{"id":467,"date":"2006-12-31T22:33:00","date_gmt":"2007-01-01T05:33:00","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=467"},"modified":"2011-09-16T12:53:36","modified_gmt":"2011-09-16T19:53:36","slug":"always-trust-the-experts","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2006\/12\/31\/always-trust-the-experts\/","title":{"rendered":"Always Trust The &#8216;Experts&#8217;"},"content":{"rendered":"<p>What&#8217;s the point about worrying about global warming when we&#8217;re getting <a href=\"http:\/\/seattletimes.nwsource.com\/html\/realestate\/2003501549_realpredix31.html\" title=\"Looking ahead: The sky isn't falling for the Puget Sound market\">all this hot air<\/a> from Elizabeth Rhodes?<\/p>\n<p>Please enjoy this year end feel good article about our robust housing market here in Rain City.<\/p>\n<blockquote>\n<p>One of this year&#8217;s biggest residential real-estate topics was the anticipated slowdown in sales and appreciation.<\/p>\n<p>Would the Puget Sound market tank?<\/p>\n<p>Would prices deflate?<\/p>\n<p>Neither of those things occurred locally, although other parts of the country have seen moderate-to-severe downturns this year.<\/p>\n<p>What happened here was a gentler transition in housing activity, from its record 2005 levels to a slower pace by this year&#8217;s end.<\/p>\n<p>What will 2007 bring? Here&#8217;s what Seattle real-estate experts are saying.<\/p>\n<\/blockquote>\n<p>First, let me introduce the &#8220;experts&#8221;.<\/p>\n<ul>\n<li>Elizabeth Rhodes (The Seattle Times and her job depend on a steady stream of advertising dollars from local Real Estate)<\/li>\n<li>Matthew Gardner (<a href=\"http:\/\/www.gardner-johnson.com\/about\/\">Gardner Johnson<\/a>, a Seattle land-use economics firm; &#8220;regularly retained by the region&#8217;s most prominent developers&#8221;)<\/li>\n<li>Bill Riss (CEO of Coldwell Banker)<\/li>\n<li>Frank Nothaft (Chief Economist, Freddie Mac)<\/li>\n<li>Mike Scott (<a href=\"http:\/\/www.dsaa.com\/\">Dupre+Scott<\/a> Apartment Advisors)<\/li>\n<li>Suzanne Britsch (Senior Analyst, New Home Trends)<\/li>\n<\/ul>\n<blockquote><p>&#8220;This bubble lunacy is still prevalent, but not in Seattle, and I&#8217;ll keep saying that,&#8221; said Gardner, of the land-use economics firm Gardner Johnson.<\/p>\n<p>The closer homes are to the major job hubs of Seattle and Bellevue, &#8220;the higher appreciation you&#8217;ll get,&#8221; Gardner said. &#8220;That&#8217;s because there&#8217;s intrinsically a value to our time.&#8221;<\/p><\/blockquote>\n<p>What did we have in 2006?<\/p>\n<blockquote><p>&#8220;A more balanced market,&#8221; said Bill Riss, CEO of Coldwell Banker Bain. That&#8217;s giving buyers &#8220;a little more time to think, plan and write good offers.&#8221;<\/p>\n<p>Riss wouldn&#8217;t be surprised if spring sales roar to life, causing another feeding frenzy, albeit not at record levels of past years.<\/p>\n<p>A rise in inflation could drive rates up, but that&#8217;s not a concern now, Frank Nothaft, chief economist for mortgage-money provider Freddie Mac, recently told the Washington Association of Mortgage Brokers.<\/p>\n<p>&#8220;Inflation will be tame, and interest rates will not change much in the next six months,&#8221; Nothaft said. &#8220;They may drop after that. We don&#8217;t see mortgage rates even getting up to 7 percent [by the end of 2007].&#8221;<\/p>\n<p>He also anticipates the number of nontraditional loans, such as negative amortization and interest-only, will drop as borrowers choose other mortgage products instead.<\/p><\/blockquote>\n<p>Sure, no problem affording that $699,000 charmer with your conventional loan: $140K down payment and $4,800 monthly payment!<\/p>\n<blockquote><p>The same strong regional economics sustaining the local home-sales market are also fueling apartment demand, said analyst Mike Scott, of Seattle&#8217;s Dupre + Scott Apartment Advisors.