Seattle Condo Review: Blog with News & Advice about Seattle Condos

The Standoff Continues as Sellers Refuse to Roll

Here's a good article in the Seattle Times describing "sticky pricing" and the fact that Seattle sellers are largely refusing to make giant price reductions -- even as most buyers refuse to pay 2007 prices. 

As most SCR readers know, I happen to believe that we are more likely to be in a balanced market by the end of this year than an all-out buyers' market.  In fact, it seems to me that the biggest factor will be if the rest of the country's economic jitters drag Seattle down since the local fundamentals (job growth, interstate immigration, foreign investment / weak dollar, baby boomer downsizing, etc.) bode well for demand keeping up with the supply.

Of course, I suppose I'd be retired in the south of France if predicting prices were easy and can see why others feel prices will drop further.  There certainly is no shortgage of lively discussion -- if you didn't see it, check out a recent SCR reader exchange here.   

-Wendy

The White House and Your House

The mortgage and economy seem to be front and center for the Presidential candidates these days. Here are some tidbits I found from the frontrunners' websites regarding the mortgage situation and what they'd do about it.

__________________________________

Democrats:

• Barack Obama: Combat Mortgage Fraud and Subprime Loans; Create Fund to Help Homeowners Avoid Foreclosures; Create a Credit Card Rating System to Improve Disclosure; Establish a Credit Card Bill of Rights to Protect Consumers.  (If you're fired up for Obama, there's a unity march in downtown Seattle this Saturday.)
• Hillary Clinton: Foreclosure Moratorium; Freeze Interest Rates; Require Accountability.

Republicans:

• John McCain: Cut Taxes; Cut Spending.
• Mit Romney: Cut Taxes; Cut Spending; Government Guarantees For Larger Loans;  More Disclosure and Counseling for Consumers.

I'm curious what readers think about these candidates' plans? In my opinion, the government's job is to help consumers make decisions with as much info as possible but people who get irresponsible loans for flipping shouldn't really get bailed out.

-Wendy

Have you refinanced yet?

If you haven't already refinanced and you got your mortgage a couple of years ago, you probably should consider calling your lender.

According to this story in the Seattle Times, some bankers are reporting refinancing activity up 50%.  Bottom line: if you're not already paying in the 5's or if your loan is really big, you may want to give your lender a call and see what they can do for you.  It may be the easiest way to save a couple hundred bucks a month or increase your equity for the same monthly payment.

p.s. If I were a betting person, I might wait till next week since I suspect our man Ben Bernanke (below) will cut rates again this week.

Belltown Recovery?

It's still very early but I noticed there was a slight uptick in activity in the core Belltown resale market in December. 

In November, there were only two 2BR units in the $400-600K range in Belltown that went from Active to Contingent. In December, there were four units that went from Active to Contingent status (note: Decembers are historically a slower month than Novembers).

Perhaps this is an early indicator that some buyers, who seemed to be price inelastic over the last few months, are starting to pull the trigger once again. 

Stay tuned.

-Wendy

Where in Seattle will the investor money go in 2008?

SCR Reader Poll: Will it be a happy Spring 2008?

Seattle Condo Market Update

Numbers from the Northwest Multiple Listing are showing a total of 1,531 active listings on the market at the end of September. Compared to the end of the 2nd quarter, months of inventory on the market has increased from 3.5 to 4.2 months. While median prices continue to exceed the same time last year, the market has definitely glided to a slower pace with longer days on market than 2006.

Overall in Seattle for the month of September, we are seeing a 21.08% drop in pending sales versus the same time last year. We are most likely going to continue to see slower sales throughout the fourth quarter with the slower season, existing high inventory and buyers biding their time and hoping for prices to drop.

Even though pending sales have dropped, most sellers are refusing to slash their prices by more than a few percent resulting in median prices for the month of September in Seattle still showing a positive growth of 7.57% compared to a year ago.

Check out the lively discussion on my recent post discussing the buyer and seller standoff here.

-Wendy

Market Update

The Seattle PI wrote a nice summary of the general local market conditions.  Some good county-wide data in there.  I thought I'd share what I'm sensing in the downtown condo market.

I'm seeing many buyers - especially first time homeowners - waiting on the sidelines out of concern that prices will fall soon after they buy.  At the same time, many of my selling clients are only adjusting prices by a few percent (if at all) or deciding to lease their properties to an increasing pool of renters before putting their units on the market in 2008. 

So who is left in the market today?

Fed cut rates!

Great news for homebuyers. The Fed cut rates by 1/2%!

"The Fed announced a cut of .50% to the Fed Funds Rate and an additional .50% reduction to the discount rate.  In the statement the Fed indicated they are concerned about the recent problems in the credit markets stating "Today's action is intended to forestall some of the adverse effects on the broader economy that might otherwise arise from the disruption in financial markets".  Unlike the last meeting, it appears that the Fed is willing to take action to support the challenged housing market."

Read more: Stocks spikes after Fed surprise with half point cut

-About Wendy

Seattle Condo Market Update

August 2007 statistics came in from the Northwest Multiple Listing service. Last month's numbers show a reduction in closed sales compared to the same time last year. Pending sales went down for Queen Anne/Lake Union/Magnolia area by 34.21% compared to same time last year. Capitol Hill/Central/Madison Park are also experiencing a drop in pending sales by 19.31%. Belltown/downtown bucked the trend, showing an increase in pending sales by 11.29%.

Overall, in Seattle, pending sales went down by 7.25%. One of the big reasons is probably buyer hesitation as a result of the sub-prime mortgage news. Many home buyers are choosing to wait to play it safe and hoping prices will drop. So far, major price reductions don't seem to be happening too much, at least not in a big way. Looking at the median price for Aug 2007 compared to July 2007, prices are still holding up even though demand has decreased for the month of August. 

