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Sunday, May 28, 2006

Caskets To Condos

Here's a fun off-beat weekend story. Casket factory to become condo complex?

While the real-estate market is cooling in some parts of the U.S., demand continues to surge in the Seattle area. That has prompted developers to step up their search for properties — even old, abandoned addresses.

The North Coast Casket Factory, a red timber building used to assemble and store caskets for 71 years, was scheduled for demolition until the Port of Everett decided to seek bids from developers.

Now it might become meeting space or artists' live/work lofts as part of a $300 million, 600-condominium redevelopment of the Everett waterfront.
The funny thing is that the article goes on to talk about how demand is still going up and supply is going down compared to a year ago, when in fact we know that the opposite is true. I think the way they get their numbers is by focusing only on downtown Seattle, which is amusing considering that the story is about a casket factory in Everett.

(Pham-Duy Nguyen, Seattle Times, 05.27.2006)

23 comments:

christiangustafson said...

Paul Allen is building a lot of condos -- a little late to the game IMO. Has he had any real business successes since his Microsoft days? Mercata.com? (SPAM "Spending Paul Allen's Money") etc. I just think it's funny that he's gone so heavily into RE just as it's about to tank.

meshugy said...

Hi Tim,

If you look at the April 2006 recaps for Snohomish it shows an 18% drop in inventory for the Condos only section. Maybe they do need more...


Incidentally, I've noticed inventory has been dropping all week in King County and Seattle. This drop is also reflected in the latest report from the HousingTracker

Does anyone know when the May MLS #s will be out? Maybe next Friday?

'm

Anonymous said...

re: Inventory:

If you look at the housing tracker link above, inventory has been climbing steadily since March 21.

The past week saw the first dip since then, and it's very slight, like not even 40 homes.

5/7.....3681
5/14....3779
5/21....3921
5/28....3886

So yeah, a tiny downward change, but nothing to bank on yet. The next few weeks should be interesting. Will it continue down, or just keep going up again? We'll see.

Anonymous said...

Someone with real MLS access could confirm it, but it appears this weeks inventory drop was due to delisting, not sales. I say this because for Seattle proper, the number of "reduced" listings dropped sharply (from 475 to 390) in a matter of hours. Meanwhile, the number of "non-reduced" listings dropped from 1590 to 1570.

Unless there was a secret "inventory blowout" sale on already market down houses, I can't see the sales mix shifting like this in one day.

meshugy said...

Inventory has been dropping for over a week now. Might have something to do with Memorial Day. Although most other West coast bubble cities went up this week, except for San Francisco. We'll see if it picks back up again...

It's also worth noting that the Housing Tracker has a pretty wide definition of what Seattle is (Edmonds, Tukwilla, etc.) If you follow the core Seattle neighborhoods, the inventory drop is much more pronounced:

On Monday there where 2,201 homes for sale in Seattle. Today there are 2,124. Zip realty shows an even lower #:1960

On another subject, I think everyone should check out this video by UCLA economist Christopher Thornburg:

Christopher Thornburg: Economics Roundtable at the University of California

I agree with his assessment completely:

-We're in a bubble (although that's a bad term because it implies a "pop").

-Housing prices will go flat unless there is massive job loss.

-Houses are different then stocks. Low liquidity makes a crash unlikely.

-Buying is OK if you buy something you can afford.

Anonymous said...

Is there a way to ban Meshugy from posting here?

I get the feeling that he sits at home and figures out ways to post the most blatantly pro real estate nonsense that is out there.

How about some of the absolute evidence of prices crumbling and inventory rising all over the place Meshugy. Phoenix and FL are great examples of this.

I get so friggin tired of reading the shit that spews forth from this troll, its astounding.

Anonymous said...

With the major inventory buildups that are occuring in MA, FL, AZ, CO and parts of CA, I think it is only a matter of time before it hits Seattle. IMO the downturn in other markets will spark a recession that brings down the economy in general.

Anonymous said...

We need Dukes MLS post badly here now!

Are you out there Dukes?!!

BTW, Mr. Thornburg has been loudly proclaiming an RE crash up until about last week. Nobody knows why he mysteriously and abruptly changed his tune. Sounds fishy to say the least.

