Misleading Media on the real stats on house prices (Seattle: real estate, 2009)

[St.Croix to Seattle]

Originally Posted by LordBalfor

One of the things I really liked about the real estate agent we used when looking for retirement property outside Tucson was the fact that once we'd settled on a property he deliberately did a 180 degree about-face and gave us a bunch of reasons for NOT buying the land. When we first started to work with him he'd "warned" us that he would try to talk us out of whatever we decided upon and sure enough when the time came he did just that - specifically to make sure we'd weighed all the pros and cons of the sale.

We LOVE the guy and have decided that we have an agent for life.

Ken

finding an agent like that is like hitting the lottery,with your last dollar in the world on friday the 13th of a leap year,in the middle of a lunar eclipse....I can't wait that long so I have my newly minted Washington State Real estate license and signed on with a flat fee broker and in 3 weeks will be buying and using the person I trust the most-myself.

[Balco9]

Originally Posted by St.Croix to Seattle

finding an agent like that is like hitting the lottery,with your last dollar in the world on friday the 13th of a leap year,in the middle of a lunar eclipse....I can't wait that long so I have my newly minted Washington State Real estate license and signed on with a flat fee broker and in 3 weeks will be buying and using the person I trust the most-myself.

How much do you actually save by going this route St.Croix?

[St.Croix to Seattle]

minus the broker flat fee,costs associated with getting the license,it amounts to about 10k on a 450k home which is our budget unless our condo sells in the next 3 weeks,then we can roll the purchase price up higher,and save a bit more=but most importantly i get the representation that i deserve from someone with my best interests at mind=myself...And I don't want to be critical but after speaking with Washington state Real Estate agents starting in Sept 2006 from Greater Seattle to West Bainbridge Island to East Bremerton which is our shopping areas I have spend about $2500.00 on plane tickets flying out to look at homes that don't even come close to what I need and it started out the same way Look on the net find a property,then ask "How much do you charge to drive out to the property make sure it is as listed,before I fly out?"...I even sent one agent a check for $300.00 to make sure a property was as listed,,end result i showed up an a 3 bedroom/2bath home with partially finished 1000sq ft basement and 8000sq ft lot,turned out to have 3500 sq ft missing from the lot,when i walked border of the property which was clear as day...Agent with my $300.00 replied "King county just can't get the records straight"...I paid $300.00 to idiot that can't tell the difference between a 4500 sq ft lot and an 8000 sq ft lot but i should entrust him to tackle a deal involving a bit under 1/2 million dollars....

[mthomson]

The numbers I used are simple. I searched ALL homes sold between those dates in the specific areas that I mentioned. I used the Median, not the mean, sales price. There's nothing not to trust, nothing to spin. Every house that was listed on the MLS was included. The only homes not included were For Sale By Owner homes. You can go to the Title companies if you want those numbers included.
If you have nothing but bad things to say about Realtors, I'd only ask how you interviewed your previous agents. Did you just go off of a sign, or a fancy add in the paper, or did you actually interview multiple agents with specific questions?
I am always amazed at how people use a few bad apples to say an entire industry is corrupt. Lawyers are crooks, Realtors are liars, Car salesmen are sleezy, Christians are hypocrites, Muslims are terrorists.
I got into real estate after 8 years of teaching junior high, partly because I had 1 bad experience with an agent, heard all the negative talk about them, and figured I could do better. Since being a Realtor, I've found that the strong majority are great people and professional businessmen/women. There are a handful of dishonest ones, and a handful of ones seeking to earn a big paycheck without taking the time to become a true professional. For some reason, the minority voice in our country tends to be the loudest. Don't believe me? Watch the news. Count how many positive stories there are versus how many negative. Now if our society was actually, on that proportion, negative, we'd have imploded by now. But the few negative things outweigh and overwhelm the many good things.
I'm proud of what I do for a career now. I'm proud of my business, of the relationships I've built, and the people I've helped to get in a dream home or sell a home that had become a burden. I feel I do as much good for society now as I did when I taught, and I was proud of what I did then, too.

