Housing Market Squeezing the Nation
After eight months of looking for a bigger home in Seattle, Keith and Beth Seinfeld were considering this gem: a former rental across the street from Interstate 5.
List price: $299,000.
``It’s loud,″ Keith Seinfeld said. ``I was thinking, `Maybe if you put in double-pane or storm windows ....‴
Keith, 32, a reporter at radio station KPLU, and Beth, 34, who works for MSNBC, estimate they’ve looked at more than 100 houses since Thanksgiving. Most needed renovation. Two went to higher bidders.
``There’s just not a lot that’s on the market,″ Seinfeld said. ``It’s frustrating.″
The story is the same in Boston, where transplanted professionals snap up townhouses days after arriving. In suburban San Diego, eager buyers camp out while awaiting construction. And in tony West Los Angeles, studio executives are throwing money around with a verve not seen since the Reagan administration.
At the same time, the bidding wars that marked the spring home-buying frenzy have tapered off. Two months ago, Karen Hanson would set up 10 appointments in Boston’s Back Bay, only to find that six were sold by the time she arrived for a showing.
``It’s nice to take a breather,″ said Ms. Hanson, a RE/MAX sales associate. ``In that kind of crazy market you’re doing well, you’re making money, but it’s nice to spend time with your clients.″
Not that brokers aren’t making money now. Home sales are on a record pace this year. With interest rates hovering around 7 percent and mortgages often cheaper than rent, even young couples with little money can afford a three-bedroom, one-bath slice of the American dream.
``It’s a boom,″ said Helen Nagel, a Realtor with Premier Properties of Southwest Florida in Naples. While families flood into inland developments, Midwestern retirees and Northeastern executives are buying waterfront condominiums as soon as they go on the block, she said.
Toll Brothers, a luxury builder based in Huntingdon Valley, Pa., that operates in 16 states, has had record sales, said Frederick N. Cooper, vice president of finance. Baby boomers can finally afford to move up to its $400,000 homes, while older empty-nesters are looking for modern conveniences.
``There’s much more demand than supply in some markets,″ Cooper said.
That’s true in San Diego, where John Fornaca has resorted to knocking on doors to find houses for clients drawn by thriving tourism and electronics industries. Five years ago, after military cutbacks led to an aerospace downturn, ``they were giving houses away,″ he said.
``It’s a panic like it was back in the late 1980s to early 1990s,″ said Fornaca, owner of United Brokers Realty.
Up the coast, Christine Taylor of Coldwell Banker Jon Douglas describes the West Los Angeles housing market as ``phenomenal″ after years of foreclosures and falling prices.
A three-bedroom ``fixer-upper″ in Santa Monica, listed at $850,000, sold for $975,000 after receiving six or seven offers, she said. The new owner promptly gutted the property.
``He had to,″ she said. ``It really wasn’t livable.″
Ms. Taylor has seen high demand before, but she said this boom differs from that of a decade ago. Buyers have more money now, but there are fewer homes available to spend it on.
``It’s hard to find a house before five offers have already been placed on that property,″ she said.
Sometimes, it’s just as hard to find people to build or renovate homes. Many laborers moved out of San Diego during the downturn, Fornaca explained; not enough have come back. Finding a contractor in Seattle, Seinfeld said, is nearly impossible.
In Pennsylvania and New Jersey, where the rise in home sales has been noticeable but modest, a remodeling boom has led to shortage of skilled tradesmen.
``We can’t man the jobs,″ said Marty McNulty, a painter with Rembrandt Painting in Philadelphia who works 14 hours a day, six days a week. ``It’s feast or famine and this is the feast.″
Also braking the boom somewhat is a shortage of land in the Northeast and California, said Toll Brothers’ Cooper. And many cities are trying to control growth.
Unlike most of the country, Seattle didn’t experience a housing downturn during the early ’90s, said Karen Lavallee of Windermere Real Estate. Two years ago, prices began galloping upward.
In the past year alone, a booming population and high-tech economy have boosted the average price 18 percent to $258,000. Anything under $200,000 _ even a dumpy two-bedroom bungalow _ draws multiple offers, Ms. Lavallee said.
``For first-time buyers, it’s tough,″ she said. ``They’re having to drive a little further or to give up.″