Call me stupid but I just bought in Seattle
Well, I just bought my first home in Seattle so consider the market as having topped and heading for a major correction. Add me to the list of obnoxious Californians driving up Seattle prices.
I will say that I paid more than I wanted but ended up in a cool house in a very cool neighborhood. The Seattle RE market really is different! Coming from CA, these differences really were noticeable
What I really found interesting was the huge volume of crappy overpriced homes sitting on the market. I would walk into them and wonder what the hell are the owners thinking? It took me a while to figure out that a small number of decent homes in good areas with a high cuteness factor were driving most owners to ridiculously over price their homes. The vast majority of these cardboard boxes sit until reality or desperation sets in and the owners drop prices to realistic level - then the homes sell. I noticed homes sitting longer on the market even during the short 2 month period I actively looked.
The good news, for buyers, is that people are no longer paying whatever sellers are asking - at least in the close in neighborhoods I looked at. Most homes seem to sit for at least 4 – 7 weeks although a small percentage of desirable realistically prices homes sell overnight. I never once ran into a bidding situation, even when the selling agent's strategy was to trigger a bidding war. I finally found a nice home and was lucky enough to buy it from a couple that wasn't looking to fund the rest of their lives but looking for a fair price and we worked out a deal with me paying significantly under asking.
As to the immediate future of RE in Seattle, I do not claim to be close to an expert. I do believe that homes will appreciate in the single digits this year - 6% - 8% is what I expect. I then believe prices will flatten out over the next 2 years or so until affordability improves. The Seattle tanking scenario? I think it is possible, but I ascribe long odds to this scenario. If it occurs, we will have more serious issues than RE affordability. BTW, I believe the US RE market is a huge bubble driven by non existent credit standards and fed intervention. So another bubble head bites the dust or at least excuses himself temporarily from agonizing over bubble blogs!
I will say that I paid more than I wanted but ended up in a cool house in a very cool neighborhood. The Seattle RE market really is different! Coming from CA, these differences really were noticeable
What I really found interesting was the huge volume of crappy overpriced homes sitting on the market. I would walk into them and wonder what the hell are the owners thinking? It took me a while to figure out that a small number of decent homes in good areas with a high cuteness factor were driving most owners to ridiculously over price their homes. The vast majority of these cardboard boxes sit until reality or desperation sets in and the owners drop prices to realistic level - then the homes sell. I noticed homes sitting longer on the market even during the short 2 month period I actively looked.
The good news, for buyers, is that people are no longer paying whatever sellers are asking - at least in the close in neighborhoods I looked at. Most homes seem to sit for at least 4 – 7 weeks although a small percentage of desirable realistically prices homes sell overnight. I never once ran into a bidding situation, even when the selling agent's strategy was to trigger a bidding war. I finally found a nice home and was lucky enough to buy it from a couple that wasn't looking to fund the rest of their lives but looking for a fair price and we worked out a deal with me paying significantly under asking.
As to the immediate future of RE in Seattle, I do not claim to be close to an expert. I do believe that homes will appreciate in the single digits this year - 6% - 8% is what I expect. I then believe prices will flatten out over the next 2 years or so until affordability improves. The Seattle tanking scenario? I think it is possible, but I ascribe long odds to this scenario. If it occurs, we will have more serious issues than RE affordability. BTW, I believe the US RE market is a huge bubble driven by non existent credit standards and fed intervention. So another bubble head bites the dust or at least excuses himself temporarily from agonizing over bubble blogs!
Comments
Come on; at least show it off! Whatchagot?
Now one of them has the guts to come in here and admit it.
But note the bottom line..... "yea there is a bubble everywhere else but those bad things that made the bubble everywhere else didn't happen here because...everybody....SEATTLE IS SPECIAL!!!
Equity locusts are just padding the median with their "top of the market" purchases.
Just keep telling yourself "there is no bubble in Seattle"...
Stupid: Buy 0-down with 103% financing as a stated income wage earner with no assets, planning (make that NEEDING) to refinance in less than 2 years and having that plan fall apart because the house didn't go up enough.
Fine: Buy a house you like knowing it may not hold its value but- maybe it will. That doesn't matter because either way it's what you want and you can actually afford it regardless of what it might sell for 1, 3 or 10 years down the road. May not be a good investment but very few consumables are.
AS to Californians buying up all Seattle proerty, that's a joke right? For your information, Seattle is not a top destination for Californians because Seattle is not cheap anymore. It was a destination in the 90's but not today. Most Califonians move to Charlotte, Austin, Portland or Denver due to low cost of living and this was confirmed by my moving company.
Yes some Califonians are buying Seattle real estate but according to a realtor I spoke with, most are not "equity locusts" but people tranfering or moving for work related reasons. She said about 20% of her biz was with Califonians. As to your assertion that I am implying Seattle is different from the rest of the USA and will never drop in value..., flat in nominal terms is negative in real terms. Do I think Seattle will drop 30% - don't think although, I indicated this could happen but with long odds.
So you enjoyed the winter here? That's the big test for Ex-Cals 30 days of rain and 6 months with no sun.
How are you putting your life on hold?
It seems like we've been collectively sold this fake "American Dream" BS, which now evidently includes being in debt to a bank for your houses, cars, plasmas and now China.
It's totally reasonable to think that even though every other city in the US is feeling the CNTR-ALT-DELETE of the housing bust, Seattle will not. Oh, Totally.
FWIW, I don't think this guy is real.
Might be hinting at things to come.
We'll buy when the time is right, with a substantial down. I've just got to keep sending the wife out of the country to keep her mind off of buying.
I looked at my rent with increase and the hassle factor of dealing with landlord and began analyzing benefits of buying in a no statetax area - in my case it included fed tax rate dropping from 33% to 28%, lower AGI due to mortgage interest deduction and eliminating 8.2% of california state tax. The more I looked, the more annoyed I got and the less ridiculous a potential mortgage payment looked so I pulled the trigger.
BTW, genius on the trips for your wife!!
I suspect that renting a house or condo or whatever is wiser now than buying, and that's what I'm doing (in the Portland area, actually, which has similarities but the market is weaker there). My own plan is to see how bad this summer selling season is, and if it's really bad I'll consider making a lowball offer and see what happens. More likely, I'll wait for the end of the failed 2008 summer selling season.