Couldn't help but notice a nice shape starting to form in Altos Research's median price chart.
I think the end of fall is quite optimistic. Seattle has not felt the effects of layoffs from WaMu, Boeing, Weyerhauser, and Microsoft to name a few. Seattle tends to lag in the real estate market compared to other markets in the U.S., so only time will tell. If I had to predict the bottom for Seattle, I'd say 2010 Q4.
Posted by: John | Apr 13, 2009 9:56:48 AM
I predict the bottom will be end of 2012. Seattle's problems with traffic, dying companies like Microsoft and WAMU, and unsupportive state government will cause prices to come down an additional 50-70% before hitting bottom for Seattle at the end of 2012 and even after that, there will be no improvement, just lack of losses. My advice is to buy precious metals and short the US equity markets.
Posted by: Albert | Apr 13, 2009 1:44:57 PM
Da' bulls:
@Albert
Seriously? C'mon dude, get a grip. It's a recession, it's not Armageddon. Have fun in your bunker with your canned food.
Posted by: Harry | Apr 13, 2009 8:58:00 PM
My intuition says bottom at end of the Fall and slow, gradual, not too exciting "normal" growth over the next few years.
Posted by: Wendy Leung
I think that median price is a poor indicator of price activity. If cheaper units are selling then the median price can drop down even if prices are steady. It can also go up when a few expensive units sell in a particular month.
The case-schiller numbers don’t show any sign of this hump that you have. That tells me that price bottom is still a ways away. Seattle is still lagging 18 months behind the rest of the country.
I was just going to point the same thing as Ben. The following paints a very different picture:
http://blog.redfin.com/seattle/2009/05/case-shiller_no_spring_bounce_in_seattle_yet.html
@George
That Case-Schiller chart is missing April and May data which is when the Altos chart starts to try and find a bottom. Therefore, I don’t think there’s any inconsistency in what the three of you are saying.
The old (CS) data shows prices dropping and the latest data (Altos) shows them not dropping. Now, if the next CS report doesn’t show a bottom, then you might be on to something.
Caser,
Good call! Thanks for pointing it out. I went by the publishing date and missed the point it’s 2 months behind. My bad. Hope the CS confirms it.
The chart needs to show multiple years, because their is a seasonality to the fluctuation in median prices, which tend to rise in the summer and fall in the winter. That aside, King county prices (all units) have corrected about 60% of what it needs to for prices to be back in line with historic, long-term averages in terms of price/rent and price/HH income. Most bubbles overshoot the mean, though, so I expect prices in aggregate across the county to decline another 15-20% on top of the 20% they have already decreased. In terms of condos specifically, tougher to say, but rents are dropping precipitously (15% off on new/renewing leases for good, close-in products), so the rent-price gap is still wide. For those seeking multi-family housing who don’t have a ton of equity to bury into a condo, renting is still looking very attractive relative to owning at this point.
I don’t really see how we can recover until we deal the $104 trillion in unfunded obligations we have for Social Security & Medicare.
http://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.html
But I guess we can all hope for some new bubble “fraud” to keep the ball rolling.
C’mon! Are you kidding? A single report from a source that is not considered a top authority in the market does not reflect “the bottom.” Let’s stop searching for reasons the bottom is here or is coming soon, but rather use information compiled from INDEPENDENT sources (not realtors) to command a decision each month. Please, for the love of God and all that is holy, stop trying to sell the market that we’re at the bottom. We’ve been hearing that B.S. for months now. I can pull from a different source every day of the week that will depict on some level that we’ve hit bottom. I could have pulled this for the past year if I wanted to do it, but I didn’t. Know why? Because I’m using my head and going to independent sources, not listening to B.S. reports compiled by realtors and those who’s lively hoods depend on higher prices.
Hi MD. You know I love your participation in these conversations but I have to strongly disagree. No one is suggesting Altos is a “top authority.” To be clear, Altos is a data research firm, not a realty or realtor. Furthermore, when pending sales have been going up for the last three months and prices are holding fairly steady, I don’t think it’s fair to make accusations about anyone who suggests we might have hit bottom.
You might be right but you might not be so I’d suggest we focus on the data, actively share different perspectives, but also acknowledge that predicting the market is as much an art as a science. Ultimately, it’s impossible for anyone to know where the market will go with absolute confidence (bulls *and* bears included).
The Seattle condo market is nowhere near the bottom. We are at a brief pause before the next leg down late this year. Besides Amazon, most Seattle companies are dying. Commercial RE is collapsing and that is going to accelerate. Dont believe me.. just drive down any main street in Eastlake, Bellevue, Seattle, Ballard, etc and look at all the ‘for lease’ signs. If you own a condo and can get near break-even price for it… GET THE F OUT!! Be happy the agents have found an idiot who will pay you near what you paid for it. It is going to get a LOT worse. One final point is that there is no pay increase for any employee at Microsoft this year and another round of layoffs is rumored
There is no way we are bottoming withe amount or inventory, finished lots and Commercial Space availble. The continued downward spiral of deflation will continue. Cheaper prices for the middle class is a good thing but if you bought after 04 you probably have a mortgage you cannot afford. Houses are 4 walls and a roof. They are shelter and sometimes an ok investment over the longterm.