Buy quickly this spring?

edited December 2007 in Seattle Real Estate
Hi everyone- Someone wrote on the blog yesterday something along the lines of "make your offfers quickly this spring because lots of people will be making offers when the weather changes" (I'm paraphrasing, can't remember exactly how it was worded). I didn't think much of this comment yesterday, but woke up this morning thinking "wait, what?" The comment is now gone because the thread was cleaned up -- rightly so as the thread was starting to go off topic. Would the person who wrote this comment mind elaborating? I thought we were all waiting for the "bloodbath" in the spring so we have more to choose from and pay less? Merci!

Comments

  • edited December 2007
    'Twasn't my comment. But I say that if everyone is waiting for a bloodbath in the spring, then probably won't happen since "everyone" is a big pool of buyers, some of whom will no doubt break ranks when they see perfectly staged houses.
  • The RE market along with the rest of the economy will be getting nothing but bad press by spring. There will be zero good news. The "herd" will finally "get it" and housing will considered a pariah investment.

    We are years away from a point where any sane person would "invest" in an asset that is 100% guaranteed to lose value.

    Combine that with a job environment where there is also a 100% probability that many jobs in our area will be lost and you have the "perfect storm" to knock prices back to where they should have been all along plus some "undershoot".

    So is next spring a good time to buy or make an offer? :twisted:
  • The RE market along with the rest of the economy will be getting nothing but bad press by spring. There will be zero good news. The "herd" will finally "get it" and housing will considered a pariah investment.
    Well, we've seen mostly bad news for homeowners since August, yet my neighbor still managed to find a buyer for her "for sale by owner" house this month in two weeks and at close to top dollar. Maybe she just got real lucky?
    Combine that with a job environment where there is also a 100% probability that many jobs in our area will be lost and you have the "perfect storm" to knock prices back to where they should have been all along plus some "undershoot".
    I doubt there will be a net loss of jobs, given all the new office space being built.
  • I get it Markor, your Field of Dreams philosophy is 'if you build it, they will come,' or something along that line. It's the buildings that create business, not the other way around. Good luck with that.
    My neighborhood has more sales signs and no sales. Guess your neighborhood is moving faster or your neighbor was lucky. Must be a better locale or pink ponies, take your pick.
  • Markor wrote:
    I doubt there will be a net loss of jobs, given all the new office space being built.
    Yes, builders are great examples of excercising restraint in their activities. That's why Donald Trump never went bankrupt. oh, wait...
  • I work in commercial RE...believe me, there is no one going into the new office space. The Yahoo! lease in Bellevue was the last "big" one of this cycle...many owners are building spec in hopes of finding that large tenant, who is not coming.
  • I'm sorry, I didn't mean to start another "to buy or not to buy" thread -- I was really looking for clarification from the poster on the blog.

    I know I've written this before and I'm starting to sound like a broken record, but we are looking at close-in city (you know, the three areas that experienced >15%, >5%, and >5% YOY appreciation for Nov despite the overall 0% YOY for the county), with a $200K down payment and looking to own for at least ten years. I'm not in Bellevue or other outlying areas, and I'm not looking at short-term flipper investments. Not everyone fits that bill. My husband and friends think I'm nuts for continuing to wait it out while the prices keep going up up up in Wallingford/GreenLake/Phinney/QA, and after seeing the numbers in the paper this morning, I'm starting to believe that maybe I am nuts for insisting on waiting. It ain't happening north of the cut yet still, no signs whatsoever for those not interested in townhouses, and I'm sorry, but being a renter in North Seattle really really bites.

    Perhaps the person who posted the comment does not read the forum, so we should just forget I asked. Thanks anyways-
  • deejayoh wrote:
    Yes, builders are great examples of excercising restraint in their activities. That's why Donald Trump never went bankrupt. oh, wait...
    And yet his projects were not mothballed, because if they had been his backers would have lost even more money.
  • Dan C. wrote:
    I work in commercial RE...believe me, there is no one going into the new office space. The Yahoo! lease in Bellevue was the last "big" one of this cycle...many owners are building spec in hopes of finding that large tenant, who is not coming.
    What about Microsoft's lease of 1.3 million sq. ft. of office space under construction in Bellevue? And the other 1.3 million sq. ft. the company is building in Redmond? They'll have room for 7,000 new high-tech workers. Even if they add only half that number, it's a massive expansion.
  • pumpkin wrote:
    Hi everyone- Someone wrote on the blog yesterday something along the lines of "make your offfers quickly this spring because lots of people will be making offers when the weather changes" (I'm paraphrasing, can't remember exactly how it was worded). I didn't think much of this comment yesterday, but woke up this morning thinking "wait, what?" The comment is now gone because the thread was cleaned up -- rightly so as the thread was starting to go off topic. Would the person who wrote this comment mind elaborating? I thought we were all waiting for the "bloodbath" in the spring so we have more to choose from and pay less? Merci!

