“HUGE leap to proposed new topic: Our 4th offer failed, we’re settling in for a long haul, and we would be riveted (better late than never) by a discussion on what protocols govern behavior among real estate agents, firms, and customers here. I can’t find a way to introduce new topics myself.
I was a meeting this weekend with an agent in Southern California where he showed me a website he says he visits a couple times a week. A competitor had built up a large repository of “pocket listings” for the Beverly Hills area and then stuck them behind a registration wall… of which he visited regularly.
Being a Rain City Guide kinda guy, I’m not keen to put things behind registration, but I am fascinated by the idea of putting together a page of pocket listings as a resource for Seattle area agents and consumers. If you’re an agent who serves any area supported by the NWMLS and you’d like to advertise a pocket listing on RCG, let me know in the comment below.
If I get 5 or more pocket listings in the comment section of this post in the near future, then I’ll assume there really is demand for such a tool in the Seattle area and I’ll start up a new page (right between “About RCG” and “Seattle Agent Recommendations”) for pocket listings.
Here’s the only information I need from you:
For obvious reasons, I’m assuming that most agents won’t want to list the address of the pocket listing, but if you want to include that information as well, all the better. And just to be clear, this is a free service of RCG. Assuming it becomes a lot of work, I may charge a nominal fee to cover my time and/or automate the system, but I honestly don’t see that happening in the near future.
Are there rules for getting your pocket listing on RCG? Most definitely! But I don’t even know what they are yet. However, I will definitely figure out some rules if people start abusing the system. Some potential rules that come to mind: (1) Only allow agents to list their top 3 pocket listings, (2) must let me know if a pocket listing gets listed on the MLS and/or (3) must let me know if a pocket listing is no longer available. But even those rules aren’t hard-and-fast yet until I get some feedback from the community.
So, if you are an agent intersted in getting some additional exposure for your pocket listings, let me know!
I’m extremely excited about tomorrow’s Rain City conversation!
I invite the entire RCG community to join us at 4pm on Tuesday for a conversation with Tracy Record, the local community expert who runs the West Seattle blog.
My plan is to talk with her about the vibe of West Seattle, what’s she’s learned running the blog and what some of her favorite neighborhood places. In addition, I’ll open up the phone lines to YOU so please come with your questions for this person behind this wonderful local resource!
If you’d like to join the conversation, then please consider calling in. All the details on our the Rain City conversation page of Talkshoe!
And to answer the most common question from last week: You can listen into the conversation by calling in using ANY phone… However, if you want to get on-the-air, then it really helps me if you log into TalkShoe so that you can ping me in the chat room when you have a question or comment! Again, all the details (and there aren’t many) are on the Rain City conversation page of Talkshoe!
By the way, I’ll announce our guest for next week’s show tomorrow on the show! I have a feeling that this series of podcasts are going to turn into something really special so set aside 4pm on Tuesdays so you can always take part! And if you haven’t tried taking part in a group podcast yet, I highly recommend logging into this show. You might be surprised just how much you enjoy it!
UPDATE: You can listen to this interview by clicking here or going to the post where I outlined the interview about with Tracy from the West Seattle blog
The other shoe has dropped. That’s the best way for me to describe the situation. Of significant interest to me is the relationship between the first and second quarters. Rarely, and not for a very long time, have prices in the second quarter dropped below prices of the first quarter of the year. This is a significant and telling change. To me it means a longer and sustained downturn is coming.
This “downturn” is not a “correction” phase. Corrections happen in gain taking, and are a result of prices going up. Our downturn in the Seattle Area is primarily and perhaps singularly the result of changes in the financing options available to buyers and persons needing to refinance. That’s both good news and bad news. The good news is that the impact should not be as great as it has been in areas of the Country who are experiencing BOTH a correction AND being impacted by financing issues. The bad news is that it will be harder to call how low and how long.
So What’s Happening out there right now? In a nutshell? The best is selling at lower prices and the worst isn’t selling at all. Lots of in between there.
Each week I post the stats on Sunday Night. Today I offer a quick visual reference. When looking at smaller segments of the marketplace, the abnormalities will be a bit more extreme because there is not enough volume in the final “closed in the last 30 days” to make it an accurate indicator. Consequently you need to look at that last number (closed in the last 30 days) in conjuction with the MMPSF of those currently in escrow and balance that with 2008 2nd quarter to date.