[irrational exuberance]

Originally Posted by mthomson

The numbers I used are simple. I searched ALL homes sold between those dates in the specific areas that I mentioned. I used the Median, not the mean, sales price. There's nothing not to trust, nothing to spin. Every house that was listed on the MLS was included. The only homes not included were For Sale By Owner homes. You can go to the Title companies if you want those numbers included.
If you have nothing but bad things to say about Realtors, I'd only ask how you interviewed your previous agents. Did you just go off of a sign, or a fancy add in the paper, or did you actually interview multiple agents with specific questions?
I am always amazed at how people use a few bad apples to say an entire industry is corrupt. Lawyers are crooks, Realtors are liars, Car salesmen are sleezy, Christians are hypocrites, Muslims are terrorists.
I got into real estate after 8 years of teaching junior high, partly because I had 1 bad experience with an agent, heard all the negative talk about them, and figured I could do better. Since being a Realtor, I've found that the strong majority are great people and professional businessmen/women. There are a handful of dishonest ones, and a handful of ones seeking to earn a big paycheck without taking the time to become a true professional. For some reason, the minority voice in our country tends to be the loudest. Don't believe me? Watch the news. Count how many positive stories there are versus how many negative. Now if our society was actually, on that proportion, negative, we'd have imploded by now. But the few negative things outweigh and overwhelm the many good things.
I'm proud of what I do for a career now. I'm proud of my business, of the relationships I've built, and the people I've helped to get in a dream home or sell a home that had become a burden. I feel I do as much good for society now as I did when I taught, and I was proud of what I did then, too.

I interview based on knowledge of the market. In order to sell someone a house you need to have basic knowledge of demographics, economics, and overalll professionalism. Common sense says that when you have a successful field in high demand for big money you will get alot of unqualified people crowd that market. Exactly what happened in real estate. I have met some phenomal brokers and real estate investors and they are the ones that gave me advice on who to choose. I have literally ran into 3 agents so far and dealt with 2 more that changed their profession in 2003 or after. Prior to 2007, agents had to show people houses and that was pretty much it beside paper preparation. Today, they have to sell someone a house and convince them based on trends, demographics etc. Most dont know how to read trends of demographics or even stats. Thats why you get the Prices are increasing although demand and sales are down and supply is up. When the market increased, demand was up, supply was down, and sales were up so it fundamentally contradicting to say that same happens in a completely opposite market. I graduated with a degree in finance and the economy is something I study daily along with stats. I find it very hard to buy something from a person who knows nothing of economics or demographics. Those people who give more I dont know instead of realistic answers. You can say the market prices are going up but I guarantee you will not see me buy a house for more than someone did in 2006 or 2007. Its easy to see how much a person buys a house for on the pierce county assessors website, not zillow with all kinds of advertisements, its goverment with just information. But there is more dishonest, unprofessional, uninformed real estate agents than there are honest ones. Those who withstand this "market stabilization" are the ones who are the real agents. You should be proud of your career just dont assume everyone you talk to doesnt understand the economy and the mechanism that drive our economy.

[mthomson]

