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Monday, May 22, 2006

Real Estate Agent Boom Slowing

I guess Elizabeth Rhodes must be on vacation or something, because lately all the real estate stories in the Seattle Times have been refreshingly less biased than I've become accustomed to. For instance, take a look at this report from Jane Hodges on the huge increase in the number of real estate agents in our state.

In Washington state, the flight into real-estate mirrors national trends. The number of adults who took courses to qualify for state real-estate licensing tests here has almost quadrupled over the past four years.

In 2001, 1,172 adults completed training; last year, 4,561 did. The number of practicing agents statewide also has nearly doubled from the 22,356 in 2001. At the end of April, 42,712 were working, Department of Licensing data show.

But at a time when mortgage rates are heading north and many prognosticators say the real-estate boom is about to stall, how will all these agents find business?

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, says the rise in the number of agents in the state isn't surprising. However, it's likely that number will drop as the market cools.
But I thought the market was never going to cool? Aren't we going to see continued wild appreciation from now until the next World War? Well... maybe not quite—and Ms. Hodges actually has the guts to admit it.
Some say the slowdown has begun.

Erin Sullivan, a registrar with Windermere Education in Seattle, said she sees fewer new agents these days.

When Windermere brokers hire new agents, they typically send them to Sullivan's department for in-house training, a practice common at most brokerages.

During much of the past three years, new-agent-training classes have been packed, Sullivan said, with a dozen or so people on wait lists for 48-person classes. Now classes fill up only at the last minute.

"The plateau started a few months ago," Sullivan said.
Even as the public face of Realtors pulls a Baghdad Bob in the face of the inevitable slowdown, the boots on the ground belie their official position. One other tidbit I found interesting in this article was the statistics on real estate agent wages:
NAR reported in August 2005 that the median income of agents with less than two years' experience was only $12,850, while that of agents with six to 10 years' experience was $58,700.
If they're only making just barely over the median wage after 6-10 years of experience, it's no wonder they want so badly for house prices to keep on rising. Although, I believe that is a national statistic, not a local one.

(Jane Hodges, Seattle Times, 05.20.2006)


Anonymous said...

47,000 licensed

....then you count the several thousand mortgage brokers,several thousand title, appraiser, escrow and support staff. I imagine in my head pictures of Safeco Field full of real estate people. Quite a picture seeing all those people vying for those 4-5 thousand sales per month. That's where you get those low median income numbers from NAR or Dept. of Licensing.

A very large pool of people are in real estate, both here in Washington and nationally. Attrition is coming and already being seen in mortgage company's folding, consolidating. You will find mergers and consolidating very heavy in real estate offices in bubble prone cities. Only way to stay open I guess.

Eleua said...

Just about every RE agent I know repeats that Washington is going to get 10000 new jobs every year for the next ten years (that's why the RE bubble is going to go on, don't you know...).

How many of these jobs are in the REIC?

Anonymous said...

Area loses jobs... RE goes UP. Area gains jobs... RE goes UP!

I guess there's just something unique about Seattle.

Anonymous said...

Ha! Brilliant assumption Tim. Elizabeth Rhodes IS on vacation. It was announced in last weeks Sunday RE section.

For this week, an interesting note on the local RE scene:

This from the Sunday Seattle Times business section: (re King, Pierce, Kitsap, Snoho)

"for the past 5 months, total sales activity in the 4 county area has been below the same months last year- a consequence of scanty inventory rather than slackening demand." (!!)

Then directly below:

"Metro area listings rose 0.7 % compared with April 2005". (!!)

Conclusion:From 2005: Inventory up, sales down. BUT sales are down because inventory is low.


dalas said...

MLS number put 2002-2003 at around 16,500 and around 26,000 for Dec 2005. So I don't know what rest of these agents are doing by not signing up with MLS, or is the number inflated by the author. I can't seem to find the number off dol website.

