling any homeowner to create a simple home profile that allows them to instantly see who wants to buy a home like theirs. No staging, no listing, and no commitments.

On the other side of the coin, there simply aren’t enough homes on the market for buyers to have a high likelihood of landing their dream home. We solve that by giving buyers access to PreMarket homes they won’t find anywhere else—more homes will be available, and in a more accessible format than ever before.

How did Rebls come about? What was the inspiration?

Bryan’s aha moment came when one of his earliest mentors took him outside, pointed up and down the street, and asked him a simple question: which of these homes are for sale? Bryan did what most people would do. He pointed to each house that had a “for sale” sign in its front lawn. His mentor corrected him with the simple truth that sparked Rebls—every home is for sale.

In 2013, Bryan met Jeff who had recently purchased a home and left the experience feeling that the real estate process was broken. Jeff’s takeaway acted as the perfect complement to Bryan’s vision; it should be easier, it should be simpler. Jeff left Amazon, where he worked as a Senior UX Designer for Kindle and as the Interaction Design Manager for the Fire Phone, to become Rebls’ Co-Founder & Creative Director.

Why are you launching here in the Seattle area to start?

We’re launching in King County first so we can dedicate all our energy into creating an amazing real estate experience for people looking to buy or sell in the Seattle area. When the time is right, we’ll expand Rebls into more areas.

Why should a homeowner create an account on Rebls?

A homeowner should create an account on Rebls to learn valuable information about demand for their home without having to list it for sale on the market. Rebls makes it easy to see who’s shopping for your home and find your own buyer if you’re interested in selling.

Rebls is valuable for all homeowners, even if they’re not interested in selling at the moment. For most people, buying and selling a home is one of the largest financial and emotional decisions they’ll ever make. Rebls allows users to keep a pulse on buyer demand for their home with minimal effort. Rebls is about more than just enabling homeowners to sell through a simpler process and to a broader audience. We empower users to make the most critical decision of all: when/if to sell.

What benefits would a homeowner get from having an account?

One of the benefits we haven’t named yet is Buyer Matches. Rebls matches buyers and homeowners through a percentage based system—think Match.com, but for homes. As a homeowner, you can see that a buyer on Rebls is a 95% match for your home, and are given the tools to reach out to that person directly.

What is Rebls’ relationship with agents?

Real estate agents are a valuable resource for buyers and homeowners, serving four core functions: matchmaker, educator, negotiator, and transaction coordinator. Of these responsibilities, matchmaking is the most time and energy intensive. Rebls streamlines this process by allowing homeowners and buyers to connect directly. This saves the agent a significant amount of time, which makes it easier for them to offer a reduced commission.

Rebls is establishing a network of partner agents from brokerages across King County who have agreed to offer reduced commissions for homeowners and buyers who find each other on Rebls.

What’s your response to Spencer Rascoff’s assertion that all startups that address real estate commissions are doomed to fail?

Spencer underestimates the power of the consumer to influence pricing in any industry, and the willingness of the consumer to adopt technologies that will save them money, much less tens of thousands of dollars. He also doesn’t address time savings as an item of consideration in whether an agent would accept a lower fee. If an agent could do 1/2 their usual work for 2/3 their usual fee, why wouldn’t they?

Sum up the big idea you’re trying to realize with Rebls.

It all stems back to Bryan’s vision: every home is for sale. Buying or selling a home is the single most impactful decision many people will make in their lives. Rebls aims to improve that process for everyone by making more homes available and empowering consumers to take control in a way that isn’t possible in the current real estate market. All while staying true to Jeff’s driving goal; it should be simpler, it should be easier.

[November 2014 Update]
Rebls has been making rapid improvements and additions since this story was posted a month ago. In addition to expanding to Snohomish and Pierce Counties, they have also added a feature that lets homeowners type in their address and see how many people are searching for a home like theirs.

They have also enabled buyers to search PreMarket homes without creating a profile, saying that it “fits well with our overall company ethos of transparency and access.”

Finally, they also launched the first iteration of agent profiles with “early adopter agents who really embrace the Rebls mission.” Agents on Rebls all offer reduced commissions to homeowners and buyers who find them through Rebls (commission range is indicated up front in an agent’s profile).

The post Rebls: A New Matchmaking Service For Off-Market Homes appeared first on Seattle Bubble.

Be sure to enter your real email address into the form when you leave your guess in the comments, because the winner gets a $25 gift card to the restaurant chain of their choosing. Don’t worry, I’m the only one that can see the emails that are entered. The winner is the person whose guess is closest to the final sale price, above or below. If there is a tie, whoever guessed closer to the correct closing date will be declared the winner.

Contest closes to entries at midnight the morning of October 10th, or when the home goes pending, whichever comes first. Note that some past rounds have gone pending in just a few days or even hours after the contest opened, so get your guess in early!

Today’s “Guess the Price” guest star is 3724 Corliss Ave N in the southern third of North Seattle’s Wallingford neighborhood, close to the Burke-Gilman Trail and Gasworks Park.

This round’s home hit the market on Tuesday with an asking price of $599,950. It last sold 18 years ago in January 1996 for $171,000, so today’s asking price represents average annual appreciation of around seven percent. For reference, the Case-Shiller index for Seattle has gained roughly 4.75 percent per year over the same period, a rate that would put the current value of this home at around $400,000.

Our home this month is not bank-owned, a short sale, or a flip. It sits in Wallingford, where the median price of single-family homes sold in August was $682,000. Here’s the listing agent’s description:

Classic 1909 Craftsman bungalow sited on a seasoned, landscaped, level yard. Formal entry, beautiful refinished hardwood & fir floors, high ceilings, original & restored woodwork, extraordinary original wood mullion windows. Delightful kitchen opens to back deck & yard. Excellent location, walk or bike to Burke Gilman Trail, Lake Union & public boat launch, restaurants, cafes, theaters, the UW, Fremont, downtown… everything.

Built in 1909, this 1-story home (with basement) sports 2 bedrooms and one full bathroom. All of the finished space is on the main floor, while the basement is unfinished and contains just the washer/dryer and lots of wide open storage space. [Update: According to a Redfin agent insight, the basement is “only accessible from exterior of home.” The Redfin agent also noted “updated copper plumbing and electrical.”]

According to the King County Department of Assessments, 990 of the home’s square feet are above ground, with an additional 990 in the basement. Note that the MLS listing is displaying the square footage as 1,980, which includes the entirety of the unfinished (and from the looks of the photos, short) basement. This misleading information is built by design into the NWMLS system.

Inside, the home looks to be very nice condition. If the windows in the living room and dining room are not original to the home, they are well-crafted to fit in with the original style. In the main living areas the wood trim is all unpainted and looks very nice. From the photos, the hardwood floors look to be in good condition as well.

The kitchen looks like it has plenty of counter space as well as a decent amount of cabinet space. The appliances all look to be relatively new and of decent quality. The countertops do not appear to be any of the currently trendy materials, but they do seem to be in good shape.

The biggest problem with the kitchen is the layout. The sink and most of the counter space is on the opposite side of the room from the refrigerator and the oven, which is oddly placed in a recessed corner of the room with no immediately adjacent counters.

Off the back of the home there is a small yard as well as a modest deck. A large tree takes up a good amount of space right in the middle of the yard. Due to the home’s location on the block and the layout of the surrounding lots, this home has five immediate neighbors, four of whom have back yards that look right into this home’s back yard.

The exterior of the home appears to be just as well-kept-up as the interior. From the photos the paint looks relatively new. The small front yard looks well-landscaped. Unfortunately, while the listing indicates that the home includes off-street parking, that parking appears to take the form of uncovered space on a driveway whose street access is shared with the neighbor to the south. The garage that can be seen on the right side of photo #21 in the listing appears to belong to the neighbor.

There is an open house scheduled for this Sunday from 1:00 PM to 4:00 PM, so if you’d like to see the home in person or judge the “open house foot traffic” before you place your guess, there’s your chance.

Overall, both the house and the location seem very nice. The current list price feels a bit high to me, but at least one similar home nearby sold for $690,000 just a few months ago, so it’s not outside the realm of possibility.

Summary of 3724 Corliss Ave N

• Pros
  • well-maintained inside and out
  • close to Gasworks Park & the Burke-Gilman Trail
  • nice hardwood floors & wood trim
  • lots of kitchen counter & cabinet space
  • nice modern appliances
  • updated plumbing and electrical
• Cons
  • shared driveway
  • no covered parking
  • odd kitchen layout
  • relatively small yard
  • back yard borders four neighboring lots
  • basement only accessible from the exterior of the home

So, what say you? How much will this home sell for, and when will it sell?

The post Guess the Price Round 8: Wallingford Craftsman appeared first on Seattle Bubble.

Zillow is a lead generation site. Home buyers and sellers who use Zillow are the “leads.” They are not the customer, they are the product that is being sold to real estate agents.

But don’t take my word for it. Here’s Zillow CEO Spencer Rascoff describing Zillow’s purpose and philosophy in his own words:

Email from Agent today: "I have tried many different lead generation products and none compare to the success I have had with Zillow."

— Spencer Rascoff (@spencerrascoff) April 30, 2012

Email from an agent in Corona CA this morning: "I have NEVER worked with a better lead generating company! Thank You Zillow."

— Spencer Rascoff (@spencerrascoff) March 21, 2012

One @zillow Premier Agent in my Seattle neighborhood: 510 leads last 6 months. Holy Cow. I hope he has a transaction coordinator.

— Spencer Rascoff (@spencerrascoff) February 20, 2013

This is why Zillow doesn’t really care about all the expired and missing listings or bad “Zestimates.” The only thing that matters is driving more leads to agents.

Panel of @ZillowforPros Premier Agents at #ZillowSummit: a lead on a stale listing is still a good lead. "Here are some other homes…"

— Spencer Rascoff (@spencerrascoff) February 25, 2013

All leads — whether on contingent, active, or expired — can be worked. #ZillowSummit

— Spencer Rascoff (@spencerrascoff) July 29, 2013

"Questions about the Zestimate are an opportunity to get the appointment." #ZillowSummit

— Spencer Rascoff (@spencerrascoff) March 20, 2014

What about "bad zestimate" issues? Premier Agent: "Anytime my phone rings I'm happy." #ZillowSummit

— Spencer Rascoff (@spencerrascoff) September 24, 2014

If you think Zillow is or will be “disruptive” to the real estate industry, you are, once again, wrong.

@dschorrnyc Real estate always will be (and should be) a professionally-assisted transaction. http://t.co/1Z8NGqHW

— Spencer Rascoff (@spencerrascoff) December 4, 2012

The post Choice Quotes From Zillow CEO Spencer Rascoff appeared first on Seattle Bubble.

Between the feature’s June 12 launch and my initial data collection on June 30 a grand total of 458 “Coming Soon” listings were added to the site. Today, only 154 more “Coming Soon” listings are on Zillow than when I checked three months ago.

Compared to the 43,919 “Make Me Move” and 94,647 for sale by owner listings, the volume of “Coming Soon” listings is barely even measurable. Zillow’s current inventory of 612 “Coming Soon” listings make up just 0.4 percent of their total off-MLS inventory in these three categories.

I’ve put together an update to the table that counts Zillow’s off-MLS inventory in three categories by state. The “Rate” for each is the number of listings per 1 million residents. The top states are still Nevada, Missouri, Arizona, and California, and 21 states still have fewer than one “Coming Soon” listing per million residents.

Do you think Zillow will kill “Coming Soon” if adoption of this mostly-unwanted feature continues to progress this slowly?

Click a column header to sort the table by that column.

Data in this post was collected from Zillow.com on September 23, 2014.

The post Three Months in, Zillow’s “Coming Soon” Barely a Blip appeared first on Seattle Bubble.

Most other real estate listing sites have settled on a fairly standard layout for home listing detail pages—two columns, address and price at the top, photos on the upper-left, bullet-point list of property features, etc. Compare this Capitol Hill listing’s page on Redfin, Zillow, and Trulia for a good example of what has become the standard layout.

Surefield went with a very different and distinctive design—single column, 3D tour at the very top, big bold address and price under that, followed by a 3-column layout with the home’s description in the left column and the details in a bullet-free list format in the remaining two columns.

Apparently the design is a hit… with their competition, anyway. 3D tour technology heavyweight Matterport, who has raised $26 million since 2011 and recently rolled out a major partnership with Redfin, has pretty much completely design-jacked Surefield’s listing detail page.

Here’s a link to a Surefield listing detail page, and here’s a link to a Matterport listing detail page. Compare them below.

