Times article: 'Real-estate anxiety: What's next in 08?'

[twistjusty]

I'm tired now of reading "poor homeowner" stories from the P-I and the Times that are actually about condo flippers. These stories are trite, and do nothing to work up my empathy.

What can also retire: the relatively new concept of "starter homes." I live among people who, fifty-five years later, are still in their "starter homes." Most living Americans don't appreciate that until recently, it was very common for multiple generations of a family to share a dwelling. Nor do they appreciate that prior to WWII, the percentage of home ownership in the United States was below 50%. I bet there'd be fewer reverse mortgages and "golden age" deferrals of property tax if multiple generations stayed in one house.

What magic atmosphere dust obliterates history knowledge here? How do people who were affected by the dot-com bust rebound from economic insecurity and buy houses with jumbo loans here? Do they expect inheritances? I'm not so sure that Seattle is viewed as special as the homeowners view themselves as special: "Oh nothing can happen to me because I've been at middle-income or better my whole life, and either my parents or the government will bail me out."

I envy their confidence and feelings of security. I'm in my starter home that I bought last millennium, and although my mortgage increases in affordability and is lower than anything comparable I could rent locally, I can't help but feel anxious over the next four years. Maybe because I'm not expecting a bailout.
[/url]

[Denny Retrograde]

Good call, twist. I looked up the Paul Kelly 2200 Westlake condo on the King County website, and this is indeed a really good flip story. The developer didn't unload this unit until Feb 2007, when the Hydes paid $545K. The Hydes flipped it to Kelly TWO MONTHS LATER for $604K. Now here's Kelly eight months in trying to unload it for $599K. Sounds like a flipping haircut to me, could get much shorter on the back and sides next year. Could become a flattop, or even a buzz...

I woulda looked up the recorder's info on this to see if Kelly took out two mortgages, suggesting 100% financing, but that county site was down this morning.

Here's the property record:

[Scotsman]

Looks like the first buyer just got out alive after transaction costs. The current owner is going to get hammered.

Don't forget it costs about 9-10% of the sales price to unload your property. There's the 6-7% for the Realtor, 1-2% for excise taxes, 1-2% for closing costs and small repairs/cleaning, the list goes on.

It always bugged me to no end that the "Flip This House" shows NEVER included the sales and transaction costs in their ending profit statements. What a farce.

[Markor]

[EconE]

[Denny Retrograde]