Seattle home buyers keep wary eye on the stock market's plunge

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Isn't it interesting that a stock market plunge and an energy crisis were both predicted as likely indicators of the severity of Y2K problems. Is it just a coincidence that both have happened in the first few months of 2000?

Seattle home buyers keep wary eye on the stock market's plunge

Saturday, April 15, 2000

By KATHY MULADY mailto:kathymulady@seattle-pi.commailto:kathymulady@seattle-pi.com

SEATTLE POST-INTELLIGENCER REPORTER

At least a few Seattle home buyers pulled out, stopped looking or postponed the closing date on their dream home as a result of this week's plunging stock market, some area real estate brokers say.

And while other agents and brokers say they haven't noticed much change this week -- even taking into consideration that it is also income tax week -- it was clear to many that some home buyers who were planning to borrow against or sell their stock have lost their buying power.

That's not too surprising since one of the big losers in the stock market has been Microsoft, which yesterday hit a 52-week low, having lost 34 percent in just three weeks.

This area's residents, who own an estimated 40 percent of the company's stock, have watched as about $5.8 billion of their worth on paper evaporated since March 23 -- just in that one stock.

And the losses in many of the region's dot-com companies were comparable to those of their software-business ancestor.

Those with stock options are limited to certain periods when they can cash out. If their date fell after the market dropped, they were out of money when it came time to buy.

Judith "Z" Zemcuznikov, an agent with Windermere Real Estate in Queen Anne, said one of her clients, a "dot-com person," made an offer on a high-end home in the Queen Anne Neighborhood the week the market started its "dipsy-doodle." The buyer asked to push the closing date on the house out to September.

"It affected people. It is a time of people not knowing where we are headed," she said.

Rene Stern, another agent at Windermere, Queen Anne, said that in the past 10 days, two motivated clients from high-profile, high-tech firms, which she didn't feel comfortable naming, told her they are not in a position to buy a home under the current market conditions.

"The volatility of their net worth has always been dramatic," she said. "It's no longer about how much they want to spend, but rather if they want to at all. It has changed their net worth so dramatically that it has frightened them." Kimberly Brangwin, a Coldwell Banker Bain broker for the Seattle metro area, agreed.

"There is a level of nervousness, an overall climate. Some properties are taking longer to sell," she said. "We have not seen a direct correlation yet (to the stock market's decline). There has been a minor shift, but nothing very specific. There is still a lot of aggressive offering."

Dick Droppelman with Re-Max isn't worried. After 23 years in business he's weathered all sorts of economic upheavals. When interest rates hit 17 percent it was more scary than the market's drop.

"Remember that it went up just as fast, it's just a bump in the road," he said.

http://www.postintelligencer.com/business/real152.shtml

-- Carl Jenkins (Somewherepress@aol.com), April 15, 2000

Answers

I have a son who lives in Seattle. Late last year he walked away from a hi-tech, NASDAQ-listed firm a multi-millionaire from his stock options. Looks like he got out just in time. He reported to me by phone today that there was a lot of panic in real estate circles Friday--people withdrawing offers on high-priced homes, etc. In all, I guess it was a lot worse than this piece would have you believe.

-- JackW (jpayne@webtv.net), April 15, 2000.

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