Matterport even jacked the shrinking top-bar feature from Surefield.

As well as I can tell Matterport didn’t straight-up copy any code, so this isn’t a sleazy as the Kirkland brokerage who ripped off Redfin code earlier this year. Still, you would think that a company with $26 million would be able to pay for an original design rather than just ripping off a smaller upstart competitor.

Full disclosure: The Tim is currently a Redfin shareholder.

The post Local 3D Tour Tech Upstart Surefield Design-Jacked by Heavyweight Competitor Matterport appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

The number one and number two homes from last month have since gone pending, pushing the number three home up to number one this month.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 10
Average number of beds: 2.1
Average number of baths: 1.2
Average square footage: 1,259
Average days on market: 67

Inventory of non-short sale homes under $200,000 in Seattle dipped slightly in September, but remained just barely in double digits. Beds and baths are mostly unchanged, square footage bumped up again, and days on market spiked.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: September 2014 Edition appeared first on Seattle Bubble.

For a daily dose of crazy listings from all over the world, tune into Looney Listing, which is updated five times as a week. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“You’ll like it when you drive up, but when you look out the kitchen window and see the back yard, you’ll fall in love.”

You’ll like it when you drive up, but you’ll also be blinded, so you won’t really get to appreciate the rest of the home. Found by Graham.

“Lighting, leaded prisim wndows & more by WA artisans”

I wonder which Washington artisan crafts those crazy windows that glow bright yellow at dusk?

“Custom Hardwood Cabinets w/ spice & cup shelves, dividers & underlighting.”

Also: drawers capable of holding silverware!

“Floating homes? Mixed use? Yacht Condominium Moorage? All of the above?”

Even the listing agent doesn’t seem to know for sure what’s being sold here.

“Opportunity knocks in Sammamish!”

Apparently Opportunity knocks on the ceiling. Found by Beth T.

“One of a kind LOCATION!”

I bet your house doesn’t have those kinds of curves!

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Blinded by the Silverware Drawer appeared first on Seattle Bubble.

This morning Curbed Seattle blogged about one such home: West Bellevue Modern With Personal Car Showroom Asks $4M

Here’s the full listing on Redfin.

Whenever I see “Undisclosed Address” on a listing, I can’t help but take it as a personal challenge to find the address of the home. Often all it takes is the photos, zip code, and a little time on Google Maps satellite view to spot the home’s location.

After a bit of satellite-hunting, I found the address of our car-loving seller: [redacted]

[UPDATE]
The listing agent contacted me and politely asked that I remove the address.

The address was intentionally left out for security reasons. I hope you can understand our concerns and we request that you please remove the address from the blog post as soon as possible.

Thank you for your urgent attention

Listings Detective: $4M Bellevue Home w/ 16-Car Garage

Moya M. Skillman
Broker | Premier Executive Director

Although everything I posted is easily-accessible public record that I’m well within my rights to post, since she asked nicely I decided to take down the references in this post to the home’s specific address.

[END OF UPDATE]

The photo at right is from the King County Assessor, which lists the owners of this car heaven as Rodney and Janice Olson.

A bit of sleuthing through public info and news about Rodney Olson pegs him as a local hotel magnate. He was President and CEO of WestCoast Hotels (now called Red Lion Hotels) in the ’90s, and according to this 2002 SEC filing, also a major shareholder when the chain was acquired in 1999.

Here’s some more background on Mr. Olson, from that filing:

Prior to the acquisition of WestCoast Hotels, Inc. by the Company, Mr. Olson was the President, Chief Executive Officer and a shareholder of WestCoast Hotels, Inc. The Company purchased WestCoast Hotels Inc. from its shareholders, including Mr. Olson, effective December 31, 1999. Mr. Olson has served as a director of the Company since May 2000. He is Chairman of the Board of Directors of Paramount Hotels, LLC in Seattle, Washington. Mr. Olson began his hotel career in 1969 with Vance Hotels, which was later renamed WestCoast. He held executive positions in both sales and operations for Dunfey Hotels and Red Lion Hotels prior to re-joining the Vance Hotels in 1977. With Vance Hotels, he held positions of hotel General Manager, Vice President of Management Services, Vice President of Purchasing, Vice President of Development and Vice President of Operations before becoming President in 1986. Mr. Olson has served on the Boards of the Washington State Lodging Association, Restaurant Association of Washington State and the Seattle Hotel Association.

…and he’s also quite the car aficionado, as well.

According to the King County Assessor, Mr. Olson purchased the lot through an LLC in 2005 for $779,144 and built the current custom, car-centric home three years later in 2008.

Just about the only thing that we can’t find through a little Internet sleuthing is why the 63-year-old hotel magnate would want to sell just six years after custom-building this impressive automobile palace.

The post Listings Detective: $4M Bellevue Home w/ 16-Car Garage appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

We skipped last month, but the number one home from June’s post has since sold, the number two home is pending, and number three is still for sale, but was bumped off the “cheapest” list. To find three homes that fit our criteria I had to go all the way up to the $200,000 line. It may be time to retire this series, or adjust our threshold.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 12
Average number of beds: 2.2
Average number of baths: 1.2
Average square footage: 1,131
Average days on market: 47

Inventory of non-short sale homes under $200,000 in Seattle inched up slightly in August from the single-digits it had been sitting at for the previous three months. Beds and baths are mostly unchanged, square footage bumped up from July, and days on market fell to its lowest point since last August.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: August 2014 Edition appeared first on Seattle Bubble.

If you want a more steady dosage of crazy listing photos, tune into Looney Listing, which is updated five times as a week with homes from all across the country. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Included are full architectural plans, with final permits expected in late July.”

No word in the listing on whether or not that sweet cardboard model is included. Found by Joan L.

“Shown by appt. only after acceptable offer has been tendered. No Drive By’s – No exceptions, This Offering is unique!”

They really don’t want anyone looking at this listing, apparently. Whatever you do, definitely don’t go drive by 19064 NW Hite Center Rd in Seabeck to try to see for yourself just how “unique!” this offering is. Found by David B.

“‘New Construction’ has nothing on this remodeled residence!”

Cool story bro.

“Beautiful Move-In Ready home on Estate Sized Lot.”

Bonus: Looks huge if you’re a fish! Found by Beth T.

“Imagine the possibilities!”

You’re going to have to crank your imagination up to 11 for this one.

“Urban Bungalow with unfinished basement and off street parking rare on 23rd!”

I think there might be an inverse correlation between the number of exclamation points in a listing description and the desirability of the home. Found by Rob M.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Cardboard Dreams appeared first on Seattle Bubble.

Last week I spent some time gathering data on Zillow to see how many “Coming Soon” listings there were on the site, state-by-state across the entire nation. In order to give us something to compare to, I also grabbed the number of “Make Me Move” (a.k.a. delusional owner dream machine) and “For Sale By Owner” (a.k.a. make me an obvious lead target for desperate listing agents) listings, two of Zillow’s other off-MLS categories.

Below is a Tableau heat map of the results normalized by each state’s population (zoom out to view Alaska and Hawaii, or shift-click and drag to pan the map). As you can see, agents who can use “Coming Soon” have so far been slow to do so. This should not be surprising, considering that many MLSs across the country forbid this kind of practice from their members, just like NWMLS does.

So far, the feature is most popular least ignored in Missouri and Nevada—the only two states with more than four “Coming Soon” listings per 1 million residents. Thirteen states had no “Coming Soon” listings at all when I pulled this data from Zillow last week.

Obviously this feature has a long ways to go before it will even come close to the popularity of “Make Me Move,” whose lowest state rate was 56 listings per million residents in Louisiana. The state with the highest rate of “Make Me Move” listings was Washington, with 587 per million residents. The highest rate for FSBO listings was 823 per million residents in Vermont, while the lowest was 73 listings per million residents in California.

On the day I pulled this data the four “Coming Soon” listings in Washington were all either in the Vancouver or Spokane areas (both served by different MLSs). Interestingly, there are now two “Coming Soon” listings in the Seattle area, one in Snohomish and one in Issaquah. Both of the listing agents, Nathanael Hasselbeck of NWG Real Estate and Darrell Parker of Parker Property, LLC appear to be NWMLS members, so I’m a bit surprised to see them openly flout the rules like this, given how fine-happy the NWMLS has been in the past. But hey, they did have to check a box, so I’m sure there’s nothing to worry about.

[Update: As of 3PM, both of these Seattle-area “Coming Soon” listings have been removed.]

Katie Curnutte, a Zillow spokeswoman, said that they were aware of the NWMLS rules when they launched the service. She said they respect those rules, and are not actively encouraging agents to break them.

“It is a marketing tool for agents, so they need to follow the marketing rules of their own MLS and brokerage,” she said. If agents are not acting within the rules of the local MLS, Curnutte said they will remove the “coming soon” listing. She also noted that agents must check a box that they are complying with local MLS rules before posting.

It will be interesting to see what these numbers look like a year from now. So far, all the outrage and concern in the agent community seems to be much ado about nothing.

If you prefer simple text-based tables to Tableau, click through below for all the data in a single table, sortable by clicking the column headers.

Data in this post was collected from Zillow.com on June 30, 2014.

The post Zillow’s “Coming Soon” Off to a Slow Start appeared first on Seattle Bubble.

If you want a more steady dosage of crazy listing photos, tune into Looney Listing, which is updated five times as a week with homes from all across the country. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Cosmetic charmer… newer hot water tank! …pie cooling station. …garage door opener!”

I live just a few miles from this home and I can confirm that the grass definitely glows radioactive green here in Everett. Wait, what?

“Nice, partially finished basement.”

The whole set of photos here is terrifying, but… um… is that a person hiding under the sheets on the bed? What the heck?!? Found by Christian W.

“You will feel right at home”

“You will feel right at home,” you know, if your home is extremely poorly lit and has random clutter just lying all over the place. And also you forgot to put on your glasses so everything looks blurry. Even after all these years I am still amazed at how little effort some listing agents will put into earning their 3% commission (which would be nearly $17,000 on this listing).

“house features 3 bedrooms, 2 full baths, living room, family room, spacious attic loft upstairs, bonus room, 3 car garage”

The reason they’re so descriptive in the text? Two tiny photos of the street and a fence is all they bothered to upload.

“wake up to the beautiful Stipek Park”

Nothing says “superior real estate service” like uploading a screenshot of Google Earth as your primary listing photo.

“May be viewed from the Road but no known access to the actual property.”

Okay, but did that really mean you could only upload a few horribly blurry photos with completely illegible captions? What kind of camera is even capable of taking photos that bad? Found by Beth T.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Radioactive Edition appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

The #1 home from last month is now pending, #2 was taken off the market, and #3 was disqualified with the addition of a mention of rehab financing. To find three homes that fit our criteria I had to go all the way up to the $200,000 line. It may be time to retire this series, or adjust our threshold.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 8
Average number of beds: 2.0
Average number of baths: 1.3
Average square footage: 1,230
Average days on market: 55

Inventory of non-short sale homes under $200,000 in Seattle stayed at the new low point set in May. Beds and baths were the same as May, while square footage shot up and days on market fell.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: June 2014 Edition appeared first on Seattle Bubble.

This poll was actually a re-run from almost seven years ago when we asked the same question.

Here’s how the results of the two polls compare:

The sample size on both polls is really just a small fraction of the 25,000 visitors this site gets in a month, but these results were still somewhat surprising to me. Are home buyers really more than twice as likely to use a traditional agent now than they were in 2007?

With the increasing number of alternative brokerages popping up around Seattle, I would have expected the opposite results.

We used the services of WaLaw Realty to buy our home in 2011, and in a heartbeat I’d use just about any of the brokerages I highlighted in last month’s series to buy or sell a home before I would pay a full commission to a traditional agent.

Are traditional agents really getting more popular, or was this survey just a fluke?

The post Traditional Agents More Popular Than in 2007? appeared first on Seattle Bubble.

The new version lays out all of the variables in a clean and simple vertical layout. As with their old calculator (which you can still use if you prefer it), they offer sliders for a wide variety of costs associated with both renting and buying.

The thing I really like about this is that it highlights many of the home buying and ongoing ownership costs that cliché “you’re just wasting money if you rent” marketing from home salesmen conveniently overlooks.

When I put in the numbers for my 2011 home purchase, the calculator suggested that even if home values don’t appreciate at all and I only stay in my home for 10 years (I plan to own it for good) I’d need to pay no more than $1,128 a month in rent to make renting the better financial choice. The 2-bedroom home next door to mine—less than half the size of my house—is currently renting for over $1,300.

