Why so many homes for sale in WS?

[Ryan]

There are a lot of houses for sale in West Seattle. For example, if you look at Redfin, just for 98116 (North Admiral, Alki, Junction) there are 161 houses for sale, not including condos, and there are over 700 for all of WS. The three other zip codes have roughly the same numbers. The numbers aren’t that much different than other, similar locations like Magnolia or Queen Anne, but since I love living in WS so much I wondered: why is everyone leaving?

I don’t know many people who are selling their houses, otherwise I would just ask them. The few people I know who have sold recently did so for a job relocation or downsizing. Most of my WS friends and neighbors recently moved in. :-)

Redfin link:

http://www.redfin.com/search#pt=6&v=3&lat=47.57258824323027&long=-122.39919662475587&zoomLevel=13&region_id=40829&region_type=2&market=seattle

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[ToddinWestwood]

ITs the same all over. Lots of the homes for sale include repos, people selling because they now cannot afford, or investment houses.

It is a product of today’s economy and the failings of the US Banking system.

I hope it picks up soon. We would like to move to a quieter street, but still in W.S., and we would have to sell ours first.

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[Bonnie]

Not only West Seattle. It’s everywhere. Haven’t you read the news? People are losing their homes at alarming rates because of interest rates, risky loans, etc. I’m sure people would stay in West Seattle if they could.

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[WSB]

My question would be whether that’s really a historic high of any sort. Depending on the boundaries from which that 700-ish number was drawn – that could be about 2% of the homes around here? I don’t see any more “for sale” signs in my neighborhood than has been the case for the 15 years we’ve lived here. I also would have to wonder if a disproportionate number of them MIGHT be the newer townhouse-type units, since so many of them have been built in recent years? You mention the number didn’t include condos, but townhouses aren’t condos.

Hey, on a side note, please make a URL that long into a “tiny url” at tinyurl.com or is.gd or one of those, before posting in the forums – it runs off the page, as you see above.

thanks, TR

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[PSPS]

As others have said, this is not unique to West Seattle. They’re for sale not because the people want to move away. It’s because they can’t afford to make the monthly payments.

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Practically any house purchased between about 2001 and 2006 is now occupied by someone who owes more than the house is really worth. It was during this time that the toxic “loan” industry was going full steam and you could get a no-doc (“liar’s”) loan on an “option-ARM” (negative amortization) mortgage. So you had Wal-Mart employees getting no-down loans on a $750K house, free to skip their monthly payments.

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Now we’ve returned to a little bit of sanity. (The current taxpayer bailout of the criminals is still insane.) Today, you have to actually qualify for a mortgage (provide proof of income, make a down payment with non-borrowed cash, etc.) As a result, demand has dried up because nobody can qualify to buy a house that is still priced as if we were still in the fraud-fueled bubble.

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Instead of a healthy 90-day supply of houses for sale, we’ve got years worth of inventory (700 houses in West Seattle, for example.) This won’t change until prices come down — way down. The median income in King County is $50K. The standard benchmark for median housing price is 2.5 – 3 times median income. You don’t see much for sale in the $187K range do you? (That would be $150K after a 20% down payment.)

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There’s still a big downward correction necessary in housing prices and it will happen over the next three or four years. There’s about $3 trillion in toxic “option ARM” loans that will be recast from the 4th quarter of 2008 through 2012. Many of these will be foreclosures and will become REO’s or the banks will have to short sell them.

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[beachdrivegirl]

I would like to see more data that would answer TR’s question; however, from what I have read/seen it seems that the market is experiencing a higher inventory level b/c it is taking longer for houses to sell. However, over the past thirty days or so there have been fewer and fewer new listings being listed in West Seattle. I would expect by early 2009 that teh inventory balance will begin to even out. And PSPS I think you are wildly optimistic if you think houses are going to drop that much in the Seattle area.