I used Redmond (detail here) mainly to show that the price changes are not totally about short sales and foreclosures and subprime financing issues. It’s a combination. No area is NOT impacted. Some are impacted more than others, but no area is NOT impacted and the full effect will not play out for at least 18 months due to lagging market segments. The first time buyer portion will play out in conjuction with those not able to refinance. Some areas will get a double whammy while others will only be adjusting to a reduction in the number of first time buyers. The 2nd and 3rd legs of the marketplace that need first time buyers to move them forward, will be impacted further down the road.
(above info and graphs not compiled or published by NWMLS – required disclosure)
Most importantly is do the stats agree with what we are seeing and hearing on the street?
What people want is the BEST property on market at the price of the worst propert on market 🙂 Some, in fact many, are going home after looking at property and waiting for that to happen. Some are making offers based on the lowest price on market to the best house and largely being unsuccessful at accomplishing that. Those who are buying, are buying the best property on market at the lowest price they can achieve.
Consequently when property is selling at a higher price per square foot, it is not an indication of rising prices, but of best on market selling at a lower price than it would have sold in the 3rd quarter of 2007, but still more than the worst and cheapest property on market.
We’re still about 10 days away from the full stats of the second quarter, but too many people need up to date info now. For the most part, sellers need to be a whole lot more reasonable and accommodating than buyers. It may not be a full fledged buyer’s market, but the large majority of sellers have to adapt to the fact that is is NOT a seller’s market.
Asking prices of property coming on market continue to inch up, even as prices of property going into escrow and closing continues to inch down.
As to prices, so far condos are down 6.7% from peak pricing; Residential is down 4.8% from peak and residential “in escrow” down 6.5% from peak pricing. (I am showing the peak price in bold in the charts below for easy comparison)
So far it looks like this will be the first quarter in a very long time where the median price per square foot is trending downward in the condo market, and flat at best in the residential market. Considering that the 2nd quarter has exceeded the 1st quarter as to price in recent years, this is significant news. We have another 8 days in the month, but look at the volume and prices in the charts below.
I’m going to continue to keep a running total of YOY. Last week I went all the way back to 2000. In future weeks I will continue to post 2004 to present so we can see where volume peaked, and track pricing to see how the volume changes are slowly impacting prices, and how these prices compare to previous quarters.
If you read the colums down instead of left to right, it should make a little more sense to you. We will see a lot of changes in the 2nd quarter starts in the next couple of weeks. But given the weekly stats are continuing to show weak numbers as to median price per square foot as to properties “in escrow”, I don’t think we are going to see the expansion we are used to between the 1st and 2nd quarters as to volume (no surprise) OR price. I’ll post and compare the percentages when all of the results are in for the month of June.
King Couny Condos
2004 – 1Q – 1,694 – $188, 2Q 2,636 – $199, 3Q 2,540 – $196, 4Q 2,176 – $195
2005 – 1Q – 2,066 – $198, 2Q 2,925 – $209, 3Q 2,769 – $226, 4Q 2,266 – $224
2006 – 1Q – 1,956 – $242, 2Q 2.748 – $252, 3Q 2,737 – $269, 4Q 2,217 – $278
2007 – 1Q – 2,042 – $295, 2Q 2,862 – $302, 3Q 2,676 – $311, 4Q 1,618 – $294
2008 – 1Q – 1,258 – $299, 2Q 1,244 – $290 (2Q incomplete data – postings as of 6/22/08)
Changes in condo stats for this week
Active Listings: 4,049 – UP 85 – median price $324,950 – MPPSF asking $321 – DOM 60
In Escrow: 929 – DOWN 17 – median price $289,000 – MPPSF asking $286 – DOM – 50
Sold YTD : 2,504 – UP 120 – median list price $295,000 – median sold price $289,950 – median PPSF – $295 DOM 48
Residential King county
2004 – 1Q 5,650 – $152, 2Q 9,237 – $160, 3Q 8.737 – $163, 4Q 7,467 – $165
2005 – 1Q 6,402 – $173, 2Q 9,093 – $185, 3Q 9,131 – $192, 4Q 7,301 – $195
2006 – 1Q 5,596 – $201, 2Q 8,248 – $214, 3Q 7,771 – $216, 4Q 6,204 – $217
2007 – 1Q 5,304 – $222, 2Q 7,393 – $230, 3Q 7,944 – $229, 4Q 4,301 – $221
2008 – 1Q 3,640 – $219, 2Q 3,846 – $219 (2Q incomplete data – postings as of 6/22/08)
Changes in residential stats for this week
In Escrow: 2,931 – DOWN 56 – median asking price $449,000 – DOM 47 – MPPSF $215
SOLD YTD: 7,489 – UP 377 – median sold price $440,000- DOM 49 – MPPSF $219
Actively for sale 11,995 – UP 178 – MPPSF <$800,000 is $220- MPPSF >$800,000 is $337
Stats not compiled or published by NWMLS. (Required disclosure)
Remember, the in escrow MPPSF is lower and those are ASKING prices, not sold prices. Sold prices have been running about $10,000 less than asking prices in both the single family and condo markets.