Plugging in a similar scenario for today’s median King County single family home price of $430,000 and a 4.25% rate on a 30-year mortgage gets you a monthly rent break-even point of $2,193. I haven’t tried renting anything in King County lately, but a Craigslist search seems to show quite a few homes for rent for less than $2,200. From what I can tell, the question of whether buying or renting is the better financial choice in the Seattle area is certainly a lot less clear today than it was a few years ago.

The post New, Even Better New York Times Buy vs. Rent Calculator appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

The #1 and #2 homes from last month are both pending, while the #3 home from last month moved up to #2 this month. The cheapest home this month is actually a re-run from way back in 2010.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 8
Average number of beds: 2.0
Average number of baths: 1.3
Average square footage: 1,078
Average days on market: 95

Inventory of non-short sale homes under $200,000 in Seattle hit a new low point in May, dropping into the single digits for the first time since I’ve been recording this data. The other stats held more or less steady in the month.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: May 2014 Edition appeared first on Seattle Bubble.

The final spotlight in our in-depth series on alternative brokerages around Seattle is on Locality. Locality was just launched earlier this year by Redfin veteran Trevor Smith. I worked with Trevor while we were both at Redfin, and can personally attest to his skill and professionalism. Long-time Seattle Bubble readers may also recognize Trevor’s name from this 2006 post (before Trevor’s stint at Redfin).

Trevor’s responses to the series Q&A are reproduced unedited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

We’re a full service brokerage that puts the interest of our clients ahead of our own. This means charging a reasonable commission but it also means telling our clients the truth, even if we lose the sale. I call it the Grandma test. If it’s something I wouldn’t advise my Grandma to do I won’t advise my clients to do it either.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

In many ways we’re actually not that different from a traditional brokerage. We have experienced Agents who work with you one on one every step of the way; we’re tough negotiators committed to getting you the best price; and we provide great marketing for our Sellers to help sell their homes quickly and for more money. The main difference is that our commission is typically 2/3rds of what most traditional agents charge.

I remember when I first started in real estate there was an Agent who showed homes in a limousine with a license plate that said SOLD. He charged his Sellers 10% total commission and people happily paid it. I know of other Agents who charge as little as $500 to put a sign in your yard and list your home on the MLS but do nothing else from there. This is often the false choice given to consumers – that you have to choose either an expensive traditional agent or a discounter. That it’s either Nordstrom or Wal-Mart. It’s my belief though that there’s a middle ground that works well for a lot of people. Perhaps you could liken it to Costco – A quality product at a reasonable price. That’s my goal with Locality.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

We currently work with Buyers and Sellers throughout the greater Seattle area. Most of our clients are in Ballard, Green Lake, Wallingford, Fremont, Phinney, and other North Seattle neighborhoods.

What is your fee structure? How much do buyers pay, how much do sellers pay?

Our Buyers receive a 1/3rd commission rebate when purchasing a property. On a $500,000 home this is usually about $5000. This money can be used toward closing costs, prepaids, and loan discount points. All our Buyers work with one Agent who shows them properties, negotiates the deal, and gets them to closing.

We offer two listing programs to our Sellers. We have a 4% total commission program that includes professional photography, a free staging consultation, open houses, and placing your listing on the MLS and other popular websites such as Zillow, Trulia, and Yahoo Real Estate.

We also offer a 6% total commission package. This package is for folks who want to hand the keys over to their real estate agent and not lift a finger. With this package we provide everything from our 4% package as well as $2500 of staging, $500 of home preparation (painting, landscaping, etc), $500 of videography/virtual tours, and an exclusive website for your listing. Everything included, we usually invest about $4000 into these listings. Because of this huge investment we do have some rules and restrictions regarding the homes that qualify for this package.

Is there anything else you would like to share about your brokerage?

I started Locality after working at both John L Scott, a very traditional brokerage, and Redfin, a very innovative brokerage. With Locality I’ve tried to implement the best parts of both of these experiences while cutting out inefficiencies.

The best part of the traditional brokerages is their ability to offer over the top personalized service to their clients. Buyers and Sellers have one Agent that they work with from start to finish. This time spent together builds a level of trust and understanding that usually produces a much better result for both the customer and the agent.

The downside to this level of service is that it usually comes at a 6% price tag. Because of this some innovators have divided the job up into specialty areas in order to produce efficiency and drive prices down. Redfin for instance teams Coordinators, Field Agents (folks who show houses), and Agents (folks who do the deal) together in order to make the process more efficient. This works well for some tasks. For instance, it doesn’t make sense to send the guy who’s making $100,000 a year out to deliver flyers. On the other hand too much work division can result in a poor client experience or even lost money for the customer. For instance, if the Buyer’s Agent negotiating your transaction doesn’t attend your home inspection how can they negotiate repairs effectively on your behalf?

I believe that personalized customer service is actually not the driver of high real estate commissions. My belief is that it’s caused by three other factors. I think two of these problems can be fixed while one will take a gargantuan shift in public behavior and will likely never be fixed.

• Problem #1: Offices. Office space is very expensive and this expense is passed onto the consumer with higher commissions. Despite this, you’ll find real estate offices on nearly every corner of Seattle.

  The solution to this problem is simple. Agents can work from home. Today with technologies like Docusign real estate contracts can be signed virtually. Client meetings can be held at a Seller’s home or at the local coffee shop. Redfin has done a good job with this by placing one centralized office in each market and having their Agents work from home most of the time.

• Problem #2: Designated Brokers. The average traditional Agent in Seattle splits their commission 50/50 with their Designated Broker up to a cap as high as $32,000. This is after the commission has already been split with a cooperating agent. This means out of a 6% commission only 1.5% actually goes to your Agent. This might be justified if the Designated Broker plays an intimate role in the transaction and adds value to the consumer; however after talking to dozens of Agents around Seattle this seems to often not be the case.

  This is the main problem I’m attempting to address at Locality. My vision is to create a co-op of Brokerages, each working in their neighborhood of expertise, and each owning their own small business. Each brokerage would remain small enough to keep Broker fees low and to keep personal accountability and neighborhood expertise high.

  The one beautiful thing about the real estate industry is that it’s an industry still made up of tens of thousands of small business owners. I think the real estate industry can be changed by playing to this strength even further – by having more brokers owning their own brokerages rather than working for companies that skim franchise fees and commission splits off the top with very little value given in return. This savings can then be passed along to the consumer without a sacrifice in the level of service.

• Problem #3: Risk Distribution. The financials of running a real estate brokerage is a lot like running an insurance company. Real Estate Brokers spend much of their time working with clients who never buy or sell a home. Maybe it’s showing homes to Buyers who can’t qualify for a mortgage or who ultimately decide to rent. Maybe it’s listing a home for a Seller who just wants to test market. In the end the Broker doesn’t collect a paycheck for these folks and someone has to foot the bill. Unfortunately it’s the diligent and decisive Buyers and Sellers who pay for this, just like good drivers pay for the repairs of the accident prone.

  Unfortunately I believe this problem will be very difficult to solve. Some folks might charge a retainer fee to make sure they’re only getting the most serious clients. Others might require a pre-approval before they show any houses. In the end though there are just too many variables when buying and selling a house and we humans are a fickle bunch. I simply can’t see a scenario where Buyers and Sellers that close on a home aren’t at least partially subsidizing people who never buy or sell. I hope I’m wrong about this though and we’re able to find a solution to this issue. If we do, I think real estate commissions could be driven much lower.

When I started in real estate I actually had a disdain for my own industry. I thought everyone was just a bunch of greedy Lexus driving sharks bilking home buyers and sellers for exorbitant commissions. Over the years though I’ve found that most real estate agents are smart decent people who work hard for their money. I’ve also found that most consumers value the expertise, marketing, and negotiation skills an Agent offers. Nonetheless, there are still a lot of ways this industry could be better. Not just cheaper, but better. That’s my goal. I want to make things more efficient, more consumer friendly, and more cost effective. I want to make things better.

The post Alternative Brokerage Spotlight: Locality appeared first on Seattle Bubble.

Next up in the in-depth series on alternative brokerages around Seattle is Surefield. Surefield just launched this week, started by Redfin founder David Eraker, Redfin veteran Rob McGarty, and Nvidea tech wizard Aravind Kalaiah. I worked with Rob during my time at Redfin, and he gave me a pre-launch sneak peek at Surefield. If you think virtual tours are old news, forget the “virtual tours” that are nothing more than a slideshow of listing photos set to elevator music and check out the Surefield Tour. Give it a whirl right in this post below, or choose a sample tour from their site.

You can read launch stories about Surefield on the Seattle Times and GeekWire.

Rob sent me his responses to the series Q&A, which are reproduced unedited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

Surefield is the only real estate brokerage with an in-house computer vision research and development team. This means that only Surefield sellers get our exclusive online 3D tour, the Surefield Tour, to sell their home for more money with less hassle.

The Surefield Tour let’s more people experience your home, at your convenience.

• Local buyers can immediately take a Surefield Tour without having to get in their car or waiting to schedule an in-person visit.
• Remote buyers are able to experience your home before they get on a plane.

The Surefield Tour gives buyers what they need online before they come into your home.

• Before Surefield, buyers had to tour your home in-person to assess suitability. Now only serious buyers need to show up in-person because they’ve already invested their time online touring your home with the Surefield Tour.
• In addition, Surefield takes care of everything including cleaning, professional staging, professional photography, custom floor plans and the Surefield Tour–all at no additional cost.

Explore a Surefield Tour right here:

Home from Surefield

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

Surefield is a real estate brokerage that combines technology with savvy agents to get you more buyers with less hassle.

Surefield provides a premium service at the typical price. Surefield sellers get free staging, professional photography, floor plans and our exclusive online 3D tour, all at no additional cost.

Surefield takes the hassle out of selling. Before, you’d have to open your door for everyone curious about your home. Now, buyers can get a much better feel for your home online with the Surefield Tour. Which means opening your door for fewer tire kickers and more serious buyers.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

Surefield primarily focuses on helping sellers by providing a more convenient way to market and sell their home to more buyers with less hassle. Buyers love Surefield listings because it lets them experience homes before having to schedule an in-person tour with their agent, who then has to schedule with the seller.

We currently service King County.

What is your fee structure? How much do buyers pay, how much do sellers pay?

Surefield uses a typical fee structure where the seller pays our fees through a sales commission based on a percent of the sales price. Rather than discounting our fees, we include many services that other agents charge extra for, such as professional staging, professional photos, custom floor plans and our exclusive online 3D open house, the Surefield Tour.

Is there anything else you would like to share about your brokerage?

Check out some examples of our online 3D tour at: http://www.surefield.com/tour-homes

The post Alternative Brokerage Spotlight: Surefield appeared first on Seattle Bubble.

Next up in the in-depth series on alternative brokerages around Seattle is MLS4owners.com. They fly mostly under the radar without much advertising, but if you pay attention to homes for sale in the Seattle area, you’ll no doubt see their signs.

They snuck in just before the deadline, so here’s their responses to the series Q&A.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

Substantial savings to the real estate consumer

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

We are a real estate advertising firm.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

Any seller who wants to save money and have control over the home selling process.

What is your fee structure? How much do buyers pay, how much do sellers pay?

Sellers pay a flat fee $200-$800 depending on the level of service

Is there anything else you would like to share about your brokerage?

It’s MLS4owners.com! Over 1 Billion Sold!

The post Alternative Brokerage Spotlight: MLS4owners.com appeared first on Seattle Bubble.

Read the series intro: Alternative Brokerages Flourishing Around Seattle

Today’s spotlight post in our in-depth series on alternative brokerages around Seattle is on Quill Realty’s real estate agent attorney team.

Craig Blackmon was the other co-founder of WaLaw Realty, and while still with WaLaw he also helped me with my home purchase in 2011. Earlier this year he launched his new venture, Quill Realty, to provide a different spin on the agent / attorney combo team.

Craig’s answers to the series Q&A are presented un-edited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

A real estate attorney. Quill Realty provides its clients with two real estate professionals: an agent, of course, plus an experienced real estate attorney. The Quill-affiliated lawyer monitors deadlines and legal obligations that are an essential part of the home buying and selling process. This helps the client to avoid surprises and allows the client to make informed decisions throughout the transaction. Because they have a dedicated legal advocate, Quill clients can rest assured that their interests are protected every step of the way.

