Seattle Washington Real Estate

Home buyers in the Seattle WA real estate market anxiety

There is an old investment adage that probably relates to the Seattle Washington real estate market “When there is blood in the street it is time to be a buyer“.

Well, it certainly feels like there is plenty of blood in the street, doesn’t it?  Then of course there is the God awful mortgage crisis as well.  There would appear to be a lot of reasons to hold your breath and see what happens next.  But remember, there is blood in the streets and you should take advantage of this opportunity to be a home buyer in South Seattle WA real estate.  Personally I don’t believe that home prices are going to be falling much more. Sure home prices will go down over the next year or so, but the real question is “How much?” and “What impact will that drop have on me if I buy?".  “How much will I lose if I buy to soon?”

Let’s start with an understanding and add a shameless plug.  I am a real estate agent in the South Seattle WA real estate markets.  I am very familiar with the real estate markets Rainier Beach, Lakeridge, Rainier Valley WA, Renton WA, Kent WA, Des Moines WA, Burien WA, Tukwila WA, West Seattle WA, Kent WA and any place, reasonably, in between.

As a real estate agent of course I want to list and sell homes.  That’s how i make my living.  Love helping people into their new Seattle homes.  Don’t much care to hurt people.  Wouldn’t want to encourage people into stepping into something that sticks on to the bottom of their shoes and can’t be shook off.  Life is simply to short to not give a damn for your fellow travelers.

That being said I have participated in the ups an downs of over 30 years of real estate in the Seattle WA markets and can attest to the fact that values have only gone up.  I bought my home in 1975 for $53,000 and today it is valued at over $500,000.  How much would I have paid to have an asset values so high?  Would I have paid $100,000?  $200,000, $400,000?  Well yes I would have!  Anything below it’s current value would be great.  Not it’s current value the day after I bought it, but I have lived here for 36 years.

If you are thinking of buying a home in the Seattle area are you truly only thinking of buying and looking at your homes value next year?  Or the year after that?  How many years of living in your dream home are you missing out on, waiting to see what happens to the Seattle, Renton, Kent WA home markets to start rising again.

It would be great if the day after you bought the largest investment in your life property values skyrocketed!  Wouldn’t that be fun.  Well, it ain’t gonna happen.  Forget the fact that you have never been so lucky, never won the lottery and probably won’t.  Neither have I.  But I did buy my home many years ago and watch steady appreciation make my investment for me.  Time heals all wounds.

What is happening to Seattle WA home prices?  Really?

Well, let’s look at answering a few questions posited earlier.  How much downturn should we expect?  According to any number of accounts, and they all seem to vary, prices are dropping. According to May figures released by the Northwest Multiple Listing Service (NWMLS), as reported by The Seattle Times article “Chillly May for Puget Sound-area real estate” prices keep sliding prices dropped a whopping 6.2% from May 2007.  Now that’s a bunch in anybodies book!  But the real question you should be asking, being a home buyer, is what is behind these numbers?  Is this true?

So I looked at the MLS data, actually the April data  is what I was working on when I got the idea for this article.  The idea is the same.  The April drop, year over year, was 5.3%.  Now let’s jump into the numbers. These numbers are based on the Median home sale price in King County WA:

• The Median home sale price was $449,950 a drop of 5.3% year over year

What does this tell you about the King County WA housing market?

And there you have it!  Those are the numbers, but what do they tell us?  Looked at in greater detail they look like this:

• The Median home sale price was $449,950 a drop of 5.3% year over year
• The Median home sale price for homes valued over $417,000 was $575,000 a drop of 3.4%
  
• The Median home sale price for homes valued less than $417,000 was $336,500 a drop of 1.6%

I broke these numbers out based upon the mortgage industry requirements of anything requiring a mortgage of over $417,000 had a bear of a time getting financed over much of the past year.  And the numbers being quoted all over the press deal with an overall median, which provides a decline in value of 5.3%!  Lies, Damned Lies and Statistics- Benjamin Disraeli.

What does this drop in King County home values mean to you?

Simply put, it means that if you have a home valued at greater than a  $417,000 mortgage (after down payment) you had a very bad year and skewed the data reported by the media.  Your home sales statistics were weighted unfiarly into the overall King County WA home value decline stats!  The mortgage crisis detrimentally affected your ability to sell your home. 

By the way SELLERS, I have access to a mortgage program with a 5-7 year interest rate around 5.625% for mortgages up to $800,000!  That is a spectacular rate!  One of our better mortgage lenders has an interest rate of 9.38% for that same mortgage PLUS $24,000 in price adjustments!  If you want a JUMBO Mortgage Refinance or need a Purchase Mortgage you should give me a call for the details.

The good news goes to the home buyers who can make a difference!

First time home buyers and move up buyers who would buy a home for less than $417,000, what are you waiting for!  Home values in your price range dropped a whopping 1.6%!  That’s a number that is almost in the margin of error!

This group of home buyers is needed in order to get the mood of our home buying economy off of it’s proverbial knees.  You are the ones who provide sellers the ability to be able to move up to their next home.  Without you the morket is stalled.  And think of it, you have been put on hold for the cost of 1/2 of a cup of Starbucks coffee, per day.

Hold it! Here is a topic for a near future blog “But for 1/2 of a cup of Starbucks Coffee, per day, I didn’t buy a home last year“. That’s right you didn’t buy a home, didn’t make a decision, didn’t get your kid into the school district you wanted and don’t get the opportunity to own your home!  All for 1/2 cup of coffee!

How much will I lose if I buy to soon?

The average holding period for Seattle WA homeowners is 7-8 years, did you know that?  As the chart above demonstrates, there is a long term appreciation rate for real estate. 

By the way, I know that there is a graph in this blog.  Wonder what it means?  And yes, the rate of appreciation is too high for this market.  But the point is…….  Look for the discussion of this topic in an upcoming blog……

Thanks for your time and SUBSCRIBE to my blog!

Contact me for your real estate, Buying or Selling needs for Seattle Washington or any other community I serve, by calling me, Dick Todhunter at 206-786-9244 or email me at dick@thesoundteam.com

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