Let's go with the number, if there are 42712 agents listed for April, give or take even few thousands, it still means that almost 15,000 of those agents are not registered with MLS. Perhaps that's the reason why they are not working anymore...

dalas said...

the MLS number puts active listing on the eastside for every month in 2006 below 2005. The same number puts number of closes for 2006 below 2005 as well. The proportion of closed sales to total listing is 46% last month, 48% in 2005, or 46% for March and 51% for 2005, and for January and Feburary it actually has been higher than 2005. Slight drop is a sign of bubble implosion? Not quite, comparing to 2004, that number is 27% and 28%. Just a bit of slowdown, but still a huge increase compare to 2004, not enough for any solid conclusion.

All these numbers are avaliable on MLS and have been hotlinked by someone on the previous posts.

Anonymous said...

You just keep telling yourself everything's going to be fine Dalas.

I do believe..I do believe..I do believe...

Dukes said...

The old 80/20 rule applies to realtors just as much as any sales position. Maybe more so.

20% of the people will make 80% of the money. It always works this way.

There are many, many real estate zombies who have a license and do nothing. There are also many, many new agents who have no idea what is coming. Count my brother in law amongst the latter.

I have tried to tell him, but by this point he thinks I am some kind of crackpot. Funny...

dalas said...

I am not telling myself anything, I like to read the facts and look for answers myself.

Anonymous said...


Inventories are rising in many (though not all) of the Puget Sound counties. This information is obtained directly from the NWMLS press releases.

So,'s a thought -- perhaps you should read the lines that don't tell you what you want to hear.

dalas said...

in that same regard, why don't you do the same?

I am an Eastside agent, and quite honestly I only care about Eastside. If you got facts to refute Eastside numbers, go ahead and do so and I would love to see. I am not defensive about this, I am happy if I am wrong, then I learn something. but under the same context about what I said earlier regarding well-off borrowers, it applies to Eastside, thus I am confident about it.

Anonymous said...

dalas- what would you say the general market mood is in your real estate office? Do you work for a big real estate company or a smaller outfit. Do you prefer lending to selling and where do you get most of your clients?

Your previous post on the other thread said you worked in the business for only about 5-6 yrs., so I suppose you've never experienced a market correction, in terms of working in the business during a soft time. True? Not many agents are willing to talk on a bubble site (or any other Blog for that matter), so your feedback is appreciated.

dalas said...

Since August of 2000, I guess there hasn't really been soft time during this period. Most offices are what you expected, they are disbelievers. I have license in RE, but I don't do any business in RE. You need the license if you are in the game, but no point fighting over thousands of agents. My office is fairly good size, 40-50 employees in and out. What's funny is that I am not very popular in the office lately because I have been the one pointing out the slowdown and possible drop in appreciation. I came to this website expecting to gather more evidences for slowdowns to talk to my co-workers, but visiting this site actually made me want to argue the opposite. Just like how my co-workers and many other around the region that still believing in the RE market and showing numbers to support their beliefs, you guys do the same here and quite blindly as well. Not that I know more than any of you, but if I see a number, I would like to verify it with its source and context.

To answer you question, yes there are still many of us diving into the market, but it's not in my best interest to advise them otherwise anyway. However, there's always both side to the story, and all I really care about is the number. If the number makes sense, I'll go either side, why would I be emotional about it.

dalas said...

Seattle had some huge real estate booms in the past, once in around 78, and another around 90. They were around 38 - 50% appreciation, yet there was never a bust following it. California and New England on the other hand, there has been some huge bust there, and seems like the history is repeating itself.

We keep on talking about history of busts, but what about Seattle? You think we'll bust finally? Or are you all just feeding into the media frenzy again...I guess the dotcom bust is still fresh on everyone's mind.

dalas said...

Oh, and everyone just loves to cite Boston, Florida and California and use it to generalize for Seattle and everywhere else.

Anonymous said...


I don't want to be rude, but you have to be reading this blog very selectively to make the statements that you're making.

Case in point:

"We keep on talking about history of busts, but what about Seattle?"

I don't know where you're getting this. I've been reading this blog for months, and I've never seen anyone mention a "history" of real-estate busts in the region or the country. If anything, most of the people here go out of their way to delineate the differences between this period, and previous periods of rapid real-estate growth.