By providing its clients with a real estate attorney, Quill Realty brings clarity to a complex transaction. A Quill client will never hear, “Don’t worry, it’s just paperwork.” Rather, Quill clients will have a complete understanding of their legal rights and obligations when they sign a contract worth hundreds of thousands of dollars, the very essence of buying or selling a home. Quill clients get the security, insight, and guidance that only an attorney can provide.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

Quill Realty is founded on two consumer-driven principles: (1) the internet has created efficiencies that are not captured by traditional real estate brokerages; and (2) a home buyer or seller is best served when legal services are provided by an attorney.

The first principle allows Quill Realty to charge less. A traditional brokerage relies heavily on the marketing efforts of each individual broker. In contrast, Quill uses comprehensive, firm-wide marketing. This allows Quill to more efficiently acquire new clients, and its brokers to spend their time providing client services. Similarly, listings today are widely available. Quill clients are actively involved in finding their next home, which reduces the work load for the Quill agent. Together, these efficiencies allow Quill to operate for less. Quill passes the savings back to its clients by charging a 2% commission.

The second principle lies at the heart of Quill Realty. Although agents can complete blanks in pre-printed forms, they cannot legally draft unique contractual language, or explain the meaning or impact of contractual terms, or advise the client on appropriate steps to better protect the client’s interests. Quill provides its clients with an attorney, who of course can do all of these things.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

Currently, Quill Realty is focused on providing services for home buyers. However, Quill does take listings as well. Over the coming year Quill will formally “build out” the seller side of its business.

Quill Realty helps clients throughout the Seattle area. People who appreciate the understanding and protection afforded by legal counsel will most appreciate the Quill model. Because the typical seller pays a commission of 3%, Quill generally rebates 1% of the sale price to its buyer clients. So, the greater the price of the home, the more money a Quill client saves.

What is your fee structure? How much do buyers pay, how much do sellers pay?

At Quill Realty, we charge a 2% fee (compared to the 3% fee charged by a typical real estate agent). We require an initial up-front payment of $1000. The client then has one year to close on a transaction. The balance of the fee (i.e., 2% of the final price less $1k) is due only at closing, with a minimum of $5000. Absent closing, no further fee is due.

Buyers and sellers pay the same amount, although the buyer’s fee is paid out of the commission offered by the seller to the buyer’s agent. The balance of that seller-paid commission, after payment of the fee, is rebated to the buyer at closing. These funds are applied to the buyer’s closing costs as allowed by the lender and federal law.

This fee also includes, of course, the attorney’s fee. So a Quill client pays less than a typical real estate consumer, and in the process gets an attorney’s legal counsel as well.

Is there anything else you would like to share about your brokerage?

There are other real estate brokers, both traditional and alternative, who are also lawyers. They promote themselves by noting their legal expertise. A few even hold themselves out as lawyers who will both represent the client as a lawyer, as well as provide the client with broker services. However, this seriously blurs the line between these two distinctly different professions, which dilutes the value of having an attorney. While conversations with an attorney are always privileged and confidential, conversations with a real estate broker sometimes are not. By keeping the distinction clear and unequivocal, Quill allows home buyers and sellers to get all of the benefits of working with both a real estate agent and a lawyer.

The post Alternative Brokerage Spotlight: Quill Realty appeared first on Seattle Bubble.

Today’s spotlight post in our in-depth series on alternative brokerages around Seattle is $500 Realty.

Ray Pepper has been a longtime reader and commenter here at Seattle Bubble. I’ve met him a few times, and he’s a stand-up guy. He even bought Ira and me lunch (at Claim Jumper, of course) when he lost a bet that I’d buy a home by March 2010.

I’ve reproduced Ray’s answers to the series Q&A un-edited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

500 Realty offers the ASTUTE Buyer/Seller the largest financial incentive to participate in the transaction itself while getting compensated the MOST in the State. The “Golden Carrot” of a HUGE PAYDAY for our Agents is NON EXISTENT. A Brokerage that gets paid to produce, with large financial incentives to close, will NEVER have the BEST interests of their clients.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

500 Realty empowers the Buyer and Seller to assist their Agent in selling or buying their real estate investment. In return we compensate Buyers 75% of the funds paid to our Brokerage. With 75% of our funds going directly back to our client we are NEVER pressured to close a sale. 500 Realty requires Buyers to be Pre Approved, look for their own properties, and practice competent decision making. 500 Realty has a $3,900 minimum per transaction.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

Our typical clients are real estate agents who no longer hold a license, Mortgage Reps, Attorneys, Medical, Professional, Red Fin clients, and a great many investors who want the SELLERS CASH when they BUY and need to save THEIR CASH when they sell. We focus more on Buyers, any price range, anywhere in Washington State served by the NWMLS.

What is your fee structure? How much do buyers pay, how much do sellers pay?

Sellers: $200 to LIST your property on the NWMLS or $500 to LIST depending on your needs. We do NOT do Open Houses.
Buyers: Receive 75% of the selling office commission with a $3,900 minimum.

Is there anything else you would like to share about your brokerage?

If YOU or your Mortgage Rep still do NOT understand what 500 Realty does after visiting our website @ www.500realty.net then you are most likely NOT a client for 500 Realty. In addition, we strongly urge you to find another mortgage “professional” as well. Many Mortgage Reps have VERY friendly relationships with “their” real estate agents and this will NEVER be an investment that is in your FINANCIALLY best interests.

The post Alternative Brokerage Spotlight: $500 Realty appeared first on Seattle Bubble.

Read the series intro: Alternative Brokerages Flourishing Around Seattle

Next in our in-depth series on alternative brokerages around Seattle is flat fee lawyer-brokerage WaLaw Realty.

My wife and I used WaLaw to buy our home in 2011. WaLaw co-founder Marc Holmes helped us throughout pretty much our entire homebuying timeline, wrote offers on five homes, and made buying a short sale seem easy. We are very satisfied customers and personally recommend WaLaw to anyone who asks.

Marc’s answers to the series Q&A are presented un-edited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

WaLaw Realty has two significant differentiators from traditional agents: a flat fee instead of commission and a real estate attorney handles every deal.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

The flaw with the traditional commission paradigm is that it charges high fees despite great variation in the services people need or want. Many buyers want to conduct their own search and just need help accessing properties and managing the offer process.

For sellers, the cost of marketing a home has fallen dramatically yet the cost of agents has not. It shouldn’t cost three times to sell a $1,000,000 house as it does a $300,000 house when the services provided by the listing agent are virtually identical.

We solve that problem by charging a flat fee that better aligns the cost of the services required plus a reasonable profit. We rebate the balance of the commission to buyers and sellers avoid paying 3% to list. Moreover, by requiring the client to commit to paying our fee we allow them to self-select in a way that only serious consumers hire us. Thus, we don’t waste time giving “free tours” to people who may never actually buy a house.

Our other value add is legal counsel. Our clients are represented by a person who is both their broker and their attorney. This means they have a seamless experience and get more sophisticated advice through the whole process including negotiating the offer, reviewing title and closing documents, etc.

Our employees are all on salary and the company provides all of the clients. They do not have to sell their services and can instead focus solely on looking out for their clients’ best interest.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

In the first few years we had way more buyer clients, perhaps 80%. It took sellers awhile to believe you could sell a house without using a traditional agent. By 2012 that began to switch and became a little more balanced. In 2013 we took on more seller clients than buyers due to capacity constraints. In 2013 we’ve added another attorney and have not had to turn away buyers as we did last year. So, we’re pretty evenly split between buyers and sellers.

Most of our clients are in King County and we’re evenly split between Seattle and the Eastside. Our clients tend to skew to the higher end. To date our average sales price for buyers is $689,000 and $569,000 for sellers.

What is your fee structure? How much do buyers pay, how much do sellers pay?

$4,995 flat fee for homes priced under $1,000,000. An additional $2,000 for each million over a million.

Is there anything else you would like to share about your brokerage?

Only how much we appreciate The Tim, Seattle Bubble. First, for giving me a great warning in 2006 and 2007 to not buy a house which I completely ignored. And second, for being a fantastic resource that we can direct people to to better understand the market we’re all in.

The post Alternative Brokerage Spotlight: WaLaw Realty appeared first on Seattle Bubble.

Read the series intro: Alternative Brokerages Flourishing Around Seattle

First up in our in-depth series on alternative brokerages around Seattle is the technology-powered real estate brokerage Redfin.

Redfin was started here in Seattle in 2004, and currently serves buyers and sellers in 22 states across the country. They were the first to build map-based real estate search, a feature that most home buyers now take for granted.

I sent the series Q&A to Redfin CEO Glenn Kelman. His answers are presented un-edited below.

What is the single most important advantage your brokerage offers vs. using a traditional agent?

Redfin Agent is paid to be on your side, earning a salary, benefits and a bonus based on customer satisfaction. To gauge customer satisfaction, Redfin surveys every customer, and publishes every result. In thousands of detailed, local reviews, you can see for yourself how carefully we work to find our clients the right home, not just any home. The point of this whole system is to make sure you can relax around us, and make better decisions so you can get a better place to live.

In 200 words or less, what factors make your brokerage different from a traditional brokerage? e.g. – Cost, services offered, agent compensation, etc.

Full Service: first, let’s explain what isn’t different. A Redfin Agent is a full-service agent, who gets to know you over coffee and walking through houses. Technology is an enhancement, not a replacement, for personal service. We’ll host you on as many home tours as you want, with no pressure. And we hire the best of the best: a Redfin Agent earns between the 80th and 90th percentile for all Seattle-area full-time agents.

Accountability: as we just discussed, a Redfin Agent is paid differently, based on comprehensive public reviews. As the CEO, I am ultimately the one accountable for the service we give every customer. My email address is glenn (at) redfin (dot) com.

Technology: we use technology at every step to make the process easier and more informed, with on-the-spot, iPhone-scheduled home tours; a Deal Room to guide consumers through the escrow process; a Scouting Report on the other agent’s negotiating history; a Listing Dashboard for your own listing. Technology helps us get buyers into homes faster, and drives more traffic to the listings we’re hired to sell.

Who is your typical client? e.g. – Do you focus more on buyers or sellers, certain types of homes, certain price ranges, certain geographies, etc.?

We started out working primarily with home-buyers from the technology industry, under 35, buying expensive properties, living in urban areas. That has almost completely changed, not only because we’ve broadened our demographic, but because our demographic has, over the years, broadened itself: our 35-year old customers are now in their 40s. We now get a substantial amount of business via referral, not just through our online tools, and these customers are more diverse, too.

Our business is now larger in the suburbs than the cities. Most important, our listing business is doubling every year, aided in part by a seller’s market, in part by the fact that a Redfin yard sign just tends to beget more yard signs.

What is your fee structure? How much do buyers pay, how much do sellers pay?

We sell homes for 1.5% of the final sales price, in less time for more money, mostly because we can promote our listings on our own website and mobile tools. A Redfin Agent visits your home to discuss pricing and staging, then we pay for professional photography and all other marketing costs.

The amount a buyer saves varies based on the list price of the home at the time of an offer. For a $500,000 home, it is roughly $5,000. A $200,000-listing offers no fee refund whatsoever, while a $1,000,000-listing refunds nearly half our fee.

For every home listed on our site, we show the precise amount a buyer would save using a Redfin Agent; this amount does not change regardless of the final home price. This means that for any given home, you’ll know with certainty how much you’ll save in fees.

Is there anything else you would like to share about your brokerage?

Redfin has now helped thousands of Seattle-area families buy or sell a home. We are a mission-driven business, founded and run to make real estate better for consumers. We are very grateful for the broad support of the Seattle community, among consumers and real estate professionals alike.

The post Alternative Brokerage Spotlight: Redfin appeared first on Seattle Bubble.

For some reason, the Seattle area has become home to the cutting edge of real estate. On the technology front, we’re home to Redfin, Estately, Zillow, ActiveRain (a division of Trulia), and Market Leader (also a division of Trulia).

But it’s not just consumer and agent-facing real estate technology that is flourishing here in the Seattle area. We’ve become a hotbed of alternative brokerage models, as well. If you want to pay someone a three percent commission to take basic photos of your home and list it on the MLS, or to help you see homes as a buyer, you certainly can, but there are a growing number of local choices if you want to pay less or get more for your money.