    I'm thinking you may have misread the comment, because Tim doesn't generally delete any comments unless they are really inappropriate - and the only comment close to that I read were in this thread

    I wouldn't get too stressed about changes in the median at that level of granularity. 700/705/710 were up - but 390 was down by 10%. Madison Park and North Capital Hill are still pretty desirable close in neighborhoods - I doubt they are moving that differently than those other areas. You are dealing with small samples and a measure with an inherently high degree of volatility.

    As to the "spring bounce", it could happen, who knows. I'd say make your own call on the market fundamentals: cost and availability of credit, inventory, economic strength; and decide for yourself if you think that the current trend of 4 months of falling prices is going to turn around based on that info - especially in light of a national market that is pretty consistently horrible.
  • pumpkin wrote:
    Perhaps the person who posted the comment does not read the forum, so we should just forget I asked. Thanks anyways-
    It wouldn't matter who said it. Nobody knows for sure what the spring market will be like. Anyone who ever bought a house took a risk on the future.

    I wish I had bought on QA myself, but then I couldn't afford it there even 10 years ago. One thing you get when you buy in places like that is high liquidity when you sell, including some imperviousness to bubbles. That's what you're seeing in the paper. You pay a premium to get in, you get it rebated when you get out.

    If you have/will have kids, keep in mind that the most popular/expensive places are increasingly lacking children. For example, look at the playgrounds on QA. The park at Greenlake still packs them in though.
  • Ouch! wrote:
    I get it Markor, your Field of Dreams philosophy is 'if you build it, they will come,' or something along that line. It's the buildings that create business, not the other way around. Good luck with that.
    Luck is certainly involved, but it's true that developers build office/retail space in the hopes that businesses will eventually fill them, which almost always happens. It's a safe bet, until the day the world population is no longer growing exponentially.
  • pumpkin wrote:
    Hi everyone- Someone wrote on the blog yesterday something along the lines of "make your offfers quickly this spring because lots of people will be making offers when the weather changes" (I'm paraphrasing, can't remember exactly how it was worded).
    Was this the comment?:
    right now debating buying or waiting to see how it looks in the Spring...
    The masses will be doing the same, so I'd suggest making a decision by Feb. The early birds will probably have provided the answer by then, esp. if there aren't any!
  • Markor wrote:
    What about Microsoft's lease of 1.3 million sq. ft. of office space under construction in Bellevue? And the other 1.3 million sq. ft. the company is building in Redmond? They'll have room for 7,000 new high-tech workers. Even if they add only half that number, it's a massive expansion.

    As I've said here before, the unofficial word on the inside is this expansion is mostly to accommodate existing employees, not a tidal wave of new hires. Lord knows employees are crammed into main campus like sardines. Five years of employment gets you doubled up without a window office in my product right now. I've heard we're at 50% over occupancy in my building.
  • You have to wait, period. With what is going on in mortgage market, it is simply matter of time before the price comes down. Seattle has always been one of the most stable mortgage market in the country, and this has been one of the major argument that Seattle is special. However, Seattle isn't special enough to avoid the exposure of all these crap loans. I would still give Seattle credit for being special though, hence the reason why the drop isn't apparent yet.
    [/list]
  • I'm looking at a community in Bothell which has a price reduction of 30K on the home I'm looking at. I believe I should be able to negotiate further 20K on the home.
    I know that this home is of very good quality and 50K reduction overall from original listed (bubble) price should be good enough.

    I'm very eager to close the deal before Christmas. But there is something bothering me on whether I should wait longer for more negotiation. Already I have seen increased number of people visiting the open houses and that is also a negative sign for buying.

    Please help!
  • Relo wrote:
    Already I have seen increased number of people visiting the open houses and that is also a negative sign for buying.

    Please help!

    Clarification: it is a negative sign for waiting.
  • Lake Hills Renter,

    You are correct, the Microsoft leases in Downtown Bellevue and SLU are for existing employees only...this is not an expansion. Also, a large portion of new construction in Redmond is to house server areas and lab space...not offices for new employees.

    My girlfriend works for MSN and they are crammed four to what would traditionally be a double office...not pretty.
  • pumpkin wrote:
    Someone wrote on the blog yesterday something along the lines of "make your offfers quickly this spring because lots of people will be making offers when the weather changes" (I'm paraphrasing, can't remember exactly how it was worded).
    Hi Pumpkin,

    The only quote I read that was similar to that was when Markor said the following:
    Markor wrote:
    James wrote:
    right now debating buying or waiting to see how it looks in the Spring...
    The masses will be doing the same, so I'd suggest making a decision by Feb. The early birds will probably have provided the answer by then, esp. if there aren't any!
    However, Markor said earlier that the way you paraphrased it wasn't anything he said, so I'm guessing you misinterpreted the comment.

    Also, Deejayoh is correct in that I don't delete comments. The only exceptions to this are overtly inflammatory, excessively foul, or spam comments.
  • Dan C. wrote:
    My girlfriend works for MSN and they are crammed four to what would traditionally be a double office...not pretty.

    Some new hires in my building are crammed 4 people into a single, and those are FTEs. They've also turned most of the informal lounge spaces into cube farms, and actually cut the copy room in half on each floor to squeeze one extra office out of them. I know several people that have transferred to other products because of the lack of office space. It's not pretty at all.
  • Dan C. wrote:
    You are correct, the Microsoft leases in Downtown Bellevue and SLU are for existing employees only...this is not an expansion.
    You could be right, but I don't think that's the whole story. For competitive reasons they need to keep hiring details close to the vest. Surely there will be some relief of overcrowding, even though that's more the rule than the exception there. But I doubt the red line on this chart is going to flatline anytime soon:

    msftjobs-0727.gif

    Microsoft continuously needs ambitious new talent, to offset the existing work force that gets one year older & lazier every year and is tough to cull.
  • Markor wrote:
    Microsoft continuously needs ambitious new talent, to offset the existing work force that gets one year older & lazier every year and is tough to cull.

    and to make up for the ones that spend all day posting on seattle bubble :lol:
  • Yup, I now officially have egg on my face. :oops: I did misread Markor's comment, which is why I went back to reread it (the "what?" gut-reaction Saturday morning), but then couldn't find it again because I thought the discussion was under the outrageous REI house and assumed the thread was cleaned up. Mea culpa, mea culpa. I suppose us buyer-wannabes are tightly wound lately, perhaps more tightly wound than sellers even.
  • deejayoh wrote:
    and to make up for the ones that spend all day posting on seattle bubble :lol:
    Good one! Back to work...
  • I'm on vacation, thankyouverymuch. 8)
  • Markor wrote:
    deejayoh wrote:
    Yes, builders are great examples of excercising restraint in their activities. That's why Donald Trump never went bankrupt. oh, wait...
    And yet his projects were not mothballed, because if they had been his backers would have lost even more money.

    Here's why I worry about all those cranes. Lenders may not be so lucky this time...
    Wall Street's Next Crisis
    by Jesse Eisinger January 2008 Issue

    ...
    Amid the tall office spires of America's cities, big-money pros have simply been playing a game of greater fool, trying to bring in huge returns with borrowed money and sell out before the arrival of the crash they knew was coming. And in this case, the fools won't just be famous developers. Some of the same banks and Wall Street firms now entangled in the subprime residential crisis will also be caught in the mess. The commercial-real-estate meltdown will be a market failure, pure and simple. We will be able to look at the wreckage in the next several years with wonder and awe, untroubled this time by sympathy for those left holding the bag.

    Here's what we know about what happened in commercial real estate: Lending standards fell, starkly. Or as I prefer to see it, they were thrown out of the 60th-floor window of that gleaming office tower in downtown Atlanta/Phoenix/New York/San Francisco/insert your city here. The gap between the cost of debt servicing and the cash actually being generated by the buildings narrowed. What's more, it used to be that banks made loans for no more than 80 percent of the value of a property to ensure a healthy cushion of protection, but by the early part of 2007, loans were sometimes made for 120 percent of a property's value. Who would be so crazy as to lend more than a property is worth? Anyone who believes in perpetual-motion machines—that is, that rents and underlying property values must always go up.
    ...
  • What's more, it used to be that banks made loans for no more than 80 percent of the value of a property to ensure a healthy cushion of protection, but by the early part of 2007, loans were sometimes made for 120 percent of a property's value.

    That's easy! You appraise it base on the year it completes construction.
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