When the “paper of record” says so, it must be true: “Seattle is down about 31 percent from its mid-2007 peak and . . . still has as much as 10 percent to fall.” The article also calls out the Seattle Times for its rank boosterism– er, I mean inaccurate news reporting, back in September of 2006. And rightfully so (the true beauty of the internet — the public record is exceptionally accessible): According to the Seattle Times in 2006 based on its own analysis, “If history is any indication, King County may escape [the housing bust].” Local economists Matthew Gardner (Matt, was that really the best head shot you had on hand?) and Dirk Conway chimed in as well in favor of the “no declines here!” position. Ah, 2006, when there was no shortage of optimism…. (more…)
February 14th, 2011 by Marc
February 4th, 2011 by Marc
First and foremost, I gotta give a big “shout out” to my friend and fellow Rain City Guide contributor, Ardell DellaLoggia, who actually made this very point in response to a prior post of mine. And instead of thanking her, I gave her a hard time. Sometimes bloggers can be real jerks…
On January 21, the Seattle Times published an article with this headline:
Back to 2005 for King County Real Estate Prices
The article noted that, year over year, the 2010 King County median home value ($375k) had slipped nearly all the way back to the 2005 median price ($374k). OK, sounds significant. (more…)
January 31st, 2011 by Marc
There was a very interesting piece in Sunday’s Seattle Times regarding “strategic defaults” (intentional abandonment of the debt, and eventually of the property, by the debtor/owner). The article was authored by Brent White, a law professor. I agree with the opinons of Mr. White: Any decision regarding such a default should be based only on the legal consequences of the action. (more…)
October 26th, 2010 by Marc
Post authored by Craig Blackmon, with assistance from Robyn Armani, our assistant/bookkeeper/paralegal/office manager!
Well, and maybe down the street too. And on the far side of the river. But its coming!! And perhaps sooner here than elsewhere…
According to a forecast compiled for Businessweek.com by Fiserv and Moody’s Economy.com, U.S. home prices will be 7.2 percent above 2010 levels by 2014, with the strongest growth right here in the Pacific Northwest. Of 384 places surveyed, the Bremerton-Silverdale area had the highest four-year growth forecast, with prices expected to increase 44.7 percent from 2010 to 2014. Meanwhile, Tacoma prices are predicted to appreciate 33.1% over the same period, while Seattle should see growth of 25.5%. (more…)
October 7th, 2010 by Marc Holmes
BofA is one of the largest mortgage lenders in the United States today and, until not too long ago, one of the most prestigious as well. It used to be that a pre-approval from BofA meant a lot because of their relatively high credit standards (admittedly, the bar set by the mortgage industry was extremely low). I’ve had many clients use BofA over the years and seldom had any problems. That all changed in August as we were preparing to close a client’s purchase of a FSBO house in Seattle.
The first foreshadowing of the problems to come was BofA’s discovery that an FHA rule required postponing the closing date. Turns out the seller hadn’t held title long enough (90 days) due to a transfer out of her LLC into her personal name. Ok, that’s not BofA’s fault or our client’s fault so no big deal. BofA assured us that they had everything they’d need and they’d close this puppy lickety-split so all we had to do is wait out the rest of the 90 days.
So, we extended the closing date, jumped through a hoop or two, and waited for the FHA-required time period to pass. Unfortunately, lickety-split turned into a whole month of foot dragging and excuses for why the deal wasn’t closing. Repeatedly we were told that “we’re in underwriting” but now they need this, that or the other thing. Or they’re waiting for a response from somebody about something. Or something got lost or misplaced. Or forgotten. Or they need something they didn’t anticipate. Then they need a new appraisal. It was non-stop. I was told “I’ve got a call into so and so but haven’t heard back” or “I sent so and so an email and am waiting for a reply” so many times it was ridiculous. Apparently, returning internal calls or emails is optional at BofA. It got so bad, the apologies so numerous, and the incompetence so great that we were kicking ourselves for not going to a new lender. And BofA wasn’t denying it. They ended up comping our client several nights in a hotel and a birthday dinner at one of the most expensive restaurants in town.
Now I’ll be the first to concede that hiccups and delays before closing are common and practically par for the course these days. But they seldom merit starting over with a new lender only days before closing. In this case everyone at BofA assured us that the file was fine and they just needed a little more time. So we hung tight. In hind sight it might have been worth the effort to look elsewhere.