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[JoB]

beachdrivegirl…

i don’t know if housing prices will continue to drop, but i have been exploring the rental market and i can tell you that rents.. at least in the mid-high range.. have dropped.

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[beachdrivegirl]

I am not saying that they might not drop some. What I am saying is that it is wildly optimistic to think that there are going to be a signigicant number of homes fall to the $150K range that PSPS is talking about when in fact between March and February of ’08 the average price of a home sale increased.

Average Sales Price Feb-08 Mar-08 $

Change

Seattle $487,219 $501,025 ⇑

Issaquah $519,510 $542,633 ⇑

Kent $332,465 $334,770 ⇑

Renton $393,067 $399,060 ⇑

Bremerton $233,663 $247,329 ⇑

Bonney Lake $306,334 $342,276 ⇑

Gig Harbor $453,638 $411,362 ⇓

Lakewood $251,489 $288,713 ⇑

Puyallup $269,324 $266,511 ⇓

Tacoma $271,477 $261,115 ⇓

Mount Vernon $328,403 $283,816 ⇓

Bothell $412,233 $450,854 ⇑

Everett $322,575 $305,386 ⇓

Marysville $308,893 $303,088 ⇓

Bellingham $305,956 $326,240 ⇑

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[charlabob]

Speaking only for myself, I suspect part of the reason for the increase in available houses, especially of the “for sale by owner” variety, is panic. If you came by and wanted to buy my house, which we love, I’d seriously consider it–and we’re probably not below water.

The prices may not be going down because reality hasn’t set into real estate. There’s a difference between asking price and selling price. In some markets the number of houses for sale is 34,000 and the number of houses sold last month is 1. Not great odds, but people can’t always lower their asking price.

Of course, this all started with the massive deregulation of the financial institutions in the 80’s and the addition of new institutions that never were regulated. As a result, we can’t even know the depth of the problem—no accountability. Until they’re re-regulated, there’s no reason to think it won’t happen again, or continue to happen.

A lot of people (not buyers and flippers) made a lot of money from this disaster and continue to do so.

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[walfredo]

One interesting thing about a lot of the 98116 housing in particular are that much of the availability of inventory are from massive renovation projects that are reaching completion.

Most of these were started long before the realization of the extended housing problems was realized. More then half of the houses and pretty much all the townhouse/condo’s etc for sale in my area are massive renovations. Most, using the old model of flipping by upgrading an existing unit or house, and then dramatically raising up the price. The townhouses are largely brand new, replacing single family units.

It has been widely reported, at least nationally, that new home builders and new construction in general is at an all-time low. I’m curious how much this impacts the inventory… I don’t see a lot of folks selling there single-family house to move elsewhere, which in most parts of the country would be the most common. Mostly it is additional housing, and/or drastically renovated housing that is available.

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[changingtimes]

ummmm PSPS can you clarify what you mean by “So you had Wal-Mart employees getting no-down loans…” i believe this is an extememly negative statement. thats the same as saying safeway employees or target employees. you are saying that since they work at walmart they shouldnt be approved for a loan? i believe most of the no down payment went alot to first time buyers no matter where they worked! Young couples buying there first house were targeted and also alot of immigrants.

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[walfredo]

Changingtimes- WalMart pays its employees on average 50% the wage of Costco. Over 90% of Costco employees have health insurance. Less then 25% of WalMart employees have health coverage.

It’s not so much a knock on the employees, as it is on the evil corporation that treats them like sh*t.

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[changingtimes]

OK walfredo i saw the movie too! but im saying the context of what the person was saying i doubt it had anything to do with your statistics…..

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[localman]

Look, I don’t think there is just one answer. All the reasons mentioned are no doubt components. Added to that it’s my own feeling is that West Seattle has changed and mostly not for the better. Traffic is horrendous. The schools are not what they once were. Pollution (all types) is more of an issue. You see my point. I know of half a dozen or so families in my neighborhood that have left to get away from what they percieve as a diminished quality of life around here. Still better than most but none the less….

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