Here’s the link: Statewide rezoning of single-family neighborhoods is a terrible idea

Now, before we start it’s worth noting that this piece is described as a “Special to The Times” and the author is not a journalist. He’s not an economist, either. He’s also not an urban planner, and as you’ll see he’s obviously not a historian. He’s an architect whose primary accomplishments listed on his bio attached to the piece are having “served on public historic preservation and design review boards.”

So with that context, let’s get into it. Here’s the opening paragraph:

The current debate about major changes to single-family residential zoning has become politically polarized, like every other issue. Clearly much more affordable housing is needed, and as soon as possible, but because there is a housing affordability problem, single-family housing has suddenly been declared “racist” by some groups as a convenient but inflammatory and erroneous way to justify a radical, top-down, across-the-board redefinition of our residential land-use patterns.

He really comes in guns blazing right out of the gate, with scare quotes around “racist” and an angry defensive stance taken right off the bat. Given the tone of that opening, I am sure you will be shocked to learn that Christopher Kirk is a 73-year-old white guy.

To be clear, I’m not suggesting that old white guys are all prone to make self-serving, foolish, intellectually dishonest political arguments, but it’s not exactly rare among that particular crowd.

And to be clear on the point of single-family zoning and racism: Yeah, single-family zoning is an inherently racist practice. That’s not up for debate. It’s a documented, historical fact.

Single-family-only zoning was invented by racist white landowners as a way of keeping Black people out of their neighborhoods. When redlining and other more explicit methods were made illegal, zoning became the primary tool to enforce this kind of racial discrimination, and it has the same practical effect today. I’m not going to get into the whole history here, because this subject has been covered very well many times over by others. At the end of this post I’ve embedded a series of videos that explain the racist history and the racist modern impacts of single-family zoning.

Anyway, moving on…

The fastest and most efficient way to develop housing is to build large, multifamily projects

Ahh so obviously every other way of adding more housing should be illegal. Got it.

Wait, no. That’s idiotic. To claim that the only two choices should be super-dense areas packed with large multifamily homes or sprawled-out single-family-only neighborhoods is absurd. The U.S. needs to legalize the “missing middle” housing. Again, I’m not going to get into this in depth, because others have already done the job much better than me. Here’s a video on that topic from the excellent YouTube channel Not Just Bikes.

Going back to the garbage heap that is this editorial:

More, denser housing won’t necessarily mean more affordable housing. Many large cities are denser than Seattle, yet their housing costs are often much higher.

Oh look, it’s a strawman argument! Nobody is saying that allowing denser neighborhoods will “necessarily mean more affordable housing.” But one thing we do know is that artificially limiting what can be built in 75% of the city is definitely a contributing factor to our current housing affordability problem.

Also, even massive housing construction will not fix problems related to inadequate mental-health care, drug addiction or people choosing to live outside normal society.

You have to love a good non sequitur. Again, nobody is trying to claim that eliminating single-family zoning will somehow magically fix problems with mental health or drug addiction. This guy is literally arguing against nonsense points that he’s making up on the spot.

Increasing density beyond ADUs and DADUs is a leap to the common “four pack” and “six pack” projects. These generally level whole sites, eliminating most trees, open space and privacy. They completely change the nature of neighborhoods while creating housing that doesn’t work well for families with children, or most older people, and they are not particularly affordable.

Appealing to “the nature of neighborhoods” is code language used by NIMBYs to keep “undesirable” people out. It’s gross, nebulous, and ultimately meaningless.

Imposing zoning law changes across an entire city or state without review with respect to local conditions ignores a multitude of ethical, legal and environmental principles, as well as decades of planning for the environment, transportation, utilities, parks, schools and other public services.

His implication here that local control is superior to state-wide lawmaking is especially rich, given his previous Seattle Times editorial appearance, which was entirely dedicated to demonizing Seattle city government.

I especially loved this part:

Further, massive, one-size-fits-all rezoning is unprecedented and a terrible shift in public policy. … There is a 100% chance of unintended major negative consequences.

Redlining and discriminatory covenants affected many single-family neighborhoods in the past, but that does not mean single-family neighborhoods are inherently discriminatory today.

Literally in back-to-back paragraphs he decries mysterious, unnamed “unintended major negative consequences” and then immediately pivots to hand-waving dismissal of the 100% intended consequence that single-family zoning continues to have to this day of keeping Black people out of certain neighborhoods. Truly astounding.

Single-family housing is more expensive because it has more open space and vegetation, more living space, more peace and quiet, and more stable populations of long-term neighbors who know each other — all reasons why people pay more to live in single-family neighborhoods.

No ignorant housing rant would be complete without throwing in the implication that filthy renters are lousy, unstable neighbors and generally bad people that nobody wants to be around.

Finally, he closes by calling the proposal to eliminate single-family zoning…

radical, ill-conceived, statewide rezoning which will have unpredictable effects on the character of your neighborhood and the value of your home

It’s like NIMBY buzzword bingo. Again with the “neighborhood character” dog whistle, and an explicit appeal to homeowner greed for the almighty “home value.” Just all-around disgusting.

Well, at least Christopher Kirk’s garbage editorial had one good outcome: It gave me the motivation to finally come back here and post something fresh. So… good job, I guess.

Anyway, if you’re not a selfish jerk and you’d like to support eliminating crappy single-family-only zoning, contact your state legislators and tell them they should support HB 1782.

Want to join a conversation about this or other local real estate topics? We’re on Twitter at @SeattleBubble.

Videos About the Racist History of Single-Family Zoning

The post Eliminating single-family zoning is a good idea, and Christopher Kirk’s Seattle Times editorial is a steaming pile of garbage appeared first on Seattle Bubble.

It’s been quite a while since we’ve had a look at our affordability index charts for the counties around Puget Sound, so let’s have a look at those charts. As of August, the affordability index currently sits at 95.1, which is somewhat lower than the 1993-2002 average of 107.6, but not ridiculously lower. For context, 69 percent of the 331 months on record back through 1993 have had a higher affordability index than what we had in August 2020.

An index level above 100 indicates that the monthly payment on a median-priced home costs less than 30% of the median household income. An index below 100 means that the monthly payment is over 30% of the median income.

I’ve marked where affordability would be if interest rates were at a more historically sane level of 6 percent—66.4, which is worse than every other month on record except July 2007, the absolute peak of the previus housing bubble. At that time interest rates were 6.7%, and if rates were that high today, the affordability index for King County single-family homes would be 61.7.

If rates went up to a more historically “normal” level of 8 percent (the average rate through the ’90s), the affordability index would be at 54.2—nine points below the record low level that was set in July 2007.

What’s interesting to me is how sharply the affordability index shifted from a rapid decline through most of 2017 and early 2018 to a sharp increase between early 2018 and today. To try to unpack this, let’s look at the individual components that make up the affordability index: home prices, incomes, and interest rates.

In 2017 and early 2018, home prices shot up rapidly, cratering the affordability index. After peaking in May (earlier than usual), home prices fell pretty dramatically over the following eight months, shaving off 16 percent by January of 2019. In fact, it looked a lot like another home price bubble may have been bursting in Seattle.

However, just as these price declines were beginning to gain steam, mortgage rates began dropping like a rock, falling from 4.87% in November 2018 to an inconceivable 2.94% as of August. It sure looks to me like this sudden shift in mortgage rates put the brakes on declining home prices in the Seattle area, and are probably solely responsible for the price increases we have seen over the past year and a half.

Obviously nothing happens in a vacuum, and there are myriad other factors at play here too, but the near-perfect synchronization of the sudden shift in the home price chart and the mortgage rates chart is difficult to ignore.

Anyway, here’s a look at the affordability index for Snohomish County and Pierce County since 2000, which have seen similar improvements in affordability driven almost entirely by declining mortage rates:

The affordability index in Snohomish currently sits at 120.8, while Pierce County is at 125.0. Both up considerably from their 2018 low points, and at levels comparable to 2008 or 2009.

You can calculate whether a home purchase scenario is “affordable” using the Affordability Index measure with my simple affordability calculator.

Next week I’ll post updated versions of my charts of the “affordable” home price and income required to afford the median-priced home. Hit the jump for the affordability index methodology, as well as a bonus chart of the affordability index in the outlying Puget Sound counties.

As a reminder, the affordability index is based on three factors: median single-family home price as reported by the NWMLS, 30-year monthly mortgage rates as reported by the Freddie Mac, and estimated median household income as reported by the Washington State Office of Financial Management.

The historic standard for “affordable” housing is that monthly costs do not exceed 30% of one’s income. Therefore, the formula for the affordability index is as follows:

For a more detailed examination of what the affordability index is and what it isn’t, I invite you to read this 2009 post. Or, to calculate your the affordability of your own specific income and home price scenario, check out my Affordability Calculator.

The post Plunging mortgage rates held off a Seattle home price crash appeared first on Seattle Bubble.

For the article I spoke with a Redfin Seattle agent who has had some interesting conversations already with buyers…

“From my conversations, it seems that some would-be buyers are waiting on the sidelines for the announcement of where HQ2 will be located,” said Seattle Redfin agent Jessie Culbert. “If they work for Amazon now, they may decide to relocate to be closer to family and friends. If they don’t work for Amazon and plan to stay in Seattle, they may wait to see how additional inventory on the market could impact pricing.”
…
Once Amazon announces the location of its HQ2 and begins hiring there in earnest, it will inevitably slow the Seattle housing market, at a time when inventory is already on the rise and a historic rental building boom is leading to a surging apartment vacancy rate.
…
So what could Amazon HQ2 mean for Seattle? Let’s consider some hypotheticals on opposite ends of the spectrum…

We touched on it a little in the post, but I think we’re already starting to see these effects in the Seattle area, and HQ2 may be a big part of why Seattle has slowed down so suddenly this year compared to many other markets.

Read the whole post over on the Redfin blog.

The post Amazon HQ2 may already be turning Seattle into a buyers market appeared first on Seattle Bubble.

If you aren’t familiar with the Czech Sky, read this 2010 post.

The Czech Sky is still found in many Seattle-area home listings today. Here are just a few:

• 6522 34th Ave SW
• 934 N 78th St
• 13315 3rd Ave NE

The post “Modern Seattle home for sale with photoshopped Czech Sky” appeared first on Seattle Bubble.

Redfin CEO Sees ‘Moment of Reckoning’ in Seattle Real Estate Market

Many people in this middle-class town have now been priced out. We are probably past peak Seattle. For the first time this year we saw more people using our website to leave Seattle than to come to Seattle. It has been a moment of reckoning for this town… Some folks have said, ‘enough is enough.'”

The post Redfin CEO Glenn Kelman: “We are probably past peak Seattle.” appeared first on Seattle Bubble.

• GeekWire: Redfin CEO warns of slowing national real estate market, as frustrated buyers are sitting out
• MarketWatch: Housing market has hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
• Seattle Times: Washington state no longer has the nation’s fastest-climbing home prices
• Financial Post: Cracks are appearing in the world’s most desirable property markets
• Bloomberg Businessweek: The U.S. Housing Market Looks Headed for Its Worst Slowdown in Years

Back in early June I said that based on the May inventory numbers, “we could finally be seeing the beginning of a trend that points toward an easing market.” In the months since then, it seems that a lot more people are coming around to that point of view as well. Personally I think it’s still too early for hyperbolic headlines like BoingBoing’s proclamation that “the housing market in America’s most expensive cities is imploding,” but more and more signs seem to be pointing to a serious cooling, which is definitely a good thing, in my opinion.

The post Summer 2018 slowdown link roundup appeared first on Seattle Bubble.

Here’s the full intro from the show’s website:

Hi, I’m Max. I’m an engineer and inventor. A couple years ago I sold my self-driving virtual reality software company to Amazon for a few hundred million dollars. After my contract at Amazon was up, I started working on my next major market disruption: a quantum bagel toaster.

I thought I finally had a working prototype that would project an instant bagel-toasting vortex onto any surface, but when I put the bagel on it, the bagel fell through and disappeared. After some experimentation I came to a stunning realization…

I know this sounds crazy, but it seems that I have accidentally invented a device that opens a portal to another dimension.

Each week I visit a new dimension and I’m documenting my incredible travels and discoveries on this podcast.

If that sounds funny and/or entertaining to you, subscribe and listen on iTunes, Stitcher, Google Play, or just go listen on the show website. Each episode is about twenty minutes long and we’re releasing new ones each week on Tuesday morning.

Thanks in advance for checking it out, and enjoy the show!

Now back to your regularly scheduled programming…

The post Shameless Plug: Subscribe to Dispatches from the Multiverse, Tim’s new podcast appeared first on Seattle Bubble.

Came upon this website a couple months ago and find everyone’s perspectives interesting. I see a lot of wondering on what potential regular, non-speculating, non-investor sellers and buyers are thinking and doing. People who just want to live in a nice house.

I can’t speak for others, but I can share my thoughts / experiences recently as well as some anecdotal stories.

I find the current environment frustrating as a buyer.

We are in Pierce County and lived in unincorporated Pierce County – we sold our manufactured house and 1 acre land Spring 2017 to move to a better school district. After our experience selling (and shock at cost of houses last year) we decided to rent a year to see what the market does.

We first went on the market in Fall of 2016. I was a bit shocked when the Realtor said if there is no offer the first week we should lower by $5,000 – $10,000 each week until we sell. I didn’t want to go down in value and was not in a rush to sell – so after turning down a few lower than asking offers we took our house off market to save more on a down payment for the next house. We put our house back on market Spring 2017 – but raised the price by $5,000 assuming people would go lower again (then we could just counter at what we originally wanted). We got two offers on the first day of listing. After asking for their best offers we accepted the offer that was $25,000 more than what we were asking! We collected our winnings (er, I mean investment results) and moved to the better school district. (Sumner School District for those wondering)

During the last housing bubble I remember distinctly knowing things were off because:

1. All the people around me who I voiced my concerns on prices and environment told me things were different this time, prices will never be lower, or told stories on so-and-so who quit their job to flip houses. You can’t lose! I finally stopped voicing my opinions as it seemed to make people mad. (Incidentally, I had the same reaction during the Dot Com bubble when I stated how dumb some of these websites were and how they had no business model, etc. I’m a tech guy – hardware and software and yet all the people around me apparently knew better than me! lol)
2. I also took a look at the ghetto meth house prices in certain areas in the Bonney Lake area and nearly lost my lunch at the prices that were being asked for.
3. On the radio and HGTV every other ad or show seemed to be about getting rich quick with real estate, or refinancing into the new, improved, [insert very long name for some sort of mortgage thing] so you can have lots of money to retire with, live that life, blah, blah, blah.

The above is obviously not any scientific, methodical approach to investing – but it spared me some financial heartache and hardship considering them. Sadly, all three points above seem to be repeating – except now higher than last time. Did you know Dean Cain is looking for a few good investors to learn the secrets to house flipping – no need for good credit or experience? Also – if you have that house with lots of equity you can do that reverse mortgage and if your house is more than a $million you can get the new improved jumbo reverse mortgage! And apparently, 5% down is still being allowed (and I have been told when pre-qualifying for a loan that if I have to do less than 20% down and do not qualify for 5% down – there are creative ways to get that house of my dreams!) And people seem to still get upset when even hinting that perhaps we are back in a bubble or at least getting unhinged with reality…

Long story short, last year I balked at the cost of the nice houses in our new area so decided to wait a year to save more of a down payment and hope things lowered to a realistic level. Based on how much I got approved for on a pre-qualified loan last month I could afford one of the houses I actually like – but then I couldn’t save for my kids college, go on vacations, and would need to eat bread and water. And when the correction happens I could possibly owe more than the house could sell for – possibly a lot more!

So considering the amounts I’d prefer to pay for a house – October-December there were houses in $300,000 – $325,000 range that I wouldn’t mind – 4 months later they are in the $375,000-$425,000 range! Everything rose higher and faster than I could save so now all I seem to be able to afford are the meth houses!

So we’re going to continue to rent, continue to save for a down payment, and hope reality and prices comes back down to earth. If it doesn’t – I’ll never be able to save fast enough to buy so will look to eventually move somewhere more affordable – hopefully somewhere warmer. Maybe somewhere out of state (but probably not since family is here). Maybe we’ll just end up renting for the rest of our lives – it’s cheaper and safer than buying the meth house!

One other anecdotal story – my wife’s co-worker heard we were looking to buy. She shared that their house went up a lot in value – but if they sold they couldn’t even afford a down payment on any of the other houses in their neighborhood so would have to move somewhere else. So they are not even considering selling even though they’d love to get the equity.

I’ll stop typing as I feel my negative sarcasm bubbling up and I’m trying to stay more positive these days…

The post Reader Comment: “Now all I seem to be able to afford are the meth houses!” appeared first on Seattle Bubble.

Seattle’s law requiring landlords to choose among qualified applicants on a first-come, first-served basis violates the state constitution, a judge ruled Wednesday.

Adopted by the City Council in 2016 and in effect since last year, the groundbreaking law “has a laudable goal of eliminating the role of implicit bias in tenancy decisions,” King County Superior Court Judge Suzanne Parisien said in a written ruling.

But choosing a tenant “is a fundamental attribute of property ownership,” Parisien said in striking down the law.

The decision is a victory for landlords represented by an attorney from the Bellevue office of the Pacific Legal Foundation.

The law allows initial screening of applicants based on standards such as credit scores.

But the plaintiffs claimed forcing landlords to accept the first qualified applicant violated their property, due-process and free-speech rights, and the judge sided with them on each point.

Here’s the full judgement from the court.

In my opinion, this is good news. The law as written was a clear overreach by the Seattle City Council. It’s nice to see that the judge agreed.

From the ruling:

Choosing a tenant is a fundamental attribute of property ownership.
…
The FIT rule’s few concessions to landlords interests’ do not redeem it.
…
The FIT rule also violates the “private use” requirement.
…
The FIT rule is also an unreasonable means of pursuing anti-discrimination because of its sweeping overbreadth.

Of course, the city is likely to appeal, but given the forceful language in the ruling, it seems unlikely that they will succeed in doing anything other than wasting time and money defending an unreasonable law.

The post News Brief: Seattle’s “first in time” rental law overturned by superior court judge appeared first on Seattle Bubble.

The Seattle City Council voted Monday to impose a one-year moratorium on rent-bidding platforms, which allow landlords to take competing bids from prospective tenants and then sign leases with the highest bidders — a little bit like eBay, but for apartments.

The council began looking at the platforms after the board of directors of the Associated Students of the University of Washington approved a student-senate resolution calling on the city to ban them.

The student group’s resolution late last year named two platforms, RentBerry and Biddwell, that have been active in Seattle.

By allowing landlords to easily take bids, the platforms can drive up the cost of housing, and that isn’t welcome in a city where “apartment values are already high, driving some students into homelessness,” the resolution said.

Additional coverage on GeekWire: Seattle bans rent bidding in latest attempt to keep disruptive tech from compounding housing crisis

What’s driving up the cost of housing is the basic economic imbalance of not enough supply to meet demand. People are moving to the Seattle area faster than we are building housing for them.

The solution is not to ban rent-bidding websites. The solution is to build more housing.

This is a misguided, ignorant, and foolish move by the Seattle City Council.

The post News Brief: Seattle City Council attempts to outlaw economics appeared first on Seattle Bubble.

The limit on the maximum amount of mortgage interest that can be deducted has been reduced from a loan amount of $1M down to $750k. A home buyer would have a loan of around $750,000 if they purchased a home priced about $950,000 with a 20 percent down payment.

To get an idea of how many home buyers is the new limit is likely to affect in the Seattle area next year, I pulled down some sales stats for the last six months from Redfin. Here are the total sales of single-family, condos, and townhomes over the last six months, and the sales over $950k.

As you can see, the new limits are not likely to have much effect at all in Sonohomish and Pierce counties. Even in King County and Seattle, the vast majority of sales come in under the limit.

In order to afford a $950,000 home, your income would need to be around $180,000 at a minimum, which puts you well within the 24 percent tax bracket. The interest paid in the first year of a $750,000 30-year mortgage with a 3.9% interest rate comes to around $29,000. Any amount over that is not deductible, so the maximum tax benefit from the mortgage interest deduction is around $6,960.

Prior to this change, the limit was already $1 million. The interest paid in a year on a $1 million home comes to around $38,682, which would be a tax savings of $9,284. So the biggest difference here is a loss of up to $2,324 in tax savings for people probably earning $200,000 or more.

In other words, we’re talking about around fifteen percent of home buyers in King County paying around one percent of their income in additional taxes. Will this have some effect on the housing market? Sure, probably. But given the fact that over 90 percent of Puget Sound home buyers will be completely unaffected, I doubt the difference will be very noticeable.

Finally, let’s look at how the $10,000 limit on state income tax, sales tax, and property tax will affect us.

According to an article in today’s Seattle Times, the average taxpayer who itemized their taxes in Washington state deducts about $2,650 in sales taxes. Since we have no state income tax, that leaves $7,350 in property taxes that can be deducted before hitting the cap. With the average effective property tax rate in King County at around 1 percent, that means that anyone with a home worth more than about $735,000 will start to hit the limit. Around 28 percent of homes sold in King County in the last year (4,488 out of 15,840) sold for $750,000 or more, so it’s probably safe to assume that about a quarter of home owners in King County will bit hit by this limit.

Here’s a look at how a buyer making around $180,000 and in the 24 percent tax bracket (previously in the 28 percent bracket) would be affected by the combination of the lower mortgage interest deduction limit and the $10,000 local tax deduction limit. The table below looks at the tax savings in 2017 and 2018 from deducting mortgage interest and state sales+property taxes.

With just the standard deduction (which doubles in 2018) and personal exemptions (which go away in 2018), a married couple earning $180,000 a year would pay around $31,500 in 2017 and around $26,250 in 2018. So before we even look at the changes in the deduction limits, it’s important to keep in mind that the new tax brackets and standard deduction changes are saving them $5,250 right up front.

It’s not until a home price of around $1.25 million that the difference starts to exceed the baseline savings from the new brackets. So if our hypothetical couple buys a $2 million home, the net effect of the tax changes in 2018 will be a bump up of about $2,390 in their taxes. Again, about one percent of their income.

In short, I doubt that the changes will have much effect on Seattle-area home buyers at all. Yes, a few wealthy home buyers will see slightly higher tax bills next year, but for the vast majority of home buyers and existing home owners, the changes will have zero effect.

The post Will the new tax laws slow Seattle’s housing market? (Part 2: New deduction limits) appeared first on Seattle Bubble.

Before we start, I want to be very clear up front: I am neither endorsing nor denouncing the tax plan that just passed. To be honest I don’t personally know anywhere near enough about it to know whether it will be good or bad on the whole. If you’re hoping for that kind of analysis, you should look elsewhere. This analysis is merely a narrow look at how some of the specific changes may affect our local market.

There are two major changes to the tax code that will matter to home buyers and home owners: the doubling of the standard deduction (from $12,700 for a married couple in 2017 to $24,000 in 2018) and the reduction of the mortgage interest deduction cap from $1 million to $750k.

First up let’s look at the doubling of the standard deduction. Here’s an excerpt from a USA Today opinion piece by William E. Brown, president of the National Association of Realtors.

In reality, there’s a homeowner tax hike hiding in plain sight.

The recent tax-reform framework doubles the standard deduction from $6,350 to $12,000 for single filers, and from $12,700 to $24,000 for joint filers.

…the near doubling of the standard deduction means all but the top 5% of American tax filers won’t itemize. That nullifies the incentive effect of the mortgage interest deduction and essentially ends a century-long tradition of encouraging homeownership through the tax code.

I’m sure you will be quite surprised to hear that I find this argument to be complete and utter rubbish. Doubling the standard deduction is not a “homeowner tax hike” by any stretch of the imagination.

To understand what doubling the standard deduction will mean to home owners, let’s look at an example using some relevant local data. Let’s say we’ve got a married couple making $120,000 a year, buying a house at the overall King County median price (across SFH and condos) of $575,000.

We’ll assume that our example couple put 20% down and have an interest rate of 3.90% on their $460,000 mortgage. They would pay an average of $17,100 in mortgage interest per year over the first five years of their mortgage. We’ll also assume that they’re making $4,000 of deductible charitable donations (source), and can deduct $1,400 in state sales tax paid plus $5,800 (1.01% of the home price) in property taxes paid. This gives them a total of $28,300 in itemized deductions.

Under the 2017 tax structure, the standard deduction of $12,700 reduces the couple’s taxable income to $107,300, which puts them in the 25% tax bracket. The standard deduction saves them $3,175 in income tax. If they itemize they can deduct $28,300, which will save them $7,075. That’s a $3,900 tax advantage for the home owner who itemizes.

Under the 2018 tax structure, the standard deduction of $24,000 reduces the couple’s taxable income to $96,000, which puts them in the 22% tax bracket. The standard deduction saves them $5,280 in income tax. They would still have slightly more to deduct if they itemize $28,300, which saves them $6,226. Still a $946 advantage for the itemizing home owner.

To put it another way, it currently makes sense for our hypothetical home owners to itemize if they purchase a home that costs more than about $200,000. Under the new tax structure, that number more than doubles to just under $500,000.

It’s important to note that although the tax savings from itemizing is lower for itemizing the same amount in the 2018 scenario ($6,226 in 2018 vs. $7,075 in 2017) that’s just because the tax rate is lower, which means that the home owner is still paying less of their income in taxes overall.

Here’s a graphical look at the total income taxes the hypothetical couple would pay if they itemized the mortgage interest on a variety of home prices. Note: This chart has been updated to reflect the deductions of state sales tax and property tax, which will be capped at $10,000 in 2018).

The change to the standard deduction does slightly reduce the incentive for buying a home by eliminating the benefit for itemizing at most home prices below $500,000, but is it a “tax hike hiding in plain sight”? Not remotely. In fact you can see that at every single home price level above, home owners are paying less in income taxes under the new plan with the higher standard deduction and lower rates.

I highly doubt that there are many people at all whose decision about whether or not to buy a home hinges on whether or not they will be able to save a couple thousand dollars in income tax after paying over $17,000 in mortgage interest. Personally I don’t think this change will have any affect on the housing market at all.

Since this post is getting pretty long, I’m going to split it in two parts. Tomorrow I’ll take a look at the other big change in the tax code: The reduction of the mortgage interest deduction cap from $1 million to $750k.

The post Will the new tax laws slow Seattle’s housing market? (Part 1: Doubled Standard Deduction) appeared first on Seattle Bubble.

No, we’re not in a housing bubble. Now is a good time to ask your boss for a pay raise. And we need to forget about the recession — it was a long time ago.

Those are the conclusions of economist Matthew Gardner.

“I’m an economist, it’s my job to worry and find bad things, that’s why it’s a dismal science,” said Gardner, who works for Windermere Real Estate in Seattle. “I’m trying to find bad things and I’m having a problem with it.”

Try not to laugh out loud at that last bit.

While Gardner used to at least maintain the illusion of impartiality, working as an independent economist with his own firm Gardner Economics, since 2015 he has been on staff at Windermere as their chief economist. And we all know how impartial economists are when they’re directly employed by real estate salespeople. Exhibit A: The book “Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade – And How to Profit From Them,” written by David Lereah in 2005 when he was Chief Economist for the National Association of Realtors.

In order to have proper context for Gardner’s current prediction, let’s take a look at his track record when it comes to predicting the Seattle-area housing market.

According to an over-the-top positive February 2007 Seattle Times article headlined “The year of the condo in downtown Seattle,” he told “an audience of about 700 that demand for new places to live downtown will remain ‘very positive.'” As we know, that didn’t turn out to be very accurate.

Here’s an excerpt from a May 2007 Seattle Times real estate Q&A:

Q: I expect to see an actual drop in the market sometime around the end of summer. Now taking into account that many of the advertisers in your section of the paper are builders and real estate agents, what is your opinion, why, and when do you expect the present trend to actually start dropping?

A: I believe that we are in a situation where we are seeing a more-rational market and one that is returning to the more-moderate pace that we saw earlier in the decade. This is not a bad thing. I do not think that we are going to see price declines, rather we will see slowing price increases with well-located, well-priced and well-marketed houses still selling well.

This was just two months before home prices in the Seattle area peaked, eventually falling over thirty percent.

In October 2007 Gardner was predicting “a leveling off — with increases of roughly 3 percent — for a couple of years.”

Even after prices started falling sharply, Gardner remained unrealistically optimistic, claiming in early 2009 that home price appreciation would return in 2010. Of course, prices did not bottom out until early 2012.

So perhaps you can understand why, when I read something like this from Matthew Gardner today, I’m more likely to believe exactly the opposite:

The dynamics that led to the last housing collapse aren’t in play, locally or nationally, he said. Borrowers are more sound. Home building is slow. And more first-time buyers are looking for a home.

“So we have limited supply, we have good demand, we have great credit and we’re not over-leveraged and the interest rates are staying low,” Gardner said. “Housing prospects across America look pretty good as far as I can see.”

“As far as I can see” is the important qualifier there. All that Matthew Gardner ever sees is a rosy outlook for real estate.

The post Matthew Gardner: “It’s not a housing bubble” appeared first on Seattle Bubble.

Unless you’ve been living under a rock, you’ve no doubt seen the news that Amazon is seeking to build a second headquarters somewhere “in North America” that “will be a full equal to our current campus in Seattle.” GeekWire has been covering the story extensively (including a data-based city analysis by yours truly), so if you need to catch up on the facts, head over there. For the discussion here, let’s focus on the possible impact this development will have on the Seattle-area real estate market.

It’s quite interesting that Amazon’s big announcement came just a couple weeks after this big feature piece in the Seattle Times: Thanks to Amazon, Seattle is now America’s biggest company town

Amazon’s extraordinary growth has turned Seattle into the biggest company town in America.

Amazon now occupies a mind-boggling 19 percent of all prime office space in the city, the most for any employer in a major U.S. city, according to a new analysis conducted for The Seattle Times.

Amazon’s footprint in Seattle is more than twice as large as any other company in any other big U.S. city, and the e-commerce giant’s expansion here is just getting started.

The swarms of 20-somethings crowding into South Lake Union every morning represent an urban campus that is unparalleled in the United States — and they have helped transform Seattle, for better or worse. Amazon’s rapid rise has fueled an economy that has driven up wages and lowered unemployment, but also produced gridlock on the roads and sky-high housing prices.

And while Seattle’s booming economy is often attributed to a wide variety of factors, increasingly, it’s all about one company.

Amazon now occupies more office space than the next 40 biggest employers in the city combined.

There is no doubt that Seattle’s fortunes have become increasingly dependent on the continued growth and prosperity of Amazon in recent years. Prior to this announcement, when I thought about what might trigger another housing market decline in the Seattle area, the first thing I thought of was the possibility of hard times at Amazon. I don’t have specific data to back it up, but I do believe that the current boom in home prices is heavily influenced by the large influx of high-paying jobs that come with large grants of Amazon’s soaring stock.

Ironically, the soaring home prices that Amazon is certainly at least partially responsible for may be one of the very reasons they are searching for a new home. Redfin CEO Glenn Kelman speculates that the high cost of living in Seattle is in fact the primary motivation for Amazon’s wandering eye.

It’s the Cost of Living, Stupid

Amazon’s departure isn’t, as some have speculated, about Seattle’s taxes. We don’t really have any. And other tech giants’ plans to expand in Seattle in lieu of San Francisco is really part of the same trend. All of these companies are expanding into new cities for a variety of reasons, but a big one has been to follow the talent to a lower cost of living. This began with folks leaving San Francisco for Seattle years ago, and now some in Seattle are leaving for places like Portland, Denver and Nashville.

Amazon claims that HQ2 will be merely a “full equal” to the current Seattle headquarters. Of course to long-time Seattlites, that promise may sound similar to Oklahoma City shyster Clay Bennett’s promise that he would make a good faith effort to keep the Sonics in Seattle. And we all know how that turned out. If Amazon finds significantly greener pastures somewhere else, why would they keep growing operations here?

It’s far too early to know how this is all going to play out, but if Amazon significantly slows their hiring growth here in Seattle, I suspect that at the very least we will see the real estate market here slow down to a more balanced market with modest price appreciation. If they start to contract their Seattle footprint… look out below.

The post Okay, okay, let’s talk about Amazon HQ2 appeared first on Seattle Bubble.

Check it out:

via The Verge

The post Cool: $140k “Micro-Home” packed with smart home features appeared first on Seattle Bubble.

Redfin’s long-awaited IPO went well for the Seattle-based technology-powered real estate brokerage this morning. They priced the IPO at $15 per share last night, raising $138 million for the company. When shares started trading on the open market this morning under the ticker symbol RDFN they opened at $19.56.

.@Redfin takes over Times Square after ringing the @Nasdaq Opening Bell in celebration of their IPO!!?? $RDFN #NasdaqListed pic.twitter.com/cKbM5ZBFeO

— Nasdaq Exchange (@NasdaqExchange) July 28, 2017

• Redfin prices IPO at $15 per share, higher than expected, in advance of Wall Street debut
• Redfin stock climbs in early trading as tech-powered brokerage debuts as public company
• Redfin vs. Zillow: Comparing the two real estate powerhouses at the time of their IPOs
• This venture firm was an early investor in the last three Seattle-area startups to go public
• Podcast: All about the Redfin IPO, and what’s next for Seattle’s newest public company
• Q&A: Redfin CEO Glenn Kelman wants to keep his company weird, even after going public

As of 11:00 AM this morning, RDFN has climbed to over $21 per share, which gives the company a market cap of about $1.67 billion.

Here’s hoping that Redfin goes on to do great things with the new cash infusion, bringing much-needed change to the industry. I’m rooting for them, and not just because I’m a shareholder.

https://twitter.com/The_Tim/status/890928694503460864

The post Redfin IPO Raises $138 Million, Share Prices Climb appeared first on Seattle Bubble.

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

For frustrated house hunters, there’s hope: the volume of new listings added to inventory during June (13,658) was the highest total for any single month since May 2008 (14,176 new listings), according to the latest statistics from Northwest Multiple Listing Service.

“This time of year we see more new listings coming on the market than pending sales, and June didn’t disappoint,” stated J. Lennox Scott, chairman and CEO of John L. Scott.

Noting the pace of sales is slowing and the number of multiple offers is moderating, broker Gary O’Leyar suggested a summer breather is under way (as anticipated), which could yield “the season for a successful purchase” for weary shoppers.

For a month that saw home prices shoot up to insane new all-time highs, the quotes from home salesmen in this month’s release are surprisingly calm.

I do want to address one glaring error in the release, though:

Seattle’s growing population is another likely factor. Recent U.S. Census Bureau data shows Seattle is gaining about 1,100 residents per week, an “astounding” figure, said MLS director Diedre Haines.

That number is false. The most recent data available shows a growth rate of less than half that level.

The most recent city population data I can find from the US Census Bureau was updated July 1, 2016. However, the Washington State Office of Financial Management (OFM) has annual population estimates through April 1, 2017. According to the OFM data, Seattle gained a little over 500 residents per week between 2016 and 2017.

The problem here is that Diedre Haines is citing a number that is true for the entire Seattle metro area (which includes all of King, Snohomish, and Pierce counties), which was originally published by the Puget Sound Business Journal in March.

The Seattle area is the ninth fastest-growing metro in the nation, gaining about 1,100 residents per week according to population estimates issued this morning by the U.S. Census Bureau.

The Puget Sound Business Journal article was clear that they were talking about the entire metro area, but the NWMLS press release just said “Seattle,” which leads us to assume the number applies only to the city.

Here’s the chart for the whole Seattle metro area:

I assume that saying “Seattle” instead of “Seattle area” was just an error and a total failure to fact-check, rather than an intentional misrepresentation of the data. But who knows.

Hat tip to commenter “justme” who pointed this out in the comments to yesterday’s post.

Now that we’ve sorted that out, read on for my take on this month’s local news reports.

Seattle Times

Kara Carlson: Million-dollar house is the new normal in one Seattle neighborhood

As Seattle home prices continue to set records, Queen Anne has officially become Seattle’s first big neighborhood to have a median home price of $1 million.

Both Seattle and the Eastside once again set price records in June as prices rose throughout King County and other central Puget Sound counties, according to the latest monthly data from the Northwest Multiple Listing Service (NWMLS).
…
Melissa Klinnert, a longtime broker with Steve Kennedy Team on Queen Anne, said the high and rising prices in that part of town make sense given the strong demand and the low inventory.
…
Klinnert said the influx of people moving in with high-paying jobs, especially in the tech industry, is contributing to strong sales and low inventories. According to recent census data, Seattle is gaining about 1,100 residents a week.

Argh. It’s frustrating to see the Seattle Times repeat that incorrect (or at least poorly worded) claim from the NWMLS press release. Other than that error, it’s a good article.

Edit:
The incorrect line in the Seattle Times article has now been corrected to read as follows:

Last year the Seattle metro area, extending to Bellevue and Tacoma, saw a net gain of 1,381 in population per week, according to Census data.

This is still a little inaccurate in my opinion since I wouldn’t consider 2015 to 2016 to be “last year” and “extending to Bellevue and Tacoma” leaves out Snohomish County. However, it is definitely much better and less misleading than what was there before. The web version of the NWMLS press release still contains the false statement.

