so how much further will house prices fall? (Seattle, Vancouver: bank owned, sales)

[Freebird2007]

I see a huge supply of new homes in Snonohomish county. Some houses have already been reduced 10-15%. How much farther will it fall?

[Ira500]

Opinions vary greatly on that question. Most real estate agents will tell you that we've hit bottom already, and with the combination of low interest rates and "low" house prices, it's never been a better time to buy.
I also know some doom and gloomers who belive we'll fall another 50%.
My own opinion? We'll fall at least another 10%, more likely another 10-15%, and then it'll be a few years after that before prices start to rise again.
I'm really bad at predicting interest rates, so I won't go there, but I've been pretty accurate so far as far as house prices...Also, there are some " microclimates" within the Seattle area. Areas close to downtown Seattle aren't likely to fall as much as outlying areas...places like Woodinville and Kent have fallen much farther than Seattle, and much of Snohomish County is probably in that category too.
Owning a house is a great thing to do. You just shouldn't be in a hurry to do it, and if you are, be prepared to keep that house for 7-10 years or more.

[Freebird2007]

I know you work in the markets so I will pose this question to you.


is offering a 20% discount on a $500k house unreasonable? Especially when the builder has abundant inventory? (9 houses left)

[tortoisegirl]

I'm hoping to see it bottom out soon because we want to buy our first place and want to see a little bottoming out or increase in prices before we buy since we're not 100% on this being a life-long house. I actually haven't seen as many listings as when I first started looking the second half of last year--I wonder if some people have taken their homes off out of frustration, and people are waiting to sell?

We're kinda hoping to time it right to have a "safe" investment and still get a low rate. I just don't want to buy and see it drop 20%, losing our down payment...even though that's what the down payment is there for.

We're looking in the Bothell/Lynnwood area at townhouses so predictions would be welcomed.

[eskercurve]

I do not expect a bottom until well into 2009. An interesting correlation between our housing market and that of the LA area shows that we consistently in history lag that housing market by about a year, meaning a home rise/fall in value in LA typically is followed in Seattle a year later by roughly the same magnitude as a % of home value. Correlating chartism to real life ... I definitely would not buy now. Seattle area is losing jobs, not adding them. That is a surefire way to lose equity. I fully expect another 10-20% fall from today's prices.

[drewba]

Originally Posted by tortoisegirl

I'm hoping to see it bottom out soon because we want to buy our first place and want to see a little bottoming out or increase in prices before we buy since we're not 100% on this being a life-long house. I actually haven't seen as many listings as when I first started looking the second half of last year--I wonder if some people have taken their homes off out of frustration, and people are waiting to sell?

That may be the case, but there is also a strong seasonal component. The number of homes on the market falls significantly every year as we move into winter and then starts increasing again in the spring. Here's a nice graph from SeattleBubble.com that shows that trend:

http://seattlebubble.com/blog/wp-con...12-600x408.png

[mthomson]

I don't believe house prices at the bottom yet. Just in the past few months we've started to see the bank-owned homes really start to sell. Bank owned properties drive prices down, so those all have to sell off before prices can rise again.
Keep this in mind. For a $400k home, every 1% hike in interest rates is equal to a 10% drop in home price. So if you're waiting to buy, you have to ask yourself if it's more likely that prices will drop another 20% (that's a huge drop) or will interest rates rise 2% (they'd still be lower than almost any other time in history). Personally, I believe rates will rise that small amount before prices will drop that huge amount. That's why I purchased with no regrets recently. Yes, our "value" has gone down. Have we lost money? Nope. Not unless we are forced to sell at less than what we bought for. Just like we didn't make money on our last home when prices were appreciating 22% per year. We didn't make a penny until we sold at higher than what we bought for.
If this is your first home, don't discount the tax credits. If you've got another home to sell, remember that if you're buying up, whatever hit you take on your current home will more than be made up for in your new home. The hard situations are folks having to sell due to job loss/change, moving to a new area and being forced to sell but not able to buy, or folks needing/wanting to downsize.
I'd guess most of '09 you'll see volume of sales rising, prices falling as bank-owned homes and other deals are bought up.

[cdelena]

The homes I have been tracking here in Vancouver are down an average of about 19% over the last year.

The two builders I talked with said they have sold 90% of their inventory (home and lots) at a discount and are looking for stabilization late this year.

[AlexaNW]

I don't think that waiting for the market to bottom is necessarily the best time to start looking to buy, because there are plenty of people waiting for the same data and then suddenly you have more competition for the best houses again and probably deal with rising interest rates.... plus it could take quite a while before we get there...if it took 5 years would you want to spend those years in a rental or take the tax benefit and be an owner?

I think this is the perfect time to look around and do all the research and find out exactly where you want to live and when a great place comes along you can always make a low-ball offer. What may sound like an insultingly low price to you may be a number that still gives a homeowner an option to avoid foreclosure. All they can say is no. Heck, post an ad on Craigslist with your requirements and see what sort of response you are getting from owners that want to sell but don't think they can.

Some builders have had to liquidate their inventory at ridiculously low prices and since there has virtually been no new construction happening in 2008 at least in my area, those sort of deals on new houses are going to dry up at some point. So if you are looking into builder's inventory, I'd say deal with them sooner rather than later.

Originally Posted by tortoisegirl

I'm hoping to see it bottom out soon because we want to buy our first place and want to see a little bottoming out or increase in prices before we buy since we're not 100% on this being a life-long house. I actually haven't seen as many listings as when I first started looking the second half of last year--I wonder if some people have taken their homes off out of frustration, and people are waiting to sell?

We're kinda hoping to time it right to have a "safe" investment and still get a low rate. I just don't want to buy and see it drop 20%, losing our down payment...even though that's what the down payment is there for.

We're looking in the Bothell/Lynnwood area at townhouses so predictions would be welcomed.

[cdelena]

Originally Posted by AlexaNW

...
I think this is the perfect time to look around and do all the research and find out exactly where you want to live and when a great place comes along you can always make a low-ball offer.
...

I talked with someone recently that says in the last six months he bought his dream house for 25% less than it was listed three years ago, financed it at 4.95% which a large savings from what he had, and had enough cash to buy the truck he really needed at better than a $10K discount.

Timing is important and some (not me) manage to hit it just right sometimes.