Here’s a quick rundown:

• Redfin – Full service, agents paid on customer satisfaction, great website and mobile apps, commission refund/discount.
• WaLaw Realty – Real estate attorney handles your deal, flat fee.
• Quill Realty – Agent + attorney team handles your deal, charges 2% commission.
• Surefield – Listing brokerage provides unique online 3D tour that allows buyers to get a detailed look at homes.
• Locality – Full service, four percent listing option for sellers, one third commission refund for buyers.
• $500 Realty – $200 and $500 basic listing packages for sellers, seventy-five percent commission refund for buyers ($3,900 minimum charge)

I have sent out a Q&A to each of these brokerages to allow them to share their model and the value they bring to buyers and/or sellers. Throughout the week I’ll be posting their responses in full, so stay tuned.

If you’re buying or selling a home in the Seattle area, I really have no idea why you would settle for a “traditional” agent charging three percent. With this week’s series, you’ll be able to determine which alternative brokerage model is right for your specific needs, wants, and buying or selling situation.

Series Table of Contents

• Redfin
• WaLaw Realty
• Quill Realty
• Surefield
• Locality
• $500 Realty
• MLS4Owners.com

The post Alternative Brokerages Flourishing Around Seattle appeared first on Seattle Bubble.

On Monday I walked by a home 10th Ave East up on Capitol Hill. Here’s what it looked like a while back, via Google Street View:

And here’s what it looks like now:

The home sold last June for $826,000. So what are the new owners up to? Here’s some research by Capitol Hill Seattle:

According to permits filed for the property, the house is being lifted and moved on its lot to make room for a two-unit townhouse and attached garage that will be added to the property. It’s a project involving Bradley Khouri’s b9 architects.

Indeed, the permits on file with King County indicate that the home is being shifted out toward the street to make room on the 5,000 square foot lot for a new construction duplex in the back.

From the listing photos on Redfin, the 3,000 square foot, 105-year-old home looks to be in very nice condition. It will be interesting to see how much it sells for after losing its front and back yards and having new townhomes squeezed in behind it.

The post Flip, Slide, Build on Capitol Hill appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

The #1 home from last month has sold, while the #2 and #3 homes are reruns. 3038 S Holden St did move up one space thanks to a price drop.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 13
Average number of beds: 2.2
Average number of baths: 1.2
Average square footage: 1,074
Average days on market: 99

Inventory of cheap homes slipped back down in April after starting to climb in March. The average number of beds and baths both dropped, while the square footage and days on market increased in the month.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: April 2014 Edition appeared first on Seattle Bubble.

Be sure to stop by Looney Listing for a steady dose of goofy listings all month long. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Fantastic location close to freeways”

Another fine example of “let’s take a picture of a picture.” Found by Lori M.

“Bus stop in front of adjacent property.”

I guess that’s one way to avoid breaking the NWMLS rule of no brokerage branding in your listing photos. Not a very classy way, but it is effective, I suppose.

“Seller is very motivated.”

But not motivated enough to, you know, stop by the property during the day and take some non-terrifying photos. Found by mukoh.

“ATTENTION Builders and Investors! Approved by City of Bothell Building permits are ready to pick up for …Triplex Luxury Modern Style Town Homes.”

Because it will definitely be a great investment to build “luxury” homes directly over the freeway.

“rambler situated on a beautiful lot”

That is the most amazing and totally real fire I have ever seen (cropped for full effect). Found by David B.

“This is a fixer right next to a large industrial/office building.”

Yikes. It looks like someone actually lives here. Technically.

“full bathroom in the hall”

This ultra-blurry bathroom photo is one of just five pictures of this home. Talk about phoning it in. Found by Beth T.

“Rehab or tear down.”

Wait a minute. I could swear there was a house for sale here. This is where the map says it should be, anyway.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Best Fake Fire Ever appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

The #1 home from last month is now pending, while the #3 home was just taken off the market without selling. 751 S Cloverdale St lingers on.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 16
Average number of beds: 2.5
Average number of baths: 1.4
Average square footage: 1,065
Average days on market: 76

Inventory of cheap homes started inching up March, but we’re still a long way from the 100+ highs set in late 2010 / early 2011. The average number of beds, baths, square footage, and days on market all increased in the month as well.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: March 2014 Edition appeared first on Seattle Bubble.

Let’s take a tour of a shameless rip off, shall we?

Home Page

The home pages are very similar, but not so identical as to arouse too much suspicion. After all, Redfin, Zillow, and Trulia all have very similarly laid out home pages. Dig a little deeper though, and the all-out copying becomes evident.

Listing Page

Identical layout, same horizontal table of contents with a moving arrow that marks your place in the page, literally identical default avatars (far upper-right). They even duplicated the agent’s left-hand-on-the-hip pose! Speaking of the agents…

Agent Page

Here’s where it gets really ridiculous. Not only is the Asset Realty Group agent page a total rip off of Redfin’s agent page, but when you view the page source, you’ll find 54 instances of “Redfin” still in the code. They literally copied and pasted large amounts of Redfin code and didn’t even bother to do a find and replace.

According to the Internet Archive, this shameless clone version of their site appeared some time between October and early February. So far there appears to have been no repercussions.

At the very least, there should be a very large fine in store for them from the NWMLS. If instead, the NWMLS chooses to sit on their hands and do nothing, here’s the message is the NWMLS sending to it’s members: Write about another brokerage’s listings, get a $50,000 fine and a threat of your listing feed being cut off. Completely clone another brokerage’s website, literally copying and pasting their code as well as at least some of their image assets… hey no problem, go for it!

Apparently sleazy tactics are nothing new for Asset Realty Group, wholesale website copying is just their latest scam. Here’s a sampling of Asset Realty Group reviews on Yelp:

After we took our house off the market, i started receiving numerous phone calls from this service, despite me asking them not to call again. Their representative was rude and pushy. Phone spam.

Every time my house goes off the market I get a call from this company. Sometimes they leave messages. Today they did not. I’ve asked them in the past not to call me, my number is listed in the ‘Do Not Call Registry’ yet they continue to call.

I too listed a property in Washington on the MLS and after removing it have been hounded by calls from this company.

I have no doubt that Asset Realty Group is a dues-paying member, but the NWMLS is not doing themselves or the rest of their membership any good by allowing brokerages that engage in sleazy, unethical, bottom-feeding tactics like these to remain part of their organization.

Full disclosure: The Tim is currently a Redfin shareholder. This content is not endorsed by Redfin.

The post Sleazy Kirkland Brokerage Rips Off Redfin Design & Code appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

All three of last month’s homes are now off-market. One has sold, one is pending, and one was just pulled off the market without selling. 751 S Cloverdale St was bumped off the list last month, but it’s back, even without a price change.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 12
Average number of beds: 2.3
Average number of baths: 1.2
Average square footage: 1,041
Average days on market: 49

Inventory of cheap homes didn’t budge between January and February, staying at the new low set last month. Other stats were basically flat during the month except for average days on market, which dipped.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: February 2014 Edition appeared first on Seattle Bubble.

Today’s “Guess the Price” guest star is 3015 64th Ave SW in West Seattle.

This round’s home hit the market last Wednesday with an asking price of $529,000. It last sold almost 13 years ago in November 2000 for $320,000, so today’s asking price represents average annual appreciation of just under 4 percent. For reference, the Case-Shiller index for Seattle has gained roughly 3 percent per year over the same period, a rate that would put the current value of this home at $475,000.

Your guesses ranged from $425,000 to $540,000. The average price guessed was $512,220, and the median guess was $515,000. Here’s the plot of all the guesses, with the final close price & date marked in green:

According to the NWMLS, the home sold on January 31 (almost five months after listing), with a closing price of $451,000. Only one person guessed lower than the sale price. However, that person was not the closest. The closest guess was $468,850 by Anna. Congratulations!

Here’s the difference between the average guess and the final sale price our contests so far:

1. -2.2%
2. +5.5%
3. -10.5%
4. +10.0%
5. +2.8%
6. -2.4%
7. +13.6%

Bummer, you guys were way off this time around. Never thought I would say this, but apparently we have far too optimistic a crowd here! Heh.

Stay tuned in the next few weeks, when we’ll kick off another round of Guess the Price.

The post Guess the Price Round 7: We (Finally) Have a Winner! appeared first on Seattle Bubble.

Our favorite crazy listing site Looney Listing was featured in HGTV Magazine this month. Be sure to check over there for a constant flow of ridiculous listings from across the country. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“This sprawling hilltop perch is brought to you by Gayteway Custom Homes…”

NOPE. Going to stop you right there. Adding an extra ‘y’ in the middle of a word doesn’t make your weird The Sims-esque half-rendered home sound classy. It just sounds dumb.

“Queen Anne Pre-Sale. Investor’s Dream.”

Yeah I know a lot of “investors” who “dream” about pre-purchasing a home based solely on an art student’s colored pencil sketch.

“Complete and build your very own dream high elevation getaway.”

This home is still in beta. The full graphics will be completed later.

“This sits on a corner lot which expands wide in the back and at the end of a cul-de-sac. ”

This primary listing photo brought to you by J.J. Abrams’ number one fan.

“…the property is like living in the middle of the forest!”

Yo Dawg, I herd you like tiles, so I put some tiles on your tiles. found by Beth T.

“Beautiful Quality New Home from Greg McGar Construction”

I’m pretty sure when you’re going for a twilight shot, there needs to be some… you know… actual twilight.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Home Still in Beta appeared first on Seattle Bubble.

My position on that argument is unchanged from what I laid out in 2007, but I bring the topic up again today because it was the subject of a lengthy editorial this week by the Seattle Times’ Jon Talton: To compete and thrive, Seattle strives for global status

Now, you can order a Starbucks coffee in more than 50 countries from Hong Kong to Hungary. Microsoft has operations on five continents, and its software runs computers across the globe. From downtown Seattle, Expeditors International acts as a travel agent for freight around the world.
…
Does all this make Seattle a global city? Does it even matter?

…being a “world city” or “global city,” terms that emerged as globalization took hold in the 1990s, carries a specific connotation.

Sociologist Janet Abu-Lughod identified only three from the United States in her influential 1999 book, “New York, Los Angeles, Chicago: America’s Global Cities.”
…
The Mori Memorial Foundation in Japan ranked cities using 70 indicators including the economy, research and development, “cultural interaction,” livability, environment and accessibility. Vancouver, B.C., made the cut. Seattle didn’t.

…you won’t find us on prestigious lists compiled by the Globalization and World Cities Research Network (GaWC) at Loughborough University in England. The think tank analyzed the “intercity connectivities” of the planet’s most important “strategic places.”
…
We’re not just below New York, Los Angeles and Chicago, but also San Francisco, Washington, D.C., Miami, Boston, Dallas, Atlanta, Philadelphia and Houston.

Here’s the updated list of “Global Cities” in the US from the GaWC:

Seattle’s standing as a Global City falls just under Houston, just above, Detroit, and on par with Minneapolis. So if you’re going to talk about Seattle’s “world class” status, it makes more sense to compare us to Houston, Detroit, and Minneapolis than New York, Chicago, and San Francisco.

The post Seattle Still Not a “World Class City” appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

One of last month’s homes has gone pending, while the other two are still on the market but were edged off the list this month. This is the first month in quite a while that all three of the cheapest homes in Seattle area bank-owned.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 12
Average number of beds: 2.3
Average number of baths: 1.2
Average square footage: 1,023
Average days on market: 81

Inventory of cheap homes fell to a new low in January. Other stats were basically flat during the month except for average days on market, which shot up.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: January 2014 Edition appeared first on Seattle Bubble.

Do not forget, you can check out Looney Listing all month long for a steady stream of bizarre and amazing listing photos from across the country. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“a completely empty shell for whatever you can think of!”

Also, here is a photograph of the listing agent’s hand! Found by Spencer W.

“Current home is dry but needs some work.”

Gotta love that they couldn’t even be bothered to paint over the swastika flag graffiti before listing this home. Found by JP.

[Update: A few hours after this post went live, the swastika photo was removed from the listing on the MLS. It can however still be found on less up-to-date sites like Zillow.]

“Charming 3 bd. bungalow”

You’re looking at the primary photo for this listing. I’d like to know how they fit 3 bedrooms in there. Found by John R.

“Hillman City fixer with tons of potential located on a fully fenced corner lot.”

Well it was fenced whenever the Google Street View car drove by, anyway. Found by KDM.

“New tiled floors with bamboo in living room and all upstairs.”

Don’t believe that this house really has tiled floors? FOOL! Behold and be shamed!

“Pete Granger Homes proudly presents this Modern View home”

Um, Pete… I don’t know how to break it to you, but… that is not a home. That is Seattle University.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Just Leave the Swastika Up appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Yes, you read that right. The second-cheapest home this month is actually a flip. Sold in April for $142,500, the home has allegedly had “over $80k in upgrades” (according to the listing), and is now back on the market at $175,000. I somehow doubt the flipper will be losing $40,000 at this asking price.