KOMO News

Herb Weisbaum: More houses for sale around the sound

A little bit of good news for frustrated house hunters who can’t find a place to buy.

Inventory around here is going up. There are significantly more homes to choose from right now, according to Lennox Scott, chairman and CEO of John L. Scott Real Estate.

I guess the NWMLS decided that there is a limit to how long they can go on and on about how great things are for sellers before buyers get fed up. The “more inventory” angle that they pushed this month (and was picked up by KOMO and others) is definitely a more buyer friendly message.

Puget Sound Business Journal

Marc Stiles: Little relief in sight for Seattle’s sizzling housing market as prices keep climbing

It used to be unusual for employees of Amazon and other tech companies to hunt for houses in less expensive outlying areas. Not anymore.

The rest of this article is for Puget Sound Business Journal subscribers only, unfortunately.

Tacoma News Tribune

Debbie Cockrell: What people are paying now for area homes and condos

Maybe it’s time to encourage your friends to go on vacation, so you’ll have less competition when you go looking for a house or condo.

After blowing past the $300,000 mark for median closed sales price in May, Pierce County saw the prices hit $317,000 in June.

We’re still the best bargain in the shadow of Seattle.
…
But the cool-down in home sales and prices could be starting, if June’s numbers are any indication.

Compared with May, statewide the volume of pending sales fell slightly, according to NWMLS, which also could be tied to the tight inventories in certain areas.

Meanwhile, the total volume of new listings added during June was the highest total for any month since May 2008, the service said in its news release.

Heh, I dig the cheeky intro. Unfortunately I think it’s a bit too early to say that “a cool-down in home sales and prices could be starting.” We’ll need to see more than a single month of inventory growth before we can make that kind of statement.

The Olympian

Rolf Boone: Buying a home in Thurston County continues to be an exercise in frustration

If you’re a prospective home-buyer looking for a little relief in a market that favors sellers, you didn’t find it in June, according to Northwest Multiple Listing Service data released Thursday.
…
Need a silver lining? June’s months of inventory rose to 1.37 months, up from 1.33 months in May, data show.

It’s interesting that the Tacoma News Tribune and The Olympian had totally different stories this month, each focused on their respective counties.

Here’s a bonus story that came out a day before the NWMLS data:

Q13 Fox

Hana Kim: Home buyers seeking relief from skyrocketing house prices look to Bremerton

Directly west of Seattle across the Puget Sound, developers are buzzing about Bremerton.

“It’s becoming more desirable,” said Wes Larson, with Sound West Group.

That’s why brokers such as Ben Hoefer, with John L. Scott Realty, is spending more time in Bremerton lately, showing homes to both first-time home buyers and investors.

Hoefer showed us a waterfront fixer-upper with 4 bedrooms and 2 baths for $425,000.

“You can’t get that in Seattle, let alone on the water. Big developers are coming in and they see the potential benefits,” Hoefer said.

Personally I don’t think I could live across the water from where I work. Good on those who can, though. Bremerton gets a bad rap sometimes, and it’s nice to see the town getting some love.

(Kara Carlson, Seattle Times, 2017-07-06)
(Herb Weisbaum, KOMO News, 2017-07-07)
(Marc Stiles, Puget Sound Business Journal, 2017-07-06)
(Debbie Cockrell, Tacoma News Tribune, 2017-07-06)
(Rolf Boone, The Olympian, 2017-07-06)
(Hana Kim, Q13 FOX, 2017-07-05)

The post NWMLS Falsely Inflates Seattle’s Population Growth appeared first on Seattle Bubble.

News broke late this afternoon that after 13 years as a “startup,” Redfin has finally filed their S-1 with the SEC, signalling their intent to make an initial public offering (IPO) later this year.

Check out the excellent coverage over at GeekWire:

Seattle-based online real estate company Redfin filed for an initial public offering on Friday with U.S. regulators and will seek to raise up to $100 million.

It’s unclear when exactly Redfin would go public or how many shares it will offer. The company plans to trade on the NASDAQ under “RDFN.” Redfin declined to provide additional details when contacted by GeekWire.

Redfin would be the first Pacific Northwest company to go public in 2017.

The 13-year-old self-described “technology-powered real estate brokerage,” which has been a recent candidate to test the public markets, is active in more than 80 markets across the U.S. It has helped customers buy or sell more than 75,000 homes worth more than $40 billion combined.

They also discuss some interesting bits of information from the filing, including the fact that Redfin has been testing something called “Redfin Now” since January:

In Redfin’s IPO filing that posted Friday, the company revealed a new service it is testing called Redfin Now that lets the online real estate brokerage buy homes directly from customers.

Redfin, which is looking to raise up to $100 million in its public offering, said customers of Redfin Now will “typically get less money for their home than they would listing their home with a real estate agent, but get that money faster with less risk and fuss.”

If that sounds familiar, that’s because it’s basically the same thing that the startup OpenDoor has been doing for a few years. Zillow also launched their own version of a similar service called “Zillow Instant Offers” in May, although personally I believe Zillow’s service is just another thinly-veiled way of harvesting leads for agents. But we can discuss that later.

Speaking of Zillow, Redfin’s IPO filing gives us the first opportunity we’ve had to directly compare some financial and usage data between Redfin and Zillow.

Before we get to the charts, keep in mind that Redfin and Zillow have vastly different business models. Redfin is a real estate brokerage that actually helps people buy and sell homes, while Zillow is a middle-man self-proclaimed “media company” that sells ads to agents and has no interest in disrupting real estate. The two companies are different enough that I don’t think it makes a lot of sense to compare them, but everyone is going to anyway, so I may as well get the ball rolling.

First up, here’s a chart comparing the top-line revenue and total net loss each company has seen over the last three complete years 2014 through 2016:

Zillow’s revenues are roughly three times Redfin’s revenues. What’s interesting about this to me is that Zillow has been getting over eight times as many “average monthly unique visitors” than Redfin. The SEC filing shows Redfin’s monthly average unique visitors at 20.16 million, while Zillow’s first quarter 2017 report put theirs at 166 million. It would seem that Redfin’s business is a lot more efficient at converting web visitors into dollars.

Also interesting: here’s the loss shown in the chart above, expressed as a percentage of total revenue:

While both Redfin and Zillow have lost money the last three years, Redfin’s trajectory looks a lot more promising than Zillow’s.

Again, this is not investment advice. I have no idea whether Redfin’s IPO will be a good investment or not. I certainly hope that Redfin will go on to be a profitable business long into the future, but I have no way of knowing whether or not that will happen.

The post Redfin files S-1, likely to IPO later this year appeared first on Seattle Bubble.

• Monday morning: The Washington Post publishes a story and video about McMansions, heavily featuring Kate Wagner and her blog McMansion Hell
• Monday morning: A Zillow employee (or possibly a major Zillow customer) reads the Washington Post story, visits McMansion Hell, and sees the “Copyright Disclaimer” at the bottom of many of the blog’s posts stating that “All photographs in this post are from real estate aggregate Zillow.com.” The employee/customer then notifies Zillow’s legal department.
• Monday afternoon: Zillow lawyers send a threatening email to Kate, accusing her of copyright infringement and “fraud and interference with Zillow’s business expectations and interests” and demanding she delete all Zillow-sourced content from her site.
• Monday afternoon: Kate takes McMansion Hell offline while she seeks legal help and archives the site.
• Monday afternoon: A number of legal experts reach out to Kate, offering support in defending her against Zillow’s spurious claims.
• Tuesday morning: Zillow’s PR department sends Kate a follow-up letter in a lame attempt at damage control.
• Tuesday afternoon: Kate announces that the EFF has agreed to represent her should Zillow actually make the incredibly moronic decision to sue.

Since I’m not a lawyer, I’m not going to go into detail about the specific inaccuracies and overall stupidity of Zillow’s arguments against McMansion Hell. If you want to read about that, check out this piece by Techdirt, or their follow-up story, or this (shudder) Buzzfeed piece with quotes from actual attorneys with expertise in copyright law, including the Ken White of Popehat fame.

https://twitter.com/Popehat/status/879705727828230150

The main purpose of this post is to simply and publicly state that Seattle Bubble is one hundred percent in support of McMansion Hell in this dispute. Zillow’s threats are wrong, and they fully deserve the universally bad press they are getting for this move.

Speaking of the bad press, Zillow stock fell 4.25 percent on Tuesday (the first news of this fiasco broke after the close of trading on Monday). The Nasdaq was down just 1.59 percent and the S&P 500 fell just 0.79 percent that day.

There could definitely be another reason for this (correlation is not causation, etc.) but it’s certainly interesting that a loss of $274 million in market value coincided so neatly with all that negative public sentiment.

Here’s hoping that McMansion Hell comes back online and Kate is able to keep doing what she’s been doing. If you’d like to support Kate’s fight with Zillow’s abusive lawyers, she has asked that you donate to the EFF. If you like what Kate is doing with McMansion Hell and want to support that work directly, you can support McMansion Hell on Patreon.

Update: EFF eviscerates Zillow, Zillow promptly backs down

The EFF has posted their official response to Zillow (backup screenshots for broken link). Here’s an excerpt from the letter they sent to Zillow’s lawyer:

Our client has no obligation to, and thus will not, comply with Zillow’s demands. Zillow’s legal threats are not supported and plainly seek to interfere with protected speech.
…
In our phone call yesterday, you suggested that Zillow’s primary complaint against Wagner is based on Zillow’s Terms of Use, which purports to prohibit any reproduction or modification of images found on Zillow’s website. You stated that Zillow’s agreements with third parties requires it to include such provisions in its Terms of Use and to enforce them. But Wagner is not bound by your Terms of Use and, even if she were, the relevant provisions are unenforceable.

Courts routinely decline to enforce “browsewrap” agreements like Zillow’s Terms of Use, which fail to present terms except via a hyperlink and without a checkbox to signal assent.
…
Even if an agreement were formed, paragraph 14 of the Terms of Use, asserting Zillow’s right to alter the contract without notice or justification, would render the agreement illusory and void for lack of consideration. … Further, to the extent that Zillow’s Terms of Use purport to undermine Wagner’s freedom to operate the McMansion Hell website, such terms would be unenforceable under contract law doctrines that restrict surprising, unfair, or speech-restrictive terms, particularly in contracts of adhesion like the Terms of Use.

The EFF’s takedown of the legal trash from Zillow was extreme and thorough. It took less than a day for Zillow to back down. Via GeekWire: Zillow drops complaint against ‘McMansion Hell’ blog after backlash over copyright claim

“We have decided not to pursue any legal action against Kate Wagner and McMansion Hell,” a statement from the company said Thursday. “We’ve had a lot of conversations about this, including with attorneys from the EFF, whose advocacy and work we respect. EFF has stated that McMansion Hell won’t use photos from Zillow moving forward. It was never our intent for McMansion Hell to shut down, or for this to appear as an attack on Kate’s freedom of expression. We acted out of an abundance of caution to protect our partners — the agents and brokers who entrust us to display photos of their clients’ homes.”

Good.

The post Zillow’s asinine threat to McMansion Hell is costing them appeared first on Seattle Bubble.

Good news for renters (and maybe hopeful home buyers, as well): 2017 should see the beginning of relief for the Seattle area’s crazy rental housing market. The infamous $750-a-month 130-square-foot ‘prison cell’ apartment just might have marked the market peak. According to the Seattle Times, Seattle’s record apartment boom is ready to explode.

And not a moment too soon. The last few years have seen some serious imbalance in housing supply and demand in the Seattle area:

Here’s the same data, but with the imbalance between supply and demand shown more directly:

In 2015 and 2016, the Seattle area added 23,800 more new households than housing units. That’s nearly twice as large as the next-largest deficit we’ve seen since 2000.

Meanwhile, after bottoming out in 2013 and 2014, occupancy rates are rapidly climbing in all three counties:

According to the Seattle Times, nearly 10,000 new apartments are expected to come on the market in the city of Seattle alone this year, followed by another 12,500 in 2018. If we see a similar trend across the whole Seattle metro area, we can expect to see a lot more balance in the rental market soon. When you combine that with an increase in mortgage interest rates, it’s entirely possible that we will also see the local real estate market start to soften in 2017.

Hit the jump for additional individual charts of housing supply and demand for King, Snohomish, and Pierce counties.

The post Huge 2017 Apartment Boom Should Soften Housing Market appeared first on Seattle Bubble.

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

Western Washington Housing Market Still Strong

It’s still a seller’s market, but some leaders from Northwest Multiple Listing Service think the imbalance may be easing in some areas, pointing to a slower pace of sales and moderating prices. Others aren’t convinced, citing mixed indicators.
…
Commenting on September’s activity, Northwest MLS director George Moorhead reported “rumblings on both sides of the fence” by buyers and sellers. “Buyers are getting antsy to make a move before interest rates rise and they’re looking harder at homes that have been on the market longer than 30 days.”
…
“We have one month until November when new listings coming on the market drop by 50 percent on a monthly basis compared to spring and summer months,” explained J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. With the decrease typically lasting until the end of February, Scott said for selection, “the best opportunity for homebuyers to find a home will be in the next 30 days.”

The “best opportunity for homebuyers” is always right now according to used home salesmen like Lennox Scott.

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

Seattle Times

Mike Rosenberg: Seattle home prices still raging despite extra inventory, slow fall season

After a punishing year for anyone looking to buy a home in and around Seattle, the fall price cool-down that many buyers have been waiting for hasn’t arrived with much force.

The good news for buyers is that Seattle isn’t setting any more home-price records like it did this spring. And the rate of home-price increases has slowed to about half of what it was earlier in the year.

But the bad news is that home costs are still growing much faster than normal, and exceed recent pay hikes. The market remains one of the hottest in the country, even though the region is finally starting to see more houses come on the market.
…
Although this month’s data presented a muddled picture on prices, the change in inventory was clearly positive. For the first time in the last few years, additional homes in significant number are finally starting to come back on the market for sale.

The number of houses for sale in the county is now at its highest point in two years, although it still has a long way to go to get back to “normal” inventory levels. That could help contain the recent bidding wars and price spikes triggered by the historically low supply of homes for sale.

But it doesn’t seem to be helping much yet.

Mike Rosenberg hasn’t been covering real estate for the Times for very long, but in my opinion he’s doing a good job of presenting balanced, thoughtful pieces. Mike also touched on the Chinese investment angle in his article:

September marked the second full month since British Columbia announced a closely watched 15 percent tax on foreign homebuyers in the Vancouver metro area. Since then, there’s been a huge increase in interest from Chinese buyers looking toward the Seattle area.

It’s impossible to know how exactly that’s affected prices here. But the area most popular with Chinese buyers — in and around West Bellevue — saw a record median price of $2.19 million in August just after the Vancouver tax was announced, before dropping a bit in September.

“I’m feeling the pressure of what feels like increased foreign investment, more so than in the past,” Moss said, adding he’s seen more buyers from out-of-state, as well.

As usual, we only have rumor and anecdote when it comes to the affect that Chinese investors are having on the Seattle-area housing market. Speaking of Chinese buyers…

MyNorthwest

Kipp Robertson: More and more Chinese investing in booming Seattle market

By now you’ve seen homes for sale that have ended up selling for at least 20 percent more than their asking price in the Seattle area. But who or what is causing this?

Well, according to Katherine Jinyi Li of Seattle Globalist, at least some of the factors playing into homes selling for way over the asking price has to do with Chinese nationals willing to pay more.

Li writes that despite a crackdown on foreign currency outflow, Chinese are desperate to get their money out of a faltering economy, so they send their college-age children with plenty of cash to Seattle to start investing in things that can eventually be re-sold — and, of course, get an education that they may not be able to get in their home. A Chinese broker with Windermere Real Estate told Li that her team “processes anywhere from three to eight transactions a week,” Li writes.
…
People upset over the increasing difficulty in finding a home shouldn’t point fingers at Chinese investors, however. Li was told by the Windermere agent that it’s the tech boom, more than Chinese investors and their college students, that are to blame for the costly homes.

Until we see some actual hard data that proves otherwise, I’m inclined to agree that Chinese investors are not a major factor in the Seattle-area housing market.

Tacoma News Tribune / The Olympian

Rolf Boone: September another strong month for area home sales

The South Sound housing market had a great summer and that continued into September as sales of single-family residences once again rose by double-digit levels in Pierce and Thurston counties, according to Northwest Multiple Listing Service data released Wednesday.
…
Sellers have been in the drivers seat all year, but prospective buyers caught a break last month as more single-family residences hit the market, the data show. Months of inventory — an estimate of how long it would take to exhaust the supply of single-family residences at the current pace of sales — moved closer to two months in Pierce County and remained slightly higher than two months in Thurston County, the data show.

“The increase in listings is pretty unusual given that the number of listings usually declines between August and September,” said Windermere President OB Jacobi in a statement. “Considering how desperate we are for inventory, I hope this trend continues as we head further into the fall months.”

That quote from OB Jacobi is straight from the NWMLS press release. It’s interesting that they actually chose to admit that the listings increase was unusual, since it is a possible sign that the market may be softening. The identical short article is also available in The Olympian.

And that’s it! I couldn’t find stories in any of the other local news outlets so far. If others pop up throughout the day today I might add them to this post.

(Mike Rosenberg, Seattle Times, 2016-10-05)
(Kipp Robertson, MyNorthwest, 2016-10-06)
(Rolf Boone, Tacoma News Tribune, 2016-10-05)

The post September Reporting Roundup: “The Market Is Still Strong” appeared first on Seattle Bubble.

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

Market showing signs of adjusting

Home sales around Western Washington continued at a torrid pace during June, but a 10 percent year-over-year increase in new listings has some brokers with Northwest Multiple Listing Service suggesting a little relief may be emerging.

In the meantime, “We have a long way to go to catch up with the demand,” stated Mike Grady, president and COO of Coldwell Banker Bain.

Surprisingly, I completely agree with the release up to this point. As I said yesterday, there are some signs that the market might be at a turning point. We may be seeing some very early signs that the market is softening a bit, but since it has been so strongly tilted in favor of sellers for so long, it’s most likely going to take a long time to get back to anything resembling a balanced market.

Back to the press release:

J. Lennox Scott, chairman and CEO of John L. Scott, Inc., described the market as “frenzy hot” in June, but suggested there was a “short breath of fresh air for homebuyers.” He credits the combination of more inventory coming on the market and lower interest rates with bringing some “welcome relief to the backlog of buyers who have been waiting to purchase a home.”

Here’s where I disagree with the NWMLS release. The market is still currently terrible for buyers. There really wasn’t any “breath of fresh air.” The data from June show signs that there might be some fresh air on the horizon, but it’s still a long way off. Of course, Lennox is never going to suggest that it isn’t a Great Time to Buy™, so his spin is no surprise.

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

Seattle Times

Mike Rosenberg: Seattle’s devilish new home price record: $666,000

As home prices and rents continue to soar faster in the Seattle area than just about anywhere else in the nation, the city and its neighbors have set new highs for housing costs.

Seattle’s median single-family home cost $666,500 in June, easily beating out the record set in February, according to figures released Wednesday by the Northwest Multiple Listing Service. Seattle home prices have risen 15.9 percent just in the past year and an astounding 74 percent in the last five years.

The typical Seattle home now costs about $300,000 more than it did when the market bottomed out in 2011.
…
“I don’t see any end in sight, yet,” said South Lake Union broker Eric Shull of John L. Scott Real Estate. “We’re still going to see price increases. With all the tech companies moving our way and more employees moving this way, it’s just nuts.”

Oh definitely. Home prices can only go up, up, up—forever! There’s no end in sight! Hmm, now where have we heard this before.

Everett Herald

Herald Staff: Housing market in Snohomish County continues torrid pace

Home prices continued to climb dramatically in Snohomish County last month.
…
And part of the reason for the increase is the continued lack of inventory on the market.

Unfortunately, the Herald article this month is basically just an excerpt from the NWMLS press release.

KING 5

Travis Pittman: Listings down, prices up in June Western Wash. housing market

The tight real estate inventory in Western Washington led to a drop in listings and fewer multiple offers in June, but home prices continued to climb. It may be a sign of more people priced out of the market.

We’ve also got an extremely short piece from KING 5. Nothing much to comment on here.

Tacoma News Tribune / The Olympian

Rolf Boone: South Sound home sales cool from May

The South Sound housing market cooled to warm from hot in June, according to Northwest Multiple Listing Service data released Wednesday.

That’s because more single-family residences came to the market last month in Pierce and Thurston counties, likely giving prospective buyers in a seller’s market a bit more time to find a house.

A fairly short, just the facts story in the Tribune and the Olympian. No real expansion on the numbers or local flavor in this online edition, anyway.

(Mike Rosenberg, Seattle Times, 2016-07-06)
(Herald Staff, Everett Herald, 2016-07-07)
(Travis Pittman, KING 5, 2016-07-06)
(Rolf Boone, Tacoma News Tribune, 2016-07-06)

The post June Reporting Roundup: “A Long Way To Go” appeared first on Seattle Bubble.

There was a time when something could have been done to avoid its entry into the locked cycle of asset value inflation, but that was a few years ago. We now have to face the fact that this city will become another Vancouver, B.C. or San Francisco (or Miami, for that matter). The soft city is gone for good; the hard city is here to stay.

The opinion piece is very thin on details explaining exactly why he believes this to be the case. In fact, I’ve quoted twenty percent of the entire article above. Mudede just makes a series of emotionally-framed declarations and apparently doesn’t feel any particular obligation to explain to the reader how he came to these dramatic conclusions.

Here’s the main part of the article that I’d like to focus on:

And the idea of building our way out of this bad situation, as the urbanists propose, will not produce the desired results in reality because the market is not structured in that way. It does not answer to the basic laws of supply and demand.

To put it plainly, that is complete and utter nonsense. The real estate and housing markets absolutely do answer to the laws of supply and demand. Can they occasionally be warped by other external factors? Sure, definitely. We saw an extreme example of that ten years ago during the last housing bubble, which is what motivated me to start this site. In fact, if you looked only at housing prices as Mudede does in his piece you would have come to a similar conclusion that we were stuck in a “locked cycle of asset value inflation” in 2007 as well.

But prices alone do not paint a complete portrait of the real estate market. Despite Mudede’s unfounded assertion to the contrary, the housing market does respond to supply and demand. And it’s funny that he should mention San Francisco, because just a few days ago a gentleman named Eric Fischer published a great piece exploring an investigation of nearly 70 years of San Francisco rental price data.

Housing, it appears, gets expensive either when people get paid more or there are more people getting paid, and more steeply than simple linear increase. … If you add [housing inventory] to the model, it does a better job of explaining the swings in rent over the past 20 years through the additional prediction that housing gets cheaper than employment alone would predict when you build more of it, and doesn’t when you don’t.

Using housing inventory (supply) plus wages and total employment (demand) he was able to build a very good model that predicts housing prices for San Francisco:

In other words, housing does “answer to the basic laws of supply and demand.” Even in San Francisco, where a 390-square-foot apartment currently rents for $3,200 (link). The source of the problem of high housing prices is simple: Demand (employment and wages) is increasing faster than supply (new housing inventory).

Even San Francisco is not in a “locked cycle of asset value inflation.” If they built more housing at a fast enough rate, the city would become more affordable. The problem in San Francisco is that most of the city’s wealthy, entrenched interests don’t want to build more housing.

San Francisco does not have enough places to live. Sonja Trauss, a local activist, thinks the city should tackle this problem by building more housing.

This may not sound like a controversial idea. But this is San Francisco.
…
Across the country, a reversal in urban flight has ignited debates over gentrification, wealth, generational change and the definition of the modern city. It’s a familiar battle in suburbs, where not-in-my-backyard homeowners are an American archetype.

In San Francisco, though, things get weird. Here the tech boom is clashing with tough development laws and resentment from established residents who want to choke off growth to prevent further change.
…
Those groups oppose almost every new development except those reserved for subsidized affordable housing.

Here’s Eric Fisher’s conclusion about San Francisco:

San Francisco is an expensive city because it is an affluent city with a growing population and no easily available land for development. Sonja Trauss is right that building more housing would reduce rents of both high- and low-end apartments. Tim Redmond is right that building enough housing to make much of a dent in prices would change the visual character of most streets, although the result could be more like Barcelona than like the Hong Kong that he fears. The unsettled question is which of these is the higher priority.

Building enough housing to roll back prices to the “good old days” is probably not realistic, because the necessary construction rates were never achieved even when planning and zoning were considerably less restrictive than they are now. Building enough to compensate for the growing economy is a somewhat more realistic goal and would keep things from getting worse.

…if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year).

Similarly here in Seattle, building more housing would help prevent it from becoming even more expensive. That said, even if we dramatically relaxed regulations and ramped up incentives for development, we’re not likely to see builders add new housing at a rate that would be required to begin driving prices down. Builders want to make a profit, after all. However, with enough new housing we could absolutely level off price increases and allow employment and wages to catch back up. There is zero reason to believe that’s not possible.

Of course, this all assumes that the economy—and specifically the tech economy—is not currently in another big bubble. If it is, and if said bubble pops, expect housing prices to drop again, regardless of how special Seattle may seem right now.

The post No, Seattle Affordability Is Not “Pretty Much Game Over” appeared first on Seattle Bubble.

Therefore, I’m happy to present a point-counterpoint on the topic of Zillow’s value in the real estate marketplace. Rather than participating myself, I’ve invited two long-time Seattle Bubble regulars and local real estate professionals to debate the subject for us all.

Presenting the “anti-Zillow” position: Kary Krismer. Kary is an attorney and Managing Broker at John L. Scott/KMS Renton. Kary is also an occasional guest author here on Seattle Bubble.

Presenting the “pro-Zillow” position: Craig Blackmon. Craig is an attorney in Seattle, where he has practiced real estate law for over a decade. He owns and operate his law firm, the FSBO Law Center, where he helps people buy and sell homes without an agent (as well as handle other legal issues relating to owning a home). He is also the founder, designated broker, and managing broker of Quill Realty, a new model real estate firm.

Full disclosure: Craig is a Seattle Bubble advertiser, but no money or other consideration was exchanged for participation in this post.

Point: Zillow is Inaccurate and Adds No Value

by Kary Krismer

People who dislike Zillow probably do so for many different reasons, but my primary complaint regarding Zillow is inaccurate listing information.

While not true for every MLS, Zillow does not receive direct feeds from the NWMLS. This has several drawbacks for buyers using Zillow. Some listings will never appear on Zillow, some will only appear after another buyer is in contract, and some will remain on Zillow weeks or even months after a listing is pending.

There is a simple solution to all of these problems. Seattle is a tech city where the regional broker sites are significantly better than those of most national firms. Broker sites like Redfin.com, JohnLScott.com, Windermere.com and Estately.com will give buyers both better data and better search options. Those sites will be updated multiple times per day and contain every NWMLS listing. As to which site is best, that would largely be personal preference, but it would also likely depend on a buyer’s needs.

This is not to say there are not some things Zillow does well in its search functions. Zillow is certainly better than some of the national brokerage websites, which is probably the reason Zillow even exists! But in the NWMLS area Zillow is not better than the local options, and thus would not be a likely first choice of informed buyers even if their data was accurate.

I have other complaints regarding Zillow. The most significant is that the reason Zillow exists is not to help buyers find homes and owners sell homes, but instead to provide a medium for agents to advertise. While that is also true to some extent for the broker sites, the broker sites are also trying to sell their clients’ listings. A buyer picking an agent based on advertising on either type of site is hardly desirable, but that is Zillow’s primary purpose.

Does this mean buyers should ignore Zillow? No. Zillow has other uses, including allowing FSBO listings (Trulia and Realtor.com do not) and has some limited information on foreclosures (although better sources probably exist). Also, “Zestimates” is a source of automated valuations, although those are of limited use. And clearly sellers should not avoid Zillow—they should pick an agent whose listings appear on Zillow, as well as all the other major sites. That Zillow is desirable for sellers does not make Zillow good. It just means some buyers are looking in the wrong place!

Zillow Provides an MLS Alternative – A Very Good Thing

by Craig Blackmon

The data provided by Zillow is of lower quality than the data available via the NWMLS. Kary is correct on that point. Zillow is a good thing for a very different reason.

There is widespread recognition that real estate needs innovation. Because of Zillow, new and more efficient business models in real estate are possible.

Here in the Northwest, literally every licensed broker is also a member of the NWMLS (but one, my firm, Quill Realty). As with any MLS, to list on it a seller must hire two brokers: one to list the property, and one to “sell” it. This “selling commission,” paid to the buyer’s agent, is inefficient and bad for buyers.

Until the Internet, buyers had to hire brokers just to know what was for sale. Today, most buyers search the listings themselves.

As result, there has been price pressure on the listing commission, and today there are lower-cost alternatives. Sellers can list the house themselves on the MLS (essentially paying one broker instead of two) for a few hundred bucks, or get full service from Redfin for 1.5%. Yet the typical selling commission remains stuck at 3%.

It will remain there as long as brokers maintain their monopoly on market data. Unlike other industries disrupted by the Internet, real estate brokers create and maintain the electronic marketplace. This allows brokers to set the rules. The biggest – and unofficial! – rule: Sellers gotta offer the full 3% selling commission.

Theoretically, the “buyer rebate” model popularized by Redfin should have led to a reduction. The initial value proposition – rebates well into the thousands of dollars – should have been enough to disrupt real estate. Large numbers of buyers should have turned to Redfin, leading large numbers of sellers to reduce the selling commission accordingly.

But it didn’t happen. Perhaps the rebate model is too complex. Or perhaps market and price pressure must be applied directly by the consumers that actually pay the inefficient fee. Regardless, the “Redfin Lesson” is clear: Buyer rebates will not lead to widespread innovation or a reduction in the selling commission.

So innovation must be driven on the listing side. Thought-leaders have for a long time believed the MLS would be “replaced” by technology.

Zillow allows both owners and non-MLS member brokers the ability to effectively market a home online. This gives consumers the opportunity to sell without offering a selling commission.

The seller may be asked to pay one by the buyer in the offer. It is then a negotiated term. Because it is negotiated, the commission will be reduced and the seller ends up paying less than 3%. Plus, the cost is effectively passed through to where it belongs, the buyer, via the negotiations over price.

Yes, the MLS works well, better than Zillow. At a cost. Specifically, the 3% selling commission. Zillow gives all consumers an alternative. That means Zillow is a good thing.

Response: A False Sense of Empowerment for Buyers

by Kary Krismer

Craig is correct that the Internet has allowed buyers to more easily search for listings, but he is mistaken thinking a different form of advertising will somehow drive innovation that impacts commissions. The Internet has merely replaced the Sunday newspaper for real estate advertising. The information available on the Internet may make consumers feel more empowered, but for most buyers that is a false sense of empowerment. Making buyers feel good is the goal of Internet sites, because they want viewers to come back to their sites.

Although Internet listings are undoubtedly better than newspaper listings, the better information does not allow anyone to adequately judge a house. That requires an on-site visit. Even when a buyer sees a property in person, most buyers generally still need significant help beyond just “opening a door.” It takes experience to understand the pros and cons of each property, and most non-flipper buyers lack that experience. Buyers need that experience and it does not come for free. Having buyers deal directly with sellers without expert guidance would only lead to problems.

As to Zillow changing commission structure, the first mistake is thinking finding listings is a significant or difficult part of an agent’s job. That is easy, and many buyers are not good at it, making their agent’s job more difficult. But Zillow’s underlying purpose is selling advertising to agents, so Zillow is not attempting to change the industry; they are part of the industry. Zillow is merely trying to capture clients for agents.

Response: Zillow Allows Fundamental Change in Real Estate

by Craig Blackmon

According to Kary, the Internet is just “a different form of advertising.” He could not be more mistaken.

The Internet has fundamentally changed the way the world works. As to information-based industries in particular, there are two types: those that have changed fundamentally as result of the Internet, and those that will eventually. Real estate falls into the latter category (travel agents and stock brokers fall into the former). Real estate has yet to see fundamental change driven by the Internet.

Today, Zillow allows for that fundamental change to occur. Will change result? I hope so, but it may not. Maybe it just isn’t time for change, or Zillow for some unknown reason isn’t the right catalyst. Perhaps someone else will find the right combination of data and service that will lead to change. In the meantime, though, Zillow provides an opportunity for widespread and long-needed improvement.

Do buyers need to tour a home before they buy it? Duh. Of course. Do buyers benefit from having an agent represent them? Again. Duh. Of course. Do agents need to be compensated for this service? Yep, there is a pattern here….

The question is, who should pay the buyer’s agent? The seller-paid commission creates a classic conflict of interest. It is a significant flaw in the traditional model that undermines the modern expectation of representation.

Regardless of Zillow’s income stream, it provides an opportunity for sellers to pay the listing agent, and buyers to pay the buyer’s agent. The terms “selling agent” and “selling commission” can be relegated to where they belong, the dustbin of history. Zillow is a very good thing.

The post Point-Counterpoint: Is Zillow a Valuable Tool? appeared first on Seattle Bubble.

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

Housing inventory improves, but market still favors sellers

“Our market is near historically low levels of absorption. This has things weighted in sellers’ favor,” remarked Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty and a former Northwest MLS director. “Successful buyers are working closely with their brokers to study the market, choose great lenders, and make smart choices in composing compelling but not careless offers,” he added.
…
J. Lennox Scott, chairman and CEO of John L. Scott, Inc. described April as “another grand slam month for housing,” adding, “The market is more intense than a year ago. We are still seeing 80 percent of the homes coming on the market sell within the first 30 days.”

Scott said “virtually all new listings are selling, many with multiple offers in all the market areas in King, Snohomish, Pierce and Kitsap counties in the price ranges where 90 percent of the sales activity is happening.” Heavy open house traffic and multiple offer situations are keeping brokers extremely busy, he added.
…
Brokers believe the frenzied market is altering some buyers’ behavior – and not all of it is prudent, they suggest.
…
Diedre Haines, a former chairman of the Northwest MLS board of directors, reports there are growing signs “of buyers’ fatigue, and game-playing at its finest.” Pre-inspections are being conducted as the “new normal,” and/or buyers are waiving many of their rights with regard to inspections, title reviews, neighborhood reviews, and financing contingences, according to Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County.

“In my opinion, this is risky behavior for both buyers and sellers,” Haines commented, adding, “Buyers need to perform their due diligence investigations, and sellers should be cautioned about the wisdom, or lack thereof, in thinking these waivers strengthen the offer, are good for them, or that they create a ‘no hassle’ quick-close transaction.” She urged parties to a transaction to think through the potential consequences of taking such risks.

Wow, a home salesperson urging prudence and they’re being quoted in the NWMLS press release? I’m floored.

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

Seattle Times

Blanca Torres: Home prices charge ahead, driving some buyers farther afield

The list of cities some might call suburbs of Seattle now stretches to places like North Bend, Poulsbo and Cle Elum. More homebuyers are willing to trade longer commutes to buy a house they can afford or for more space and features.

Some would-be buyers are looking at such alternatives as a lack of available homes on the market drives up prices in the hot housing markets of Seattle and the Eastside.
…
Multiple bids and bidding far above the asking price are the norm in hot submarkets, leaving some prospective buyers demoralized. That is prompting some buyers to consider moving to another part of the region.

“You see Seattle fatigue, where you have buyers who have been outbid many times or have seen homes go well above asking prices,” said Stacie Gall, a Redfin agent based in Bainbridge Island.
…
“A lot of people are being willing to move out of their comfort zone and are finding that Seattle and the Eastside are becoming too expensive,” said Shane Raff, a real-estate agent with John L. Scott. “People are just getting priced out of the market and there’s nowhere for them to go.”

I don’t know if this is a real trend, but if it is, it’s worrisome. It’s this same kind of “buy a home no matter what” mindset that contributed to the frenzy and eventual bubble burst ten years ago.

Everett Herald Business Journal

Jim Davis: More homes land on market in county, but still too few

More homes hit the market in Snohomish County during April, but inventories remain far below what was available a year ago, the Northwest Multiple Listing Service says.
…
It’s part of a trend that’s been going on for months: There just aren’t enough homes available for the number of active buyers in the area.

It was nice to get a local article in the Everett Herald for the first time in a long time, but unfortunately the article was little more than window dressing on the NWMLS press release.

Puget Sound Business Journal

Marc Stiles: New home listings up, but not enough to cool down region’s blistering market

Pending home sales in the Puget Sound region’s four-county area are at a near record, more owners are putting their houses on the market, and price increases for single-family homes have started to slow down some.

Yet prices still are climbing, and it remains a seller’s market, especially if you’re unloading a condo.
…
The temperature of the condo market remains torrid, especially in King and Kitsap counties. In King, where inventory fell nearly 27 percent, the median sales price was up 19 percent. Downtown Seattle condo prices jumped 37 percent even as inventory remained about the same. In Kitsap, condo prices soared nearly 62 percent, though the number is based on just 16 sales. The Pierce County median price increased 13 percent and Snohomish County’s went up 3.6 percent.

Not a lot of depth to this article, but those are at least some interesting observations about the condo market. I’ll have to see if there’s enough data to see any interesting trends in condos lately.

Tacoma News Tribune

Craig Sailor: Pierce County still a real estate bargain compared with King

A tight inventory of homes continues to drive up prices in King and Pierce counties.

But that’s only one of the direct factors affecting affordability.

