Yesterday I was interviewed by a KING-5 reporter, Kim Holcomb, and which I had written about on my blog at this post. I had jokingly referred to taking on King Kong but only because the news segment was shown on KING-5 and KONG-6 last night.
The news story was about how the market here is changing just a bit to more of a stabilized market. At the beginning of the report a seller talks about it being a “buyer’s market” but I wouldn’t necessarily agree with him completely. We’ve still got room to move before that happens and if anything we’re more balanced than the past 5 years. The segment did run on both KING and KONG stations and, from what my business partner tells me, it is one of the most viewed and forwarded links from the KING-5 website today. Here is a link the actual news story about the Seattle real estate marketplace along with pieces of my interview.
It seems we’re (Team Reba) getting a lot of press lately. I was interviewed in July for a story on blogging for the RE/MAX Times back in July (released in September) and just last week I was interviewed for a real estate investment magazine which will be printed in the November/December time frame. Now, if I could just get the interviewers to pronounce my name correctly…. 🙂
So much for Dustin Luther’s Rule #2 for Rain City Contributors…..
2. Avoid obvious self-promotion.
Well, what is great but couldn’t get into the TV interview was that this reporter found me on RCG. So, it’s also a way for RCG to get coverage too. The story isn’t about me in particular but about our marketplace and so in that vein it isn’t self-promotion but promotion of the local market conditions. There were loads of other agent’s signs being shown in that piece and not one of mine – heck, she didn’t even say what brokerage I worked with. I’m sure people will see it different ways and that’s fine with me. There are plenty of self-aggrandizement type topics that I stay away from on a regular basis. The majority of all the articles I write are informational so having one that I think was fun to point out (hey, real estate agents aren’t on TV all the time but they are blasted regularly).
I mean this in the nicest, most constructive way possible… “a lot” is two words.
Wouldn’t want you to spend all of your new cred on a basic grammatical error!
Any idea where they found the flipper?
purely a typo – I put in the space required. 🙂
biliruben – are you referring to the seller that was interviewed? If so, I’m not sure how they found him.
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Yeah, that’s who I’m talking about. It’s pretty hard to cut a sympathetic profile when you’ve filed 11 warranty deeds in the last 3 years.
LOL, I love it. They interviewed us separately so who knows how they found him. Could be they knocked on his door or he saw them outside with a camera on his street. I don’t think he was going for “sympathetic” based on his comments onscreen but I can see where for the regular person on the street that it could come across that way.
Congratulations Reba,
I was interviewed by KING KONG last month from an article that I wrote on the PI Real Estate Professionals Blog, and they called again the following week (but couldn’t do it). It looks like the reporters are taking a hard look at the local real estate blogs. Again, congratulations!
Yes, they seem to use the Internet quite a bit in their research for a story or for people to use as resources. Considering the estimate of only 4% of real estate agents writing blogs then it certainly makes for some good opportunities for folks like us to get some screen or print time.
Hah! Yeah, maybe sympathetic isn’t quite right. They did seem to be portraying him as an unbiased non-industry seller (they referred to West Seattle as “his neighborhood”), when in fact he appears to be flipping houses for a living. Far from unbiased, though I’m not sure if advertising that it’s a buyer’s market helps or hurts him.
I’m with you biliruben, and while it may not hurt himi I don’t think it helps him.
Reba, the MLS data the last couple of months is showing a trend of decreasing sales and increasing inventory. Is that really a sign that we are in a balanced market? Wouldn’t a balanced market be a market where inventory changes and sales volume changes are pretty much in correlation? I.e a market where supply and demand is balanced?
tj, you have to keep in mind that we’ve had numbers in real estate that have been well above the norm for some time now (several years) so even if we have decreasing sales and increasing inventory they are really going back to more “normal” levels. If you go back and look at the past several years of articles about the industry you’ll see where because of lower than usual interest rates people were buying that might normally not have qualified (payments were lower and closer to rents or at least reachable) or people were stepping up what they owned because they could get more house for their money.
Thanks Reba, so at what approximate point would you personally say that we are beyond balanced and more in a buyer’s market?
Reba ~
Hope you have better luck with your interview than I did.
I mentioned that Boise area sales (closed units) were off by as much as 40% YOY, and they printed that I had said that prices were off 40%.
Maybe I will at least get some calls? 🙁
TJ, inventory has been “rising” or I’d use the term “high” for much longer than a couple of months. Prices have not suffered (yet).
There are at least two reasons for the inventory change. First, when there is a lot of buyer interest, that eats up inventory quickly. So when it’s a so-called sellers’ market, that will eat up inventory. Second, the laws of supply and demand indicate that at higher prices there will be more supply. Homeowners hear of the high prices and decide to sell now, rather than later.
Phil Hoover mentions the risk of speaking with the press. They will not understand what you say, or quote you out of context. It’s a huge risk.
Not quite the same thing, but yesterday mornning on KCPQ, when they were discussing the then upcoming fed rate cut, they were showing a bunch of For Sale signs and mentioned a house in the area (West Seattle) had been on the market for over a year. They didn’t inverview any agents for that piece, but would you really have wanted to be a part of a piece that presented such a distorted picture of the Seattle real estate market?
