How Well Does Seattle Recover From Disaster?

Turns out, pretty well.

80.5 percent* is the percentage of Seattle metro area homes that have recovered to peak pre-recession value, according to a recent Trulia article.

What does this mean, exactly?

It means that the Seattle area has recovered quite well compared to a large amount of the United States. The region ranks #22 nationally in recovery percentage (a bit surprising we're that low), currently sitting behind Colorado smoking buddies Denver (#1, with an impressive 98.7 percent recovery rate) and Colorado Springs (#7, 93.4 percent), San Francisco (#2, 98 percent), and Oklahoma City (#3, 94.3 percent—and give us back the Sonics, please).

Other cities beating us at the moment include Dallas (#9, 92.5 percent), Honolulu (#11, 91.5 percent), and Portland (#13, 90.3 percent—grrrr).

Find the full list here.

Among the areas with the lowest recovery rates, including the bottom tier of Las Vegas—#101, with just 0.6 percent of homes back to pre-recession value), Tucson (100, 2.4 percent), and Fresno (99, 2.5 percent), it's no surprise to find that these cities have seen the worst income growth in the years spanning December 2009 to January 2017.

And guess what?

The cities with the strongest recovery rates, including our beloved Seattle, also have the strongest income growth. With the median Seattle proper home price currently clocking in at $638,000 (and $426,000 in the Seattle metro area), that's no big surprise, really. It takes a heavy wallet (or a lot of big wallets) to help dig us out of such a monumental disaster, especially considering that just 34.2 percent of all homes nationally have fully recovered to their pre-recession peak value.

The three big factors that set the tone for quicker recovery include, alongside income growth, job growth and population growth, as well as post-recession vacancy rate.

It's a bit humbling to see just how far into the hole the housing market was just eight years ago, spurred by the foreclosure crisis that was so big it now has its own major motion picture. The good news is that, according to Trulia, U.S. home recoveries have been steadily—albeit slowly—climbing since the stuff that hit the fan began to get cleaned up, to the tune of 5 to 6 percentage points per year. While Trulia's data suggests we won't see 100 percent of homes fully recovered until September 2025, the fact that we can again use terms like "thriving" and "booming" when it comes to the housing market and our economy feels good. Let's hope we can keep wearing these buzzwords out.

Now, if we can only figure out where to house all these home-hungry folks…

*All data courtesy of Trulia.com

FOR IMMEDIATE RELEASE
Media Contact:
Sharon Couts
Master Builders Association of King and Snohomish Counties
425.499.1723

Master Builders Association Hires Kathleen Sims, Former Weyerhaeuser Executive, as its New Executive Director

Bellevue, Wash—March 1, 2018—The Master Builders Association of King and Snohomish Counties (MBAKS) announced the selection of Kathleen (Kat) Sims as its new executive director. Sims is the first woman to lead the association in its 109-year history. As the former vice president of environmental affairs, sustainability, and corporate responsibility of Weyerhaeuser Company, she is an influential leader accustomed to the building industry. She begins her new role Monday, March 5.

“Kat’s depth and breadth of experience as an executive, real estate attorney, and coalition builder will be a tremendous asset for our association,” said Erich Armbruster, the association’s board president. “She will be an excellent representative for Master Builders Association as we expand our influence with regional leaders in addressing the growth and critical housing issues facing our region. I could not be more pleased that such an exceptional leader is taking the helm.”

Sims is a seasoned attorney specializing in real estate law, with more than 10 years of in-house business management expertise. Prior to her most recent position at Weyerhaeuser, Sims worked as vice president of government affairs at Plum Creek Timber Company Inc., which merged with Weyerhaeuser in 2016. She also served as senior director of sustainability and senior director, real estate law at Plum Creek. Early in her career, Sims was a partner at Alston, Courtnage & Bassetti LLP and an associate attorney at Foster, Pepper & Shefelman LLP (now Foster Pepper), where she provided strategic legal advice to developers, landowners, and lenders.

“Developing adequate housing is vital to the health of our region and the Master Builders Association needs to be at the table as discussions are made that impact housing availability,” said Sims. “I’m looking forward to forging new partnerships and locking arms with the association’s leadership, members, and staff to help solve critical issues affecting our communities.”

