Seattle Sweet Digs

January 5, 2008

An Inconvenient Truth

An inconvenient truthWe’re not talking about the global warming here, we’re talking about the local Puget Sound housing market.

Throughout the latter half of 2007, as TV pundits spoke endlessly about the deteriorating housing markets, those of us in Seattle watched confidently, knowing that our market was still one of the best in the nation, squeaking by with market growth that at least equaled the yearly inflation rate.   

The question now is whether we can continue to have confidence in our economic fortunes over the other states in the union. The Seattle PI recently posed the question, “Is Seattle heading towards a recession?” while the real question might really be, “DOES IT MATTER?” The point is that perhaps it really doesn’t matter what the local economy is like, so long as people do not feel safe. With the stock market down 256 points this last Friday and unemployment hitting a multi-year high, all the pieces are in place for people to start playing things a lot more cautiously about their housing investments.

All this does not bode well for pricing growth in 2008, even in the Puget Sound area.  If you are a homeowner with no intent of moving, you can look on with the morbid curiosity of a spectator at a car wreck, but for those of us with a real need to buy or sell in 2008, the decisions will not be so simple.  As a buyer, are you confident with the underlying value of the home you are looking to purchase? As a seller, do you price low to the market in hopes of standing out from high housing inventory available on the market?

Are you a buyer or are you a seller? Or maybe you are just a homeowner, simply pondering your house equity in 2008. Whatever you are, share with us what you think will happen in 2008, as we dive head in to the new year with the uncertainty of a shaking economy, continued credit crunch, and a Presidential political cycle.

Posted by Katrina Munsell on January 5, 2008 1:27 PM | del.icio.us | Digg

  • Gene
    Thoughtful post. Great to be a buyer in the next year, liveable to be both a buyer and seller, but I'd prefer not to soley be on the selling side.
  • The news media can drive behavior with dire sounding predictions, whether about the real estate market or a presidential campaigner's prospects. Based on such warnings, some people won't buy, or will change their vote to avoid wasting it on a loser.

    As a buyer and a seller in the Seattle market, I've looked at the fundamentals of population and employment here, and I feel fine about both decisions. And, I'm going to vote for whichever candidate has the best platform, not one the newspapers say will or can win.
  • Guest
    Debra, you and Mike have made my day. I'm so tired of the negative drivel the newspapers write, and the fear they create. The bubblites say we have a bubble. I don't like the term 'bubble', it implies sudden and drastic.

    We have a changing market, one becoming more balanced, or even in favor of the buyer. That sounds like a needed change to me!

    Coupled with that, today we have high employment (fact, unemployment is considered at effective-zero in King County), very low interest rates, and a decent supply of houses for buyers to choose from. The suburbs have more selection than the close-in City neighborhoods, so it is at least a good time to go browsing.

    Buy if you want, rent if you want. Just remember that the sky is not falling.

    Yes, if you are a buyer with credit problems, you need to get them fixed before you buy: but guess what? You did know that already, didn't you?!
  • Hi Katrina,

    Mike could not have said it any better! The fact is the market is either a sellers' market, a buyers' market or it is balanced market. The past few years have been a terrific run for the sellers. Appreciation had been strong and the multiple offers were more the norm.

    Now, it is the buyers' turn. Mike is right on when he says he will benefit from buying right now as he can take his time and pick and choose. As a buyer he will not have to worry about "giving away his first born to buy." He will be able to negotiate the price of the home and the building inspection. What a novel experience!

    I find it interesting when it was such a strong sellers' market, competitive and scary in its own way, the buyers come out to buy, no they stampede to buy! Now that it is a buyers' market, they hold back.

    The bottom line is there will always be some fear with buying and selling a home, regardless of the market. Everyone worries about whether they are making the right decision and everyone worries about the future.

    Mike is right, now it is a more sane time for the buyer.
  • Guest
    HI Katrina, we plan to both buy and sell this year. We've been in our current home for many years, so we've got equity and can price to sell at whatever the market pricing suggests. When we buy, we'll possbily be buying in a lower than last year pricing model, but at the same time, we don't think we'll be in any "bidding war" situation, which will save us both money and stress. This could well be the balanced market that buyers have been hoping for.
    Even as a seller, we hated to watch the last few years - thinking if we sell, then we have to buy. I've been around the block many times, and todays interest rates are great, and I feel comfortable making a move. We'll buy first, even though there is risk in that, but I don't want to move twice, and I won't be a weak 'contingent' buyer.
    I guess we're both forward thinkers, and have been waiting for sanity to resume. Nice to see that the bag boy at Safeway isn't talking about buying a home and flipping it too.
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