Five Sales for November
As Many Pending
Showings Slower Than Slow
Keeping the Lawsuit in Perspective
First, Let’s Talk About Those Sales:
Excise tax was collected on five sales during November. There were eight at this time last year and seven in November of 2012. Sales typically slow this time of year due to the Holidays but year over year, the numbers are disappointing. Interest rates are back into the upper 3% range so it’s a great time for buyers. The lack of inventory in the more affordable price ranges is no doubt not helping and I’m sure the pending lawsuit has scared a fair number of otherwise buyers away. Some are gone for good which is a shame. Arbitration is expected to reconvene December 19th with the hopes of a settlement. If that happens, things will definitely improve. Regardless, the New Year is expected to bring a solid flow of both Sellers and Buyers, regardless.
Please, keep in mind all the following data is as of November 30th, 2014 at midnight for month over month accuracy. Statuses of some of these homes have changed by the time you receive this report. We’ll serve no wine before its time. Add the appropriate days per the month of November for time on market of available homes.
The Match Tic
|8 (January)||68 (June)||33||31|
The total amount of all Northwest Multiple Listing statuses measured 31 at month end. Status may include Active (Homes currently available for sale), Pending Inspection (Homes under contract but still in the home inspection process), Pending (Homes that have worked through the inspection process successfully), Sold (Homes that have closed escrow), Contingent (Sold homes that are contingent upon the buyer selling their own home) and TOMK or BOMK (Homes that are either Temporarily Off Market or Back on Market after being temporarily unavailable.)
November Results for Sold Homes:
We’ve been chatting for a few months about the lack of homes in the $500K range or less. Respectively, four out of five of the closings for November were in the $500K range. With an average of 50 days on the market, it seems buyers got tired of waiting and pretty much bought up the inventory in the price range. One very important point is that each of these completed sales originated with contractual agreements from September and October with the exception of one on November 3rd. Only one home has gone pending since, an ARCH Chelan priced at $318,691 that had been on the market over seven months. People like to shop the bargain bin.
Here’s What Sold:
|Model||Original Asking Price||Asking Price when Sold||Sale Price||Days on Market|
The average number of days on the market was 65.The average sales price was 91.56% of original asking price. The Monticello is skewing the average having realized just for 82.6% of the original asking price. This is a lovely home on the golf course, mind you, but all I can do is shake my head and bite my lip at an ultimate discount of $160,000.00. Do you think being priced too high to begin with could have hurt this sale?
The Northwest Multiple Listing Service reports that sales in King County are up about 5.2% year over year and there is about a two month supply. That’s very low when a healthy market is considered five to six months of supply. Trilogy’s active listings fall right into the two month category with an average time on market of 55 days. An interesting fact is that about half of the King County inventory is vacant. Of the 10 homes for sale in Trilogy, seven of them are vacant. Vacant homes for sale indicate people aren’t hurting for money right now. The vacant homes in Trilogy are not foreclosures and a significant of them outside Trilogy aren’t either. Many in Trilogy are moving to warmer weather; others are moving to assisted living or choosing to lower debt and are going to rent for a while.
New Pending and Under Contract:
Here’s what’s currently pending or Pending Inspection. There are five:
|Model||Original Asking Price||Current Asking Price||Days on Market|
|Chelan – ARCH home||$318,691||$318,691||228|
*Homes in bold; the Elephant’s Work of representing either the Seller, Buyer or both.
Just one of these Pending sales went under contract in November, the ARCH Chelan. The rest reached mutual agreement between seller and buyer in October. Things really slowed down in November. The NWMLS reports pending sales are up about 3% year over year. This is a reflection of the lack of inventory. The fact that sales are up 5.2% indicates buyers are being less particular and taking what they can get. January and February bode to be a great time to enter the market for a likely quick sale. This does not mean, as the Monticello proved, you can name your price. Most upper end home sales have had some price reduction before securing a buyer. The market will only bear so much. It’s been tested by me and by others with strong marketing.