“Having an opportunity to engage an experienced leader with Kathleen’s credentials is a terrific outcome for our association,” said Mike Walsh, MBAKS 2017 board president and head of the executive search committee.  “Kat has sound judgement and common sense and will be an effective voice for Master Builders Association.”

About MBAKS

Founded in 1909, the Master Builders Association of King and Snohomish Counties has grown to become the largest residential homebuilders association in the United States. With nearly 3,000 member companies, the association is dedicated to membership value, housing advocacy, community service, and financial stewardship throughout the Puget Sound region.

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A home is more than bricks and sticks. Under the law and project documents summarized below, a complex bundle of rights and obligations are imposed upon the buyer and builder.

Why is disclosure a buyer’s best friend? The best consumer protection the law can provide is ensuring an opportunity to acquire an understanding of the products being purchased. This is difficult to achieve, however, because of the complex bundle of rights and obligations being obtained.¹

A builder wants a buyer to buy—but only what the builder is selling; not what a buyer mistakenly hopes or believes is being sold. To avoid post-closing disputes, a builder needs clear guidance to describe what is being sold (the complex bundle of rights and obligations).

The Washington Condominium Act (WCA, RCW 54.34, for condominiums) and Land Development Act (LDA, RCW 58.19, for subdivisions) require a Public Offering Statement (POS) containing mandatory specific information. The objectives fostered by this approach include: providing guidance for POS contents; promoting clear and concise POS’s; encouraging buyers to read and understand; avoiding irrelevant, ambiguous, and confusing disclosures; avoiding a false sense of security that lengthy POS’s contain all relevant information; promoting uniform POS’s; facilitating project comparison; enabling POS preparation at reasonable cost; facilitating obtaining legal opinions; and decreasing the need for state agency review. The WCA-POS is mandatory. The LDA-POS is often not required because of various exemptions (e.g., lot is improved with, or builder is under contract to build, a house). But, an LDA-POS may be given voluntarily. ^{1, 2}

The WCA/LDA disclosures involve three components: cautions to buyers, topics covered, and documents delivered. To avoid post-closing disputes, WCA/LDA POS’s provide the following cautions: buyer has a cancellation period; buyer may only rely on seller representations and express warranties contained in the POS or a writing signed by seller; buyer may not rely upon agent’s promises; POS is only a summary of some significant aspects of the home; documents are complex, contain other important information and create binding obligations; and buyer should seek legal counsel assistance. ²

The topics covered by the POS include: community name and address; developer and management company name, address and relationship; nature of interest being purchased; permitted and restricted uses; number of homes; principal amenities; limited common areas; land the owners and others may access; construction status; association and owner maintenance; owner's assessments; other dwelling fees; governmental assessments; blanket encumbrances; developer’s rights; model homes; association liens; physical hazards; construction warranties; building code violations; association litigation; association insurance; documents delivered; insulation data; and Form 17 environmental disclosures. ²

The documents delivered with the POS include: public offering statement; declaration; plat/survey map; HOA articles; HOA bylaws; HOA rules; HOA balance sheet; HOA annual budget; and construction warranty. ²

The Form 17 Seller Disclosure Statement (provided for under RCW 64.06) creates problems for sellers— the questions are subjective, subject to multiple interpretations, provide grounds for litigation, and are not well designed for builder project sales. Buyers may waive, and builders need not provide, a Form 17. Builders should give either a WCA or LDA POS in lieu of a Form 17—builders are not avoiding disclosures, but are providing disclosures more appropriate for project sales. However, the builder must provide in the POS the Form 17, Section 7 Environmental Disclosures if any question would be answered YES. ³

A single Disclosure Book, with Acknowledgement Addendum, should be used, and contains: POS and documents; delivered when PSA signed; makes disclosures a part of buyer’s contract; avoids document delivery hassles; assures that buyer gets disclosures; and makes proof of delivery easier.

The builder’s Addendum to the Purchase and Sale Agreement should provide for buyer’s waiver of the Form 17 and acceptance of the builder’s alternative Disclosure Book.

Endnotes: ¹ WCA Comments; ² RCW 64.34.400, 405 & 410 and 58.19.030, 045 & 055; ³ RCW 64.06.

Author: James C. (Pete) Middlebrooks, owner of the Law Office of James C. Middlebrooks, provides comprehensive services to individual, corporate, and institutional clients on residential and commercial real estate development, land use, acquisition, investment, and financing.

423.252.2693  |  pete@jcmiddlebrooks.com