Spokane Real Estate Tanked? (Seattle, Wenatchee: sale, credit, loans)

[Swigchow]

Originally Posted by Deena160

Wondered what happened to you? Glad you've gotten settled. My brother lives in Texas and yes, they have a beautiful home that would be worth quite a bit more in Spokane. Unfortunately, prices in Spokane haven't fallen as much as I'd like, especially compared to the other side of the mountains where we'll be trying to sell our home first. In the 2 1/2 years I've been monitoring the market, homes that would work for us have probably fallen about $20-25K. Houses in Everett seem to have dropped about $40-50K
My husband would gladly move to Texas. No thanks. Of course, I would if I had to and suck it up, but I've been told that the weather is very much like where we lived in Australia(minus the hurricans and freak snow) and five years of it was quite enough for me to last a life time. Even going to Spokane is going to push my comfort limit for heat--I'm a Pacific NW, rain loving girl!
Good luck and God Bless!!! :~) D

Have you looked at REO's? They're starting to hit the Spokane market with discounts of +40%.

[NomadicBear]

I was looking at houses in Spokane back in 2003. At the time, I was selling a house in western, WA, and wanted to put the money into another house while I furthered my education. I decided against Spokane, but I did get a real good pulse on the market at that time. Prices seemed reasonable in comparison to western, WA, and very favorable as compared to a few short years later.

I was looking in the South Hill area, and there was a house right across from Manito Park that I almost purchased. It was a small, white, very charming two story, and the asking price was $119,000. During the peak, its price rose to over $500k. That is outrageous, and in no way was that sustainable. I anticipate that, given local incomes, prices will end up right back where they were when I was looking in 2003, and maybe even beyond that.

[coffeepotbend]

Originally Posted by NomadicBear

I was looking at houses in Spokane back in 2003. At the time, I was selling a house in western, WA, and wanted to put the money into another house while I furthered my education. I decided against Spokane, but I did get a real good pulse on the market at that time. Prices seemed reasonable in comparison to western, WA, and very favorable as compared to a few short years later.

I was looking in the South Hill area, and there was a house right across from Manito Park that I almost purchased. It was a small, white, very charming two story, and the asking price was $119,000. During the peak, its price rose to over $500k. That is outrageous, and in no way was that sustainable. I anticipate that, given local incomes, prices will end up right back where they were when I was looking in 2003, and maybe even beyond that.

From $119 to 500k??????? that is INSANE! And it sounds more like the Florida/Nevada/California/Arizona markets!!!!!!!! That's really bad!!!!! Totally unsustainable!

[Deena160]

Originally Posted by coffeepotbend

From $119 to 500k??????? that is INSANE! And it sounds more like the Florida/Nevada/California/Arizona markets!!!!!!!! That's really bad!!!!! Totally unsustainable!

That sounds like some home owners wishful thinking. People did a lot of that around here. It's a, "Let's just see what we can get away with" way of thinking. Unfortunately, sometimes they did get away with it which messed up the prices and now those poor people who were suckers for it have incredibly upside down mortgages. One house down the street sold a couple of years ago for $425K when it probably should have been $375K compared to the other homes in the area. Now it'd probably be listed at about $340K and lucky to actually get $325K. Ouch.
I just checked that house on Zillow to double check my memory. The zestimate was actually $341,500. Dang, I'm good! Seriously, for our area, the zestimates are pretty close to listing prices, but of course not necessarily what you'll get in the end. :~) D

[Deena160]

Originally Posted by Swigchow

Have you looked at REO's? They're starting to hit the Spokane market with discounts of +40%.

