Tacoma's Home Prices Are Rising - Or So We Hear
The folks at Moody’s Economy.com continue their love affair with Tacoma’s future economic prospects. This time, we’re #8 on the “Where Home Prices Are Rising” list. We are not the only city from the Pacific Northwest. Three of the seven cities are in Washington State. The complete list includes:
- Santa Rosa, CA
- Cheyenne, WY
- Kennewick WA
- Merced, CA
- Anchorage, AK
- Bremerton, WA
- Corvallis, OR
- Tacoma, WA
Here’s the bit on Tacoma:
Tacoma’s downtown has gone through a revival over the past few decades, and its metro area lies within striking distance of some of the most spectacular scenery in the Pacific Northwest, including the Puget Sound, Mount Rainier and Olympia National Park.
Still, the local housing market has lost more value since its peak than did nearby Seattle. It did, however, outperform the nation as a whole.
Careful growth policies that Washington has urged its cities to pursue will help boost prices in Tacoma. The city is projected to keep growing, with an annualized gain of 3.9% through 2011.
Now are you optimistic?
Link to Yahoo News
Filed under: General
16 comments
J Jim C March 23, 2010
“Careful growth policies that Washington has urged its cities to pursue…”
Are they referring to Lakewood, Puyallup and Federal Way? If anything (IMHO) it has been the reckless growth in outlying areas that will, long-term, drive up home prices in T-town proper.
Ha.
M Mofo from the Hood March 24, 2010
On Sunday morning I was walking on South Yakima Ave down by that 25th ST new construction grocery store(?) with 5 levels of apartments, and I was pleased to see that across from them and McCarver Village the sleek contemporary Element 20 condos had a couple guys doing some construction finish work. Looks like some units are available now. Cool building, cool view, ? price.
E EQC March 24, 2010
Looks like the Jackson building has stalled. Its been weeks since I’ve seen anyone working on that place. Anyone know whats up?
K K. Malone March 24, 2010
It turns out, that I have been and always will be optimistic… this has, for no reason other than Destiny as far as I can figure, brought me to Tacoma.
My hope for my city is that it learns to take the reigns in leading its own way, creating its own economy, and realizing that many people are still living, living very well, under any “economic climate”. Why not have them live here…
A Altered Chords March 24, 2010
@EQC – IS the “Jackson” building that grocery store/mixed use huge project up at 25th ish and Yakima?
J Jake March 24, 2010
Altered Cords, yep that is the Jackson Building. Ghost Town for weeks now. Stopped midway putting up siding. Not a good sign.
Whatever, the building is more like 190 units. Supposed to be the largest apartment complex built in Tacoma in years.
E EQC March 25, 2010
They say prices may be rising which I doubt and according to this article today rents are falling.
http://realestate.msn.com/slideshow.aspx?cp-documentid=23517536>1=35000#4
Yes what were they thinking. Its been my experience that some of these developers are just in it for the development fees. They could care less if it gets completedJ Jake March 25, 2010
Whatever, That link has nothing to do with the developer of the Jackson Building’s other projects. Not one is listed on it. This developer is connected to the Walker Building.
There are what we will call “family issues” that I suspect might be part of the problem with getting the building finished.
As to rents…. They are not falling in the downtown area. They may be giving some “months free” but they are overcharging (yeah because that studio’s “market value” is $800 a month”) to give that and hitting people with other fees.
A Altered Chords March 25, 2010
I heard that there were issues w/ the “lender” of the Jackson project. I was told who the lender is but when I went to that bank’s website there was no indication of difficulty. Maybe I was told the wrong bank name?
It is in everyones best interest in Tacoma that a local developer find success. Hopefully whatever difficulty has befallen them, it can be worked out.
W whatever March 25, 2010
Metropolitan Real Estate Development does has the Walker Building listed as one of their projects.
Their lender is Banner Bank… MRD has stated this already to the News Tribune so not sure why the secrecy.
I read they were expecting to finish the project by Oct. 31 — hope they are able to finish without any more delays or problems.
A Altered Chords March 26, 2010
Banner Bank’s website does not advertise any distress. I have not demanded that the bank open their books up to me yet.
T Thorax O'Tool March 27, 2010
Did you know that on March 31, the Federal Reserve is going to stop buying so-called “Mortgage-Backed Securities”?