I think you've mentioned your degree in economics in just about every post you've written...I get it. Generally, you're right. Supply and demand SHOULD indicate that prices are dropping since supply has risen. But the numbers I presented are as basic as it can be. Prices HAVE risen, though at a much slower rate than in '04 and '05. You and your wife don't have to pay more for a home now than someone did in '07, but you will most likely struggle to find a place to buy.
Here's where people are getting caught...they bought in the peak of an out of control market in '05, many people re-fi'd 2 or 3 times PER YEAR! Dishonest lenders and appraisers who had their hands tied were assessing homes at values 20-30% above their actual value, because that's what they were increasing yearly. Now, prices are only increasing 1-5%, and so many people have loans for higher values than what their house is worth. The home's value has increased, but not enough to catch up to their loan's value.
Things are screwy because while supply has increased, demand has also increased. More people are still moving in to Washington each year, we're not seeing an exodus like many states where the market is struggling. So supply is up, as is demand, which is keeping prices up. You can throw your theories at me all day, but I'll counter them with reality. Supply has outpaced demand, which is why prices have slowed.
I didn't get a degree in economics, mine was in literature with a masters in education. That masters indicates that I'm learning based, which is why I love studying market trends. I don't pay attention to theories or national hype. I look at actual market trends...real numbers. You may try and accuse me of being biased as an agent, but I represent sellers and buyers, and I AM a seller and a buyer. I can't be consistent in my message unless I'm telling it straight. Numbers are what they are, the market trends give you a great idea of what's going to happen. Statistics can be tweaked in almost anyway you want to say what you want, which is why I don't want stats. Don't give me month to month appreciation. Give me actual numbers. What has sold, how much.
I'd disagree with your statement that there are more dishonest than honest Realtors. I may grant you that you'll find more uneducated Realtors than educated, more who won't take the time to learn the market and study trends and learn what the numbers mean. Doesn't mean they're dishonest, just means they either don't want to work hard or don't know how to study numbers.

[Fallingwaters]

Originally Posted by irrational exuberance

Common sense says that when you have a successful field in high demand for big money you will get alot of unqualified people crowd that market.

I saw the same thing happen in the tech industry around 2001 when it started to sour. People with important or technical sounding titles, but without the skill levels to justify them, didn't sustain.

The realtor profession will likely see this dropping off, just like the prospectors back in the 1840's had to go find something else to do when the gold rush ended.

I lucked out in that I have family friends who are realtors and loan officers -- both of which gave me good advice about the market, types of loans, what to avoid, etc.

[irrational exuberance]

Originally Posted by mthomson

I think you've mentioned your degree in economics in just about every post you've written...I get it. Generally, you're right. Supply and demand SHOULD indicate that prices are dropping since supply has risen. But the numbers I presented are as basic as it can be. Prices HAVE risen, though at a much slower rate than in '04 and '05. You and your wife don't have to pay more for a home now than someone did in '07, but you will most likely struggle to find a place to buy.
Here's where people are getting caught...they bought in the peak of an out of control market in '05, many people re-fi'd 2 or 3 times PER YEAR! Dishonest lenders and appraisers who had their hands tied were assessing homes at values 20-30% above their actual value, because that's what they were increasing yearly. Now, prices are only increasing 1-5%, and so many people have loans for higher values than what their house is worth. The home's value has increased, but not enough to catch up to their loan's value.
Things are screwy because while supply has increased, demand has also increased. More people are still moving in to Washington each year, we're not seeing an exodus like many states where the market is struggling. So supply is up, as is demand, which is keeping prices up. You can throw your theories at me all day, but I'll counter them with reality. Supply has outpaced demand, which is why prices have slowed.
I didn't get a degree in economics, mine was in literature with a masters in education. That masters indicates that I'm learning based, which is why I love studying market trends. I don't pay attention to theories or national hype. I look at actual market trends...real numbers. You may try and accuse me of being biased as an agent, but I represent sellers and buyers, and I AM a seller and a buyer. I can't be consistent in my message unless I'm telling it straight. Numbers are what they are, the market trends give you a great idea of what's going to happen. Statistics can be tweaked in almost anyway you want to say what you want, which is why I don't want stats. Don't give me month to month appreciation. Give me actual numbers. What has sold, how much.
I'd disagree with your statement that there are more dishonest than honest Realtors. I may grant you that you'll find more uneducated Realtors than educated, more who won't take the time to learn the market and study trends and learn what the numbers mean. Doesn't mean they're dishonest, just means they either don't want to work hard or don't know how to study numbers.