Also, your post at 12:11:

Slight drop [in sales] is a sign of bubble implosion? Not quite, comparing to 2004, that number is 27% and 28%. Just a bit of slowdown, but still a huge increase compare to 2004, not enough for any solid conclusion.

Anon 2:07 had you pinned -- you're just looking at the "Eastside" data, to the exclusion of all other data in the NWMLS reports. The Tim has posted after each of the last two NWMLS releases, noting decreasing sales and increasing inventories in most of the tracked counties. Furthermore, there's been some extensive discussion in the comments about the reasons that the east side hasn't seen declines (yet) -- numerous comments indicate that there's a strong speculative component to that market.

You may want to credit yourself with being open-minded about the prospect of a bubble, but to my eyes, you're using the same selective reading that most real-estate "professionals" use to justify their rosy views of the situation.

Anonymous said...

Oh, and everyone just loves to cite Boston, Florida and California and use it to generalize for Seattle and everywhere else.

Speaking of generalizations...who is "everyone," and how often is he posting? I must have missed his comments.

Every day, I find something insightful and specific to the Seattle market on this blog. Very rarely do the posts draw broad comparisons to market conditions in other parts of the country. Your comments, on the other hand, tend to be based on cursory readings of the information, and sweeping statements about what "everyone" does to "generalize" the market conditions.

In short, I'm calling bullshit on you: find three separate occasions where The Tim has posted "generalizations" from the market conditions in other cities or states, without data specific to the Seattle market to back up his arguments.

If you can't do that, you're just bitching.

Anonymous said...

I just went to and noticed that King County foreclosures jumped from 51 to 77 in the last couple of days (I've been watching regularly). This over a 50% increase in foreclosure activity in only a few days. Also, there are 1518 Preforeclosures...these are foreclosures ready to happen. I'm not sure how many preforeclosures there were last year, but something tells me this is a huge number. In many other areas there are only a over 1500 seems like a lot.

Please tell me why we won't be seeing double digit declines in King County in the coming months. The rate of foreclosures to preforeclosures here is as big as any other West coast bubble area.

Anonymous said...

Regarding comparisons to other's absolutely critical to view this in the context of the larger macro economic situation. Seattle won't walk away unscathed with the rest of the country imploding.

Anonymous said...

Blast from the past (Seattle Times articles):

1) Back To Reality? -- Seattle Market Slows Down, May 1990

``We are starting to reduce some prices,'' says John Jacobi, president of Windermere Real Estate, ``especially on higher-end homes. The frenzy is not occurring. We are not receiving multiple offers anymore. Buyers are smart. They are going to figure out if the level is too high and they'll adjust the market.''

2) Sunday, July 29, 1990
"The Real In Realty by
Michele Matassa Flores"....

``Is the bottom just falling out of the housing market , or what?'' she asked. (consumer)

"The number of sales in the three-county (King, Sno., Pierce)area dropped from 4,100 in March (1990) to 2,600 in June (1990)"

"Ruby White, a 22-year real estate veteran from Point Roberts Realty near the Canadian border, blames greedy realtors as much as sellers. "

3) May 1990 on price cuts:

"An example of a huge reduction in price occurred recently in the Edmonds area, where a home purchased a year ago for $257,000 sold for $207,000. I couldn't believe it," said Mike McDonnell of Northwest Appraisals.

4) Sunday, July 14, 1991 :
Tom Kelly on the market--
"Where are the home buyers? The answers are unclear and perplexing."

"The multiple-listing book seems to get heavier and heavier," said Michael Nelson, an agent at Greenlake Realty. "I came back from a week's vacation and had three more people who wanted to list their homes for sale. The truth is, I'd trade all of them for one serious buyer."

5) Seattle Times Jan. 1990--Just prior to Spring huge shift...see what Realtors and experts spew:

``It's astonishing,'' Ross said. ``The home-buying frenzy is not slowing down at all and I really don't see that happening for some time.'' (Jim Ross, Senior VP of Coldwell Banker NW region)

.....just a couple months later, the bottom fell out and scores of people selling sold at a loss, bringing money to close.