Two of last month’s homes have gone pending, while the third carried over to this month as number three.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 15
Average number of beds: 2.2
Average number of baths: 1.2
Average square footage: 1,026
Average days on market: 60

Inventory continued to fall in the month, but it is still above the low point set in April. Meanwhile, the average size moved up slightly.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: December 2013 Edition appeared first on Seattle Bubble.

Click on the image to jump to their website for the interactive (which won’t fit on the page here).

One interesting bit of information I learned from his chart that I didn’t know before: At 707 units, the under-construction ultra-luxury Insignia condos are the biggest project built in Seattle in the last 8 years.

The post Downtown Seattle Housing Interactive appeared first on Seattle Bubble.

If you want to enjoy strange listing photos without interruption throughout the month check out Looney Listing. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Upper levels boast ‘Walnut hardwood floors’ throughout.”

Crookec, poor lighting, distracting TV… This is what’s called really earning the commission.

“Capture the spirit of innovation by Calico Studio.”

You weren’t expecting to see an actual photo of the imaginary 1.15 million dollar home were you? Hah!

“Experience one of the most unique homes around”

Lens flare: Not just for J.J. Abrams movies!

“…just right for someone who likes to soak up the sun & dig in the dirt!”

It’s easy to understand how a photo like this could be accidentally taken. What’s hard to believe is that a listing agent would willingly choose to upload such a photo in an alleged attempt to sell a home.

“Great location close to downtown kenmore”

The one and only photo of this home is a picture of an old framed black and white photo. Wow.

“Three Floors of Space on this classic craftsman home”

Photo is shown actual size. I have no idea what I’m looking at here. Spotted by Marc.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Picture in Picture Edition appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

All three of last month’s homes have either sold or gone pending. 751 S Cloverdale went from #3 in September to out of the top 3 in October, to #1 this month—all without a price change.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 19
Average number of beds: 2.2
Average number of baths: 1.2
Average square footage: 947
Average days on market: 65

Inventory dipped back down in the month, while the size of homes fell.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: November 2013 Edition appeared first on Seattle Bubble.

Your main objection seems to be based on a belief that there are large numbers of homes with mortgages that the borrower has stopped paying months or years ago, but for which the banks aren’t even filing a notice of trustee sale.*

The problem I have with the claim that “shadow inventory is there, but it’s just not measurable” is the same problem I had back in 2006 with claims that Seattle home prices were not in a bubble. These claims are based on gut feelings, rumors, and anecdotes—not the data.

It’s true that we can’t measure the number of borrowers who have stopped paying their mortgage but have not even reached the first quantifiable step in the foreclosure process (notice of trustee sale). However, we can look at what data we do have available to see if it implies something else going on that we can’t measure.

Foreclosure filings surged from ~250 a month in the years before the housing bubble burst to over 1,600 in a single month in 2009, when home prices were falling over 16% year-over-year. That’s a peak level four times higher than the highest level ever recorded before 2007 and nearly six times higher than the pre-bubble average. Does that sound like banks holding back foreclosures?

From January 2005 through July 2007 (when Seattle home prices peaked), 100,533 homes were sold in King County. From July 2007 through September 2013, 23,441 homes have been foreclosed. That volume of foreclosures represents nearly one in four homes sold during the bubble years. Does that sound like banks holding back foreclosures?

There is nothing in the data that we do have that suggests that large numbers of defaulted mortgages are being withheld from the foreclosure process. On the contrary, the foreclosure data looks just like you would expect it to during a massive collapse in home prices following years of increasingly dangerous lending.

How many foreclosures would have to have occurred for you to believe that there was no large backlog of shadow inventory being withheld by banks? 50% of homes sold during the bubble? 75%? 100%?

I’m not buying it any more than I was buying the “Seattle is special” anti-bubble argument in 2006.

*There were also a few of you who consider homeowners who are current on their mortgages but either underwater or otherwise unable to sell as “shadow inventory.” I consider those homes to be “pent-up supply,” and I think that number is probably quite large (but also not measurable). For the purposes of this discussion though I’m going to limit the definition of shadow inventory to homes where the borrowers have stopped paying their mortgage(s).

The post Shadow Inventory Gut Feelings, Rumors, & Anecdotes appeared first on Seattle Bubble.

In the comments to the article I did my best to point out the misleading, sensationalist nature of the RealtyTrac “data.” A commenter going by the name of “IArustic” was not satisfied when I summarized the monthly foreclosure data I post here:

The data shows a reasonable pattern of homes moving through the foreclosure pipeline, with foreclosures peaking in mid-2009 and generally declining since then.

The number of homes coming out the end of the foreclosure pipeline (via Trustee Deeds and subsequent MLS sales) has moved in proportion to the number of homes coming in (via Notices of Trustee Sale). There is no evidence to suggest a growing number of homes being stuck in the process nor a giant backlog of “shadow inventory” that will burst forth any day now and collapse the housing market.

In response, IArustic argued that:

Your monthly posts track the notices of sale, but not the MLS foreclosure sales, that I can see. I don’t see the data for your proportional claim.
…
I’m not arguing so much as asking a data guy to show me the data.

Ideally what we would be able to do is look at how many homes hit each stage of the foreclosure pipeline (described in detail in this post) over a long period of time, rolled up by month. Unfortunately notices of default are not public record in Washington, so we can’t get that data, but thanks to my old friends at the technology-powered brokerage Redfin, I was able to get counts of actual foreclosures, MLS listings of bank-owned homes (REO), and REO sales.

Here’s what the pipeline looks like in King County since January 2000:

As you can see, it’s exactly what I described in the Seattle Times comment thread. Foreclosures, MLS listings of REOs, and subsequent sales of REOs have moved in direct proportion to notices of trustee sale (NTS) throughout the entirety of the data I have available.

The table at right shows a summary of the total number of foreclosures through various stages of the process during the 2000-2004 pre-bubble period and the 2007-present post-bubble period.

Many notices of trustee sale do not translate into an actual foreclosure, because the homeowner is able to get current on their mortgage or because numerous notices are filed on the same home. During the period when home prices were rising at a reasonable rate, roughly 78 percent of notices of trustee sale did not result in a foreclosure. As we would expect when home prices were decreasing, that number dropped to 60 percent, meaning that a notice of trustee sale more often did end in foreclosure.

Only nine percent of foreclosed homes did not appear in the sale stats Redfin pulled for me during the pre-bubble period. During the post-peak period, that number decreased to just six percent.

If banks were intentionally keeping large numbers of foreclosed homes off the market, we would expect to see both of those numbers increase during the post-peak period, not decrease.

Does some amount of shadow inventory exist? Yes.

Are there some homes that are taking years to move through the foreclosure process instead of months? Yes.

Is there a massive backlog of foreclosures being “held back” by the bank, amounting to a huge shadow inventory large enough to have a large effect on the housing market? No. Not in King County, anyway.

The data shows foreclosures being processed in much the same way they always have, and a general decrease in the number of foreclosures since late 2010.

Full disclosure: The Tim is currently a Redfin shareholder.

The post “Shadow Inventory” Conspiracy Theories Are Nonsense appeared first on Seattle Bubble.

My main leaf battle takes place next to my driveway. A large tree on the corner of my lot drops probably hundreds of thousands of leaves at this time of year, spread out over at least a month. For the first year after buying our home I did my best to manage the leaves with brooms and rakes, but after two seasons of that I was ready for… more power.

After doing some research I found the Toro Ultra Blower Vac, which I paid $75 for on Amazon (it’s currently $70 at the time of writing). The Toro Ultra Blower Vac fit all my criteria:

• It’s electric, so no nasty fumes or gasoline to deal with, relatively less noisy, and fewer parts to break.
• It is powerful enough to take care of all my leaf and fir needle-clearing needs.
• It’s lightweight and relatively compact—easy to store in my garage.
• It cost less than $100.

Here’s a video I made this weekend, cleaning up the season’s first leaf dump.

In this video I’ve compressed about forty-five minutes of leaf blowing and vacuuming into roughly three minutes. With rakes and brooms this job probably would have taken me two hours. I’ll need to do this almost weekly for the next couple of months to keep up with all the leaves this tree drops. I definitely consider the Toro Ultra Blower Vac to be $75 well-spent.

The post Homeowner Tool Review: Toro Ultra Blower Vac Leaf Blower appeared first on Seattle Bubble.

Real estate agents in Snohomish County are now resorting to a “shock treatment” for slouching home sales in their area.

Realtors advertised more than 400 open houses over the weekend. Agents say they hope playing the numbers game adds-up to more home sales.
…
Chris Lamoreaux says the housing market story is more than just numbers.

“We’re going fight the media (sic) that’s been negative about the housing market,” he said. “The real estate market in Snohomish County and the Puget Sound is excellent.”

At this point Seattle-area home prices were already down 8% from their peak a year earlier. They proceeded to drop another 27% before bottoming out nearly four years later.

If only that darn media hadn’t been so negative.

If you like, you can read my 2008 comments on this article here.

The post Friday Flashback: “We’re going fight the media” appeared first on Seattle Bubble.

If you want to enjoy strange listing photos without interruption throughout the month check out Looney Listing. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“home boasts solid beams & extensive wood work”

Check out those beams. Or don’t, because this photo is shown at the actual size the agent uploaded to the listing. Spotted by Beth T.

“1978 Split level that has been updated.”

Not actually in the Seattle area, but seriously? That’s your only photo? Way to not even pretend that you’re trying. Spotted by Chris M.

“Bring your imagination…”

…because you’re certainly not going to get any useful information about the home from these pictures. With modern digital cameras you really have to make an effort to take a photo this terrible.

“* * * * MONEY MAKER * * * * Needs a roof, some paint and make $100,000. Will sell VERY, VERY FAST.”

Bold claim, given the apparent cleanup required to take care of the massive spill of mustard all over the front lawn.

“Cute Craftsman w/ recent upgrades enhancing its original style.”

Okay the photo itself is actually quite nice—well-composed, in focus, good lighting and appropriate saturation. But that color… ouch. Personally I don’t consider the puke-green to be “enhancing its original style.”

“This 3148SF home offers an open flr plan w/ abundant natural light”

Too bad the photo doesn’t offer natural colors. Reminds me of this one on Looney Listing from a while back.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Totally Accurate Colors Edition appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Two of the homes from last month have sold or gone pending. Last month’s #3 is still on the market, but was bumped off the top three list by cheaper homes.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 27
Average number of beds: 2.3
Average number of baths: 1.3
Average square footage: 1,050
Average days on market: 55

Inventory shot up in the month, hitting its highest point since February, while the average square footage recovered some ground as well.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: October 2013 Edition appeared first on Seattle Bubble.

Here’s an excerpt:

Vampire REOs are bank-owned homes that are still occupied by the previous homeowner who was foreclosed on. On the surface these properties often will look like normal, non-distressed homes, but beneath the surface they represent a shadow inventory that is becoming more imminent as rising home prices motivate banks to sell off these homes to try to recoup their losses on soured loans.

Zombie foreclosures are homes that are still languishing in the foreclosure process but have been vacated by the homeowner being foreclosed. Often these homes are more obviously distressed, falling into disrepair with no one to perform regular maintenance and upkeep.

They go on to claim that 43% of bank-owned homes in the Seattle area are “vampire bank-owned inventory,” 24% are “zombie foreclosure inventory,” and that these types of homes are somehow “threatening the housing recovery.”

Nonsense.

To understand why this is 100% non-news, let’s look again at the foreclosure timeline I posted yesterday:

This data from RealtyTrac simply says that 43% of bank-owned homes in the Seattle area have not yet reached the eviction state. In the above timeline—the fastest that the process could move—a foreclosure is “bank owned” for roughly 60 days. For 20 of these days (between the courthouse auction and eviction), the borrower is still in the home.

In other words, even if the banks were 100% efficient at processing foreclosures, about 33% of bank-owned homes would be so-called “Vampire REOs.” If this number is higher, it just means the bank is taking a little longer to evict, not that there is some large stagnant stash of REOs “threatening the housing recovery.”

Similarly, “zombie foreclosures” are non-news. Here’s how RealtyTrac defines terms in their report methodology:

Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month — broken out by type of filing. Some foreclosure filings entered into the database during the month may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee’s Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). The report does not count a property again if it receives the same type of foreclosure filing multiple times within the estimated foreclosure timeframe for the state where the property is located.

