Altos Research shows a flattening market in Seattle and confirms Ardell’s analysis: the high end is (was?) the worst place to be. I’m not signing on to the “bubble proof” theory though.
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Your Guide to the Seattle Real Estate Market
Altos Research shows a flattening market in Seattle and confirms Ardell’s analysis: the high end is (was?) the worst place to be. I’m not signing on to the “bubble proof” theory though.
Thanks Galen,
All market segments will show a down trend in the 4th quartile.
Condos will show an upswing in the first quartile of 2007, through end of April closings.
Median priced homes up to $550,000 will show an upswing in the 2nd quartile of 2007, through end of July closings.
Prices will fall in the resale of new construction built in 2006 and sold in 2007, should anyone need to sell those, if they bought at spec home price vs. presale price.
The $1,000,000 and over market will split. Those who don’t really need to sell will simply drop off market, especially those at $1.3 mil and up. New construction priced at $2.3 mil to $2.5 mil will be hit the hardest. $1mil to $1.1 mil will do OK, except they will be people who “wanted” $1.3. 🙂
I’ll do a separate piece on condo conversions vs condo new construction and non-conversions, for Rich by tomorrow morning, as that market segment deserves it’s own warning label.
Good luck even finding a home in Seattle that you would want to live in for under $300,000.
The high end is always the worst place to be in a down cycle. You will see the suburbs/outlying areas of Seattle getting hit first.
Take a look at zip realty and you’ll see that many homes are 60, 75, 150+ days on the market (those that didnt’ cheat and relist – as is common) out in the burbs.
The few buyers that are left will only buy properties that are in the best shape and most convenient. Soon there will be no more buyers at all.
I think if you did your study of a good median range, $400-550K, you’d find that it’s a pretty sick market – and getting sicker by the day.
Even if Seattle is somehow different, property values still could not remain artificially high here if they are plummeting in the rest of the country. Why wouldn’t people migrade to San Diego (median price is approaching Seattle’s) where it’s always sunny and 70F?
But isn’t that always true in November? The true test will come in May, and not before, for the $400,000 to $550,000 market.
How much do you expect the $400,000 to $500,000 market to drop? Or do you just expect it to stagnate for a while? Why wouldn’t a drop in that market affect the prices in the $300,000 to $400,000 market?
>How much do you expect the $400,000 to $500,000 market to drop?
If we have a “soft landing”, I’d expect prices to drop back down to 2000-2001 levels (normal appreciation). However, if we get the double whammy of housing/asset bubble combined with an energy crisis, a serious recession or depression is likely.
There were times in the 1970s when you could virtually pick up a brownstone in manhattan by simply paying the maintenance fees.
More and more “buyers” waiting on the sidelines will create a snowball effect and there will be many false bottoms along the way. I believe there will be a very long and sustained “bottom” that might last 2-3 years where there are very few buyers or sellers.
I certainly don’t want this to happen, however I can’t envision a scenario where it does not. The question is not “is there a bubble” but just how bad will the economy take it in the gut? And, are you prepared for it?
Personally, I wouldn’t want to have any debt at this time in history. There will be lots of opportunities to short the equity markets very soon and later to buy up properties at the bottom for passive income opportunities.
That’s if the economy/republic even holds together over the next 10-15 years.
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