Posted by unregistered user at 7/3/08 7:32 p.m.

Why would inventory of homes for sale ever get back to 10,000 or below here? When it was low was when everyone and their dog could buy with funnymoneymortgages. A normal amount of properties for sale is likely 20% higher than 10,000 or below.

Posted by Kary L. Krismer at 7/4/08 7:34 a.m.

Not that I'd say it would never get below 10,000, but there are other factors besides financing.

One of the obvious ones is that there are more housing units in total, due to new construction and condo conversions. As that number increases, the number of units on the market would increase--all other things being equal (which they won't likely be).

Posted by Kary L. Krismer at 7/4/08 8:03 a.m.

From OP: "Seattle Bubble editor Timothy Ellis repeated his previously detailed possible strategy of waiting either for two years or for six consecutive months of price increases, whichever comes first. The point of waiting for six consecutive months of increases would be to ensure prices had not reached a false bottom (sometimes called a "dead cat bounce") from which they would again decline."

I don't see that he says that there. But assuming he did, I really don't get the 6 month thing (which is why I'm commenting). First, I don't think real estate moves fast enough to have a significant dead cat bounce (but that would be something to avoid). But second, I just don't see it as a valid strategy.

We were at $440,000 in June (King Cty SFR median). In the past only 9 months were higher than that, and they were not all in a row. It looks like July, 2008 will be higher than June, 2008, so let's say it's the first month of increases. By the time you have five more months, you could very well be close to or even above the prior peak. And assuming July comes in at $450,000, and you had 5 increases from there, probably at most only 5 months would have ever been higher. What's been accomplished by that strategy?

But beyond that, given the seasonal nature of real estate, six consecutive months of increases would tend to indicate an overheated market--not something you'd want to buy into. Going back to December 2005 (the farthest back I have the numbers in easy format to read) the longest consecutive increase is 5 months, and that was the five months leading up to the peak. If anything, six consecutive months of increases would be a reason not to buy!

Finally, not all increases are good increases. A year ago I was comparing YOY price increases and expressing some concern they were close to levels that were unhealthy, but I didn't think they were unhealthy. If I'd been looking at the month to month pattern instead, I probably would have thought it unhealthy. The point is, just looking for increases is not a good strategy, because not all increases indicate a healthy market.

So anyway, assuming you're going to use some strategy to try to time the market, I wouldn't be looking for 6 consecutive months of increases, unless perhaps you used that as something that would indicate you shouldn't buy.

Posted by unregistered user at 7/4/08 10:35 a.m.

Who cares what prices do in the short run? A home is to live in for the long run. Find the one you like the best, take as much, or as short of time as you need, buy it, move in, and don't look back. Ten years from now it won't matter what you paid for it.

Posted by Marlow Harris at 7/4/08 8:30 p.m.

Yeah, I don't get this obsession with buying the cheapest possible house to live in. I could probably get away with driving a 1979 Toyota Celica and it would be really cheap, but I don't think I'd enjoy that very much. You don't expect a car to appreciate in value, why expect a house? If it does, great, but don't expect it. Yes, you have to pay to live in a nice house just like you have to pay to drive a nice car or wear nice clothes. I don't buy my clothes at K-Mart either.....

While you're busy dithering and number-crunching to figure out when's the best time to buy a house, life could be passing you by.

Posted by Kary L. Krismer at 7/5/08 8:37 a.m.

Hey, I drive an old vehicle (not quite a 1979 though) and I enjoy it! At 51 cents a mile the IRS is being very generous. :D

One factor besides the pure financial factors is the control an owner has over the property. I've seen buyers go into what I consider a perfectly nice (but 15 year old) kitchen, and talk about remodeling it. My wife wants to remove a huge Rhody that's in our front yard. Renting doesn't allow you that kind of control.

Well, I guess that's not right. Most landlords would let you spend $30,000+ remodeling a kitchen if you wanted to. ;-)

Posted by unregistered user at 7/5/08 1:27 p.m.

I have been watching townhomes in Queen Anne and Magnolia for the last year and have watched asking prices drop from $600,000 down to $499,000 and below.

The people who are talking about buying a home for a safe secure place and not worrying about the price obviously either have so much money they don't care or have recently purchased and are trying to make themselves feel better about the circumstance they now face.

Don't take my word for it though. Spend some time on Redfin and watch a particular area and set up the alerts. I get price drops EVERY day emailed ot me from Redfin and these are not small drops. Sometimes the drops are as much as $40,000 to $50,000 at a time!

Posted by Mack McCoy at 7/5/08 2:45 p.m.

Yeah, don't buy those at $600,000.

Posted by Kary L. Krismer at 7/6/08 6:53 a.m.

Price drops happen in all markets, and aren't really evidence of anything other than that the particular house was overpriced.

Posted by unregistered user at 7/6/08 6:35 p.m.

Condos are always the first to lose value, didn't you know that? Condos are not houses, houses are more stable over $500,000+.

Posted by Kary L. Krismer at 7/7/08 6:48 a.m.

Actually condos have held up rather well--surprisingly well.

Were the townhouses new construction? That would be a better explanation of why they're dropping.

Posted by Kary L. Krismer at 7/7/08 9:44 p.m.

No one has commented on my six months of increases being a bad sign, not a good sign.

But I would point out that today's number of $449,700 will make buying at the six month point (assuming we get there) rather foolish).

Posted by Mack McCoy at 7/8/08 3:51 p.m.

No no, Kary, I'd always prefer to wait until a good price rise is under way before getting my feet wet. It's why I never buy an IPO - why not wait a few weeks to see if it quintuples in price, then buy!