Tag Archives: prices

U.S. % Change in Home Prices

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This chart reminds me of the crash in real estate prices in the late sixties when REIT (real estate investment trust) stock prices dropped to pretty much worthless.  I was still in high school, but the Courts got involved in the loss of value in trust portfolios, so I was looking at those in 1974 in my accounts.  I would think that today’s national drop in home prices emulate the drop in the late sixties to some degree.

I do recall in recent years warning people not to buy into REITs, but must admit I felt a bit “old-fashioned” at the time.  Once you see those losses, you don’t forgive or forget, somewhat like people who lived through the Depression.

This post is supplemental to last night’s post and as a result of the comments that follow in that post.  The source of this info is at the end of last night’s post for those who want to look at the detail.

U.S. YOY % Home Price Changes

U.S. YOY % Home Price Changes

Are Short Sales Affecting our Home Prices?

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This downturn in real estate is so much different than the one we ‘older than dirt’ agents experienced in 1980’s. Then, with inflation over 12% and interest rates over 20%, we knew why we were in so much trouble and saw only long term effects since it was a problem with our national economy. We were using rubies, horses, businesses, anything we could use for exchange for a down payment and doing ‘mushroom closings’ where the sale wasn’t recorded to avoid paragraph 17 of the note to kick in. (before you judge, let me mention that this was with attorney guidance!)

This time, it’s been very very confusing since our national economy is healthier, inflation appears under control and here in the Puget Sound area, there is low unemployment and signing bonuses are again being offered for qualified high tech employees.

So, the big question here in the northwest (I’m only referring to the NW, specifically King, Pierce and Snohomish County and of course, there’s Wenatchee), is, is this a short term or a long term correction.

And, is the effect of the short sale inventory going to be a drag on our home prices. There are phenomonal discounts right now in short sale properties. However, are they really affecting the price of normally marketed properties? Do buyers see these short sale properties as good homes for them to purchase, or are we only attracting fix and flippers and other investors to these properties.

The nwmls statistics show that in King County, there are 71 short sales, trustee, or foreclosures in the entire county. Of these, 27 are active, with an average price of $397,000 and average days on the market of 134.

21 are under contract either sti or pending and only 1 is sold in the last 6 months. So, with 27 active, and 22 sold or under contract in all of King County, compared to 8355 active, 1731 sti or pending and 10126 sold in the last 6 months, is there really a measurable effect? or is this just a temporary hiccup?

Copper thefts on the rise – a new threat to vacant homes for sale or rent

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The local NWMLS has posted a notice to its members that I’ve pasted in below:

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Snohomish County Copper Pipe Thefts
January 19, 2007. NWMLS has received reports that copper piping has been cut away and stolen from the crawl spaces under several vacant homes in the Everett vicinity. Many of these crawl spaces were not secure, allowing easy access. A police report has been filed with Everett city police (Case #DD071461). Please notify local law enforcement if you see any suspicious activity.

For those that don’t know the price of copper has skyrocketed and there are many people stealing copper (and other metals) from locations like vacant houses. Recyclers typically don’t verify the source of where these scrap metals come from so it’s up to homeowners to be careful and make sure their properties are kept safe.

This isn’t just a local issue to Everett, it’s a problem throughout Puget Sound and nationwide. My parents own rental properties in Kansas and they were the victim of just such a theft from one of their vacant rental units this past fall. It cost them a lot of money to replace all the copper piping in the house, and unforeseen expense that can wreak havoc on annual profits from rental ownership.

Night shots

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[photopress:15.jpg,full,alignright] Night photos have become very popular here in the Seattle Area.  Used mostly for high end homes, rather than this price range of $599,900. 

I’m thinking a digital camera is likely not the best way to take these, though this one didn’t come out badly for an “extra” shot.  Looks fairly appropriate for Halloween. If anyone has any tips on how to best take a photo in the dark with all of the lights on, please post them here. 

And before Galen asks, yes.  I broke my own price tier rule on this one because I already market tested it at $600,000 to $650,000.

Seattle in Top Ten for Continued Appreciation- Want to know Why?

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We’ve talked alot on RCG about whether we’re in a bust or a bubble real estate market and we in the Pacific NW have been watching the rest of the country and wondering, Why all the gloom? Bankrate.com and today’s Seattle times have some explanation that can provide perspective:

Last week, Bankrate.com unveiled its forecast for the changing real estate market in the U.S. over the next few years – ten markets where housing prices and values will continue to remain strong, ten markets where appreciation will pretty much top out and the ten markets that are most likely to experience a decline. They talked to experts, studied public and private databases, analyzed market trends and examined the analysis of many others.

The ten “bubble blowers,” where appreciation should continue to grow, are:

  • Boise (ID);
  • El Paso (TX);
  • Albuquerque (NM);
  • Seattle (WA)/Portland (OR);
  • Salt Lake City (UT);
  • Raleigh (NC);
  • Philadelphia (PA);
  • Atlanta (GA);
  • Little Rock (AR); and
  • Cincinnati (OH)/Birmingham (AL) (they were too close to call).

Just why this is happening in the Pacific NW is the subject of this mornings Seattle Times article by Elizabeth Rhodes. She sheds light on why Seattle is breaking the national trend toward stagnating or dropping home prices. Her article notes that the average home prices have taken a steep hike in the last year and appear to be continuing the rise.

Citing the NWMLS statistics that came out on Thursday, median closed price of King County single-family homes has shot up almost 12 percent in the past year, reaching $405,000 last month (and up from $392,950 in February).

Interestingly, sales are down, but so is inventory. In March 2004, there were 7,156 homes for sale countywide. March 2005’s inventory was 5,244 homes. This March recorded a further drop, to 5,100. This is the pinch that causing the rise in prices.

At the same time, the local economy is growing and employers are adding jobs, bringing more potential buyers to the area. So the competition for available homes is strong and prices are reacting accordingly.

We agents have been experiencing this hot market all spring as we did through most of last year, possibly feeling the market fluctuations first. We’re out there in it, pricing homes to reflect the low inventory and coaching buyers for the best positioning in a multiple offer situation. I just watched the price of an Eastside condo jump $20,000 in a two week period!

Rising tide lifts all ships…

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revenueWho benefits when housing prices rise? The sellers, of course… But also the local governments though increased property tax revenue. The Seattle PI has an article on how the mayor of Seattle has $15 million to spread around thanks to rising home prices:

In 2000 the average value of a residence in Seattle was $232,800, on which the property tax paid to state and local government was just under $2,832, according to the King County Department of Assessments. In 2005 the average home value had gone up to $368,700 with a property tax bill of just over $3,765.19.

The Seattle general fund budget proposed by Nickels for 2006 is $760 million, up from $717 million last year. It includes more money for street resurfacing and more money for sidewalks, police and firefighters.

“Thanks to a strong local economy, we can expect significantly more sales and business tax revenue,” Nickels said in his budget address Monday. “Strong real estate sales will also provide much more revenue for the city than initially forecast.”

I find the similarities interesting between this article and my post from Monday, where I note that the Federal government (IRS) benefits when flippers don’t pay attention to tax laws.