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People Are Freaking Out, Want To Sell And Have A Lot Of Equity

A report from KOMO News in Washington. “The scene is bleak outside Josef Weiss’ West Seattle townhouse. Three ‘for sale’ signs line the street, just a block off the water – Weiss’ is one of them. Weiss’ home of six years has been on the market 67 days, something almost unheard of in Seattle just months ago.”

“‘We definitely didn’t think it was going to take this long,’ Weiss told KOMO. ‘We’ve lowered it three times now.'”

“For more than a year the Puget Sound region has been one of the hottest housing markets in the nation– full of bidding wars and skyrocketing prices. It seemed nearly every real estate agent in town had a story about the lengths a buyer would go to.”

“But, according to Windermere Chief Economist Matthew Gardner, there’s been some change. Gardner found home prices are down 4.4% compared to the second quarter of this year.”

“Natalie English, who is working with Weiss to sell his house, said she’s seen Seattle neighborhoods going from having ‘zero inventory to about two to three months’ worth of inventory.’ English said the days are buyers waiving inspections and sellers refusing to repair or stage their homes before listing appear to be over.”

“It’s also the time that people on the verge of selling, are getting their house on the market quickly, she said. ‘We’re not getting into the crazy bidding wars any more, buyers are having time to do their due diligence,’ English said.”

“Weiss, who is hoping to move to Minnesota, said his girlfriend is getting nervous about the changing housing market. ‘I just think people are freaking out, want to sell their home and have a lot of equity,’ Weiss said.”

The Seattle Times. “For the first time in four years, the average house sells for a bit below the listing price in Seattle and across the surrounding metro area, another sign that a hectic market has finally calmed down for burned-out buyers.”

“In most of the country, it’s normal, and even expected, for buyers to negotiate the list price down. But this is Seattle, a place where the asking price had become merely a starting point destined to be bid up.”

“As recently as May – a time now seen, in hindsight, as perhaps the peak of the market – homes in Seattle were selling on average for 6.3 percent above the list price, according to Redfin. Now, they’re going for 0.6 percent below asking.”

“The actual list price of homes is dropping at a similar rate. In all, sales prices have dropped nearly 7 percent, or $55,000, in Seattle since the spring. In fact, just in the past month, Seattle-area home prices dropped more than anywhere else in the country, according to the new Case-Shiller home price index. The index showed the region’s largest monthly drop in home prices since the late stages of the housing bust.”

This Post Has 33 Comments
  1. ‘on the market 67 days, something almost unheard of in Seattle just months ago…’We’ve lowered it three times now’

    I think we can consider the – 6 months inventory = balanced market is rubbish by now.

    ‘English said the days are buyers waiving inspections and sellers refusing to repair or stage their homes before listing appear to be over. It’s also the time that people on the verge of selling, are getting their house on the market quickly, she said. ‘We’re not getting into the crazy bidding wars any more’

    Gosh, I hope no one overpaid in such an environment.

          1. Ok, you’re invited to the BBQ…

            And as for why I’m even here now, I was on Ben’s blog more than a decade ago (forgot the handle I used then) and it helped me realize I needed to take fast measures to get out from under the albatross of house I had in Texas before the ’08 crash.

            A lot of ups and downs since then.

  2. The index showed the region’s largest monthly drop in home prices since the late stages of the housing bust.”

    Oh dear. That looks like a tacit admission that not only is Housing Bubble 2.0 underway, but it’s already on track to vaporize more fake shack valuations than Housing Bubble 1.0.

    ‘Tis sweet to be a serene, popcorn-munching renter in such an environment.

    1. want to sell their home and have a lot of equity

      Yeah, you and Jingle.

      List prices off 7% and sales prices off 7% from that Weiss. Your imagined equity just got hammered, and you have to stage it and undercut your neighbors too. Time is not on your side.