Land regulations, development costs, job growth and labor shortages also are raising prices. And builders are turning toward higher-end projects where those costs can be more easily worked in. The result is less affordable and entry-level housing.

That’s the conclusion of Robert Dietz, a national economist for the National Association of Home Builders, and Aaron Terrazas, a senior economist for housing data company Zillow.

The pair spoke early Wednesday at the annual Master Builder’s Association housing forum in Puyallup.

This article technically isn’t about the latest NWMLS data, but it is interesting and worth a read. You’re obviously going to get a very pro-buying-always message from an event put on by a homebuilder organization, but it’s interesting to see the latest spin they’re putting on it and the kinds of underlying factors they’re looking into.

The Olympian

Rolf Boone: Sellers had the advantage in South Sound housing markets in April

South Sound home sellers remained in the catbird’s seat in April as a lack of inventory and rising prices continued to favor them, according to Northwest Multiple Listing Service data released Thursday.

But if prospective buyers can’t find the houses they want or get outbid, guess what happens? Sales slow. That was the case in Pierce County, at least, as sales were essentially flat, rising only 1 percent last month compared with April 2015.
…
Thurston County has had a little more breathing room, but not much. In April, months of inventory was 2.06 months, the data show.

This one is the article covering the NWMLS numbers for the Tacoma and Olympia area. Not a lot of meat on the bone here, but frankly there’s not a lot of new and interesting things to say about the market right now.

(Blanca Torres, Seattle Times, 2016-05-05)
(Jim Davis, Everett Herald, 2016-05-05)
(Marc Stiles, Puget Sound Business Journal, 2016-05-05)
(Craig Sailor, Tacoma News Tribune, 2016-05-04)
(Rolf Boone, Tacoma News Tribune, 2016-05-05)

The post April Reporting Roundup: “Risky Behavior” Edition appeared first on Seattle Bubble.

Richard Stone, the attorney for Move was questioning Spencer Rascoff on the stand:

Stone: It’s true, isn’t it, that you referred to the CEO of Redfin as ugly and annoying, correct?

Rascoff: I don’t remember if I said that. As I’ve said though, when you review tens of thousands of emails and days of videotape deposition, you will find examples of things that I’ve said inarticulately or emotionally, and you take them out of context and put them under a microscope, and they don’t look so good.

Stone: And Redfin was a competitor of Zillow?

Rascoff: Redfin is a competitor of Zillow.

Stone: And you said they were a bunch of jerks as well?

Rascoff: ​As I’ve already answered, I don’t remember​ ​having said that, but when you review tens of​ ​thousands of emails, you will find things that I​ ​have written, and if you take them out of context​ ​and put them under a microscope, there will be​ ​examples of things that I’ve said which don’t look​ ​so good.

Stone: And you’ve said similar, very personal aggressive statements about every CEO who was competing with you; is that a fair statement?

Rascoff: It’s not a fair statement to describe those statements as aggressive. I think it depends on the context. So you have me goading fellow employees and needling them by talking about competitors in certain contexts. That’s what some of these emails out of tens of thousands of emails are referring to. So I wouldn’t describe them as overly aggressive. I think that was the term you used.

Stone: Did you tell Curt Beardsley, if Redfin F’s with you, you will F with Redfin?

Rascoff: Basically the same answer that I’ve already given is how I would answer that question. I don’t remember saying that to anybody. If I did, it would be an example of something out of tens of thousands of emails that I have fired off on a whim and maybe doesn’t look that good when you —

Stone then cuts him off and they play a segment of recorded video from a deposition, which is not transcribed.

Of course it is important to note that I used to work at Redfin, and in fact I worked rather closely with CEO Glenn Kelman. In my personal opinion, he is neither ugly nor annoying. I will also say that when I worked there, there are very few of my coworkers who I would describe as jerks.

The post Excerpt from Zillow CEO Spencer Rascoff’s Court Testimony appeared first on Seattle Bubble.

As I write this, I’m waiting to hear from my realtor on whether or not I just bought a house. It’s my sixth attempt at purchasing a home in Seattle this year, and you know what they say: The sixth time is the charm! Or maybe it’s the 16th?
…
There’s nothing quite like waiting for the call from your Realtor to find out whether you just spent your entire savings and then some on a house that may or may not survive even a minor earthquake. (You won’t know until said earthquake hits because you had to waive the once-standard opportunity to have the house properly inspected because inspection contingencies are so 2015.)

Nevertheless, you hope beyond hope that you get this house, despite the fact that the foundational supports are shimmed up with a log, a brick, a wedge of plywood — and is that a stack of plates? And if you have to write one more sickeningly earnest letter about why you’re the best buyer for this home, you might have to call it quits and move back to Iowa, where hundreds of thousands of dollars buys you an entire operational farm.

The whole piece has an eerily familiar ring to it… Here’s an excerpt from a piece that ran nearly 10 years ago in the Seattle P-I, the famous “last spaceship flight” piece:

But with friends who have not yet “squeezed in” to the housing market, I am reminded of how I felt when I got accepted by my first choice for college and my best friend got nothing but rejections. What do you say to each other? I try to offer soothing assurances: “I hear there are still some great deals up north.” “600 square feet is plenty of room!”

But no matter what I say, I know we all feel like they have probably missed their chance, like they didn’t buy their ticket on the last spaceship flight off a planet that’s about to explode. I fear they’re doomed to move back to Missouri in order to afford more than a studio condo on the fringes of the city.
…
Fortunately, none of my friends have left town — yet. And even if they don’t, even if they all hit the jackpot and land their cramped little dream homes, I guess I’ll never know who else may have left.

The author of the 2016 piece has apparently been getting lots of advice from her friends:

Well-meaning people keep offering unsolicited advice.
…
I wish people would stop telling me I need to keep the faith because my perfect house is right around the corner. I need them to stop suggesting I look for houses in neighborhoods they would never set foot in, let alone purchase property in. I would appreciate it if people stopped recommending fixer-uppers and tear-down-ers. And if one more person suggests that I include a heartfelt letter and photo of my adorable children in my offer packet, I will lose my mind.

The one piece of advice it seems nobody is giving her: Maybe you should just hold off and don’t buy a home in a ridiculously frenzied market. Just a thought.

The post “You hope beyond hope that you get this house…” appeared first on Seattle Bubble.

https://www.youtube.com/watch?v=QlRm6Y5iVfw

Wow. It is like the people at Quicken Loans who are responsible for promoting their Rocket Mortgage app somehow completely missed the previous housing bubble and the massive economic fallout when it burst.

Yes, let’s make it super easy for everyone to buy homes! What could possibly go wrong?

Neil Irwin at The New York Times summarizes the issues with this ad: The Super Bowl Ad That Set Off Economic Alarm Bells

The hackles this raised among the economic commentariat was instant. For a while during the Super Bowl, certain segments of Twitter were dominated not by talk of Peyton Manning and Cam Newton, but by snark. “Rocket Mortgage: Let’s do the financial crisis again, but with apps!” tweeted Dave Weigel of The Washington Post.
…
Reducing paperwork and bureaucratic hurdles to a mortgage are desirable in isolation; the homebuying process is laden with hidden fees and conflicts of interest that can add thousands of dollars to the price of a home purchase.

But the Quicken Loans ad goes a step further, with the narrator asking what would happen if the Internet “did for mortgages what the Internet did for buying music, plane tickets and shoes,” then showing a woman getting a home mortgage with the press of a button on her phone.

If taken too literally, this could get people in trouble. A home mortgage is the biggest financial obligation most people will take on. If you buy the wrong music, plane ticket or shoes, it’s probably not a crippling financial burden, where the wrong mortgage can be.

The current problem with the housing market is that supply is too low, not that demand is too low or that people can’t get a mortgage when they want one. There’s certainly something to be said for simplifying and streamlining the mortgage application process, but it should be focused on convenience for people who are already otherwise buying a home, not somehow luring suckers into buying homes because of how easy you made it with your app.

The post Rocket Mortgage Super Bowl Ad: Let’s Repeat the Bubble! appeared first on Seattle Bubble.

Local alternative brokerage Surefield added another slick new tool to their arsenal this week: A map-based home pricing tool that they are calling Pricepoint. Together with their flagship 3D home tour technology (previously spotlighted here), this new offering strengthens Surefield’s focus on home sellers.

The tool offers an interactive, transparent alternative to Zillow’s black box “Zestimates,” and is touted by Surefield as “the most accurate and reliable way to price a home.”

I’ve been playing around with the tool for a few weeks, and I really appreciate the clean interface that communicates a lot of great information. You can see all the comparable homes (sold and currently listed) on a map, in a list, and on two different charts all at once. It’s easy to flip through the photos of the homes, exclude homes from your estimate, or adjust the matching criteria.

The feature is somewhat similar to Redfin’s Home Value Tool (which I worked on some as a product manager when I was at Redfin), but offers a lot more flexibility and displays more detailed information.

If you’re thinking of selling your home, you’ll get a much better idea of where you should be pricing it if you start with something like Surefield’s Pricepoint tool than you would by just looking at your “Zestimate.”

Here’s some additional coverage of the feature from other local outlets:

GeekWire: Surefield challenges Zillow with new tool to figure out how much your home is worth
Puget Sound Business Journal: Redfin founder calls his new Seattle real estate startup a ‘Zestimate killer’

The post Surefield Releases New Map-Based Home Pricing Tool to Compete with Zillow & Redfin appeared first on Seattle Bubble.

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

With holidays approaching, real estate brokers usually expect a slowdown as buyers and sellers shift their attention elsewhere. “This year is different,” say some industry leaders.

“This time is different!”

It always is, isn’t it?

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

Seattle Times

Sanjay Bhatt: Short supply pushes up region’s home prices

Given such tight supply, homes that do come on the market are gone quickly. Across King, Snohomish, Pierce and Kitsap counties, last month’s volume of pending sales — purchase contracts that haven’t yet closed — made it the second best October on record, said J. Lennox Scott, chairman and CEO of the John L. Scott brokerage.

“The market will remain hot through the winter,” he said.

Buyers may pine for more choices, but construction of new single-family homes isn’t capable of meeting the enormous appetite.

And of course there is no way demand would ever drop, right? It’s impossible to conceive of any way that could happen, so obviously Seattle’s housing market will remain hot forever!

Puget Sound Business Journal

Marc Stiles: Struggling to find a house? Try the ‘Seahawks Strategy’

A new report shows that the acute shortage of homes for sale in the Puget Sound area continues, spurring more bidding wars.

One real estate company is offering a game plan to beat out the competition: go shopping during a Seahawks game. It worked for one John L. Scott Real Estate client.

The woman had thought she found the perfect home only to lose out in a multiple-offer situation. So she and her broker decided to look at a few homes on a Seahawk Sunday. At 10 a.m. she walked into a house she loved. By noon she made an offer, and it was accepted 24 hours later.

Yes I am certain that the Seahawks game had everything to do with her successful offer. And also the phase of the moon and Venus in retrograde.

My Northwest

Kipp Robertson: Buy a home on Seahawks game day if you want to win the bid

The housing market in Seattle and outlying areas has become so competitive that people are willing to skip a Seahawks game to look for a home.

After losing in a bidding war, a client of John L. Scott and her broker went to go shopping for a new home on a Seahawk Sunday, the Puget Sound Business Journal reports. The client was able to make an offer, which was accepted 24 hours later.

“The key is to go shopping during a Sehawks game,” KIRO Radio’s Tom Tangney said. “You tend to have fewer bidders.”

It is embarrassing that this nonsense was published in even one outlet, but two? Yikes.

Tacoma News Tribune / The Olympian

Rolf Boone: South Sound home sales still strong in October

Although Pierce County didn’t experience a double-digit increase in sales, the picture was brighter for median price, which rose 10.5 percent in the past year. In Thurston County, the median price rose 8.3 percent over the same period, the data show.

Bottom line: It remains a seller’s market.

It’s nice that we can close this up today with a nice clean factual report devoid of superstitious nonsense and ridiculous predictions. Thank you, Mr. Boone.

(Sanjay Bhatt, Seattle Times, 2015-11-05)
(Marc Stiles, Puget Sound Business Journal, 2015-11-05)
(Kipp Robertson, My Northwest, 2015-11-07)
(Rolf Boone, Tacoma News Tribune, 2015-11-05)

The post October Reporting Roundup: Predictions and Superstitions Edition appeared first on Seattle Bubble.

I laughed out loud when I read it. Specifically the first word there: “keep.”

If you’re not wealthy, Seattle is already unaffordable by nearly any metric. Rents are soaring, home prices are hitting new all-time highs, and inventory of both rentals and for-sale homes are at all-time lows.

I don’t live in Seattle proper, nor do I have any desire to. I have no position on Seattle Proposition No. 1 (a.k.a. “Move Seattle”), but I find the language in this ad to be laughable.

The numbers listed on the KeepSeattleAffordable.com “Facts” page are amusing as well.

Consider this sample tax bill from a home without a view on Queen Anne.

The property’s assessed value is $713,000. The total property taxes last year came to $6,833, of which the city’s portion was $1,870.

…if voters approve Proposition 1, the burden will jump another $439…

So $37 a month on a $700,000 home. That’s the line between “affordable” and “unaffordable.” Right.

I’m sure there are good arguments for and against this transportation levy, but “keep Seattle affordable” is not among them.

The post Will a No Vote on Prop. 1 “Keep Seattle Affordable”? appeared first on Seattle Bubble.

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

Housing market slowdown expected
But prices in most areas are still rising

Scarce inventory, new rules for mortgage closings and affordability concerns will likely slow home sales around Western Washington during the remaining months of 2015 and into early 2016, according to spokespersons from Northwest Multiple Listing Service.

The latest statistics from the MLS show a double-digit drop in inventory, a double-digit jump in closed sales, and a near double-digit increase in prices from a year ago, prompting one industry leader to say the trends aren’t sustainable. “We simply can’t sustain double-digit increases in sales when inventory levels continue to drop every month,” remarked OB Jacobi, president of Windermere Real Estate. “We’re on the cusp of a housing market slowdown,” he predicts.

I think this is the first time I have ever seen the NWMLS press release quoting their agents with anything other than a “rah rah hot market” sentiment. It’s very odd.

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

Seattle Times

Sanjay Bhatt: Many homeowners stuck owing more than their houses are worth

After the most brisk summer selling season in a decade, the Seattle area’s home prices showed signs of easing in September.

Potential buyers may welcome a cooling, but it’s grim news for the large slice of the region’s homeowners whose mortgage debt remains greater than their home’s value.
…
Although home prices have rebounded strongly since the Great Recession, more than 33,500 King County homes had negative equity at the end of June, or 9 percent of homes with a mortgage, according to Seattle-based Zillow, the real-estate website.
…
Owners in that position have little financial incentive to list their properties for sale, reducing the potential inventory available to first-time buyers. And lower-value homes account for a disproportionate share of these so-called underwater homes.

“It’s causing a lot of friction at the bottom of the market, which then ripples through to the entire market,” said Zillow Chief Economist Svenja Gudell. “For some of these homeowners, they may pay off their mortgages before they resurface.”

With as much as home prices have increased in the last three years, I really doubt that underwater mortgages are having much of an effect on the market anymore.

Note that these estimates for how many people are underwater are based on Zillow’s notoriously inaccurate automated home price estimates. For example, in my neighborhood, one home that sold for $285,000 last month had a “Zestimate” of $191,000. I put very little stock in these “underwater” guesses in this hot market.

Puget Sound Business Journal

Marc Stiles: Windermere president: Seattle’s ‘on the cusp of a housing market slowdown’

September revealed double-digit drops in inventory along with a double-digit jump in closed sales.

This trend isn’t sustainable, said Windermere Real Estate President OB Jacobi, who predicts that the area is “on the cusp of a housing market slowdown.”

Another factor that will slow things down is the new banking and closing disclosure requirements that will extend closing times.

I wish the article had gone into more detail about the new disclosure requirements. That is something I will be looking into.

Tacoma News Tribune / The Olympian

Rolf Boone: South Sound housing market heats up again in September

After a cooler August, the South Sound housing market heated up in September as single-family residence sales once again jumped by a double-digit margin, according to Northwest Multiple Listing Service data released Monday.

And median prices weren’t too far behind, rising 10.3 percent in Pierce County and 7.5 percent in Thurston County from September 2014, the data show.

Given the limited supply of homes on the market, buyers need to be decisive, write competitive offers and be prequalified by a lender to purchase, said Francine Viola, a longtime broker with Coldwell Banker Evergreen Olympic Realty in Olympia, who was showing an open house in the Campus Highlands area of Lacey on Sunday.

But that’s not to say that sellers can sit back and wait for the offers to roll in, she said. They still need to price their residence correctly and be prepared to negotiate.

“This is not Seattle,” she said about the Thurston County housing market, where some buy with cash but many still finance their purchase.

Or, maybe buyers need to sit the market out for a while instead of contributing to the frenzy, making things even worse? Nah, crazy idea.

Since this post is so late, here’s a bonus article from the New York Times last week:

New York Times

Nick Wingfield: Seattle, in Midst of Tech Boom, Tries to Keep Its Soul

SEATTLE — For years, business leaders here have closely studied the San Francisco region, seeking to emulate the way it churns out so many leading technology companies.

In large measure, those efforts worked. But now, leaders in Seattle are looking to the Bay Area as a different sort of model: a cautionary tale.

The giant sums of money spinning around San Francisco in recent years, fueled by a booming tech sector, have generated hordes of 20-something millionaires and thousands more with six-figure salaries. While that wealth has created a widely envied economy, housing costs have skyrocketed, and the region’s economic divisions have deepened. The median rent for a one-bedroom apartment in San Francisco is $3,530 a month, the highest in the country.
…
“Seattle has wanted to be San Francisco for so long,” said Knute Berger, a longtime chronicler of life in Seattle. “Now it’s figuring out maybe that it isn’t what we want to be.”

Great article with some outside perspective on Seattle’s boom. I definitely recommend reading the whole thing if you haven’t already.

(Sanjay Bhatt, Seattle Times, 2015-10-05)
(Marc Stiles, Puget Sound Business Journal, 2015-10-05)
(Rolf Boone, Tacoma News Tribune, 2015-10-05)
(Nick Wingfield, New York Times, 2015-10-08)

The post September Reporting Roundup: Unsustainable Trend Edition 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.

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

Opinions vary on possibility of a housing slowdown, but numbers show solid activity

Some brokers from Northwest Multiple Listing Service detected a slowdown in housing activity during August, “but nowhere near what is typical,” according to one industry veteran. Among MLS leaders who commented on the service’s latest report, expectations for the remainder of 2015 ranged from one who predicted “we’re on the cusp of a slowdown,” to others describing activity as “torrid” and saying “sales will continue at a fast pace.”
…
“I don’t think any real estate market/economy can sustain steadily increasing prices like we’ve seen without a leveling or a drop-off of sorts,” cautioned Gary O’Leyar, designated broker/owner at Berkshire Hathaway HomeServices Signature Properties and a past chairman of the Northwest MLS board.
Another industry leader also commented on a possible leveling of activity.

“Given the seasonality of real estate and low inventory levels, I think we’re on the cusp of a slowdown in the housing market,” stated OB Jacobi, president of Windermere Real Estate. “The continued double digit increases in home sales simply cannot be sustained unless we see inventory growth,” he emphasized. That is unlikely, he suggested, “since we’re entering the time of year when fewer people list their homes.
…
“Conditions are optimal for the home buying surge in the Puget Sound Region to continue, due to job growth and historically low interest rates,” suggested J. Lennox Scott, chairman and CEO of John L. Scott. “We can also expect the severe shortage of homes for sale close to job centers, and in the more affordable and mid-price ranges in all Puget Sound markets, to persist,” he added.

You can always count on Lennox for the perpetually rosy outlook, no matter what reality suggests.

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

Seattle Times

Sanjay Bhatt: Condo prices climbing even faster than houses

While the inventory of homes for sale has ticked up steadily since March, the region continues to suffer the worst shortage in more than a decade.

But prices haven’t risen enough to jump-start new-home construction.

From January to July, building permits were issued for a total 5,103 single-family homes in King, Pierce and Snohomish counties, down 4 percent from a year ago, according to the National Association of Home Builders.

But permits were issued for 9,938 multifamily units, a 45 percent jump over a year ago, with the vast majority being apartments.

Builders are opting for apartments over condos, experts say, because they don’t face the liability of being sued under the state’s condominium act. Some condo builders still bear fresh memories of multimillion-dollar settlements with homeowner associations.

“You’re finding developers saying, ‘Why take the risk of building a condo?’ ” said Matthew Gardner, chief economist at Windermere Real Estate. “Whereas in today’s environment, you can build an apartment, get it half leased up, sell it to an institutional investor and walk away.”

There’s also the overall falling home ownership rate and general disinterest in home buying in the wake of the bursting bubble. The closer you get to the city, the less likely you’ll find affordable homes and the less likely you’ll find people who even want to buy.

KING 5

Dan Cassuto: Home prices soaring in Seattle

The market is especially hot in neighborhoods like Ballard.

A 950-square foot home with three bedrooms and one bath had an open house on Saturday. The listing price? $425,000.

“It’s considerably more difficult to find a place than it was a year ago,” said Heather Hearsey, the agent listing the home. “I’ve heard of numerous people getting 13 to 15 offers on a house with people waiving inspection and waiving financing.”

Here’s the video from KING 5:

To quote the buyer in the video: “The market just totally sucks. Everything is overpriced and super tiny.”

I feel your pain, anonymous Ballard buyer. I feel your pain.

Puget Sound Business Journal

Steven Goldsmith: For Seattle-area home shoppers, August was not enough of a good thing

The housing market showed few signs of wilting in the August heat.

…the overall market continued to be held back by a scarcity of listings. For the fifth month this year, the MLS said, pending sales in its 23-county area outpaced the number of new listings added to the inventory. The 9,921 new listings was was the lowest level since February.

We didn’t get much more than a short blurb from the PSBJ this month, unfortunately.

Tacoma News Tribune / The Olympian

Rolf Boone: Growth of South Sound home sales slowed in August

The South Sound real estate market cooled in August as sales of single-family residences in Pierce and Thurston counties failed to rise by a double-digit margin for the first time since February.

But let’s not get greedy, because sales still rose more than 7 percent in both counties from the same period a year ago, according to data released Thursday by the Northwest Multiple Listing Service.

Median prices, too, continued to rise in both counties last month, as did the number of pending sales, the data show.

“August continued a very busy spring/summer market,” said Ken Anderson, president and owner of Coldwell Banker Evergreen Olympic Realty of Olympia, in an email.

Even though this month’s Tribune / Olympian story is short, I appreciate that Mr. Boone at least got an independent quote from a local agent. Better than just copying the canned agent quotes in the NWMLS press release.

(Sanjay Bhatt, Seattle Times, 2015-09-03)
(Dan Cassuto, KING 5, 2015-09-06)
(Steven Goldsmith, Puget Sound Business Journal, 2015-09-04)
(Rolf Boone, Tacoma News Tribune, 2015-09-03)

The post August Reporting Roundup: “The Market Just Totally Sucks” appeared first on Seattle Bubble.

If we’re in the beginning of a serious bear market, will Seattle’s crazy real estate market finally start to slow?

One of the major causes of the last real estate bubble was capital flight from stocks into real estate, so it is possible that a crash in the markets will just heat things up even more. However, if a tanking stock market takes down the overall economy this year, it seems unlikely that already-high home prices will be able to keep increasing. Also, I haven’t done the in-depth research on this, but I feel like markets like Seattle and the Bay Area that are home to lots of tech companies probably have a soaring stock market to thank for much of the recent frenzy in the real estate market.

What say you? Assuming for a moment that the recent dip in the market isn’t just a temporary setback, will a bear market apply the brakes to Seattle’s speeding real estate market?

The post Will a Prolonged Bear Market Slow Seattle Real Estate? appeared first on Seattle Bubble.

I waited an extra day because there were only four articles out there about this month’s numbers, but nothing new showed up all day yesterday, so this is all we get.

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

Pent-up demand continues to fuel home sales around Western Washington with millennials, military families and relocating workers vying for limited inventory. Brokers from Northwest Multiple Listing Service say they’re not seeing a typical summer slowdown.

Commenting on a new report from Northwest Multiple Listing Services summarizing July activity, J. Lennox Scott, chairman and CEO of John L. Scott, Inc. said, “The Puget Sound housing market is sizzling hot, with the best July on record.” He expects inventory shortages will continue into the summer of 2016.
…
Commenting on the possibility of a “bubble market,” MLS director Darin Stenvers believes it is unlikely. “With broader government controls and enforcement of new banking/loan programs, the underlying instability is now gone.” Buyers are feeling confident that “home ownership is still the best investment they can make right now, and homes are still within reach for most segments of the market,” added Stenvers, the office managing broker at John L. Scott in Bellingham.

This month’s press release seems like it’s a lot longer than the typical ones put out by the NWMLS, and that “not a bubble” bit was stuffed in right near the end.

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

Seattle Times

Sanjay Bhatt: King County median home prices slip as market cools a bit

The median price of King County single-family homes sold in July slipped 3 percent over the month to $485,000, a surprising reversal for a month that brought peak prices in each of the past two years.

The drop comes after King County’s median home price hit a post-recession peak of $500,000 in June.

July’s median price, reported Wednesday by the Northwest Multiple Listing Service, represented a 3.6 percent gain over the past 12 months, the weakest annual gain so far this year.

The numbers suggest a cooling in an overheated market. From April through June, prices had jumped 9 percent to 12 percent from their year-earlier level, a pace far above the market’s historical average of about 4 percent.

I agree with Sanjay that the market may be cooling just a bit, but I disagree that the one-month price fluctuation is anything other than a change in the mix of homes that were sold. Oddly, this means I actually agree with Lennox Scott about something:

Lennox Scott, CEO of John L. Scott Real Estate, said the lower price in July also could be due to the mix of homes that sold.

Of course, Lennox only offers up that explanation when the price falls, not when it shoots up.

KING 5

Travis Pittman: No summer slowdown in home sales in Western Washington

It remained a seller’s market in Western Washington in July, something realtors say is due to more people moving to the region and not enough available homes to go around.

The Northwest Multiple Listing Service (NWMLS), a real estate industry-owned system which tracks home sales in 23 Washington counties, says realtors are not seeing the typical summer slowdown in home sales.

KING 5 took the opposite position of the Seattle Times, claiming that there is no slowdown. Of course, they pulled that claim straight from the NWMLS press release, so take that for what it’s worth.

Puget Sound Business Journal

Marc Stiles: Home prices fall in July, but that doesn’t mean market’s cooling down

Median home sale prices actually declined from June to July in some parts of the metro Puget Sound region, but other indicators show that unlike the weather, the housing market isn’t cooling off.

New numbers out Wednesday from the Northwest Multiple Listing Service (NWMLS) show the median July sales price of single-family homes had a month-over-month decrease of 3 percent in King County and 4 percent in Pierce County. Yet based on the total number of properties that sold, it was still “the best July on record,” said J. Lennox Scott, chairman and CEO of John L. Scott Inc.

Everything is great. There are never any storm clouds on the horizon. Continue buying and do not fear.

Tacoma News Tribune / The Olympian

Rolf Boone: No slowdown in South Sound housing market

The South Sound housing market remained as hot as the weather in July, as sales continued an upward march last month, rising more than 20 percent in Pierce and Thurston counties, according to new single-family residential data released Wednesday by the Northwest Multiple Listing Service.

But the hotter real estate market likely has been stoked by a key factor: There still isn’t much in the way of inventory for buyers.

All about that inventory.

(Sanjay Bhatt, Seattle Times, 2015-08-05)
(Travis Pittman, KING 5, 2015-08-06)
(Marc Stiles, Puget Sound Business Journal, 2015-08-05)
(Rolf Boone, Tacoma News Tribune, 2015-08-05)

The post July Reporting Roundup: Slowdown / No Slowdown Edition appeared first on Seattle Bubble.

During the last bubble it was nearly impossible to turn on the radio without hearing some form of scammy “riches in flipping” ad during the commercial break. I don’t listen to the radio that often, but in the rare instances that I do tune in recently I’ve been hearing a lot more of that same kind of garbage. For example, I’ve heard this one on KIRO more than a few times lately:

How would you like to make some serious cash flipping houses in your area?

Hi, I’m [censored], founder of the [censored] Real Estate Academy. Over the last few years my elite team of committed house flippers has been using my three step “Fortunes in Flipping” system to buy and sell properties for quick profits and long term financial gains.

Now it’s your turn to have the same investor success. For a limited time I will send anyone that calls a free copy of my “Fortunes in Flipping” kit that will show you how easy it is to get in, get out, and get paid! There’s no catch, I even pay the shipping cost.

In my free kit I eliminate all the guesswork and I break down the process for evaluating properties for a quick turn and instant profit and I show you how to access some very unique financing programs to finance your deals.

If you dig around online you’ll find that this particular scammer lures you in with the free seminar then tries to take you for a few thousand bucks for his three-day seminar. At the three-day seminar his slick salespeople will attempt to soak you for upwards of $30,000 to buy into his “system.” Oh, and the “very unique financing programs” apparently include financing real estate purchases on credit cards.

Yikes.

The post Scammy Real Estate Ads Back in Force 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.

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

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.
…
“Kitsap house sales are hotter than a firecracker,” observed MLS director Frank Wilson, the branch managing broker and Kitsap district manager at John L. Scott Inc. in Poulsbo. “Despite heat, vacations and holidays the market has not slowed. We continue to see good open house traffic, low market times and multiple offer situations,” he stated.

Multiple offers are common throughout the Central Puget Sound region.

“We see many multiple offers on properties,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, who described sales activity as “phenomenal.” For first-time buyers, the competitive bidding can be daunting, which he suggested underscores the importance of relying on experienced brokers. Anxious buyers have a sense of urgency as prices rise, he noted. “They need a great real estate broker to help guide them through multiple offer situations,” added Beeson, a member of the Northwest MLS board of directors.

Rising prices are prompting some house-hunters to broaden their search beyond primary job centers.

“More and more buyers are starting to chase the market northward as prices increase in King County, especially around Seattle,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynwood. [sic]

Happy days are here again for used home salespeople. You can feel their excitement oozing through the press release with phrases like “hotter than a firecracker” and “diving right in.”

It’s great times for everyone… except the people out there actually trying to buy a home.

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

Seattle Times

Sanjay Bhatt: Median price for single-family homes hits $500,000 in King County

But real-estate experts say this market is different in a number of ways. Buyers now must leap over many more hurdles to qualify for a mortgage. Hiring at technology firms has expanded the region’s economic base. And a drought in listings that surfaced in 2013 has no end in sight.

“I wouldn’t say we’re in a bubble,” said Alan Pope, a real-estate appraiser in Redmond. “I would say the balloon is growing, and I can’t tell when it’s going to stop.”

Lennox Scott, CEO of John L. Scott Real Estate, said that over the long term, homes in the region appreciate 4 percent annually. Home prices lost so much ground during the past recession that the market today is just slightly above where it should be by that measure, he said.

Home salespeople declare current frenzy market not a bubble. Film at eleven.

KIRO 7

Deborah Horne: Median single-family home in King County reaches $500,000

waiting several years for the right moment.
Within a week, they sold it for $529,000, nearly four times what they paid for it 22 years ago.

“It’s amazing. I could not afford to come back here and buy into this house,” said Meyer, who is retiring to Bellingham.

He said they wondered if they should wait another year, but thought interest rates might climb up by then.

“We thought you know, let’s get out of here. Let’s get going while the going’s good,” Meyer said.

Smart move. Now is a pretty terrible time to buy, but it’s a great time to sell.

KING 5

Travis Pittman: Average price of King County home rises to $500,000 in June

The median price for a single-family home in King County was $500,000 in June, up more than 10 percent from the same month a year ago.

Not much content in the KING 5 story, but they lose points for using average in the headline, even though they correctly cite $500,000 as the median in the text.

Puget Sound Business Journal

Marc Stiles: More buyers compete for fewer houses: Experts say this could go on for years

Typically home-buying activity falls off during the summer months, but not this year in the metro Puget Sound region, where buyers are competing to buy fewer homes while paying significantly higher prices.
…
Real estate brokers say first-time buyers are fueling the market as tenants grow tired of paying ever-rising apartment rents. In addition, more people are moving to the region to fill a growing number of jobs. Across the state, non-farm employment rose by 7,700 positions from April to May, according to early estimates from the federal Bureau of Labor Statistics.

The Puget Sound Business Journal is relatively light on any commentary beyond the press release as well.

Tacoma News Tribune / The Olympian

Rolf Boone:

The South Sound housing market in June had just about everything an owner would ever want if they needed to sell.
…
But here’s the catch: Can anyone actually find a house to purchase?

That might be the question on the minds of many buyers, because even though the South Sound housing market continues to sizzle like the weather, inventory got a little tighter last month.

Homes for sale are scarce across the entire Puget Sound region.

(Sanjay Bhatt, Seattle Times, 07.07.2015)
(Deborah Horne, KIRO 7, 07.07.2015)
(Travis Pittman, KING 5, 07.07.2015)
(Marc Stiles, Puget Sound Business Journal, 07.07.2015)
(Rolf Boone, The Olympian, 07.06.2015)

The post June Reporting Roundup: “The balloon is growing” appeared first on Seattle Bubble.

It’s not explicitly stated, but since most people aren’t referring to the price of food or clothing when they complain about a specific place being unaffordable, I think it’s safe to assume that Sawant is talking about housing affordability—probably mostly focusing on rentals. I was very curious how she intends to “make Seattle affordable,” so I headed over to her campaign website to read her measured, thoughtful opinions on this economic conundrum.

Let’s have a look at her “issues” page on the “Make Seattle Affordable for All” topic:

Our city is becoming increasingly unequal and unaffordable. In one Seattle, glittering fortunes are being made for the super–rich and the major corporations that dominate its landscape. The other Seattle, where the rest of us live, faces skyrocketing rents and underfunded services.

I think most people will agree with this sentiment, at least on a high level. I mean, it’s blatantly populist and I don’t think the “us versus them” mentality is a particularly productive form of politics, but at least she’s on-topic so far.

While the Mayor and City Council give sweetheart deals to billionaire developers, we’re left with “stakeholder” committees and empty promises.

All right, what exactly are these “sweetheart deals” that the “billionaire developers” are getting from the Mayor and City Council? Can you cite them specifically?

Instead of investing in desperately needed mass transit, this same arrogant political elite is doubling down on the Bertha boondoggle, threatening to rack up hundreds of millions of dollars in cost overruns while safety concerns mount.

Wait. Hold on. I thought we were talking about housing affordability. You know, “billionaire developers” and whatnot. What does the Highway 99 tunnel fiasco have to do with this? Please explain the connection.

The political system in our city and throughout the country is beholden to corporate cash. A Republican-controlled Congress brazenly champions the interests of Wall Street. Here in Seattle, where the Democratic Party has governed for decades, big developers and downtown business interests nonetheless dominate city politics.

I am starting to get the feeling that she is not even going to attempt to explain how she hopes to address affordability on this page titled “Make Seattle Affordable for All.”

I am committed to building an alternative to this model of corporate politics. We need political representatives who are independent of corporate cash and corporate parties, who will give voice to the needs and aspirations of working people.
…
In line with the principles of the political party I represent, Socialist Alternative, I pledged to stay accountable to working people by taking only the average worker’s wage. Seattle City Councilmembers pay themselves $120,000 per year – the second highest amount of any city council in the country. Inevitably, such a salary removes councilmembers from the realities of life for poor and working people.

I only accept $40,000 per year after taxes. This amount is roughly the full-time take-home pay of an average Seattleite. The remainder of my salary goes to a Solidarity Fund to help build social justice movements.

And that’s the end of this page on her site. I am rather curious if she is really living on just $40,000 a year, since the mortgage payment on the house she bought last year and refinanced a few months ago would likely eat up about half of her $3,333 monthly pay. But I digress.

If you click through to the fourth page of the “Issues” section of her campaign website, you finally come to a page titled “Affordable Housing for All.” Maybe we’ll have better luck learning her plan here.

Seattle is facing a severe housing crisis and District 3 is at its epicenter. The for-profit housing model is not working, with big developers and speculators pushing workers and even middle-class families out of the city. Meanwhile, the City Council is working on behalf of big business rather than ordinary renters and homeowners.

This sounds more promising. We’re finally getting to the meat of her plan to “Make Seattle Affordable.” Here is what appears to be the crux of her plan:

• We need rent control as an immediate step to address the crisis of out-of-control rents. The city council should immediately pass a resolution demanding the state government remove the ban on rent control, and bring a legal challenge to it. Most importantly, tenants, unions, and community organizations need to organize, building for major protests in Olympia to demand an end to the undemocratic state ban.
• Make big developers pay the maximum “linkage fee” possible to help fund affordable housing.
• Working and middle-class people need an affordable alternative to the skyrocketing private housing market! The city should provide a public option by building thousands of high–quality, city-owned housing units, rented at below-market rates. This can be financed by selling municipal bonds and making use of currently vacant city land.
• Seattle needs a Tenants’ Bill of Rights!
  • Tenants should have six months’ advance notice of a major rent increase, rather than the two months currently legally required.
  • Expand relocation assistance to those being economically evicted by out-of-control rent hikes. Tenants should receive the same $3,200 relocation assistance currently available for those evicted due to major construction.
  • Cap security deposits and move-in fees at no more than one month’s rent.
• Housing is a human right! Fully fund an emergency plan to immediately offer decent shelter for the more than 3,000 homeless people on Seattle’s streets.
• Mortgage relief for homeowners! Over 16,500 Seattle families have lost their homes to foreclosure since 2008. The city needs to stop dragging its feet and finally implement a principal reduction program for underwater homeowners to keep more families from losing their homes.

