Housing Bubble Burst? (sunny, work, degrees)

[Tony1790]

Originally Posted by AzDreamer

It looks like the stats for outlying areas with raw land like Kistap County don't match the stats for desirable areas with easy commutes to good jobs.

I remember when I lived in Redmond back in the mid 90's, as the prices and traffic got so bad that I moved to the outlying area of Kitsap and what a relief that was, peaceful, tranquil and low cost. That was then, fast forward 10 years and now Kitsap has rush hour traffic, back ups and density that I remember from King county 10 years ago (of course King county is much worse now than 10 years ago).

My Point you ask, and ask you should. The expansion went from the center outwards, so the contraction....duh......goes from the outlying area's and hits the center last. But if you don't think that the credit contraction and falling prices will effect Seattle then, well, never mind.....you'll figure it out soon enough and I'm just wastiing my time by trying to warn you not to make a life altering mistake by over spending on a home.

Anywho, God bless all the recent home buyers, I hope things go well, if you haven't closed yet, go ahead and do so, just do so with your eye's open and read the fine print on the loan paperwork and yes the lender can and often DOES put stuff in there (prepayment penalties, etc) that wasn't agreed to prior to closing. (Don't ask how I know that, ouch, it still hurts

p.s. To the censor who keeps asking why I post on the Seattle website, my family still lives there and I'm on a temporary assignment in MO until permanently assigned elsewhere, I just sold my last house in Port Orchard in April, but I still like to follow the local property scene (habit).

Tony in misery, I mean Missiouri.

[bellevue,wa]

Hello

I have also been watching the Seattle market for some time. The prices will certainly come down quite a bit. I am also moving to Bellevue at the end of the year and have been watching the market close. Housing prices have out paced income and rent by large margins. It may take a couple of years for the prices to come down, but they most certainly will. Home and condo owners are stubborn because they do not want to loose. The media has home owners convinced that Seattle is the next San Fran. I have lived in both cities and Seattle will never be elevated to the level of San Fran. because the weather patterns are not as pleasant. Significant price declines in the Seattle/Bellevue area is an uncommon occurance. Significant market trends in both the real estate market, stock market, and population dynamics will bring prices down over the next several years.

Some sellers in areas like Medina and west Bellevue seem to think their homes are worth twice as much as 5-6 years ago. That is ridiculous. If that were the naturea tendency of the housing market, homes would cost a billion dollars.

Take a look at Redfin.com and you will see that some people are recently having to sell their homes for less than the purchase price they paid 1-2 years ago. However, this is just the beginnning. Most people who are selling million dollar homes or multi million dollar homes purchased several years ago are speculators and unless they lower their price sooner rather than later, they will loose a significant amount of money. Several years from now, when most of the speculators are out of the market, I suspect prices will be down 30-40% from the peak. Even in Medina, rent is relatively cheap comparred to house prices. I suggest waiting for several years. There is a large number of unsold condos on the market and these will also have a depressive effect on the market.

[Tony1790]

Wow, What a blast from the Past!! I came across this post from what, 18 months ago, to the people (AZDreamer, Neptune) who ripped me a new one, yeah there was no bubble and prices are definitely not coming down, nor is the stock market in decline nor is Microsoft laying off people, nor is Boeing laying off, nor did WaMu implode and most of their corporate headquaters staff get layed off and I sure am sorry that I sold off my properties......no wait!!! I checked the news, and.........never mind.

I hope that Neptune (who I believe was in the process of buying a home) is doing ok, even though he lunged for my throat for implying that the Seattle market was going to decline, prices in King county are down almost 12% from last year and still in freefall last I checked.

OK, ok, I'm being a little snarky here, honestly I hope that Neptune is doing well, as negative as I was in 2007, even I could not believe the crazy home price crash (nationally), bank crash, stock market crash that is going on now and forget about the trillions that the Treasury and Fed have loaned out directly or placed the tab of onto the taxpayer.....I'm literally in awe at the pending consequences of these events/actions.

I haven't come to the WA boards too much anymore, even though I still have family there and hopefully (if prices come down enough) I may move back. In the meantime, I paid cash for a little place on 34 acres in TN and am going to school now.

