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Old 09-24-2007, 03:02 PM   #41
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Many folks are still desperately trying to find a sucker buyer that will pay what WAS the going rate in early-to-mid-2006.
Same thing up here in the NYC metro area; but nobody's buying and houses are sitting.

I think NYC and DC are holding out (false) hope that they can avoid the (necessary) plunge in housing prices. As you said, hang in there and don't be in any rush to buy, and I think in 6 months or so you'll see a much different picture.
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Old 09-24-2007, 03:09 PM   #42
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Same thing up here in the NYC metro area; but nobody's buying and houses are sitting.

I think NYC and DC are holding out (false) hope that they can avoid the (necessary) plunge in housing prices. As you said, hang in there and don't be in any rush to buy, and I think in 6 months or so you'll see a much different picture.
The housing market in DC will slide, but only until next Spring/Summer. After then, people will simply hold onto their houses until the election in November. Lots of new appointees will be looking for houses in the "right" neighborhoods (and which have good schools). As such, we're probably going to buy sometime between February and May.
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Old 09-24-2007, 04:00 PM   #43
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Is the to-the-winner-go-the-spoils segment of the govt workforce really that large that it drives real estate prices in DC? I didn't think it would be large enough to have such an impact. But you know that area way better than I do.

And won't there be an equally sized group of outgoing appointees as well to cancel out the effects of the incoming politicos on the housing market? Just curious.
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Old 09-25-2007, 08:12 AM   #44
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Is the to-the-winner-go-the-spoils segment of the govt workforce really that large that it drives real estate prices in DC? I didn't think it would be large enough to have such an impact. But you know that area way better than I do.

And won't there be an equally sized group of outgoing appointees as well to cancel out the effects of the incoming politicos on the housing market? Just curious.
To answer your questions:

1. The reason a change in administrations has such a large impact is because many of the political appointees have money and want to live in convenient areas that feature top schools. These areas include: Bethesda, Potomac, Great Falls, McLean, Vienna and Alexandria. Housing in such areas is very expensive and rather tight.

2. Yes, there will be an outgoing group of political appointees, but the issue is not one of number but rather turnover of houses. Most of the appointees in D.C. have been here since the early-2000s (when GWB was elected). They're already leaving in droves, with that number increasing as the election grows closer (this would even be the case if a Republican is elected -- supporters are promised jobs for working on the campaign). That means the existing houses will be sold at prices that are probably double what the current occupants paid for them. This makes it difficult on those of us who aren't political appointees and are hunting for bargains.
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Update on Seatle RE
Old 10-01-2007, 09:45 PM   #45
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Update on Seatle RE

Today I was down in Madrona, a convenient and nice older neighborhood about 2 miles from the center of Downtown Seattle, on Lake Washington. I saw a nice 3 story medium size house overlooking the lake with a For Sale sign and one of those broker boxes by the street. I picked up a flyer and put it in my pocket. When I got home I saw that the original glossy flyer gave the price as $1,350,000, but that it had been stickered over with the new price--$995,000. Compared to what I have seen lately, this is quite a buy.

I have made a kind of a Sunday hobby of going around to open houses, mostly condos and co-ops. Not much traffic, some moderate price reductions, but the brokers talking tough.

I think the gravity defying Seattle market is finally starting to get real- especially for people who really do have to sell. Both of the open houses I attended yesterday were staged with rented furniture; the owners had long since departed for a new house, or new job or whatever. And the prices had been reduced. Still a long way from rental values, but reduced none the less.

Ha
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Old 10-02-2007, 06:39 PM   #46
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Today I was down in Madrona, a convenient and nice older neighborhood about 2 miles from the center of Downtown Seattle, on Lake Washington. I saw a nice 3 story medium size house overlooking the lake with a For Sale sign and one of those broker boxes by the street. I picked up a flyer and put it in my pocket. When I got home I saw that the original glossy flyer gave the price as $1,350,000, but that it had been stickered over with the new price--$995,000. Compared to what I have seen lately, this is quite a buy.

I have made a kind of a Sunday hobby of going around to open houses, mostly condos and co-ops. Not much traffic, some moderate price reductions, but the brokers talking tough.

I think the gravity defying Seattle market is finally starting to get real- especially for people who really do have to sell. Both of the open houses I attended yesterday were staged with rented furniture; the owners had long since departed for a new house, or new job or whatever. And the prices had been reduced. Still a long way from rental values, but reduced none the less.

