Comments on: Lower Cost Options for Buyers & Sellers of Real Estate http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/ Seattle's Leading Resource for Real Estate Information Mon, 15 Mar 2010 18:22:02 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: What Drives an Active Online Community? | Seattle Real Estate ~ Rain City Guide http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-322618 What Drives an Active Online Community? | Seattle Real Estate ~ Rain City Guide Wed, 30 Jul 2008 22:27:22 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-322618 [...] Lower Cost Options for Buyers & Sellers of Real Estate by Ardell [...] [...] Lower Cost Options for Buyers & Sellers of Real Estate by Ardell [...]

]]> By: Unstoppable Forces and Unmoveable Objects: Real Estate Commissions : agentgenius.com http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-238546 Unstoppable Forces and Unmoveable Objects: Real Estate Commissions : agentgenius.com Fri, 04 Jan 2008 00:16:43 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-238546 [...] From Ardell DellaLoggia on Seattle’s Rain City Guide two weeks ago: How does a company survive?  If the company has to charge the agent more and more to survive, causing the agent to charge consumers more and more to survive, well then maybe the company should quit.  OR brokers should charge agents less, so they can be free to price their services more fairly, and maybe all will become stronger as a result. [...] [...] From Ardell DellaLoggia on Seattle’s Rain City Guide two weeks ago: How does a company survive?  If the company has to charge the agent more and more to survive, causing the agent to charge consumers more and more to survive, well then maybe the company should quit.  OR brokers should charge agents less, so they can be free to price their services more fairly, and maybe all will become stronger as a result. [...]

]]> By: ARDELL http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236698 ARDELL Mon, 31 Dec 2007 17:45:33 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236698 I haven't been feeling well, have that flu that's going around, and I just woke up. But still seems like you are stacking the deck against the guy who bought vs. the guy who rented. Wouldn't both have the same inflationary costs outside of housing payment? Why would you erode the buyer's gain on his house due to inflation on say buying gas for his car or a loaf of bread? Wouldn't they both have those costs? Just saying that if Realtors shouldn't stack the deck on the favorable side, likewise "the other side" shouldn't stack the deck on the unfavorable side. Let's keep both sides of that fence on an even keel so we we are not cheerleaders and bubble trackers aren't naysayers. I'm trying to pinpoint a peak time, as I think we did have it. Probably July of 07 in markets I'm familiar with. What I'm seeing is the best locations and properties sustained the upswing longer and at a more rapid pace. I've seen this before. In some markets, those properties never do go down depending on the length of the lull, as those are the last to start down and the first to rise up. So if the lull is not sustained, that segment never takes the hit. Not saying they won't, but we won't know until March or April of 2008. That's why I'm running all the stats back as far as I can in the next week or so. Seems to me that the number of units sold is the key, and not "medians" of any kind. Without the December figures in, I'm at 44,278 for 05, 39,544 for 06 and 33,644 for 07 through the 28th or so of December. We'll pick up some more as the final postings for December get entered. But I don't think it will change the number by more than 1,000 given the holidays and weekend. Probably not even that much. Condo sales down by 10% in 07 (9,026) compared to 05 (10,021), without the final December numbers. Single Family accounts for a 28% drop from 31,928 sales in 05 to 23,000 plus in 07. Is it a shift to condo living? Or a priced out of single family housing? Or some of both? Some of that drop was in 06, buy largely it is in 07. As to "month to month" calculations. I am posting month to month for 05, 06 and 07 so we can see the trend out the gate on 08 compared to those three years as to all sales, condos and single family homes. I am doing King County for now, but will be breaking out the numbers into smaller segments as we go. It will be very interesting in early 2008 for sure. I haven’t been feeling well, have that flu that’s going around, and I just woke up. But still seems like you are stacking the deck against the guy who bought vs. the guy who rented. Wouldn’t both have the same inflationary costs outside of housing payment? Why would you erode the buyer’s gain on his house due to inflation on say buying gas for his car or a loaf of bread? Wouldn’t they both have those costs?

Just saying that if Realtors shouldn’t stack the deck on the favorable side, likewise “the other side” shouldn’t stack the deck on the unfavorable side. Let’s keep both sides of that fence on an even keel so we we are not cheerleaders and bubble trackers aren’t naysayers.

I’m trying to pinpoint a peak time, as I think we did have it. Probably July of 07 in markets I’m familiar with. What I’m seeing is the best locations and properties sustained the upswing longer and at a more rapid pace. I’ve seen this before. In some markets, those properties never do go down depending on the length of the lull, as those are the last to start down and the first to rise up. So if the lull is not sustained, that segment never takes the hit. Not saying they won’t, but we won’t know until March or April of 2008. That’s why I’m running all the stats back as far as I can in the next week or so.