Take care all, I remember the days when I was the kook saying the sky is going to fall and I listed the reasons why.....now the reasons why are on TV in real time and the "kooks" are on CNBC, Fox and CNN screaming about the collapsing economy.

If I could add anything, it would be this, As sure as I was 2 years ago about what was going to happen (Implosion) I am now equivalently unsure about what happens next....deflation or massive inflation, disinflation followed by massive inflation? The not knowing or at least not wanting to think about what is going to happen has taken the fight right out of me with regard to the housing bubble debate, I rarely post or talk with people about it anymore.....it's as they say....not news anymore and it's freaking depressing!!

Take care

Tony in TN
(still with ties in WA and 1st amendment rights still in place)

[texastrigirl]

I guess I have to say I am still glad I bought a house on the Eastside in Sammamish in August 2007. My house has gone down in value between 6-10% but if I had put my equity of $120K in the market, I would've lost 50%. So real estate in Seattle is still a good deal. I think it all depends on where and how you buy. First, location, location, location. Second, stellar schools will always sell. Third, commuting distance to MS and downtown via I-90 and not 520. Fourth, always good to be on the low end of home prices in your neighborhood. We found a great deal on an 80's home on a big lot that had been beautifully updated. We have 3 houses on our street for sale. All have had offers around asking price...the problem is they are all contingent on the buyers selling a home elsewhere. Herein lies the problem. I don't think I am being smug at all...but generally anytime you own real estate in a major city that is bordered by water on one side and mtns on another, you are gonna do okay. That compared to my previous home in TX where the new subdivisions just go and go and go on forever. My 2 cents.

[texastrigirl]

Several major news sources also have Seattle as the #1 city rebounding in real estate. Commercial real estate is still doing well and residential usually follows behind that. According to these sources, Seattle didn't see the major bump up of the big CA cities, so it will not see the big bump down either. Although foreclosures are on the rise here...so that could factor in.

[texastrigirl]

Also, is it valid to compare Kitsap and King counties in terms of real estate?? We live on the Eastside and although we gave Bainbridge a look because of the quality of schools, the Eastside won out due to commutable distance to many Seattle area companies. I think we felt Bainbridge would work to commute to downtown but not up to MS if someday that became a need. I think many people consider that same thing.

[Tony1790]

Originally Posted by texastrigirl

Also, is it valid to compare Kitsap and King counties in terms of real estate?? We live on the Eastside and although we gave Bainbridge a look because of the quality of schools, the Eastside won out due to commutable distance to many Seattle area companies. I think we felt Bainbridge would work to commute to downtown but not up to MS if someday that became a need. I think many people consider that same thing.

Yep, there is at least $100,000 penalty (benefit?) for living in Kitsap vs King, the commute is horrible, but then again the commute to Seattle from Redmond is horrible as well. I liked Kitsap due to the military bases, cheaper housing and employers usually pay for the ferry, so it was worth it to me. If I worked at MS, it'd make more sense to live closer in.

To your being happy about losing 6-10% (and counting) vs 50% in the stock market, you could have put the cash in CD's, etc had guaranteed rate of return for a while and gotten a 80/20 on the house and if prices fell too far, it's the banks problem. Or just miss a couple of payments and the banks via the govt will do a rework on your terms and you'd have saved money there. With 0% risk! That was the beauty of the 80/20, if prices went up, you get the cash tax free, if they went down, the bank would eat the loss (potentially) Is it making sense why home prices went up as fast as they did in 2006-2007?

And what rebound are you talking about, looks like the Case-shiller price index has Seattle down 10.1% since July 2007 peak. Seattle has been lagging behind both on the upswing and now on the downdraft. And if you don't think that the Seattle economy can tank big time, you haven't been around long enough, remember the last one out of Seattle turn out the light billboards from years ago? In 18 months it went from Seattle will keep rising, to worst case is a flat market, now it's down 10% but hey that's it right. The fact that the nation is in the opening round of an unprecedented (recently that is) severe recession, will have absolutely no effect on Seattle's economy? What company will continue to buy ships/aircraft/software if they are struggling to survive? Not many, and that will have an impact on the Seattle market.