I’m not going to go over every one of these points, but I do want to address a few of them.

Good article linking #FightFor15
w/ affordable housing. We got the min wage ball rolling. Now we need #RentControl! http://t.co/jhDXpEN7wt

— Kshama Sawant (@cmkshama) June 1, 2015

At the top of her list is rent control—the idea that the government can just dictate a ceiling on rent prices or rent increases. Despite being totally illegal here in Washington State, rent control definitely makes for great hashtags and soundbytes. Unfortunately, economists are near-unanimous in their agreement that rent control does not work. You can read study after study after study after study and they all say more or less the same thing. The really strange thing here is that Sawant has a PhD in Economics. This is something that she should understand better than most people.

Sawant also says that the city should “implement a principal reduction program for underwater homeowners.” This too is a terrible idea. If you took out a mortgage that you can’t afford to pay back, there already exists a “principal reduction program” for you: either sell the home or walk away and give it to the bank. The city should not be in the business of bailing out bad borrowing decisions.

Her plans to improve tenants’ rights and build more homeless shelters both seem relatively reasonable, and will definitely help some people. But it’s her suggestion for “building thousands of housing units” that really comes closest to a solution that would actually help make Seattle more affordable. The housing market is subject to supply and demand. Prices are currently rising sharply because demand is increasing more quickly than supply.

You can solve this basic problem in one of two ways: Decrease demand or increase supply. Building lots and lots of new housing units so that supply can catch up to demand is the only reasonable way to address affordability. Now, I’m not sold on Sawant’s suggestion that these units should be city-owned and “rented at below-market rates,” but she does at least get close to the actual solution to the affordability problem with this proposal.

It doesn’t have the same populist appeal as rent control, but dramatically increasing housing supply is something that would actually work, and if Sawant really wants to “Make Seattle Affordable for All,” that is where she should be focusing her energy.

The post How Does Seattle City Councilmember Kshama Sawant Plan to “Make Seattle Affordable for All”? appeared first on Seattle Bubble.

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

J. Lennox Scott, chairman and CEO of John L. Scott, Inc. called 2015 “the best start ever for sales activity.” Citing MLS figures, he noted cumulative pending home sales in the four-county Puget Sound area for the first five months of the year are outpacing the previous record year of 2005. “This time,” he emphasized, “the housing market is built on a strong foundation of qualified buyers.”
…
“Locally, home prices are continuing to rise at a steady pace, and they continue to outpace both inflation and wage gains,” observed Mike Gain, CEO/president at Berkshire Hathaway HomeServices Northwest. Pent-up demand is pushing inventory lower, he notes. Gain believes the supply challenges could be alleviated if more sellers put their home on the market. “Sellers may never see a better time to be a seller,” commented Gain, a former chairman of the Northwest MLS board.
…
Mike Gain expects historically low interest rates, a growing economy, improving consumer confidence and consumer finances will continue to fuel activity and push up the numbers. “Anyone who can buy a home today at today’s prices with today’s low interest rates should do it. In my opinion, prices and monthly payments will never be lower than they are today.”

I love it when salespeople throw around over-the-top hyperbole and absolutes like “never.” No way that will ever come back to haunt them.

This month I could only find three articles in the local media outlets about the latest NWMLS numbers, despite waiting all weekend for more stories to come in. Apparently “yeah, it’s still a terrible time to be a homebuyer” is not considered very newsworthy.

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

Seattle Times

Sanjay Bhatt: Home-price boom: What $450K will buy you around Puget Sound

The [inventory] shortage in King County is historic: May marked the third month in a row the county had less than a month’s supply of homes and condos for sale, which hasn’t happened since at least 2004, according to a Seattle Times analysis of MLS data.

“You’re at crisis levels. Something’s got to be done,” said Stephen O’Connor, director of the Runstad Center for Real Estate Studies at the University of Washington. “There has to be some level of comprehensive strategy here to figure out how to bring in more supply.”

With interest-rate hikes on the horizon, buyers appear willing to duke it out in bidding wars and pay a premium for living in King County’s urban corridors to avoid long commutes and surging rents, real-estate agents say.

“It’s like buying a loaf of bread for $10 because there’s nothing left on the shelf and you’ve got company coming,” said Mark Ossinger, a Seattle-based designated broker for Fathom Realty.

Oh man, I am totally going to get into the bread sales brokerage business.

Puget Sound Business Journal

Marc Stiles: And you thought Seattle’s housing market couldn’t get any tighter

The number of condo and house sales in the central Puget Sound region jumped 15 percent last month over the previous year, even as the number of residences for sale dropped precipitously.

The result: an even tighter housing market with home prices climbing at more than 9 percent, according to data the Northwest Multiple Listing Service (NWMLS) issued on Thursday.

In a balanced market, there is a four- to six-month supply of inventory. But in King County there was only 1.2 months of inventory last month, and several neighborhoods near Seattle’s job centers had less than a month of supply.

To be honeset, there isn’t much substance to the PSBJ article this month. It was mostly just a slight rehash of the press release.

Tacoma News Tribune / The Olympian

Rolf Boone: Home sales rise, prices soar, inventories dip in latest Washington real estate report

Severe inventory shortages.

Prices up, and multiple offers for homes for sale in many neighborhoods.

According to the Northwest Multiple Listing Service, May was a great month to be selling a home but a not-so-good month if you were looking to buy.

“The crush between the lack of inventory and desperate buyers may soon generate the next TV reality show,” stated Dick Beeson, an MLS director and principal managing broker at RE/MAX Professionals in Tacoma.

Similar story in the News Tribune this month. I guess there is only so much you can say about low inventory.

(Sanjay Bhatt, Seattle Times, 06.04.2015)
(Marc Stiles, Puget Sound Business Journal, 06.04.2015)
(C.R. Roberts, Tacoma News Tribune, 06.04.2015)

The post May Reporting Roundup: Never a Better Market Edition appeared first on Seattle Bubble.

I don’t think we’re anywhere near in a position to worry about another bubble. The increase in appreciation has been pretty steady. It hasn’t gone up overnight.

– Deidre Haines, Broker with Coldwell Banker Bain

“Not anywhere near” definitely seems like a stretch to me. And here’s what “steady appreciation” apparently looks like to a home salesperson:

That spike is pretty much exactly what most people would call overnight. We went from prices falling by 18 percent year-over-year in late 2011 to prices up 18 percent year-over-year in early 2013.

I am also quoted in the article, so at least it’s got some balance.

The post Home Salesperson Quote of the Day appeared first on Seattle Bubble.

Disputes over the release of earnest money are extremely rare, but anyone who has ever been involved with one knows they can be an extremely miserable experience. For a buyer with limited funds it can mean a lengthy delay in being able to make an offer on another property. For both parties it can be very emotionally draining and expose them to the potential of paying attorney fees—both their own and those of the other party.

The most common scenario for an earnest money dispute is after a buyer terminates a contract based on the Form 35 inspection contingency. That contingency is based on a subjective standard, so assuming the buyer’s agent followed proper procedures to give notice, and that there’s no element of “bad faith” in the contract process, the buyer should be entitled to the return of their earnest money. Unfortunately the seller may act in an irrational manner, and refuse to sign the documents that an escrow will likely require allowing the return of funds. Escrows usually will require the signatures of all the parties because they do not want to risk being sued for an incorrect return of the funds, particularly on a transaction which they will not be making any money.

The NWMLS statewide forms (e.g. Form 21) attempted to deal with this problem by setting up a notice procedure which would allow the escrow to release the earnest to the party demanding it. Unfortunately very few escrows have been willing to follow that procedure, and not being a party to the contract, they have not been required to follow that procedure. Instead, if the parties did not come to an agreement the escrow would eventually deposit the earnest money into a Superior Court registry by initiating an interpleader action.

Fortunately the legislature has noticed this problem and passed HB 1730 (pdf) which applies to residential real property transactions. HB 1730 does several things. Most notably it requires that within 15 days after receipt of a written demand for the earnest money that the Holder of the earnest money:

1. Send a notice to all the other parties to the contract;
2. Release the funds to the demanding party; or
3. Interplead the funds.

A Holder following either option 1 or 3 will be protected from liability. Assuming a notice is sent, it will give the other parties 20 days to object to the release of the funds, and give them an address to send their objection. If no response is received within the 20 day period, the Holder has ten days to release the funds to the demanding party. If an objecting response is received, then the Holder has 60 days to commence an interpleader action, absent further agreement of the parties.

The notice is required to be sent to the known address and email addresses of the parties, and the Holder is not required to look outside its records to find an address. This makes filling in the address or email address (preferably both) of the parties on the purchase and sale agreement critical, as well as notifying the Holder of any change of address. [Note: It is somewhat unlikely the Holder would know the parties’ email addresses until after the parties return the Holder’s “Open Package.”]

HB 1730 is not effective until July 24, 2015, but it is effective as to any earnest money held on that date. That means that real estate agents should make sure at least the mailing addresses of the buyer(s) and seller(s) are included in their current purchase and sale agreements, as well as their email addresses if possible. And it also means that buyers and sellers should check to make sure those mailing addresses are included on any contracts that they sign. It is not exactly clear what will happen if that information is not provided, but one likely possibility is the escrow will start an interpleader action within 15 days of the demand for earnest money, and if that occurs, HB 1730 requires the court to pay the Holder their attorney fees and costs, leaving less money for the buyer(s) and seller(s) to fight over.

Disclaimer: This piece is not intended to be legal advice, but is merely the author’s understanding of the operation of the new legislation. Persons needing or wanting legal advice would need to contact and hire their own attorney. Real estate brokers may want to also contact their designated brokers.

The post Earnest Money Disputes and HB 1730 appeared first on Seattle Bubble.

Last week local brokerage Quill Realty (spotlighted in this 2014 post) announced that they will be withdrawing from the NWMLS completely in order to “offer broker services to sellers who want to avoid the cost of a cooperating broker.”

As longtime readers of this site know, I have something of a love-hate relationship with the NWMLS. I love how open they are with much of their data, and I definitely love that listings are kept current in their database, but I hate many of their backward and overbearing rules, and I’m not a fan of some of their data processing methods.

That said, being listed in the local MLS has been the only way to reliably sell your home quickly and for the best price, even back when the MLS was literally a 3-ring binder with listing printouts.

So how does Craig (owner & managing broker of Quill) hope to compete post-MLS? Here’s an excerpt from his press release:

This will allow Quill to sell homes while charging owners only its own, single broker commission of 1%. So home owners will soon be able to sell their houses using the services of a fully licensed REALTOR for far less than the 3% to 6% of the MLS.
…
Quill anticipates being able to put its listings on numerous, highly trafficked web sites, such as Zillow, Redfin, and Realtor.com, exactly those places where buyers are searching today. All without using the NWMLS and without paying the commission of a cooperating broker who represents the buyer.

Will the appeal of paying just one percent of the sale price to a real estate broker be enough to lure sellers to take the plunge? It’s not the first time this kind of thing has been attempted. In fact, it is very similar to the model Redfin began with ten years ago (although Redfin was focused on buyers and Quill is targeting sellers). Over the years, Redfin’s fees have gone up and their service has become closer to what’s provided a typical agent.

The biggest question I had for Craig was whether buyers who are already working with an agent would be steered away from Quill listings since Quill will not be offering to pay the typical three percent to the buyer’s agent. Here’s what Craig had to say about that:

First and foremost, Quill will be relying on the legal and ethical duties of real estate brokers. This conduct you describe may be illegal, and it is grossly unethical. So I believe this won’t happen as often as you are assuming.
…
Buyers of Quill listings will know as much about the listing as their agent. They won’t need their agent to tour the home, and they won’t need their agent to make an offer. At the end of the day, I like how those disincentives stack up. Those unethical brokers who might be inclined to steer clients away from Quill-listed homes will soon realize that they are making a poor decision. They will soon realize that it is in their interests to assist their clients in buying the homes their clients want to buy, whether listed with Quill or any other real estate firm.

Craig also goes into more detail on his plans on the Quill blog and in a recent Rain City Guide post.

Quill’s new model is similar to what Surefield launched last November (Surefield is also a Seattle Bubble advertiser, and is a Quill partner). The differences between Surefield’s model and Quill’s new model are that Surefield is still an NWMLS member, they charge slightly more at 1.5%, they offer a $2,000 flat commission to buyers’ agents, and their listings include their signature 3D virtual tour on their website.

The current listings-scarce market definitely seems like an ideal time to try something like this. Buyers are desperate for listings, and if they find something they want, they’re most likely going to do whatever it takes to see it, whether it’s listed on the MLS or not.

I’m definitely a fan of moves that will save home buyers and sellers money and bring further pro-consumer change to the real estate industry. I’m not yet convinced that consumers are ready for something this dramatic, and I still think Craig has an uphill battle ahead of him when it comes to dealing with the entrenched interests of buyers’ agents, but I do hope he succeeds.

The post Quill Leaves NWMLS, Dramatically Slashes Listing Cost appeared first on Seattle Bubble.

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

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

Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.
…
Within the four county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, “That is super amazing.”
…
[Principal managing broker at RE/MAX Professionals in Tacoma and MLS director Dick] Beeson cautioned buyers against “playing games” with sellers. “The new normal for buyers is that the quest for the perfect home may have to wait,” suggested Beeson. “You should buy now, get in the mix, buy a home and build equity for a future decision,” he advised. “Don’t wait to pay more for the same home next year.”

Brokers do not appear to be worried about a housing bubble.

“Some are talking about the potential for another housing bubble given the lack of homes for sale and the bullishness of buyers in bidding up properties,” acknowledged [Windermere Real Estate president OB] Jacobi. “For now,” he said, “I believe there are sufficient safeguards in place to keep this from happening.”

Classic Beeson. He’s got such a great track record for predictions. I definitely think it is a good idea to take his advice that you should buy now, don’t wait! P.S. – That was extremely sarcastic.

I’d also love to know what “safeguards” OB Jacobi believes are in place to keep another bubble from happening. You know, other than wishes on stars.

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

Seattle Times

Sanjay Bhatt: King County home prices surge, just shy of 2007 peak

Buyers have hit the gas, fearing higher interest rates and offering premium prices in the face of a record low inventory of homes for sale.

“This is a historic moment in time,” said J. Lennox Scott, CEO of John L. Scott brokerage. “Housing is in a pressure cooker in the metro area. We’re going to be here for a while.”
…
One extreme example of that pressure is a 1,120-square-foot north Ballard home that sold last month for $158,000 above its asking price. While Windermere broker Phil Greely said he’s delighted with the price he got for his seller, “for buyers it’s a slightly depressing story.”
…
The three-bedroom, one-bath house drew 13 offers, most with so-called escalator clauses that ratchet up to compete with higher bids. The top offers waived every consumer safeguard in the contract, known as “contingencies,” effectively giving up their earnest money. The winner put up roughly $100,000 in earnest money, Greely said, and released half of it immediately to the seller once the offer was accepted.

The selling price, 28 percent above the list price, was $717,000 — an eye-popping $640 a square foot.

I think we can officially declare that whether or not this market is a “bubble,” it’s definitely become completely absurd. If I was dead-set on owning a home, I would rather move away from the Seattle area entirely than pay over $700,000 for a 1,100 square foot shack in Ballard. Ridiculous.

Everett Herald

Herald Business Journal Staff: Snohomish County sees 35-percent increase in home sales

They should just put up the ‘For Sale’ signs with the ‘Sold’ placards already attached.
Or that’s what it feels like.

Snohomish County saw a 35-percent increase in closed sales year over year for the month of April, according to numbers released on Tuesday by the Northwest Multiple Listing Service.

Unfortunately this month’s Herald piece is little more than a regurgitation of the NWMLS press release. It’s slightly better than having no story at all though, I suppose.

Puget Sound Business Journal

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

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

For some, myself included, that’s true.

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

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

Buying a home may look attractive if your rent just went up, but in this extreme seller’s market the appeal will evaporate pretty quickly once you actually realize how much time and money it will take to buy a home.

Tacoma News Tribune / The Olympian

Rolf Boone: Lack of inventory a problem as South Sound housing market remains hot

The South Sound housing market remained hot in April as closed sales of single-family residences jumped by more than 20 percent in Pierce and Thurston counties, according to housing data released Tuesday by the Northwest Multiple Listing Service.

But can all potential buyers or sellers actually find a single-family residence or move-up property to buy?

That’s increasingly becoming the challenge for both markets as the number of single-family residences for sale fell 16 percent in Pierce County from the period a year ago, and fell 4 percent in Thurston County.

And that means the inventory of single-family residences on the market continues to drift lower, the data show.

Nice piece, if rather short, from The Olympian this month.

Bonus: You can listen to a short segment from yesterday’s “Seattle’s Morning News” with Dave Ross in which I talk a little bit about the local real estate market (my segment starts around the 13 minute mark).

(Sanjay Bhatt, Seattle Times, 05.05.2015)
(Herald Business Journal Staff, Everett Herald, 05.05.2015)
(Emily Parkhurst, Puget Sound Business Journal, 03.06.2015)
(Rolf Boone, The Olympian, 05.05.2015)
(Dave Ross, Seattle’s Morning News, 97.3 KIRO, 05.06.2015)

The post April Reporting Roundup: “You Should Buy Now” Edition appeared first on Seattle Bubble.

This story by KUOW’s Joshua McNichols is a couple weeks old, but he hits the nail on the head, and I wanted to make sure it wasn’t overlooked. Why This Rickety Building Lost The Fight Against Rising Rents

Frustrated renters often blame developers. But the reality is more complicated…
…
The Summit Inn started out as housing for people with mental health problems. It morphed into an artists’ hub over time because of its former owner, Peter Sikov, whose motto was to “create places where things can happen.”
…
Rents at the Summit Inn stayed low because Sikov didn’t maintain the building much. Over time, it slid into disrepair.
…
Last year, the Seattle City Council passed a law requiring that all rentals meet a standard. Apartments would be subject to random inspections.

Sikov balked. And at the end of 2014, he sold the Summit Inn for twice what he paid in 1998.
…
That’s when Brad Padden entered the picture.

“We bought the building at today’s market rates,” Padden says. “There was no discount to us so that we could continue with that kind of patronage of the residents there.”

Padden and his business partner bought the building for almost $3 million.
…
“When you buy a $3 million building, and you put $2 million into it, you have to recoup those costs,” he says.

You should read (or listen to) the entire story.

As Joshua points out, an investor can’t buy an apartment and increase the rents if the previous owner doesn’t first put it up for sale. If you insist on having someone to blame, perhaps you should be blaming the sellers, not the buyers.

The post KUOW Nails the Problem of Placing Blame for Rising Rents appeared first on Seattle Bubble.

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

Frenzied Market Frustrating Buyers

Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. Figures just released for March show 11,408 pending sales during the month while only 10,505 sellers listed their homes for sale during the same period.
…
The multiple offer market has become commonplace on well-priced new listings, observed John Deely, principal managing broker at Coldwell Banker Bain. However, he cautioned, “Some sellers are pushing pricing boundaries and are not seeing the same action as their well-priced competition.”
…
Deely, a member of the Northwest MLS board of directors, said buyers are flooding into the Greater Seattle market due to abundant job opportunities. He also attributed the high demand to low interest rates and skyrocketing rents. “Some high demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” according to Deely.

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

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

Seattle Times

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

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

The number of available homes for sale has been at historic lows in recent months, helping drive up prices.
…
Multiple offers have become commonplace across the region because of the shortage of homes for sale. In March, King County had 1.3 months’ supply of homes, while Seattle had less than a one-month supply.
…
As the start of the spring season, March is typically a very good month for sales, Scott said. But coming out of a mild King County winter where sales didn’t slow down as they usually do, March’s sales have made the lack of inventory more severe.

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

Seattle P-I

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

KIRO 7

Deborah Horne: Seattle housing prices skyrocket

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

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

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

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

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

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

KING 5

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

Buyer anxiety. Frenzy market.

Those are two descriptions about the current status of the Western Washington housing market given Monday by the Northwest Multiple Listing Service.
…
For those buyers who can’t win a bidding war, they’re left to try to find an affordable place to rent.

Good luck with that.

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

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

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

Puget Sound Business Journal

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

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

For some, myself included, that’s true.

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

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

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

Tacoma News Tribune / The Olympian

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

Prices are up, inventory is down and real estate officials seem stretched as they attempt to find the sturdiest metaphors to describe a sizzling seller’s market.
…
“The multiple-offer market has become commonplace on well-priced new listings,” said John Deely, principal managing broker at Coldwell Banker Bain, in a NWMLS release.

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

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

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

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

The post March Reporting Roundup: Anxious Frenzy Edition appeared first on Seattle Bubble.

…Eve and Charles told us they were putting the property up for sale. Who could blame them? The building is a century old and so much work went into maintaining it, especially for a couple of people who, also, are aging. But it’s prime real estate, right on the water with a view that would make even Donald Trump drool. So we had a good idea of what would happen after the sale went through. Skyrocketing rents and a landlord we’d never see, much less ever know.
…
No one begrudges your interest in a profit. After all, spending millions on a building is no small thing; you should indeed expect a sound return on your investment. But if that means that low-income, older tenants who have lived in the same place for decades must leave their homes, and likely their city, in search of affordable rents, then let’s be honest. You aren’t just in the real-estate business. You’re in the business of creating unaffordable housing.

Yes, it is sad that the long-time tenants of this apartment will need to move. No, it is not the investor’s fault. If you must assign blame, point the finger at basic supply and demand.

On the supply side, building policy in the Seattle area makes new construction expensive, time-consuming, complex, and in some places thanks to restrictive zoning and height restrictions, downright impossible.

On the demand side, the Seattle-area economy is currently booming, with high-paying tech jobs leading the way. People are moving to King County in record numbers.

Investors are not causing unaffordable housing. They are an effect of an economic system running on overdrive.

When the timer expires on your longtime bargain on a water view rental it feels good to have someone to point the finger at, but blaming the investors is just dumb.

The post Don’t Blame Investors For Unaffordable Housing appeared first on Seattle Bubble.

Mapping King County’s disappearing middle class

The map is cool (click through to the article for an interactive version), and Gene’s overall point is interesting (that the middle class is stagnating while low and high income households are both increasing), but this is the part that jumped out to me as particularly relevant to the local real estate market:

investment returns — which many of the ultrarich live on, rather than salaries — are excluded from household-income calculations by the Census Bureau

Strong increases in high income households will certainly drive up home prices, but I think investment returns may be causing some of the recent disparity between incomes and home prices. The Seattle area is strong market for tech and startup jobs where equity is a big part of compensation. Since this equity is not considered in median or per-capita income data it stands to reason that when the stock market (and in particular the tech market) is doing well local home prices are likely to rise more quickly than local incomes.

Unfortunately no good data exists (that I know of) on the source of money that poeple are using to buy homes. There is data on all-cash purchases, but our last look at that data (through 2011) showed that most of those were focused on the low end of the market, probably mostly rental investment properties or flips. The best proxy I can think of would be to look at what percentage of homes are being bought with more than twenty percent down, but not all-cash. I would hypothesise that those purchases are likely to represent people buying expensive homes to live in with the help of a large investment return.

Two thirds of the 31 percent that Seattle-area home prices fell after the bubble (per Case-Shiller) came between November 2007 and March 2009, when the Nasdaq fell 54 percent. I think it’s likely that good times in the tech stock market has a greater effect on Seattle-area home prices than most other areas (the Bay Area being the other obvious candidate for such a correlation).

I’ll be digging into this to see what kind of data I can dig up on this topic. Let me know if you’ve got any ideas in the comments below.

The post Are Seattle Homes Being Purchased With Income, Or… appeared first on Seattle Bubble.

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

Favorable weather and restored confidence are propelling home buying activity around Western Washington to the highest level in nearly a decade, according to Northwest Multiple Listing Service sources.

“The pent-up demand being unleashed has rocketed pending sales back to the levels of our record year in 2006,” said Ken Anderson, president/designated broker at Coldwell Banker Evergreen Olympic Realty in Tumwater. Buyers have come off the sidelines, the former MLS director commented, adding “At the same time, homes for sale are near a 10-year low.”
…
“Listings are flying off the shelf faster than allergy medicine in this early spring market,” quipped MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo. He said the brisk activity is posing challenges for buyers. “They will probably make several offers before one is accepted and they just need to expect to be competing with others,” he cautioned.
…
“The housing market is on fire,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Due to the backlog of buyers and shortage of homes available for sale, we are experiencing multiple offers on nearly every new listing. This is creating price appreciation where 90-plus percentage of the sales activity is taking place.”

It’s on fire!

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

Seattle Times

Sanjay Bhatt: King County home prices up 6% from a year ago

The drought in local homes for sale, combined with heavy demand from buyers, has real-estate brokers openly worrying that the pressure on prices could become toxic.

“We’re to the point now where I’m worried about another bubble,” said Bill Groen, a veteran broker at Keller Williams Realty in Bothell. “I worry about affordability throughout King County and South Snohomish County.”

Trevor Smith, managing broker of Locality Seattle, said he’s concerned when he sees homes that need a lot of work receiving multiple offers.

“It’s important for the buyer to keep their wits about them and not get caught in the frenzy,” Smith said.

Whoa. Agents openly worrying about a new real estate bubble? That’s definitely not in the NWMLS talking points. Good to see Sanjay Bhatt and the Seattle Times pushing beyond the rah-rah press release fluff from the NWMLS, as usual. Such a refreshing 180-degree change from where we were with Elizabeth Rhodes during the last bubble.

Seattle P-I – MIA

Everett Herald

The Herald Business Journal Staff: Bumper crop of buyers despite limited supply of homes

An often warm and sunny February brought out more and more people looking to buy homes, but in a market with fewer properties available.

“Undeniably, our unusual spring-like weather has not only fueled and jump started an early allergy season, but the market as well,” said Diedre Haines, Coldwell Banker Bain’s principal managing broker, in a statement.

Sadly, the Herald’s effort this month is basically just a reprint of the NWMLS press release.

Tacoma News Tribune / The Olympian

C.R. Roberts: Home sales are hot and prices are up as inventory dwindles in Pierce, Thurston counties

Blame the nice weather and the cockeyed optimism that accrues in an economic recovery.

The real estate market is back. Sales are up, Inventory is down and the price of homes has increased.
…
“The pent-up demand being unleashed has rocketed pending sales back to the levels of our record year in 2006,” said Ken Anderson, president and designated broker at Coldwell Banker Evergreen Olympic Realty in Tumwater.

Buyers, Anderson stated, are leaving the sidelines, while “at the same time, homes for sale are near a 10-year low.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, was more effusive still.

“The housing market is on fire,” he said in Thursday’s NWMLS news release.

“Effusive,” heh.

Puget Sound Business Journal

Marc Stiles: Seattle-area home sales rocket back to 2006-era levels

A new report shows just how hot the Puget Sound region housing market is.

Even though more people are putting their houses and condos on the market, it’s still not enough to keep up with demand, and the inventory of available properties is less than it was a year ago, according to the report on February sales that the Northwest Multiple Listing Service issued Thursday.

This month the Seattle Times was the only local outlet to print much more than a mild rewrite of the NWMLS press release.

(Sanjay Bhatt, Seattle Times, 03.05.2015)
(The Herald Business Journal Staff, Everett Herald, 03.05.2015)
(C.R. Roberts, Tacoma News Tribune, 03.05.2015)
(Marc Stiles, Puget Sound Business Journal, 03.06.2015)

The post February Reporting Roundup: Market on Fire Edition appeared first on Seattle Bubble.

For those who have been living in a TV culture vacuum for the last seven years, Parks & Recreation was an NBC TV show about local government and politics in a small fictional Indiana town. Although the show never really ventured to the west coast, they managed to slip a 30-second gag about the Seattle real estate market into their series finale last week.

I got a laugh out of it, anyway. Although, the thought that “giant commission checks” will still be common for real estate agents nearly a decade from now is somewhat depressing to someone who would like to see more disruption in that part of the market.

You can pre-order the complete series of Parks & Recreation on DVD on Amazon here.

Note to NBC lawyers: This 36-second clip is posted under the Fair Use Doctrine, for purposes of commentary.

The post Seattle Real Estate in 2023 (via Parks & Recreation) appeared first on Seattle Bubble.

Today’s the big day for Zillow and Trulia, as they complete their big merger. John Cook over at GeekWire has a good write-up: Here is Zillow’s big concern as it prepares to gobble up rival Trulia

One of the biggest concerns facing Zillow is whether it can properly integrate its long-time rival.

Trulia is a large and complex publicly-traded company, with more than 1,100 employees, 125 multiple listing services partners and monthly visitors that top 55 million.

Competently digesting San Francisco-based Trulia — which will operate as an independent brand — will not be an easy task. The integration may take longer that anticipated, and some key Trulia staffers may leave during the process. The deal also may serve as a distraction to Zillow’s historic growth.
…
Acquisitions of this size have been known to derail the acquiring company, disrupting the culture and sending the merged entity into a tailspin. (Remember the outcome of AOL-Time Warner).

In other words, they are a big risk.

I don’t really have anything more to say on the matter than what I said when the merger was initially announced in July. Combining two money-losing, “high growth” real estate advertising platforms chock-full of lousy data under the leadership of a CEO with a publicly-stated interest in bad data is noteworthy because of the large sums of money involved, but it will matter very little to you, the real estate consumer lead.

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

— Spencer Rascoff (@spencerrascoff) July 29, 2013

The post Zillow / Trulia Merger to Complete Today appeared first on Seattle Bubble.

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

Spring market "not waiting for tulips" but limited inventory frustrates homebuyers

Home sales this super bowl season outpaced a year ago as sidelined buyers emerged to compete for limited inventory, according to brokers who commented on January activity.

New figures from Northwest Multiple Listing Service show year-over-year increases in pending sales, closed sales, and prices, while inventory fell by double digits.

“The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker,” lamented MLS director George Moorhead, designated broker and owner at Bentley Properties.
…
Moorhead believes inventory shortages are due in part to hesitant sellers. “Sellers who would like to enter the market are holding off for two main reasons,” he suggested, adding, “Either they cannot find the next home to move up/down to, or they purchased between 2005 and 2007 and may still be underwater.” Sellers who were foreclosed or completed a short sale during the Great Recession are becoming eligible to purchase a home again, Moorhead noted. “This will bring an altogether new segment of buyers who are more savvy and cautious” so they won’t repeat past mistakes.

Moorhead also credits new loan programs, revised loan programs, and a general easing of guidelines for buyers with making home buying more attainable. “The only holdback is inventory or credit scores,” he suggested.

Northwest MLS director Frank Wilson echoed that notion. “It’s almost the perfect storm: low interest rates, low inventory, pent up demand, and a pipeline of sidelines buyers who could not buy because of a past short sale or foreclosure.” Their two year to three year waiting period is up and they are looking again, he reported.

Wilson, branch managing broker at John L. Scott in Poulsbo, said the spring market is not waiting for the tulips this year – “spring has already sprung. We are seeing an increase in traffic at our open houses with more buyers out looking at our limited inventory.”

When we’re talking about the housing market, it is definitely a good idea to bring up tulips, but not for the reason Mr. Wilson seems to think.

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

Seattle Times

Sanjay Bhatt: Tight house supply pushes prices up in King County

Last month’s median price of single-family homes sold in King County was $441,500, nearly 8 percent higher than in January a year ago.
…
Inventory remained tight, the MLS said, with a two-month supply; a supply of four to six months is considered a balanced market.

Brokers say the shortage is worse than the numbers show because a significant chunk of the two-month supply isn’t in salable condition.

“We’re a fast-growing area with not enough houses and condominiums on the market,” said Alon Bassok, a researcher at the University of Washington’s Runstad Center for Real Estate Studies. “We can expect to see housing prices go up.”

That comment about “a significant chunk” of homes on the market not being in “salable condition” is super worthless. How much exactly is a “significant chunk”? Is the number or percentage of current inventory that isn’t in “salable condition” larger than it is in a typical market? Much like “open house traffic,” this is one of those claims that home salepeople like to throw out there to make the market sound hotter than it is, without having to provide any hard data to back it up.

Seattle P-I

Aubrey Cohen: Supply of houses for sale in Seattle remains tight

Prospective home buyers continue to have little selection in and around Seattle, the Northwest Multiple Listing Service reported Thursday.
…
“We just really are a fast growing city without enough inventory on the market,” said Alon Bassok, a research scientist at the Runstad Center for Real Estate Research at the University of Washington. “Limited inventory, in this case, means to me that we’re going to see prices go up even further.”

In addition to the lack of homes currently for sale, the rental market is also tight and construction of new homes isn’t keeping pace with demand, Bassok said. “So there’s pressure on all sides.”
…
In a listing service news release, George Moorhead, designated broker and owner at Bentley Properties, said: “The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker.”

Prospective sellers are holding off because they can’t find another home or because they still owe more than their homes are worth, Moorhead said. Meanwhile, he added, new buyers are hitting the market, thanks to a new federal program for people with low down payments, an easing of lending guidelines and the expiration of waiting periods during which people whose homes were foreclosed on or who went through a short sale during the recession were not eligible for another mortgage.

Bassok agreed these factors are at play, but said they are secondary compared with the general influx into Seattle and lagging construction of new homes. He said people able to buy again after a foreclosure or short sale aren’t able to compete with new arrivals. As for homes still being worth less than the mortgage balance, he added, that could be the case in some outlying areas, but not in the core of Seattle, between Sodo to the south and 85th Street to the north.

Hah! Gotta love a little academic smackdown. Calling out home salespeople on their nonsense.

Tacoma News Tribune / The Olympian

C.R. Roberts: Home prices up, inventory down in Pierce and Thurston counties

Home prices are up; the inventory of available properties is down; and now is the time to buy, if you’re looking to buy.

That was the message Wednesday as the Northwest Multiple Listing Service released the latest data concerning home and condominium sales activity and prices.

“The numbers are as good as we could hope for,” said Dick Beeson, a member of the service’s board of directors and the principal managing broker at Tacoma’s Re/Max Professionals.

His advice for people considering buying a home?

“You’re going to have to make decisions more quickly,” Beeson said. “You’re going to have to step up to the plate and do your homework. You won’t have the luxury of picking and choosing that you had last year.”

JUMP IN NOW! DON’T THINK! JUST DO IT NOW!

Puget Sound Business Journal

Ben Miller: Where are the Seattle-area homes for sale? Inventory shrinks

There are a lot fewer Seattle-area homes for sale right now than there were a year ago.
…
In King County, there are only about two months of home supply for sale; real-estate brokers say a healthy balance between supply and demand is a four- to six-month supply.
…
Brokers lamented the tight inventory situation.

The PSBJ article this month was very light. I’ve quoted almost half of it above.

(Sanjay Bhatt, Seattle Times, 02.05.2015)
(Aubrey Cohen, Seattle P-I, 02.05.2015)
(C.R. Roberts, Tacoma News Tribune, 02.05.2015)
(C.R. Roberts, The Olympian, 02.05.2015)
(Ben Miller, Puget Sound Business Journal, 02.06.2015)

The post January Reporting Roundup: NWMLS Tulips Edition appeared first on Seattle Bubble.

Stop Complaining That I, Zathbog of Planet Cibwarv, Am Inflating U.S. Housing Prices

I’m told there’s a familiar narrative that unfolds whenever you try to buy property in a cosmopolitan American city these days. You find a place that you like, put in a bid that’s well above the asking price (just to be safe), and prepare to celebrate, even though the place itself isn’t very nice. It actually pretty much sucks. But it’s a place, and it’s sort of within walking distance of some stuff, so you’re excited. Then you get a call from your broker, who says that you’ve been outbid. “Don’t tell me,” you say. “Yup,” she replies. “It’s yet another alien gazillionaire parking cash in American real estate as a hedge against the volatile economy of his home planet.” This story must be getting old, but you have to stop complaining. It’s simply how the intergalactic economic system works now.

I understand your frustration—really, I do. Because of alien magnates like me, you can’t afford to own property (or even part of a floor of a property) in the city where you work and live. And it’s not like you’re middle-class or anything. You and your spouse make a lot of money at the corporate jobs you took so that you could afford to live in neighborhoods full of competing chain pharmacies and consumer banks. You’ll just have to come to grips with the fact that you’re not rich enough. You could look into the interstellar mining industry, where I made my gazillions, but—oh, wait, I forgot, your spaceships are awful and can’t even get to the star systems with valuable deposits. Never mind.

Read the rest…

The post A Humorous Take on Foreign Buyers Driving Up Prices appeared first on Seattle Bubble.

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

Local real estate leader calls December "One of best on record"

Real estate brokers around Western Washington reported a strong finish to 2014. December’s sales outpaced the same month a year ago by double digits, according to new figures from Northwest Multiple Listing Service.