Seems to me that the number of units sold is the key, and not “medians” of any kind. Without the December figures in, I’m at 44,278 for 05, 39,544 for 06 and 33,644 for 07 through the 28th or so of December. We’ll pick up some more as the final postings for December get entered. But I don’t think it will change the number by more than 1,000 given the holidays and weekend. Probably not even that much.

Condo sales down by 10% in 07 (9,026) compared to 05 (10,021), without the final December numbers. Single Family accounts for a 28% drop from 31,928 sales in 05 to 23,000 plus in 07. Is it a shift to condo living? Or a priced out of single family housing? Or some of both? Some of that drop was in 06, buy largely it is in 07.

As to “month to month” calculations. I am posting month to month for 05, 06 and 07 so we can see the trend out the gate on 08 compared to those three years as to all sales, condos and single family homes. I am doing King County for now, but will be breaking out the numbers into smaller segments as we go.

It will be very interesting in early 2008 for sure.

]]> By: Kary L. Krismer http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236636 Kary L. Krismer Mon, 31 Dec 2007 14:46:37 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236636 czb, I think there is a measure of inflation that includes energy and such, it's just that it's too volatile to be much use (especially to people who set fiscal policy). It's sort of like month to month comparisions of real estate medians for them. But for the rest of us, over longer periods of time, it is relevant. czb, I think there is a measure of inflation that includes energy and such, it’s just that it’s too volatile to be much use (especially to people who set fiscal policy). It’s sort of like month to month comparisions of real estate medians for them. But for the rest of us, over longer periods of time, it is relevant.

]]> By: czb http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236492 czb Mon, 31 Dec 2007 08:56:16 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236492 Ardell, Since I was referring to a two-year time frame, the 5-10% inflation numbers I quoted were for the two year period (ie 2.5 to 5%/year). I think the range is appropriate, depending on who's numbers you use/what you wish to include in the calculation. Many would argue that actual inflation is higher since certain entities such as energy, for instance, do not get included in the calulcations but that's beside the point. Similarly, the opportunity cost numbers I stated for what the downpayment would have accumulated in interest if it were invested in a CD was also for a two year period (ie 7-9% total over two years after tax = @5.5%/yr before tax (compounded), which is about what rates would've been at the time - lower now). Ardell,
Since I was referring to a two-year time frame, the 5-10% inflation numbers I quoted were for the two year period (ie 2.5 to 5%/year). I think the range is appropriate, depending on who’s numbers you use/what you wish to include in the calculation. Many would argue that actual inflation is higher since certain entities such as energy, for instance, do not get included in the calulcations but that’s beside the point. Similarly, the opportunity cost numbers I stated for what the downpayment would have accumulated in interest if it were invested in a CD was also for a two year period (ie 7-9% total over two years after tax = @5.5%/yr before tax (compounded), which is about what rates would’ve been at the time – lower now).

]]> By: ARDELL http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236485 ARDELL Mon, 31 Dec 2007 08:24:39 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236485 I don't have any people who bought in late 2005 who have sold, but I've been running the numbers on the complex with the $104,500. One is in escrow for $230,000 or so, but I can't believe that is going to close and they just bought it for $202,000 earlier this year. So I was being conservative at the $175,000 figure. Didn't mean to give you a hard time. Just seems with such great gains for many that there's always a reason to suggest the gains aren't real and can be explained away with inflation, etc. Did we really have 5% to 10% inflation in 2006 and 2007 not including housing increases? I don’t have any people who bought in late 2005 who have sold, but I’ve been running the numbers on the complex with the $104,500. One is in escrow for $230,000 or so, but I can’t believe that is going to close and they just bought it for $202,000 earlier this year. So I was being conservative at the $175,000 figure.

Didn’t mean to give you a hard time. Just seems with such great gains for many that there’s always a reason to suggest the gains aren’t real and can be explained away with inflation, etc. Did we really have 5% to 10% inflation in 2006 and 2007 not including housing increases?

]]> By: Kary L. Krismer http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236468 Kary L. Krismer Mon, 31 Dec 2007 07:15:45 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236468 The rent factor is another one that favors holding property longer term. Back when I bought my first condo a friend couldn't believe how much I was paying per month. But I said something to her that stuck--I'd be paying that basically forever, without it going up. I think the P&I was about $500 at the time--downtown Seattle. At the time that was outrageous--it didn't take that long before it wasn't, but it was longer than 3 years. The rent factor is another one that favors holding property longer term.

