It starts at the bottom and works it's way up.
Sold 12/1997 for $74,000
Sold 11/2006 for $276,500
Current asking price $99,750
http://www.redfin.com/WA/Seattle/6213-C ... ome/476637
Learn to follow the foreclosure patterns.
It is VERY specific from what I'm seeing in L.A.
The banks make their way around to the better neighborhoods in time...but they start with the worst streets :x
Sold 11/2006 for $276,500
Current asking price $99,750
http://www.redfin.com/WA/Seattle/6213-C ... ome/476637
Learn to follow the foreclosure patterns.
It is VERY specific from what I'm seeing in L.A.
The banks make their way around to the better neighborhoods in time...but they start with the worst streets :x
Comments
And yeah, they couldn't have started in a worse neighborhood. Even in my decent neighborhood of new homes, of which I am renting one, I am watching them sit foreclosed or vacant at 100k less than they sold for 18 months ago. Yet the one I want the bank isn't budging on...
I'm running for the back door while there is still time.
Why, did someone suggest south Seattle isn't the best part? <looks around rapidly clearing room> Oh no!
Glad to so low rents in the low-rent district.
OK, you guys got me. I've got to concede that you get much better value in the pastoral north end, for instance:
http://www.windermere.com/index.cfm?fuseaction=listing.SearchLanding&searchConstraintType=mls&ln=29009476#">%20much%20better%20value
20% less than that Georgetown place, but no dryer in sight.
Just don't take it out on us when you find out your current house is worth $50K by 2011.
Enjoy it while you can!
If that happens, then you truly will just have been the bank's renter since the time of purchase and any down payment will have just been confiscated.
I think your rate of return would have been better in CD's.
Your landlord will expect you to continue to pay rent, regardless of whether he or she still owes on the building where you reside.
Just because I didn't buy in an overheated market like Seattle doesn't mean I am not a homeowner.
As it happens I am a homeowner, but I bought in an area that wasn't an overheated market and hasn't been hit by mass layoffs and isn't likely to, given the industries that are predominant here.
Keep thinking positive and happy thoughts Angie! It's the only thing that will keep you from drinking heavily over the next decade as your house value never recovers to 2007 levels in adjusted dollars.
The great thing is, I will never be forced to watch my home value self destruct because I bought in the wrong area of the city.
I somehow doubt you will be able to do that, ever!
And do you believe that there are areas of the city or region or nation that are relatively unaffected by the rise and fall of real estate values?
I'm not asking because I have an opinion. I'm merely curious.
...then come sit next to me.
Public Enemy, you're pretty funny. Just keep doing what you do best. Love you, baby.
Hey Ira, what say we propose the next Bubble meetup down in the south end? Start out at the Columbia City Ale House, then after a few beers see which ones of our esteemed colleagues are brave enough to go have a drink at my namesake tavern across the street. Betcha none of them have the cojones. Should be fun!
But anyhow....the point of this thread isn't to rag on anybody. I'm just showing you the patterns.
They start at the bottom and work their way up.
repeat over and over. The exact same pattern is being followed in L.A. It spreads like a cancer finally making it to the "bestest" neighborhoods.
So....anyhow...a couple more contributions...
Purchased for 310k July 2007
Currently Listed at 169k
http://www.redfin.com/WA/Seattle/7027-D ... ome/159762
Purchased for 275k October 2006
Currently listed for a whopping $7,900 over it's 1998 purchase price of 160k at $167,900
http://www.redfin.com/WA/Seattle/11115- ... ome/178427
I'm all for it. You and I might be the only two in attendance. Many others will be fearing the loss of their cars and their lives. I've never been to Angie's Tavern, but have been seen in some of Skyway's finest watering holes, and lived to tell the tale.
.....On a related note, when things start to recover, where does the recovery start? On those streets that were affected less or later, or on the "worst" streets?
Would you like me to show you some patterns in Los Angeles WRT a bad street in a good neighborhood?
But because I'd rather be wrong than make a bad investment, I am also interested in the case against the south end. So Public Enemy, please say more about the risk of buying in "the wrong area of the city" -- like, what do you think is an appropriate price differential for the theoretical same houses in Columbia City and Ballard, and why? And, EconE, I am very interested in the Los Angeles patterns. Question for you though -- couldn't it be that the credit crunch/global finance meltdown, which is hitting Seattle at a different point in the crash from other cities, is such a major input that we won't see the same bottom-up pattern here? It seems to me that we could see the top coming down at the same time simultaneously with the bottom coming up... you know, because Seattle is so special.
