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Elecktro, let me know if you find any good restaurants in Bothell.
Well, I already know and like Canyons, Outback, Applebees, and Bonefish which are all in Canyon Park. The Outback there is among the better ones, much better than Kirkland.
7 minutes away at Alderwood there is also Macaroni Grill, P.F. Chang's and Olive Garden, which are all decent.
Or were you looking for non-chain recommendations? I'm sort of a chain expert, unfortunately, but I do seek out the occasional Greek or Japanese local restaurant.
Well, if we look at historic home prices (adjusting for inflation) the "normal" average price for a 4-5 person home has been $100k (roughly what it costs to build them) except during real estate bubbles when everything becomes overpriced. Once a recession/depression sets in, the home prices fall back down to "normal" and then beginning climbing up to the next bubble... roughly a 30 year cycle end to end.
I've got a 3000 sq ft home in Bothell/Kenmore that I purchased in 2003 for around $300k. When I had a realtor come appraise it, she said I'd be lucky to get that now... closer to $250k.
I don't think we'll officially bottom out until 1500-2000 sq ft homes get around $100k. We're likely to see short periods where things level out and even appear to be getting better, but it will continue to slowly trend downward until we hit $100k. No one believes it'll happen in the big cities where real estate has always been stable or climbing, but you can't ignore history or our current economic problems.
Well, if we look at historic home prices (adjusting for inflation) the "normal" average price for a 4-5 person home has been $100k (roughly what it costs to build them) except during real estate bubbles when everything becomes overpriced. Once a recession/depression sets in, the home prices fall back down to "normal" and then beginning climbing up to the next bubble... roughly a 30 year cycle end to end.
I've got a 3000 sq ft home in Bothell/Kenmore that I purchased in 2003 for around $300k. When I had a realtor come appraise it, she said I'd be lucky to get that now... closer to $250k.
I don't think we'll officially bottom out until 1500-2000 sq ft homes get around $100k. We're likely to see short periods where things level out and even appear to be getting better, but it will continue to slowly trend downward until we hit $100k. No one believes it'll happen in the big cities where real estate has always been stable or climbing, but you can't ignore history or our current economic problems.
If you think a 2000 sqft home in this area is ever going to be $100K again, seasons aren't all that you're missing. Also, there is no way you'd get less than $350K for a 3000 sqft home in that area now unless it is pre-1950 or in absolutely terrible and outdated condition. I'd get a better agent. Redfin is your friend, and what you are stating is an observed impossibility on my end. If you negate the housing bubble and graph a straight line in house prices in THIS area from the 90s until today for a 2000 sqft house, the price should be approximately $320,000 adjusting for inflation, not $100,000 (it peaked around $430K). Those kinds of prices have not existed since the 80s. This collapse will just bring prices down to 2004/2005 levels (and for the most part already has.) And if the economy continues to tank, the gov will just start printing money like mad, and eventually skyrocketing inflation will make any house under $500K a thing of the past.
We've been in a bubble since the 70's. The little pop in the 80's is nothing compared to what's about to happen. At least not from my vantage point. So, we should also include pre-1980's pricing into our market analysis. The huge upward curve we've seen since the 90's is completely abnormal from all historical perspectives. I don't see a huge collapse happening tomorrow... but I do think it's going to go a lot lower over time than anyone wants to admit.
We've been in a bubble since the 70's. The little pop in the 80's is nothing compared to what's about to happen. At least not from my vantage point. So, we should also include pre-1980's pricing into our market analysis. The huge upward curve we've seen since the 90's is completely abnormal from all historical perspectives. I don't see a huge collapse happening tomorrow... but I do think it's going to go a lot lower over time than anyone wants to admit.
I see, so you're taking an even broader historical viewpoint than I am. Interesting. But not accounting for the house price spike anomaly of 2005 to 2008, which was clearly a much larger spike than the upward trend since the 90s, I'm not sure the trend has been all that abnormal. I say that because the cost of seemingly EVERYTHING has gone up at the exact same "accelerated" pace since 1990. The only way I see house prices reaching $100K again is if everything ELSE also followed suit, which could only happen through massive deflation. In other words, retail prices and salaries would also fall back down to the point where a $100K house seemed like a $300K house today in terms of affordability. The problem is that the federal government will always favor inflation over deflation, because inflation makes the staggering national debt and deficit less of a big deal, while deflation would make the problem even worse. Let's put it this way, if prices were $100K now, I would have just been able to buy a house outright and not have a care in the world for the rest of my life. I'd be able to work at Starbucks and make plenty of money to live comfortably. It would create a housing boom the likes of which we have never seen, and that alone would drive prices BACK UP. So you see, what I'm trying to say here is that real estate (EXCEPT for the 05-08 anomaly which was fueled by speculation, greedy investors, and overseas interests) is priced in line with people's income and ability to afford it. Let's just hope I'm right and you're wrong, or else I'll be stuck living in my new house forever, because I'll never be able to afford to move.
