This was just going to be a bonus link but I thought it was a good opportunity to check in on our favorite flipper condos…
First the link: Forbes, Best Places To Flip A Home:
However, those looking to make a quick buck may do so in a number of markets ripe for a well-spotted flip.
Best among them is Seattle. It landed atop our list based on a number of measures.
Second: 2200 vs. Cosmo
vs.
Popularity: 14% [?]
23 responses so far ↓
1 Dan C. // Aug 10, 2007 at 7:15 am
Seriously? I can’t believe Forbes would even pay someone to write an article like this.
2 Chris // Aug 10, 2007 at 7:58 am
I know, real responsible journalism…at least the number is coming down on the Cosmo
3 Dan Ji // Aug 10, 2007 at 8:53 am
They define flipping as follows: “Flipping–in which an investor buys a home, makes quick improvements and resells at a higher price–”was a rage in the housing market surge”
Not sure how this applies to the Cosmo or 2200… unless you consider adding some floor rugs as a “quick improvement”?
4 jo // Aug 10, 2007 at 10:36 am
This will not end pretty
5 EconE // Aug 10, 2007 at 12:44 pm
Matt…just popping by to update the numbers.
Cosmo:
per condo compare…there are 24 listings (I have them listed in my records). 25 listings have been pulled and not yet sold (again…per my records) Then add the rentals that have not rented yet that are listed in the MLS, Seattle Rentals and CL. Yup…lots of empties.
2200:
cmon…even you can drag yourself 1/4 mile or so down here to count the number of keyboxes on our “bubble bench” (hint…it’s alot more than you have listed. Not to mention…some have never come on the market from conversations I overheard prior to the last HOA meeting because they “have a few to sell but don’t want to compete with all those other listings” (as the owner gestured over to the bubble bench)
I wonder what will happen at all the other places such as Mosler, Lumen, Parc et al. Frthermore…it’s not just the downtown condos…lower $ condo conversions have been bought up by flippers in the lower socioeconomic strata and they don’t seem to be moving all that quickly either.
Jo is right…it’s not going to end pretty.
6 Matthew // Aug 10, 2007 at 4:09 pm
You would think the builders around here would take notice at what is happening in the rest of the U.S. The Federal reserve just had to pump billions into the market today to try and help prop up lenders and banks. There is a massive credit crunch underway right now in this country unlike anything we have seen since the 1930’s and people are building away like there is no tomorrow.
Seattle is leading the nation in terms of increased inventory. According to Zip Reality we are up 56 percent YOY. But yet there are 13 cranes building structures in downtown Bellevue!!! Bellevue!!!!!! Hello??!?!?!?!
How do they expect people to obtain the financing to buy all this new construction? Credit is tightening like never before. Good luck flippers, don’t tell us you weren’t warned.
7 Peckham // Aug 10, 2007 at 5:05 pm
Anyone want to rent 124 Bellevue Ave E #504?
8 Joel // Aug 10, 2007 at 11:55 pm
“Seattle is leading the nation in terms of increased inventory. According to Zip Reality we are up 56 percent YOY. But yet there are 13 cranes building structures in downtown Bellevue!!! Bellevue!!!!!! Hello??!?!?!?!”
Absolutely, 100% agreed. This in a city of only about 120,000 people. I wonder if our crane to population ratio beats Miami at it’s peak. They would’ve had to have had around 43 cranes going at once to beat us out.
It’s all good though. More glut means lower prices as the credit bubble bursts.
9 Bob // Aug 12, 2007 at 7:10 am
When the rest of the country is crashing, Seattle is in a better shape in comparison. But the tightening of lending standards is taking a chunk of buyers right out of the market. No more zero down, liar loans; more inventory. It is just a matter of time before the flipper paradise turn into…well, you know.
10 Dan C. // Aug 13, 2007 at 8:44 am
People consistently use the “economy” arguement as to why Seattle is “different” than the rest of the country. It is said we have a strong employment base, high salaries, high immigration from other states… I argue we just have a six month lag.
Dallas/Fort Worth was one of the fastest growing economies in the country for the past 4 years and a poster child of the real estate bubble, with +7% YOY economic growth coupled with 30+% appreciation. Also home to many of the most profitable companies in the country(Exxon, Texaco, Texas Instruments etc). Over the past 10 years, Dallas has had one of the lowest unemployment rates in the country beating the average by almost 2%.
Today, Dallas is one of the leaders in SFH foreclosures, unemployment is rising slowly, prices are depreciating 5-15% depending on the market etc. The same can be said for other “high-tech/high-growth economies” like San Francisco, Boston, Charlotte/Raleigh…
Tbis is a national problem, Seattle is just a little behind the curve. These builders will lose their shirts just like all the others.
11 seattle67 // Aug 13, 2007 at 11:48 am
Buy low when the real estate market softens, and sell when it rebounds. Sounds to me like the real flippers paradise is right around the corner.
12 mhays // Aug 13, 2007 at 2:04 pm
Bellevue municipal population has nothing to do with the size of its downtown. Downtown Bellevue is simply the #2 downtown for this region — the shiny, urban-suburban one. Apparently that’s an attractive concept to a lot of people. Developers keep breaking ground on residential projects (multiples in the past few weeks), and they keep announcing new projects. The only difference is the announcements are trending toward rentals — which is good because the rental market is getting tighter in a hurry.
