Seattle Home Sales

Buckle Up


Contributed by Aaron Fairchild:

Buckle up, there will be turbulence
“Plunge in Home Sales Stokes Economy Fears” WSJ article said the following about the national real-estate market on Wednesday, August 25, 2010:

  • “Sales of previously owned homes fell 27.2% in July. . . Lowest level since (NAR) started tally in 1999.”

  • “Economists say sales drop…means another drop in housing prices is on horizon.”

  • “High unemployment and meager wage growth and falling home equity means depressed consumer spending.”

In the same WSJ issue the editorial page reported that national homebuilders’ stocks rallied on Wednesday as the news of the decline in home buying was announced.  Apparently investors believe the time for getting into the real estate market is now, when home prices and employment rates are at or near their bottom.

Is there really a “National Real-Estate Market”?
According to the Bureau of Labor and Statistics the Seattle area unemployment rate in June was 8.6% and holding steady.  Employment in our region is anchored by desirable jobs in growing sectors of the economy.  We live in a beautiful part of the world with plenty of water, mountains and forests.  People continue to move here as the map published by Forbes (June, 2010) illustrates below.  Red lines indicate a net migration away from the city, black indicates net movement into the city.

The last time we saw more people leaving than coming to our state was in 1982 and demographers expect growth in this region to continue as unemployment, poor economies, water shortages, and desertification continue to push people out of other regions of the country.  Additionally, homes in Seattle are more affordable today than they were during the period of our local depression, where 1 in 8 people were unemployed, from 1969 to 1973.

How does all this affect G2B?
Less Competition at Acquisition
G2B continues to believe that in the near to mid-term, property values will remain flat or rise only with the rate of inflation.  This will shrink margins for investors who look to buy and hold.   The uncertainty in our real estate market will continue to drive nervous investors and speculators to the sideline leaving less competition for acquisitions of fixer properties in neighborhoods where G2B thrives.

More Competition at Sale
This situation continues to play to G2B’s strength.  G2B differentiates its homes in the direction the market is trending.  G2B designs comfort, quality, energy efficiency, and green into existing homes in neighborhoods with a strong sense of community.  G2B’s differentiating design appeals to the values that homebuyers are demanding.  The current market conditions only enhance G2B’s edge when competing for precious homebuyers.

Knowing the Market with Deep Experience
G2B knows how to accurately value homes at acquisition and sale.  Having compared and evaluated over 15,000 homes in Seattle’s good and bad times gives G2B the strategic edge needed to exploit opportunity in uncertain markets and create additional value.

We are certainly living in interesting economic times.  Turbulence and uncertainty provides opportunity for smart moves and strong profits.  We are excited about this market and extremely well positioned to thrive!