A colleague of mine passed this article to me this morning- click here! It is a piece on why the housing market has scared off first-time buyers (falling prices, foreclosures, loan approvals, on and on) and also touches on how it has momentarily affected the rental market.

The National Association of Realtors reports that hundreds of thousands of young Americans are just waiting for the clouds to part and are not buying or renting:

“There’s probably 700,000, maybe 800,000 people out there that are not getting into the market either as a renter or as a homebuyer,” said Walter Molony, spokesman for the NAR. “Where are these folks? They’re out there, they’ve got jobs. Some of them are moving back with their parents, never left the house, they’re doubling up with roommates.”

While on of the largest U.S apartment owners, Equity Residential (downtown communities: Centennial Tower & Court, Olympus, Metro on First, 2300 Elliott, Harbor Steps, Summit at Lake Union and 7th & James) have seen fewer people moving out of their apartment buildings in the last year.

The bottom-line is that buyers can no longer make a strong profit in owning a property for just a year or two and even though Seattle’s market is stronger than most, it is still important to plan for the future. If you feel that you can’t commit to staying in Seattle (or in one place) for 3 to 5 years, as an alternative there is always the option of renting your home.

The image says it all- homebuyers are having a more difficult time securing financing, foreclosures have reached record highs, unsold homes flood the market and prices have dropped dramatically, however the one thing we can be thankful for…is that all regions experienced drops in sales except the West.

On Friday, the Commerce Department reported that sales of new homes in the Midwest dropped 27.6%, the Northeast plummeted to 19.3%, the South fell to 6.4%, but in the West, sales rose 4% from October 07 to November 07. (Click here to read more)

We have continued to remain one of the strongest housing markets in the US, but over the last 12 months, sales nationwide have decreased by 34.4% (said to be the largest annual slide since early 1991) and many economists are predicting a housing crash is in the near future. Of course media coverage only seems to worsen perceptions of the housing market so I am interested in knowing what some of you think will happen in 2008 in Seattle and on a national level…thoughts?

In the 20-city S&P/Case-Shiller Home Price Indices survey released this morning, the nation’s average prices fell over 6% from one year ago BUT Seattle experienced an increase of 3.3% along with Portland (1.9%) and Charlotte (4.3%).

Out of the 17 cities showing declines, Miami sits at a 12.4% decrease while Tampa (11.8%), Detroit (11.2%), San Diego (11.1%), Las Vegas (10.7%) and Phoenix (10.6%) follow close behind.

Click here to read the full report

A couple weeks back when I attended the IREM Forecast Breakfast, Mike Scott (from Dupre + Scott) talked a bit about the rental market and where it is heading. The topic of conversation seemed to go a little like this…

Seattle’s economy is stronger than ever, apartment vacancy rates are down and rents are still on the rise, but come 2009 we should expect to see the rental market flatten a bit due to a large amount of new construction apartments entering the marketplace.

The Seattle PI covered the topic today (and all the contributing factors) while announcing two new apartment high-rises that are well on the way.

- The Olivian will be a 27-story luxury apartment building with 224 units located at 8th & Olive…right across the street from Olive8.

- The Aspira, which was first slated as condominiums, broke ground yesterday and will soon be a 37-story apartment tower located on the corner of Stewart & Terry Ave.

Click here to read more

P.S. I am back!

It looks like I did miss some exciting news while I was away…

NEWS
Seattle-based REIT, The Schuster Group, launched a $100 million private real estate investment fund called Schuster Realty that will focus on the Seattle area.

Zillow.com signed a real estate advertising deal with 282 U.S. newspapers through 11 major publishers

CONDOS
The Cosmopolitan Community Committee wrote a letter to Mayor Nickels

Mosler Lofts will get certificate of occupancy on the 16th of November

The Parc now has two model homes and a 360 degree tour of the units, lobby and homeowner’s lounge on their website- check it out!

Ben Kakimoto’s update for Seattle condo sales performances in October

EVENTS
IREM’s 22nd Annual Forecast Breakfast (11/29, 7:30-9:30am, Meydenbauer Center) – I really enjoyed last year’s breakfast so I will be attending again this year. Martin Selig, Mayor Degginger, Mike Scott, John Curley and Jamie Moyer are a few of the speakers this year, click here to reserve your spot!

23rd Annual TRENDS Rental Housing Management Conference and Trade Show (12/11, all day, Convention Center) – This year we are not sponsoring a booth but I will still be volunteering and attending seminars throughout the day. AGENTS: You can earn clock hours! Click here for more information.

Although the home prices here in Seattle have recently dropped a bit, when comparing prices in August 2006 to August 2007 prices actually increased 5.7% according to the S&P/Case-Shiller Home Price Indices report released today. There were 4 other cities among the 20 metropolitan regions across the United States that saw increases: Atlanta, Dallas, Charlotte & Portland.

On a pessimistic note, home price declines across the US mark the 8th consecutive month of negative annual returns and the 21st consecutive month of decelerating returns.

Click here to read the S&P/Case-Shiller Home Price Indices report 10/30/2007

”The S&P/Case-Shiller® Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan region across the United States. These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs. This index family consists of 20 regional indices and two composite indices as aggregates of the regions.

In addition, the S&P/Case-Shiller® U.S. National Home Price Index is a broader composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly.”

“Rents in Seattle rose 10.7 percent to $1,057 last month. Seattle is the West’s only major market outside California where the cost of renting an apartment averaged more than $1,000 per month.”

Click here to read the Seattle Times article.

This came out a day or two ago but the article is pretty interesting-
They rank Seattle as being the most stable housing market in the nation based on the state of local economies, new construction contracts, foreclosure rates, local credit markets, sales rates, affordability and inventory.

Right behind Seattle- Pittsburgh, Columbus, Dallas, St. Louis, Cincinnati, Atlanta, San Antonio, San Francisco and Fort Worth, Texas. Click here to read the Forbes Article.

- Thanks for the tip Sonya!

According to the Dupre+Scott Apartment Vacancy Report, Seattle’s apartment rates have jumped 12.2%– the highest annual increase anywhere in central Puget Sound. The Eastside wasn’t too far behind at a 10% annual increase.

Vacancy rates aren’t the lowest ever but are sitting at 3.8% for King County and are as low as 2.6% from the Ship Canal up to the county border- FYI – 5% is considered a balanced market but anything above would be considered a Renter’s Market. (Click here to read more)

A lot of the condos and homes I leased last year are being rented this year for $75-$200 more per month. There are still some neighborhoods and property types that are not experiencing quite the increase but for the most part I think that the private rental market will follow the overall trend.

As we go into the “slowest” time of the year for real estate in general, I have a feeling that we might all be surprised at how sustainable the rental market will be- I leased 15 properties in September alone!