Is the housing market slowing down (Seattle, Tacoma: renters, home builder, neighborhoods)

[noah]

It may have been sudden but it shouldn't be a total surprise that prices are falling, when they rise as quickly as they did, particularly led by cash offers and multi bid up situations that continually set a new appraisal floor for the next sale to be valued you can predict that they will go down. And in many markets they are down from the spring peak, even if still up for the year at this point. An example is the Genesee neighborhood of West Seattle which Redfin data shows peaked at $800k medium this spring and is now at $681k. I imagine a lot of neighborhoods are also down 10%+ since the peak, not insignificant.

Realtors can say it depends on the area and of course it does, but it's a marked changed from April no matter how you look at it. That bench of buyers disappeared in a hurry..

The affordability issue is real and clearly causing issues. From the Seattle Times:

Still, it’s not like buyers are suddenly cashing in: Due to rising interest rates, someone who bought a $700,000 house a year ago is paying the same monthly mortgage bill as someone who pays $640,000 for a house today.

The slowdown in the market, now six months in the making, continued in September when the number of single-family homes on the market in King County jumped 68 percent from a year prior, the biggest increase on record dating back to 2000, according to new data. Only San Jose saw the number of homes for sale jump faster than Seattle among major U.S. metro areas last month.

Do we really think a 68% increase in active listings caused by lack of sales (new listings are close to flat) will really lead to no change in prices. If you subscribe to the belief that low inventory and multi bids led to the large increases in recent years it is hard not to see the opposite happening when you have more inventory and less buyers...IMO

[Ira500]

Originally Posted by noah

It may have been sudden but it shouldn't be a total surprise that prices are falling, when they rise as quickly as they did, particularly led by cash offers and multi bid up situations that continually set a new appraisal floor for the next sale to be valued you can predict that they will go down. And in many markets they are down from the spring peak, even if still up for the year at this point. An example is the Genesee neighborhood of West Seattle which Redfin data shows peaked at $800k medium this spring and is now at $681k. I imagine a lot of neighborhoods are also down 10%+ since the peak, not insignificant.

Realtors can say it depends on the area and of course it does, but it's a marked changed from April no matter how you look at it. That bench of buyers disappeared in a hurry..

The affordability issue is real and clearly causing issues. From the Seattle Times:

Still, it’s not like buyers are suddenly cashing in: Due to rising interest rates, someone who bought a $700,000 house a year ago is paying the same monthly mortgage bill as someone who pays $640,000 for a house today.

The slowdown in the market, now six months in the making, continued in September when the number of single-family homes on the market in King County jumped 68 percent from a year prior, the biggest increase on record dating back to 2000, according to new data. Only San Jose saw the number of homes for sale jump faster than Seattle among major U.S. metro areas last month.

Do we really think a 68% increase in active listings caused by lack of sales (new listings are close to flat) will really lead to no change in prices. If you subscribe to the belief that low inventory and multi bids led to the large increases in recent years it is hard not to see the opposite happening when you have more inventory and less buyers...IMO

Asking a Realtor what they think will happen to the market is like going into a barbershop and asking the barber if they think you need a haircut. Let's also not forgot that there were an enormous number of real estate agents who had to either short sell their own homes, or got foreclosed on.

[flyingsaucermom]

My question is: Where are all these people selling their homes going? I assume some (many?) properties weren't owner-occupied (like the one I just bought), but I know many to have had been owner-occupied.

[homesinseattle]

Originally Posted by flyingsaucermom

My question is: Where are all these people selling their homes going? I assume some (many?) properties weren't owner-occupied (like the one I just bought), but I know many to have had been owner-occupied.