In other words, they’re defining “in the foreclosure process” to mean everything from the notice of default to the sale of the home by the bank. Again, referring to the timeline above, from Day 230 when the borrower must vacate to Day 281+ when the home sells, the home is empty but “in the foreclosure process.” That’s 51 days out of a 230 day “process,” or 22% of the time—almost the exact same percentage as Seattle’s percent of “zombie foreclosures.”

In some markets banks take longer to process a foreclosure at various steps, due to differing local laws, bank staffing, or foreclosure volumes. These variations, along with variations in how quickly bank-owned homes sell once they hit the market are hardly worth describing as “monsters threatening the housing recovery.”

Finally, you know I love Tableau, but seriously, RealtyTrac, what the heck is this?

How are those visualizations supposed to convey anything even slightly informative? They’re just a jumbled mess of circles and a random stack of rectangles.

Here’s the data in an actual readable form (click the headers to sort):

RealtyTrac “Vampire” and “Zombie” Foreclosure Nonsense

I could go on a rant about the terrible misuse of bubble and treemap charts, but this guy already did it for me.

In summary: What the heck, RealtyTrac.

The post RealtyTrac “Vampire REO” Nonsense appeared first on Seattle Bubble.

Minimum Foreclosure Timeline in Washington State

To start things off, here’s a visual (click to enlarge):

• Day 0 – Borrower misses first payment
• Day 60 – Borrower receives Notice of Default (not public record in WA)
• Day 90 – Borrower receives Notice of Trustee Sale (public record in WA)
• Day 210 – Trustee Sale: Home is auctioned on the courthouse steps
• Day 230 – Borrower must vacate the home
• Day 237 – Bank begins the “trash out” and clean up process
• Day 251 – Bank lists the home on the MLS
• Day 281+ – Bank sells home

Foreclosure Timeline Terminology

“Foreclosure”

Technically a home has not actually been foreclosed until Day 210 in the process above, but the word “foreclosure” is often used broadly to describe any home at some point in the process between the Notice of Default at Day 60 and whenever the bank sells the home. On Seattle Bubble when we provide stats on the number of foreclosures that are happening in the Seattle metro area we’re referring to homes that have reached the Notice of Trustee Sale stage.

“REO” / “Bank Owned”

Any home that has been sold back to the bank at the courthouse auction (Day 210) and not yet sold to a new buyer is bank owned, also known as real estate owned (REO).

“Shadow Inventory”

In its broadest sense, the term “shadow inventory” can mean any home where the borrower is not current on the loan, but the home is not yet listed on the market for sale. Note that when it is used this broadly, many homes that are considered to be shadow inventory will never end up as normal inventory due to the borrower getting current on their loan or working out a loan modification plan with the bank that holds the mortgage.

It is also worth noting that even in the fastest scenario outlined above, all foreclosed homes that at least get to the notice of trustee sale stage will pass through a period of at least 161 days as “shadow inventory,” even if they are moving along the process at a normal rate. In other words, about five months worth of homes in the foreclosure pipeline would be considered “shadow inventory” at any given time.

Based on the latest Trustee Deed stats for King County that’s a minimum of 1,724 homes in recent months. That sounds like a lot of shadow inventory compared to the ~5,000 homes on the market right now, but it just represents the normal process playing out. The vast majority of so-called “shadow inventory” is made up of homes just moving through the normal foreclosure timeline, not some massive store of homes sitting in some unsold cache, waiting to flood the market any day now.

Ways to Extend and Delay the Foreclosure Timeline

Note that what I have described above is the minimum foreclosure timeline. In Washington state, there are a number of ways to drag it out (some ethical, some not), should a borrower be so inclined.

Notice of Pre-Foreclosure Options

Thirty days before the official Notice of Default, the lender must send the borrower a letter detailing their pre-foreclosure options, as described in RCW 61.24.031. If the borrower responds to the letter asking for a meeting with a representative of the lender, an additional sixty days are added to the process.

The HAMPster Wheel

Some borrowers have taken to abusing the federal government’s Home Affordable Modification Program (HAMP) to drag out the foreclosure process by months or even years. The “HAMPster Wheel” name for this “game” comes from a lengthy thread on the LoanSafe forums in which various borrowers share their tactics for living for free in their mortgaged home for as long as possible.

Filing Bankruptcy

Filing bankruptcy any point before the actual Trustee Sale will delay or even cancel the process, pending the outcome of the bankruptcy. Chapter 13 bankruptcy could cancel the foreclosure completely, while Chapter 7 will generally just delay the process by about 60 days.

Filing a Motion to Restrain Sale

Up until five days before the courthouse steps foreclosure auction, the homeowner may file a motion with the court to restrain the sale. If you have no legal grounds to restrain the sale this delay tactic will not buy you much time, but if there is a valid legal argument (e.g. predatory lending, illegal foreclosure process, MERS issues etc.), the court may approve a restraint of the sale.

Forcing a Sheriff’s Eviction

As early as 20 days after the Trustee Sale, the bank can take possession of the home. However, if the borrower decides not to move out willingly, they can force the bank to evict them. The sheriff’s eviction process can delay the final move out of the house by about two weeks.

[Update: Some corrections and additions were made to this post.]

The post Foreclosure Timeline in Washington State appeared first on Seattle Bubble.

We’ll cover the basics of what’s going on in the local housing market right now, with links to relevant recent posts in case you missed them. If this is something you would like to see on a regular basis, let me know in the comments.

Supply: Inventory

Listing inventory is finally heading back up after falling nearly every single month since July 2010 and setting record seasonal lows for 18 months straight. We’re still at almost the lowest point we’ve ever seen, but listings are moving back toward a normal level, which indicates that a more balanced market should be on the horizon.

Demand: Sales

Sales have come in very strong this year, due to a combination of ultra-low interest rates and near-the-bottom home prices. If interest rates continue to rise up to five percent or more, expect sales to drop off dramatically (though not as dramatically as they did when the recession hit in late 2008)

Prices

The combination of this year’s ultra-low inventory and strong sales have led to a dramatic increase in home prices. This year’s gains have now put home prices above a level that is supported by local fundamentals such as rent levels. Some of the recent spike is due to a changing mix of homes selling in more expensive regions and fewer distressed sales, but some of it is definitely homes just getting more expensive. I expect home prices to settle down over the next few months.

Other Factors

Thanks to the increasing inventory, the record-high level of bidding wars has tapered off in recent months. This is good news for buyers, but for homeowners thinking of selling who didn’t pull the trigger this year it means that you may have missed the best window of opportunity.

Similarly, the speed at which homes are selling has been tapering off over the last few months as well, indicating that later this year and early next year should see a more calm market.

Summary

In general, we’re currently in a housing market that is still skewed strongly in favor of sellers, but the trend over the last few months has been toward buyers. Home prices are high relative to a year ago, but rising interest rates and increasing inventory should work to slow price gains to more reasonable levels in the coming months.

If you’re thinking of buying, you’ll probably have less competition and slightly lower interest rates if you buy in the next few months instead of waiting until next spring, but inventory gains probably won’t really pick up steam until then. If you’re thinking of selling, you might want to think about listing now. If a lot of homes hit the market and interest rates continue to rise, attempting to sell a home next spring could be a frustrating experience.

The post The State of the Housing Market: 2013 Q3 appeared first on Seattle Bubble.

The idea for this series stems from the ongoing forum thread Detrimental Listing Photos. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by readers and yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“Plenty of space for comfortable living…”

Everything looks like “plenty of space” when you shoot rooms from the perspective of a toddler. Found by reader ggrraahhaamm.

“Charming 1921 Tudor w/ updates that keep original style intact.”

This one sort of complements that last one, giving us the perspective of the room as it might be viewed by a giant. This might also perhaps explain the tall chairs…

“Bring your contractor to finish this incomplete home addition.”

As pointed out by Lara, the reader who spotted this gem, “started addition that wasn’t finished but they couldn’t even mow the lawn or put the shower nozzle away before taking six photos.” Real estate agents, keeping it classy.

“One carport for off-street parking add to the appeal of this property.”

The carport is apparently the main attraction, given that that’s about the only feature you can make out through the sun flares in the listing’s primary photo.

“Down your private drive you’ll find this 3br 1.5ba home with a totally new kitchen and bath, new paint and flooring, a cozy dinning area and free standing wood stove.”

How could they not mention the indoor snow machine?!? Who cares about a “cozy dinning area” when you can make it snow inside. Spotted by reader Beth Traverso.

“Solid built brick home in quiet neigh. … Use your imagination and with over 2800 square feet of space, this can be a very nice entertaining home.”

Double pool in the basement! Play some pool from inside your indoor pool! The whole set of photos on this home is classic.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: Indoor Snow Machine! appeared first on Seattle Bubble.

Last week I happened to pull up my home on Zillow, and was greeted with an interesting surprise. According to Zillow, I purchased my home on May 17, 2011 for $364,000.

The especially strange part about this is that it was new information that had been added to Zillow somewhat recently. I only check my home’s page on Zillow a few times a year but this erroneous information definitely did not exist as recently as a few months ago. Up until this bogus data was added, Zillow’s price history for my home looked similar to my home on Trulia, where the 2011 listing and sale are entirely missing.

Of course, if you pull up my home on Redfin, you get information that is both complete and accurate:

If you spend much time comparing Zillow and Trulia to the underlying county records and MLS data you will run into these kinds of blatant errors with regularity. It is worth noting that incorrect sales data like this was not even covered in the real estate listings data quality study that Redfin commissioned last year, which showed that Zillow and Trulia are also missing approximately 20% of the active listings and that 36% of what they show as homes for sale are no longer actually on the market.

To their credit, for one-off issues like my home’s incorrect data above, Zillow does have a “Flag transaction” button, and support staff there were quick to respond last week when I reported the incorrect data. By the end of the day they reported that they had resolved the issue, and about a day later the site reverted to the version that is merely missing my 2011 purchase. So that’s a win, sort of. There are certainly some people at Zillow and Trulia that care about data quality, but their current approach to improving the quality of their data is like trying to improve your Hummer’s gas mileage by making sure there is enough air pressure in the tires—you might get a few more miles per gallon, but you’re still driving a vehicle that is ridiculously inefficient by design.

These types of systemic data quality issues have been known to Zillow and Trulia for years, and yet they have made only modest infrastructure improvements to address them. This makes sense when you realize that buyers searching for a home on Zillow or Trulia are not really their customers, they’re the product that is being sold. Zillow and Trulia’s customers are real estate agents who buy advertising, for the explicit purpose of turning buyers on those sites into “leads.”

But don’t take my word for it. I’ll let Zillow CEO Spencer Rascoff tell you in his own words how bad data is a good thing for Zillow’s lead-hungry real estate agent customers:

I honestly have no idea why any serious home buyer would use Zillow or Trulia to search for homes for sale. I suppose if you live in a rural area that is not serviced by Redfin or any other MLS-powered site, using Zillow or Trulia is better than having nothing at all, but only slightly.

If only Zillow would put as many resources into data quality as they put into sappy TV commercials.

Full disclosure: The Tim is no longer employed by Redfin, and holds no positions in Zillow, Trulia, or Redfin at the time of this post.

[Update]
Wow that’s rich. After this post went live my home’s page on Zillow magically updated with the correct 2011 sale date and price. Obviously I have some readers with data edit access over at Zillow HQ.

The post Zillow & Trulia Still Apathetic About Data Quality appeared first on Seattle Bubble.

Be sure to enter your real email address into the form when you leave your guess in the comments, because the winner gets a $25 gift card to the restaurant chain of their choosing. Don’t worry, I’m the only one that can see the emails that are entered. The winner is the person whose guess is closest to the final sale price, above or below. If there is a tie, whoever guessed closer to the correct closing date will be declared the winner.

Contest closes to entries at midnight the morning of September 23rd, or when the home goes pending, whichever comes first. Note that in Round 6 the home went pending in 4 days, and in Round 5 it was just a few hours after the contest opened, so I recommend getting your guess in early.

Today’s “Guess the Price” guest star is 3015 64th Ave SW in West Seattle.

This round’s home hit the market last Wednesday with an asking price of $529,000. It last sold almost 13 years ago in November 2000 for $320,000, so today’s asking price represents average annual appreciation of just under 4 percent. For reference, the Case-Shiller index for Seattle has gained roughly 3 percent per year over the same period, a rate that would put the current value of this home at $475,000.