What’s Available for Sale?:
AS of November 1st, there were 10 homes for sale in Trilogy. Here they are:
|Model||Original Price||Asking Price||Days on Market||Elephant thoughts:|
|Vashon||$589,000||$589,000||32||Golf Course Home|
|Hemlock||$709,000||$709,000||25||Partial View Home|
|Hemlock||$785,000||$785,000||40||Golf Course & View|
*Homes in bold; the Elephant’s listings.
The average home had been on the market 55 days at the beginning of the month. That’s almost exactly half of the 111 days reported for October. Not surprisingly, the one lower priced range home, the Orchard, is now under contract. Once more, buyers have nothing to choose from unless they want to invest half a million dollars or more. Pricing is strong in Trilogy and remains steady. Time will heal and sales will pick up in January.
Note: All listings after the first and all currently available are posted at www.DevinSanfordHomes.com on the home page. Just scroll over to the Trilogy tab and select “Current Trilogy Listings” from the dropdown list. For all listings, “Click” the big green tab to the right. It says, “View all Trilogy at Redmond Ridge Listings.” Within this report, we share what is available at the first of the month for consistent and measurable month over month reporting.
Some Home Owner Perspectives Regarding the Lawsuit:
First of all, homes continue to come on the market, signs are hung, there are some showings, homes pass inspection and they still close escrow. That won’t stop. It didn’t halt with MOTH one or MOTH two and it won’t now. This market report is very late this month, partially because I took a long overdue vacation but mostly because I’ve been responding to in-depth inquiries as to what my take is on various aspects of the lawsuit. I’ve tried to be diplomatic and brief in my responses. The amount of inquiries I have received is quite humbling. I ask myself, “Who am I?” Just the same, I can’t ignore them. With that in mind, I’m going to air some thoughts and comments from and for some of our residents. I’ve greatly contemplated “Do I dare?” In order to answer that question, I’ve been doing what I always do. I’ve been gathering facts. This is the other reason this market report is late. Yes, I may share some of my own observations and interviews. Facts are facts no matter the subject. Names will not be used out of respect for our members and my first amendment rights.
I, also, would like you to know that it is not my intention to take sides. I’m sure there are valid claims by both parties. You may find my collection of sentiments is a bit lop-sided. I received what I received and I think it is probably because the plaintiff’s and/or their attorneys have had so much publicity, there’s no need to reach out to someone like me. Those with other concerns would like to, somehow, be heard. For the sake of not taking up an enormous amount of your time, allow me to just quote a few.
The Seattle Times articles which came out on October 10th and November 21st seem to be the major thing that has the folks I’m talking with speaking out. One of the more thorough communicators contacting me said, “I have no problem with people filing for damages on their individual behalf, but I DO have a problem in trying to file a broad-brush lawsuit that paints all houses here in Trilogy as low quality, just to get maximum damage awards.” In an inquiry to his attorney asking, “could one ever build a case against those attorneys who are stirring the case?”, the same resident expressed concerns saying, “To make the process as painful as possible for Shea Homes (forcing them into the biggest (double award settlement)) they have denigrated the quality of ALL Shea Homes built homes and created as much negative press as they could…They are shooting for $25,000 – $50,000 per home settlement.” The attorney responded, “My initial reaction is that if the damages can be repaired, under normal circumstances, that is the extent of damages. However, if the publicity has denigrated the value more than the costs of repair, there MAY be additional damages that can be pursued.” This same home owner wrote the editor of the Seattle Times arguing, “The article didn’t say a single word about why most people have chosen to live here in Trilogy in the first place” and challenged the reporter to “come up with the name of one resident who has sold his/her home because it had turned into a “rotten safety hazard.” No response was received. Not wishing to “join the frenzy” as this resident stated, he decided to reach into his pocket and spend $175.00 for a professional home inspection by a company that has done many in Trilogy. The inspector found nothing wrong with his ten year old home and he is at peace; interesting concept.
Reporter, Alexa Vaughn of the Seattle Times said in her November 21st article, “Residents have complained for more than three years that most of Trilogy’s 1,522 houses weren’t properly assembled or water-proofed during construction and, as a result, have turned into rotting safety hazards.” Most is a very strong word and does add validity to the above Trilogy homeowner’s concern and the same concern of others. They don’t deny the story or two we’ve heard of rotting supports which could become a safety hazard but Alexa’s blanket statement seems to be quite an over-statement.