Especially with the median dropping all over the US!

Anonymous said...

Thornburg knows that even flat prices will cause the job losses necessary to crash the current equity-fueled economy.

Aside from equity/consumer effects, flat prices for the next 6 years (Thornburg says flat till 2012), even at low inflation rates, will translate into a huge drop in real values - especially when carrying- and opportunity costs are factored in.

Thornburg knows what the effects of his predictions will be; he just doesn't want to go on record as the guy who's speech precipated the crash itself.

Notice the one time in the video when he talks off-script; he says that the OC "is going to get hammered" on prices - that's the moment when he's being apolitical and saying how bad he really thinks it will get, which is why he apologizes immediately afterward.

synthetik said...

>Is there a way to ban Meshugy from posting here?

What's wrong with having a differing opinion? If you actually watch that video meshugy makes total sense, at least with the "soft landing" part vs. an audible "pop".

I think Thornburg does go wrong by suggesting that prices can ONLY drop when you have a loss of jobs. I'm not sure there is a precedent for what we have now. Certainly, we have never seen this many ARM's and interest only loans, or an appreciation as high as this before.

What will happen when the number of people start to default on their loans? More and more listings, followed by prices being driven down due to inevitable panic.

I hope that doesn't happen but it seems fairly likely.

meshugy said...

Hi anon,

Not sure why I would be a candidate for banning....along with most folks on this list, I believe in the housing bubble. I only have a more moderate opinion of it's outcome. I do think prices will slow down and probably go flat in Seattle. But not crash...but I still believe prices are too high and don't align with fundamentals.

If anyone should be banned, I think it should be anonymous posters who use foul language and make no coherent arguments.

On another topic, here's a recent article on jobs. Not local, but in indicates a general hiring trend:

An improved job market awaits this year's college grads

Corporate America is laying out the welcome mat for the nation's 1.4
million college seniors, creating perhaps the strongest job market for
graduates since the dot-com days of the late 1990s.

cosmos said...

I think having meshugy's comments are a good thing. And from what I can tell they are more intelligent and tempered than many real estate pros. (I know agents who realize few people are moving from their homes, and so these agents' new plan is to focus on encouraging people to extract equity to buy rentals. Geez.) Of course, there is a bias, but we each have a different perspective.

Anonymous said...

Wow Eliz, that is horrifying to think that an RE agent would encourage somebody to extract equity from their home to buy a rental.

And they KNOW that the cost of carrying that rental will not even come close to covering that person's monthly payment.

That is just ruthless.

Anonymous said...

Hey Meshugy, the fat lady is singing and you can cover your ears as long as you want... we all can hear it!

Anonymous said...

Different anon here...

I don't think that Meshugy deserves banning, necessarily, but I do tend to believe that he is a troll, and should not be fed.

By my observation, Meshugy usually posts the same tired arguments over and over -- "job market good," "weekly listings down," "J. Random Economist says that there's no bubble," etc. -- and there is rarely any new insight or analysis in his writing. However, he *is* civil, and therefore mostly inert.

I think the best thing to do is to ignore Meshugy unless he makes an argument that hasn't already been debated to death. For example -- the fallacy of extrapolation has been repeatedly explained to Meshugy, but he continues to post short-term changes in the MLS listings. Ignore them.

In any case, if you do not feed trolls, they eventually starve. If Meshugy really pisses you off, just ignore his posts. Simple, no?

Anonymous said...

By my observation, Meshugy usually posts the same tired arguments over and over

That's the same thing the rest of ya'll are doing, so why are you any better?

synthetik said...

A realtor I know continues to contact me even though I have expressed no interest in buying. He thinks I still live in CA so I am ablidged to send him bubblishious info just for fun.

The last thing I sent him was an MSNBC video regarding resing defaults:

http://www.msnbc.msn.com/id/12975777/

Here is his response:

Ya know - I just put a 2.3 million dollar home in escrow in Poway. 40% down, 733 credit score, makes about 80K a month. The buyers are out there and the deals are all over the place - just need to know what to buy and where. If your fishin for the bottom of the market, now is the time to really focus, because it looks like we are very, very close. As soon as the fed crunches the numbers on the economy going forward, and they decide to pause or stop, then the real bottom has already passed. This year, California will be short 500,000 homes of what actually should be built to provide housing to every potential purchaser that want to buy a home - can you say supply and demand!!

