A question for the Realtors here (Seattle, Tacoma: days on market, for sale by owner, real estate)

[shlingdawg]

I see there are several realtors here and I want to ask you some pretty blunt questions about the market in the Seattle area.

Seeing how the market is how it is (a buyers market) -

1. What kind of concessions are your buyers getting from the sellers?

2. How much, on average, are the sellers dropping their price (off the listed figure) to sell their home?

3. Are you seeing better "deals" on new homes from contractors that are holding lots of inventory, than you're seeing from existing homes?

Thanks for your candor.

[mthomson]

The major concession buyers are getting in my experience is price and terms. Prices are coming down to a reasonable level (when I say that, know that what is actually happening is prices are leveling out. A home may be listed for 15%-20% more than what a comparable home sold for 6-8 months ago, and then dropping to the same price that the comp sold for 6-8 months ago. Prices aren't actually dropping...here in Gig Harbor at least...but they've leveled). Terms are all in favor of the buyer now. Sellers are paying closing costs, they're fixing everything on the inspection, closing date is set by the buyers, etc.
Question #2 is tougher to answer. A well priced home to begin with isn't seeing any price reduction (the 2 homes I had listed that sold in November sold for 99.8% of their asking price...one in Gig Harbor the other in University Place). I work very hard at educating myself first and then my clients to price their homes well from the get go. That avoids the price reduction game. If I'm working with a buyer and we find a house that I feel is priced well, we're likely to offer full price or close to it. Trying to undercut a seller based on what the market is supposed to be doing is unfair and can cost my clients a home they want. If a home is over priced, I've come in as much as 30% under asking.
Playing off question 2, leading into #3, there is an entire new home development here in Gig Harbor (19 homes) that have had from $30k-$100k price reductions (12%-22%). I think builders are feeling the crunch more than resale sellers. If you ever wanted a brand new home, now's a pretty good time. The gap between new home prices and existing home prices is far narrower than I've seen before. Builders tend to be in a position to offer more incentives as well.
Those are just my thoughts from my local area.

[AzDreamer]

The quote below is from the Seattle Times. They are talking about new home construction.

"There are deals to be had depending on where you are. If you're in Seattle and Bellevue, there are not that many," Anderson says. "But in the hinterlands, people are offloading inventory like crazy."

Builders are telling him they expect the deals to dry up after the first of the year.

http://archives.seattletimes.nwsourc...&date=20071229

[irrational exuberance]

Originally Posted by AzDreamer

The quote below is from the Seattle Times. They are talking about new home construction.

"There are deals to be had depending on where you are. If you're in Seattle and Bellevue, there are not that many," Anderson says. "But in the hinterlands, people are offloading inventory like crazy."

Builders are telling him they expect the deals to dry up after the first of the year.

http://archives.seattletimes.nwsourc...&date=20071229

That is a good article. Many people need to look past house prices or leveling off or however some prefer to assess the housing market locally and nationally and see why things are declining in the economy overall. Consumer spending for the holiday season in 2007 is far below any projections. Consumer spending accounts for 3/4 of our economy. The S&P 500 only yielded a 3.53% return when historically is anywhere between 10-12% a year. Energy prices and gas prices are going up. So what you have is everything costing more, the main funding our economy for the last 2 decades (credit) getting cut short and now people are raising the odds of the R word (Recession) from 1/3 chance to 1/2. But it surprises how many people look at the microeconomic level when this crisis is macroeconomic level and really worldwide. This is just a quick snapshot on economist theory of why the house prices are really going down and on top of that the artificial demand that was created called subprime loans. How do you have record high prices being sold to less reliable (as far as credit) people and not expect this to happen. I seen some real estate agent on here talking about leveling off. Ask them why it is widely accepted that the worse of the market will be in summer of 2008 that spells decline in my eyes and that projection like many other of the house market is optimistic and is probably going to be wrong like the previous projections for the last 2 years

[mthomson]

Originally Posted by irrational exuberance

I seen some real estate agent on here talking about leveling off. Ask them why it is widely accepted that the worse of the market will be in summer of 2008 that spells decline in my eyes and that projection like many other of the house market is optimistic and is probably going to be wrong like the previous projections for the last 2 years