Another Trilogy member writes “What I think is happening is an attorney who is preying on both the fear and entitlement of an affluent population. Ongoing maintenance is required on any home (especially in the Pacific Northwest) and if not properly attended to problems will arise, but that is not the fault of how the original structure was built. Hard to say this to people who are so emotionally charged, but everyone has seemed to lose sight of the very real fact that if they are not willing to be responsible for their maintenance accountabilities and continue to be “charmed” by this lawyer, they will permanently damage the value of the most beautiful active adult community around, serves no one.” To support my reason for printing these statements, she concluded with, “Because of your prior experience with Shea and your intimate familiarity with the community, I think you are one of the few people who can start some messaging to counterbalance all of the emotions the attorney has stirred up. This is a dangerous situation for all and needs your attention, in my opinion.
In speaking with many members, it is evident to me that the majority of homeowners are very happy with their home and have had no major issues. A member from division three kept me in check saying, “We’ve NEVER had a problem with Shea or any of their staff, crews or customer service folks, even long after our homeowners warranty was up.” Residents don’t deny that others have had problems and no builder is perfect. Homes outside Trilogy have construction or maintenance issues too. On an older home, that may have not had anyone inspect their caulk or paint on corbels or trim pieces in years, it’s hard to determine if it was a construction flaw or simply lack of maintenance in many cases. I can share a couple things, the handful of “scared” people I have talked with, including a couple of resident real estate brokers, seem to be full of fear about; it’s the unknown. One broker said, “We don’t know what might go wrong in the future.” Do we ever really know that about anything? I do know this, without information, people tend to think the most negative, pessimistic things as sort of a natural protection reaction. Another resident broker said to me, “Shea needs to pay.” To date, she has recorded one Trilogy sale for 2014. For what it is worth, so far, nearly all of my fearful conversations have been with single women.
I’ve dug deep with a couple inspectors, one of which directly called planning and development with King County. As a former builder of several custom homes, he knows the ropes. According to him, the county shared with him that Z flashings over windows, indeed, are not a code requirement. He reports, “What is required is that the windows are caulked against the backing they are attached to and that Vicor or a similar waterproofing product be laid over the flange of the windows to prevent water intrusion; that is all.” The Vicor product is about a 10 inch wide, thick, black vapor barrier that is real sticky on the back. It is a common product stuck over window flanges to keep things dry. We’ve read and heard from many rumors that Shea did not install these windows and trim to code because windows did not have flashings. I believe the lawsuit alleges that Shea did not build according to the approved architectural plans that were submitted to the county, which are alleged to have included flashings. There is a difference. More than one inspector or general contractors reported, “Flashings are not a code requirement or necessary when you have a well caulked and painted trim piece, especially if the window is below a bump-out.
I do have first-hand experience in attending many home inspections as a licensed real estate broker. I have viewed many quotes and invoices for various repairs on Trilogy homes before and after the sale, and have interviewed a fair number of licensed contractors and certified home inspectors. My questions have been more in-depth and more specific to the lawsuit items over the last several months. Of course, I’m a former employee of the developer having served as a real estate sales representative, Designated Broker and part-time sales trainer for Shea Homes. During this process, I had my hands on the blue prints for virtually every floor plan prior to the Nice and Monaco and have walked hundreds of homes during every stage of construction from excavation to handing over the keys. I have been deeply involved in Trilogy for the greater part of the last 11 years so it would be fair to say I have a better than average knowledge of the construction of these homes and of the types of repairs needing to be done to satisfy inspection recommendations.
John F. Kennedy once said, “The only thing necessary for the triumph of evil is for good men to do nothing. Much earlier, British Philosopher, Edmund Burke said it this way; “Let not any one pacify his conscience by the delusion that he can do no harm if he takes no part, and forms no opinion. Bad men need nothing more to compass their ends than that good men should look on and do nothing. I have been asked by more than one to voice a few concerns. I know of no-one else who has offered these people a voice. Simply said, I cannot ignore them. This is not to say ANY of the plaintiffs are “bad men” or women. My point is that, if we want a fair outcome, all perspectives deserve to be heard.