Seattle Condo Market Update

The numbers are in from the Northwest Multiple Listing service. In July, we saw major increases in inventory as well as significant increases in closed sales for most areas.  Queen Anne, Lake Union and Magnolia had a 18% dip in closed sales versus the same time last year - this followed a strong month in June 2007 with an increase of 23.33% of closed sale compared to June 2006 for Queen Anne.

As for Belltown and the downtown area, there has been consistently higher closed sales (ranging from 39.47% to 157.69%) for the last 3 months compared to same periods last year.  Nevertheless, active listings are increasing at a major clip with July inventory more than double last years while sales were up about 50%.  Over the next four months, we will start seeing major spikes in closed sales as new construction for projects like the Parc (Sep), Mosler Lofts (Sep), Trio (Nov), and 5th and Madison (Oct) come online.

Condo Investments - Not for the Faint of Heart

A lot of my clients are experienced investors. However, I also work with first-time investors as well. For those folks who aren't planning on using their new property as a primary residence and haven't bought and sold investment properties before, there are some things I generally go over before we even consider touring the first unit: 

• Buying a property for zero down and renting it out expecting you'll make a monthly income after dues, taxes, and expenses is highly unlikely to happen. Perhaps you can find a really under priced dated unit and are able to do the renovations yourself but in general, investors experience short term losses and reap their profits in the medium to long term at selling time. 
• Especially if it's primarily an investment property, buying a pricey unit today that is in a hot building may not leave a lot of head room for appreciation a few years out. Consider units that are attractively priced and/or in areas that are still developing (and priced accordingly).
• Run the numbers. Make sure you whip out your Excel and see what your monthly costs, taxes, and expected resale value will be to see if the figures pencil out. If the numbers don't work out on paper, they probably won't in real life either.

Hope this helps!

-About Wendy

Belltown Market Analysis

May 2007 data came in fairly strong - despite all the pessimists who were forecasting a steep decline in the making. In Belltown/Downtown, inventory shot up from 120 active listings in May 2006 to 308 active listings in May 2007. While this may seem like a major increase, closed sales went up by almost the same percentage from 26 sold in May 2006 to 67 sold in May 2007.

In contrast, Queen Anne, Lake Union, and Magnolia and Capitol Hill, Central, and Madison Park had active listings increase at a higher rate year over year than closed sales.

Seattle Real Estate Market Update

The April stats are in and it appears we're at an exciting chapter in the Seattle condo market boom. One thing that jumps off of the table below is how much listings grew compared to the same time last year and how closed sales grew compared to last year, but at a fraction of the rate of listing growths.

Many buyers will be happy to see increasing inventory and stablilizing prices. Owner residents can also find comfort knowing the last couple year's exuberance is now settling back towards more sustainable long-term growth without giving up their recent gains.

(NWMLS statistics. Information deemed accurate but not guaranteed.)

CNN predicts Seattle property market appreciates slightly in 2007

Interesting article in CNN on US regional real estate markets shows Seattle is one of the brighter spots in the nation.  Specifically, they predict a small gain (2.8%) in 2007 and flat growth in 2008.  This is the kind of news both home owners and buyers are probably relieved to see.

In fact, the Pacific Northwest is the only region on the West coast with appreciating prices.  California and Arizona are more clearly favoring buyers with dropping prices.

Click here for info on other regions.

-Wendy

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Zillow's real estate hot spots report

The Seattle Post Intelligent reported on Zillow’s latest real estate hot spots report. The report pegged the median home value in Green Lake at $521,916 in June -- up by an annualized rate of 32.2 percent, compared with 16.5 percent for the city as a whole. Broadview, Wedgwood, Westlake and Windermere were up by an annualized rate of more than 40 percent. Zillow also showed much lower appreciation in some other city neighborhoods, and even declines in Broadway and downtown. Read more here.

-Wendy

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Condo appreciation in King County

The Seattle Times just published their annual home values review in King County. Here is some interesting data for condominiums. Since 2000, condominiums have outperformed single-family houses two out of five years in King County. And even when they haven't, their appreciation has been strong.

Income required for condos in Belltown is $81,728. Income required for Capitol Hill and Queen Anne, Fremont, and Ballard is around the same at $60,000’s. Check out the full article.

Neighborhood         Median price    Avg. price change    Avg. annual
                               2005             2004-2005           5 yr change

Belltown                   $359,990           23.2%                 6.1%

Downtown/First Hill    $324,900             6.4%                 3.6%

Lower Queen Anne     $299,975           16.5%                 6.0%         

Queen Anne             $293,000            12.4%                 7.8%

Lake Union                $300,750            1.4%                 5.5%

Capitol Hill/              $270,000           22.3%                 6.6%
Montlake         

Central District/         $232,000           23.9%                 6.9%
Madison

Source: Seattle Times

-Wendy

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Seattle market remains strong

The Wall Street Journal reported that Seattle was "one coastal market that remains strong."  Using data from multiple sources, the Journal examined inventories, pricing trends and projections of job creation.

Seattle was one of only five areas with a "very strong" employment outlook, and one of only five areas with upward trending prices. It was the only area with both a gain in inventory and prices combined with expectations of "very strong" job growth.

Good news for the Seattle market!

-Wendy

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Seattle named most educated city

Just learned on Upfront and on the PI that Seattle was named most educated city in America.  Given there's a good correlation between education and income, and income and demand for nice condos, this is reassuring news for downtown homeowners, investors, and realtors ;-)

-Wendy

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