From what I can gather, there really doesn't seem to be that many. There are deals to be had, but I haven't seen the -40% that you're talking about. Not in family-sized homes, in nice areas(although I do have one saved in my favorites). Of course, they'll still get you with the taxes for the "accessed" value!
For a while we thought we were going to Boise. Now there's a buyers market for you--tons of short sales and bank owned properties. I wouldn't wish the mess they've got on Spokane, but it has made me a bit green with envy. I've stopped looking at their listings because it was making me depressed. :~/ D

[coffeepotbend]

Ya know, Dena, your totally right about the sellers. We saw the same thing in Florida at the top of the bubble. The sellers were so greedy. They all thought their homes were their personal gold mines...and yes, plenty of them found suckers! I know a couple who recently sold their home in Florida for $200K. They bought it at the top of the bubble for $300K (in the fall of 2005). It was a fixer upper. They poured $100K into renovations. So, they had a total of $400k invested in the house. In the summer of 2009, they got their orders for their next base. They sold their house for $200K, a $200k loss......OUCH!!!!! We arrived in Florida in 2005 and rented. Boy were we bitter renters...but we were so glad we did. We avoided a financial nightmare! That fixer upper my friends bought was a hole in the wall. She has the before and after pictures posted on Facebook. What a transformation. It was beautiful when they finished it....but they still lost $200K when they sold at the bottom of the market. That is how inflated that Florida market was. It sounds like Spokane has reached the same insane level. I feel good about the Texas market. Buying here was safe. I'm happy to be a homeowner again that is for sure!!!!!

[noah]

We all know now that prices got way ahead of where they should have been but I don't think we will see 2003 prices anytime soon, that would require quite a drop from today and things seem to be bottoming out.

Agree, incomes in Spokane have always kept prices down and will continue to but I bet we go back to 2-3% growth per year. This would at least keep up with inflation once it comes back and quite frankly this is generally what Spokane does for appreciation outside a few peak market times.

Originally Posted by NomadicBear

I anticipate that, given local incomes, prices will end up right back where they were when I was looking in 2003, and maybe even beyond that.

[NomadicBear]

Originally Posted by noah

We all know now that prices got way ahead of where they should have been but I don't think we will see 2003 prices anytime soon, that would require quite a drop from today and things seem to be bottoming out.

Agree, incomes in Spokane have always kept prices down and will continue to but I bet we go back to 2-3% growth per year. This would at least keep up with inflation once it comes back and quite frankly this is generally what Spokane does for appreciation outside a few peak market times.

Well, only time will tell, that's for sure. I know one thing- the people of CA, NV, etc. were shocked to see their home prices fall more than 50% from the peak, especially since a few short years ago, before prices starting falling in earnest, all the blather was "real estate only goes up". What goes up, must come down. It's all about incomes. Incomes didn't drive this bubble, loose lending and speculation did. Once you take that away, incomes are the only thing left to provide support. When you take away loans for even credit worthy borrowers, you get over-corrections. That's what's going on, now.

[noah]

Yep. Its not the first real estate bust and it won't be the last. Things always overcorrect with lending becoming very tight before easing. The trick for most is whether they can hang on and maintain through the down times. As optimistic as people were 4 years ago now it seems almost impossible to find anyone who feels good about the future. I would bet you prices will be higher in 3 years and Yes we will eventually surpass the highs of 2005/06.

Originally Posted by NomadicBear

Well, only time will tell, that's for sure. I know one thing- the people of CA, NV, etc. were shocked to see their home prices fall more than 50% from the peak, especially since a few short years ago, before prices starting falling in earnest, all the blather was "real estate only goes up". What goes up, must come down. It's all about incomes. Incomes didn't drive this bubble, loose lending and speculation did. Once you take that away, incomes are the only thing left to provide support. When you take away loans for even credit worthy borrowers, you get over-corrections. That's what's going on, now.

[NomadicBear]

Originally Posted by noah

Yep. Its not the first real estate bust and it won't be the last. Things always overcorrect with lending becoming very tight before easing. The trick for most is whether they can hang on and maintain through the down times. As optimistic as people were 4 years ago now it seems almost impossible to find anyone who feels good about the future. I would bet you prices will be higher in 3 years and Yes we will eventually surpass the highs of 2005/06.

Well, then, what you're really betting on is that wages will be higher in 3 years. Where do you see economic growth? Wages have been flat to declining for a decade. How do you anticipate that's going to change, especially with record unemployment numbers? With a glut of labor on the market, wages fall. When wages fall, so do house prices. Historically, house prices increase with the rate of inflation, as do wages. Over the past 10 years, real estate became detached from wages. That gap is now closing, and in a vicious manner.