Personally I think it’s nobody’s market not a balanced market. The prices are way,way,way to high to be called favourable for buyers and sellers can’t seem to sell their houses for the prices they are asking. Thereof the trend of sales drying up. For transactions to pickup again prices needs to come down and at that point we will have a true buyer’s market with plenty of supply and decent prices. I would still like to know what Reba considers a buyer’s market?
The real issue is things coming together and not sticking together through close of escrow, more and more. So it really isn’t about supply and demand as much as ready, willing and “ABLE” buyers. Also a few other things…but holding my post on market conditions for the end of September.
TJ, if it’s not a buyer’s market or a seller’s market, it’s a balanced market. The only exception would be if sales were totally off, but so far that hasn’t happened (but I do expect this month’s numbers to be low because of people being put off last month by the negative press).
But it’s like liberal and conservative. If you’re neither of those, you’re moderate.
If fewer buyers are able, the demand is down.
We will just have to disagree and wait and see. A balanced market should inherently be pretty stable. So the next months will better tell if we now are in a balanced market or if there are underlying problems.
Maybe the term you’re looking for would be a shifting market. That would be where you’re moving relatively quickly from either a buyers’ or sellers’ market to the other.
hi, tj, sorry for the delay getting back, I had other appts yesterday afternoon and evening and only got back online just now. To answer your question in post 15, we’re more likely to go into a buyer’s market when we see one or more of the following things happen: 1) interest rates rise to a level that limits the number of buyers qualifying or willing to buy, 2) economic factors dampen such as employment and wage levels dropping significantly, 3) very little in-migration to the area, 4) numbers of sellers rise beyond the norm. Typically you’ll see around 6% of all homes turn over within a given month. I don’t think we’ve hit that yet even with the current rise in seller activity – we’re still catching back up to normal from what have been some historically odd circumstances for our area.
There are sure to be more factors involved but these are some of the ones that I look for. I’m also still finding many clients to be very financially worthy of closing a transaction so it isn’t all doom and gloom that no one can qualify any more – the loans that are getting all the press right now are one small segment of the loans being offered. I just closed 2 homes with 1st time home buyers and one couple had a substantial down payment (family gift funds involved) and the other was 100% loan with PMI. Both clients sailed through financing.
“But it’s like liberal and conservative. If you’re neither of those, you’re moderate.”
…or an extremist.
Think of a seller’s market as a conservative and a buyer’s market as liberal. Seller’s have turned from conservative to extremist with the completely radical run-up in prices over the last few years. What does a liberal (buyer) do when confronted with a conservative extremist?
Revolt.
Thanks Kary, I think shifting will prove to be a much better description than balanced of where the market is now.
Reba, thanks for answering my question and adding some of your recent obeservations. Your conditions for a buyer’s market looks logical. We do disagree though on the tstaus of your first condition which is factors that limits the number of buyer’s to qualify or being willing to buy. I think those factors are already a reality. Not due to interrest rate levels but due to prices being both unaffordable and cooling buyers willingness due to poor value vs. price. That combined with stricter lending standards that limits the number of buyers qualifying.
Many people are unable to qualify for large priced homes but keep in mind that our outlying areas (places like Renton, Kent, Edmonds, Snohomish, Marysville, Tacoma, etc all have much more reasonably priced housing and are considered part of our overall market conditions. It’s true that not everyone can afford an $800,000 home but there are many more that can afford a home for $250,000 or $350,000.
Reba, perhaps you are right that the areas you mention will fair better but I doubt it since I would guess they are impacted harder by the subprime tightening and that the median income tend to be lower in the lower priced areas. And that you will have large number of people migrating from for example the Eastside or Seattle city to Tacoma or Marysville however nice those areas might be is not very likely. I think people tend to stay close to where friends, family and work is. If that means holding off a home purchase I think that’s what is more likely to happen.
When I bought my first home, it was in NE Tacoma and I had to take the Metro to the Columbia Center. It was a drag…but it was my home…I was young and happy to be a “home owner” since my family grew up renting. It was a smaller rambler–not what I see many FTHB going after these days. We were away from family and friends. The appreciation we made on that house in one year is what allowed us to buy our next house (and we sold that house in another year or so)….
Rhonda, I think the sacrifices you were prepared to make to become a home owner (and Ardell is prepared to make to stay a home owner) is not the norm. Some are, but my guess is it’s not enough to make any impact on the market direction.
tj, I guess I really didn’t look at it as a sacrafice. For me moving futher out so I could afford a home made sense. We all make our choices and their not all based on economics or what might seem logical to some one else.
I still have people with no money in the bank what so ever who want to get a mortgage. When I ask them a few quesitons like “what would you do if your income decreased (or disappeared)?”, they just get silent.