I dont have a degree in Economics I have a degree in Finance. Reality is that there are three types of lies, lies, darn lies, and statistical lies. In an any other industry growth is measured by volume of sales. In the real estate industry growth is determined by the prices of houses. So although any person with any common sense can see what is going on. Example if you sell 10 units of an item for 75 dollars in year one and 6 for 80 dollars in year two, when are you better off? Obviously, one the largest corporation in the world, Walmart showed us that selling more units for less is better than selling fewer for more. Your "reality" is that prices are increasing. My reality is that there not increasing because you can clearly see that residential construction is at a dead halt so sales by volume is way down. The real estate market is like any other market, you the volume of sales is the most relevant factor because that drives demand and supply, so although you and many other advocates of real estate will preach the market is still rising it hasnt it is falling. The only thing that separates Washington state from other areas, besides the fact we are generally a year behind other places just like when the boom started, is the foreclosure rate hasnt forced local banks to go bankrupt and need fed bailouts. There are alot of builder in washington struggling right now on the verge of bankruptcy, but how could that be if prices are up? So the media and brokers just like agents need to give buyers justice and tell them that the market is alot worse than they lead everyone to believe. I can make a full price offer right now in any of the neighborhoods my wife and I looked at and we would be saving $30k + than those who bought in 2006 or even late 2007. When I go look to purchase a product I dont care about who a person is their for. Reality is you get your checked signed by the people you spend your work days sitting at you are there for them. If there wasnt no them there wouldnt be no you. I only care about getting the deal that my wife and I are comfortable with. But I dont accuse you of being biased more than cherry picking stats and not telling the whole story. The housing market is on a serious decline. Its the media and real estate people who dont want people to think that because if they did they would sit on the sideline like I and many buyers are. I guess we will take the risk of increasing prices for waiting but only a truly naive person would say that waiting is bad because prices are rising as we do.

[irrational exuberance]

Originally Posted by Fallingwaters

I saw the same thing happen in the tech industry around 2001 when it started to sour. People with important or technical sounding titles, but without the skill levels to justify them, didn't sustain.

The realtor profession will likely see this dropping off, just like the prospectors back in the 1840's had to go find something else to do when the gold rush ended.

I lucked out in that I have family friends who are realtors and loan officers -- both of which gave me good advice about the market, types of loans, what to avoid, etc.

And that is happening. I asked a real estate agent what is the median household income for a specific city and he looked at me like I was asking him to explain the laws of physics. He spent more time telling about all these houses he sold and buyers bonuses and special offers set to expire the moment I leave than he did about potential homeowner dues, property taxes, and schools in the area. One agent told my wife and I to hire my friend as an appraiser to get a phony appraisal. I looked at him like he was crazy. I asked him in order to buy a house we liked, I should overlook potential deficiencies to get in a house sooner. That was normal behavior this man. I couldnt believe some of the things that these so called professional do to make that sale. I guess the $60k + vehicles have to be paid somehow

[Fallingwaters]

Originally Posted by irrational exuberance

The housing market is on a serious decline. Its the media and real estate people who dont want people to think that because if they did they would sit on the sideline like I and many buyers are. I guess we will take the risk of increasing prices for waiting but only a truly naive person would say that waiting is bad because prices are rising as we do.

This is just what I think:
The market is obviously on a decline right now nationwide and slipping in the Puget Sound region.
Buyers will try to wait it out, but when sellers get disgusted and take their houses off of the market (still bad for realtors, but people are going to protect their interests), the foreclosure and distressed property market, new construction slow-downs, and the few people who have to sell for relocation, divorce, or other reasons get churned through, then the prices will likely flatten, at less than 2005-2006, sure, but I don't think it'll be a full downward spiral.

There are going to be less buyers (I think this is good because people bought way above their means) because the higher principal and riskier loans will be harder to come by. Sure, I think the estate "boom" is fading and will fade further, but the market will stabilize at some point.

Just a matter of when. People will definitely lose money and some people in the real estate industry will have to find other jobs. I bought a property at about 5% below market value (for the time) last year and am seeing it more or less break even right now (still a roughly few thou above what I paid). I'd expect it to drop further, but not to the point where I'm panicking (plus, I was prudent on my loan, paid off a chunk of the principal early, don't have to sell any time soon and can wait it out).

I don't have a degree in economics, nor do I work in the industry; this is just my opinion from what I've observed and picked up from an interest in history (and economic history as a part of that).