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Old 04-27-2011, 01:43 PM
 
44 posts, read 65,195 times
Reputation: 51
Quote:
Originally Posted by ElektroDragon View Post
I THOUGHT we had touched bottom back in May 2009 when the prices flattened for a while, so I decided to buy. It was Obama's policies that caused an artificial slowdown in the freefall, misleading me into thinking it was a good time to buy. Since then, I am $50,000 in the hole. Not only that, but thanks to stupid wording on the part of the government, I was not able to qualify for any home buyer credits whatsoever!

I hope I never have to move, as I think I'm stuck in this house forever now.

Actually, you weren't mislead, it just sounds like you couldn't hold out any longer and bought. If you did your research (like a lot of us) you would have waited longer. Probably best to take responsibility for your own actions.
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Old 04-27-2011, 01:49 PM
 
Location: WA
4,248 posts, read 5,077,919 times
Reputation: 2291
$50,000 is a fair price to pay for not having to live in a crappy apartment for another year.
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Old 04-27-2011, 07:00 PM
 
33 posts, read 73,194 times
Reputation: 38
Quote:
Originally Posted by Vinylly View Post
It's pure and simple: It's called 'Supply and Demand'. When an ever increasing number of foreigners move to Seattle, demand for homes go UP simply because there are not enough homes for the demand. Right now people are litterally fighting each other to get into a $400,000 to $600,000 simply because that's the price 'affordable' homes are now. When you foreigners stop moving in here, demand will go down, and that's what will drive down the cost of homes. Only then will there be a housing collapse.
Supply continues to outstrip demand, prices continue to fall. When I compare rents and asking prices on equivalent nicer homes in my budget range ($450-$550k), it looks like asking prices are about 20-25% high.

My rules: when annual rent is greater than or equal to 9% of the price of buying the house, 100% buy the house. When annual rent is less than or equal to 6% of the prices of buying the house, 100% rent. Somewhere between those numbers, there is a transition that's not totally clear because this house for rent is never exactly the same as that house for sale.

So if I can find a nice 4br 3ba 2400sf home in South Rose Hill for $2000/month, I should unambiguously buy an equivalent home at or below $270k and never buy anything similar at or over $400k. Right now, everything in South Rose Hill on MLS is still well over $400k. And none of them are selling.

Oh, and I'm moving up later this year from LA! Isn't that exciting?
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Old 04-27-2011, 08:54 PM
 
Location: Near Graham WA
1,133 posts, read 1,242,698 times
Reputation: 1286
Quote:
Originally Posted by Vinylly View Post
To us Seattlites, a 'foreigner' is somebody from LA, Boston or New Yourk that shouldn't be here and are the ones causing the prices to go UP.
Quote:
Originally Posted by rabagley View Post
Oh, and I'm moving up later this year from LA! Isn't that exciting?
So, you're one of them thar foreigners that should be staying put...
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Old 04-28-2011, 12:01 AM
 
Location: Capital Hill
1,603 posts, read 1,393,950 times
Reputation: 781
Don't be shocked. Home prices are 'astronomical' here in Seattle as well and they don't seem to be going down like other parts of the country. It's that law of 'Supply and Demand'. Everybody and their pet monkey wants to move here and they are driving up the price of housing simply because there isn't enough housing for the demand. It's called 'a seller's market'. When a person sells his house he usually has a choice of at least six offers and he can pick the best of the six. The buyer's usually put an 'Esculating Clause' in their offer so if a competiting buyer makes a bid higher then his, his automatically goes higher then the competitors, -and the price just keeps going up to the joy of the seller.
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Old 04-28-2011, 06:48 AM
 
Location: Austin, TX!!!!
3,737 posts, read 5,294,006 times
Reputation: 1665
Quote:
Originally Posted by Vinylly View Post
Don't be shocked. Home prices are 'astronomical' here in Seattle as well and they don't seem to be going down like other parts of the country. It's that law of 'Supply and Demand'. Everybody and their pet monkey wants to move here and they are driving up the price of housing simply because there isn't enough housing for the demand. It's called 'a seller's market'. When a person sells his house he usually has a choice of at least six offers and he can pick the best of the six. The buyer's usually put an 'Esculating Clause' in their offer so if a competiting buyer makes a bid higher then his, his automatically goes higher then the competitors, -and the price just keeps going up to the joy of the seller.
You are overgeneralizing. When we sold our house in Wedgwood back in spring 2009, we had one offer, our realtor didn't suggest an "Esculating clause' and we were grateful to unload the thing. There were several houses that had been sitting for a while in Northeast Seattle and we were worried that ours would sit too so we lowered the price...and there was NO bidding war. As far as EVERYBODY and their pet monkey wanting to move there, that's not accurate. Seattle hasn't made a fastest growing list in a while.