On to condos. People keep talking about Seattle’s inventory growth, but some people seem to ignore the fact that our inventory is much lower than those other cities. Fort Worth has no barriers to entry and they can build like mad. Miami is building several times as many condos as we are. Our condo market will be soft for a while, but nothing like the worst cities.
(For disclosure, my employer is building a condo tower right now, I’m slated to buy a condo in August 2008 after signing this January, and I’ll be selling my current condo in September 2008.)
13 Matthew // Aug 13, 2007 at 6:38 pm
Mhays,
I don’t think anyone here is arguing that our market is going to be as bad as what will happen to Miami. Miami and So Cal will be the worst real estate disasters in the history of real estate, when all is said and done.
Does that mean that Seattle can’t learn from these other regions and what they did wrong? Absolutely not. We could and should learn from them, however, developers are still going full speed ahead, despite massive inventory increases.
Add increased inventory with tightening credit and things can only deteriorate. Anyone can predict yesterday’s news, but tell me what you think is going to happen 6-12 months from now? Many of the current projects aren’t slated to be finished until 2009. How can a developer tell what the market is going to be like then? They can’t.
Soft for a while? The condo market is going to be annihilated when all is said and done. The only thing that is propping up the condo market right now is the faux idea that the condo has become the first time buyer’s entry point onto the magical equity elevator. This myth is already coming crashing down in DC, Miami, San Diego, LA, Boston, and soon coming to a city near you!
Jumbo rates (houses over 417,000, sound like Seattle?) are already now being repriced to 8%. The tightening cycle is just beginning. Sit back and enjoy the ride. Median incomes don’t support the prices in the city despite what the media says about strong job growth. It’s not about number of jobs, its about affordability, and Seattle is in the top 10 of least affordable markets.
14 richard // Aug 13, 2007 at 8:19 pm
Matthew, I’m in the process of relocating to a market that has a median income $25K higher than Seattle and a median price about equal. The area has good job growth and better in-migration than Seattle, yet the prices are dropping 10% YOY.
Rationally, you’d think that extra $25K/yr would offer some price support, but apparently not. Seattle would still be overpriced even if incomes magically increased by $25K overnight.
15 Matthew // Aug 13, 2007 at 9:14 pm
It’s a credit bubble and we are in the first stages of the credit crunch. Housing is going to be hit hard nationwide, some areas worse than others. Seattle will not be unscathed.
16 jo // Aug 14, 2007 at 1:58 am
What causes so many people to spend so much time painting a picture of doom and gloom here in Seattle? Do you guys not have anything better to do?
It’s ruining this blog.
17 Dan C. // Aug 14, 2007 at 7:10 am
I don’t think it has anything to do with doom and gloom. We are merely discussing our views of where we see Seattle real estate headed. Every industry goes through recession periods…some much worse than others…but they always manage to pull out.
Do you want this blog to be written by real estate agents and be made up of only positive spin and false information? There are a couple of other places I could recommend.
18 Dan Ji // Aug 14, 2007 at 9:07 am
“Do you want this blog to be written by real estate agents and be made up of only positive spin and false information?”
No!
BUT, I also don’t have to read an economics lesson on why the market must correct itself - on every post.
When I first started reading this blog, I noticed Matt’s vision: “My vision for this site is to make it the source for all new condo and pre-sale center information.” It’s somehow turned into SeattleBubble-Lite. Minus the cool avatars.
Everyone has a prediction about the trend in Seattle’s real estate market… but it’s just that, a prediction. I appreciate people’s comments on the blog, all of them. I just wish it’d be more about Urban Living - with a twist of market watching, as opposed to the other way around.
19 Matt // Aug 14, 2007 at 9:21 am
“BUT, I also don’t have to read an economics lesson on why the market must correct itself - on every post.”
I agree.
“I just wish it’d be more about Urban Living - with a twist of market watching, as opposed to the other way around.”
I agree too. If anyone has feedback or wants to contribute posts on urban living in Seattle please let me know.
20 Dan C. // Aug 14, 2007 at 12:06 pm
Okay, fine. I promise to lay off the economic talk…for now. :)
I would like to note that the post by Matt that spawned this discussion had nothing to do with urban living. The post was about flipping houses. I thought the economic discussion would be prudent here.
21 Matthew // Aug 14, 2007 at 1:09 pm
Its a freaking post about flipping houses, what do you guys expect?
The very mention of flipping right now screams “bubble”. The fact that dozens of these units are appearing on the MLS every week just reaffirms that point.
Not like this point of discussion is off topic. I don’t know how you can discuss speculating on real estate without discussion the impact it is going to have on the market once lending tightens up.
22 jo // Aug 14, 2007 at 1:11 pm
Everyone go and get in their last word. :)
Good to see Cosmo has seen inventory cut in half the last month or two.
23 Matt // Aug 14, 2007 at 2:05 pm
Yes, I am guilty of starting this riot! :)
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