“December was one of the best Decembers on record,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate upon reviewing the latest statistics from the listing service.
…
Commenting on the combination of scarce inventory in some areas and expectations of rising interest rates, the head of one large real estate company advised, “Anyone thinking of buying a home should do it early in 2015!”

“Prices, interest rates, and rents will continue to rise,” stated Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he explained, adding, “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase.”

“Buy now! The price is only ever going to go up, up up!” Gee, now where have I heard that before…

Oh yeah only from basically every single real estate agent prior to the collapse of the bubble. But wait, didn’t home prices totally crash, while interest rates simultaneously fell to historic lows? Don’t you worry your pretty little head about that. Surely it could never happen again. Never ever.

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

Seattle Times

Sanjay Bhatt: Flurry of year-end home sales brings strong finish to 2014

King County’s housing market ended 2014 with a flurry of sales, but with the lowest supply of active listings in any month going back more than a decade.
…
That crunch affected total sales: The MLS reported 24,393 sales of single-family homes for the year, 300 fewer than in 2013. In the previous five years, total sales volume climbed each year in King County.
…
The $440,000 median price of single-family homes in 2014 was 6 percent higher than in 2013, MLS data shows.

“I’m looking forward to 2015,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “It’s just going to be a very healthy, steady year. I don’t think we’ll see price increases off the charts.”

The initial version of the Seattle Times story focused primarily on the very slight decrease in annual sales rather than the crazy low supply of listings on the market. The story was updated before the end of the day to this version, which has a more complete view.

It’s interesting that Mike Gain gave the Seattle Times a much more toned-down quote than what he provided to the NWMLS for their press release.

Seattle P-I

Aubrey Cohen: Supply of homes for sale falls even more

It’s getting even harder to find a home to buy in the Seattle area, according to a new report.

King County had just 1.39 months’ worth of houses for sale, at the current sales pace, in December, the Northwest Multiple Listing Service reported Tuesday. That’s down from 1.74 months last December and 1.96 months in November, and well below the four to six months considered balanced between buyers and sellers.

Supply is even tighter in Seattle itself, at 0.86 months, down from 1.19 months a year earlier and 1.25 months in November.

“It’s phenomenal,” said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington.

Inventory fell because new listings ticked down slightly from a year ago in Seattle and countywide, while sales jumped 15 percent and 10.5 percent, respectively. O’Connor speculated that buyers are acting now because they see mortgage interest rates going up, along with prices.

Hmm, what happened to Glenn Krellin? Can’t say I’m a fan of the breathless tone of the quote provided by his stand-in Stephen O’Connor. I mean, tight supply is an interesting phenomenon, but calling it “phenomenal” has a strong positive implication that I doubt many home buyers would agree with.

Everett Herald Business Journal

Dan Catchpole: County housing market finishes strong in 2014

The housing market in Snohomish County and around metro Puget Sound finished strong in 2014.
Residential sales and median home prices climbed in December compared to the same month last year, according to data released Tuesday by the Northwest Multiple Listing Service.
…
But while more houses and condos sold, new listings did not keep pace. The county’s only has enough homes for sale to feed demand for about two months, according to NWMLS. King County has lowest supply of listings. It has less than six weeks of supply.

Hey, the Herald decided to post something this month. There isn’t much “meat” in their story, but it’s better than nothing.

Tacoma News Tribune / The Olympian

John Gillie: Median home prices jump nearly 10 percent in 2014 in Pierce County; 7 percent in Thurston

A tight housing market where demand is outpacing supply could drive prices higher for Western Washington homes and condominiums, real estate experts are predicting for the coming year.

Over the past year through December, median home prices have jumped by 6.41 percent in King County, 6.68 percent in Thurston County and nearly double digits, 9.76 percent, in Pierce County, according to new December 2014 statistics from the Northwest Multiple Listing Service.

The median home and condo sales prices in December in King County increased from $375,900 in December 2013 to $400,000 last month. In Pierce County, the median sales prices increased from $205,000 to $225,000 in that same period. Thurston County’s sales prices jumped from $224,950 to $239,975 from December 2013 to December 2014, said the listing service.

While home prices were moving the right direction for sellers, the market has yet to return to pre-recession highs, said Michael Robinson, residential investment specialist at Windermere Professional Partners in Tacoma. That high was $285,000. The low in February of 2012 was $185,000.
…
Robinson said that as long as interest rates remain low, the Pierce County market is affordable to many potential buyers.
…
“Prices, interest rates and rents will continue to rise,” said Mike Gain, chief executive of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he said. “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase,” Gain said in a news release.

And the bait has been taken. Buy now! Don’t wait!

Puget Sound Business Journal

Marc Stiles: Puget Sound region sees huge jump in million-dollar home sales in 2014

The prospect of higher interest rates spurred home-buying activity last month in the greater Seattle area, where the number of pending sales hit the highest level in nine years.

Sales of million-dollar-plus properties in King County jumped significantly last year. According to the MLS, nearly 2,000 homes priced at $1 million and up sold in 2014. That’s up more than 25 percent compared to 2013.
…
Reflecting the strong regional economy, the overall housing market is firing on all cylinders.

I rather doubt that sales volume has much to do with “the prospect of higher interest rates.” More likely it’s entirely due to the last bit quoted there: the Seattle area’s roaring economy.

(Sanjay Bhatt, Seattle Times, 01.06.2015)
(Aubrey Cohen, Seattle P-I, 01.06.2015)
(Dan Catchpole, Everett Herald Business Journal, 01.06.2015)
(John Gillie, Tacoma News Tribune, 01.06.2015)
(John Gillie, The Olympian, 01.06.2015)
(Marc Stiles, Puget Sound Business Journal, 01.06.2015)

The post December Reporting Roundup: “Buy Now, Don’t Wait!” Edition appeared first on Seattle Bubble.

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

Real estate brokers say showings, offers "still going strong" despite "seasonally adjusted" inventory

Buyer interest remains high and many good values exist for those whose holiday wish list includes a new home, according to brokers with Northwest Multiple Listing Service. A new report from the MLS summarizing November activity shows year-over-year gains in pending sales, closed sales and median prices.
…
“The holiday season is in full swing and the most special gift this year is that interest rates have dropped down to touch the upper 3 percent range. Interest rates at this low level are considered unbelievable,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Unbelievable indeed. Let’s see what NWMLS press releases earlier this year were saying about interest rates, and where those rates were at the time…

March, rates at 4.28%

For sellers on the fence, [MLS director George Moorhead of Bentley Properties in Bothell] recommends “stepping forward,” saying “interest rates will rise this year.”

April, rates at 4.41%

“There are many reasons potential sellers should consider selling now,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. …interest rates are still very low but will likely rise, he noted.

July, rates at 4.12%

Stenvers, the office managing broker at John L. Scott in Bellingham, said buyers would be “well advised” to monitor interest rates, since they have a tendency to move up as summer winds down.

As of last week average interest rates on a 30-year fixed-rate mortgage are at 3.97%. Here’s some free advice to the NWMLS PR team: Maybe don’t let your brokers make predictions about where interest rates will go.

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

Seattle Times

Sanjay Bhatt: King County median home price up 6.3 percent over year ago

Over the past 12 months, the median price of single-family homes in King County has risen 6.3 percent. The steepest increase has been in North King County, where the median price is $390,000, up 13 percent. Southwest King County’s median price of $255,000 was down 2 percent over the year, the only submarket to post an annual price decline.

This month’s article in the Times is fairly brief and matter-of-fact. Nothing much to comment on.

Seattle P-I

Aubrey Cohen: Still few homes for sale, many buyers in Seattle area

Prospective Seattle-area homebuyers hoping for more selection won’t find any hope in the latest market data.

King County had just 1.96 months worth of homes on the market at the current sales pace in November, the Northwest Multiple Listing Service reported Thursday. That’s down from 2.15 months of inventory a year earlier and 2.01 months this October, and well below the four to six months considered balanced between buyers and sellers.

Similar story in the P-I. Short and to the point.

Tacoma News Tribune / The Olympian

John Gillie: Home prices moving upward in the Puget Sound area

November saw double digit increases in home and condo median sale prices in both Pierce and Kitsap counties and healthy single-digit increases in King and Thurston counties, new figures from the Northwest Multiple Listing Service show.
…
In the South Sound, said Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, broker interest is brisk because of concern that interest rates could jump.

“Broker interest remains high partially because many buyers feel interest rates could rise next year, and they realize now is a good time to take advantage of rates under 4 percent,” he said.

Yeah, those darn interest rates. Gonna rise any day now. Better jump in quick.

Puget Sound Business Journal

Marc Stiles: Housing prices climb as inventory drops in Puget Sound area

People are still hot to buy houses and condos in the Seattle metro area, where pending sales last month reached a nearly eight-year high for November. But for now buyers have fewer options because the number of residences on the market is dropping.

Pretty much everyone barely did more than drop in a few stats and quote the press release this month. Overall not a very exciting or interesting set of articles.

(Sanjay Bhatt, Seattle Times, 12.04.2014)
(Aubrey Cohen, Seattle P-I, 12.04.2014)
(John Gillie, Tacoma News Tribune, 12.04.2014)
(John Gillie, The Olympian, 12.04.2014)
(Marc Stiles, Puget Sound Business Journal, 12.04.2014)

The post November Reporting Roundup: Let’s Predict Interest Rates appeared first on Seattle Bubble.

Here are some of their starting assumptions:

p. 6 – Existing housing does not meet the needs of many current residents. Households are increasingly burdened by their housing costs.

p. 10 – The gap between demand and availability of affordable housing is greatest for lower income households, including family-sized households. Workers in some of the city’s most common occupations are priced out of living in Seattle.

p. 15 – In a growing City, new housing supply is necessary but not sufficient to achieve affordability.

The claim that new housing supply alone is not sufficient to achieve affordability is based on data that shows that (unsurprisingly) typical new housing stock rents and sells for considerably more than existing homes.

I would argue that new supply could be sufficient to achieve affordability if there were enough new supply. The city is predicting that 70,000 new housing units will be built in the next 20 years. Imagine if the city adjusted zoning, permitting, and incentives such that 700,000 new housing units came on the market instead. There is no way that would not drive prices down dramatically.

I’m not saying that’s the best solution, but it definitely seems like something that could work.

You can give your own input in three upcoming evening meetings (6:00 PM – 8:30 PM):

• November 19, South Seattle: Ethiopian Community Center
• November 20, Central District: Garfield Community Center
• December 04, Northgate: Olympic View Elementary

Here’s their full slide deck.

Thanks to reader Shane for pointing me to WSB’s post.

The post Seattle Advisory Committee to Study Affordable Housing appeared first on Seattle Bubble.

In June.

Of last year.

So what could possibly cause a home to be pending for seventeen months and counting? John Gillie at the Tacoma News Tribune has the story.

Weyerhaeuser mansion owners and neighborhood remain locked in a dispute

A long-simmering dispute over the use of Tacoma’s former Weyerhaeuser mansion as an event site appears headed for a showdown in early December before a city hearing examiner.
…
The mansion’s current owner, Oregon-based Corban University, is seeking to sell the 1923-vintage English Tudor mansion, a chapel and classroom building on the grounds to Seattle-based Blue Ribbon Cooking School. Blue Ribbon has been leasing the mansion and its grounds from the university for two years as a venue for weddings, parties and corporate events.
…
Those events, say the mansion’s neighbors, have created chaos along the tree-lined streets near the mansion as event goers used the streets for parking, have brought their boisterous behavior outside the mansion gates as they leave late at night and have raised the decibel level of the neighborhood with loud music.
…
Corban University confirmed that Blue Ribbon still has an agreement to buy the mansion subject to its obtaining a permit that will allow it to operate the venue profitably.

Sounds like a load of fun for everyone!

The post The Longest Pending Sale appeared first on Seattle Bubble.

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

Brokers say home buyers are back, but they’re choosy

Home buyers are back, and they’re savvy and selective, according to officials who commented on the latest statistics from Northwest Multiple Listing Service.
…
“Watching some markets around the Puget Sound is like watching a championship tennis match, first a buyers’ market, then a sellers’ market,” remarked George Moorhead, a board member for the multiple listing service. “As these shifts become more of a blend, as they have the last 18 months, we will see good balance and stability in our market with healthy growth and competition,” stated Moorhead, the designated broker and owner of Bentley Properties/America’s Home Caretakers in Bothell.

Blah blah blah. How long can you talk without really saying anything? According to this month’s NWMLS press release, about 1,200 words, at least. It’s hard to blame them though. There really isn’t much interesting going on in the market right now. Just the typical seasonal slowdown and the three-year-old story of low inventory.

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

Seattle Times

Sanjay Bhatt: Borrowing becomes easier as housing market softens

As the housing market slows, borrowers with tarnished credit are finding an opening to qualify for mortgages and own a home again.

Over the summer, mortgage-buying giant Fannie Mae notified lenders it was reducing the waiting period for borrowers who’ve been foreclosed to qualify again. While lenders know about the policy changes, the public is largely unaware of it, mortgage bankers say.

“It is easier for people to qualify now than it was even six months ago,” said Kim Toskey, president of the Washington Homeownership Resource Center, a nonprofit that fields calls from homeowners in financial crisis and links first-time homebuyers to classes.

David Floan, executive vice president of loan production at Evergreen Home Loans, said news of the changes hasn’t trickled down to prospective buyers.

“It’s going to allow more first-time homebuyers into the marketplace,” he said.

That could be welcome news to a housing market that’s softened from last year’s frantic pace.

I don’t think anyone who has purchased a home this year would describe the current market as “soft.” It seems like the last thing we need is policies that serve to increase demand when we’re already in a high demand / low supply situation.

Seattle P-I

Aubrey Cohen: Area house prices, sales up; inventory down

People are buying more homes and paying more for them, but fewer are for sale, according to a new report.
…
People who might traditionally consider selling their homes to move up or downsize may be deciding not to because they don’t want to take part in the frenzy as buyers, according to Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington.

“It’s a very real conversation that people who are in their homes right now I’m sure are having,” he said in an interview Wednesday. Meanwhile, there are few options for new construction in Seattle.

O’Connor predicted the local housing market would remain “robust” through the end of the year.

So what’s new?

Everett Herald

Herald Business Journal Staff: Snohomish County sees 17 percent jump in home prices year-over-year

Snohomish County saw a spike in the price of sold homes in October compared with the same month a year ago, according to the Northwest Multiple Listing Service.
…
The county also saw an increase in the number of pending sales last month. The listing service reported 1,327 pending sales in October compared with 1,219 for the same month the year before, or an increase of 8.86 percent.

Still, real estate agents cautioned that home sellers need to price their home correctly from the start, said Kathy Estey, a member of the listing services board of directors, in the statement.

This month’s Herald article is basically nothing more than a minor rewrite of the press release.

Tacoma News Tribune / The Olympian

Rolf Boone: South Sound housing market steady in October

The South Sound housing market had a decent-to-good October as home sales and median prices bumped higher, according to Northwest Multiple Listing Service data released Wednesday.

But the bigger news for the housing market might be which direction mortgage interest rates head now that the Federal Reserve ended its bond-buying program last week, also known as “quantitative easing,” which injected more than $4 trillion into the economy to keep it afloat during the recession.

So far, average national mortgage rates for a 30-year mortgage remain low, although they have climbed to 3.98 percent from 3.92 percent in the past two weeks, according to Freddie Mac data.

Mark Kitabayashi of Windermere Real Estate Puyallup thinks that mortgage rates will trickle up slowly, although not more than 1 percentage point for a while, he said.

What effect this might have on the housing market is still to be seen because it is coming off a “great spring and summer,” Kitabayashi said.

It will definitely be interesting to see how the market reacts if rates really do go up a full percentage point over the next 6-12 months.

(Sanjay Bhatt, Seattle Times, 11.05.2014)
(Aubrey Cohen, Seattle P-I, 11.05.2014)
(Herald Business Journal Staff, Everett Herald, 11.05.2014)
(Rolf Boone, Tacoma News Tribune / The Olympian, 11.05.2014)

The post October Reporting Roundup: Nothing New Edition appeared first on Seattle Bubble.

A global cable TV network is looking for Seattle-area borrowers who have been through the process of a deficiency judgment for a story they’re working on. If that’s you and you’re willing to talk about it for a television business show, contact me or leave a comment below using your email address and I’ll put you in touch with them.

Here’s a recent Reuters story on the subject of deficiency judgments, which are relatively uncommon here in Washington State due to the way our state foreclosure laws are structured.

Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a “deficiency judgment,” lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come.

It turns out when you take on debt and sign papers saying that you will pay it back, the lender may actually want you to, you know… pay it back. Who knew?

The post Have You Faced Deficiency Judgment? appeared first on Seattle Bubble.

Well this is interesting.

Redfin was one of the last real estate search sites to integrate Walk Score into their listing pages. Today Redfin announced that they have acquired Walk Score.

From Redfin’s blog post:

The acquisition is Redfin’s first and the reason for it is simple: We want to give folks a complete portrait of what it would be like to live somewhere new, within the house and in the surrounding neighborhood.

Since developing its original idea, Walk Score has become an online authority on neighborhoods, adding cycling and transit metrics to the mix, and delivering 20 million scores per day through 30,000 partner sites. Even better, Walk Score has rental homes. This is all stuff that Redfin needs on its own site.

Redfin, meanwhile, with its membership in the Multiple Listing Services used by agents to list properties, is the authority on homes for sale; as a broker, we can also convert traffic into lasting, profitable customer relationships. We have a full suite of mobile applications.

The two businesses together nicely address one another’s needs: for Redfin, richer content about neighborhoods; for Walk Score, homes for sale to engage its online visitors, and a way to convert those visitors into happy, paying customers.

I’m honestly quite surprised that Zillow did not acquire Walk Score first, with as many companies as they have been swallowing up lately (StreetEasy, HotPads, Trulia, etc.).

The really interesting thing about this move is that it instantly gives Redfin a national footprint without compromising the superior quality of their real estate listing data. I’m very intrigued to see what they do in the coming years with their combined resources.

Read more coverage elsewhere:

• Redfin Blog: Redfin Buys Walk Score!
• Walk Score Blog: A Look Back and A Look Ahead
• Geekwire: Redfin buys Walk Score, marking first acquisition in company history
• Inman News: Redfin’s first acquisition: Walk Score
• Seattle Times: Online home broker Redfin acquires walkability data site
• TechFlash (PSBJ): Redfin buys Seattle walkability startup Walk Score as competition heats up
• Wired: Redfin Buys Startup to Make Online Home-Hunting a Little Less Maddening

The post Redfin Gains Instant National Footprint With Acquisition of Walk Score appeared first on Seattle Bubble.

Homebuilder faces suit over construction at Trilogy of Redmond Ridge

For years, hundreds of Trilogy at Redmond Ridge residents say they have been pleading with California-based Shea Homes, the 55-plus resort community’s developer, to fix and better waterproof more than 1,500 homes.

They say the things every other homebuilder in the Pacific Northwest does to waterproof houses — put flashing around windows, use the right paint at the right time to prevent mold, and installing moisture barriers on garages — were not done on Trilogy homes. And by the time many of the original homeowners say they discovered the problems, possessions in their garages had been ruined and extensive wood rot needed massive repairs.

…more than 950 Trilogy residents [are] hoping to win a lawsuit filed this week in U.S. District Court in Seattle against Shea Homes. Lead lawyer on the case, Steve Berman of Seattle, says he’s seeking $30 million in damages, and is seeking class-action status for the case.

Too-hot housing market? Not for condos

Financing hurdles, a smaller buyer pool and high homeowners dues are among the factors that have slowed sales in the condo market, industry experts say. But over the past year, condos have appreciated at a faster rate than single-family homes, MLS data show.

In areas with at least 100 condo sales this year, southeast Snohomish County has led all submarkets with a 59 percent annual increase in median price, to $249,800. Everett/Mukilteo, Kirkland, Des Moines and Federal Way also have seen strong improvement in sold prices, rising more than 25 percent over the year.

Surprisingly, while single-family home prices and apartment rents climb, some submarkets have seen condo prices drop this year.

The biggest decline: downtown Bellevue, where the median price last year reached a record, only to tumble this year by 14 percent to $430,000. West Seattle, the Eastside south of Interstate 90, and Burien also lost ground over the year (see chart).

Downtown Seattle, the biggest condo submarket, saw the largest increase in sales activity, but only 3 percent appreciation to a median price of $439,500.

Tiny cliff cabin rocks the Methow Valley

From the distance, it’s a speck of a cabin, only 850 square feet, that sits on top of a cliff.

In the CinemaScope view of mountains, forests and pastures, it’s easily missed by visitors to the Methow Valley as they drive on Highway 20.

But the cabin sparked a nasty court fight about ruining ridgeline views. By one estimate, attorney fees for both sides will total as much as $300,000.
…
Descriptions of the cabin by opponents in interviews for this story, on a Facebook page and in local media have included “an extended third finger,” a “boil,” a “blight” and a “wart” to a Mazama area that has no “ridgebuster” dwellings atop hills.

Kundig and three partners were the defendants in a seven-day August trial that explored whether the cabin broke covenants drawn by previous owners of the property that protected the visual impact on the valley.

The plaintiffs want the cabin torn down.

Sounds like a barrel of fun!

[Update: The architect has been ordered to move his eyesore cabin off the ridge. Methow Valley ‘ridgebuster’ cabin has to move, judge rules]

The post Seattle Times: Trilogy Lawsuit, Condos, Cabin Battle appeared first on Seattle Bubble.

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

Home Sales Stay Strong but Prices Approaching "Affordability Ceiling" for Some Buyers

Commenting on September’s activity, industry veteran Gary O’Leyar said he expects the Greater Puget Sound real estate market will maintain a “healthy glow” in 2015 so long as there is no radical increase in interest rates. “I foresee a general leveling off in overall market activity as prices approach the affordability ceiling for many buyers,” remarked O’Leyar, the designated broker/owner of Prudential Signature Properties in Seattle.
…
OB Jacobi, president of Windermere Real Estate, noted luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. “I attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest,” he remarked.

Despite keen interest in high-end homes, overpriced homes will not draw offers, cautioned Northwest MLS director Diedre Haines. “It is extremely important for sellers to know if their house is overpriced, it may not garner offers and will eventually sell for below market,” she declared, adding, “This is an absolute that has always been the case, in all market conditions, and all locations!”

Haines, who is regional managing broker for Snohomish County at Coldwell Banker Bain, described some of the newer inventory as not saleable or overpriced. “Today’s buyers are more savvy and educated regarding market values, so correct pricing has become the key factor in selling a home.”

If it is indeed true that “today’s buyers are more savvy and educated,” I hope that this site has contributed at least a little to that education.

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

Seattle Times

Sanjay Bhatt: King County home prices resume their climb

September, however, was hot for King County home sales, and Seattle’s sizzled — the median price rose 12 percent from a year earlier to $517,000, the highest appreciation among the five major King County submarkets.

“It has all the classic signs of getting very, very frothy,” said Stephen O’Connor, director of the Runstad Center for Real Estate Studies at the University of Washington. “At some particular point in time, the market’s going to take a break.”

The real estate reporting in the Seattle Times is so much better than it was during the housing bubble. Back then the only people quoted in an article like this would have been real estate salespeople crowing about how amazing the market is and how there’s never been a better time to buy, etc. Today, the very first quote of the article is from an academic who is skeptical of the frothy market.

A+ for the Seattle Times.

Seattle P-I

Aubrey Cohen: Seattle-area home prices up again

“It’s looking pretty frothy out there,” said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington. “Double-digit increases, it’s not the norm.”
…
“At the risk of sounding incredibly obvious, it is supply and demand,” O’Connor said.

Real estate reporting in the P-I was never as bad as the Times during the bubble, but it has improved over the years as well. The difference is that it’s been the same reporter the whole time, Aubrey Cohen holding down the fort, while the Times has is on their third different real estate reporter.

I do take issue with this bit though (which is just a quote from the NWMLS press release):

Chinese buyers are making “very significant purchases of prime properties,” particularly east of Seattle, according to [designated broker/owner of Prudential Signature Properties in Seattle Gary] O’Leyar. Beeson agreed, saying high prices in Vancouver and San Francisco are pushing these buyers here.

Again, where’s the data? Agents keep making these claims without providing any data or even really quantifying their statements. What is “very significant purchases”? Is it a small number of expensive, high-profile homes, or a large number of homes? Show me the data on this alleged Chinese boom.

Everett Herald

Herald Business Journal Staff: Snohomish County home sales jump 15.5 percent

Pending sales for Snohomish County homes jumped 15.48 percent in September compared with the same month of the previous year, according to statistics released Monday from the Northwest Multiple Listing Service.

The number of homes with pending sales rose to 1,328 last month from 1,150 in 2013. Every area of the county saw an increase in the number sales.
…
One novelty of the market is the number of international buyers, especially from China, who are picking up prime homes in the Puget Sound area particularly east of Seattle.

“The influx of buyers from China is very real,” O’Leyar said.

A big increase in pending sales is interesting, but pending sales are not closed sales, and many in fact do not close (we’ll post the latest numbers on that next week). It’s a bit misleading to headline the article with a pending sales stat. And again with quoting the Chinese buyers bit from the press release without pressing anyone for data. Tsk.

Tacoma News Tribune

Rolf Boone: South Sound housing market wraps up summer on positive note

The South Sound housing market wrapped up summer on a positive note in September as the number of home sales and median prices continued on an upward trend in Pierce and Thurston counties.

But this time the Thurston County housing market stood out in September, while the housing gains in Pierce County have taken on a steady quality, according to data released late Monday by the Northwest Multiple Listing Service.

Not much more here this week than a mild rehash of the press release.

The Olympian

Rolf Boone: South Sound housing market wraps up summer on positive note
It’s literally the exact same article that was in the News Tribune.

(Sanjay Bhatt, Seattle Times, 10.06.2014)
(Aubrey Cohen, Seattle P-I, 10.06.2014)
(Herald Business Journal Staff, Everett Herald, 10.06.2014)
(Rolf Boone, Tacoma News Tribune, 10.06.2014)
(Rolf Boone, The Olympian, 10.06.2014)

The post September Reporting Roundup: “China is Very Real” Edition appeared first on Seattle Bubble.

The post This is why I love the Eastside appeared first on Seattle Bubble.

…increasingly, China’s rich are also offshoring their families along with their cash. That’s created a real estate boom in an unlikely corner of the United States: suburban Seattle.

Wealthy Chinese have become far and away the biggest foreign buyers of real estate in Seattle in recent years, accounting for up to one-third of $1-million-plus homes sold in certain areas, brokers say. Seattle real estate agents are hiring Mandarin speakers and even opening offices in Beijing. Builders are designing much of their new construction for Chinese buyers.
…
That’s made Seattle one of the world’s top catch basins for the billions of dollars spilling out of China every year. While foreign money has also been pouring into New York, Los Angeles and London real estate, the impact of the Chinese rich on Seattle is far more concentrated, focused on a few small, upscale suburbs. They’re especially attracted to Medina — home to Bill Gates and Jeff Bezos — and the West Bellevue area. “The first question you often hear from Chinese clients is ‘Where does Bill Gates live?'” said Moya Skillman, a broker with Windermere Real Estate.

Brokers and analysts say 20 to 40 percent of $1 million-plus homes sold on the Eastside — a collective term for eastern suburbs of Seattle — were purchased by Chinese buyers.

A $1.1 million listing in West Bellevue recently attracted 24 bidders, virtually all of them Chinese, and the home quickly sold for $1.4 million. Ms. Wan said a $2.5 million lakefront property recently sold with three offers, just days after coming onto the market.

There are a lot of anecdotes in the story, while the only data they cite is the “20 to 40 percent” number from “brokers and analysts.” I’d be interested to know more about exactly how they’re defining that and where they’re getting the data from.

Here’s some data I pulled on single-family sales volume over the last three months in King County and across some of the popular upscale eastside zip codes.

So taking the high end of the “20 to 40 percent” estimate, we’re talking about around 50 sales in the last three months, out of 6,400 county-wide—0.8 percent of all sales.

The story is certainly interesting, but I’d hardly call it a trend that’s likely to affect many homebuyers in the Seattle area.

I did like this part though:

Their attraction to Seattle stems from its top schools, clean air, longtime Chinese population and, more recently, a hit movie. The 2013 film “Beijing Meets Seattle” (or “Finding Mr. Right” in English) became one of China’s top-grossing films of all time, telling the story of a pregnant woman who flies to Seattle to find true love and American citizenship for her baby. The film struck a chord with younger Chinese, who saw Seattle as a liberating, romantic escape from the intense materialism of China (even though much of the movie was filmed in Vancouver).

“People my age in China suddenly started talking about Seattle,” said Bangze Wang, a Beijing native who now lives in Seattle.

I fully expect the movie to be fairly terrible, but I kind of want to see it now. Anyone up for a viewing party?

The post A Chinese-Driven “Real Estate Boom” in Seattle? No. appeared first on Seattle Bubble.

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

Western Washington housing market stability continues with modest gains in sales, prices

“Stability” seemed to characterize the direction of Western Washington’s housing market during August, according to new figures from Northwest Multiple Listing Service.
…
“What we are seeing now with the market is a moderated growth in appreciation, a normalizing of sales volume, and continued health overall,” declared MLS director George Moorhead, the owner and designated broker at Bentley Properties in Bothell. “It is not a call for alarm,” Moorhead emphasized, describing it as “just a balancing and adjusting of a healthy market.”
…
“The current trend for strong pending activities and solid closed transaction numbers should keep the confidence level steady,” remarked Darin Stenvers, chairman of the board of directors at Northwest MLS. “Buoyed by low mortgage rates, buyers should remain optimistic about their new home purchases late into 2014,” he added.

Stenvers, the branch manager at John L. Scott in Bellingham, expects the balance of 2014 will remain at a slow and steady pace of appreciation, which should help distressed sellers. “Sellers should reevaluate the market as they may be surprised at the current values,” he suggests.

Like I said yesterday, this month’s release just seems really somber compared to the usual tone of these things.

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

Seattle Times

Coral Garnick: King County home prices in August up from year ago

J. Lennox Scott, CEO of John L. Scott Real Estate, said even though prices dropped around King County this month, the market is still hot. “We’re just talking about a few degrees lower of hotness,” he said.

That Lennox Scott. Always good for a laugh. I’m definitely going to save that quote for later. Comedy gold right there.

Seattle P-I

Aubrey Cohen: Seattle house prices down from July’s record

Higher prices and lack of inventory are contributing to a decline in sales, with closed sales down 12 percent in Seattle and 6.9 percent countywide. Pending sales, which don’t all close, but can be the best indicator of recent activity, fell 3.5 percent in the city and 2.2 percent across King County.

Some of the dropoff in sales may be due to people getting frustrated with not being able to find a home to buy, or getting outbid by other buyers, and deciding to sit on the sidelines, said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington. “People are kind of exhausted.”

Yeah, that’s the ticket. People are just tired! They just need a good nap and the market will perk right back up.

Tacoma News Tribune

Rolf Boone: July was good, August a little better for South Sound home sales

Home sales fell nearly 7 percent in August, while median prices inched up about 1 percent. The challenge? King County has only a two month’s supply of homes for sale, the combined data show.

And that’s increasingly the challenge in Pierce and Thurston counties. Although the number of homes for sale rose nearly 12 percent in Pierce County and 5 percent in Thurston County, that still equates to less than a four month’s supply of homes on the market at the current pace of sales.
…
But Mike Larson, president and designated broker of Allen Realtors in Lakewood, wasn’t too concerned about the lower inventory level in Pierce County because at one time a two-and-a-half month to three-and-a-half month’s supply of homes was once considered the norm.

“It’s slow and steady and trending in the right direction,” he said about the market. “Balanced and moderate is a lot better than the ups and downs we saw for years.”

This month we get a more in-depth article than we usually find on the web from the News Tribune or the Olympian.

The Olympian

Rolf Boone: July was good, August a little better for South Sound home sales
Same story in the News Tribune and Olympian again.

(Coral Garnick, Seattle Times, 09.04.2014)
(Aubrey Cohen, Seattle P-I, 09.04.2014)
(Rolf Boone, Tacoma News Tribune, 09.04.2014)
(Rolf Boone, The Olympian, 09.04.2014)

The post August Reporting Roundup: No Call For Alarm Edition appeared first on Seattle Bubble.

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

Western Washington housing market in "recovery mode" but some brokers say it’s still not at full potential

More sellers listed their homes for sale during July compared to a year ago, but brokers with Northwest Multiple Listing Service say inventory remains “well below” what is considered to be a balanced market.
…
“Some agents and firms are beginning to feel the summer doldrums, while others are experiencing a definite increase in activity,” observed Diedre Haines, regional managing broker-Snohomish County for Coldwell Banker Bain. Haines, a director with Northwest MLS, described price increases as “healthy, not exorbitant,” adding, “Thankfully we are not seeing signs of a bubble and instead are seeing realistic appreciation.”
…
Matt Deasy, general manager at Windermere Real Estate/East in Bellevue, said King County’s slowly improving supply should reduce “the frenzy pace we experienced in the spring,” although he was quick to point out that highly desired neighborhoods remain frenzied.
…
Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate, also commented on supply. “Although the housing inventory locally is up slightly, we just don’t have enough of the right inventory in the right neighborhoods to satisfy the demand. Our inventory today in King County is under 1.9 months’ supply,” he lamented, noting that’s well below the normal level of 5-to-6 months. “The lack of supply leads to multiple offers and many properties selling for above their list prices.”
…
Looking ahead, brokers are upbeat:

“A growing economy, job growth, pent up demand, competitive mortgage rates, affordable home prices and low unemployment will keep housing moving on an upward trajectory,” predicts Gain.

With a name like “Gain,” how can you predict anything but a perpetual upward trajectory?

Overall these NWMLS press releases are starting to feel more and more like the ones that were published in the year or so leading up to the market peak and subsequent crash. I’m definitely starting to get nervous again.

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

Seattle Times

Coral Garnick and Sanjay Bhatt: Seattle median home price leaps past 2007 peak

The median price of single-family homes sold in Seattle rose last month to $543,500, blowing away the last peak of $501,000 set in August 2007 — before the housing bubble burst and the country went into the Great Recession.

It’s too soon to say whether the Seattle market can sustain that level; in June the median price of homes sold was $499,000. Nationally, in July existing homes in the top 20 markets were 18 percent short of their summer 2006 peak, as measured by the S&P Case-Shiller index.

“The Seattle marketplace is a very special place in the nation because of our robust job sector,” said J. Lennox Scott, CEO of John L. Scott Real Estate. “We are just in one of those places in the nation where this recovery took place, and all the fundamentals are in place for it to continue.”

“Seattle is special” is such a cliché phrase used to justify otherwise unreasonable home prices that we gave it its own tag on Seattle Bubble back in 2006. Lennox trotting it out again is yet another sign that we might be back in bubble territory.

Seattle P-I

Aubrey Cohen: Seattle’s median house price tops 2007 peak

“Certainly those are extreme pricing numbers,” Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington, said Wednesday.
…
A big reason for the price increases is a continued shortage of homes, despite some improvement in July.
…
“Obviously we’ve still got an inventory issue,” Crellin said. “That’s not a healthy supply for the market.”

Crellin said he expected that months of talk about the inventory shortage, along with prices rising to the point where people who bought during the peak would no longer be underwater, would have spurred more owners to list their homes.

People just don’t want to move, apparently, and many of those that do seem to be content to hang onto their home as a rental.

Once again, the Everett Herald has no story, so here’s a piece in the PSBJ instead.

Puget Sound Business Journal

Marc Stiles: Still too tight: Limited number of Seattle houses for sale drives prices higher

More houses were for sale last month in the Puget Sound region compared to this time last year, but the inventory was still way too limited, area Realtors said Wednesday.
…
For months, real estate agents have been clamoring for more houses and condos to sell. They’re starting to get their wish, albeit slowly. In the four counties, the number of residences on the market climbed to nearly 14,700 in July, or around 1,550 more than a year ago.

Listings, listings, listings!

Tacoma News Tribune

Rolf Boone: South Sound housing market shows strength in July

The summer home-buying season finally kicked into gear in South Sound as sales and median prices rose in July, according to Northwest Multiple Listing Service data released Wednesday.

Pierce County home sales barely inched higher last month, but the county still recorded 1,205 homes sold, the most units sold in one month this year, the combined single-family residence and condo data show. Median prices rose more than 4 percent to $230,000 in July from $220,000 in July 2013.

It’s all about those listings, boss.

The Olympian

Rolf Boone: South Sound housing market shows strength in July

The summer home-buying season finally kicked into gear in South Sound as sales and median prices rose in July, according to Northwest Multiple Listing Service data released Wednesday.
…
Thurston County, meanwhile, had one of its best months all year as sales and median prices both rose last month. Sales climbed to 362 units last month from 342 units in the same period a year ago, while median prices inched up nearly 3 percent to $234,950 from $228,500 in the same year-over-year period, the combined data show.

One factor that might be influencing the market is that there are not a whole lot of homes to choose from. Although inventory levels are higher than they were a year ago – up 19 percent in Pierce County and nearly 15 percent in Thurston County – it still equates to less than four months’ supply of homes in Pierce County, while Thurston County is right at four months, the combined data show.