Ha
Having lived in Seattle when the Seattle Times had the headline "Would the Last Person Leaving Seattle Please Turn Out the Lights," I have been amazed how property values have soared for my siblings while my Houston abode languishes around my purchase price. I have never felt Seattle was full of high income people able to afford million dollar plus homes but they seem to be happening. My $20,000 per year sister is sitting on a $750,00 property and doesn't like my advice of selling and moving out to the far burbs for another chicken sh*t job.
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Old 10-02-2007, 07:50 PM   #47
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My $20,000 per year sister is sitting on a $750,00 property and doesn't like my advice of selling and moving out to the far burbs for another chicken sh*t job.
She must be struggling to pay what is likely $600/month in property taxes.

Ha
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Old 10-02-2007, 08:01 PM   #48
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Today I was down in Madrona, a convenient and nice older neighborhood about 2 miles from the center of Downtown Seattle, on Lake Washington. I saw a nice 3 story medium size house overlooking the lake with a For Sale sign and one of those broker boxes by the street. I picked up a flyer and put it in my pocket. When I got home I saw that the original glossy flyer gave the price as $1,350,000, but that it had been stickered over with the new price--$995,000. Compared to what I have seen lately, this is quite a buy.

I have made a kind of a Sunday hobby of going around to open houses, mostly condos and co-ops. Not much traffic, some moderate price reductions, but the brokers talking tough.

I think the gravity defying Seattle market is finally starting to get real- especially for people who really do have to sell. Both of the open houses I attended yesterday were staged with rented furniture; the owners had long since departed for a new house, or new job or whatever. And the prices had been reduced. Still a long way from rental values, but reduced none the less.

Ha
FWIW, my blah middleclass suburban area has seen some asking price reductions, but nothing dramatic. Meanwhile, I see properties sitting on the market for 6+ months, and the sherrif's sale list every monday is growing longer. Something's gotta give, and I bet it is price. I have my eye on a smallhouse in the hood that has an unrealistic asking price given its condition and the current market. I think that the week I see it first appear on the sherrif's list I will talk a walk through and posibly submit a lowball offer. I think that's what it will take to make the pricing work for an investment property.
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Old 10-02-2007, 08:50 PM   #49
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Having lived in Seattle when the Seattle Times had the I have never felt Seattle was full of high income people able to afford million dollar plus homes but they seem to be happening.
The Seattle area is experiencing job growth. High tech and medical device companies are fueling the growth. Salaries offered by these companies are quite high, I presume.
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Old 10-02-2007, 09:15 PM   #50
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In addition to the new strip malls cropping up, has anyone else noticed a flurry of new bank branch offices sprouting? One area here in NJ (Morristown) has at least 10 brand new bank branches in the last 6 - 12 mos!!! (some are just buying/rehab'ing existing buildings) Aren't people doing more online banking?
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Old 10-02-2007, 09:24 PM   #51
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In addition to the new strip malls cropping up, has anyone else noticed a flurry of new bank branch offices sprouting? One area here in NJ (Morristown) has at least 10 brand new bank branches in the last 6 - 12 mos!!! (some are just buying/rehab'ing existing buildings) Aren't people doing more online banking?
I live in PA outside and Philly and said the same thing to my wife the other day. It seems there are new banks going up everywhere. I wish the bust would hit the strip mall real estate market also. We chose to move a ways outside the city for a reason and every week it seems a new strip mall or subdivision is being announced. Existing house that are for sale have been sitting on the market over a year but new houses seem to be moving.
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Old 10-02-2007, 09:34 PM   #52
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Houses in my neighborhood aren't seeing price reductions--they're not selling, either. I think a LOT of people already took out their overblown equity and now can't/won't lower their price below what they owe if they don't have to sell.
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Old 10-02-2007, 09:41 PM   #53
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Houses in my neighborhood aren't seeing price reductions--they're not selling, either. I think a LOT of people already took out their overblown equity and now can't/won't lower their price below what they owe if they don't have to sell.
EXACTLY. You hit the nail on the head! There's only so low that most sellers can go. So, if the market is such that the house won't sell at that price right now, then there it sits.
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Old 10-02-2007, 10:52 PM   #54
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EXACTLY. You hit the nail on the head! There's only so low that most sellers can go. So, if the market is such that the house won't sell at that price right now, then there it sits.
People sit still only if they do not have to sell. Some may have decided to rent it out and wait for the recovery (good luck to them).
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Old 10-02-2007, 11:46 PM   #55
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Here's the latest Oahu newsletter from George Stott, a realtor who's been in the islands for nearly 40 years and in the business since the mid-1970s: http://stott.com/docs/Q3_2007_Newsletter.pdf