While it is true that many "owners" dont actually own the home they are in - the bank does until is it is paid off - there is a world of difference between people who trully rent and those who have taken out a whopping big loan and are seeing their equity/downpayment/retirement evaporate.
Just as they enjoyed rising equity on the way up, they are suffering massive wealth destruction on the way down....
Maybe instead of a drink on a weekday we could get coffee midmorning on a weekend. I'd be happy to clear the car seats and cracker crumbs out of the back seat of my car and take a few interested parties on a driving tour of the highlights and lowlights of SE Seattle.
Very much!
This is both an excellent question, and perhaps a little bit too early. We don't really have any evidence of anyplace recovering yet. EconE evidently has interesting numbers for the LA crash, but I'm sure we won't see any recovery trends for at least a couple years still.
First a description of the area.
Old established neighborhood (Hancock Park). The "official" boundaries of Hancock Park run from Rossmore Ave. to Highland Ave.(east to west) and Melrose Ave. to Wilshire Blvd (north to south).
The N/S arterials are Highland and Rossmore. Highland is the busier of the two and the homes and lots are smaller than the Rossmore homes.
Demographics of neighborhood....Entertainment industry A-listers, Foreign Consulates, Financial Big Wigs etc. Yes, you've all heard of them.
Now let's take a tour up Highland. I'm going to include a couple houses south of Wilshire as the area is still pretty nice *just* south of Wilshire. Go too far south and it drops off substantially. North of Melrose is commercial.
Here are the candidates.
800 S. Highland.
purchased for $1,935,000 in 2006.
knifecatcher pays $1,625,000 02/08
http://www.redfin.com/CA/Los-Angeles/80 ... me/6912251
in June 08, 812 S. Highland the seller makes out like a bandit, but now 800 will definitely comp lower.
http://www.redfin.com/CA/Los-Angeles/81 ... me/6912253
Here's a current shortsale...purchased during the 1990 bubble (yes, it was big)
http://www.redfin.com/CA/Los-Angeles/63 ... me/7091798
Here is a home that is no longer listed on the MLS....267 S. Highland. It was last listed at $1,499,000 or $1,599,000...can't remember. Last sold in Jan 06 for $2,250,000
http://www.redfin.com/CA/Los-Angeles/26 ... me/7095095
106 N. Highland.
Purchased 10/2005 for $1,430,000
Sold 02/09 for $983,400
http://www.redfin.com/CA/Los-Angeles/10 ... me/7094668
364 N. Highland
Purchased 08/07 for $1,750,000
currently listed at $1,299,000
http://www.redfin.com/CA/Los-Angeles/36 ... me/7101505
525 N. Highland
Purchased 09/05 for $1,700,000
currently listed as a shortsale for $1,490,000 (Not a chance in hell)
http://www.redfin.com/CA/Los-Angeles/52 ... me/7101277
628 N Highland
Purchased 05/06 for $1,245,000 (Bank buyback for over $1,556,363 later that year) Held by bank for a long time.
Sold 12/08 for $799,000
http://www.redfin.com/CA/Los-Angeles/62 ... me/7101126
and the most recent contestant on the "Bank Pattern Tour"
738 S. Highland
Purchased 04/2007 for $1,250,000
Now listed as REO for $634,900
http://www.redfin.com/CA/Los-Angeles/73 ... me/7091959
And just for fun...not a foreclosure...but here's a flip that Beck (The singer) is gonna lose on. (Paid $6,750,000 in 2007)
http://www.redfin.com/CA/LOS-ANGELES/Un ... e/16892586
I don't think there is ever any "wrong area" to buy in, I just think people need to be realistic about the appreciation potential of said areas when it comes time to sell.
The problem is, most buyers think, "I will stay here forever so it doesn't matter to me". Well, it doesn't matter until that plum job opportunity comes up in the city you have always wanted to live in, or the crack dealer moves in next door, or the next door neighbor buries his wife in the backyard, etc.
There is nothing wrong with South Seattle, other than what is wrong with the rest of the Seattle metro area. Seattle was and still is, extremely overvalued.