Are you asking me a question, or are you asking the original poster to ask me? No matter, I'll answer.
Here are actual numbers, not speculation, not ignorance based on national media. I don't sell real estate nation-wide, or even state-wide, so here are the numbers for the areas I do serve. These numbers are only for those homes that were sold on the NWMLS, so they do not include For Sale By Owner homes, but those make up less than 1% of all home sales so these numbers are pretty telling. These are for homes that actually sold, and their sales prices, not asking prices.
In 2005, the median home price in Gig Harbor was $389,950, rose to $450,000 in '06 and dropped to $448,000 in '07. Looks level to me.
In 2005, the median home price in Tacoma was $204,000, rose to $235,500 in '06 and rose again to $245,000 in '07. Looks pretty level, actually inclined, to me.
In 2005, the median home price in Port Orchard was $234,900, rose to $262,900 in '06 and rose again to $281,349 in '07. Looks like another incline to me.
So I guess I can't answer your question, because I don't know what market predictions were wrong that you refer to. I don't know who all is predicting that '08 will be so bad. I don't care about the national numbers. I don't care about Fox News, CNN, or the Wall St Journal. I care about the market I serve, because my clients are here. Can the national trends affect us? Sure. They clearly have. Look at the huge jump in '06 from '05 compared to the mild jump (and slight dip in Gig Harbor) in '07 from '06.
I'm not saying our market is flourishing. It's not. But it IS leveling. If the numbers above scare you and make you think we're having a housing crisis, that's fine. Hunker down and protect yourself. If those numbers shed a little light on what's actually happening in our area, great, that's all I want to do.

[Iceberg]

Realtors sure did not have a problem with the media pumping up the market the last few years. You are nothing but used car salesmen.

[irrational exuberance]

Originally Posted by mthomson

Are you asking me a question, or are you asking the original poster to ask me? No matter, I'll answer.
Here are actual numbers, not speculation, not ignorance based on national media. I don't sell real estate nation-wide, or even state-wide, so here are the numbers for the areas I do serve. These numbers are only for those homes that were sold on the NWMLS, so they do not include For Sale By Owner homes, but those make up less than 1% of all home sales so these numbers are pretty telling. These are for homes that actually sold, and their sales prices, not asking prices.
In 2005, the median home price in Gig Harbor was $389,950, rose to $450,000 in '06 and dropped to $448,000 in '07. Looks level to me.
In 2005, the median home price in Tacoma was $204,000, rose to $235,500 in '06 and rose again to $245,000 in '07. Looks pretty level, actually inclined, to me.
In 2005, the median home price in Port Orchard was $234,900, rose to $262,900 in '06 and rose again to $281,349 in '07. Looks like another incline to me.
So I guess I can't answer your question, because I don't know what market predictions were wrong that you refer to. I don't know who all is predicting that '08 will be so bad. I don't care about the national numbers. I don't care about Fox News, CNN, or the Wall St Journal. I care about the market I serve, because my clients are here. Can the national trends affect us? Sure. They clearly have. Look at the huge jump in '06 from '05 compared to the mild jump (and slight dip in Gig Harbor) in '07 from '06.
I'm not saying our market is flourishing. It's not. But it IS leveling. If the numbers above scare you and make you think we're having a housing crisis, that's fine. Hunker down and protect yourself. If those numbers shed a little light on what's actually happening in our area, great, that's all I want to do.

__________________________________________________ _____

A direct correlation that is happening everywhere is price. Everything is a function of price. Name one area that has appreciated over 5% this year with an median price over $500k in the nation? Its not happening, Why because you cant get the jumbo loan although you make 6 digit income. Like Seattle alot of places are growing because there prices are ridiculously high compared to the income levels even though it is starting to show that Seattle is overpriced as well. Pierce county is ridiculous overpriced? What is the median income for Pierce county? What is the average house price and size of family? If you take King county out of our local market then we are just as bad as any other state but not as bad as the worst. Look at the foreclosure rate in Pierce county. Its nearly 3X King county rate. An article in the news tribune showed that King county had 30 more foreclosures than Pierce county but the population of King is nearly triple that of what Pierce is.Why? Job market. If you dont work industrial in Tacoma, what do you do and make a decent income? Seattle education rate is in the 60s percents what is Pierce? You should worry about local market but you must be realistic and understand why Pierce County is in the middle of the pack in foreclosures and King is in top 10 best housing markets. My wife and I are sitting back watching the market. We would rather live in King county than Pierce although she works in Downtown Tacoma and I work in Federal Way. Why because when you look at places like Puyallup and Spanaway its nothing but a big commute. There is no location value added as many are starting to understand living there now. But dont be surprised if Pierce county goes into negative appreciation (depreciation) for 2008 and I know its nearly zero in 2007.

[irrational exuberance]

Now that I think about it, leveling could be a proper term for what is happening. I seriously doubt with 57% appreciation rate in the last 5 years that things will decline that much. Is it possible yes, we dont know how bad things are getting. It wouldnt surprise me if prices the "level off" to -10 to -15% in Pierce county from now until 2009 but they still we be higher than in 2003 price levels. Either way over inflated prices brought this about and there are a series of other things I mentioned in my first post that are going to get worse before they get better.

[mthomson]

Actually, Iceberg, I'm a used house salesman. I prefer to call them "Gently used" though. Sounds better.
Happy New Year to you.

[Snootylooter]

Mthomson,
Thanks for the stat's from NWMLS! How does the days on market and number of units sold compare over the past 3 years in those areas? Our trend in SW Michigan is somewhat similar, but time on market is increasingly longer, and number of residential units sold is lower.
Again - Thanks!