6) Seattle No. 1 In Increase Of Home Cost by Bill C. Dugovich--(early 1990 article about 1989 market spikes)

"Home prices in the Seattle-Tacoma area increased an average 37.2 percent last year, outpacing 17 other metropolitan areas in the latest national survey of home prices.

The survey, by Chicago Title and Trust, found that while home prices in some areas of the East Coast are declining (like today 2006, other markets are clearly tanking), values in Seattle and most of the West Coast continue to climb. (Seattle lagging but it's party is coming to an end)

7) A year later-

Sunday, May 19, 1991 : Business

Grubb & Ellis Cuts Offices, Plans Layoffs

``There has been so much overbuilding......''


Anonymous said...

That blast from the past was great. It sounds like Deja Vu...perhaps history truly does repeat itself.

I can't wait to see the May sales numbers...

Anonymous said...

Thanks for posting that. I guess that I am one of the few that remember to post-CA price drops ("going back to Cali, to Cali, to Cali"). It does seem that price corrections in the RE market are one of the best kept secrets out there. Goes against the training they keep drumming into our heads (just like not tracking expenses = huge profit).

One other thing to keep in mind WRT the whole 'we won't be impacted by other markets' discussion...What about all the specuvestors that own in Seattle and also have over-leveraged 'investments' elsewhere? I can't count the times I heard people at work talking about buying 'investment' condos. Seems like some of their Seattle homes may go on the market as well...

Anonymous said...

How many people became RE agents just to avoid paying commissions especially due to higher home prices?

Anonymous said...

Anon.'s post "blast from the past"-- How that for specifics to Seattle/Eastside, Dalas?

Anonymous said...

THankyou SO much for the "Blast from the Past" post.

It is exactly what I would like to see more of on the Seattle blog.

Though I am confident that Seattle is due for a major correction, I understand, in a way, Dalas' complaints about a lot of the "info" here.

It tends to go towards the emotional and reactions to silly media stories, fun but not very useful.

Thankyou thankyou "Blast from the Past" Anon.

concerned renter said...


Thanks for the blast from the past. It is nice to know that the real estate slowed down so quickly, it is also a reminder that reporters write stories, stories are not data. The housing prices grew 2.5% per year between 1990 and 1996 before the present bubble started. Data source:

I only hope that the history does not repeat and this time will be different and the prices will actually crash here in Seattle like they did in CA in the 90ies. LA nominal prices went down about 20% over 6 years in the mid 90ies, real prices went down about 40% for the same area. Same data source. Will the same thing happen this time around? Will it be a repeat for Seattle and CA?

dalas said...

that blast from the past was bull. too bad you can come up with any chart that shows Seattle as a bust after 90's boom. I quoted earlier from that book, you can go ahead and look it up at local B&N.

till then, you can keep on blasting from the non-existing past.

dalas said...

none of you is question the source again. you bunch of gullible crowd, no wonder it's so easy to convince you folks.

"An example of a huge reduction in price occurred recently in the Edmonds area, where a home purchased a year ago for $257,000 sold for $207,000. I couldn't believe it," said Mike McDonnell of Northwest Appraisals."

20% bust...ok, why would the following chart name Phoenix, Denver and San Fran with less than 10% bust but not Seattle.

Ok, I guess you loved quoting Seattle Times, how about the following article, where was the mentioning of the "devastating bust"

Funny how all the "blast from the past" were taken from 1990, during the "slow down", and all these negative news about it. But if someone can show this forum an actual proof of ANYONE calling the post-1990 Seattle RE market as a bust, I sure would like to see it. All of this actually strengthen my case, people panic the year of slowdown, yet it turns out, NOTHING HAPPENS. Thank you for that little blast from the past.

dalas said...

thank you concerned renter. just as you wish the market will bust, I am financially set for the same thing to happen if it does. market up or market down, I have the asset in the bank to make short term or long term investment if necessary. I don't know why you guys are so excited to prove me wrong, yet you're the one that is once again making the wrong assumption of questionable source again. Who is emotional about this? you or me?

dalas said...

oh, I found that chart.

FDIC.GOV baby, beat that source.

End of the blast from the non-existence past. Did that anon posted that garbage just to prove my point that none of you care to verify the source and believe what you want to believe?

dalas said...

here's the rest of that link.