A couple excerpts:
"Total sales on Oahu continue to decline. Comparing January through September, island-wide sales were down 11.7% in 2007 compared to 2006. However, for the month of September, island-wide sales were down a whopping 20.4% comparing 2007 to 2006. The decline in July and August were both under 10%; the step change (increase) in September may merely be an aberrant or it could also be the start of much lower sales rates on Oahu."

"We have a different mix of homes selling today than what sold prior to this past March when subprime lending problems were initially identified. Last year, almost one-half of the sales to first-time buyers nationwide involved 100% financing. With first-time buyers, often there are two working spouses, so a family may have relatively high monthly income but very limited savings available for a down payment. Recently, sales of lower-end homes have been curtailed by far more stringent qualification standards. Many lenders will no longer make 100% loans and now insist upon a down payment of at least 5% or 10% which rules out many first-time buyers. The decline in sales of lower-end homes causes the median sales price to increase from where it would have been if there were a similar number or percentage of lower-end homes selling each month; i.e., the mix of homes selling is different now from what it was when buyers had far greater access to 100% financing."

"Plaguing us today are frequently changing underwriting requirements or rules. In mid-September, I attended a presentation on subprime lending problems along with about 100 other realtors. One of the speakers asked for a show of hands from those attendees that had recently had a transaction fall out of escrow because of changing underwriting criteria after the borrower had seemingly been fully approved for the loan. Almost 100 hands went up including mine... Forecasters are now projecting that the median sales price of American homes nationwide will fall this year for the first time since federal housing agencies began keeping statistics in 1950 thereby contradicting the widely held notion that there is no such thing as a nationwide housing slump... One of the speakers was the Chief Economist for the Bank of Hawaii, Paul Brewbaker, who stated his opinion again that home prices will not increase on Oahu until sometime in the 20-teens; i.e., sometime in 2013 to 2019."

Of course the news isn't all bad:
"On November 9, 2006 all 464 units in Waikiki Trump Tower sold out for more than $700 million in less than eight hours establishing new world records for both total sales dollars and total units selling at a residential development in a single day. Now, several units are back on the market ranging from #1101, a 418 sq. ft. studio unit facing Diamond Head for $639,000, to #3301, a 2 bdrm, 1,406 sq. ft. unit facing the ocean for $3,288,000."

No word on whether longboards will fit in the elevators, but let me know if you want me to accompany your realtor on a walkthrough...
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Prices still climbing in Honolulu 4.8% YTD
Old 10-03-2007, 12:29 AM   #56
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Prices still climbing in Honolulu 4.8% YTD

Prices up, sales down for Oahu homes in September - The Honolulu Advertiser - Hawaii's Newspaper

Still a 24% return on your money if you bought at the first of the year, 2007! $1,500 a square foot for a studio and $2,338 a square foot (must be a penthouse!!) Of course the return will be much better when things jump up again to normal 9% annual appreciation but I'll take the 4.8% while rents are rising at a good rate. All tenants are paying before or on due dates!
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Old 10-03-2007, 07:08 AM   #57
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Well there is still a bunch of money in the hands of many.
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Old 10-03-2007, 07:20 AM   #58
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"... Last year, almost one-half of the sales to first-time buyers nationwide involved 100% financing. With first-time buyers, often there are two working spouses, so a family may have relatively high monthly income but very limited savings available for a down payment. "
If any downturn of the economy under which people becomes unemployed ever occurs, these people will have a rough time paying their mortgage.
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Old 10-03-2007, 07:25 AM   #59
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Houses in my neighborhood aren't seeing price reductions--they're not selling, either. I think a LOT of people already took out their overblown equity and now can't/won't lower their price below what they owe if they don't have to sell.
I completely agree, it seems like people think this is a short term thing and
will be all over in a few months. With new home builders lower their prices
and providing incentives, it makes getting a new vs old a no brainer decision.
TJ
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Old 10-03-2007, 07:49 AM   #60
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The prices for starter homes are really dropping in SW Florida . We drove by a few for sale in the $150,000 range .It's been a long time since I've seen that price on a small,older home in a decent neighborhood .
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