So you see, what I'm trying to say here is that real estate (EXCEPT for the 05-08 anomaly which was fueled by speculation, greedy investors, and overseas interests) is priced in line with people's income and ability to afford it.
Exactly! And that's why I expect prices to continue downward, because prices are not in line with historical norms of home price/area median income, or in line with the historical relationship of mortgages vs rents.
That said, while I wouldn't be shocked to see another 10-20% shaved off current home prices, I would be completely shocked to see a 3000 sq ft home in the Seattle area go for 100,000 dollars.
So you see, what I'm trying to say here is that real estate (EXCEPT for the 05-08 anomaly which was fueled by speculation, greedy investors, and overseas interests) is priced in line with people's income and ability to afford it.
Exactly! And that's why I expect prices to continue downward, because prices are not in line with historical norms of home price/area median income, or in line with the historical relationship of mortgages vs rents.
That said, while I wouldn't be shocked to see another 10-20% shaved off current home prices, I would be completely shocked to see a 3000 sq ft home in the Seattle area go for 100,000 dollars.
But, the problem really is that only SOME of the houses in certain areas are abnormally high. I don't think everything is abnormally high. For example, Issaquah is without a doubt abnormally high. Those 600K houses with no land have plenty of room to drop down to 400K. But are prices in Bothell going to drop from $350K to $200K for houses with a quarter acre? I don't think so, because I don't think the market will allow it. Now that the speculators and investors are out of the picture, and the economy is the way it is, and people can't get huge unrestricted loans.... the really expensive homes suffer the most. But the homes that were somewhat sanely priced to begin with don't have much room to fall further. This is also one of the few areas in the country that I have seen $350K houses and 1 MILLION dollar houses intermixed with each other to the point of being on streets off the same avenue. That tends to keep prices somewhat inflated on the low end.
As for rents, the Eastside at least has had abnormally high rents for years. I don't think there is a proper historical relationship between mortgages and rents on the Eastside. Back where I lived in upstate NY, you could easily buy $350K houses like you can here. But NO rent was higher than $1100 for the most deluxe apartment. Here the rents are $2000 for similar places. Averages are $900 there vs $1800 here. Unlike real estate, rents never tend to go down, no matter what. Landlords are simply too greedy. I have never seen rent go DOWN anywhere in my life. As all the house prices were dropping like flies earlier this year, my rent STILL WENT UP! The rents are obviously completely out of whack here (much more than housing is) when in NY I paid double my rent when getting a mortgage, and here in the Seattle area I will be paying LESS than rent. This is why now that SOME house prices have fallen to sane levels in this area, folks who rent will come out of the woodwork to own a house for the same price (esp. with that 1st time buyer credit), which will keep the low end of the market stable or even make it rise, while the high end, due to the economy, continues to sink like a rock. So, I predict stability or increase on the low end, and continued plummet on the high end. (Maybe not the million dollar mansion end, but certainly the $600K end). And let's face it, as long as Microsoft is a huge force, Redmond/Bellevue will NEVER be cheap. At least, that's how I see it, but I don't pretend to be a real estate expert, just a common sense expert.
Last edited by ElektroDragon; 05-14-2009 at 03:15 PM..
Elektrodragon,
Your thinking is in line with a lot of RE experts, and I mostly agree with you. But ya know what? The million dollar homes are plummeting too....And Seattle area rents are currently falling, which I've never seen in my 31 years here.
But you're right. I highly doubt that a house selling for 350 thousand will drop to 200. But I did see a brand new home in Kenmore which went on the market two years ago for 699 now for sale for 439.
I dunno. I kind of think that rents are still a "deal" on the Eastside, at least in Bellevue and Kirkland. The townhouses across the street from me are about the same size and layout than the one I'm renting, but they're "from the low $400s", which would be a lot more in mortgage than I'm paying in rent.
I dunno. I kind of think that rents are still a "deal" on the Eastside, at least in Bellevue and Kirkland. The townhouses across the street from me are about the same size and layout than the one I'm renting, but they're "from the low $400s", which would be a lot more in mortgage than I'm paying in rent.
Oh yeah, mortgage payments are still almost twice the rent in a lot of cases. Not everywhere, but mostly.
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I'm sort of a chain expert, unfortunately, but I do seek out the occasional Greek or Japanese local restaurant.