Back when I bought my first condo a friend couldn’t believe how much I was paying per month. But I said something to her that stuck–I’d be paying that basically forever, without it going up. I think the P&I was about $500 at the time–downtown Seattle. At the time that was outrageous–it didn’t take that long before it wasn’t, but it was longer than 3 years.

]]> By: czb http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236459 czb Mon, 31 Dec 2007 06:49:46 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236459 Ardell, Of course people have done very well in this inflated market in the past. I wouldn't deny that and have myself benefited from the run-up in prices. The market appreciated dramatically up to last year so it would've been practically impossible to not do well. However, times have changed. The time frame Kary and I are discussing (per his post) is specifically the last two years. Recall that he claimed that Christiangustafson would undoubtedly be selling for a profit if he had purchased a house a couple of years ago, which is the point that I find contentious. The situation is quite different for those who purchased well below the peak (eg especially your Spring 2004 and even December 2004 examples) rather than closer to the peak. Your example of the Microsoft condo that "can sell now for $175K" is meaningless unless the place actually does sell for that much, which does not appear to be a sure thing these days. And as I have acknowledged several times now, I realize anything is possible so there will certainly be *some* success stories, but I do not think the odds are that great. You have not really refuted my argument that those who bought in late 2005 would not likely profit, in real terms, if they were trying to sell their property today - a point upon which we will apparently continue to disagree. Ardell,
Of course people have done very well in this inflated market in the past. I wouldn’t deny that and have myself benefited from the run-up in prices. The market appreciated dramatically up to last year so it would’ve been practically impossible to not do well. However, times have changed. The time frame Kary and I are discussing (per his post) is specifically the last two years. Recall that he claimed that Christiangustafson would undoubtedly be selling for a profit if he had purchased a house a couple of years ago, which is the point that I find contentious. The situation is quite different for those who purchased well below the peak (eg especially your Spring 2004 and even December 2004 examples) rather than closer to the peak. Your example of the Microsoft condo that “can sell now for $175K” is meaningless unless the place actually does sell for that much, which does not appear to be a sure thing these days. And as I have acknowledged several times now, I realize anything is possible so there will certainly be *some* success stories, but I do not think the odds are that great. You have not really refuted my argument that those who bought in late 2005 would not likely profit, in real terms, if they were trying to sell their property today – a point upon which we will apparently continue to disagree.

]]> By: ARDELL http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236410 ARDELL Mon, 31 Dec 2007 04:50:12 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236410 P.S. None of those were flips or improved properties. In fact the $855,000 one was a tear down and I think is now torn down making way for townhomes in Seattle. P.S. None of those were flips or improved properties. In fact the $855,000 one was a tear down and I think is now torn down making way for townhomes in Seattle.

]]> By: ARDELL http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236409 ARDELL Mon, 31 Dec 2007 04:48:33 +0000 http://raincityguide.com/2007/12/22/lower-cost-options-for-buyers-sellers-of-real-estate/#comment-236409 Will you agree that my client who paid $104,500 in July of 2005 across from Microsoft, and can now sell it for $175,000 or more, is way ahead of the game? You seem to think no one did well or could have done well. How about my client that bought for $580,000 in December of 04 and sold in July of this year for $855,000? Maybe the one that bought in Spring of 04 for $130,000 including closing costs and sold in August of 06 for $207,500 not including closing costs. You don't seem to want to acknowlege those who have gained. Of course you are not the only one. I have only two people who I have helped purchase in Seattle who have since sold the properties. The rest still live in them. Pretty substantial gains there anyway you slice it, or can you say those people didn't make any money either due to "other factors"? You seem to want to justify away any and all gains by any means. Will you agree that my client who paid $104,500 in July of 2005 across from Microsoft, and can now sell it for $175,000 or more, is way ahead of the game? You seem to think no one did well or could have done well. How about my client that bought for $580,000 in December of 04 and sold in July of this year for $855,000? Maybe the one that bought in Spring of 04 for $130,000 including closing costs and sold in August of 06 for $207,500 not including closing costs.

You don’t seem to want to acknowlege those who have gained. Of course you are not the only one. I have only two people who I have helped purchase in Seattle who have since sold the properties. The rest still live in them. Pretty substantial gains there anyway you slice it, or can you say those people didn’t make any money either due to “other factors”?

You seem to want to justify away any and all gains by any means.

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