Our home this month is not bank-owned, a short sale, or a flip. It sits in the far west corner of West Seattle‘s Alki neighborhood, where the median price of single-family homes sold in August was $617,000. Here’s an excerpt from the listing agent’s description:

Sited JUST ONE HOUSE from the beach & in the Alki School zone, the location can’t be beat! This charmer w/ view front porch & sun room has all the classic character of its era. Featuring original hardwood floors, 2 bay windows, period-correct mouldings, copper plumbing, upgraded 200 Amp breaker box, and gas appliances!

Built in 16, this 1-story home (with basement) sports 2 bedrooms and one full bathroom. Both of the bedrooms are on the main floor, while the basement is mostly unfinished, containing a “Den/Office” and “Bonus Room,” according to the listing.

According to the King County Department of Assessments, 1,300 of the home’s square feet are above ground, with an additional 1,080 in the basement. Note that the MLS listing is displaying the square footage as 2,380, which includes the entirety of the unfinished basement. This misleading information is built by design into the NWMLS system.

Inside, the home looks to be in decent, but not amazing condition. Many of the original period details remain, as noted by the listing agent, although “original hardwood floors” look like they probably need to be refinished. For some reason the trim in the main rooms on the first floor suddenly switches at one point between rooms from the original hardwood to white boards.

The kitchen looks like it has plenty of counter space, but a limited amount of cabinets. The countertops and appliances in the kitchen look like they were replaced in the ’90s or early ’00s. The cabinets are probably older than that, although they appear to have been painted somewhat recently.

Off the back of the home in lieu of a yard there’s a deck, complete with a hot tub. Unfortunately, neither is covered, so I wouldn’t expect to get much use out of these features during the wet half of the year.

The exterior of the home appears to be in decent condition. From the photos the paint looks relatively new. There is virtually zero yard to speak of, but the tiny little strip around the home appears to be well-landscaped. The listing also notes that this home provides no off-street parking.

Two different Redfin agents have been to see this home and published public insights. Joe Hunt noted that “both the front and back of the home appear to have been added on or enclosed” and that “cosmetic and system upgrades needed.” Elisa Reuhlmann said that the home has a “great floor plan.”

Overall, both the house and the location seem nice, but not amazing. Based on what other similar nearby homes have been selling for the asking price seems like it might be a bit high to me. There are just 10 houses for sale in Alki right now, so they may be banking on a continued supply shortage to carry the high price.

Summary of 3015 64th Ave SW

• Pros
  • close to Alki beach
  • nice period details
  • central heating
  • well-kept exterior
  • good floor plan
  • deck with hot tub
• Cons
  • no yard
  • no off-street parking
  • limited kitchen cabinet space
  • hardwood floors are worn
  • deck and hot tub are uncovered

So, what say you? How much will this home sell for, and when will it sell?

The post Guess the Price Round 7: West Seattle Almost-Beach appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only one home from last month has sold or gone pending. Last month’s #2 and #3 moved up to #1 and #2 this month.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 18
Average number of beds: 2.2
Average number of baths: 1.3
Average square footage: 962
Average days on market: 51

Inventory dipped back down again month, while the average square footage dropped below 1,000 for the first time since July 2010.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: September 2013 Edition appeared first on Seattle Bubble.

photo by The Tim

I was a big follower of this site during 2006-2009 and felt pretty informed/unsurprised when the original bubble burst. I’ve been busy since then, got married, went through grad school, got a good job, and am now thinking about buying a home. I’m curious what you all think about that.

We’re looking at prime, walkable neighborhoods in central Seattle, (Wallingford, Capitol Hill, Phinney, Tangletown) and are looking for 3-4 beds / 2 baths, since we’ll be starting a family soon. The interest rates seem really appealing right now, and while I’m confused a bit by the lack of inventory and the recent price bump, it doesn’t seem like it’s a bad time to get in, given what we’re looking for, and our current situation. (Cramped in a nice, but small 1-bedroom apartment).

Obviously I’m a bit concerned about the recent run up, the Fed and the discontinuation of them pouring money in the mortgage market, but I’m unsure how much that’s propping the market up right now. Even if they stop and mortgage rates go up into the 5-6% range, that would likely be paired with a small dip in home prices, and my affordability would probably be similar, no?

If we’re looking to live somewhere for the next ten-plus years, what are your thoughts? What if it were only five years?

It’s good to be cautious after the intensity of the competition and home price increases in the market this spring. While now might not be as good a time to buy as a year ago, I think that someone who chooses to buy today can still make a good purchase.

I think my best advice for avoiding over-paying in any market is probably the “How To: Analyze a ‘Below-Market’ Deal” series that I wrote back in 2010. If you can find a home that you like, can afford, and is a good deal based on comparable sales, nearby rents, and historic pricing, then I say go for it.

The biggest challenge in this specific reader’s case is going to be the location he’s targeting. The “prime” neighborhoods are prime for a reason: Lots of people want to live there. That’s likely going to mean lots of competition on the nice homes, so be prepared for a number of disappointments before you finally land the right home.

What’s your advice for this reader? Is now a good enough time to buy? Why or why not?

The post Reader Question: Thinking of Finally Buying appeared first on Seattle Bubble.

…to post news stories and generate discussion about the real estate/housing bubble and specifically how it affects the Seattle area.
…
To be honest, the main reason I’m starting this blog is to collect information for my own interest, and I just figured that if I’m this interested in the subject, maybe some other people in the area are too. I hope you find this to be a useful resource.

Eight years and one massive national housing bust later, here we still are.

Here are a few stats from our first eight years:

• 2,913 posts (not counting open threads)
• 145,515 comments
• 5.3 million visits
• 12.5 million pageviews

I guess it was a subject that other people were interested in after all. Hopefully a few people have gotten some value out of this site.

Here’s to many more great years to come. Thanks everybody!

The post Eight Years appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Only number two this month is a carry-over from last month. Last month’s number two is still on the market, but was undercut by cheaper homes this month.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 20
Average number of beds: 2.3
Average number of baths: 1.2
Average square footage: 1,069
Average days on market: 38

Inventory inched up a bit this month, but the average beds, baths, and square footage all dropped.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

The post Cheapest Homes: August 2013 Edition appeared first on Seattle Bubble.

Wow, it’s been over two months since the last installment of Real Actual Listing Photos. In case you’ve forgotten, here’s a friendly reminder that you can find similar content three times every week from across the USA over at Looney Listing.

The idea for this series stems from the ongoing forum thread Detrimental Listing Photos. If you’ve got a nomination for a listing photo that should appear here, drop me a line.

No particular theme this month. Just enjoy a collection of odd listing photos found by yours truly.

Enough explanation. Let’s get to the photos! Click the photo to view the Real Actual Listing.

“2BR+1BATH + BONUS ROOM”

One of just two photos the listing agent felt were necessary to share with potential buyers of this home. This is what’s called “not really trying.”

“plenty of promise … Special details”

This home is so sad even the ceiling fan blades are droopy. How is that even possible. No wait I don’t think I want to know. Keep the “special details” to yourself please.

“Why rent when you can own plus your mortgage payment will be much less than renting, hurry and go see your lender and find out what I’m talking about.”

The color, the decor, the tilt… There’s just so much to love about this photo.

“Do not enter or be near the existing structures on the site for safety precautions.”

This historical photograph apparently shows the last time this home was actually habitable.

“Home features 3 large bedrooms…”

Are they selling a bedroom here, or a cheap used bed?

“Highly Desirable Area!”

Photo shown here at full size and original focus. Clearly modern photography is woefully inadequate to capture the true desirability of this area.

Let me know if you have an idea for a future “Real Actual Listing Photos” theme, and be sure to check out Looney Listing for listing photo amusement throughout the month.

The post Real Actual Listing Photos: “Special Details” Edition appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):

Number one is a carry-over from last month. Last month’s number two home has since gone pending, while last month’s number three was taken off market without selling. The second-cheapest home this month is actually a carry-over from May that was pushed off the list in June by cheaper homes.

The third-cheapest home this month was featured a few weeks ago on Looney Listing. It’s is pretty incredible. Check out how many electronics the current owner has managed to pack into just 510 square feet.

Stats snapshot for Seattle Single-Family Homes Under $200,000 (excluding short sales)
Total on market: 17
Average number of beds: 2.4
Average number of baths: 1.4
Average square footage: 1,181
Average days on market: 84

After two months of increasing inventory of cheap homes, stock retreated slightly this month. Meanwhile, average beds, baths, and square footage all increased slightly.

Here are our usual charts to give you a visual of the trend of these numbers since I adjusted the methodology in April 2010:

Here are cheapest homes in Seattle that actually sold in the last month, regardless of condition (since most off-market homes don’t have much info available on their condition).

Oh hey, look at that. Number three on this month’s sold list was the popular “Littlest Cottage in Seattle,” the number one cheapest home in April. Sold for $10,000 under its original $136,000 asking price (93% sale-to-list ratio).

The post Cheapest Homes: July 2013 Edition appeared first on Seattle Bubble.

Ann Dickhoff’s house purchase typifies a milestone in more ways than one.

Like many other parents of adult children, Dickhoff was afraid her son would be priced out of homeownership in his hometown.

So last month she helped him buy a North Seattle rambler, gulping as she paid $409,000 — or $89,000 more than she shelled out a year earlier for a nicer house half a block away.
…
Dickhoff and her husband, Walton, an administrator for the National Oceanic and Atmospheric Administration, had to pay $320,000 last year to snag a small Greenwood-area bungalow for her mother. “That was our wake-up call,” she said, to climbing prices and the possibility that homeownership for her kids was in jeopardy.

Indeed that’s a serious possibility for many residents, according to Washington State University’s Center for Real Estate Research. Average-wage workers, in particular, are susceptible to the double whammy of rising house prices and rising interest rates.

In the past year, the average interest rate on a 30-year, fixed-rate loan has climbed half a percentage point to 6.5 percent.

Can you imagine how shrill the media frenzy would be if rates today were anywhere near 6.5 percent?

In January, Ann Dickhoff, a nurse at Swedish Medical Center, began hunting for a house to buy for son Paul, 21, a cheese maker at Pike Place Market, to live in with roommates. A real-estate agent warned her the first one she bid on would sell for more than its $400,000 list price.

So the Dickhoffs bid $416,000 — and added a $30,000 escalator clause in case a bidding war broke out.

It did, and they lost that house to a $450,000 all-cash offer.

That made clear to her that “the market was taking off, and if we were ever going to buy something for the kids to live in, we’d better make a move.”

They quickly did, landing for $409,000 a newly refurbished 1950s three-bedroom with a spacious new garage.

Still, if the market weren’t so hot, “we wouldn’t even have looked at it,” Dickhoff confided. The house is on busy Greenwood Avenue North, and the street noise is significant. Plus a newer townhouse development has consumed its entire backyard.

Good thing those buyers jumped in when they did, or they never would have had another chance!

Ironically, as buyers like the Dickhoffs scramble to find a house, the number of King County home sales has been slipping. That usually indicates a cooling market.

That is the case in California and Florida, where sales are slowing down, according to the National Association of Realtors.

But not here, said Jill Jacobi Wood, owner of Windermere Real Estate.
…
King County’s median for single-family homes “will stay over $400,000,” she predicted. “There are too many good jobs; it’s too desirable a place to live for high-income people.”

Except for four and a half years between 2008 and 2013. Also note that $400,000 in 2006 dollars is roughly equivalent to $462,000 now. The latest median price for King County was $417,500 in May.

Here’s what I had to say about this particular nonsense when it was originally posted: Perplexing March Reporting

The post Friday Flashback: “Homeownership in Jeopardy” appeared first on Seattle Bubble.

• What the Heck is the Affordability Index, Anyway?
• The Monthly Payment Buyer
• The Consequences of a Market Full of Monthly Payment Buyers
• Interest Rates vs. Home Prices
• Do Rising Interest Rates Lead to Falling Home Prices?
• The Curious “Logic” of Home Salesmen

Summary: Interest rates have a large effect on affordability, and many if not most homebuyers base their sense of how much home to buy on what monthly payment they can afford, but in the end there is only a very loose relationship between interest rates and overall home price trends.

The post Post Roundup: Mortgage Interest Rates appeared first on Seattle Bubble.

Please note: These posts should not be construed to be an advertisement or endorsement of any specific home for sale. We are merely taking a brief snapshot of the market at a given time. Also, just because a home makes it onto the “cheapest” list, that does not indicate that it is a good value.

Here are this month’s three cheapest single-family homes in the city limits of Seattle (according to Redfin):