It’s literally the same exact article as The News Tribune.

(Coral Garnick and Sanjay Bhatt, Seattle Times, 08.06.2014)
(Aubrey Cohen, Seattle P-I, 08.06.2014)
(Marc Stiles, Puget Sound Business Journal, 08.06.2014)
(Rolf Boone, Tacoma News Tribune, 08.07.2014)
(Rolf Boone, The Olympian, 08.06.2014)

The post July Reporting Roundup: Totally Not Another Bubble Edition appeared first on Seattle Bubble.

Trulia shareholders will get 0.444 shares of Zillow stock (Z) for every share of Trulia stock (TRLA), making the deal worth $3.5 billion at today’s prices.

I’ve never been much of a fan of either company, since they aren’t really “disrupting” or improving the real estate industry so much as they are just leeching off of it. Their persistently lousy data makes either site a terrible place to try to find a home that is actually for sale, and their business model is basically to be a middle man.

Both of these companies make most of their money by selling advertising and collecting referral fees from real estate agents and mortgage providers. That is, if you can really consider consistent net losses to be “making money” at all:

So all in all, it seems like a great match. High fives all around!

The post Zillow + Trulia = Love Forever appeared first on Seattle Bubble.

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

No Summer Slowdown Expected – Brisk Activity Reported

Listing activity perked up during June, but strong job growth in the Seattle/King County region has brokers predicting brisk sales with competitive bidding throughout the summer.
…
“We are still suffering from low inventory in parts of Snohomish County, and we’re still seeing multiple offers on the majority of new listings,” reported Diedre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain and a director with Northwest MLS. She described the market as “strange,” adding, “We are not feeling or sensing the onset of a typical summer slowdown.”
…
John Deely, principal managing broker at Coldwell Banker Bain in Seattle, expects the brisk market to continue into fall, citing low interest rates, increasing prices and inventory, and high demand as drivers of the positive activity.

“Brokers in the Seattle market are keeping busy as multiple offers and cash buyers dominate new, well priced listings in most markets,” commented Deely, a director with Northwest MLS. The market for homes priced at $1 million and up around Seattle is experiencing pending sales volume at levels not seen since 2007, according to his analysis.
…
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, shares the optimism. Pointing to recent reports on the addition of 14,400 jobs in the tri-county area (more than any two month period since the beginning of 2007), he expects a “red hot summer selling season.” Scott also credits lower interest rates with fueling what he described as a “mini power surge of sales.”

Wow this month’s press release reads like someone sneaked into the NWMLS office and stole the diary where they write down their their affirmations. If you say something enough times, maybe it will come true!

There will be no summer slowdown.
There will be no summer slowdown.
There will be no summer slowdown.

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

Seattle Times

Coral Garnick: King County home prices up 6 percent over year

Summer has eased the drought of available homes for sale in Greater Seattle, and sales are growing at a pace not seen previously this year.

After five months of declining sales activity compared with a year earlier, the number of June sales was up 2 percent annually, and the supply of homes for sale grew by almost 6 percent, according to a report Thursday by the Northwest Multiple Listing Service.

The larger inventory hasn’t lessened competition among buyers in the most sought-after areas, said Mike Gain, president of Berkshire Hathaway HomeServices Northwest Real Estate.

“We don’t have enough supply of homes for sale in desirable neighborhoods to satisfy the demand,” he said. “In those areas, it is just like a feeding frenzy when a house goes on the market,” he said.

I don’t think I’ve seen a real estate piece by Coral Garnick before. Decent first outing, but something more than quotes from home salesmen and a couple of anecdotes would have been nice. Perhaps Glenn Crellin was out for the holiday and unavailable to comment.

Seattle P-I

Aubrey Cohen: Home supply ticks up but remains tight

King County’s supply of houses for sale continued to improve, slowly, in June, even though sales rose for the first time this year, according to a new report. Seattle inventory got even tighter.

The county had 1.8 months of inventory, at the current sales pace, in June, up from 1.74 months of inventory a year earlier and 1.79 months in May, the Northwest Multiple Listing Service reported Thursday. That’s still well below the four to six months of inventory generally considered the balance zone between supply and demand.

Inventory actually fell in Seattle, from 1.4 months a year ago and 1.26 months in May to 1.23 months this June.

Not much more than a few stats and press release quotes in this month’s P-I story. I guess releasing the numbers before the holiday weekend meant nobody really had time to write a very in-depth story.

Tacoma News Tribune

Kathleen Cooper: Pierce, Thurston counties see higher home sale prices in June

Western Washington’s real estate market continued its steady improvement in June, data released Thursday show.
…
Big institutional investors are still major players, said Diedre Haines, a broker and NWMLS director.
…
As of the end of September, those two plus one other private investor were responsible for almost one in 10 purchases of single family homes in Pierce County.

American Homes 4 Rent has slowed its activity, but not Invitation Homes. Since Oct. 1 of last year, various limited liability companies affiliated with Invitation Homes have bought almost 300 more properties in Pierce County, government sales data show. That makes Blackstone the owner of about 950 homes in Pierce County alone. By comparison, American Homes 4 Rent has added fewer than a dozen properties to the 185 it purchased last year.

In a bit of a twist this month, the Tacoma News Tribune has one of the more in-depth articles, tying the NWMLS numbers to original research they’ve done recently on the big institutional buyers.

The Olympian

Kathleen Cooper: Thurston County sees higher home sale prices in June

Western Washington’s real estate market continued its steady improvement in June, data released Thursday show.

Median sale prices for single family homes and condos rose year-over-year between 5 percent and 7 percent in King, Pierce and Thurston counties. Pierce’s median sales price in June was almost $230,000. Thurston’s hit $236,000.

Not much more than a short blurb in the online edition of The Olympian this month.

(Coral Garnick, Seattle Times, 07.03.2014)
(Aubrey Cohen, Seattle P-I, 07.03.2014)
(Kathleen Cooper, Tacoma News Tribune, 07.03.2014)
(Kathleen Cooper, The Olympian, 07.04.2014)

The post June Reporting Roundup: Affirmations Edition appeared first on Seattle Bubble.

None of these listings have been posted on Zillow in Seattle since the launch of the service on June 12.

Why?

The Northwest Multiple Listing Service — an association of more than 21,000 real estate agents in Western Washington — actually forbids agents from engaging in the pre-marketing of properties. In other words, agents can’t drum up interest in a property before it hits the NWMLS database.
Here’s the relevant part of the rule from the NWMLS:

Members shall not promote or advertise any property in any manner whatsoever, including, but not limited to yard or other signs, flyers, websites, e-mails, texts, mailers, magazines, newspapers, open houses, previews, showings, and tours, unless a listing for that property has been delivered to NWMLS, or input by the member.

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.

The really amusing bit about all this is how Zillow has stated in the past that they are not trying to compete with MLSs or become their own MLS, but if this feature were widely adopted, Zillow would effectively become an MLS (which is itself nothing more than a marketing platform for advertising listings). Since Zillow is not a brokerage, and therefore not a member of the MLS, they can release features like this that fly in the face of MLS rules, but any agent who attempts to market a listing as “Coming Soon” will no doubt swiftly incur a hefty NWMLS fine.

The box-checking bit is also especially hilarious. Oooh, agents have to check a box! Surely they won’t use the feature in violation of MLS rules now!

I’m certainly no big fan of some of the rules and data practices of the NWMLS, but in this case they’ve got it right. The only one who would benefit from “pre-marketing” a listing is the listing agent. It’s in the best interest of the seller and potential buyers to list the home on the MLS for maximum market exposure.

I could go on, but this Inman News guest post by Doug Miller, executive director of Consumer Advocates in American Real Estate, pretty much sums it up.

In a hot market, pocket listings will almost always generate offers. That is not “test marketing” to gauge demand or pricing. Worse, when that offer comes in, the seller is placed in the undesirable situation of either accepting an offer generated by a semiclosed marketplace or rejecting that offer and putting the house on the MLS. The result is to place the seller in a decision clouded by duress. No fiduciary should ever put their clients in such a situation. And no fiduciary (broker or agent) who is financially biased with a double fee should ever “advise” their clients in this situation, as such advice would certainly be construed to be self‐serving.

Pocket listings exist to generate a double fee. That’s it. Every argument in favor of pocket listings is little more than self‐serving rationalizations that do not survive logical analysis.

If this is a subject that interests you, it’s worth reading the whole thing.

The post Zillow’s “Coming Soon” Won’t be Coming to Seattle appeared first on Seattle Bubble.

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

Housing Market Righting Itself as Buyers, Brokers Get Creative to Compete

Housing around Western Washington is on an upward trajectory, but inadequate inventory “in the right prices and locations” makes for a “very difficult market for purchasers and brokers,” according to an executive with one multi-office real estate company.

New figures from Northwest Multiple Listing Service show inventory increased in May compared to a year ago, but brokers say competition is keen. “Multiple offers and escalation clauses occur on a regular basis for properties that are extremely well priced and in great condition,” reports Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma.

Mike Gain, a former chairman of the Northwest MLS board of directors, also commented on the bidding wars. “We are experiencing more multiple offers than I have experienced in my 35 years of practicing real estate in this marketplace,” stated Gain, the president and CEO of Berkshire Hathaway HomeServices Northwest Real Estate.

There are definitely a lot listings that receive multiple offers, but the trend is actually cooling off compared to a year ago, with 62 percent of Seattle-area offers facing competition in March 2014 vs. 72 percent a year earlier.

[Windermere President OB] Jacobi said there’s also an increase in the number of cash buyers…

Also false. All-cash deals are also not really increasing. They shot up dramatically between 2007 and 2011, but have basically been flat since then.

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

Seattle Times

Sanjay Bhatt: Home prices rise as fewer properties change hands

The median price of homes sold last month in King County was $442,250, almost 6 percent higher than a year ago.

But for the fifth consecutive month, sales activity is down annually: Almost 8 percent fewer homes sold in May than a year ago, even though the supply of for-sale homes grew by nearly 11 percent, according to figures published Wednesday by the Northwest Multiple Listing Service.

Sanjay must have had other priorities this week, as the Seattle Times article on this month’s data is unusually short and lightweight.

Seattle P-I

Aubrey Cohen: Seattle area had more houses for sale in May

Homebuyers had more options in May, although inventory remained low, according to a new report.
…
The continued shortage of inventory has prompted sellers to set deadlines for when they will review offers, and buyers to get pre-inspections, submit offers before the deadline and, increasingly, make all-cash offers, Windermere Real Estate President OB Jacobi said in the release. He said a balancing out of the market “probably isn’t going to happen any time soon.”

Aubrey actually quotes from yesterday’s stats preview post as well, which doesn’t leave me much to comment on without commenting on my own comments. And that would just be weird.

Everett Herald

Jim Davis: Number of homes for sale in Snohomish County surges

The number of homes on the market in Snohomish County far surpasses the number a year ago, continuing a streak seen this spring.
…
The higher number of homes on the market is attributed in part to new construction, George Moorhead, a member of the NWLS Board of Directors, said in a statement.

The MLS database shows 406 of 2,206 listings of single-family homes in the county are classified as new construction. That’s about twice the number from a year ago.

This is an interesting theory, and makes some sense. I haven’t really dug into what’s driving the big surge in listings in Snohomish County, but I’ll see if I can look into this soon.

Tacoma News Tribune

Kathleen Cooper: Home sales, prices and inventory all up for Pierce

Pierce County’s median sale prices, number of closed sales and number of homes for sale all went up in May, according to statistics released Wednesday.
…
Though there are 21 percent more homes and condos for sale in Pierce County than a year ago, brokers say competition is fierce.

Just the basic facts and a few quotes from the release in this month’s News Tribune piece.

The Olympian

Kathleen Cooper: Median sales price of homes, condos steady in Thurston County

Thurston County’s median sale prices of homes and condos held steady in May while the number of closed sales decreased, according to statistics released Wednesday.
…
More homes are on the market in Thurston County. Though inventory increased by almost 19 percent compared with a year ago, brokers say competition is fierce.

Hmm that sounds familiar.

(Sanjay Bhatt, Seattle Times, 06.04.2014)
(Aubrey Cohen, Seattle P-I, 06.04.2014)
(Jim Davis, Everett Herald, 06.05.2014)
(Kathleen Cooper, Tacoma News Tribune, 06.05.2014)
(Kathleen Cooper, The Olympian, 06.05.2014)

The post May Reporting Roundup: Imaginary Increases Edition appeared first on Seattle Bubble.

Here’s an excerpt from GeekWire’s May 1 story about the launch of Flipt:

A new Seattle startup wants to fill what it believes is a gap left by real estate sites like Zillow and Trulia.

Flipt launched today to provide home buyers and investors with detailed property information pertaining to potential investment value. The company crunches data from a variety of sources and then scores homes on three categories: Fix & Flip, Buy & Hold, or Rent.
…
Nokhrin told GeekWire that his new company differentiates from fellow real estate sites like Seattle-based Zillow and Trulia because of its complex algorithm that was developed with machine-learning capabilities.

Sounds pretty cool, right? I tried out the site the same day as the GeekWire story, and something odd immediately stuck out to me. When I pulled up my home on Flipt, they were showing a rather recognizable photo—one that I actually shot myself…

There is only one place I’ve uploaded this photo of my home with Seattle Bubble’s pink pony mascot Crystal and associated it with my address: Zillow.

Just a day after launching, all the features on the Flipt website disappeared, and everything redirected to their front page, which had been replaced with a message that said “We will be back shortly.”

This week, after that message changed to just “We will be back,” I decided to dig into the issue with the guys at GeekWire and figure out what happened. John Cook has the write-up of what we found:

Zillow slaps down Flipt, issues cease-and-desist over hijacked real estate data

The post Flipt Off appeared first on Seattle Bubble.

Here’s an excerpt from the Seattle Times article about the melting Antarctic ice sheet:

“A large sector of the West Antarctic ice sheet has gone into a state of irreversible retreat — it has passed the state of no return,” said Eric Rignot, with NASA’s Jet Propulsion Laboratory in Pasadena, Calif.

That move by itself could increase sea levels by about 4 feet, Rignot said. But it also will help set in motion other changes that could cause the ice sheet’s contribution to sea-level rise to triple to 12 feet or more.

I was curious how a 12-foot increase in sea level might affect homes around Seattle, so I pulled up the handy Surging Seas simulator by Climate Central. Their simulator only goes up to 10 feet but even at that level you can see that the increasing sea levels will have a dramatic effect on Seattle.

Here are a few highlights:

• 8,257 homes in King, Snohomish, and Pierce Counties will be literally underwater
• Most of the Snohomish River Valley and the Duwamish River Valley will become ocean.
• Lake Union and Lake Washington would both become saltwater bays.
• I-5 through Fife would be submerged (along with 30% of the city of Fife)

Although thousands of homes would end up in the Puget Sound in this scenario, that only represents about one percent of all homes in the Seattle area. Still, the overall effects on our area would most likely be quite large.

Thankfully, we’ve got a while to figure out how to handle it (the article estimates 200-1,000 years), but unfortunately, if the scientists are correct, there’s absolutely nothing we can do to stop it.

Bottom line: Buy a waterfront home in the Seattle area for yourself and your kids to enjoy, but don’t count on passing it down to your great-great grandkids.

[Update]
Apparently the visualization tool at Climate Central fails to properly account for the 20-22 foot differential between the Puget Sound and Lake Union / Lake Washington that is maintained by the Ballard Locks. Thanks to commenter Brad for pointing that out below!

The post Thousands of Seattle Homes to End Up Literally Underwater appeared first on Seattle Bubble.

To get this party started, here’s an excerpt from the NWMLS press release:

Housing activity ranges from "red hot" to "slowly healing"

Brokers report some skittishness among both buyers and sellers, but the latest statistics from Northwest Multiple Listing Service indicate the housing market is continuing to rebound.
…
“The residential market is red hot,” reported J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. He said multiple offers are the “norm” for new listings, with about two-thirds of homes near job centers selling in the first 30 days. That’s about twice the normal rate, according to Scott.
…
“We are still desperate for inventory in spite of statistics indicating we have more listings,” commented MLS director Kathy Estey. Inventory is being held back because potential sellers fear they will sell their home and not find one to move into, said Estey, the managing broker at John L. Scott in Bellevue.

The result is a catch-22 situation “because nearly no one will accept a contingent offer,” according to Estey. Also, she explained, “bridge financing is scarce and risk tolerance is low” as a result of the hangover from the recession.

It’s a RED HOT CATCH-22! The market’s simultaneously rebounding and being held back. Black is white, up is down, and slow is fast!

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

Seattle Times

Sanjay Bhatt: No thaw in home inventory despite April’s rising prices

Rockwell Realty’s Bui said the inventory is so tight in some areas that he’s seen houses sell for $100,000 over their list price in close-in Seattle neighborhoods like Capitol Hill and Madison Valley. Brokers are supposed to list property at fair-market value, he said, so it’s hard to see how lenders would approve financing deals so far above list price.

“Just on the face of it,” he said, “it makes you think, ‘Bubble.'”
…
Glenn Crellin, associate director for research at the University of Washington’s Runstad Center for Real Estate Studies, said he was pleased to see that April’s annual price appreciation in King County was in the single-digit range.

“I think it needs to come back down a bit more to be a balanced healthy market,” he said.

More great reporting from the Times. There are two main reason I’m not super-concerned about a bubble… yet.

First, volume is just too low. Sales volume at the height of the frenzied housing bubble around when I started this site was 40% higher than it is today. In April 2005 2,841 single family homes sold in King County. This April just 2,016 homes sold, and that number is down from last year, when 2,096 homes sold.

Second, thanks to still-crazy-low interest rates, homes are far more affordable today than they were in 2005-2008. The affordability index for King County sits at 99.7 as of April. In the year before home prices peaked during the bubble, the affordability index averaged 71.8, and hit a low point of 65.2. If home prices rise a lot more without incomes rising, or rates start to fall and home prices keep increasing, then I’ll start to get concerned.

Seattle P-I

Aubrey Cohen: Local home supply inches up, but remains tight

With the peak home-buying season approaching, there are signs that this year may be just a little less frenzied than last spring.
…
“It’s still an extreme shortage of product,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

Shorter story than usual this month in the P-I, but it’s nice that at least they’re still reporting, and their stories are more than just regurgitations of the NWMLS press release.

I couldn’t find a story in the Everett Herald this month.

Tacoma News Tribune

John Gillie: High percentage of distressed home sales negatively affect home prices in the South Sound

A high percentage of foreclosed and short sales home transactions last month in Pierce and Thurston counties caused median prices to take a dip in both locales, new figures from the Northwest Multiple Listing Service show.

Those statistics show the median home sales price in Pierce County last month was $215,000 in April compared with $217,000 a year earlier. That’s a 0.92 percent decline.

That’s unusual, considering that distressed sales had been decreasing in overall share of sales volume for quite some time, falling to just 14 percent the last time we checked in on those stats.

The Olympian

John Gillie: Foreclosures drive down home prices in Thurston County

A high percentage of foreclosed and short-sale home transactions last month in Thurston and Pierce counties caused median prices to take a dip in both locales, new figures from the Northwest Multiple Listing Service show.

Doh. Same exact article.

Since we were missing an article in the Herald, and the Olympian and News Tribune were duplicates of each other, here’s an article on this month’s numbers from the Puget Sound Business Journal.

Puget Sound Business Journal

Marc Stiles: Seattle area residential real estate is a Catch-22, Realtors say

Even though more houses are being offered for sale in the Puget Sound region, inventory remains ultra-tight in many areas, and King County continues to have a particularly limited supply.
…
The situation is exacerbated by anxiety among some would-be sellers. They are torn. While they want to put their residences on the market, they fear they won’t be able to find new houses to buy. That’s a Catch-22 — because it limits supply at a time when the market craves it.

Bonus points for explaining the Joseph Heller reference from the NWMLS press release.

(Sanjay Bhatt, Seattle Times, 05.06.2014)
(Aubrey Cohen, Seattle P-I, 05.06.2014)
(John Gillie, Tacoma News Tribune, 05.06.2014)
(John Gillie, The Olympian, 05.06.2014)
(Marc Stiles, The Olympian, 05.06.2014)

The post April Reporting Roundup: Red Hot Catch-22 Edition appeared first on Seattle Bubble.

To get this party started, here’s an excerpt from the NWMLS press release:

Lack of inventory is holding back sales

Northwest Multiple Listing Service brokers reported rising prices on fewer sales during March compared to a year ago, citing inventory shortages as the main reason.
…
“The only thing holding back sales is the lack of inventory,” said John Deely, a member of the Northwest MLS board of directors. He said one recent listing priced at a fair market value drew more than 40 offers. “The depth of buyer demand appears to have no bottom in the most popular price ranges,” added Deely, the principal managing broker at Coldwell Banker Bain in Seattle.

Here’s the thing. For the claim that “the only thing holding back sales is the lack of inventory” to hold any water in an environment where sales are on the decline from this same time last year, inventory would need to be flat or down from last year. In fact the opposite is true:

So there’s obviously something else that’s driving down sales beyond just a lack of inventory. I think it’s mostly due to interest rates. Many buyers who might have otherwise waited until this year to buy jumped in last year when rates were crazy low. Since rates are now on the rise, sales are starting to suffer.

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

Seattle Times

Sanjay Bhatt: Home price rising more slowly, but for-sale signs remain scarce

A continuing tight inventory of homes for sale kept pressure on prices.

“Everyone’s waiting for the spring bounce in listings,” said Seattle economist Matthew Gardner. “We’re all hoping that’ll be the case. Without a doubt there are still more buyers than sellers.”

Still, annual price growth has been slowing: In January the median price in King County was 17 percent higher over the previous 12 months; in February, 11 percent higher.

The number of active listings every month has been higher than a year ago, but the number of pending deals — mutually accepted contracts to buy a home that haven’t closed yet — is lower than last year in all three counties, suggesting buyers are being more choosy.

As usual, a good article from Sanjay Bhatt, digging deeper than the shallow sales pitches in the NWMLS press release.

Seattle P-I

Aubrey Cohen: Home inventory, sales fell in March

So much for improving home inventory.

After starting to ease in recent months, the supply of houses for sale in King County retightened in March, the Northwest Multiple Listing Service reported Thursday. The county had just 1.8 months of houses for sale at the current sales pace in March, down from 2.6 months of inventory in February.

Hmm. Technically true, but misleading. Months of supply always drops over the first few months of the year. Overall, inventory is (very slowly) climbing and sales are falling compared to a year ago, which removes seasonal factors.

Everett Herald

Jim Davis: Low inventory depresses county home sales

Another month, another drop in home sales.

Pending sales for homes and condominiums in Snohomish County dropped in March from the same period a year ago, according to according to numbers released Thursday by the Northwest Multiple Listing Service.

Sales fell to 1,481 last month, down from 1,576 in March 2013. That’s a 6 percent drop.

Hey, look, the Herald is back in the monthly reporting game. Welcome, Jim Davis!

Tacoma News Tribune

Rolf Boone: Pierce County home sales face tough comparison with 2013

The Pierce County housing market sold more homes in March, but it still didn’t match last year’s March totals as sales dipped nearly 2 percent, according to Northwest Multiple Listing Service data released Thursday.

Looks like we just get the short blurb version of the News Tribune’s story online this month.

The Olympian

Rolf Boone: Year-over-year home sales fall, but prices climb

The Thurston County housing market delivered a mixed bag of results for March, with sales heading in one direction, while prices went the other way, according to Northwest Multiple Listing Service data released Thursday.

Although more homes sold in March than February, last month’s sales still fell 6.8 percent from the year-ago period, falling to 246 units from 264 units in March 2013, the combined single-family residence and condo data show.

Not much of a meaty story online in the Olympian, either.

(Sanjay Bhatt, Seattle Times, 04.03.2014)
(Aubrey Cohen, Seattle P-I, 04.03.2014)
(Jim Davis, Everett Herald, 04.03.2014)
(Rolf Boone, Tacoma News Tribune, 04.03.2014)
(Rolf Boone, The Olympian, 04.04.2014)

The post March Reporting Roundup: Lack of Inventory Edition appeared first on Seattle Bubble.

West Seattle Blog: West Seattle development: 30-apartment, no-off-street parking 6917 California SW gets land-use approval

This morning the decision is in from the city Department of Planning and Development – land-use approval for the 30-apartments, no-parking-spaces project at 6917 California SW (map), with DPD determining its “environmentally non-significance,” meaning the city will NOT require a full environmental-impact report. Read the decision here.

West Seattle Blog: As-it-happened: 4755 Fauntleroy alley-vacation hearing, standing room only; vote delayed to April 8th

We’re at City Hall for the alley-vacation hearing (process explained here, same as ‘street’ vacation) for 4755 Fauntleroy before the City Council’s Transportation Committee. Standing room only. Supporters are wearing purple stickers with slogans; opponents are wearing yellow stickers with slogans.
…
First to speak, project opponent Deb Barker… She is a community organization leader and former Design Review Board member. She says the public benefits in the project package are not enough. She talks about the setbacks and says the alley vacation overall will “waste public land for profit.”

Next, project supporter Sharonn Meeks, also a community-organization leader. She notes she was “involved in this project way before it began” – that included being on the Triangle Planning Group. She calls the site “a blighted grayfield.” She says scrapping these proposal would cost time and “an excellent developer.”

Standing-room only at a meeting do decide whether a developer can build over the top of an alley? West Seattleites really care about their alleys, apparently!

Capitol Hill Seattle: Slow growth groups continue pushback on Seattle development

A petition CHS first shined a little daylight on back in spring 2013 is now getting big media play — and apparently the attention of Seattle City Council member Nick Licata.
…
You can read the entire confused thing here. In addition to the TV station article’s challenges with apostrophes, the report says organizers “are working to hand in their petitions, signatures and letters soon to city leaders.”

Capitol Hill Seattle: Hill’s ‘hard hat special’ continues with start of 7-story E Pike Mercedes project

The walls and glass are smashing down on yet another block of Pike/Pine as demolition — and preservation — work has begun at the site of the former Mercedes Benz dealership where a seven-story, mixed-use project will eventually stand on E Pike between Belmont and Boylston. What the project will look like, more on the staggering amount of Pike/Pine construction underway and video of giant Tonka toys in action, below.

Queen Anne View: Next Early Design Review for Seattle Children’s Home development set for March 19th

The proposed CamWest development for the Seattle Children’s Home site is up for another Early Design Review next Wednesday, March 19th. The developer has provided several new site plans, as well as proposed building designs, in advance of the meeting.
…
To provide feedback, attend the Early Design Guidance meeting on March 19 at the Queen Anne Community Center, 1901 1st Ave W, Room #1. The meeting begins at 6:30pm and you can find materials related to the meeting online.

The post Local Development Roundup: March 2014 appeared first on Seattle Bubble.

To get this party started, here’s an excerpt from the NWMLS press release:

Home Sales Shrink as Buyers Take a Timeout due to Inventory shortages, Seahawks Playoffs

Northwest Multiple Listing Service brokers reported 507 fewer pending sales during February than the same month in 2013, but members believe the 6.5 percent decline isn’t due to a shortage of buyers. “If we just had enough homes to sell we would easily be outpacing last year’s pending numbers,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “Locally, we are literally starving for inventory,” he added.
…
Another industry leader pointed not only to a “severe shortage of homes for sale” in the most sought-after price ranges, but also to the fan frenzy surrounding the Seahawks as a factor in the setback of sales. “The Seahawks’ run to the Super Bowl affected sales,” reported J. Lennox Scott. Since the Super Bowl Championship game, he said listing activity has picked up, resulting in brisk sales activity for the new, but still limited inventory.
…
The smaller selection is resulting in bidding wars for well-priced homes in some neighborhoods. Multiple offer situations are common in local markets with less than four months of inventory, according to Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma and a member of the Northwest MLS board of directors. He noted traffic has been “very good” at open houses. “These are harbingers of a medium- to fast-paced spring and summer selling seasons,” he suggested.

I just can’t comprehend why the NWMLS would choose to put that nonsense from Lennox so prominently in their press release. Do they really believe that there were people in January and February who thought to themselves… “Well honey, I know we were planning to buy a house this month, but gosh darnit, we’re just too busy watching football on Sundays! I guess we’ll just have to wait until March.” It is ridiculous on the face of it.

As I pointed out yesterday, the weakness in sales is not new nor is it just a local phenomenon. As you can see in the chart above, both pending and closed sales have been getting consistently weaker since August or September. To claim that the Seahawks had anything to do with February sales coming in lower than last year is absurd.

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

Seattle Times

Sanjay Bhatt: Home prices dip again in King County

The area’s housing market hit a lull in February, with the second consecutive monthly slide in home sales and median prices.

Blame the Super Bowl. Or the Winter Olympics. Or Mercury retrograde.

Housing-market pundits searched for clues Wednesday in new data from the Northwest Multiple Listing Service to explain why the median price of single-family homes sold in King County in February fell to $405,400 from $410,000 in January amid little growth in the number of homes for sale.
…
“The Seahawks’ run to the Super Bowl affected sales,” suggested J. Lennox Scott, chairman of John L. Scott Real Estate, in a statement put out by the MLS. Since the championship game, he said, more homes have been listed and sold.

An even bigger factor was the continued tight inventory of homes for sale, said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies. King and Snohomish counties had less than a four-month supply of homes for sale, making it a seller’s market.

Thanks once again to Glenn Crellin for bringing some sanity to the discussion.

Seattle P-I

Aubrey Cohen: Fewer home sales, more listings drive up inventory in Seattle area

Why were sales down countywide? A continued lack of inventory is one suspect.

“If we just had enough homes to sell we would easily be outpacing last year’s pending numbers,” Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate, said in a listing service news release. “Locally, we are literally starving for inventory.”

Glenn Crellin, associate director for research at the University of Washington Runstad Center for Real Estate Research, said the uptick in inventory makes this factor “a little bit less relevant than it has been in previous months,” although: “It’s still very tight, no question about it.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, argued for another factor.

“The Seahawks’ run to the Super Bowl affected sales,” he said in the news release, adding that activity has picked up since the big game.

It couldn’t be low inventory, rising interest rates, or rising prices… must have been the Seahawks! Yeah!

Everett Herald

Jim Davis: Pending home sales in county fall

Pending sales for homes and condominiums in Snohomish County dropped in February from the same month a year ago, according to numbers released Wednesday by the Northwest Multiple Listing Service.
…
While there is a shortage of homes for sales, many potential home buyers stayed home glued to their televisions during the weekends in January and early February, said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.
…
With higher prices, more people will be willing to sell their homes this year, said John Deely, the Northwest MLS director and a principal managing broker at Coldwell Banker Bain in Seattle.

“People who didn’t have enough equity in their house, or didn’t have enough confidence in the economy, didn’t move the past few years,” Deely said. “We’re going to see these people start to come to the market this spring. This is going to be a phenomenal year — not just an average year — a phenomenal year.”

I wonder if Mr. Deely would care to explain exactly what measures he’ll be using to quantify this “phenomenal year.” Also, it’s great to see real estate reporting reappear in The Herald.

Tacoma News Tribune

Rolf Boone: Pierce County home sales down, median prices up in February

Pierce County home sales fell in February, the second consecutive month in which sales have cooled after an earlier red-hot period for the market, new data released Wednesday by the Northwest Multiple Listing Service show.

Last month, sales fell 3 percent to 692 units from 714 units in the same period a year ago, the combined single-family residence and condo data show.

The News Tribune was the only article this month not to quote that Seahawks nonsense from J. Lennox Scott, but that’s probably just because the entire article is only about twice as long as what I’ve quoted here.

As far as I could tell, there was no story in The Olympian this month, but recently when there has been it’s just a copy of the News Tribune story anyway.

(Sanjay Bhatt, Seattle Times, 03.05.2014)
(Aubrey Cohen, Seattle P-I, 03.05.2014)
(Jim Davis, Everett Herald, 03.06.2014)
(Rolf Boone, Tacoma News Tribune, 03.05.2014)

The post February Reporting Roundup: Seahawks Super Bowl 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.

While the housing market was definitely on fire last year, with respect to bidding wars and home price gains, there are a lot of signs that things will slow back down dramatically this year. If you’re a buyer looking for a home, near-record-low inventory will no doubt still make things feel intense, but it definitely looks like 2014 will be quite a bit different for housing than 2013.

Calculated Risk: MBA: Mortgage Purchase Index lowest since 1995

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 8.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 21, 2014. …

The Refinance Index decreased 11 percent from the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier to the lowest level since 1995. …

“Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it,” said Mike Fratantoni, MBA’s Chief Economist.

…
The purchase index is probably understating purchase activity because small lenders tend to focus on purchases, and those small lenders are underrepresented in the purchase index – but this is still very weak.

Calculated Risk: Housing Weakness: Temporary or Enduring?

The recent data for housing has been weak, with new home sales and housing starts mostly moving sideways over the last year (with plenty of ups and downs, and I expect downward revisions to Q4 new home sales). Existing home sales have declined 14% from a peak of 5.38 million in July 2013 on a seasonally adjusted annual rate basis (SAAR), to just 4.62 million SAAR in January.
…
The bottom line is the housing weakness should be temporary. There should be more inventory this year, price increases should slow, and sales volumes increase.

Wall Street Journal: Mess in the West: Home Sales Index Hits 7-Year Low

An index that measures contracts to purchase previously owned homes was mostly unchanged in January from December, according to a report Friday. But the index showed another drop in the West, where it has fallen for eight consecutive months.

The index fell in the West to its third lowest level since the NAR began its tab in 2001, surpassing only two months from the summer of 2007, when housing markets were beginning their free fall.

Wall Street Journal: Don’t Get Excited by Jump in New Home Sales

New home sales jumped to the highest level since July 2008 in January, which is really good news if it holds. But the Census new-home sales data is a choppy indicator with a small sample size, and when you take a longer look at the series it’s pretty clear that the nation’s two-year-old real estate turnaround is still largely a recovery in prices.

The building of new homes — the housing sector’s biggest contribution to annual economic growth — continues to lag badly. This disconnect goes a long way toward explaining why U.S. growth is still pretty weak some four years after the recession. It’s also why economists’ hopes that 2014 will finally be a breakout year for the economy depend on home building regaining its footing in the spring.

“The key piece for the U.S. economic outlook in 2014 is a turning point in the construction cycle,” says Ryan Sweet, an economist at Moody’s Analytics.

The post Link Roundup: Housing Market Strength Evaporating appeared first on Seattle Bubble.

Western Washington housing market "definitely in full recovery mode"

“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how [CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate Mike] Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014,” Gain added, emphasizing there is pent up demand and “a very active market is anticipated once the number of listings increases.”

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate agreed. “Available inventory remains tight with shortages or low inventory where 90 percent or more of the sales activity is taking place,” he remarked.
…
Thirteen counties have more listings than a year ago, but eight counties are reporting declines in total inventory. “We are literally starving for inventory. We need more homes to sell, especially in the most desirable neighborhoods,” Gain stated.

Literally starving, you guys. Literally.

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

Seattle Times

Sanjay Bhatt: Thin inventory puts pressure on King County home prices

In general, many houses that are listed are overpriced because those sellers are incorrectly comparing their homes with others in top condition and top locations, said Deidre Haines, principal managing broker for South Snohomish County at Coldwell Banker Bain.

“Sellers need to pay better attention to what their brokers are telling them about the value of their homes, and not think that Zillow knows,” Haines said, referring to the Seattle-based online real-estate marketplace.

Zillow’s algorithm for estimating a home’s value is a great starting point, she said, but isn’t incorporating all factors.

“You can’t smell it, you don’t know what condition it’s in, you don’t know if it’s been updated, you don’t know if the neighborhood has parked cars in the front yard,” Haines said.

I love that. Not only is Zillow terrible for home buyers thanks to intentionally incomplete data, but it’s bad for sellers because “you can’t smell it on Zillow.”

Another interesting note from the Seattle Times article:

Starting with Wednesday’s report, the listing service said it was changing how it reported the months of supply, using closed sales instead of pending sales, relative to total active listings. The service said it wanted its supply ratio to be comparable to those calculated by the National Association of Realtors and other groups.

I may switch to this method in these posts as well, just to be consistent with what shows up in other media.

Seattle P-I

Aubrey Cohen: Area home inventory picked up in January

It’s getting a little easier for Seattle-area home shoppers to find a place, according to a new report.

King County had just under 2.4 months worth of houses for sale at the current sales pace in January, the highest inventory since June 2012, the Northwest Multiple Listing Service reported. That said, he inventory level is still well below the 4- to 6-month range considered balanced between supply and demand. Seattle had 2 months of inventory in January.

“It’s still a situation with an inventory that isn’t as robust as it needs to be,” said Glenn Crellin, associate director for research at the University of Washington’s Runstad Center for Real Estate Studies.

Despite the slow growth of inventory, we’re still near record lows. For buyers’ sake, let’s hope this spring sees a big bump in the inventory of homes for sale.

Tacoma News Tribune

Kathleen Cooper: Home prices continue climb in Pierce County

The residential real estate market in Western Washington continued to heal in January, with most counties seeing an increase in sale prices and overall sales.