There is just no buildable land left there in Seattle proper so that limits a growth in housing stock and all those twentysomethings that become thirty somethings want to buy houses and there are none it their price range (you know, like your kids that were born there).
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Old 04-28-2011, 10:35 AM
 
33 posts, read 73,194 times
Reputation: 38
Quote:
Originally Posted by Vinylly View Post
Don't be shocked. Home prices are 'astronomical' here in Seattle as well and they don't seem to be going down like other parts of the country.
Seattle home prices continue to fall | Seattle News, Weather, Sports, Breaking News | KOMO News | Local & Regional

Quote:
Originally Posted by Vinylly View Post
It's that law of 'Supply and Demand'. Everybody and their pet monkey wants to move here and they are driving up the price of housing simply because there isn't enough housing for the demand. It's called 'a seller's market'.
No, Seattle and vicinity is not a seller's market, it's very clearly a broken market. There's no supply because most homeowners paid way too much and most can't even list their house at anywhere close to the market price. So the supply of non-distressed homes is ridiculously small.

Quote:
Originally Posted by Vinylly View Post
When a person sells his house he usually has a choice of at least six offers and he can pick the best of the six.
Tell me about just one house like you're describing. Use verifiable details like addresses and actual prices because I don't believe you for a minute. There are a few sellers who come on the market and list their property at market prices. Those get bought fairly quickly. Everyone else sits on MLS for months or years and those simply aren't going to sell. The saddest are the ones who've been on the market for 300-400 days with dozens of tiny price reductions that still don't get them close to the market price.

Quote:
Originally Posted by Vinylly View Post
The buyer's usually put an 'Esculating Clause' in their offer so if a competiting buyer makes a bid higher then his, his automatically goes higher then the competitors, -and the price just keeps going up to the joy of the seller.
First, that's not how I use escalation clauses. I use escalation clauses to make sure that my bid isn't any higher than the next best bidder. So I specify a max which is my actual offer price, and if the bank allows it, I'll specify a lower base offer and an escalation clause so that if the next offer is way below mine, I don't have to pay nearly as much.

Banks know this and most prohibit escalation clauses in foreclosure sales. Escalation clauses like you're describing simply don't exist and never have. Nobody puts an open-ended bid on a property. Not even back in mid 2006.

Here's a hint to all of the potential buyers who read this: if you make an offer on a REO home and the bank comes back with "We have other offers and want you to put in your best bid." Don't be fooled. Leave your offer the same or even knock it down by a few percent. The banks are gaming you and the only way to do well up against a bank is if you keep emotion out of your purchase decision. Get the house you want at the price you think it's worth. In the current market, the only thing preventing that is time, since prices are continuing to drop and the bank who turns down your offer today may be willing to accept the same or an even smaller offer next month.

My plan will be to move to Seattle at the end of this year and rent a 3br home close to the Kirkland city center. We'll try for a long term lease (3-5 years), but if none can be had we'll possibly take a 1 year lease. We'll then begin the process of waiting for the right opportunity to buy. I'm expecting another 10-15% price drop by the time we move, but that's probably not enough to actually normalize with rents, so we're expecting to wait for the right property to come along.

Last edited by rabagley; 04-28-2011 at 10:53 AM..
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Old 04-28-2011, 10:41 AM
 
33 posts, read 73,194 times
Reputation: 38
Quote:
Originally Posted by PollyGlott View Post
So, you're one of them thar foreigners that should be staying put...
According to Vinylly, that's true. Too bad for him, we're coming.
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Old 04-28-2011, 10:45 AM
 
Location: Near Graham WA
1,133 posts, read 1,242,698 times
Reputation: 1286
Quote:
Originally Posted by rabagley View Post
According to Vinylly, that's true. Too bad for him, we're coming.
...and so will I, soon as my house sells!!!
Sorry, Vinylly! The foreigners are coming!
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Old 04-28-2011, 11:04 AM
 
8,204 posts, read 14,302,454 times
Reputation: 3646
What Vinylly says is mostly untrue, but not entirely.
What's really happening is that there are two different real estate markets in Seattle. One is for 1920's Craftsman homes in places like Ballard, Wallingford, Ravenna, Phinney Ridge, Greenlake, etc, and the other is everywhere else. Prices have gone down in all parts of the Seattle area, but less so in the " "Ravenna Craftsman" types, and those houses stay on the market for less time.
But that's only a small part of the Seattle market, and even for those houses it's unusual for escalation clauses.
I'm a fairly busy real estate agent, and also a statistics geek, so I think from both looking at the numbers and from my own experience I have a pretty good feel for what's going on. I was involved, as the agent representing the buyer, in a bidding war for a Craftsman home in Ravenna a few months ago. That's the kind of deal Vinylly is talking about. It exists, but it's not common.It was one of those situations where the home went for far more than it should have, and was only on the market for a couple of weeks. But that is not the typical situation. It's much more common to see houses linger on the market and for prices to drop before they are sold.
Still, the current real estate market in the Seattle area right now is weird. If we're talking supply and demand, the existing inventory of homes for sale is very low, compared to what it's been in recent years. And a lot of what is for sale is junk. So you'd think that with such a limited choice of homes for sale, prices might rise, but they're still dropping, and I think that's more a function of just how far out of whack they were when prices were at their peak a few years ago..Home price to median income ratio is still too high, and home price to median rent ration is still too high, so prices might continue to drop. That doesn't mean you shouldn't buy a house. It means you should be aware of what could happen.
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