      1. Never understood the whole “staging” thing. You’re not buying the furniture. I much prefer looking at a house empty.

        I know a Realtor who has a storage unit full of staging furniture. She used it for her own flips. She was flipping houses up until last year when she stopped. Seems she may have lucked out this time, having lost everything last bust. These people don’t learn.

  3. For central banks, signs of a mania:

    ‘full of bidding wars and skyrocketing prices…nearly every real estate agent in town had a story about the lengths a buyer would go to…buyers waiving inspections and sellers refusing to repair or stage their homes before listing…a place where the asking price had become merely a starting point destined to be bid up… the crazy bidding wars’

    Seems obvious now, no?

    1. “…nearly every real estate agent in town had a story about the lengths a buyer would go to…buyers waiving inspections and sellers refusing to repair or stage their homes before listing…”

      Seattle is quite possibly the worst place in the country to waive an inspection. Most older houses are moldy rotboxes.

  4. “In fact, just in the past month, Seattle-area home prices dropped more than anywhere else in the country, according to the new Case-Shiller home price index. The index showed the region’s largest monthly drop in home prices since the late stages of the housing bust.”

    This is going to be an epic price collapse. Seattle is fooked.

  5. ‘In most of the country, it’s normal, and even expected, for buyers to negotiate the list price down’

    Eh, not really:

    ‘Remember that too-hot-to-handle housing market in metro Detroit? The one where a nice, well-priced home in Ferndale could get three offers on the table in one day? Well, we’re starting to see listing prices on some homes inch down enough to indicate that we’re settling into a housing slowdown. ‘You’ll probably even get a little bit better of a deal in the spring than you would right now as a buyer’

    ‘More likely than not, experts say, this isn’t a temporary blip but a clear indicator that the days of name-your-price bidding wars are likely to be fading fast…Some of the more pie-in-the-sky asking prices are being trimmed back here’

    http://housingbubble.blog/?p=307

    ‘But this is Seattle…’

    Ah yes, the mythical city/resort town/etc of bubble-land where every behavior of rational man is discarded. They used to say,”Manhattan real estate will always hold it’s value.” Now price slashing there has become so common it borders on gallows humor.

    1. Yep this is Seattle, that is the problem, the depressing climate, moldy houses, pot holes, taxes, liberal to the core, the folks who can’t believe they got hung up in trend buying.
      You are stuck now?

    1. Average square foot of listings is also down 30% dig deeper and price per square foot is only down $3. Not as cataclysmic as you suggest. The bigger point of reference is that listings are up over 90% YOY. So severe price declines on the way. Just not yet.

        1. Sure, but it is a better indicator than just price. If I bought a steak today for $6 compared to last week for $7 it would be foolish to not consider the weight of the respective steaks before concluding that the price has fallen or risen. I should as you point out, also consider the cut. Case Schiller seems to be the best index.

          I also prefer months of inventory as a measure as it captures the balance between supply and demand. What we have now is lessening demand and increasing supply so months of inventory is increasing faster than either of its inputs.

          1. You’ll never get MB to acknowledge things like $/sq ft or lot size. He goes around with fingers in his ears saying “la la la la can’t hear you, selected second item from pull-down menu”

          2. just price

            Price is the bottom line. How much are you willing to pay for a house. Similarly, the bank doesn’t care how much you earn per hour, they want to know how much you earn total.

            Keep in mid that as this bubble grew house size went from 1000 ft2 to 3000. The extra ft2 was vanity.

  6. Time to write a letter to would be buyers Josef. Tell them how much you’d love for them to buy your house. Include pictures of your girlfriend to show them what great people you are!

  7. Never understood the whole “staging” thing. You’re not buying the furniture. I much prefer looking at a house empty. I too prefer an empty house. But it’s hard to buck a popular cherished belief. I wonder if any research shows an advantage to staging over showing a clean empty house.

  8. People Are Freaking Out, Want To Sell And Have A Lot Of Equity

    Well…only one way to find out how much equity they really have.

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