Hi saucer mom,

Some recent experiences (in my world) where sellers are going:

-NYC
-SFO
-Arizona
-Snohomish County (x2)
-Florida
-Bali
-from Seattle to the Eastside
-from the Eastside to Seattle
-Divorce, staying in town
-North Carolina
-Olympia
-Boise
-Mexico
-Charleston, SC
-Portugal
-Langley/Whidbey Island
-Bellingham
-Yakima
-across town-Wallingford to Montlake
-San Diego
-Portland, OR

[pnwguy2]

Originally Posted by homesinseattle

Hi saucer mom,

Some recent experiences (in my world) where sellers are going:

-NYC
-SFO
-Arizona
-Snohomish County (x2)
-Florida
-Bali
-from Seattle to the Eastside
-from the Eastside to Seattle
-Divorce, staying in town
-North Carolina
-Olympia
-Boise
-Mexico
-Charleston, SC
-Portugal
-Langley/Whidbey Island
-Bellingham
-Yakima
-across town-Wallingford to Montlake
-San Diego
-Portland, OR

I'm sure your recent experiences are anectdotal, and that is fine, but here in Tri-Cities we have been seeing a huge influx from the Seattle/Tacoma metro for several years now. By contrast the growth rate of Yakima is only about 20% of Tri-Cities.

2010-2017 MSA growth:

Yakima 2.86%
Tri-Cities 14.59%

[homesinseattle]

Originally Posted by pnwguy2

I'm sure your recent experiences are anectdotal, and that is fine, but here in Tri-Cities we have been seeing a huge influx from the Seattle/Tacoma metro for several years now. By contrast the growth rate of Yakima is only about 20% of Tri-Cities.

2010-2017 MSA growth:

Yakima 2.86%
Tri-Cities 14.59%

Absolutely pnw, many Seattle people relocate over the mountains, especially as they get a little older. Some are from there originally and heading home to a more affordable place to live out their golden years. Tri-Cities has a lot to offer.

[Sockeye66]

Originally Posted by homesinseattle

Hi saucer mom,

Some recent experiences (in my world) where sellers are going:

-NYC
-SFO
-Arizona
-Snohomish County (x2)
-Florida
-Bali
-from Seattle to the Eastside
-from the Eastside to Seattle
-Divorce, staying in town
-North Carolina
-Olympia
-Boise
-Mexico
-Charleston, SC
-Portugal
-Langley/Whidbey Island
-Bellingham
-Yakima
-across town-Wallingford to Montlake
-San Diego
-Portland, OR

Arizona? Crazy talk!
Lower cost of living and less crowding does have some pull.

[mhays25]

The region's population seems to be booming still. Maybe it's slowing down a bit. And/or maybe the other elasticizing aspects of housing demand are in play...more roommates, 20-somethings and elderly living with family more often, fewer vacation homes, fewer offshore buyers than there were, and so on.

I wish we had closer to real-time numbers on population. Census estimates are ancient history the moment they come out...we still only have the 7/1/17 county/city/state/metro estimates that came out in 2018. The State OMB attempts to estimate the current year but even that still looks at the past.

[myname_isborat]

Originally Posted by mhays25

The region's population seems to be booming still. Maybe it's slowing down a bit. And/or maybe the other elasticizing aspects of housing demand are in play...more roommates, 20-somethings and elderly living with family more often, fewer vacation homes, fewer offshore buyers than there were, and so on.

I wish we had closer to real-time numbers on population. Census estimates are ancient history the moment they come out...we still only have the 7/1/17 county/city/state/metro estimates that came out in 2018. The State OMB attempts to estimate the current year but even that still looks at the past.

Couldn't all the new apartments absorb the new residents? The issue now besides the actual sale price is interest rates are jumping. People are used to historically low rates and we are heading for rates that are probably going to be double if not higher shortly. I read rates are already at 5% as of yesterday. The Fed said they are no where near neutral less than a week ago. Can people afford to sell their current home and afford these higher new mortgage payments is the unknown. Seattle real estate used to be fairly priced but is it now? I say no way.

[noah]

FlyingSaucerMom - Keep in mind the actual increase in new listings is only around 7%, the record increase in standing inventory is due to existing inventory not selling more than it is an net increase in new listings.

Another words, the buyers stopped buying.