It doesn't matter if it's South Seattle, West Seattle, Greenlake, Ballard, Beacon Hill or Madison Park, prices are WAY too high compared to incomes, without even touching on the debatable "world class" aspect of Seattle.
Madison Park, which many people would consider a "desirable location", is crashing and burning heavily. How is that not going to kill the West Seattle market, the Capitol Hill market and the South Seattle market?
Most people don't buy a multi-million dollar home for their first home so Madison Park is supported by move up buyers and out of area buyers who are moving up. If they can't move up, who is going to take their place?
People like to talk about how the bubble didn't start until 2002 or 2003, when I believe it started long before that. I think we are headed for mid to late 1990's pricing in Seattle. With each month bringing more declines, each month is bringing more homeowners who bought during the run-up further into negative territory, forcing more of them to sell, give up, walk away or whatever.
Angie likes South Seattle, and more power to her. But you have to be realistic about future appreciation. There are certain aspects that many people will find distasteful about South Seattle. Those things might attract you, but you need to be realistic that you don't need to buy just for your tastes, but for the NEXT homeowner.
It's like the time I was looking at a home in Tacoma. Located right behind Hell's Kitchen. Nice place, but who wants to live behind a bar, especially on the weekends? Now, some buyers might say, "Cool, think of all the hip live music we can go and see!" That works fine until you have kids and suddenly, the broken green bottles aren't so "hip" anymore. Then you go to sell and realize that most other people don't want that "hip" aspect either. This is why I say, don't just look at your wants and desires, but at future buyers' wants and desires.
Having said that, I would say I could live in South Seattle, but I have to be compensated with a MUCH lower price point because I am aware of what the difficulties will be for reselling in the future. I think a lot of people lost sight of that during the run up and just focused on constant future appreciation to get them out of any discounting scenarios.
EconE has said it perfectly:
"Now let's take a tour up Highland. I'm going to include a couple houses south of Wilshire as the area is still pretty nice *just* south of Wilshire. Go too far south and it drops off substantially. North of Melrose is commercial."
There are demarcation points in any neighborhood and that goes for a city as well.
You can't compare Green Lake to Ballard, or Ballard to Fremont. There are different economic impacts. Fremont has extremely high end office space along the canal. Ballard has the most cocktail lounges in a concentrated area of any place in the city.
Then trying to compare North of down town to South of down town is problematic. West Seattle is a separate world. Alki to South of Henderson has a variety of neighborhoods. South Seattle is commercial Industrial as you get closer to the air port.
What happened here as well as other cities is that pricing became homogeneous. Yes houses in Columbia City started selling at the same prices as Ballard. Never mind the area was run down for years, Never mind houses were torn down to be rebuilt with cheap housing units. Never mind that when you drive in any direction the neighborhood changes radically. Columbia City has problems Ballard does not share.
Now without the future appreciation Columbia City is that much less desirable and prices will go down faster and farther.
You're right about location.
Not only does it go down to the neighborhood level...or even the street. It even depends on the quality of the house.
Hancock Park even takes it a step further. The agents don't just sell you on the Neighborhood/Street/House...they actually sell you on who your neighbors are...and for some reason...to the buyers there...that matters greatly.
Who the neighbors are?!? Idiotic...but true.
Prices are currently down about 25% on average on the interior streets based on homes currently selling...which are very few. This is based on peaking out in late 2006/early 2007.
The greater L.A. area also has the "Platinum Triangle" (BelAir, BH, Holmby), Brentwood, Pacific Palisades, Hollywood Hills, Malibu, etc. etc. etc. and they are taking their knocks also.
Manhattan has it's prime areas and even buildings (The Dakota for example).
Problem is...there aren't enough people making the kind of money necessary to fill all these special places at the current asking prices. Far from it.
Of course, people will always pay a premium to live in certain locations. All that means is that the houses in those areas will continue to be more expensive than others. It doesn't mean that they don't/won't drop substantially in value however.
I doubt however that we will see 80-90% off on properties such as these as some claim. 50%...easy.
1999 prices for this one.
http://www.redfin.com/WA/Tacoma/1915-67 ... me/2789883
Sold in 2001 for $174,500
2005 for $272,000
2008 for $345,000
Currently offered for $140,000.