I'm not saying that the Seattle isn't a nice place, it is generally, but it isn't "special" in that it's somehow isolated from reality. And the plain fact that prices need to come down in that overinflated market, when you can go to San Diego and buy a home for the same or sometimes less money than Seattle, show how out of whack the valuations are, Sandog is a much better diversified place than Seattle with better weather!

Anyway, losing money on a home sucks, not facing reality is oh I dunno, silly?

Tony

[texastrigirl]

Not sure what your deal is or your point is Tony?? You seem to have a pretty big ax to grind with random people you will never meet and you seem pretty smug that your opinion is the only one and that you are 100% right. Don't know why it really matters to you what people do/don't do with their money. But I will engage you. Some of your logic is a bit interesting...such as the letting the bank deal with the problems of prices falling...missing a few payments and letting the government figure it out? I value my great credit rating and try to be as ethical as possible so no thanks on those recommendations. I try to live within my means so hopefully we'll be okay even if things get worse. As far as the news sources - Money Magazine and CNN. Not perfect sources by any means but I'd rather have Seattle on the list of rebounding real estate markets and at #1 than not at all...because if anything perception is reality and if the news is saying it's rebounding, there is some perception it's happening. I don't think anyone here on this board thinks Seattle is immune to anything else the rest of the country is feeling but it's still faring better than most places. We came from Austin, TX which is also still faring relatively well but isn't immune either. So pretty simple, if Seattle real estate is too risky for you, then don't buy. Gotta play to win and be prepared to hold if needed.

[Tony1790]

Originally Posted by texastrigirl

Not sure what your deal is or your point is Tony?? You seem to have a pretty big ax to grind with random people you will never meet and you seem pretty smug that your opinion is the only one and that you are 100% right. Don't know why it really matters to you what people do/don't do with their money. But I will engage you. Some of your logic is a bit interesting...such as the letting the bank deal with the problems of prices falling...missing a few payments and letting the government figure it out? I value my great credit rating and try to be as ethical as possible so no thanks on those recommendations. I try to live within my means so hopefully we'll be okay even if things get worse.

You are correct, it doesn't really matter what you, I or any person really does with their money, and the reason that I responded to your post is that you responded to mine, with your own axe to grind...that is to somehow justify that you didn't really make a bad investment or that Seattle isn't tanking or at least won't tank further. That's all, I don't/won't know you and it doesn't matter what I say. Like I said earlier, this is a post from 18 months ago and the attitudes of home buyers hasn't changed, ya gotta be in the game to win

But on a philosophical note, the willingness of one group of people to take on any amount of debt for a certain investment class drives up the cost for everyone else, and I do mean everyone, renters and buyers alike. Homes are not supposed to be investments, unless they are positively cash flowing, which they stopped being able to do a few years ago.....but I digress. How everyone in America is paying for CA/WA/FL folly is that these banks that are getting the Trillions in debt backed by the Govt (taxpayer) are going to cost us our money, our economy and perhaps more in the on going economic collapse. And this debt bubble, was fueled in large part by housing, debt minded people that have to be in the game to win, at any cost/price. So as a taxpayer and an American....I guess that's my axe to grind. Personally I own a small modest home on 34 acres and have no debt other than to the govt.

So I say to you, do not be bothered by my ramblings about housing being a dumb debt right now or blowing tons of money and need to justify it, and as you said you have no plans on missing 2 or 3 payments to get a deal from the govt to reduce your debt or better the terms, but I say the govt is making it tempting to do just that and many of your brethren will do just that and be better off financially for it. It's unethical, but so is talking people into Adj Rate Mortgages at the top of the bubble and wanting the taxpayer to bail out the banks when the people default.

Take care

Tony
(turning off the axe grinder for the night )

p.s. I am smiling while typing this, I was reading earlier that the Fed announced close to a Trillion dollars for a new program for consumers to borrow more money.....jeesh with friends like that, who needs to work, to the Fed I say charge.......it!!!!

[texastrigirl]

So I DO agree with you philosophically on a few things...you're not all bad!