Pierce County’s median sale price increased almost 12 percent from January 2013, to $212,500, according to data released Wednesday by the Northwest Multiple Listing Service.
…
Pricing also is a concern. “Many listings are overpriced,” said Deidre Haines, regional managing broker in Snohomish County for Coldwell Banker Bain. “Buyers are not interested in making offers on those properties,” she said.

Isn’t that true in every market though? There are always a lot of overpriced listings…

The Olympian

Kathleen Cooper: Thurston home prices mysteriously slip a bit

Thurston County’s median sale price took a tiny dip, dropping almost 3 percent from the same time a year ago, to $208,250, according to data released Wednesday by the Northwest Multiple Listing Service. The reason for the drop wasn’t immediately clear. Other data indicate market strength, including a 27 percent increase in closed sales and about 4.5 months worth of inventory.

“I really don’t understand it,” said Randy Reynolds, president of the Thurston County Realtors Association. “I haven’t truly analyzed it yet, but what I’m feeling is that we’re seeing more investors picking up properties at the low end” of the price range, which would drive that median point down a bit.

I highly doubt we’re seeing an up tick of investor activity. Most of the investors bought lots of homes in 2012 and early 2013. Investor activity has been on the decrease lately.

(Sanjay Bhatt, Seattle Times, 02.05.2014)
(Aubrey Cohen, Seattle P-I, 02.05.2014)
(Kathleen Cooper, Tacoma News Tribune, 02.06.2014)
(Kathleen Cooper, The Olympian, 02.06.2014)

The post January Reporting Roundup: “Full Recovery Mode” Edition 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.

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

"Stage is set for another good year" in real estate with year-end gains in inventory, sales, prices

Brokers with Northwest Multiple Listing Service ended 2013 with the best year-over-year improvement in inventory (up 8.4 percent) and a similar gain in closed sales to buoy confidence heading into the new year. December’s pending sales slipped slightly (down about 1.7 percent) compared to the same month a year ago.
“Positive job growth and the continuation of favorable low interest rates are setting the stage for another good year in real estate,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Friday’s narrow approval of Boeing’s contract proposal for Machinists union members bodes well for members of Northwest Multiple Listing Service and the real estate industry.

Reacting to the vote, MLS board member John Deely said, “The robust and diverse economy of the Pacific Northwest is solidified by Boeing’s continued presence in the Seattle area.” Deely, the principal managing broker at Coldwell Banker Bain in Seattle, said the vote helps secure the region’s position as “the aerospace epicenter of the world with top-notch manufacturing jobs that support the industry.”

Boeing workers and others hoping to buy a home have a bigger selection of homes to consider than house-hunters who were looking twelve months ago – especially in Snohomish County, where the number of active listings is up 43.6 percent.

I’d just like to point out again how slimy it comes across to see salesmen jumping on this Boeing story as just another way to sell more used homes. Basically on par with the smarmy car salesmen that pounced on Navy sailors as soon as they arrived back in Everett last month.

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

Seattle Times

Sanjay Bhatt: King County home prices rise 10.5 percent for 2013

The median price of single-family homes sold in King County last month was $419,825, a 10.5 percent gain over the prior year, but the typical home’s value likely didn’t appreciate quite that much.
…
“No one should be misled into thinking the typical home in King and Snohomish County has gone up 10 percent or more over the past year,” [Associate director of research at the Runstad Center for Real Estate Studies at the University of Washington Glenn] Crellin said. The typical home’s appreciation in 2013 was closer to 7 or 8 percent, he said.

Great reporting as usual from the Times, and a great quote from Glenn Crellin.

Seattle P-I

Aubrey Cohen: King County still has few homes for sale

There still isn’t very much selection for King County homebuyers, according to a new report.
…
“Its’ still a very tight inventory,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.
…
Crellin said he expects more homes to hit the market soon, as builders finish new construction and as homeowners “become convinced that hte market has bailed them out of being as far underwater or underwater at all.”

More great insight from Glenn.

Tacoma News Tribune

Rolf Boone: Pierce County home sales up in December over 2012

The Pierce County housing market ended the year on a mostly positive note as sales in December rose 11 percent from last year, while price appreciation and pending sales cooled, according to Northwest Multiple Listing Service data released Monday.
…
Allen Realtors of Lakewood President Mike Larson said Monday that he was ready to announce that the “market was back” after a sizzling summer of home sales in 2013.

And then things slowed during the second half of the year.

Aww, pity the poor used home salesman.

The Olympian

Rolf Boone: Home sales, prices, listings all get better

The Thurston County housing market ended the year on a positive note in December, showing across-the-board improvement in sales, prices, pending sales, inventory levels and new listings.
…
Mark Kitabayashi, the immediate past president of the Washington Realtors Association, said 2013 was a year when the housing market continued to recover, with buyers who had previously been on the fence finally buying a home.

But the market also slowed during the second half of the year, he said.

Interesting how similar the sentiments are from the agent quoted in the Tacoma News Tribune and the agent quoted in The Olympian.

(Sanjay Bhatt, Seattle Times, 01.06.2014)
(Aubrey Cohen, Seattle P-I, 01.06.2014)
(Rolf Boone, Tacoma News Tribune, 01.07.2014)
(Rolf Boone, The Olympian, 01.07.2014)

The post December Reporting Roundup: Positive Everything Edition appeared first on Seattle Bubble.

West Seattle Blog: How high is too high for ‘lowrise’ development? You’re invited to citywide meeting January 14th

What’s allowable in [“low-rise multifamily”] zoning is an area of interest/concern, literally, in neighborhoods around the city, including ours, as multifamily development intensifies, particularly in that zone, which is often adjacent to single-family areas. So if you share that interest/concern, from whatever viewpoint, you’ll want to make plans to be at a citywide meeting on January 14th, regarding possibly changing the rules

West Seattle Blog: 6917 California SW developer meets neighbors; see the future no-offstreet-parking building’s ‘identical’ twin

The developer planning to build a 30-unit, no-offstreet-parking building in Morgan Junction says it will be a duplicate of a 30-unit, no-offstreet-parking building the same architect designed for a North Seattle site.

After Mark Knoll explained that last night to about 30 people who came to hear from and talk with him about 6917 California SW (map) – the plan first reported here two months ago – we took a field trip today for a firsthand look at the “duplicate” building.

Ironically, we discovered, that building (same architect but different owner/developer) in Roosevelt is directly across the street from a big parking lot.

Capitol Hill Seattle: The Gatsby Apartments of Capitol Hill

With new apartment projects under construction across the Hill, CHS has noted the increasingly creative names used to market the projects. A new one we’ve gotten wind of seems to be more over the top than most. Come spring 2014, you’ll have the opportunity to live inside Capitol Hill’s new Gatsby Apartments

Capitol Hill Seattle: Design board goes back for thirds in effort to shape neighbor-friendlier Chutney’s building

Wednesday night, a four-story apartment project slated to replace the former Chutney’s restaurant at 15th Ave E and E Mercer will be weighed by the design review board for a third time.
…
According to the report on the September meeting, developers Stream Real Estate nailed down the “terminus” element well enough but left the board wanting more for the project’s northern and western walls facing the neighborhood’s more “residential” streets. Wednesday night, the East Design Board will weigh in on whether Nicholson Kovalchick’s new friendlier setback treatment for the “gateway” walls are good enough to move forward.

Queen Anne View: Seattle Children’s Home development plans revealed; public design review meeting Dec 18

The development site at 901 W McGraw St is bordered by W McGraw St, 9th Ave W, and 10th Ave W, with alley access to the site via Crockett St. These streets are key to understanding the 3 plan options, as the entrance for 60+ townhomes moves around in each plan. The plan includes on-site parking for approximately 122 vehicles and all options save the on-site cottage, converting it to a duplex.

Seattle Times: Big Lake Union site sold for $80M

A large site facing Lake Union was acquired this week for nearly $80 million by a developer who has proposed building 800 apartments there.
…
In preliminary plans filed with the city, Holland proposes to spend about $165 million developing 800 apartments in phases in buildings up to 65 feet high. Holland also has a land-use permit expiring in January 2016 to develop a six-story office building with nearly 150,000 square feet at 1101 Westlake Avenue North.

The post Local Development Roundup: December 2013 appeared first on Seattle Bubble.

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

Commenting on recent activity along with expectations of a holiday season slowdown, some brokers noted there are multiple—and sometimes, unrealized—advantages to buying and selling homes as the year winds down. “Waiting will not provide much benefit,” suggested Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle.

MLS director Frank Wilson agreed. He believes it will be more expensive to buy a home during 2014. “Slow but steady price appreciation, upward pressure on interest rates and increased costs of getting a loan will all work to decrease the buyer’s purchasing power,” said Wilson, the branch managing broker and Kitsap District manager for John L. Scott in Poulsbo.

“Waiting will not provide much benefit.” “It will be more expensive to buy a home [next year].” Gee, where have we heard those claims before? Oh right. Only from basically every real estate agent, all the time. The photo above is one I took of a real estate broker’s street sign in 2006.

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

Seattle Times

Coral Garnick: King County home-price gains lose some sizzle

The Northwest Multiple Listing Service said Wednesday the median price of a single-family home in King County rose 7.5 percent compared with a year ago. It was the 20th consecutive month of a higher year-over-year median price, but the first time in more than a year that the increase was less than 10 percent.

The drop-off may mean the housing market is moving away from the dreaded boom-and-bust cycles that can lead to a market crash, brokers and economists in the region said.

Oddly, the article doesn’t quote any economists, just the incredibly trustworthy home salesmen Dick Beeson and J. Lennox Scott.

Seattle P-I

Aubrey Cohen: Home sales down, but inventory remains tight

November brought a solid sign that the recent home sales surge is at least leveling off, with King County’s first year-to-year sales drop in two and a half years. But inventory remains tight.
…
“It’s pretty much a stable market,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

Hmm, I’m not sure I’d go so far as to call the current market “stable,” but it’s definitely less insane than it was earlier this year.

Everett Herald

The Everett Herald has just stopped reporting on the NWMLS stats in their real estate section, it seems. I’ve reached out to offer them contract writing services. While the Herald apparently doesn’t have a budget for freelancers, the Herald Business Journal does, and my first piece there will be appearing there soon.

Tacoma News-Tribune

Rolf Boone: Home sales, prices move up in Pierce County

The Pierce County housing market still exhibited growth during one of the slower months of the year, with home sales and median prices rising modestly in the year-over-year November period, according to Northwest Multiple Listing Service data released Wednesday.

Not a lot of meat to the online version of the News-Tribune article this month.

The Olympian

Rolf Boone: Home sales in county jump 33 percent over November 2012

Thurston County home sales shot up more than 30 percent in November, a stronger-than-usual showing during a month when sales are typically slow, according to Northwest Multiple Listing Service data released Wednesday.
…
Van Dorm Realty managing broker Jerry Wilkins explained the rise in sales this way: Consumer confidence continues to improve, and buyers have been in act-now mode because they are anxious about another rise in mortgage interest rates.

Now that is interesting. Sales fell year-over-year for the first time in quite a while in King County, but were up over 30 percent in Thurston? I’ll be looking into that later this month for sure.

(Coral Garnick, Seattle Times, 12.05.2013)
(Aubrey Cohen, Seattle P-I, 12.05.2013)
(Rolf Boone, Tacoma News Tribune, 12.05.2013)
(Rolf Boone, The Olympian, 12.05.2013)

The post November Reporting Roundup: Don’t Wait, Buy Now Edition appeared first on Seattle Bubble.

West Seattle Blog: Neighbors speak out about 36-unit, no-parking Junction development

We’re in the basement at Hope Lutheran Church along with more than 30 people here for a meeting that wouldn’t have happened if neighbors hadn’t petitioned the city for it. While the 36-unit, no-parking-space apartment building proposed for 4535 44th SW is going through Design Review – with at least one more meeting to come – other components of public comment are routinely dealt with via e-mail, postal-mail, phone comments … unless at least 50 people petition for a meeting to address SEPA (State Environmental Policy Act)-related impacts.

West Seattle Blog: New renderings, ‘packet’ as 3210 California SW returns to Design Review

This Thursday (November 21st), 3210 California SW – the biggest development on the drawing boards for the greater Admiral area – goes back to the Southwest Design Review Board, 6:30 pm at the Senior Center of West Seattle (California/Oregon). In advance of that meeting, developer Intracorp has gone public with new renderings that are not in the “packet” published online in advance of the meeting.

WSB also has a very detailed follow-up of the Design Reveiw Board meeting, where it was decided to send the project through at least one more review meeting.

Capitol Hill Seattle: Neighborhood groups try to halt new microhousing rules in fight for tighter restrictions on aPodments

In October, CHS reported that the City of Seattle was “seeking feedback” on new rules proposed to regulate microhousing and expose the developments to the public design review process.

A group of community organizations has, indeed, provided its feedback — in the form of an appeal that seeks to reverse a recent decision to move the proposals forward and halt any in-progress microhousing development.

Capitol Hill Seattle: A rowhouse mini-explosion in Capitol Hill helping to transform single-family home blocks

A small explosion of new rowhouses and townhome developments is in the works around Capitol Hill, and two familiar names are involved in quite a few of them. Capitol Hill architect Bradley Khouri and developer Graham Black are pairing up on at least two projects of the type on Capitol Hill, and individually involved in at least five total.

If you see a story about local development that should be included in a future roundup, send it my way.

The post Local Development Roundup: November 2013 appeared first on Seattle Bubble.

Here are my top 10 proposed future uses for the facility.

10. Museum for future generations to remember that Seattle used to have manufacturing
9. Two words: Ice Town
8. Microsoft data center | Employment: 5
7. Home of the world’s largest coffee roasting machine.
6. Townhomes, townhomes, townhomes!
5. Genetic research center dedicated to breeding pink ponies.
4. New mega-ultra-super-sanctuary for Mars Hill Church
3. Storage warehouse for Sonics merchandise produced when Seattle imagines the NBA will return
2. Massive indoor garden for the upcoming economic implosion and subsequent collapse of society
1. Low-income housing development for thousands of laid-off machinists

What are your top ideas?

[Update]
RedmondJP had the best reader suggestion: “The biggest indoor pot grow operation IN THE WORLD!”

The post Top 10 Future Uses for the 98-Acre Boeing Everett Factory appeared first on Seattle Bubble.

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

Home sales "pause" with government shutdown, but brokers mostly bullish on market recovery

Home sales “paused” during October but prices continued to rise, according to the latest statistics from Northwest Multiple Listing Service. Commenting on year-to-date totals for 2013 compared to 2012, one industry expert remarked, “I would say the real estate market is recovering nicely.”

Pending sales during October dipped 2.7 percent when compared to the same month a year ago, but rose nearly 3.2 percent from September’s volume. October’s decline was the first negative change in year-over-year comparisons since April 2011. (That drop-off was attributed in part to a frenzy during April 2010 when buyers were scrambling to take advantage of a federal tax credit that was expiring.)

Brokers point to the federal shutdown during the first two weeks of October, below-normal inventory, and shaken consumer confidence as factors in the slowdown.

So, in the first month of positive year-over-year inventory in nearly three years it is “below-normal inventory” that caused a sudden slowdown in pending sales. Right. Here’s what the year-over-year trend in pending sales has looked like since January 2012:

The year-over-year change in pending sales has been trending down sharply since July, and has been on an overall downward trend since early last year. But why look at obvious trends when you can blame the political 3-ring circus in Washington DC?

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

Sanjay Bhatt, Seattle Times: King County median home price up 15% over year ago

While extremely tight inventory drove bidding wars in spring, October was the first time this year that inventory of single-family homes was higher than a year earlier.
…
Pending sales slipped to 2,579, down almost 4 percent from a year earlier, perhaps related to the federal government’s partial shutdown from Oct. 1-16.

Pending sales are where the shutdown’s impact would have shown up, but it’s hard to tease that out from other possible causes, said Glenn Crellin, associate director of research at the Runstad Center for Real Estate Studies at the University of Washington.

“I’m very encouraged by the fact that listings are increasing gradually,” he said.

The trend in October was

Aubrey Cohen, Seattle P-I: Was home sales slowdown just a ‘pause’?

The number of deals to buy King County houses fell 3.6 percent in October from a year earlier, the Northwest Multiple Listing Service reported Tuesday.

That was just a “slight pause,” Mike Gain, president and CEO of Prudential Northwest Realty Associates, said in the listing service report.
…
Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington, said the pause hypothesis is “probably right,” noting that we’re now comparing to months last year when sales were ramping up.
…
Looking foward, Crellin said: “I think you’re going to see stabilization.”

It’s all Crellin, all the time in this month’s reporting, apparently.

No story has appeared in the Everett Herald.

C.R. Roberts, Tacoma News Tribune: Home prices up in Pierce County in October, dip in Thurston

Residential home prices were were up in Pierce County in October, while the number of pending sales declined. Thurston County saw the opposite effect, with pending sales up and prices down, the Northwest Multiple Listing Service reported Tuesday.
…
“More inventory is still needed to meet demand,” suggested Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma. Beeson is also past chairman of the Northwest MLS board of directors.
…
“It still looks like a potential housing shortage in Puget Sound come 2015 if building doesn’t increase,” Beeson said in an MLS release Tuesday.

A potential shortage? Because the record-low inventory we had in 2012 and early 2013 wasn’t a shortage? Dick Beeson never fails to entertain.

C.R. Roberts, The Olympian: Home prices down in Thurston in October, up in Pierce County
The News Tribune and Olympian stories this month are literally the same exact story but with slightly different headlines.

(Sanjay Bhatt, Seattle Times, 11.05.2013)
(Aubrey Cohen, Seattle P-I, 11.05.2013)
(C.R. Roberts, Tacoma News Tribune, 11.05.2013)
(C.R. Roberts, The Olympian, 11.05.2013)

The post October Reporting Roundup: Denying the Trend 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.

ValueAppeal CEO Charlie Walsh made the tough decision to shut down the service earlier this year, saying the economics of helping homeowners challenge their tax bills for as little as $99 just didn’t work out.

“There is only a thin slice of homeowners that are overassessed, about 20 percent of homes,” says Walsh. “And at the same time there is only a 30 to 60 day window in which you are allowed to file an appeal, so that presented a marketing challenge.”

In order to solve that challenge, ValueAppeal turned to direct mail. “To make money at $99 a pop acquiring customers through direct mail — you have to be pretty good at direct mail,” said Walsh, adding that they started layering on all sorts of demographic data about who was most likely to respond to direct mail campaigns and from that who was most likely to file a tax appeal.

“Over the course of a few years, we got really good at predicting who would respond to our direct mail,” said Walsh, describing the data as a “crystal ball.” Late last year, Walsh started kicking around new ideas, thinking about ways they could predict which homes would be most likely to sell, refinance or foreclose in a certain geographic area.

Well, that’s a bummer for homeowners. ValueAppeal was a great service, but given the small niche market they served and the timing issues discussed in the article, it’s not surprising that they decided to pivot into a business with a much larger potential for growth.

Instead of trying to help homeowners figure out if their tax bills are too high, MostLikely is attempting to help real estate professionals develop leads through predictive intelligence…
…
Walsh admits that the “pain point” still very much exists for home owners trying to appeal property taxes, but he said the company could not afford to service those customers while going in the new direction.

That “new direction” is marketing subscription services for real estate agents, based on predictive analytics. While it’s certainly a business that sounds like an interesting and fun challenge, it’s still sad to see a valuable service for homeowners fall by the wayside.

The post ValueAppeal: Drops Property Tax Appeals Business appeared first on Seattle Bubble.

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

Region’s housing activity still "speeding along," but pace slowing as seasons change, uncertainty looms amid government shutdown

September tested the housing market’s resilience around Western Washington with fluctuating mortgage rates, record-setting rains, and persistent inventory shortages in some areas. By month’s end, however, both pending and closed sales outgained the same period a year ago, according to the latest figures from Northwest Multiple Listing Service.

Prices also increased compared to 12 months ago, but fell slightly from the previous month. Year-to-date figures through nine months show prices for homes and condominiums that have sold in the 21 counties served by the MLS are up 12 percent from a year ago.

With uncertainty about the duration of the government shutdown, brokers say the positive momentum could stall.

It’s the perfect scapegoat! When things slow down from the unreasonably hot market we had this spring and summer, they can now blame it on the “shutdown.” How convenient!

Also:

Northwest MLS director John Deely said the Seattle market shows no signs of slowing down and house-hunters seem undaunted by soggy weather. “Buyers continue to flood open houses and multiple offers rain down on competitively priced properties,” he commented.

I see what you did there.

Northwest MLS director George Moorhead, the branch manager at Bentley Properties in Bothell, said market activity “waned just a bit” towards the end of August and during September, a pattern he said is normal with students going back to school and last-minute vacations. He expects interest rates will climb to 5 percent by summer 2014, and says the big message is “If you want to capitalize on the current lower interest rates, don’t delay any longer.”

Coincidentally, that has been the same “big message” home salesmen have been driving home for the past three years, at least.

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

Sanjay Bhatt, Seattle Times: King County home prices dip; shutdown threatens closings

Single-family home prices in King County saw a remarkable run from January to July, when the median price hit $434,000, a 24 percent increase in just seven months.

“That’s way too fast. That’s a 2006 market,” said Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma.

Hah! As if Dick Beeson is worried about home prices rising too fast. Good one.

Aubrey Cohen, Seattle P-I: Home selection the best since February

Frustrated would-be homebuyers should be able to find a little more selection, according to a report released Friday.

February home inventory at the current sales pace was 2.2 months in King County and two months in Seattle, the Northwest Multiple Listing Service reported. Those were the highest numbers since February, although they’re still well below the four to six months of inventory generally considered balanced.

“It’s still a short inventory,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington. “It’s good to see that inventory level picking up a little bit, though, giving prospective buyers a little more choice in the marketplace.”
…
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said the area’s market is going through its third “mini power surge of sales activity” this year.

“With interest rates suddenly coming off their peak for the year, we’re having another surge of activity, which is keeping the inventory at the shortage level in both King and Snohomish counties,” he added.

I like the contrast between the sensible, logical statements from Glenn Crellin and the marketing mumbo-jumbo hype from J. Lennox Scott.

As far as I can tell, there hasn’t been an article posted on the Everett Herald yet.

Kathleen Cooper, Tacoma News Tribune: Pierce County home prices rise again last month, data shows

Pierce County home prices ticked up again in September, data released Friday showed, continuing the trend it has followed all year.

The median sale price for homes and condos in Pierce County last month was $220,000, up almost 10 percent from the same time a year ago, according to data from the Northwest Multiple Listings Service. At the median sale price, half the homes sold for more than that amount, and half sold for less.

It looks like the online edition only gets the lightweight version of the story this month, with a few numbers and a couple of direct quotes from the NWMLS press release.

Kathleen Cooper, The Olympian: Thurston home prices, sales climb in September

Thurston County median home prices rose by 8 percent to $228,497 in September, data released Friday from the Northwest Multiple Listing Service showed.

Aside from that one sentence, the rest of The Olympian’s article is literally identical to the article in the News Tribune.

(Sanjay Bhatt, Seattle Times, 10.04.2013)
(Aubrey Cohen, Seattle P-I, 10.04.2013)
(Kathleen Cooper, Tacoma News Tribune, 10.04.2013)
(Kathleen Cooper, The Olympian, 10.05.2013)

The post September Reporting Roundup: Blame the Shutdown Edition appeared first on Seattle Bubble.

Oddly, the the NWMLS press release website is still showing last month’s release, and they don’t send the releases to me, so I guess we have to skip that part of the program this month.

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

Sanjay Bhatt, Seattle Times: King County home prices drop in August: ‘Just a hiccup’?

Rising interest rates could have thrown cold water on the market’s activity: The average rate on a 30-year fixed mortgage was 4.46 percent in August, up from 4.37 percent in July and a low of 3.35 percent last December, according to Freddie Mac.

The higher interest rates, combined with rising home prices, could dampen some buyers’ appetites, Conway said. But those factors just as easily could prompt others to close a deal before prices and rates rise further.

Summer vacations are a more likely reason for the slowdown in the market, brokers said.

In other words, there really isn’t much interesting in this month’s data. It’s mostly just what we would expect for this time of year.

Aubrey Cohen, Seattle P-I: Seattle-area home supply slowly increasing

Seattle had 1.6 months worth of homes for sale at the current sales pace in August, up from 1.5 months of inventory in July. King County had 1.9 months of inventory, up from 1.7 months.

But both were down from more than two months of supply a year earlier and well below the four to six months generally considered balanced between supply and demand.

“What these numbers tell us loud and clear is that buyer demand in the Puget Sound region is still incredibly strong,” Windermere Real Estate President OB Jacobi said in a listing service news release.

Good ‘ol OB Jacobi.

I waited as late as I could, but there’s still no story posted on this month’s numbers at the Everett Herald.

[Update: Here it is.]
Everett Herald: Snohomish County housing market ‘strongest in years’

Available housing inventory in Snohomish County showed a 10.5 percent uptick in new listings, according to NWMLS data. Realtors reported 1,424 new listings, up from 1,185 new listings in August 2012. Total listing activity in the county jumped from 2,322 units to 2,565 units.

However, the available inventory of houses and condos remains far below normal when measured by months of supply. A balanced housing market has a four- to six-month supply, NWMLS says, but Snohomish County’s current housing supply would be exhausted in 1.8 months at the current sales pace without any new listings.

Darin Stenvers, a director with Northwest MLS, called the current market “the strongest in four or five years,” with signs of stability that should continue into 2014.

“If a buyer finds the home of their dreams, they should make their first offer their best offer or risk losing that home,” he said.

Rolf Boone, Tacoma News Tribune: Pierce County housing market stays hot in August

Although the market has been strong, the change in inventory and slightly higher mortgage interest rates has had an effect on the market, said Dick Beeson, principal managing broker for Re/Max Professionals in Tacoma.

“While the overall market remains vibrant and active, we don’t appear to have the frantic ‘must have this home because there may not be another’ mentality among buyers,” Beeson said.

Pending sales also rose 11.4 percent to 1,486 units last month from 1,334 units in August 2012, the combined data show.

If all those pending sales become closed sales, which doesn’t always happen, the county will extend its monthly home sales streak of 1,000 or more units to five months.

“Doesn’t always happen” in this case should be “never happens.” The ratio between pending sales and closed sales a month or two later has been 80% to 80% in the last six months, so around one in five pending sales are still falling through.

Rolf Boone, The Olympian: Home sales, inventory in Thurston county both are up

The final full month of summer was one of the best months of the year for the Thurston County real estate market as sales and prices rose sharply, new Northwest Multiple Listing Service data show.

Sales rose nearly 18 percent in August to 361 units from 306 units in August 2012, the combined single-family residence and condominium data show.

Prices and pending sales also rose in the year-over-year August period, with median prices climbing 7.8 percent to $235,000 from $218,000, while pending sales rose nearly 5 percent to 410 units from 391 units, according to the combined data.

But inventory levels, which had recently fallen and helped to drive median prices higher, suddenly were higher last month than they were a year ago.

I’m still not a fan of describing the real estate market in qualitative terms that skew so strongly in favor of sellers. A month of sharply rising prices is not what most buyers would describe as “one of the best months of the year.”

(Sanjay Bhatt, Seattle Times, 09.05.2013)
(Aubrey Cohen, Seattle P-I, 09.05.2013)
(Kurt Batdorf, Everett Herald, 09.06.2013)
(Rolf Boone, Tacoma News Tribune, 09.06.2013)
(Rolf Boone, The Olympian, 09.06.2013)

The post August Reporting Roundup: Seasonal Slowdown Edition appeared first on Seattle Bubble.

For renters and homeowners, market forces are permanently altering the familiar face of many neighborhoods. While wealthy newcomers are helping to revitalize neighborhood business districts, the reality is that many renters, saddled by stagnant wages, are being forced to reexamine lifestyle choices and, in some cases, move out of Seattle altogether.

Low housing inventory, a growing population of young tech-company workers and changing attitudes about when to buy a home are all contributing to rent increases throughout the Seattle metro area.

Translation: Some developers of rental units are cashing in on the fact that “the dream of home ownership” is no longer the default aspiration of many Americans.

The article also includes a nifty interactive rental cost map, but given that they’re using Zillow as the source of their data, I’d take the exact numbers with a rather large grain of salt.

What’s fueling rent increases most is development itself, said Jonathan Grant, the Tenant Union’s executive director. If almost all new units cater to wealthier tenants, he said, increasing supply is no path to getting rents to go down or even level off.

“The reality is that these units are high-cost, and often these were taken out of affordable-housing stock,” Grant said. “That’s why you see this theory of supply and demand being turned on its head.”

Sorry Mr. Grant, but that makes no sense. You can price rental units in your new development as high as you want but you simply won’t have any renters if the demand isn’t there. Supply and demand has not been “turned on its head.” It’s working exactly as one would expect: new development supply simply isn’t keeping up with increased demand.

Earlier this summer, The Seattle Times asked readers how they were coping with rising rents, and dozens responded.

Some told us they’re reconsidering whether they’ll ever be able to save enough money to buy a house if they want to stay in the Seattle area.
…
Homebuying may never be in the future for some who stay in the Seattle area because they’ll never be able to save enough for it.

Here we go again with the overblown concerns about being priced out forever. Yes, there will be some periods during which some people who could have afforded to buy a home under ideal circumstances will no longer be able to, but for the most part, if you can’t afford to buy a home in the city or neighborhood of your choosing, it’s probably because you simply aren’t making enough money. The rental market is not conspiring against you.

Pro tip: In places where rents are expensive, homes are expensive too.

What I would love to see in a follow-up story is more exploration of what’s driving the strong demand for high-priced rental units. If I were to venture a guess, I’d say it probably has at least something to do with this:

The post Demand for Seattle Rentals Still Outstripping Supply appeared first on Seattle Bubble.

West Seattle Blog: West Seattle development: 2 more project sites up for sale

It seems to be something of a trend – get your development all or part of the way through the review process, then put it up for sale before starting construction. Newest one: The proposed three-story, 29-apartment, 29-parking-space project at 3829 California SW just went on the market for almost $1.6 million…

West Seattle Blog: Design packet now online for Junction Flats project, before August 29th design review

That’s the cover image for the “packet” put together by Nicholson Kovalchick Architects for their Junction Flats project at 4433 42nd SW (map), across from Hope Lutheran School/Church in The Junction.

Capitol Hill Seattle: What the development at 12th and Pike will look like — Plus, E Madison’s Mad Flats

…the public gets its first look at a new project on E Madison (that will replace a really old Victorian that first must pass through the landmarks board) and the most complete look yet at the mixed-use project coming to the northeast corner of 12th and Pike (replacing one of the oldest, “organic” mixed-use projects in the neighborhood that was already rejected by the landmarks board).

Capitol Hill Seattle: What the Bill’s building will look like — Plus, 30 stories on First Hill

Wednesday night, the East Design Review Board will get its first look at the fleshed out vision for the project from longtime Seattle developer Denny Onslow set to overhaul — and keep — three businesses with deep Capitol Hill roots at Harvard and Pine as a seven-story apartment building soars above. Meanwhile, the board will also make time for what could be the final review of a 30-story apartment tower on First Hill just above I-5.

Seattle Times: Amazon gives a push to biking downtown

Almost single-handedly, Amazon.com has driven the recent downtown Seattle office market boom. Now, at its massive, three-tower Denny Triangle development, the online retailer is raising the stakes for what companies can do to encourage bicycle commuting.

Amazon will build “cycle tracks” on Seventh Avenue along the two-block stretch of its office complex, demonstrating what a downtown network of dedicated bicycle lanes could look like.

The company also will provide stalls for about 400 bikes in each of its towers — three times the number of bike spaces required under city code and many more than other office projects provide.

Seattle Times: NY investor plans Seattle, Portland apartment push

One of the East Coast’s big real-estate investors is launching a West Coast affiliate with local partners with plans to build apartments in cities like Seattle, Portland and Los Angeles.

New York-based Mack Real Estate Group announced today it had invested in Mack Urban, a Los Angeles real-estate firm that combines the portfolios of Seattle’s Harbor Urban and Los Angeles’ Urban Partners.

The new partnership plans to build about 3,000 apartments over the next five years in the Pacific Northwest, focusing on urban centers like Seattle and Portland, said Richard Mack, CEO of Mack Real Estate Group.

Let me know what you think of this kind of post as a recurring feature.

The post Local Development Roundup: Take One appeared first on Seattle Bubble.

Quoting from the letter:

As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:

• certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
• the borrower has demonstrated full recovery from the event; and,
• the borrower has completed housing counseling.

In other words, they’re throwing the gates wide open, extending FHA-insured financing to borrowers who have gone through foreclosure, deed-in-lieu, short sale, or bankruptcy as recently as one year ago. The waiting periods were previously three years after a foreclosure or short sale and two years after a Chapter 7 bankruptcy.

To me the three-year waiting period seems completely reasonable. Why would FHA feel the need to shorten it to as little as one year? My tipsters have their theories.

Says one:

…FHA is nearly broke and this creates huge churn in fees. …it was only a matter of time before they did something like this to keep the churn going. …it is still almost hard to believe they would take it this far.

The other’s theory is remarkably similar:

In my opinion the reason FHA has relaxed underwriting guidelines is because the FHA Mortgage Insurance Fund is dangerously low and they need to invite more people to use FHA because they need more mortgage insurance premiums to pay losses on future claims.

I think people who are that close to financial disaster in their recent past need to stop and think before jumping into home ownership again. It’s really not for everyone… lots of work… cost of upkeep. I know the industry especially Realtors will jump all over this.

One thing we can be sure of: HUD Secretary Shaun Donovan (pictured at right) isn’t pushing through a major decision like this out of the kindness of his heart and unbridled empathy for downtrodden homeowners. National government agencies make big policy changes for one of two reasons: the new direction either furthers someone’s political agenda or it is a necessary reaction to cold hard economic facts.

Given that this move isn’t getting the usual media circus attention that the political agenda items typically receive, I’m inclined to subscribe to the theory offered by my two tipsters.

The post FHA: Foreclosure One Year Ago? No Problem! appeared first on Seattle Bubble.

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

Home sales, prices still rising in Western Washington despite lean inventory and increasing mortgage rates

Rising interest rates, rising prices and rising consumer confidence are creating a “positive cyclone of home sales activity,” according to members of the Northwest Multiple Listing Service. A robust job market around the Greater Seattle area is also spurring sales.

“We experienced a mini power surge of sales activity that was touched off by a sudden raise of interest rates during the month of May,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Scott attributes part of the surging activity to buyers who rushed forward to purchase a home before rates climb higher. He also reported more sellers are listing their homes “due to the realization that the next home they purchase will be at a higher interest rate.” As these sellers become buyers, they’re contributing to the “positive cyclone of sales activity,” Scott stated.

Without even reading the attribution, I already knew that quote was from Lennox. Classic.

Interestingly, there are a few bits in this month’s release that aren’t quite so optimistic:

Despite improving inventory overall…

…some sellers are testing the waters with aggressive pricing, but they are experiencing longer market times.

…the seller’s market will continue for at least the next few months.

…some economists expect weaker U.S. economic growth for theremaining months of 2013 and moderating home price increases…

If you read between the lines, it sounds like they’re actually bracing for a slowdown in the second half of the year.

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

Sanjay Bhatt, Seattle Times: King County median home price up 15 percent over year ago

The silver lining: Last month’s number of listings in King County was the highest level so far this year.

Experts said rising prices drew more sellers into the market in July than expected, including banks with repossessed properties and owners once underwater on their mortgages, a welcome sign for a tight market.

“We’re looking at a stabilizing marketplace,” said Glenn Crellin, associate director of research at the University of Washington’s Runstad Center for Real Estate Studies.

Once again I find myself in agreement with Mr. Crellin.

Aubrey Cohen, Seattle P-I: More homes hit market, but supply still tight

The number of listings is the most significant news in the July report, according to Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

“While the total listings are down (from July 2012), they’re not down as sharply as they have been,” he said. “That’s a sign to me that we’re starting to get inventory a little bit in better balance.”

Another great quote from Glenn C. He’s on fire this month!

Kurt Batdorf, Everett Herald: Prices rise in ‘cyclone’ of local homes sales

Members of the Northwest Multiple Listing Service said the threat of rising interest rates, quickly rising prices and growing consumer confidence are creating a “positive cyclone of home sales activity.”

The greater Seattle area’s robust job market is also spurring sales just north of the King County line.

As late as the Herald’s story was posted this morning, the content disappointingly relies somewhat heavily on the NWMLS press release.

Rolf Boone, Tacoma News Tribune: Pierce housing market riding summer hot streak

After a sizzling June for the Pierce County housing market, the heat was turned up even higher in July as sales and median prices not only blew the roof off the house but burned right through it, according to new Northwest Multiple Listing Service data released Tuesday.
…
Prices have benefited from fewer homes on the market, giving sellers the upper hand in recent months after buyers had been in the catbird seat for years. But inventory is on the rise as new listings begin to outpace the number of last year’s listings.

The result is that inventory was down only 8 percent last month to 3,495 units from 3,786 units in July 2012. Previous monthly inventory levels had been down 20 percent or 30 percent from the year-ago period.