Having been said, I have attended many home inspections during the sale process and have been in many attics and crawl spaces in Trilogy over the years and I have yet to personally, see a safety hazard regarding structure or have one pointed out to me by a licensed inspector. It is what it is. A member mentioned,“Only problem is that Shea Homes previously only worked in CA and AZ, and had never worked in a temperate rain forest before.“ I heard this years ago on the news when mold and mildew were the concern. Many of you may find it interesting that statement is not exactly true. Shea Homes started their first communities in the Coastal Carolinas back in the 1960s.
Pretty much everyone I talked with had no doubt there are some more serious issues with some of the homes in Trilogy and they emphasize “some.“ Others have less serious issues to none. What it seems upsets many is the dollar amount the plaintiff’s attorneys are seeking. They feel the large numbers some are seeking is more of a vengeance or “hurt Shea” amount than simply a “make me whole” dollar amount. It makes sense that the larger the numbers being sought for damages and touted in the news, the more potential homes will be categorized as more defective and less valuable in their community.
Plaintiff’s attorney, Dave Von Beck was quoted in the Nov. 21st Seattle Times article as saying, “more than 500 homes may require twice that much to replace roofs, which the lawsuit alleges were installed with insufficient structural support.” He’s talking about double the $25,000 in repairs quoted in his previous line. $50,000.00 for a roof does seem a bit excessive. I championed the replacement of an entire roof on an over 2,900 square foot home in Bothell just a few months ago. The cost was $13,000 total for the tear off of old plywood and shingles and the 100% replacement of the entire sheeting, shingles and ventilation with new. In Von Beck’s letter to Trilogy homeowners on November 14th he illustrates a photo of a problem and describes, “Roof framing on most models that can cause the roof eaves to sag and roof shingles to buckle.” One member with construction background mentioned, “This is the edge of the roof; the overhang. It doesn’t mean you have to replace the entire roof. “It’s easy to understand why people get so scared when they are at the mercy of, perhaps, inflated repair quotes from not so honest contractors or the unknown. When a member sees a rotten column opened up at the front of their home and they are quoted thousands to repair it, it’s scary. It’s also a shame when what is involved is a $20.00 piece of plywood, a few 2 x 4s, some nails, some caulk and paint and a few hours labor from a knowledgeable contractor. I recommend getting more than one bid from a reputable, licensed contractor when seeking repairs. Sure, flash it for additional quality. Keep the change.
One Trilogy resident is quoted in Alexa Vaughn’s October 11, 2014 Seattle Times article as saying he’s made repairs in a series of wood-rot and piping problems that’s cost he and his wife at least $20,000.00. In a later article by the same reporter on November 21st, 2014, the same gentleman is quoted as saying the couple has spent more than $5,000 fixing rotting wood and other problems at the house his wife bought 11 years ago. This is a much lesser number than quoted just weeks earlier. Yes, he is a handy guy and was able to do much of the repairs himself but he said it has “cost” at least $20,000.00. Which is it; is it $5K or $20K? Members wonder if emotion paired with vengeance is getting in the way of reporting actual damages suffered. The question also arises, what kind of repair was the wife’s home in before the former contractor moved in much later?
I interviewed a gentleman recently who was having many of the corbels replaced on his Craftsman style home. I witnessed the contractor doing the work. The owner talked about how cracks in the corbels allowed water in and they rotted. I asked him if he had had anyone do a periodic inspection, perhaps get a ladder and make sure there was paint atop the corbels. Weather does wear on just about everything. His response was “no” and he claims he was told many times, while making the decision to buy his new home back in early 2004, that these homes were supposed to be “maintenance free”. He said, “Maintenance free was advertised to us several times while we were making up our mind. “This is a community for older people” he said. He got a bid from a well-known contractor about a year and a half ago. When I asked if he had the home inspected, his reply was “Yes, but they were already rotten by then.” The house was over eight years old by the time he had a checkup by a professional. I asked two contractors what could have been done to prevent these corbels from rotting. They responded, “Common sense would say, no matter the grade of wood when built, if you keep an eye on your investment and keep caulk and paint on any cracks you discover, water won’t damage the components of your home.” I recall no marketing collateral saying “Shea homes are maintenance free.” I am, personally, very happy that I no longer work for anyone. I prefer serving real estate clients in my current capacity much more. When I did work for Shea, I worked in a bullpen with as many as ten other sales people and never heard any of them say that, nor do I recall it was it printed in any collateral we handed out.