Please consider two things, if you will.
FIRST
Low interest rates are what have kept hose prices from really falling in this country. Essentially, doubling the interest rate halves the amount of house you can afford. For example: the payments on a $400,000 house at 4% interest are approximately the same as the payments on $200,000 at 8%. Remember that through the 80s, interest was in the teens, in the 90s and 00s (yes, 7% was the going rate during the bubble, remember?), interest was in the 7-9% range.
When the Fed stops buying the MBS for pennies on then dollar, only private investors will be around to buy them. And I can promise you, due to the risk associated with the MBS (they were key in bringing down the banking system in 2007/8), private investors will absolutely demand a higher rate of return than the current rate the Fed is willing to squander OUR money on. Interest rates have only one way to go, and it isn’t down.
SECOND
New “housing aid” plans floating around DC are going to encourage lenders to reduce principle on underwater loans. This is good for the banks (they take a small loss instead of a huge one) and it’s good for the underwater homeowner (they really can afford the mortgage now). But what kind of pressure will this put on the market? Banks reducing mortgages certainly won’t put upwards pressure on prices. If 4 houses on a block have their principle cut by 30%, other houses on the block won’t be finding their values jumping… after all, a lot of this information is public record. And don’t forget, this plan is only workable if prices do not fall any more, which is certainly not guaranteed. Think about that. You get a modified loan, your house is now “worth” $130K. You lose your job, and have to sell. Think that house will sell for much more than $130K? in 2006, maybe. Not in 2010.
And don’t forget that the modified loans will no longer be non-recourse. So who really wins? The banks, not you. This seems to me to be fishy, at best. Never trust a big bank nor the politicians whom they own.
TO’T‘s opinion:
Don’t buy the media hype. Use your own judgment, and do your own homework. There is a TON of pertinent info on the web, including official date from the government… both raw and “seasonally adjusted”.
I’m thinking prices have another 20-50% to go down still, depending on your locale. And this isn’t even touching on things like the sovereign debt issues that are going to bring the Euro down to parity with the Dollar (which Germany desperately wants) or the looming trade war with China (it’s MAD for the 21st century). 2010 and 2011 (especially) will be interesting years…
J Jesse March 29, 2010
Thorax:
Point One:
Low cost = high volume = profit.
Think Wal-Mart model.
or
High cost = low volume = profit.
Think Nordstroms.
So, that could go either way. But, who’s doing better right now; Wal-Mart or Nordstroms?
Point two:
Mortgage buy-downs are different from re-buying a home just like refinancing is different from re-buying a home when it comes to comparables. Comparables are what appraisers use to value your home for refinancing or valuation for taxes. Comparables are based on what the houses that are comparable sold for, not the refinancing the owner may have done. On the books, mortgage buy-downs are as if the owner refinanced their home so it won’t drag down prices.
But you are right on one front. If interest rates start shooting up (the Nordstroms model) than housing prices have to fall.
W whatever March 30, 2010
It’s anyone’s guess as to where the interest rates will be once the Fed stops buying back tomorrow. I don’t think we’ll see a sharp spike up anytime soon.
The Fed estimates the program lowered mortgage rates by between 25 and 100 basis points (100 basis points is 1 percentage point) so rates will probably go up to around 5.5%
The Fed has been slowly backing off buying for awhile now and rates haven’t spiked. Private investors are getting back into the market and will make up for where the Fed left off.
The BIGGEST downward pressure for home prices for years will be:
1. high unemployment
2. foreclosures
3. negative equity
Banks are going to handle this new “housing aid” plan like they did with the HAMP plan — almost nothing. The incentives are NOT ENOUGH for them to bother with helping out homeowners. Unless the government forces them to act they won’t.
W whatever March 30, 2010
Oh, forgot to add the decline of personal income. WA personal income declined 1.0% while nationwide the number hit 1.7% in 2009.
Median household income for Pierce is back to 2003 levels.
We aren’t going to see a 50% drop in home median prices from current levels.
Currently the median sold price for homes in Pierce was $215k / $127sq/ft
Tacoma median sold price was $160k / $132 sq/ft for February (based on Redfin data)
I think we may dip a little more — maybe to the $125 sq/ft level but not much more.
C crenshaw sepulveda March 31, 2010
Where were all these brilliant real estate minds before this mess happened, I want to know.