“A more balanced market is certainly healthier,” [Allen Realtors president Mike]Larson said about the higher inventory levels.

I like how in that last quote the real estate agent almost sounds disappointed.

Rolf Boone, The Olympian: Thurston home sales rise 20 percent in July, prices inch up

The Thurston County housing market had another strong month as sales rose 20 percent in the year-over-year July period, according to Northwest Multiple Listing Service data.

Apparently to get the full story in the Olympian this month you have to buy a paper copy. Oh well.

(Sanjay Bhatt, Seattle Times, 08.06.2013)
(Aubrey Cohen, Seattle P-I, 08.06.2013)
(Kurt Batdorf, Everett Herald, 08.07.2013)
(Rolf Boone, Tacoma News Tribune, 08.07.2013)
(Rolf Boone, The Olympian, 08.06.2013)

The post July Reporting Roundup: “Cyclone of Sales” Edition appeared first on Seattle Bubble.

Rising interest rates, rising prices and rising consumer confidence are creating a “positive cyclone of home sales activity,” according to members of the Northwest Multiple Listing Service. A robust job market around the Greater Seattle area is also spurring sales.

Wow. It’s like they’re parodying themselves. “Positive cyclone of home sales activity”?!? Just wow. What can I even say to that?

On with our usual monthly stats.

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

July 2013	Number	MOM	YOY	Buyers	Sellers
Active Listings	4,582	+9.0%	-9.6%
Closed Sales	2,648	+9.3%	+24.9%
SAAS (?)	1.30	-8.5%	+3.5%
Pending Sales	3,010	-2.7%	+17.5%
Months of Supply	1.52	+12.0%	-23.1%
Median Price*	$434,000	+1.5%	+15.7%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

Another nice increase in inventory, while pending sales dropped for the second month in a row. The market is definitely shifting back toward buyers, however slowly.

Here’s your closed sales yearly comparison chart:

Making up for last month’s dip, closed sales increased in July. I fully expect this number to decrease for most of the remainder of the year.

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

A little over a month ago I pointed out that inventory is on track to beat 2012 by August. So far that still looks like a strong possiblity.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade.

The inventory line is still rapidly heading toward zero. The sales line keeps bouncing back and forth, with July posting the largest gain since January.

Here’s the median home price YOY change graph:

Yet another bump up as the median home price gained $6,500 in a single month.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

July 2013: $434,000
June 2006: $434,950

I haven’t seen any articles about the numbers yet at the Times and P-I, but I’ll update this post when they’re posted.

Update: Here they are.

Seattle Times: King County median home price up 15 percent over year ago
Seattle P-I: More homes hit market, but supply still tight

Check back tomorrow for the full reporting roundup.

The post NWMLS: Inventory Increases Again, Pending Sales Fall appeared first on Seattle Bubble.

Here are a few of the tips I shared for finding a cheap rental in the Seattle area, and some relevant links to previous posts on the topic:

• Avoid the overly “trendy” areas (e.g. Ballard, Capitol Hill, etc.) if low price is a priority.
• Search on off-beat rental sites, including various local property management sites.
• Literally drive around your target neighborhood with an eye out for “For Rent” signs.
• Sign up for an RSS feed of your Craigslist rental search to get alerted immediately when a new rental listing hits the market.
• If your job is near a bus line or other reliable transit option, open up your search to further-out areas with direct transit to your job.

Rents have risen quite a bit recently, but in general I expect the rental market to ease up over the next year or two as all of the apartments currently in the pipeline come online, flooding the market with supply.

The post How To Find Cheap Rentals Around Seattle appeared first on Seattle Bubble.

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

Northwest MLS brokers say market stays "extremely competitive;" some industry experts believe "housing affordability may never be better"

Current market conditions — including rising mortgage rates, tight inventory and declining unemployment — are driving even more buyers into what is already an “extremely competitive housing market,” reported OB Jacobi, a member of the board of directors for Northwest Multiple Listing Service.
…
“With higher interest rates and potentially going higher, more resale listings are coming on the market,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Many potential sellers are now realizing if they are going to purchase another home, they will be purchasing at a higher interest rate, so they are choosing to move forward now,” Scott continued. “The additional inventory is appreciated by the backlog of buyers trying to purchase a home, though we are still in a quick action market. ”

An industry expert whose career dates to 1976 said he’s been through many “hot markets,” but never one quite like the current one. “I’ve never seen the in-city market so stressful for buyers because there is such intense competition on anything priced well,” said Mike Skahen, a past chairman of the Northwest MLS board and the just-retired owner/designated broker at Lake & Co. Real Estate in Seattle.

Commenting on the current market, Skahen said what’s relatively new is buyers doing pre inspections before they make their offer so it is not subject to inspection. “Often, buyers are even waiving financing and risking low appraisals where they have to make up the difference in cash,” he reported.

While pre-inspections aren’t really news (they’ve been relatively common since things heated up last year), it is interesting to note that when I’ve been looking at Redfin data around the country for the monthly Bidding War Report, I discovered that pre-inspections are apparently just a Seattle thing. Note in the second table in the report that they’re virtually non-existent in other markets.

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

Marissa Evans, Seattle Times: King County median home price up 12.5 percent from June 2012

June was the third consecutive month the median price topped $400,000 and the 15th straight month of year-over-year price increases.

But the traditional summer buyer enthusiasm has already dampened, says Tim Ellis, founder and editor of Seattle Bubble, a real-estate news site.

True!

Mike Gain, CEO and president of Prudential Northwest Realty Associates in Seattle, says with so many prospective buyers out there, bidding wars have intensified.

False. They’ve actually decreased in the last couple months.

Aubrey Cohen, Seattle P-I: Buyers fighting for homes as mortgage rates rise

June was only just a little less hot than May, at least as far as the area’s real estate market was concerned, according to a new report.
…
Mike Gain, president and CEO of Prudential Northwest Realty Associates, added: “We desperately need more properties to sell to satisfy the current demand.”

Gain and others said rising interest rates are spurring buyers to act now.

Thankfully we’re already seeing more properties hit the market, and sales are easing. We’re heading back toward a balanced market, despite the increasing volume of hype from real estate salespeople.

It looks like the holiday threw off the Herald’s calendar, because there’s still no article about Wednesday’s number, just an article from Wednesday about May’s CoreLogic data.

Rolf Boone, Tacoma News Tribune: June was another hot month for homes in Pierce County

It’s not just the weather that’s been sizzling — it’s also the Pierce County housing market.
…
[Allen Realtors of Lakewood president Mike] Larson recently listed a home for $140,000 in Tacoma that was in a great location but needed a lot of work. Once listed, the front door quickly became a turnstile as it had 20 showings over the next couple of days, finally selling for $149,000 after two competing offers.

“That’s a snapshot of what’s going on,” Larson said.

Only two offers? Compared to a few months ago, that’s nothing. Definitely a sign that things are calming.

Rolf Boone, The Olympian: Thurston home sales rise again, but not their prices

But while sales are on the rise, median prices were flat in June compared with $226,000 in June 2012, the combined data show.

Although home sellers are on better footing in this market than in past years, the market hasn’t completely shifted in their favor because buyers are still sensitive about prices, Washington Realtors Association president Mark Kitabayashi said.

Other factors that might have dampened prices last month include the recent increase in mortgage interest rates — making the cost of borrowing money a little more expensive — and higher inventory levels, allowing buyers to be choosier about a prospective home.

Inventory levels remain low, but new listings have outpaced last year’s listings since March.

Interesting that home prices were flat from a year ago down in Olympia. It’s also nice that this article highlighted some of the recent cooling.

(Marissa Evans, Seattle Times, 07.03.2013)
(Aubrey Cohen, Seattle P-I, 07.03.2013)
(Rolf Boone, Tacoma News Tribune, 07.03.2013)
(John Gillie, The Olympian, 07.04.2013)

The post June Reporting Roundup: Late Hype Edition appeared first on Seattle Bubble.

However, since this is obviously a topic of interest that we haven’t covered here before, I thought it would be worth explaining when you can and can’t find yourself at risk of deficiency judgment in Washington State. Note that this is not legal advice, just my best interpretation of the available information on the subject.

The most authoritative resource I found that details the nuances around deficiency judgment in Washington is this page on short sales from the Washington State Department of Financial Institutions. You can also go straight to the law and read the Revised Code of Washington, specifically RCW 61.24.100.

You could face deficiency judgment in the following scenarios:

• You had loans with two banks but only one foreclosed. The other bank may pursue deficiency judgment.
• Your home was foreclosed in a judicial foreclosure (most foreclosures in Washington are non-judicial via a Trustee Sale).
• You sold your home in a short sale and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You gave your home back to the bank via a deed-in-lieu of foreclosure and did not receive a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You trashed your home so thoroughly as to reduce its “fair value.”
• You collected rent for your home after the foreclosure sale.

You should not face deficiency judgment in the following scenarios:

• You had just one lender, and they foreclosed in a non-judicial foreclosure (via a Trustee Sale).
• You sold your home in a short sale and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.
• You gave your home back to the bank via a deed-in-lieu of foreclosure and received a written guarantee from the bank (or both banks if you had two loans) that they were forgiving all outstanding debt.

Again, this is not legal advice, and I make no guarantee that the scenarios above are comprehensive, but this should be a guide to at least give you an idea if deficiency judgment is a risk you might be exposed to.

For the most part deficiency judgment is relatively rare in our state, but if you’re worried about it and any of the scenarios in the first list above apply to you, you should contact an attorney (I recommend both Craig Blackmon and Marc Holmes).

The post Can Banks Seek Deficiency Judgment in Washington State? appeared first on Seattle Bubble.

Looks like it’s that time again… Recent headlines have described an increase in mortgage interest rates from 3.35% to 4.0% with hyperbole like “Mortgage Rates Soar,” and “Soaring U.S. Mortgage Rates.”

If this sounds familiar it’s because we heard the same nonsense when rates moved from 5.0% to 5.3% in 2010. These types of articles often include a graphic like the one at right, with the x and y axes manipulated to make the latest gyrations in interest rates look like a very big deal that will most likely destroy the housing market.

I’ve pointed this out numerous times in the past, but it is worth repeating: Rates are still crazy low.

Rates could increase four percentage points and still be historically low. Here’s the appropriate historical context to keep in mind when you read these hysterical stories about rates “soaring” or “hitting a one-year high.”

The latest increase barely registers as a blip when the chart is appropriately scaled.

As long as interest rates are still below 6%, I doubt we’ll have anything resembling a “normal” housing market. I for one take increasing interest rates to be a good sign. It’s an indication that the market is able to sustain itself without artificial manipulation via ridiculously low rates.

The post Déjà Vu‎: Mortgage Interest Rates Panic appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-06-07 appeared first on Seattle Bubble.

Obviously, I love a good contrarian argument. Unfortunately, this piece is far from good.

Take the consumer confidence numbers, which are measured every month by the Conference Board and act as one of the more foolish hinges on which to hang our hopes. Consumer confidence in May jumped to 76.2, on a scale of 100.

Just three paragraphs into the article and we’ve already run into the first error. Consumer confidence is not measured “on a scale of 100.” It’s indexed to 1985 = 100. She might know that if she had bothered to look at the Conference Board’s public documentation (pdf).

In the popular interpretation, that indicates that consumers believe the economy is improving.

No, all it means when the consumer confidence index reads 76.2 is that consumers are ~24% less confident than they were in 1985. What’s important is the direction the index is moving, which is definitely up. Less than two years ago the index sat at 40.9. Is she seriously trying to argue that 76.2 is not a dramatic improvement from 40.9?

The May data shows the highest measure of consumer confidence since February 2008. That was a time in which a housing crash was already well underway, and only a month before before Bear Stearns collapsed and confirmed that the country was in a financial crisis. At least six months before that, in August 2007, three major hedge funds invested in subprime real estate had to be bailed out by the French bank BNP Paribas, and the Federal Reserve and other central banks started pumping $300bn into the global banking system. Any collective confidence back in February 2008 was foolish and unwitting of the crisis that had already started in the higher rungs of finance.

Again she completely misses the point. In February 2008, consumer confidence was plummeting, having dropped 35.5 points in just 8 months. The current rising trend is obviously good news. To imply that it isn’t is either dishonest or ignorant. Things aren’t great, but they’re getting better.

Housing prices have risen at the fastest rate in seven years, as the Case-Schiller Index of national housing prices showed today.

Apparently neither she nor her editor knows how to spell Robert Shiller’s name correctly.

The housing recovery, for instance, seems to be just another stage of the foreclosure crisis. Note that the areas where house prices have risen the most – Arizona, Las Vegas and California – are all areas that were hurt most deeply by the housing crash. So pry between the boards of the housing recovery and the termites start crawling out.

Home prices are rising fastest in these areas for a number of reasons. These places are where prices fell the furthest, overcorrecting in some cases, so it’s natural for prices to come up a bit to match local incomes.

Also, foreclosures were a huge share of sales in these markets, but over the last year foreclosures have dramatically declined, so the mix of sales has shifted toward non-distressed inventory, which is naturally higher-priced.

There is evidence that lenders are controlling the housing supply by reducing the number of houses for sale. Last year, AOL Real Estate’s reporting suggested that as many as 90% of available properties were not even really on the market, but just polished for sale and being held back to keep supply low.

Then, last month, three major banks, including Citigroup and Wells Fargo, halted all their sales of homes in foreclosure; this also reduced the supply of homes on the market. The reduction in housing supply, then, is largely artificial, designed by the banks and institutions that hold thousands of houses and thus have the most to gain from higher house prices.

It couldn’t be that the number of foreclosures on the market is decreasing because the number of homes being foreclosed is decreasing, thanks to rising prices and a gradually improving economy. No, there must be a conspiracy by the banks to withhold inventory! Yeah! I’ve looked into this data and found nothing to suggest that banks are doing anything other than putting foreclosures on the market at the same rate that they’re foreclosing on homes.

A recovery allows real estate agents and banks to tell Americans that they can’t borrow money for the home they want, that they can’t participate in the housing market, while wealth private investors scoop up as much as they can.

Um, what? That doesn’t even make any sense.

Anyway, if you’ve read any contrarian arguments recently that aren’t rambling illogical messes full of basic factual errors, I’d love it if you shared them in the comments.

The post The Guardian Needs a New Finance & Economics Editor appeared first on Seattle Bubble.

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

Competition among home buyers "still fierce;" rising interest rates adding to fury

With inventory apparently improving, some would-be buyers are staying on the sidelines. The increased inventory is “cooling some buyers,” reported George Moorhead, managing broker at Bentley Properties in Mill Creek and a member of the MLS board of directors. “We also have buyers who are stepping back as they are frustrated with current inventory and multiple offers going well above asking price,” he added.

Okay wait. That makes no sense at all. They’re trying to claim that an increase in inventory is causing buyers to get out of the market? When the big story for the last year-plus has been buyer frustration at record low inventory? That does not pass the sniff test. I can see higher interest rates being a reason that sales might soften, but increase inventory? Nope.

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

Marissa Evans, Seattle Times: More buyers than sellers push King County home prices up

Lack of homes for sale has been the major reason behind rising home prices in the Puget Sound area.
…
Glenn Crellin, of the Runstad Center for Real Estate Studies at the University of Washington, said the shortage is happening for a combination of reasons. Some homeowners are waiting for prices to rise even more, while others owe more than what they could get for their home. This prevents owners from being able to sell unless they can make up the difference out-of-pocket.
…
Despite the shortage, Matthew Gardner, principal for Gardner Economics, said this is the kind of report he’s been looking forward to seeing. The number of listings increased 21 percent for Seattle in the past month.

“We are seeing a late increase in spring listings,” Gardner said. “It’s going to be a busy summer now.”

Whoa. Accurate insight from Matthew Gardner? Okay then.

Aubrey Cohen, Seattle P-I: Surging home prices fuel fears of a new bubble

Shoppers fighting over the few homes listed for sale in the Seattle area pushed up prices again in May, prompting fears of a fresh housing bubble, according to a new report.
…
“We certainly can’t sustain 15 percent annual price increases,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.
…
“Traditionally, during the initial phase of a rate uptick we see a flurry of activity,” Crellin said.
…
After that initial flurry, Crellin said, rising rates “will tend to slow things down a little bit.” They’ll also moderate median price increases, as the same monthly payment will buy less, he added.

Here’s hoping.

I held this post until this late because I was hoping a story would appear on the Everett Herald, but so far there’s nothing. If they post one tomorrow I might update this space.

[Update]

They did finally post a story: Kurt Batdorf, Everett Herald: Fewer county homes listed, so prices rise

Median sale prices on homes and condominiums in Snohomish County jumped by $40,000 in May from a year ago, due in no small part to the continuing decline in active listings.
…
“There are still home owners who want or need a higher equity position in order to sell their home, so they may continue to wait and watch,” said Dan Gunderson, broker with Windermere Everett.
…
“We currently have significantly less inventory of bank-owned and short-sale properties,” Gunderson said. “New construction is currently about 15 percent of the inventory, and we would like to see it at 20 percent. Supply is certainly a driver of the increased property values. Affordability, low interest rates and the job market in this region are contributing to the increased value as well.”

[End of Update]

Kathleen Cooper, Tacoma News Tribune: Seller’s market pushes home prices higher in Pierce, Thurston

Prices are rising as more buyers enter the market and fewer homes are listed for sale. Inventories in both Pierce and Thurston counties dropped in May, 20 percent and 16 percent respectively. Pierce County has just under two months’ supply of homes for sale, according to the NWMLS – a number so low only King and Snohomish counties beat it, with about one month’s supply there.

Reasons for owners not putting their house on the market vary but probably include people still suffering the hangover of the market collapse, now five years past.

Well, it’s been five (almost six) years since the local housing market began to collapse, but the collapse only really ended a little over a year ago.

Unfortunately literally the exact same story ran in The Olympian, so instead of the usual five reports this month, we only really got three.

(Marissa Evans, Seattle Times, 06.05.2013)
(Aubrey Cohen, Seattle P-I, 06.05.2013)
(Kurt Batdorf, Everett Herald, 06.07.2013)
(Kathleen Cooper, Tacoma News Tribune, 06.06.2013)
(Kathleen Cooper, The Olympian, 06.06.2013)

The post May Reporting Roundup: Inventory Increase Edition appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-31 appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-24 appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-17 appeared first on Seattle Bubble.

Homeownership is a good thing, for the individual and for society. Or so American governments, whether Republican or Democrat, have long believed. The benefits have been cited repeatedly in justifying the existence and expansion of the tax breaks given to home buyers.

But maybe it isn’t nearly as good as had been thought.

A new study by two economists concludes that rising levels of homeownership in a state “are a precursor to eventual sharp rises in unemployment in that state.” As more homes are owned, in other words, fewer people have jobs.

This week’s poll is inspired by the story, but since I only linked to it in the comments and I’m interested in seeing more broad discussion on the topic, I’m dedicating a regular post to the topic. Commenter “whatsmyname” weighed in, accusing the study authors of having ulterior motives:

English translation:

Cutting taxes for the rich without decreasing tax revenues will require increasing tax revenues from the not rich. We think they’re too stupid to notice when we say it openly. Oftentimes, we are right.

Here’s the problem with that claim, though. It has been well-documented by numerous sources that most of the benefit from the mortgage interest deduction is in fact collected by “the rich.” The “not rich” have been duped into thinking it’s a great deal for them when in reality they get very little from it. Here are a few links on that topic:

• Despite Benefit Disparities, Middle Class Supports Mortgage Deduction
• Only Rich People Benefit From The Home Interest Mortgage Deduction
• The Stark Geographic Inequality of the Home Mortgage Interest Deduction
• Who Really Benefits From Interest Deductions

So what do you think about the claim that increasing homeownership in a region leads to a later increase in unemployment? I think the authors make a compelling case, although I admit that I have not yet read the entire original study. I’m a fan of homeownership, but I also understand that it’s not right for everyone, and it is ill-suited to the increasingly mobile workforce of today’s economy.

[Update: Here’s the link to the original paper from the Peterson Institute for International Economics: Does High Home-Ownership Impair the Labor Market?]

The post Rising Homeownership May Lead to Rising Unemployment appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-10 appeared first on Seattle Bubble.

I attended a meeting last week sponsored by the National Association of Hispanic Real Estate professionals (NAHREP). This group has brought many high quality educational events to the greater Seattle area and I’m so impressed with NAHREP that I decided to join.  I have been following the success and growth of NACA, the Neighborhood Assistance Corporation of America, for several years. They are a non-profit association born out of disgust with predatory lending and the use of subprime loans by banks, lenders, and brokers during the housing bubble.  It’s founder, Bruce Marks, was featured on 60 Minutes, and many other national news programs.  NACA has two main goals:

1. To extend the reach of affordable lending and homeownership to every working person; and,
2. To combat discrimination and exploitation of working people by lenders and financial institutions.

NACA has offices in many states and is in the process of coming to the greater Seattle/Puget Sound. They have no physical office here but they are on the way.  NACA, a non-profit organization, also holds either a lender or mortgage broker license in the states in which they do business.

“Best Mortgage in America”

NACA is bringing their “Best Mortgage in America” to WA State. They hold a WA State Mortgage Broker license MB-4082 and currently have one licensed loan originator assigned to WA State with the intent to hire more, though their compensation plan is best served by loan originators who prefer salaries in line with working for a non-profit….because one of the many duties of NACA employees is to spend many hours thoroughly counseling their clients before the client becomes a homeowner, and requires long face-time office hours of 830-6PM.  So what is the “Best Mortgage in America?” Let’s find out.

• NACA acts as the mortgage broker; loans are funded by Bank of America or Citi
• Purchase money loan only (there is no refinance program)
• Less than perfect credit—Okay
• No credit score—Okay
• Affordability and Character-based lending
• Below market interest rates
• Interest rate buy downs at purchase are encouraged
• 30 or 15 year term
• 1-4 single family home, condo, coop
• Loan limits: Home or Condo for King, Pierce Kitsap. Snohomish county loan limit not yet available…SFR: $341,516, Duplex: $416,254, Triplex: $488,153, Fourplex: $583,514
• Rehab/Renovation Lending: 110% of after-repairs-completed value
• Owner occupied only
• Owner occupied for as long as the NACA loan is in existence
• No down payment
• No closing costs

NOTE: Actually there ARE closing costs.  The representative from NACA said, and I quote, “There is a fee, and there are non recurring costs but these are paid for by the lender.”

Before NACA goes wild with their “no closing costs” marketing program in WA State, I recommend their compliance department read our WA State Mortgage Broker Practices Act:
WA 208-660-440

(3) Is it a violation to advertise that third-party services are “free” when the licensee has paid for the services? Yes. Advertising using the term “free,” or any other similar term or phrase that implies there is no cost to the applicant is deceptive because you can recover the cost of the purportedly “free” item through the negotiation process. This is a violation of RCW 19.146.0201 (2), (7), and (11). See the Federal Trade Commission’s Guide Concerning Use of the Word “Free” and Similar Representations (16 C.F.R. §251.1(g) (2003))

Misc

• NACA fully underwrites the credit portion of the loan before the borrower is released to purchase a home from the Realtor and the pre-approval letter will contain the monthly payment including taxes, insurance, and homeowner’s assoc dues, if any, instead of just a sales price.
• One purchase every 5 years to discourage flipping.
• RE Condos: Requires 51 percent owner occupied in the complex w less than 10 percent of the units delinquent. Complex does not have to be FHA approved.
• Not just for first time homebuyers: Home buyer cannot own another piece of real property when receiving the NACA loan.  Note: the Homebuyer CAN own land or timeshare because we can’t “owner occupy” our land or timeshare.
• If purchasing a short sale, NACA buyers do not pay any of the seller’s fees including any third party short sale negotiator fee
• No income limits
• No time limit required to stay in the home
• ITIN (individual taxpayer ID number) okay
• Also avail: mixed use commercial-residential
• Buyer pays for home inspection
• Cannot use a NACA loan to purchase property at a foreclosure auction.
• NACA selects the title company
• Homebuyer’s loan closing will take place in the local NACA office.

Real Estate Brokers

Real estate brokers go thru a NACA training program. Since NACA does a lot of homebuyer outreach education, if a buyer is referred from NACA to the real estate broker then the real estate broker will pay a referral fee to NACA of 33%.  They do not yet have a real estate license in WA State but will soon and mentioned “buyer broker representation” as part of their goal for WA State.  Their real estate broker program is not up and running yet but the NACA rep says plans are in place to bring the program into the Seattle/Tacoma area soon.

REOs: 14-Day First Look with B of A

NACA-approved home buyers have an exclusive option to purchase REOs from Bank of America before they are listed in the MLS. Not all REOs, and not all of B of A’s REOs…just some.  This “first look” list goes from Bank of America to NACA.  NACA sends the REO list to Realtors affiliated with NACA. B of A has three BPOs completed to determine the price.  Selling broker makes sure NACA-approved buyer can qualify.  If yes, then the NACA-approved buyer can view the home before it is listed on the MLS.  If a NACA-approved buyer submits a full list price offer within the 14 day “first look” window, then the offer must be accepted by B of A, even if other offers are higher.  IN ADDITION: If NACA-approved buyer makes a full price offer within the first 14 days…are you sitting down? Get this—B of A will give 10 points to the buyer to buy down the interest rate.  Typically 1 point = .25 of a rate buydown so this means the NACA-approved buyer could end up with a 2.5 percentage point interest rate buydown. The opportunistic side of my brain started thinking about how I could buy a home this way but the skeptical side of my cold black heart tells me that maybe the First Look homes are going to be mostly dog house former meth labs in Granite Falls.

NACA Homebuyers Are Heavily Counseled 

All bets are against the NACA borrower.  Zero down, less-than-perfect credit sounds like your typical FHA borrower using gift funds for the down payment. And currently FHA’s default rate is 15%. Zero-down-less-than-perfect-credit also sounds like a subprime borrower.  At the peak of the meltdown/housing reset, subprime loans defaults went as high as 40%.

So why should NACA’s default rate be any less?  Here’s why: The NACA borrower goes through heavy pre-purchase counseling and has access to after-purchase default support services such as help with forbearance/repayment plans and loan modification support. In addition, if you have a NACA loan and you are in financial distress, you can receive 3 monthly payments paid by NACA to bring your loan out of default.

So what’s the catch?

NACA homebuyers must join NACA at a cost of $20 per month while they are attending pre-homebuyer counseling classes and then the cost is $50 per month for 5 years ($3,000.) In addition, NACA homeowners must agree to participate in 5 NACA activities each calendar year. Activities include community volunteer work, hosting a NACA meeting in your neighborhood, organizing a homebuyer workshop, participating in advocacy campaigns against predatory lenders, and so forth.

Reasons For

Clearly this is a great deal for first time homebuyers who want a mortgage with a very low interest rate and don’t mind going through the extensive homebuyer counseling, don’t mind paying $50/month for 5 years, and don’t mind carving out time to participate in 5 volunteer activities each year.  Some consumers were burned by predatory lenders during the real estate bubble and burned again with the 2008 recession. Maybe they are now renters…it’s been 2 years since their financial distress event and they are considering buying once again.  This sounds like a good program for people with a previous foreclosure of bankruptcy due to the extensive pre-purchase counseling they will get at NACA.. Anyone against predatory lending should welcome NACA to town.

Reasons Against

Clearly this is not a good loan program for people who don’t want to commit to owner occupancy for the life of the loan, or do not want to become active NACA members, are financially uber smart and would consider the homebuyer counseling classes beneath them. Budget? Savings? They’ve been doing this successfully for years and don’t need somebody to hold their hand. On the other side of the financial spectrum, not all buyers are going to fit into the NACA box including those with higher debt-to-income ratios.  Yeah, we are free-throwing those high DTI loans into the FHA program for as long as that will last. NACA DTI is a more manageable 31/40.

Sustainable homeownership should be our goal in mortgage lending. This is NACA’s main priority and I welcome NACA to Washington State.

By the way, NACA’s loan default rate is less than 1 percent.

The post NACA: The Largest Housing Services Organization in America Comes to Washington State appeared first on Seattle Bubble.

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

Multiple offers are “the new normal” for housing market around Puget Sound

“Multiple offers have become the new normal,” remarked MLS director Diedre Haines, the Snohomish County regional managing broker at Coldwell Banker Bain. “We have literally gone off the charts in absorption,” she stated, adding the dip in pending sales in that county “is all due to lack of inventory.”
…
Prices will continue to rise as current market conditions are sustained, predicts J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Among the conditions he mentioned are historically low interest rates, pent up buyer demand, and a shortage of available inventory.
…
Whether the market becomes more balanced may depend on listings. Northwest MLS figures show every county in its service area had year-over-year gains in new listings during April. “Let’s hope this is the start of a positive trend for inventory,” commented Mike Grady, the president and COO of Coldwell Banker Bain, but then added, “Considering the overall market landscape, it’s likely there won’t be enough sellers to fill buyer demand, at least for the short term.”

For once I’m on the same page as at least one of the real estate agents quoted in the NWMLS release (Mr. Grady). Of course, I’m hoping for more inventory so the market becomes more balanced, while they’re most likely motivated primarily by the additional commission checks that come with additional listings, but I’ll take what I can get.

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

Sanjay Bhatt, Seattle Times: County home price back to $400,000

The double-digit percentage gain in home prices is triple the inflation rate and isn’t sustainable in the long run, [Glenn] Crellin said.

“We need inventory for the market to really stabilize,” he said.
…
Eastside broker Mike Chaffee said he represents a buyer who wants a house that will ensure her son attends popular Newport High School in the Bellevue School District. His buyer is well qualified, with a 30 percent down payment.

They’ve been looking for a year.

At homes in the neighborhood, Chaffee has sprinkled fliers with unsolicited offers for “top market value,” vowing to close a deal in 30 days and save the seller money on closing costs. Chaffee said it’s an example of how buyers are getting creative.

“I’m doing my best to get this buyer a house,” he said. “If I can do it without 10 other people putting in an offer, it relieves a lot of stress on the situation.”

Two people responded to the flier: One wanted $50,000 over what the house was worth, Chaffee said, while the other asked for $100,000 over the house’s market value.

His buyer didn’t bite.

Another month of great reporting in the Seattle Times. Kudos to Sanjay Bhatt for doing a great job filling the void left by Eric Pryne’s retirement.

Aubrey Cohen, Seattle P-I: King County house price back up to $400,000

“I’d been hoping to see an increase in listing activity, and I really can’t figure out what everybody’s waiting for,” Crellin said. “It’s been tight now for several months, and that doesn’t bode well for stable prices.”

It looks to me like inventory did begin to show signs of life in April. We’ll know in a few months whether we’re finally heading toward a more normal market, but I was encouraged by April’s inventory.

Kurt Batdorf, Everett Herald: Supply of homes for sale tightens in county

It’s 2007 all over again for the county real estate market as antsy buyers rush to buy what’s available in a tight supply of homes for sale.
…
Several factors are contributing to a “recipe for a frenzied May real estate market,” said John Deely, another member of the Northwest MLS board of directors and the principal managing broker at Coldwell Banker Bain in Seattle.

“The market pace has not subsided from previous months with low inventory and low interest rates being the primary drivers,” he said.

Wait, that does not make sense. Low inventory is driving the “frenzied market pace”? Um, no. If anything, low inventory is holding back sales.

Rolf Boone, Tacoma News Tribune: Pierce housing sales, prices continue up

The Pierce County housing market enjoyed another good month, with both sales and prices rising again and extending a streak that started last October, according to Northwest Multiple Listing Service data released Monday.
…
Another characteristic of the recent housing market has been fewer homes to choose from, and that continued into April as well.

Here we go again with the qualitative language, describing the market as “good” when it is clearly only good for sellers and is in fact quite frustrating for buyers. Boo.

Rolf Boone, The Olympian: Thurston home sales, prices rise in April

Thurston home sales and median prices rose in April, the fourth consecutive month of an improved housing market, according to Northwest Multiple Listing Service data released Monday.

Once again, the full story from The Olympian is only in the print edition, so all we get online is a brief rehash of the press release.

(Sanjay Bhatt, Seattle Times, 05.07.2013)
(Aubrey Cohen, Seattle P-I, 05.06.2013)
(Kurt Batdorf, Everett Herald, 05.07.2013)
(Rolf Boone, Tacoma News Tribune, 05.07.2013)
(Rolf Boone, The Olympian, 05.06.2013)

The post Reporting Roundup: The New Normal Edition appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-05-03 appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-04-26 appeared first on Seattle Bubble.

Shame on you, Tim, for publishing misleading data. You cannot say that unemployment has dropped nationwide without also commenting on the record high not in the labor force number. I trust you are not turning into a NAR cheerleader at this stage. Remember, if there were zero jobs, and folks stopped looking, the unemployment rate would be zero, and yet no one would be working. Tsk, tsk…

The jobs posts, like most of the content on this site, are intended to be primarily about what’s going on in the local area, and as the first chart showed, the number of jobs in the Seattle area has been growing since late 2010. That’s hardly a “zero jobs” scenario.

That said, I love a good data request, so here’s a chart of national labor force participation alongside the unemployment rate:

Indeed, in 2006-2007 when unemployment was at its lowest (~4.5%) before the housing bubble popped, the national labor force participation rate was at 66.3%. As of March it is three points lower at 63.3%, while unemployment stands at 7.6%.

Here in the Seattle area the picture is somewhat different, though:

In early 2007 when Seattle’s unemployment was as low as 3.6%, the local labor force participation rate was at 69.5%. As of March, unemployment is at 5.5%—nearly two points higher than it was pre-bust—but the labor force participation rate is virtually the same, at 69.0%.

Even when you include the labor force participation rate in the local picture, the jobs situation is clearly improving. That’s not to say that the jobs that are being added pay well compared to those that were lost during the bust, but there’s no denying that the Seattle area is adding jobs and unemployment is falling fast.

The post Seattle Labor Participation Outperforming National Rate appeared first on Seattle Bubble.

The post Weekly Twitter Digest (Link Roundup) for 2013-04-19 appeared first on Seattle Bubble.

All of these claims focus on the just-foreclosed home—an empty, run-down shell with an overgrown lawn, missing appliances, and disconnected utilities. But the fact that a home was foreclosed at one point in time doesn’t mean that it will remain vacant and derelict forever. In fact, I contend that foreclosures benefit a neighborhood, and areas that have experienced the most foreclosures are poised to improve the fastest during a recovery.

Before I get into the benefits of foreclosure for a neighborhood, I want to be clear that the personal experience of foreclosure is not positive. Going through a foreclosure is disheartening, and losing your home takes an emotional toll, no matter the circumstances. I have a handful of friends who have been through foreclosure. It was not something any of them enjoyed, and I would not personally wish the experience on anyone.

At the national level, consider the markets that were the hardest-hit by foreclosures after the bubble burst. Las Vegas and Phoenix were both overwhelmed with foreclosures a few years ago, and yet today they are experiencing some of the largest price gains in the nation—15% and 23% year-over-year as of the latest data from Case-Shiller.

Just in the handful of blocks around my home there have been at least half a dozen foreclosures in the last few years. Instead of becoming worse with each new foreclosure, the overall character of the neighborhood has been noticeably improved through these foreclosures.

Some foreclosures are purchased, fixed up, and lived in by the family that bought from the bank. Some are bought by flippers, dramatically refurbished (often after being gutted to the studs), and sold for a decent profit. Others have been bought, fixed up, and are now rentals. In every case, within a year of being repossessed by the bank each the foreclosed homes in my neighborhood has become nicer, as evidenced by the photos throughout this post.

Homes that—even before foreclosure—were the most run-down and neglected in the neighborhood have often become the nicest home on the block. Former homeowners who could not afford even the most basic maintenance have moved on to more affordable rentals, replaced by investors and families who have both the resources and the motivation to keep these homes looking nice.

Here’s a quick rundown of what’s happened with a few of the foreclosures near my home. The homes listed below appear in the same order as their photos in this post.

• 3431 Oakes: Purchased by a family. Since foreclosure they have refurbished the interior, added a railing to the front porch, put in a nice fence, and cleaned up the yard.
• 3609 Wetmore: A small investment group that has fixed and flipped a number of homes in Everett bought this home. After their high quality work was complete, the home sold to the new owner for over double what they paid.
• 3331 Wetmore: Totally gutted, remodeled, and refinished over the course of nine months. Major work includes a whole new front porch, all new windows and doors, a new back porch, and an all new interior. Currently on the market.
• 3616 Rockefeller: The family that bought this home built a matching garage with second floor living space on the back of the lot (not seen in the photo) and is completely renovating the main house.
• 1710 36th: Purchased by a small investor, totally gutted and refurbished with new windows, doors, insulation, floors, all-new kitchen, etc. The finish work was nice enough that he was able to charge above-market rent.

The house directly across the street from mine was foreclosed in January. Rather than causing me concern about the detrimental effect that this will have on the “value” of my home or worrying about how the neighborhood is going downhill, instead I am excited to see how the home will be improved by its eventual new owners.

Foreclosures are not the dark cloud over neighborhoods that they are claimed to be. On the contrary, they are the leading edge of positive changes that improve the character of a neighborhood and lay the groundwork for a sustainable recovery.

The post Foreclosures Benefit a Neighborhood, Not Hurt It appeared first on Seattle Bubble.