I can’t make this stuff up. This happened today.
Agent: “Please send me the HUD when you have it ready.”
Escrow: “Sure, no problem.”
A short time later…..
Agent: “I got your e-mail and I want to know how much my buyer needs to bring to close.”
Escrow: “Did you review the HUD?”
Agent: “Yes, I have it right here, but I want to know how much my buyer needs to bring to close?”
Escrow: dead silence….a moment goes by, then…”It’s on the HUD.”
Agent: “But, I want to hear you say it.”
Snohomish County real estate land developer Barclays North is shutting down.
Back in April, CEO Patrick McCourt went public with their financial problems.
Everett-based developer Barclays North has struggled since late last year to repay loans from nearly 100 banks and other lenders, according to court documents. Company officials said in court papers in January that Barclays North and its many affiliates were in default with at least 56 lenders, though most had agreed to hold off any action until the end of March…
“What got Pat into trouble,” said Britsch, was purchasing land in advance to supply “national contracts with very large builders,” who backed out after the housing downturn began in California and the Southwest in mid-2006.
Demand for undeveloped lots in Snohomish County “fell relatively hard and fast,” he said, “and when that happened the builders obviously didn’t need as many lots as anticipated. That left Pat and the banks holding this huge financial burden.”
Local state-chartered banks exposed to loan losses include Frontier Bank, Banner Bank, Shoreline Bank, Cascade Bank, and First Sound Bank.
and from the Everett Herald story:
“It’s fair to say all builders and developers are facing pressures in this market, although every company’s business model is different,” said Mike Pattison of the Master Builders Association of King and Snohomish Counties
I wonder which title insurance companies are on the hook for any outstanding mechanics liens?
The NWMLS has announced that as of June 24th 2008, they will no longer use the term. Active STI. It will become Pending Inspection and two new statuses will be created, Pending Feasibility and Pending BU Requested.
For those who are members and have access to the database, all three statuses will appear in the pending section of the Hotsheet. Pending Inspection will be used when the property has a signed Purchase and Sale Agreement and has an inspection scheduled. Pending Feasibility will be used for listings where a purchase and sale agreement is signed pending a feasibility study. Pending BU Requested will be used when the seller would like to receive back up offers.
Once the inspection or feasibility study is completed the listing must be changed. The listing would be set to Active, if the inspection or feasibility study were not waived and the sale fails, or Pending, if waived.
The most significant change is that properties with a Pending Inspection status (formally STI) will not be visible on the public websites. All pending statuses shall be considered off-market and will be treated as follows:
I’m sort of surprised that Pending BU Requested will not be in the IDX feed and can not be shown on public websites. This goes counter to what Sellers want. That is, continued exposure to the market. Perhaps this will change with time too if the NWMLS receives feedback about it.
Just when you thought you had seen the most stupid law from our legislature regarding real estate omitting common sense, here comes another! House Bill 2770 aims to make what was a federal offense a state class-B felony. While it is aimed at mortgage brokers, it has wide sweeping implications to real estate agents, buyers, sellers, home inspectors, contractors, and just about anyone else who has even a limited financial interest in a real estate transaction involving a mortgage.
This law provides that a residential mortgage loan may not be made unless a disclosure summary of all material terms is placed on a separate sheet of paper and has been provided by a financial institution to the borrower and that a financial institution may not make or facilitate the origination of a residential mortgage loan that includes a prepayment penalty or that imposes negative amortization under certain circumstances. And here’s the catch-all clincher: The law says that certain acts and omissions by any person in connection with making, brokering, or obtaining a residential mortgage loan are unlawful.
While part of the law attacks important issues like negative amortization and pre-payment penalties, it’s the broad definition regarding the disclosure of material facts relating to a property that causes me the greatest concern.
Example: Buyer purchases a home “subject to inspection
Thanks again to everyone who participated in today’s first episode of a Rain City conversation! I had a blast and definitely appreciated everyone who took part in both the conversation and the chat! You can listen to the episode below: