Microsoft neighbhorhoods still selling like hot cakes?
Most listings in neighbhorhoods prefered by Microsoft employees seem to be still selling like hot cakes (even in the $600k+ market)? Wonder if these neighbhorhoods will ever see a slowdown?
Any thoughts on why this is the case? I don't think Microsoft is hiring as agressively as they did over the past couple of years.
Any thoughts on why this is the case? I don't think Microsoft is hiring as agressively as they did over the past couple of years.
Comments
On the eastside, it seems like the preferred areas are Bellevue, Redmond, Sammamish, Issaquah, Kirkland, etc. Typically fairly new homes (less than 8+ years old) tend to preferred. Note that this purely my preception -- not backed by any data.
The eastside market seems to have really taken off in the past 3-4 weeks. Though, I'm clueless as to why. Any thoughts/insights are highly appreciated.
That sounds like a possible reason. Approx, when is the relocation/school season expected to end?
In addition to the people waiting for their kids to finish school, there is also a large influx of college grady. But most of them are not purchasing.
Its not so much the Microsoft salary that is creating weird dynamics as their habit of pulling people from places that are really overpriced.
On the other hand, this is why Google is building their Kirkland campus. Its cheaper for them to build a campus here for their Seattle (ex-Microsoft) employees than to pay those employees enough to make it worth their while to move down and buy in to the way overpriced Bay Area market. Especially since the SF market will probably not crash nearly as much -or at all - compared to Southern California or how other places currently are, since they really are "special"....
Very good point.
Exactly! I've been trying to convince Tim of this but he insists that there needs to be exact correlation of median income to median house price. But that theory is complete mishegas because of the large # of people moving here from high equity markets. Even if their job doesn't pay that well, which it usually does, they still have massive buying power because of all the equity.
That's what condos are for....
so a family should get a subpar 400k 1br condo instead of a subpar 500k 3br house?
Plus one of the hot buzz words in my office right now is "loss on sale" which is a reimbursement paid to individuals who have to sell at a loss at origin. I have been here 5 years and only in the last few months have I ever heard it mentioned.
Meshugy:
For your theory to be accurate, the influx of equity-rich transplants has got to be relatively large to influence the median. Do you have data, or is your opinion just speculation? Are there really that many equity-rich Microsoft employees moving here?
I see a lot of people that make a lot of money but at the same time have none. I am talking so little money that they cannot afford incidental expenses they have to pay up front (yet get reimbursed). These are people making double or more than median Seattle income.
And that has been addressed on several occasions, but again, you don't listen. and to comment "that's what condos are for"? idiotic.
Yes, people came up here with lots of equity, they WERE able to sell their home and put down a large dp and have little to finance. Hence price increases. BUT WAKE UP SHRUG! those days are OVER!!! they can't sell their damn house. do you get it? And even if they can sell their house, and say they bought it more than 3 years ago and have a decent amount of equity, they are getting to the point that they see what is happening where they came from and see the same thing happening here, hence, they would have to be complete MORONS to think buying would be a good idea at this time. I know of Several Cali's that have moved up here and are putting off buying because of the sting they took, and they have plenty of euquity, but try sitting on your house for 10 months waiting for it to sell. You are a lot less likely to jump back in under these circumstances.
Hence the delay in Seattle taking a dump. but it will happen.
We have substantial equity and decent tech management salary, and yes we could easily afford houses in Redmond, Kirkland, Bellevue, Sammamish.....; although there are also many we can not afford. Some programmers who had phone interviews declined to go further once they realized that they worked in places where they could get 2 acres with a huge house for under 300,000 and that wouldn't buy a shed here.
Having previously lived in Vancouver Canada and watched real estate burst not once, but 3 times......we are quite happy renting and waiting. I know people who overspent, interest rates went up, they had to sell at substantially less than they bought for and spent many years paying off debts and owned nothing in the end.
When we first arrived here, everywhere we went we noticed huge signs advertising new housing developments, tons of houses being built, lots of signs advertising houses for sale, for rent.... Looking through all the local real estate websites, there are tons of houses up for sale that are empty.
Currently, it seems like most of the activity in single family houses tends to be in the lower price ranges, potentially by people stretching to buy at the upper reaches of their affordable levels. It maybe that some houses are selling well, but I know one person who just bought a newer house in the lower belowe $450K in Duvall, while similar houses are being advertised for $550K. If the prices on huge glut of houses in the more expensive categories starts to fall, it will affect prices all the way down.
First cycle: Prices increased 119% from 1979 to 1981 and declined back to pre-boom level by 1985 (although the largest part of the drop occured by 1982)
Second cycle: Prices rose 69% from 1986 to 1990 and declined abruptly by 16% by 1991
Third cycle: Prices rose 38% from 1991 to 1994 and declined 24% by 2001
Since 2001 prices have gone up about 100%
I just read today that for every house sold, 2 are being listed. I also read on a forum that realtors have been selling houses to each other recently.
Yeah, all those guys worried about an emminent layoff are going to be psyched to buy now.
Unless they were waiting for the stock to break 30 before cashing out options, probably won't have a direct effect.
It is worth noting though that AMZN, SBUX, MSFT and BA all posted favorable results and saw their stocks climb. Then again, WM posted some questionable results and is also up since mid April.
That same out-of-town experience is going to come into play in 2007, but with very different results. As markets drop elsewhere fewer newcomers are going to believe the "Seattle is different" story, since it's the same story that was told in nearly every high-flying market in the country. Before the drop.
Reports: Microsoft Pursuing Yahoo
Microsoft down 2%
yahoo up 16%
market loves it. not
Microsoft doesn't lack money or market share in this area, they're lacking in innovation. Buying up a few "also-ran's" seems pointless. There's no magic GOOG killer like there was for Netscape.