Our client really wanted the home and was understandably concerned that the seller would back out. The concern was valid because the seller could have reasonably decided to walk away. Fortunately, the contract we drafted protected our client’s earnest money so the seller had a big disincentive to bailing out. Our client’s desire for the home also made sense because it’s a great house and he was getting a great price: two separate appraisers both appraised it for more than the agreed upon sales price. That’s pretty impressive in this day and age when appraisals come in low much more often than high.
Fortunately, we had a very understanding seller and an open line of communication gave her some idea of why we were being delayed. Ultimately, BofA got their act together and the deal closed but the process taught us a real lesson about how far BofA has fallen.
It’s clear that BofA didn’t use the billions of dollars in bailout money it received to hire enough staff or to train and motivate their staff to do quality work.
Well, we’ve learned our lesson and we’ll politely decline the next time somebody asks us to do the Dance of Death with Bank of America.
August 24th, 2010 by Marc
Per a recent article in the New York Times, popular wisdom may now be off the mark in thinking that housing is a “good investment.” Most people have believed for their entire lives that buying a house made good financial sense. You need a place to live anyway, you get a tax break on the interest, and most importantly houses appreciate in value over the long term, like stocks (but unlike virtually every other “consumer” good, which of course depreciates in value).
But apparently there is a new reality: Given the hangover from the housing bubble, evidence now suggests that housing prices will not significantly appreciate for a very long time, particularly in those areas that were most susceptible to the bubble.
Why is this important? Well, many buyers of real estate do so for the investment. If housing is no longer considered to be a good investment, then many of those potential buyers will seek to invest their money elsewhere. And fewer buyers will translate into continuing downward pressure on buyers. Which in turn will make housing a less profitable investment. In other words, this cycle will feed on itself, depressing home values further in the process.
June 10th, 2010 by Marc
Down. At least per the “really smart” people at Goldman Sachs. I use quotes because I imagine these same people were singing an entirely different tune two or three years ago — while shorting the market at the same time! So its not like they’ve got a lot of crediblity these days. That said, the Seattle market has historically trailed the larger national market. Since the larger market appears to have bottomed out, it makes some sense that Seattle would continue to decline for some period. Time will tell…
April 20th, 2010 by Marc
and to heck with the neighbors! That’s the gist of a new case decided by the court of appeals here in WA. It is an unpublished decision and therefore has no legal authority (i.e., this decision will not apply to anyone else) but is still an interesting read.
Home-owning smokers smoked on their back deck, and the smoke blew into the neighbor’s house. Neighbor sued seeking first and foremost an injunction prohibiting smoking in any area that would cause second hand smoke to drift into his house. Court ruled in favor of the smokers and found no legal claim for second hand smoke emitting from a private residence.
Who says there is no justice in this world? Now excuse me, I’ve got to step outside onto my deck for my afternoon smoke break…
March 25th, 2010 by Marc
Here’s one of our recent listing success stories. This seller saved more than six grand ($6,000!) on the listing agent fee. The house sold in less than two months. The system works!
On a related note, I authored an interesting post on Rain City Guide about this picture. Specifically, what does the “Sold by…” sign indicate? I soft sell my point in the post, but here I’ll give my full two cents: It tells other brokers and agents that the buyer’s agent (Mr. Houston) will work cooperatively to get a deal closed.
This must be the purpose of the “Sold by” sign. It simply cannot be designed to promote Mr. Houston as a competent buyer’s agent, because most buyers don’t understand the role played by Mr. Houston based on these signs. The only people who completely understand the message are other brokers and agents. Therefore they must be the audience, and this is the only message to that audience that makes sense.
In the not-too-distant future, WaLaw should have its own “Sold by” sign — except it won’t say, “Sold by.” Rather, it will say something like “Buyer assisted by” or “Buyer’s interests protected by” (obviously we need to refine the message) because that is what WaLaw does. When representing a buyer, we don’t “sell” anything.
February 5th, 2010 by Marc
Turn and face the strain. Changing the real estate industry is not easy – a strain indeed. Thankfully there are many people out there who are putting their shoulder into this heavy work. One of the leaders of that effort has been and continues to be Glenn Kelman, CEO of Redfin, a longtime mover and shaker in the “Reform RE” movement. His recent post on the Redfin blog does a great job of identifying those changes that will improve the industry by putting the focus on the consumer.
And just for the record, no, we did not have ANYTHING to do with this post — even if No. 1 on the list is EXACTLY what we’re doing here at WaLaw. We don’t charge a commission, and our fee is not paid by the seller. Rather, we charge a flat fee paid to us directly by the client. When our client is a buyer, we rebate the entire commission back to the client. In other words, there is no conflict of interest whatsoever between us and our client in regards to our compensation.
Keep up the great work, Glenn!