Anonymous said...

Please read this for a very educational overview of inflation vs deflation to gain some very needed perspective on the macroeconomic situation at play in our country.

It's easy reading and very entertaining, and will make you take notice of the opposing forces in our credit bubble and the need of the fed to do something.

Basically, it boils down either 1) let the bubble run rampant. This will require the fed to print money in order to fuel the bubble, leading to hyperinflation and essentially collapsing our economy. This scenario is only good if we feel it's important to continue driving the prices of homes up so that the ever increasing amount of debt can be paid in cheaper dollars. The problem here is that the dollars will devalue and hyperinflation results. This is a lousy option for several reasons, but in the end it does more damage to the global economy (while of course ruining the US economy).

The other option is to raise rates, slow (or pop) the bubble and risk a deflationary world. Deflation is what Japan experienced for the past 15 yrs. This is more desirable, but it isn't pursued because deflation is the enemy of debt. So, we'd have millions of owners who couldn't really pay off their loans and would default, but the trade off is to delay the inevitable and wait until everyone, boomers kids, etc. are up to their eyeballs in debt and then pop the bubble through this path. Either way, it's inevitable, so the only real option is for the Fed to let the bubble deflate and tighten credit standards to prevent more damage to the economy.

dalas said...

bah, bad links.

then follow the US home prices: does bust always follow boom. then the pdf chart is on that page.

The other link is you can go and find the charts there, bunch of them, but none of them included Seattle. Yet it included single digit depreciation cities, so go figure.

Anonymous said...


Either slow down and use the english language correctly, or go hang out on myspace. Nobody wants to slog through a half dozen of your incoherent, ranting, stream-of-consciousness posts to get to useful information.

You've been challenged several times to answer well-reasoned arguments, but you continue to ignore these, only to post ad homenem attacks and paranoid invective. I for one, intend to skip your posts from now on....

dalas said...

Name those so called well-reasoned arguments.

dalas said...

alright nevermind, you guys win. I'll quit this blog. good luck with the wait, renters. I hope your new house won't be built on your neighbor or co-worker's financial ruin.

Anonymous said...

So it seems people here would rather take snippets of out-of-context info as gospel instead of acutally reading full articles of credible information? Sad.

Anonymous said...

Accoring to, Seattle doesn't have much inventory. When you click the Seattle link, you can see that we actually had more inventory back in fall '05. I'm not quite understanding how all this talk of more inventory lately equates with the coming downturn.

meshugy said...

When you click the Seattle link, you can see that we actually had more inventory back in fall '05. I'm not quite understanding how all this talk of more inventory lately equates with the coming downturn.

Yes, we did have more inventory last Fall and it only resulted in more price gains.

It's unclear if the current rise in inventory will result in the huge pile ups we're seeing in San Diego and Miami.

Here' some data:


King County: 7,538
Seattle: 2,187

On May 1st it was:

King County: 6,977
Seattle: 2,010

Not the huge increases you're seeing in California and Florida. But it's definitely trending upwards. But still far below "normal" for Seattle.

For example: May 2003

King County: 12,295
Seattle: 3,169

Way more houses back in 2003....

Also, it's worth looking back at Sept. 2005

King County: 7,496
Seattle: 2,089

Also, inventory has been going down for the last 4 days:

King County:

May 20: 7,552
May 21: 7,550
May 22: 7,547
May 23: 7,538

Anonymous said...


YOu seem to forget that many of these homes were purchases using ARM's, Negative ammoritization loans, or a combination of other "fancy" lending schemes to get people into homes that they could not afford.

In 2007 when over 1.2 trillion in ARM's readjust we will see foreclosure after foreclosure and sellers will flood the market trying to get out.

The bubble hasn't burst yet. Wait until next year.

Anonymous said...

Good riddance Dalas. RIP

marin_explorer said...

6-10 years of work for $58K per annum?!
Isn't it good to know all those years of paying your dues will be handsomely rewarded?

Oh no, more of the "Seattle is Different" argument? I thought someone "turned out the lights" on that argument years ago...