I’ll share, as a very inquisitive and active real estate Managing Broker, I have received reports on multiple inspections from different inspectors reporting “This is one of the cleanest inspections I’ve had. I see no worries regarding the items in mentioned in the lawsuit.” At the same time, I’m aware these same members have already received or have been offered settlement offers from Shea in exchange for confidentiality. In every case, the money far exceeds the actual cost the repairs would run if they were needed. Pro-active quotes from local contractors have been collected. So, why are the homeowners accepting Shea’s money if there are no defects in their home? “Why not; if Shea is going to offer me free money, I’ll take it.” Today, I spoke with a very credible owner who reported receiving compensation for a few minor cracks in his driveway and other small items. He said, “I’ve been living here a long time and nothing has really bothered me. If Shea wants to give me money, I’ll take it but I don’t see the need to fix anything.” I received this response from more than one owner. Others have said, “If I ever decide to sell, and any of these areas need repair, I will have been paid for the cost of doing the repairs.”
Why is Shea, at least in the cases I’ve been told of, offering so much money so easily? I don’t exactly know. I’ve racked my brain about this for weeks. They’re a big company and I’m sure they have their reasons. In fact, they’ve talked out loud about them in forums and in the papers. Some believe them; others don’t. One of my confidential owners prompted an article in the Redmond Reporter which came out on November 27th, 2014. Shea was quoted as saying, “Shea would rather have homeowners satisfied and pleased with our repair/settlement program then forced to participate in a lawsuit that could drag on for years.” Shea, no doubt, is trying to spare their reputation and they do have homes for sale in other communities in Washington like Jubilee in Lacey and Tehaleh in Bonnie Lake. From a customer service point of view, I’m guessing paying out a settlement in lieu of having to satisfy homeowners yet again, with the work of Shea hired tradespeople making prospective repairs, makes sense too. Write the check and be done with it. Let the homeowner hire who they want. This allows Shea to wash their hands with one house and move onto the next. Again, I’m guessing. Most, I’ve talked with take the money and most say, “It’s more than I need.” One thing is for sure, we’ll all be glad when it’s over.
Many of those who have prompted this report have no doubt some homes have problems, for whatever reason, that need addressing or that some of those problems are the fault of the builder. What they do have issues with is inflated claims just to hurt the developer who built this community, most admit they love and enjoy. The message they want to get across is, “Keep it real, keep it honest, make yourself whole and don’t believe everything you read. The lawyers don’t have to live here; we do.”
Don’t kill the messenger. Times of conflict and uncertainty are never fun. It is clear that Trilogy members love their community and most enjoy boasting they have the best floor plan. It’s not a perfect world and sometimes lawsuits are necessary when things cannot be worked out amicably. That’s too bad, but it’s a reality of the world we live in. Defects in construction are important to remedy. Who’s responsible or who is going to pay for them can certainly create a snowball effect of escalating emotions. In the end, most conflict heals with time. We all hope those who have issues of any kind, find resolve and a satisfying remedy. When issues are settled and all is behind us, most of us reflect and realize “less would have been more” and we spent a lot of wasted energy. When lawyers are involved, asking for more than you’re willing to take is usually the case. “You don’t ask; you don’t get” seems to be status quo. I think the concerns of those who reached out simply want to express, “Don’t take more than you deserve. You might just be hurting yourself.”
We Love Feedback
Your emails are very welcome. If you have anything you’d like us to address, by all means, drop us a line! Of course, we are not perfect so mentoring is very welcome, as well. We love growth in any facet. Thank you, in advance.
That’s a wrap for November!
Devin, Bridgette & Team