----

does that not make you want to puke?

a) he's trying to say we are near the bottom

b) CA has a shortage of inventory (only true if you are low income or middle class!)

c) how could his "buyer" make 80K a year and buy a 2.3mill house? Obviously he had sufficient equity in a previous house and also lacks basic mental function to see that the market is tanking in San Diego.

Anonymous said...

Sorry, Meshugy sucks, plain and simple. He doesn't add anything to what we talk about here.

All he does is try to demoralize anyone who thinks Seattle real estate is going to be in trouble.

I second the movement to ban him!

Anonymous said...

Synthetic-

Thanks for being pro-active with the realtor. I love to see people doing that.

Little mistake in your post: the realtor claims this person makes 80K/ month. Hmmmm....drug dealer?

Meshugy is a bonehead who adds nothing to the discussion here, intentionally anyway.

However, every once in a while (quite often actually) he does throw info out that backfires on him. Case in point, it was Meshugy's article on Microsoft hiring 10,000 that allowed us all to get to the bottom of that rumor and discover it's falsity.

This happens quite often with Meshugy's posts. So perhaps we could thank him every now and again for shining the spotlight on just how hollow and false the RE boosters arguments are.

I agree though that he's mainly just a pain in the butt. And downright silly.

cosmos said...

There is a benefit to having someone from "the other side" post. Truth can certainly withstand challenges. In addition, as we see meshugy's perceptions change, we get to see the storm approaching. And when he drops off the site on his own accord, we'll know the major decline is at hand.

Anonymous said...

How true Eliz. He's a very good guage for that. I have been monitoring the flipper sites from time to time with the same thought.

When they start complaining or stop writing, you know some changes are happening.

A couple months ago one of the S. California sites just went off the web. He's the kid who bragged he was worth millions, all in loans!!!

Now the Seattle flipper is having trouble getting loans. Does this mean that somebody somewhere is finally setting the loan bar a tad higher? That would be awesome news.

And M. lives in Ballard, currently about the only hot, or warm, spot left in Seattle. So when M sees the end, we'll know it's well and trully over.

If only he'd just shut up til then. That would be perfect.

Jackson Wallace said...

The fact is that the outlying Seattle area got going a little later than
the current bubble markets in other places. This bubble has radiated outwards
from places like View Ridge and Ballard to Shoreline to Skyway, the last being the most recent appreciator in late 2004.

Maybe Meshugy is biased, so what? I have a lot less respect for foul-mouthed morons who advocate censoring opinions. Sounds like our fearless leaders approach to issues, and it makes the bubble argument look like its populated by idiots.

With no wage growth, and an economy based on housing and commodity bubbles, it seems like a collapse is likely, but with massive debt and a declining dollar, it looks like prioces could stagnate and people would once again feel rusehd to dive in before theor money loses value. Noone knows which will be true in five years, rapid inflation or deflation, so people need to stop acting like they know whats going to happen because you dont. I for one, would like to see mass foreclosures so i could get a screaming deal, or at least a 33% decline to the prices of only five years ago. I dont see how the panic developing in other partsof the country wont spread here, especially when newbies get s sense of waht the weather is like in this city.

Paul Allen is a jerk. he wants to put a streetcar down one of the last viable arterials out of downtown, namely Westlake, and then cross Mercer. Great idea, bozo. just like pretending he was jimi Hendrix and asking people to pay $30 to see an airport full of music trash.

Oh yeah, prediction, pedestrians are going to die out in front of Whole Foods at the new 2201 condo complex. Look for some real juicy traffic there. Denny is aparking lot already, and now add grocery trcuks and tons of residents, hotel guests and shoppers. Brilliant traffic planning. Lots of panhandlers, too. I cant wait to see that clusterhuck. I'm going to set up a little cafe table and laugh.

BN said...

I too disagree with the need to
ban meshuguy. He is definitely a
person with more balanced views than most people here :)

Minds are like parachutes, they
work only when they are open.

So let us not close them.