<\/p>\n<p>Logically, strong demand should ramp up apartment construction, but it hasn&#8217;t worked out that way, Scott said.<\/p>\n<p>A year ago, he forecast 3,600 new units would be built in King, Pierce and Snohomish counties this year. Instead, just under 3,100 opened.<\/p>\n<p>In 2007 Scott anticipates even fewer: just 2,600 new apartments.<\/p>\n<p>&#8230;apartment rents to jump about 8 percent next year, Scott predicted. Vacancies will fall from their current 4.7 percent to roughly 3.5 percent, he said.<\/p><\/blockquote>\n<p>Buy now or be priced out forever! I don&#8217;t know about you, but even if he&#8217;s correct I would gladly pay an additional 8% in rent rather than 50% more in mortgage costs while facing the inevitable repossession, bankruptcy and anxiety disorder.<\/p>\n<p>My prediction: Rents will remain flat through 2007 and drop in 2008 as additional housing becomes available. Desperate FB&#8217;s will have no choice but to rent out properties that do not sell. Condos and condo conversions will face a serious slowdown in sales and many will convert into apartments.<\/p>\n<blockquote><p>The national news has been full of stories about homebuilders cutting production and prices as the real-estate market cools. In November, for example, building permits nationwide fell to a nine-year low, according to a government report.<\/p>\n<p>&#8220;But that&#8217;s the national news, not the local news,&#8221; said Suzanne Britsch, senior analyst for New Home Trends, a construction-analysis and consulting firm in Mill Creek. &#8220;We still have job growth and a shortage of lots here, so we have just not had a problem with standing inventory.&#8221;<\/p><\/blockquote>\n<p>We&#8217;re different. Special. A breed apart.<\/p>\n<blockquote><p>In King County, the average price of a new house will be $750,000, she predicted. A big chunk of that expense is the land. The rock-bottom price for a lot in a new King County subdivision is now $250,000.<\/p>\n<p>In Snohomish County, new single-family homes will start at $400,000. And they&#8217;ll likely be on 3,500-square-foot lots, rather than 6,000 square feet, the norm there until recently.<\/p><\/blockquote>\n<p>OMG that is so affordable! Isn&#8217;t it nice to have all these objective opinions?<\/p>\n<p>Happy New Year ;)<\/p>\n<p>(<em>Elizabeth Rhodes, <a href=\"http:\/\/seattletimes.nwsource.com\/html\/realestate\/2003501549_realpredix31.html\" title=\"Looking ahead: The sky isn't falling for the Puget Sound market\">Seattle Times<\/a>, 12.30.2006<\/em>)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What&#8217;s the point about worrying about global warming when we&#8217;re getting all this hot air from Elizabeth Rhodes? Please enjoy this year end feel good article about our robust housing market here in Rain City. One of this year&#8217;s biggest residential real-estate topics was the anticipated slowdown in sales and appreciation. Would the Puget Sound&#8230;<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[612,198],"tags":[415,15,144,13,414,14,3],"coauthors":[],"class_list":["post-467","post","type-post","status-publish","format-standard","hentry","category-local","category-news","tag-britsch","tag-experts","tag-gardner","tag-job_growth","tag-new-home-trends","tag-predictions","tag-rhodes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Always Trust The &#039;Experts&#039; \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2006\/12\/31\/always-trust-the-experts\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Always Trust The &#039;Experts&#039; \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"What&#8217;s the point about worrying about global warming when we&#8217;re getting all this hot air from Elizabeth Rhodes? 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