Rhonda, I was not thining of economics at all but the sacrifice of leaving the area you are familiar with and where friends, family and work resides. That I think is a big sacrifice that most are not prepared to make if not neccessary. I think holding off a purchase until you can afford in the area you know and like is the more likely choice for the majority.
tj, We were a half hour from family and friends. We made friends with neighbors. I don’t believe that we were in a minority. When we bought our second home which was new construction and a little (maybe 5 minutes) closer in Federal Way, most of our neighborhood was not from the area. There were families from Bellevue in Seattle who bought (many are still there) because it was affordable. This was back in 1990 and home prices were shooting up then. The plat we bought in was marketed as “The Affordable Street of Dreams”.
People have choices.
Your recommendation of waiting until you can afford an area. I think a majoritiy of people will not receive increases to income to move into an area if they’re waiting for this method.
You can do as Ardell often recommends which is to buy a condo or townhouse. After I divorced years ago, I bought a condo in Des Moines.
Or you can move a little futher out and have a “starter home”. Which is how I bought my first home at 21. I don’t feel it was a sacrafice at all.
Ok Rhonda so let’s make it a bit more “real”. Say that you would endup in some financial hardship and had to sell your current home and you had the choice to either rent for a year or two where you are now or buy a house in say Marysville for apporximately the same monthly cost until you got back on your feet again? What would your family want? Just a thought.
And I absolutely agree there are many choices I’m just saying that some are more likely than others to dominate and have the biggest impact on the market.
I also suspect that your sub-conscious business gene is doing some talking. Obviously it’s very benefitial for mortgage brokers and realtors if people buy starter homes and move up the chain compared to if they rent and save until the buy a home they stay in for a long time. The first scenario creates several transactions per buyer feeding your pockets every time. I don’t think it’s neccessarily intentional but just an industry coloring.
Hi tj, I can’t speak for Rhonda’s situation but I can tell you that based on my family situation right now I am about to embark on a new purchase of a home and will sell my home in Seattle. I wrote about it specifically here: http://www.teamreba.com/blog/?p=190 but part of the background has to do with the fact that Medicare cut off physical therapy to my dad. He is coming back from a traumatic and severe brain injury sustained as part of a drunk driver hitting my parent’s car back in March.
Because I’ve always said that I would help my parents out financially should the time or situation ever arise, I am about to “put my money where my mouth is” and cut back on my personal expenses about 30% per month to allow myself the capability to hire the professionals that our health care system is now denying my hard working father. I’ve started out by hiring a massage therapist that will offer massage and reflexology therapy to my dad once a week. I also travel for 5 days to 2 weeks per month to provide additional physical, occupational and speech therapy to my dad when I am there, and I will hire (if necessary) a PT, OT, and speech therapist for him.
We’re also looking at options within my parent’s home to possibly get him out of the nursing home environment and either have home care and/or get a new home with universal design features that we can also retrofit to have lifts and pulleys to help with caring for my father’s daily needs.
When life hands you lemons, make lemonade!
Reba, i’m sorry to hear about your dad. Health and family really is what matters most. I wish the best for you and your dad.
Reba, would your dad qualify for Washington’s Crime Victim Compensation program? I don’t know much about it, but it really helped a friend out once (but it was a more major crime–he was shot after walking into a store during a holdup.)
Anyway, drunk driving is criminal, so maybe they could help.
tj, thanks for the comments, they are much appreciated.
Kary, the accident happened in Kansas which is another reason for my downsizing – I have to fly there every month. They have a similar type of program there but you have to pay it back if a civil suit gets any payment to the victim, which in this case doesn’t make sense because my dad’s care will far outlast anything this multi-DUI offender will be able to pay.
I think you have to pay it back here to, if you get anything from the criminal. But that’s not a reason to not take advantage of it. In fact, the same thing would be true if insurance was paying this, and might be true of the plan he was on before. It’s called subrogation, and it’s very common. Basically when a third party pays for something that another person is responsible for, they step into the shoes of the injured party, to the extent of their payments.
The fact that the criminal can’t pay timely is a reason to look into the government program.
In this guy’s case even if a financial settlement is awarded he won’t be able to pay it. His insurance policy capped out at $25k because he had SR-22 insurance because of all his former DUI’s.
This may be really ignorant here, but the intention’s sure good. Can you get long-term care insurance? Again, it might be ignorant…just curious.
LTCi has to be purchased usually WELL in advance of anyone needing it. Typically people start buying it in their 40’s or 50’s so that it is available for the “later years”. If my parents were to try and buy it now my dad wouldn’t qualify. Thankfully about 7-8 years ago they did buy LTCi and we are waiting for the payments to kick in (mom says they won’t pay anything till the lawsuit is settled but I don’t think that’s true if we push it). Care for the facility my dad is in costs $5500 per month not including medications, adult diapers, etc. When the LTCi policy kicks in it will only cover about 2/3 of the monthly cost. We’re lucky that mom thought this far ahead and that we’ll get that 3 years of coverage (once it starts) but it’s very likely dad will survive well past 3 years from now. This is why I write articles like this all the time: http://www.teamreba.com/blog/?p=189
an article I wrote about durable power of attorney for RCG is posted here: http://www.raincityguide.com/2007/03/29/do-you-have-a-durable-power-of-attorney/